The fitness industry offers massive opportunity for business owners: As of 2016, nearly 60 million Americans held a membership to a health club. But with 36,000 membership-based fitness facilities competing for customers, success is not guaranteed.

Pete Dupuis owns Cressey Sports Performance in Massachusetts. With an MBA from Babson College and a decade of experience, he has an appreciation for the harsh realities that come with managing and operating a gym.

“Most people who get into gym ownership are former trainers who get sick of working for someone else and decide they’re going to open their own gym. It rarely works out as well as they imagine,” he says.

Dupuis has seen dozens of entrepreneurs start their own gyms. Below, he reveals the mistakes that gym owners should avoid if they want to build a thriving, sustainable fitness facility.

1. Don’t overlook what makes you different

Consumers can get a good workout anywhere. And as competition grows, clients looking for a treadmill and a weight bench will shop around for a gym that’s closer to home or offers cheaper monthly rates. Successful gyms that prevail over competitors do so by capturing a select audience, offering a specialized experience and becoming the best in their niche.

“When I started my business, we had three competitors within a 10-mile radius. Last week, we had more than 15,” says Dupuis. “But 85 percent of our clients are baseball athletes who realize we’re the best in the world in that field. Those customers don’t leave, regardless of price or location.”

A unique brand is invaluable. Mark Fisher Fitness, for example, has earned acclaim in the industry for offering what its website describes as “serious fitness for ridiculous humans.” The 4000-square-foot facility in New York City found a niche and capitalized on it. The gym offers unique workouts for quirky clients, referring to its facilities as an “enchanted ninja clubhouse.”

“[Mark Fisher Fitness] has a training environment that clients can’t help but talk about,” says Dupuis. “Ninety-nine out of 100 gym owners new to the game are just trying to replicate someone else’s business model. But what makes the top 2 percent of gyms successful is having a unique voice and being true to who they are. It’s not that common,” he continues.

2. Don’t forget to do a competitive analysis

Landing the right location is key to a gym’s success. But too often, fitness trainers open their own facility in a seemingly sought-after neighborhood, without performing a competitive analysis.

“It’s common for people to jump into this field with the mentality that they know more than everybody else,” Dupuis says. “But it takes more than a personal training background to run a successful business.”

Before committing to a location, do your research:

  • What is the true size of the market?
  • Who is your competition? What’s their business model?
  • What is the pricing structure and service offering of local competitors?
  • What are the strengths, weaknesses, opportunities and threats to your business?

Gaining a solid understanding of your local competition is crucial to standing out and meeting a real need.

3. Think twice before accepting investments from clients

Many personal trainers accept money from their affluent clients to start their own gyms. But Dupuis warns that business partnerships between trainers and trainees often turn toxic. While these investors may be attorneys or venture capitalists who understand business, they rarely understand the fitness industry. Furthermore, the founder of the gym loses ownership over his or her own business.

“It always sounds like a good idea to take money from your favorite client,” says Dupuis. “But it’s not uncommon for that client to decide that they’re going invest their energy into recouping their costs, and start dictating how to run a fitness business, when they don’t have any fitness experience. That’s how your gym loses its identity.”

4. Forget “go big or go home”

The more equipment and space that gyms occupy, the more they cost to sustain. Entrepreneurs are wise to open smaller fitness facilities that require fewer clients to turn a profit. Don’t go bigger than you should at the outset. Instead, start small and grow later.

5. Never underestimate the value of an accountant

Basic accounting skills are immensely valuable and shockingly uncommon among small business owners. Savvy gym owners know that a good accountant can boost their cash flow and help them keep their doors open. For example, your accountant can depreciate the value of equipment in the gym to keep a portion of the money you would otherwise pay in taxes.

6. Avoid fitness groupthink

Look outside of your industry for business insights. Most fitness pros follow a handful of influencers for guidance. But gym owners should look beyond their field for fresh ideas: Entrepreneurs who run tech companies, restaurants, nonprofits or other types of businesses can be an excellent source of innovation.

7. Don’t hesitate to join new social media platforms

Most small businesses are wise to carefully consider which social media platforms are worthy of their time and attention, but emerging fitness businesses are an exception.

“Quickly embrace every new social media platform and be present until it proves useless,” advises Dupuis, who has more than 42,000 followers on Instagram. He says being an early adopter of new social platforms can reap big rewards.

By jumping into trendy social media channels, most business owners risk wasting the time they invested if the channel withers and dies. But for up-and-coming gyms, free time is abundant. “The resource that is eaten up with social media is time, and small gym owners have time. They’re new, they have a small client roster. Be positive and be active on social: That’s the best way to succeed in the fitness industry,” Dupuis says.

8. Abandon your comfort zone

To own a business, it helps to be extroverted. As the face of a gym, your job is to win trust and persuade clients to believe in your mission.

“In this space, you can’t get away with being the smartest person in the room with zero social skills,” says Dupuis. “It doesn’t really matter how many degrees or certifications you’ve accumulated. If you’re socially awkward, clients will not give you the opportunity to engage with them.”

As the market for fitness services grows, competition also thickens. But business-savvy fitness pros are better suited to beat the odds and establish a thriving business. Building a memorable brand, choosing the right partners and following these tips means success is within reach.

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