Cost of startup boutique fitness studio

What does it cost to start up a fitness studio? Of course this depends.   I’ve seen startups at $50,000 and I’ve seen startups at $1.5 million.  Since we define a boutique fitness studio as a 1500-3500 square foot space,  I would estimate the average startup cost across the U.S. to be $300,000 to $800,000.

You should have 2 questions.  1) What does that include? and 2) Why such a broad range / what factors impact cost.   Here’s your answers:

Startup Costs
For this discussion, startup costs are defined as dollars spent before you open the business.  For the majority of boutique fitness startup costs fall into 5 basic categories

  • Construction and Buildout
  • Furnishings and Equipment
  • Marketing
  • Admin and technology costs
  • Staffing
  • Working capital*

For the vast majority of startups, the largest cost by far is buildout and construction.  If you’ve ever built a house or renovated a kitchen you know how quickly costs mount with flooring, lighting, electrical, plumbing, framing, painting and everything else.  Related costs are design and permitting,  Whatever your final startup cost is…..construction is likely to be 60% to 80% of the total,

Furnishings and equipment are separate but include your sound or a/v systems, your point-of-sale equipment, lockers, front desk, bathroom fixtures, furniture and any fitness equipment your concept requires.biz plan

Marketing is the creation of your name, logo, brand, website, app, social media platforms, collateral material, and signage….but also the development of a Grand Opening strategy and your ongoing marketing strategy.

Admin and technology costs include your financial system, CRM, booking system, legal and accounting fees, professional services, permits, licenses, insurance, lease or security deposits and others.

Staffing costs are those costs incurred before the business opens.

*Working capital (to cover costs before business revenue does) is not technically “spent” before you open, but I still include it as a startup cost because it does need to exist and be set aside.  It would be included in your loan or financing need.

Factors impacting start up costs.
Construction
costs – First, how much space are you building out?  More space, more cost.  Second, how complex or luxurious is your space?  the more fancy, the more it costs.  Third, what part of the country are you in?  Coastal urban markets are the most expensive, suburbs and small towns less.

Furnishings and equipment:  the more ‘luxury’ oriented your vision is, the more expensive these costs.  They are also impacted by the overall size of the studio.  If you are franchising you often get better volume rates on equipment.

Marketing costs:  Are you franchising, or building a brand and marketing platform from scratch?  If you franchise, you have a franchise fee but save dramatically on the basics of building up a marketing approach.

Admin and Technology costs will not see huge variation from market to market other than lease deposits and other items tied to a local real estate marketing.

Staffing costs depend on how much you plan to do yourself versus how much you hire out.  This cost is also geographically dependent.

Working Capital is needed to cover expenses before business does.  Hopefully a conservative estimate of your year 1 cash flow will help guide this need.  The better you revenue in year one, the less your need for working capital.

One final factor impacting startup costs:  the competitive environment in your market.  The more boutique fitness in your area, the more the “bar is raised” on costs you will need to incur to keep pace with market expectations.

 

Would you like to connect? Since 2005 we have owned and operated our own boutique fitness studios. We advise entrepreneurs, franchisees, franchisors, suppliers and investors in this space. To touch base, CLICK HERE and tell us more. We’ll be in touch soon.

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