The most common call I receive from aspiring gym developers is, “where do I obtain a template for creating a financial projection for my gym project?”

Unfortunately, the industry does not have any industry financial profiles, which are generally compiled by an industry trade association. There are a couple of vendors in the climbing wall industry that provide algorithmic financial models (in Excel format), but my experience is that most fall far short of a strategically based financial projection.

What is an aspiring gym developer to do? I suggest a four step approach.

1. Identify other markets, in which gyms operate, that you believe may be similar to your proposed market in terms of demographics and psychographics. Obtain demographic and psychographic reports (I use ring studies) from the internet that profile the existing gyms market. Compare those to your proposed market/location. Are they reasonably similar?
2. Contact the owners of those gyms and ask if they will share their basic financial metrics (number of members, number of day pass users, and how their revenue breaks down by revenue category). Note, you do not need the dollar amounts, which they may be hesitant to provide. So don’t ask for them. Oh, and offer to share your results once your gym is open.
3. Use the square footage footprint of those gyms and volumes to develop benchmarks for your gym, based on its proposed size. Use comparable pricing for health clubs and recreation centers in your market to create revenue amounts and soon you will have your basic financial projection.
4. Contract with an industry consultant to give your business plan and projections a review. It should not require more than ten hours of time.
   One word of caution is to be careful that you are not using volume numbers for your first year of business that are based on a gym that has developed a mature business. You will need to discount those numbers for your mistakes and early market development.