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mousey6
Aug 14, 2011, 3:25 AM
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Hey hey hey
Just figured I'd stop lurking and pick your brains, directly.
The question is this: Can gyms in large metro areas be profitable if they are done right?
I've been doing a lot of thinking about starting a gym. If you exclude smaller towns but only look at cities (>500k population) I'm guessing that owning a gym is somewhere between being a lifestyle business and being a profitable business.
I'm hoping someone can tell me if this statement is fair. My reasoning is that:
-Gyms in larger cities that are planned and built as proper businesses (ie right size, decent cash reserves, good location, not overly leveraged $, with a dedicated O/O and proper marketing to the various target segments) dont' seem to close down, meaning that variable costs are being covered, at least over the long term, so it must be worth continuing
-BUT membership acquisition is still slow and there's a constant + sizable (50%?) member turnover so its always uphill + limited demographics to pull in.
I AM pulling these #s and "reasons" from my ass as they're based on anecdotal info I've gleaned while lurking here.... Can anyone set the record straight for me???? Can one make a good living owning and operating an indoor gym? Has it been done?
I personally can't start and run one and put in years of sweat unless I know that it's "possible to do well with it and that the business model is sound.
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mousey6
Aug 14, 2011, 3:28 AM
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How uncool it is to respond to my own post but I haven't seen a single large, well planned gym go under when in a large metro area.
Just had to add that addi'l point .
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justanotherclimber
Aug 14, 2011, 4:20 AM
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absolutely- one only has to look at Central Rock gyms in Western Mass. They're like 2-3 years old and already have 3 locations due to profitability.
contact the Climbing Wall Association. There's loads of profitable gyms around the country, and the annual convention brings many of them together to teach new folks how to do it.
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stoneguy
Aug 15, 2011, 10:01 PM
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I estimate approximately 1% of the population base might be your membership. I think lots of gyms in cities run 3-5,000 memberships plus birthday parties for kids. I hate the kid thing, but in some cases it's the stabilizer. Capital costs can be big, but your overhead is NOT SMALL. Do the hours, manpower and rent on 10,000-15,000 ft is a killer. Having said all that, and it seems more lifestyle income... the gyms seem quite profitable.
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djlachelt
Aug 15, 2011, 10:14 PM
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justanotherclimber wrote: absolutely- one only has to look at Central Rock gyms in Western Mass. They're like 2-3 years old and already have 3 locations due to profitability. contact the Climbing Wall Association. There's loads of profitable gyms around the country, and the annual convention brings many of them together to teach new folks how to do it.
http://www.climbingwallindustry.org/
They host the Climbing Wall Summit each year in Boulder, CO. It always has excellent seminars and plenty of time for networking. You are sure to be able to get answers to many of your questions and meet the owners of those successful gyms that you are talking about.
On their web-site you can see the seminar offerings for the most recent conference. You can see that there are seminars for new & potential owners as well as content for those who have been in the business for years.
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marc801
Aug 15, 2011, 10:42 PM
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Some quick figures...
Momentum, our newest gym in the Salt Lake Valley (now several years old), was built in an old movie theater (the other half is an REI). It has over 40K sq ft of wall and cost $4M to build. http://momentumclimbing.com/index.php
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guangzhou
Aug 16, 2011, 5:12 AM
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Yes, a well run climbing gym in the right location can be very profitable. If run correctly, it can also offer the owners a lifestyle they want.
The key is to start the business into what you want it to be. If you want a profitable gym, you need to set up the infrastructure of your business to be just that. You also need to look the part when you built.
Thanks to the poster above who said my gym looks like a serious gym. We are also creating a serious guide service and outdoor program.
Remember, climbing gyms don't make money from climbers, they make money by convincing people who are not climbers to climb.
Eman
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mousey6
Aug 16, 2011, 4:47 PM
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In reply to: Remember, climbing gyms don't make money from climbers, they make money by convincing people who are not climbers to climb.
Fantastic quote there.
Everything really hinges upon the % of general population who will climb/become a member.
I recall 2.4% as the rate of people who will/could visit your gym, as a national "average". This number should be taken with a grain of salt then because Orlando with all the old folks/visitors should be very different than say San Francisco. After all, the deviations from norm could be very high.
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stoneguy
Aug 16, 2011, 5:24 PM
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In the Toronto & surrounding area, my estimate would be normal gyms might be 10% of the gen pop, and that climbing 10% of that (or 1%) as a membership base. Obviously you could do better. I'm thinking minimums. Near University can be good, but cost per visit can be low, whereas Birthday parties revenue /visit higher, as long as it doesn't really piss off your regular climbers.
It could easily be possible to double that revenue with walk-ins.
In our area, all the RC gyms are new or moving/expanding, so they must be making money, as yes with a good gym should be good money.
I think the RC Wall association is optimistic.
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mousey6
Aug 16, 2011, 6:42 PM
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10% of the pop b/w 5 and 40 years of age?
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stoneguy
Aug 16, 2011, 7:36 PM
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I didn't do advanced demographics.. took the quick route. Toronto is 3mill Greater area 5 mill, since no one likes to commute, I used the 3 mill figure. Four new Gyms in the last two years with probably 3-5k membership. So that is .8% and since all are making money/busy assume my estimates are low.
I know that on a Groupon deal, one signed up 1,000 but also assumed short term members.(hence they lost a few). If this gets detailed, I would prefer a private email. terry@northernstoneworks.com
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Kartessa
Aug 17, 2011, 6:54 PM
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GTA has a stupid amount of gyms because we live in an area with high incomes and a desperate lack of outdoor recreation. Yes there are some crags that are always crowded and polished to shit, and there's some trails and a few parks but its pretty insignificant when you consider our population and the total lack of access to any real kind of wilderness.
Mini-putts are quite profitable here as well.
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guangzhou
Aug 18, 2011, 3:03 AM
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In reply to: In the Toronto & surrounding area, my estimate would be normal gyms might be 10% of the gen pop, and that climbing 10% of that (or 1%) as a membership base. Obviously you could do better. I'm thinking minimums. Near University can be good, but cost per visit can be low, whereas Birthday parties revenue /visit higher, as long as it doesn't really piss off your regular climbers. It could easily be possible to double that revenue with walk-ins. In our area, all the RC gyms are new or moving/expanding, so they must be making money, as yes with a good gym should be good money. I think the RC Wall association is optimistic.
I think they are a waste of time. As for 10% of the population, good luck.
Bottom line, if climbing gyms couldn't make money or were not profitable, they would not be popping up all over the place.
like any business, good management, good strategic planning, marketing, growth, recourse management, including money, and a well trained staff are all part of the operation.
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stoneguy
Aug 18, 2011, 1:07 PM
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Obviously, the way you are doing it is the best if you can afford it. Buildings are expensive here, and as you have said, there is no point in having a bad location because the rent is cheaper. I think you mis-read... I guess 1% of the market, and agree with you that new members or "want to be" climbers are what you need to attract. Good climbers make up your "core" membership and keep you honest(credibility). A decent building here would be in the range of $3 million.Sucks huh..
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Kartessa
Aug 18, 2011, 1:26 PM
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stoneguy wrote: A decent building here would be in the range of $3 million.Sucks huh..
Unless you own Boulderz, which has a sekret hidden location that I took 4 U-turns to find, is itty bitty, the A/C is weak at best, and theyre next door to a caterer so it sometimes smells delicious.
But I'll say it's probably the best gym in the city.
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stoneguy
Aug 18, 2011, 3:08 PM
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I don't know where these guys get the funds to put up new facilities, or new buildings, but it takes a TON of money. The math is staggering.
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vencido
Aug 18, 2011, 3:53 PM
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Just about any large metro area already has climbing gyms.
So if you want to start a business it will have to compete with other well established businesses that are likely run by people who are devoted to being profitable.
You won't be the only game in town. And if you are, and the market makes sense, you won't be forever.
Oh, and yes numerous gyms have gone out of business.
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Kartessa
Aug 18, 2011, 6:26 PM
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stoneguy wrote: I don't know where these guys get the funds to put up new facilities, or new buildings, but it takes a TON of money. The math is staggering.
Have you been to Boulderz? Its not exactly a multi-million dollar facility. The guy did a great job on a budget and he actually caters to climbers, not people who might want to try climbing.
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stoneguy
Aug 18, 2011, 6:33 PM
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No, but I'll check it out. Thanks
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guangzhou
Aug 19, 2011, 3:19 AM
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In doing research, over half the gyms I spoke with in the U.S. has five or more investors when starting out. Each owns a piece of the business according to how much he or she invested.
Location is important, but you don't need to be int he expensive part of town. We built because they were no buildings here with big enough open interior. Our building is a giant shed with insulation.
E
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tolman_paul
Sep 6, 2011, 9:30 PM
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I think you need to look bigger picture. When you say lifestyle business, what do you mean? Starting a business sucks up all of you time and $ for the first several years, so the business will be your lifestyle. I don't see how working at a climbing gym 7 days a week 12 hours a day is such a hot lifestyle, and if you aren't working it that hard, and promoting the heck out of it, it's not going to be a going concern.
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marc801
Sep 6, 2011, 9:55 PM
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tolman_paul wrote: I think you need to look bigger picture. When you say lifestyle business, what do you mean? Starting a business sucks up all of you time and $ for the first several years, so the business will be your lifestyle. I don't see how working at a climbing gym 7 days a week 12 hours a day is such a hot lifestyle, and if you aren't working it that hard, and promoting the heck out of it, it's not going to be a going concern.
One of my long ago partners once decided that he wanted to be a guide so he could climb more often. He quit after guiding for about 3 years and wound up taking the next two off entirely. He eventually returned to climbing, but for a while, he was completely fed up with it and took up sailing.
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guangzhou
Sep 7, 2011, 1:27 AM
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I have to agree with the two above post, creating a successful business is hard work and requires time.
The main key to remember when you develop a business, any business, not just a climbing, is that you are starting a business not a job. You need to create a business that can operate without you. You hould be working ON the business, not in the Business.
If after the first year, you still need to be a regular day to day fixture in your own gym, you set up the business wrong. ll you did was create ajob, in which case you could more easily work as the gym's manager for someone else.
Running a climbing gym requires more than putting up climbing walls inside a building. Running a financially successful one requires even more.
Eman
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stoneguy
Sep 7, 2011, 9:37 PM
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I think probably 80% of business owners end up just buying themselves a job... and they are happy to be their own boss and not make a million. And it doesn't take smarts, but moreso mangement and drive. I have seen a number of "not so smart" guys make lots of money on simple things, because they are singularly focused, Delegating is tough. Winners are generally anal micromanagers. Unfortunate but true (&necessary)
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