Great Financial Returns Commercial Budget Gym Equipment
commercial gym equipment

Commercial Gym

You may be a gym owner, an investor, someone just interested in how the gym business works, or perhaps you need to work out how to buy gym equipment right the first time. Whoever you are, in the next few pages I will share with you the reasons why I think the budget gym concept has so much potential in South Africa and how you can make money out of it.

Start a Gym and Starting a Gym Business

Lets face it, the commercial gym industry is a problem child.

If you are new to the gym industry then you may be excused for shaking your head sadly at some of the missed opportunities and spectacular failures.

Like any problem child, it’s the parents that to blame. The parents in this case being the business people who entered the industry with a very fast and easy buck on their minds. The gym industry is profitable and can be a highly client centred, if you are prepared to get involved for the long term and spend the right money initially.

Over the years South Africa has seen the rise and enormous crashes of various fitness related business’s over the years.

In a relatively short period of time commercial gyms went from backyard hard-core sweat houses to exclusive and expensive full facility health clubs with all the bells and whistles and a well-heeled sales team to go with them.

However some cycles come to an end, and that was no exception with the health and fitness industry. When the end came for the hard and fast talking sales orientated gyms it was felt throughout the country

The Early Names In The South African Commercial Gyms

commercial gym equipment

Old Names in the Gym Industry

You don’t have to be too old to remember the old gym companies in South Africa.

The early gym groups to go to push up the proverbial daisy’s were Players, (From Durban) , The Sharper Image, (nationwide) and Lional’s Health Clubs, (Pretoria).

Later on was the spectacular fall of The Health and Racquet Club Group, (and the holding company Leisurenet) and of course a group that I was closely involved with, The Health Connection Group in 2007

There were many reason why these groups closed down and one is hard pressed to find one overriding reason for so many businesses within the same industry going out of business.

For sure, a business goes out of business when it runs out of money and can no longer pay its bills. This was generally not the reason for any of gym groups to begin their demises.

One reason given so often quoted by bystanders to the gym groups collapses was the sale of long term memberships that the gyms were offering. My father always told me that when a solution to a complex problem seems too simple then it most probably is. The sale of long term gym memberships was not a great long strategy, but it did not contribute in a significant way to the demise of the gym groups.

So What Did Make These Commercial Gyms to Close Down?

commercial gym equipment

Old Gyms

When I am coaching executives and business people, I often refer to the concept of the “perfect storm”. This means a convergence of factors that together create an outcome. Because of factors such as the psychological availability heuristic we find some factors more palatable and salient than others, but that does not make them right.

Here are some of the factors which when combined, created problems for the older bigger groups as well as some of the nearly 200 gyms that closed down in the late 1990’s and early 2000’s.

More relevant factors included

  • More competition from gyms and health clubs in general as well as the expansion drives of the very well capitalised larger gym chains. The industry became more attractive.
  • More focused and targeted competition in the form of more specialized gyms, personal training studios, corporate gyms, school gyms.
  • Sliding exchange rates and more expensive equipment.
  • Rising staff costs.
  • Changing legislation which has restricted the ways in which gyms can hold members to long term membership agreements.
  • The development of a more savvy gym member.
  • Exclusive agreements between two gym chains and various medical aids creating an anti competitive environment.
  • Inadequate gym equipment maintenance and servicing.
  • Attempts to franchise off non performing gyms
  • In house disputes and infighting amongst partners
  • Proliferation of the medical aid schemes partnering only with two big chains. This still happens today.
  • Misappropriation of funds and income to other projects and businesses, instead of being reinvested in the gym company growth.
  • Failure to pay relevant taxes.
  • Lack of sales and marketing teams.

So What About Starting a Gym Business Now?

starting a gym business

Modern Gym Industry

Over the years the fitness product and services market has increased exponentially. The public is by and large far more aware of specialised diets, food groups, gyms names and types of exercise programs.

The gym members and pool of potential gym members has also become far more savvy and knows what to expect. When it comes to world class full facility health clubs there are around 130 group owned and at least another 30 independent owned facilities in South Africa. Add to that number at least 200 other smaller independent gyms.

What that means is that the prospective gym owner knows what is on offer and has been exposed to world class health clubs.

A Growing Fitness Trend Limited by Affordability

All things being equal, we can expect to see more people around the world attempting to enter the fitness market. Affordability being of course the operative term and the biggest barrier to many people becoming gym members.

With Home gyms and good quality gym equipment being out of the grasp of most people, a well-equipped gym offers the only way to exercise on a number of different types of gym equipment.

Until recently the gym or health club scene was dominated by a duopoly consisting of Planet Fitness and Virgin Active. Both offer large and inclusive facilities, mostly in richer areas. There are of course a few exceptions but demographics drive the choice of a company owned gym location.

The Budget Gym Concept and Commercial Gyms

starting a gym business

Budget Gym

If money and affordability are driving forces then what can the clever gym owner do?

Well for starters you could strip out all of the unnecessary frills and clutter that are peripheral to the core fitness and gym concept. This might include areas such as swimming pools, squash courts, steam rooms, saunas and possibly juice bar areas.

Low usage exclusive facilities are sacrificed to create more high density usage areas. There are of course some clients that want facilities such as pool, squash courts, saunas and juice bars. These clients may choose another gym

Next you could drop the membership rate. Cheaper memberships not only widen the captive potential membership base but they make it easier for staff members and sales people to “close” deals or sell a membership. This means that a gym owner no longer has to rely on highly experienced sales people.

However the lower price point opens up a massive opportunity to market to a segment of the population who previously could not afford to exercise at a gym.

Sales consultants at gyms consistently cite price point as their most difficult barrier to overcome, followed by

For instance the question “would you rather sell a gym membership at R269 per month WITH a pool versus R199 without a pool?” frequently generates positive answers from sales consultants.

Lastly optimise your capital expense on gym equipment so that you get the biggest capacity for gym membership usage for lowest possible budget for the longest period of time. Equipment that goes “Cheap Cheap” does not last a long time.

We run our training program over 5 days and within that time period can teach almost anyone how to sell a gym membership.

What Facilities for a Budget Gym?

starting a gym business

Gym Machine Circuit 1

A budget gym needs a low price point, strong equipment and a clean engaging environment. The same peripherals need to be present that are present in retail as well as exclusive health clubs such as

  • Health and Fitness Branding
  • Colour Psyhology applied
  • Efficient use of space
  • Good lighting
  • Music
  • Sound Containment
  • Odour Management
  • Cleanliness and hygiene

What you will want to be including in your new budget gym is the following

Commercial Gym Equipment For Budget Gyms

Good Quality Cardio Vascular equipment area;

with plenty of treadmills, exercise bikes, recumbent exercise bikes, elliptical trainers, steppers and rowing machines. This is the areas new gym owners are most likely to skimp on when budgeting. Gym members demand treadmills and cardio equipment

Circuit Training Areas

Including all of the normal selectorised commercial gym equipment including large step podiums, chest press, lat pull-down, low row machine, leg extension, leg curl, ab crunch, bicep curl and tricep pushdowns.

Well Stocked Weight Training / Resistance Training Area.

The weight training area, strength training or resistance training area is an area of the gym that can become chaotic especially on a Monday night! Creating as many stations here is the best way of optimising your capital spend on gym equipment. As you will see from one of my examples in How To Start a Gym, simply adding some adjustable bench’s, (A spend of less than R20 000) to your gym equipment mix can create a significant increase in your membership capacity

Aerobics Floor.

The Aerobics floor in a budget gym should be large, square and be multi functional. You want to get more people in per class, not run more classes. The gym industry orientates itself around certain narrow window periods during the day, you need to capitalise on these periods.

Spin Studio or Studio Cycling

Spin classes and studio cycling classes can create a dense workout area. The more crammed people are the better the vibe in the class, (there are limits to this of courses). A large room stocked with commercial grade spin bikes is worth its weight in gold.

Changing Rooms

What could make the difference between a budget gym and a cheap cheap nasty gym is the quality of the changing rooms. A budget gym should have large, clean user friendly changing rooms. The lockers should be professionally crafted, the shows should be clean and should be better than your showers at home.

Going budget does not mean skimping on the quality of the facilities that you offer, it means cutting back on what is not needed.

Who Are The Main Players in The Budget Gym Industry

So who is taking advantage of this trend of low price and pure facilities. 

starting a gym business

Budget Gyms Muscle In

Well first out of the blocks were the existing big gym groups. Not wanting to lose out on the action both Virgin Active and Planet Fitness

South African Budget Gyms and Commercial Gyms

These are the groups and clubs that have firmly made it into budget gym territory with the main criteria. A budget gym must offer a world class selection of equipment and not just simply be cheap

My Gym: Mygym https://www.mygym.co.za/

  • R249 per month no contract
  • Joining fee R250
  • Currently one gym in Johannesburg with more planned

Go health club https://gohealthclub.co.za/

  • 12 month memberships
  • R259 per month plus health key of R199
  • Cash Upfront also available.
  • One gym in Northview, Johannesburg and many more clubs planned.

Viva Gym: httpss://www.vivagym.co.za/

  • Monthly and contracts basis
  • Fees: From R189 (R159 on contracts) to R269 (R239 on contracts) depending on the branch
  • Plus joining fee of R250
  • 6 gyms around SA, mostly Johannesburg and more planned.

Virgin Red httpss://red.virginactive.co.za/Pages/home.aspx

  • R199 for 12 months to R805 for national membership of all gyms
  • 7 gyms located in Gauteng and Cape Town, many more planned*
  • * Virgin is one company which does have the capacity for a massive rollout. To some extent this sadly muscles out many other smaller players who could level the playing field.

Just Gym, (Planet Fitness) https://www.justgym.co.za/

  • Starting at R179
  • 1 year contacts
  • 8 gyms around South Africa, may more planned*
  • * Planet Fitness has always been planning many more gyms. in 2013 the owner has been promising 100 budget cubs in 5 to 10 years, (29 APRIL 2013, They have built 8). This is not the first time that Planet fitness have undershot with their club expectations.

Body Classique, (www.bodyclassique)

  • Starting at R149 per month
  • Additional options available
  • Based in East London with more clubs planned

Do you feel that you need to hear more about seeing your way to opening your own budget gym?

We help new and existing gym owners strategize their business, train their staff and of course equipment their gyms with world class gym equipment.

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About miles
Hi! my name is Miles Harrop. I am an educator, writer and life coach specializing in fitness, wellness, human behaviour and brain based coaching. I help you to transform your body by helping you buy the right gym equipment first time around, and to learn how to "change your mind" so that you can transform your body easily and effortlessly. Let me help you achieve your goals today!