4 Signs It's Time to Expand Your Fitness Business

Whether you’ve thought about introducing new services, opening a bigger space, or adding another location altogether, if you have your eyes set on growth, you’re not alone. A recent Mindbody customer survey found that over 40% of fitness business owners are ready to start growing again.

Is your business ready to expand? Maybe. Here are 4 indicators the answer is yes.

1. You have loyal members—and they’re asking for more

Recurring revenue is the best revenue. If you have a strong membership base (according to Mindbody University, that means 60%+ of your revenue is from autopays) you already have recurring revenue you can count on. More importantly, you have a loyal following that wants to support your success.

Of course, you’ll want to pay attention to your member retention rate. A sudden spike in autopays doesn’t necessarily mean you should expand right away. Pay attention to patterns over time. More on metrics in a bit.

2. You’re running out of space

Struggling to find room to store equipment and inventory? Are members fighting for space during every class? If waitlists are the norm and your capacity utilisation is at 65% or higher, it might be time to expand. A larger or second location will give everyone a bit more breathing room.

That said, first take a hard look at your existing space and schedule. Are you using what you have to its full potential? Are there opportunities to expand your operating hours, grow your schedule, or utilise your space more efficiently to generate revenue? Only when you’ve checked these off your list should you think about taking the next step.

Want to expand your current location? This is probably the simplest and least risky way to grow. Consider how you might convert previously underused spaces and make the most impact with the least amount of construction. Commercial buildouts are expensive and take time—especially these days.

Considering a second location? When looking for “the perfect spot,” you don’t want to be too close, or too far, from your current location. Most people don’t want to commute more than 8-12 kilometres from their home or work to get in a workout. With a nearby location, you can leverage your current reputation in a neighbourhood that’s home to some of your current clients as well as many prospective customers. That said, don’t choose a location that’s too close and will cannibalise too many clients from your current space.

Another option altogether? Look for fitness businesses for sale. Often times, they come complete with their own membership base and are less expensive than starting from scratch. Download our checklist to learn how to successfully purchase an existing fitness business.

3. Your financials tell the right story

We touched on member retention earlier, but that's just one of the metrics you’ll need to review as you plan for what’s next. You’ll want to keep tabs on:  

• Net income. Is your business profitable? Is your bottom line consistently growing? Do you have savings to access

• Gross revenue. Are sales trending up? By how much? Will it continue or is it seasonal?

• Return on investment. How is investing in your growth going to provide a return? When? How much?

Need help making sense of the numbers? Consider working with a Mindbody Certified Business Consultant to support your growth.

4. The industry is on the rise

While the industry’s performance isn't a make or break for your unique business, it is indicative of overall consumer demand. Thankfully, the wellness industry is on an upwards trajectory. In fact, 78% of consumers say wellness is more important than ever. Even in the face of inflation, a recent Mindbody survey found that half of consumers feel that wellness is too important to cut back on spending.

What’s next for fitness? See what the biggest brands expect in 2023—and beyond.