The fitness industry has been on a steady incline over the last few years. However, we’re starting to see many fitness businesses failing in 2022. Why is this the case? In theory, a business in this industry should be destined for success. And yet, too many small companies are being forced to close their doors earlier than expected. Primarily, we’re looking at fitness centres and gyms. For the most part, the ones in trouble are either independent brands or franchises – the big fitness brands aren’t showing any signs of issues as of late. So, why are these fitness businesses finding it so hard to stay afloat? When you take a deeper look and compare them to the bigger brands, a few clear reasons jump out…
Fitness businesses tend to make money through memberships. People join your gym/fitness facility and pay money every month to access all the equipment and services. The key is building on these memberships while ensuring your existing members stick around.
Unfortunately, it seems like lots of smaller gyms and facilities are struggling to do this due to membership price hikes. Ironically, we can date the source of this problem back to the pandemic. In 2020, there was a huge fitness boom – everyone wanted to join a gym and get healthy. This is where many small fitness businesses thrived, and plenty were established at this time. Due to the popularity and demand for these services, you could offer cheaper memberships. But, as the demand has decreased with life returning to normal, it’s meant that fitness businesses have to increase membership prices to cope with the lack of new members.
Therefore, existing members may feel priced out of their membership, opting to go for a cheaper gym elsewhere. More often than not, the bigger brands are offering cheaper rates because they have more room to play with. Thus, small fitness businesses are starting to close because memberships are drying up.
Health & safety
The other reason a lot of small gyms and fitness facilities are closing is because of health & safety concerns. With so many new facilities popping up, the government has to ensure that these places are safe. Unfortunately, lots of small facilities don’t meet the current safety standards. They are missing simple things like adequate signage or emergency evacuation diagrams.
There are also issues relating to how the equipment is stored or located within smaller facilities. Because these gyms aren’t part of an overall big brand, the owners can be more lenient. This might be good for the people in the gym as it’s a friendlier atmosphere, but it means that a lot of health & safety issues go unnoticed.
So, when the officials come down to inspect the small business, they see countless things that need changing. The cost to make these changes is too big, leading to the company shutting down.
If you are thinking about starting a fitness business, don’t let this put you off. Clearly, there’s a market for companies like this – as the bigger brands are proving. Just make sure that you keep your workplace as safe as can be, and that you manage your membership prices accordingly.