Posted by Eamonn Curley on 27 September, 2018
We talked to Ibrahim Mohammed of MYGYM Bristol on the importance of a well thought out business plan and we lay out what you need to create one of your own.
A Different Path
Fitness entrepreneurs start gyms for a number of reasons and what drives them on in the pursuit of their goals can differ from person to person.
For Ibrahim Mohammed, MYGYM Bristol was born out of necessity. His journey in fitness started with Taekwondo, a Korean martial art defined by its fast and high kicking style. During his time as an instructor at a club based out of the University of the West Of England (UWE), he found himself and other combat clubs facing the prospect of having to leave the building they were housed in due to its upcoming demolition. It put him and his Taekwondo club into a tailspin for which they were unprepared.
He decided to take it upon himself to find a new space in Bristol for the club but soon ran into difficulties, with the majority of leisure centers and gyms in the city unable to accommodate them. And when he discovered that other clubs from UWE were experiencing similar problems, he was struck with an idea.
“I decided to approach the other clubs and see it they would be up for supporting a venue that would be there to cater to their hiring needs” says Ibrahim. They jumped onboard with the idea and, alongside his business partner Luke Boulton-Major, they approached UWE with their idea.
“In the end it took us 4 to 6 months to find a space in Bristol” says Ibrahim. And once we found it, the University agreed to a 3-year contract with us which paid the rent for the first while”
And so in September 2012 MYGYM Bristol opened its doors for the first time on Dean St. in the south of the city. While initially a martial arts venue to house UWE’s combat clubs, Ibrahim soon added a fully-functioning gym on the back of the growing demand he noticed for such a facility in the area. He opened MYGYM Bristol as a fully-functional gym in January 2013 and hasn’t looked back since.
The Foundation For Success
Ibrahim’s journey to becoming a gym owner may have been slightly unorthodox but the foundation of his achievement is something that is replicated across the board by most successful fitness entrepreneurs.
It’s the business plan.
Before you even lay down a mat or set up a squat rack, the business plan is something you need to create to know where you are going and how you are going to get there.
“What I believe is that once you write down what you are going to do, you know exactly how to go about it, rather than guessing along the way” explains Ibrahim. “You know how you are getting from A to B and on to C”
The business plan is a road-map. It takes in your vision for the business, the short and long-term goals, how you intend to market the business, and your financial projections. It is a document that you can go back to each time you need to make a key decision or need to move your business to the next level.
As the gym grew over time, Ibrahim found the plan extremely beneficial in bringing MYGYM to the next level. He explains: “One of the big milestones for was to try and own the building. To achieve this we approached the Regional Growth Fund which had funding from the EU for any emerging start-up that had real plans.”
Using the business plan they had created as part of their application process led them to receiving the funding they needed to finally own their building, which Ibrahim says has had an extremely positive knock-on effect for the rest of the business.
“We received £80,000 in funding and we were able to use that to secure our property which we now own” he says. “And this has led to a reduction in the overall costs of running the business and has enormously increased our asset value.”
So as you can see from Ibrahims experience, a business plan is vital not only in starting up your gym but it’s also a key document that can help your growth and development.
An important point to note is the plan itself is an evolving document that grows with your business. Think of the MYGYM Bristol journey. From a strictly martial arts venue for hire they have evolved into a fully-functioning gym that now has the addition of Olympic weightlifting and power-lifting facilities. And on every step of the journey Ibrahim has gone back and changed his business plan to reflect where he is and where he is going.
Because that is what the business plan essentially is. A snapshot of the current state of things in your gym and where it will be headed in the next 3 to 5 years.
Creating A Plan That Works for You
The significant progress of MYGYM Bristol comes down to concise planning and a good business mindset. Ibrahim’s success in this regard is partly down to his background, holding a degree in marketing and information systems from the University of the West of England, which helped him formulate the business plan in the beginning
You don’t need to have a business background to write a business plan but you need to get into a business mindset when it comes to laying out your vision for the gym. A large part of this is being realistic about where you are right now, where you want to be in the future and, crucially, the steps you are going to take to get there.
So to get you started on the right path we have laid out an overview of the key sections you need to cover to create a business plan that gives you a solid foundation to grow your gym successfully.
Layout of the Business Plan
This is a paragraph or sentence on your business, outlining its character and goals. It is pretty much the ethos of the company. For example Ibrahim defines the mission statement of MYGYM Bristol as “Deliver excellence in fitness and healthcare and enriching people's lives through fitness and nutritional advice.”
A summary or overview of the business plan. This is usually the first thing any potential investors will read so it needs to be clear and concise. Give a brief description of your gym and give a summary of the market analysis that has identified your unfulfilled need. Then explain why your gym is uniquely qualified to meet those needs.
For the company analysis provide a snapshot of your company in its current state. The most important topics to write about here are its founding, current business stage and legal structure.
As a part of this, provide information like important milestones you have met. For example, a big milestone would be switching from and Excel sheet to gym management software to manage your gym more efficiently.
Focus on writing about what your market is about and specific niche your gym fits into. Think of things like:
- Are you interested in a general or a specific type of fitness?
- Do you focus on beginners or more experienced gym goers?
- What are the current trends in your industry?
Put simply, this is the part of the plan where you identify your ideal customer. This is very important especially for boutique gyms as going for a “one size fits all” approach may result in poor customer retention. Think clearly of the type of person who would benefit from your type of gym and focus on them.
Analyze the competitors in the local area and divide them in two main categories:
Direct: This includes gyms similar to yours in the local area who are going after the same type of customer.
Indirect: This would be categorized as every other type of gym in the local area and other types of health and fitness based businesses that target your market with different types of products and services.
Lay out the key members of your management team and the skills and experience they can bring to help grow your business. This is not the fitness experts and trainers you hire but people with business experience. It is important to show any potential investors that the right people are in place to help your gym succeed.
Within the business plan you need to lay out how you are going to acquire members. The best place to start is to lay out the 4 Ps - Product, Price, Promotion, Place.
Product: The classes, memberships, and items you offer for sale in your gym.
Price: The amount you will charge. The product and pricing mix can be a good way of getting ahead of your competitors.
Promotion: The marketing strategy you will use to convince people to attend your gym. For advice on a digital marketing strategy read our guide to developing your own.
Place: The physical location of your gym. This will also include your online presence.
The most important part of your plan and the section that will be scrutinised the most by potential investors and lenders. You need to detail things like revenue streams and external funding as well as laying out Income Statements, Balance Sheets, and Cash Flow Statements. These must all be based on reasonable and verifiable assumptions about the market.