How a Gym Actually Makes Money

Most of the money in a gym comes from people who stopped showing up in February, and this is how a gym actually makes money. Picture it. Six a.m., the lights are already on before you get there, the regulars nod at you by name on their way to the squat rack, the playlist is yours and every single treadmill is running at once. It is a good picture. It just leaves out the couple hundred people on your roster who have not touched that door handle since February and are still paying you every month like clockwork. We start with the number the industry actually watches, which is not attendance but retention — 66.4 percent in the most recent benchmarking report, which means roughly a third of the base cancels and has to be replaced every year. From there the video works through why a member who pays forty-five dollars and never appears is worth several times more than one who trains three times a week, why executives report EFT revenue instead of member counts, and what fourteen hundred quiet bank drafts look like against a building sized for six hundred active bodies. Then the other side of the ledger: leasehold improvements running past two million dollars before a single membership is sold, a rent cheque that is identical in your best month and your worst, the fifty to three hundred dollars it takes to replace one lost member, and the nine closed months that put Blink Fitness into a Delaware courtroom carrying $280 million in debt while its revenue was still climbing. If you want the same treatment for tanning salons or climbing gyms, say so in the comments and it goes on the list. #gym #smallbusiness #businessbreakdown #fitnessindustry #howbusinesswork