Where to find Gym Insurance .

[Glenn King]

Hey Guys and Gals , anyone know of any insurance companies that cover gyms ? I am thinking about opening up a place and am exploring the monthly cost . It will be a small gym w/ few members to start so I will need a very reasonable liability rate . I have searched the net but didn't come up with anything for small independently owned gyms . Any help would be great .

[Jay Hagadorn]

Hey Guys and Gals , anyone know of any insurance companies that cover gyms ? I am thinking about opening up a place and am exploring the monthly cost . It will be a small gym w/ few members to start so I will need a very reasonable liability rate . I have searched the net but didn't come up with anything for small independently owned gyms . Any help would be great .


Tell them Jay from Genesis Fitness in Nampa, ID recommended you...

http://www.clubinsurance.com
AJ Jankoviak
Association Insurance Group, Inc
Phone: 800-985-2021 Ext: 18
Fax: 303-985-1248

[Glenn King]

Thanks Jay , It will be awhile yet before I can possibly open . But this helps greatly. Have you been operating a gym long? I also still need to check into the tax side of things . I know for the 1st year until I could get membership up I would be in the red . And I really don't know how long you can be in the red before uncle sam shuts you down . Whooo alot to look into . Anyway thanks again .

[Cory Strack]

I'm interested in a lot of this too, i'd like to open a personal training studio. IF anyone is willing to post some thoughts/ideas/experience (Jesse maybe) I'd love to pick some brains as well.

[Jay Hagadorn]

Thanks Jay , It will be awhile yet before I can possibly open . But this helps greatly. Have you been operating a gym long? I also still need to check into the tax side of things . I know for the 1st year until I could get membership up I would be in the red . And I really don't know how long you can be in the red before uncle sam shuts you down . Whooo alot to look into . Anyway thanks again .


I have been operating for four years thanks be to God. The only tax issue you would need to worry about would be sales tax. Past that, when you get employees it would be income taxes, workers comp, etc...
The best thing you could do is sit down and write a business plan. Business Plan Pro is a good program that has a template you can follow. Figure out who you are going to cater to, can your market support what you want to do (population, competition, annual houshold income, etc...) Figure out what the worst case scenario is from your endeavor is (you doing all the work and cleaning the tiolets, possible failure, losing your house etc...) and figure out whether or not you want to take the risk. Your wife also needs to be onboard or you will lose from the begginning. I do not say this to neg you out, nothing worth having comes without a risk...If you are willing to take the risk, get online or go down to your state house and file your business type and also your federal tax ID #.

Why would you want to run for a year in the red? If you have any sales skills and are likeable, you can do it without being in the red for long. If you have $10,000 to invest in the beginning, you could open the gym. You need to recruit help in a agreement that they will prosper also. I could send you a PM with details.

Don't open a gym that is HUGE and full of equipment right off the bat. Make a long term plan that has progressive growth. Start out with less equipment and less space then increase both as your membership grows. Anyway, I could go on and on about this forever, God bless you in your endeavor...

[Paul F.X. Armstrong]

--good advice from jay--remember to set up a corporation to reduce your personal liability--
this will give you some distance between you and your members if they are injured and start legal action against you--your insurance is there for that also-
if the business plan does not work-?- a corporation will protect you from other situations that may arise from your business failing--
beleive in your plan--be optimistic--but prepare for the worst possible scenario

[Kevin Klavetter]

--good advice from jay--remember to set up a corporation to reduce your personal liability--
this will give you some distance between you and your members if they are injured and start legal action against you--your insurance is there for that also-
if the business plan does not work-?- a corporation will protect you from other situations that may arise from your business failing--
beleive in your plan--be optimistic--but prepare for the worst possible scenario

To be more specific a type "S" corporation is the best way to go for an individual. It offers the protection of a corporation but greatly simplies the tax structure. It basically passes all the profits through to you and your income or loss is treated as another W-2 if you will. The other corporation is a type "C" which involves a much more complex and heavy set of tax rules. Any decent lawyler can set you up as an "S" corp. pretty cheaply or I am sure you can find the forms on your states home page. Just be sure to sign any long term leases and such as the president of the corporation and not an individual to take advantage of the protections offered.

[Mike Gill]

To be more specific a type "S" corporation is the best way to go for an individual. It offers the protection of a corporation but greatly simplies the tax structure. It basically passes all the profits through to you and your income or loss is treated as another W-2 if you will. The other corporation is a type "C" which involves a much more complex and heavy set of tax rules. Any decent lawyler can set you up as an "S" corp. pretty cheaply or I am sure you can find the forms on your states home page. Just be sure to sign any long term leases and such as the president of the corporation and not an individual to take advantage of the protections offered.

I would look into an LLC first. Less tax burden and much of the shielding that an S corp offers.

[Glenn King]

Great info guys . Jay the reason I believe I may be in the red for awhile is due to location.
I live in a very economicaly depressed area w/ small population . I know in the begining I wouldn't have over 20 members. Why do it here ? I don't want to have to relocate or travel for this will be a side venture . The good news is I own all my equipment . No loans . I have been purchasing equipment at auctions for the last eight years for next to nothing nautilus , paramont , universal , champion ect . So anyway thats one less bill . Cory I plan on about the same as you . I plan on getting my pt cert and really working that end also .
One things for sure I will not be quitting my bread and butter job . This is something I have wanted to do since childhood . Guys thanks for all the help . Youve certainly opened my eyes to different avenues.Jay Your future mentorship would be greatly appreciated . Thanks and God bless.

[Jay Hagadorn]

Great info guys . Jay the reason I believe I may be in the red for awhile is due to location.
I live in a very economicaly depressed area w/ small population . I know in the begining I wouldn't have over 20 members. Why do it here ? I don't want to have to relocate or travel for this will be a side venture . The good news is I own all my equipment . No loans . I have been purchasing equipment at auctions for the last eight years for next to nothing nautilus , paramont , universal , champion ect . So anyway thats one less bill . Cory I plan on about the same as you . I plan on getting my pt cert and really working that end also .
One things for sure I will not be quitting my bread and butter job . This is something I have wanted to do since childhood . Guys thanks for all the help . Youve certainly opened my eyes to different avenues.Jay Your future mentorship would be greatly appreciated . Thanks and God bless.

There are a few people on the forum that could give you sound advice on the forum that own gyms, and I am sure there are other business owners that could also pipe in. Paul Armstrong has owned several business' and now runs a successful gym with his wife also.
As far as demographics goes, 7% of any population will have a gym membership somewhere (unless the prices are too high in a depressed area. So, if you are in a city of 10,000 you should have a member base of 700 if you have no competition (I am just using this as an example.) If I were in your shoes, I would be very excited to own all my own equipment, this can be a huge bill.
Try to find like minded individuals to help. If you can find some people in your area that have personal training certifications, solicit them for help. Offer them a place to bring there members in to train. Charge them very little to incent them to come in and train there client base. If you can find 5 people who have an existing client base of say 20 people each you will sell all their clients reduced rate memberships. This could work on any scale, large or small. Each person will pay you a $49 enrollment, plus $199 for a year paid in full. This will give you $24,800 in working capitol. When the trainers agree to train out of your facility, they still need to pay you something per session. That is between you and them. Part of the deal is that they cover certain ours in the gym (i.e. 5a.m. to 9a.m., 9-12noon, 12noon-3 etc...) They cover those hours, get the right to sell members in teh gym training (or new members) and get the right to sell memberships at those hours for commisions. They actually work as contractors for you not employees. They must know up front though how serious you are that they don't screw off and miss shifts. This will help you cover most of your hours without having to put people on payroll and pay workers comp on them. They need to have their own insurance also.
Before you ever open the doors do a pre sales campaign. If you have some money available to you, do a direct mail campaign. Negotiate a lease rate out with your lessor. Let them know you do not want to pay rent for an extended period of time (making these payments up with a slightly higher lease rate later on.) Pre sell out of the facility before you ever open. On a direct mail campaign you can get a 3% interest rate in the door. If you do horribly and only close 1%, here is the scenario:
Expense
Direct mail 10,000 pieces @ $0.35 per piece made and mailed
$3,500
1% close on response (100 people)
$49 enrollment+$199 pre sale special
$24,800 pre sales + $24,800 personal training clients= $49,600 working capitol before you ever open the doors. There's more and more, but here are some options you could look at...

[Paul F.X. Armstrong]

good advice jay-
pre-sale:get a kiosk at a local mall before opening--leave it unmanned most of the day--but get a personable a guy or gal work it from 3:30p til 7p-
we pre -sold memberships at a very low rate---

at the kiosk we had blueprints of our new building--photos of equipment-descriptions of services--we had a cardio piece at the kiosk and a weight bench or something-as the contruction progressed we added photos of the job site/building--we kept it fresh--this went on for 6 months
in an economically depressed area-?-kiosk in a mall may not be as expensive as you think-(i once actually owned a gym IN an mall-they wanted the space rented and were greatful for the traffic we generated)-
i owned two other business's in that mall so it wasn't hard to sell them on that idea-- but malls in small towns are usually in bad shape--and everything is negotiable- :cool: a kiosk shouldn't be too expensive-- or talk them into renting an empty mall storefront

if the mall too expensive-?-or if there isn't a mall :)
find an old down town empty store front-rent it-- put up some banners or signs--or find another business that will let you sublet or 'trade out' a portion of their shop a few hours a day----you tell the other business that you will advertise the pre-sale and that this will generate traffic for their shop

-we also do business in a very small and economically depressed city-it loses population every year-factories closing and big lay-off's-low per cap income-low percentage of college graduates--high unemployment-large percentage of folks over 65 years of age(18%!!)!
-but even in a "poor"town ,during bad economic times a fitness center/gym can work-


yes-always have your personal trainers work as independant contractors--same with masseuse-aerobics intructors--or whatever other service you have--

i admire the way jay did his gym--jay did it HIS way-- ;)
-we certainly have had to make some compromises-

[Glenn King]

Jay , Paul . thanks so much for your time ! Those were some great idea's . Poor town ? Yep thats us . Southern Va. high population of retirees ect . you hit the nail on the head .
You guys have been very inspiring . One thing . At the risk of sounding stupid what is a kiosk ? Again thanks for the enlightening stats . Maybe there is hope above medicority . And for my spelling :LOL:


P.S Another question . Have you guys seen any conflict between having hardcore members and general fitness buffs ?I want to appeal to all but don't know if thats possible w/o the politics . I do plan on having my machines in a separate room from the free weights ect . I know that will help keep some of the less hardcore from getting scared away . Not to be an Idea thief but how do you all market your gyms to the masses and not get stuck w/ just one sect . I would love to have a total hardcore gym . But , for business sake it wouldn't pay the bills . Also are any of you doing the personal training yourselves ? Is there any type of blanket insurance that covers other activities , trainers in your gym ?

[chad_coy]

Glenn,

I am coming in a bit late, but Jay and Paul are both giving you great stuff....your local SBC will help you with writing a business plan and could also get you hooked up with a mentor....ours did 13 years ago.
Blending the hardcore and the deconditioned markets NEVER WORKS....think of the 40 something house wife training next to Dan Harrison....trust me we tried for years...our consultant fired me from the gym in 02....best thing to every happen to my gym...PT went up,memebership went up...PROFIT went up...and I moved out and no one cares if I puke after a set of 20 squats!

Speaking of consultants go see THOMAS PLUMMER( he has a great set of CD's and a few good books).....He has made a huge difference in the way we run our business....with his help we grew from 8,000 to 18,500 and before the end of teh year we will be moving yet again into our new 25,000 facility....


Our insurance covers our in house trainers and coaches( my wife oversees this portion of the business- if you want specifics I will get them for you).....if you plan on using contractors make sure you are set as "additionally" insured on their policy....make sure they stay current as well!
God owns my business I am but his steward!

[Glenn King]

Chad . Congrads sounds like you have done great in your business life . More importantly sounds like you've got your spiritual life together too . I would like it very much if you would possibly pm me about your additional insurance or umbrella insurance . I really want to have different things going on in the gym inorder to attract a wide base . thanks