A gym membership invoice is a bill that is served by gym employees to gym goers that outlines their current outstanding balance, which can accrue from their weekly, monthly, or yearly gym memberships, a rented gym locker, classes taken at the gym, purchased food or smoothies, or a personal trainer service. With the exception of hourly-based personal trainers, gym services are charged as singular items and the associated cost-per-item.
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The membership fees that a gym charges can make all the difference between profitability and bankruptcy. While research is essential, simply analyzing what other gyms charge in the area and copying their fees is a recipe for disaster, especially for those that are opening non-chain gyms. Setting too low of a price can result in an over-crowding of machines and parking, an inability for the business to turn a profit, and the assumption by guests that the gym is of low quality. On the other hand, setting too high of a price can turn off a wide margin of prospective customers. A few of the factors that should be analyzed before setting a fair and effective price are the following:
- Competitors – Take a considerable amount of time analyzing competing gyms in the town, city, or county in which the new gym will be opened. Preferably focusing on the size and type of gyms that match the new planned gym. Identifying the average monthly gym membership costs in the area gives the gym owner the ability to determine how they plan on capturing a share of the market. After calculating the regular gym expenses, the owner will be able to determine if going the low-cost route will be an option. If it can indeed be profitable, setting lower prices than the competition can result in an influx of customers.
- Average Household Income – If the gym will be opened in an affluent neighborhood or city block, the prices charged can (and should) be significantly higher than in areas where the average household income is lower. This should be factored heavily when doing competitor analysis as stated above, as analyzing gyms in a less affluent area can dissuade gym owners from setting higher prices.
- Expenses – Strong financial analysis is the backbone of a gym. Every single one-time, recurring, and potential cost should be factored into prices. With an understanding of every single price, the business’ margin will be exceptionally accurate, allowing owners to understand exactly what should be charged in membership, enrollment, one-time, and other fees.
For new and hopeful gym owners, the act of price-setting is often the most important, and stressful task they will be faced with. However, owners should understand that prices will most likely need to be changed after the first month or year of business, as no amount of speculation and calculations can predict how the local customers will react to the opening of the new gym.
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