Most Common Causes of Gym Failures

June 2, 2014

By: Eric Haaranen

In the ultra-competitive world of health and fitness, where less than 50% of new gyms and fitness centers are expected to survive beyond the first 5 years in business, Jim Thomas has many answers to questions most gym owners don’t even know to ask.

Jim Thomas is the well-known founder and president of Fitness Management USA, Inc., a management consulting and turnaround firm specializing in the fitness and health club industry. The tagline for his company is an apt one. “When the going gets tough, the smart get help.”

The health and fitness industry, like so many others, is one in which many businesses are spawned through passion. For example, a personal trainer loves what he or she does so decides to open a gym hoping that the old axiom, “Do what you love and the money will follow” will hold true. Unfortunately, it rarely does.

“Other than being under-capitalized, the biggest reason we see for health club failure is lack of business know-how and lack of proper implementation of sales and marketing strategies,” points out Thomas. “Another common misconception that many new gym owners have is that the gym will sell itself.”

It is rare to find someone that is both passionate about providing health and fitness services and adept at marketing and sales. The result is often that one side of the business falters and may drag the entire operation down with it.

In these cases, Thomas suggests, “If you are not an expert in gym sales and marketing find someone that is. Embrace sales and marketing. Get some training. In an effort to provide good service, you can’t give up key steps of the membership sales process.”

After 25 years of owning and operating gyms as well as speaking and consulting extensively on the subject, Thomas has seen pretty much all the industry can throw at gym owners. When asked what precautions or research new gym owners could undertake to improve their odds of success, Thomas responded, “For people entering this business, be fully aware the biggest mistake is a failure to grasp and implement proper sales and marketing programs.” He also added, “Keep fixed overhead low. Newcomers need to shorten the learning curve and not learn based on trial and error – it’s just too costly.”

It seems that gym owners – like many entrepreneurs – may be overly optimistic for their own good at times. When asked what the greatest challenge he faces in helping aspiring or struggling gym owners, Thomas was very up-front, “Club owners often wait too long to engage professional help. Instead, thinking the problem will miraculously be fixed without help.”

The lesson to be learned here? Running a health and fitness facility is a high-overhead and sometimes complicated business requiring a diverse skill-set. To ensure the greatest likelihood of success, anyone thinking about entering into this industry should either have the proper skill-set or be willing to work with someone that does. or call 1-800-929-2898