Gym business plan: A step-by-step guide

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Gyms are a large part of the health and fitness ecosystem. With the rising trend and awareness regarding fitness, gyms are also increasing in number. Therefore, gyms are extremely profitable business ventures. This guide will help you understand the fitness industry in India and create a strong business plan.

Fitness Industry in India

The fitness industry in India is an unorganized sector. Only until recent years, has the trend started shifting towards gyms. With the launch of pan-India fitness chains like, the fitness industry has shifted gears. According to a Deloitte report, India’s fitness market in 2017 was estimated at approximately $1.1 billion and it is expected to grow at a CAGR of nearly 12% for the next 5 years. Globally, the gym industry is worth over $96.7 billion. And this figure is rapidly rising.

To understand India’s potential in the fitness sector, consider this – India represents over 15% of the world population. Yet, its market share in the fitness sector is a fraction of the western countries. What this data means is that the fitness niche in India is far from saturated. There exists a vast demographic pool that hasn’t been tapped into yet. Additionally, fitness sales in metropolitan cities like Mumbai have grown from INR 1,200 crores in 2017 to INR 2,000 crores in 2019. Therefore, the demand for fitness products and spaces is a lot more than the supply.

Gym Business Model

Starting a successful gym business requires proper planning and research. Before you begin creating your business plan, it is important to figure out a suitable business model. If you’re a fitness professional or enthusiast, starting a physical gym may be the best option.

However, several types of business models exist in the gymming industry. For example, instead of starting a gym, you can manufacture gym equipment, supplements, and clothing. The fitness equipment market is parallelly successful. For example, the demand for supplements like Whey protein, creatine, and plant-based protein is extremely high.

Gauge your experience in this industry. As mentioned above fitness experts can even begin a coaching and gym consultancy business. Whereas, people who do not have a lot of experience can either undergo training or set up an equipment manufacturing unit for the best results. Therefore, select a business model that matches your experience and knowledge to enter a fitness niche.

Create Your Gym Business Plan

Setting up a gym or fitness center is quite expensive. You need to construct the facility, buy machines and equipment, employ certified fitness trainers, and create marketing campaigns. Apart from these fundamental steps, several steps can determine the success rate of your business. All business plans follow a standard template. You can refer to this business plan template to create your own. However, given below are some important areas that need to be focused upon while creating your gym business plan.

Industry Analysis

The first step when starting with a business plan is industry or market research. Understanding the current market trends and the growth of the industry will help you narrow down your niche. An easy way to start with your industry analysis is the inside-out method. In this method, start with gyms and fitness centers in your local area, town, and city. Identify their target audience, type of gym, and gather approximate data about pricing and profits. Then, you can expand towards multi-city chains and connect all that data to overall industry statistics.

There also exists research and information providers that conduct high-quality research for you. If you do not wish to gather all that data, you can outsource a detailed report on the Indian fitness industry. Thus, you can study the outsourced report and save some time. Conducting an industry analysis is a great way to understand the ‘behind-the-scenes’ aspect of any business. Attending seminars on fitness, health and nutrition is also a great way to gain knowledge about how this industry works and connect with resourceful people.

Customer Segmentation

A business is as good as the target audience. If you do not segment your target group, you incur a loss even before starting the business. Therefore, determining your target group is extremely important. Is your gym focused on weight loss? Is it located near an educational institute? Does your gym focus on cardio, yoga, or body-building? Such questions can help understand who your potential customers might be.

Conduct surveys or use the data from previous surveys to understand your customer. Once you have identified what the customer needs, you can segment them into different age groups. Customer segmentation will help you organize your services and create effective marketing campaigns.

Competitor Analysis

Competitor analysis is another important part of creating a business plan. It can help you identify gaps in the market. Using competitor analysis you can identify business and marketing strategies used by your competitors and benefit from them. This is an essential learning process as studying how your competitors operate can help you gain an edge over them. The first step is identifying who your competitors are. Start with a simple google search and create a spreadsheet to track your competitors. Next, segment your competitors into direct and indirect.

In the next step create a SWOT analysis of your competitors. SWOT analysis is a powerful tool that can easily highlight a company’s strengths, weaknesses, opportunities, and threats. You can utilize factors such as the company’s location, funding, pricing model, profitability, products, etc. in your SWOT analysis. Apart from tracking your competitors, create a second spreadsheet to track the services and products they sell. Rank the services by highest selling and most popular. This will narrow down your competition.

Marketing strategy

Creating an efficient marketing campaign will ensure that your business stands out from the competition. Creative marketing campaigns also help new businesses gain a head start in the industry. Therefore, to decide upon your marketing strategy you need to keep several factors in mind:

  • Target audience: If the target audience is from the age group 16 – 30, social media marketing can be the best fit. Whereas, if the audience is older, banner, newspaper, and guerrilla advertising could work the best.
  • Type of product/service: Identifying your product’s USP will help give direction to your campaign. If your primary service is yoga or martial arts, then that will become the center of your marketing strategy.
  • Mode: There are several ways of going about a marketing strategy such as influencer marketing, paid advertising, word of mouth, etc.

Management & Staffing

Selecting the right team of professionals can help sustain and grow your business rapidly. To successfully run a gym, you will the following workforce:

  • Certified gym trainers: These are people who hold valid licenses in nutrition and gym training. They have prior experience in coaching, body-building, or a fitness discipline. A capable team of gym trainers can help your gym gain credibility and eventually more customers.
  • Accountant: An accountant will manage the finances of the gym. He/she will be responsible for transactions, creating monthly reports, managing the payroll of staff, and taxation.
  • HR & Marketing: A good quality gym must have an HR professional as well as a marketing professional to ensure smooth functioning. The HR professional will ensure proper internal communication, staff recruitment, and addressing grievances. The marketing professional is responsible for promoting and growing the brand and attracting new customers to the gym.
  • Janitors: You will also require one or two janitors that will sanitize and clean the gym area, changing rooms, washrooms, and the lobby. Gyms need to be extremely hygienic and regularly sanitized. Therefore, a team of janitors is essential.

Financial Plan

Financial forecasting and planning are the backbones of a business plan. Estimating the investment and pairing it with operational costs will help you secure a loan easily. Therefore, your financial plan must be factual and laser-focused. Gyms do not have a fixed or standard investment amount. The amount required to start a gym varies. However, you can start a decent gym under INR 25 lakhs.

Depending upon the location, interior furnishing, experience of the trainers, number, and quality of machines, the investment can go upwards of INR 70 lakhs. Therefore, you must conduct a market survey for all of these factors as well. Scout for ideal locations and get a tentative rent estimate for your gym space. Browse the internet and note down the current prices for all the basic machines. Use LinkedIn or other job portals to connect with experienced trainers and get an idea of how much they charge. Based on the collected data, you can begin to put together a financial plan.

Franchise Option

Opting for starting an already popular gym franchise is a great option if you can invest a large capital. Franchises have several advantages such as – large customer base, brand recognition, higher profits, and customer support. However, the downside of starting a franchise is the large investment. The initial cost of buying a franchise is extremely high. Therefore, it is a viable option if you have a large capital at your disposal. You can choose from many popular brands such as Gold’s Gym,, Planet Fitness, etc.


Location hunting must not be skipped. Selecting a location for your gym requires strategic planning. Look for densely populated areas such as commercial streets, offices, schools, colleges, or apartments. This helps give your gym good visibility and attract the right customers. An average gym located in an easily accessible location will always be preferred by customers over a world-class gym located far away.


Licenses and permits

There is no specific license required for setting up a fitness center. Only the fitness trainers must be certified. You do need to register your gym as a private business, get a GST number, and complete tax registration.

Apart from that, you will require a clearance from the state police department for opening a fitness center in India. Approach the local police department and obtain an application to operate a fitness center in India. This procedure may differ from state to state. Therefore, visit your nearest police department to get a better idea.


The list of equipment required to start a gym depends on the budget and size of the gym. However, some essential types of equipment are:

  • 1,000 kg free weights (dumbbells, plates, barbells, mats, ropes, etc.)
  • Training benches
  • Pull-up frame and bars
  • Resistance machines (Leg press, leg extension, cable crossover, chest press, rowing, ab-crunch machines, etc.)


Gyms are rapidly becoming high-value business options. A well-equipped and well-staffed gym can earn up to INR 60 lakhs per annum considering it has a customer base of 500. By carefully following the steps mentioned above you can create an effective business plan and marketing strategy for your gym. That will eventually help you secure a business loan, and get started.

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