Your decision to sell your fitness business is personal and should align with your future goals. Do you want to retire, explore new opportunities, give the gym a fresh start? Or maybe it was assumed by your gym business plan to have a long-term investment? Selling could open the door to exciting new possibilities. How to do it profitably?
Key Takeaways
- Selling a business in the gym industry is not always caused by the fact that having an own gym may be quite a challenge or the owner’s salary is unsatisfactory. Some entrepreneurs treat it as a long-term investment and count on earning more money in a longer perspective.
- Selling a big or small business in the gym industry is a complex process, but don’t get discouraged. Follow a few steps we suggest and go through the whole process smoothly!
- A gym selling process can be presented in the following points: prepare financials, evaluate the business, grow your gym’s value (for example thanks to introducing a gym software), find a buyer, negotiate and transfer ownership.
Why do Gym Owners Sell the Gym?
The decision to sell your gym business is not always an easy one. The motivations behind selling can vary greatly, depending on personal circumstances, business goals, and where you see yourself in the future. Here are some potential reasons why you might choose to sell your gym, each with its own set of underlying factors and benefits.
1. Burnout and Fatigue
After years of hard work, you might feel emotionally drained or unmotivated. If your idea on how to make money in fitness has become more of a burden than a passion, selling it can give you a break and free you from stress, allowing someone else to bring fresh energy into the business.
2. New Better Care of the Business
You may believe that the gym business needs a fresh perspective. A new owner with energy and innovative ideas could help grow the business in ways you’re no longer able to. Their enthusiasm could provide the momentum needed for the gym’s future success in the fitness industry.
3. Expand Brand and Sell Profitably Later
Selling the gym might be part of a larger plan to scale your brand. Thinking of expanding into a chain or franchise? Selling your current gym could help raise capital and establish a stronger brand presence to perform a business valuation at the right time for future sales at a higher profit.
How to Sell a Gym in 12 Steps
Below we provide you with a step-by-step guide for gym owners on how to sell a gym business with a maximum profitability.
Step 1: Research Comparable Gyms
Before putting your gym up for sale, you need to get a clear understanding of the market landscape. Research the prices of similar gym businesses that are for sale in your region, focusing on those with comparable sales, scale, facilities, gym equipment brands and quality. This will give you a solid benchmark to price your gym competitively, not only think of a rough estimate.
Make sure to consider factors such as:
- Gym size (How many square feet or meters does it cover?)
- Location (Is it in a high-traffic area? A gym based in a no-competition zone may have more profit potential.)
- Client base (Do you have a loyal following or a diverse demographic?)
- Tangible assets & their quality (Is your gym stocked with top-of-the-line equipment or older models?)
- Unique offerings (Do you offer specialized services or unique programs?)
This market research will also help you determine if your asking price is reasonable and if any adjustments are needed to make the gym more attractive to buyers.
Step 2: Assess Regional Demand
The demand for gyms can vary widely depending on the region. Assess the local market to understand the potential for gym businesses. Research factors such as population demographics, fitness trends, and competition in your area. A region with a growing health-conscious population or limited gym options could significantly increase the value of your business.
Consider these points:
- Population growth (Is your area seeing an increase in residents?)
- Fitness trends (Is fitness gaining popularity in your region?)
- Competition (How many gyms are in the area and what are their offerings?)
- Client willingness (Do your existing members express interest in continued gym services?)
If you’re unsure, you might also consider doing a survey or having informal conversations with clients to gauge their willingness to continue using the gym post-sale.
Step 3: Demonstrate Business Value
To successfully sell your business, you need to effectively communicate the value of your gym to prospective buyers. Gather data and evidence that show the gym’s performance and growth potential. Use your gym management software to generate reports that demonstrate key metrics like:
- Membership numbers (Current and past trends in gym reports)
- Retention rates (How many members renew memberships each year?)
- Revenue (Monthly, quarterly, and yearly income)
- Profit margins (How much profit is the gym making after expenses?)
- Growth over time (Has the gym’s performance been improving or stagnating?)
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By presenting these documents, you can provide transparency and build trust with buyers. It’s also crucial to outline what sets your gym apart from others – whether it’s your unique service offerings, loyal client base, or the community atmosphere you’ve cultivated.
Step 4: Prove You Gym’s Financial Performance
Having well-organized and accurate financial performance documentation is essential when selling your gym. Buyers will want to see clear and transparent records to evaluate the profitability and sustainability of the business, for example no debt commitment.
Ensure that your financial records, such as:
- Profit and loss statements (Detailed breakdown of income vs. expenses)
- Tax returns (Typically from the last three years)
- Balance sheets (Assets vs. liabilities)
are up-to-date and easy to understand. If there are any irregularities or red flags, be prepared to explain them.
Additionally, make sure all contracts with employees, suppliers, and clients are organized, so potential buyers can easily review them during due diligence. You can handle that easily using gym staff management software to keep employee documentation in order and gym membership software for organizing all the client topics.
Step 5: Improve the Gym’s Present Value
Before selling, consider making strategic improvements to increase the value of your gym. Small enhancements can make a big difference in how potential buyers perceive the business. Consider these changes:
- Implement Gym Management Software: Invest in a management system to streamline operations and raise the image of a professional place.
Manage your gym
like a pro
Get more online bookings and increase your gym profit
- Host events: Organize gym events, challenges, or health-related workshops to attract attention and be recognizable.
- Have a professional website: Hire a fitness industry-savvy website creator like WodGuru, who provides the perfect tool for this purpose: their website builder.
- Update Facility: Replace old equipment or give the gym a fresh coat of paint.
- Community engagement: Increase interaction with local businesses or offer group classes to boost visibility.
- Introduce a members app: It makes them loyal to the brand thanks to an easy and quick experience with it.
These changes show that the gym is well-maintained, forward-thinking, and has growth potential. Potential buyers will feel more confident in taking over a business that appears well-positioned for future success.
Step 6: Consult a Lawyer
The process of selling a business involves several legal considerations, so it’s crucial to consult with a lawyer who specializes in business transactions. A lawyer will help you navigate the legalities of selling your gym, including:
- Reviewing contracts (Ensuring that all contracts with clients, employees, and suppliers are in order)
- Drafting a sale agreement (A legal document that outlines the terms of the sale)
- Addressing non-compete clauses (If applicable, ensuring you’re not restricted from opening a competing gym nearby)
- Protecting intellectual property (If your gym has any trademarks or proprietary software)
They can also advise you on important legal aspects and help ensure that the sale proceeds smoothly and legally.
Step 7: Brand Valuation Method - Hire a Specialist
To accurately determine the present value of your gym, it’s helpful to hire a brand valuation expert. This professional can evaluate not only the tangible aspects of your business (like equipment and facilities) but also intangible factors such as:
- Your gym’s reputation (How well is it known in the community or online?)
- Brand recognition (Is your gym a trusted name in the fitness industry?)
- Client loyalty (Do members return for the long term or renew memberships regularly?)
A valuation specialist will give you an impartial, expert assessment of your gym’s market value, which can help you set a realistic asking price and improve your negotiating position with potential buyers.
Step 8: Take High-Quality Photos
When marketing your gym for sale, first impressions are crucial. High-quality, professional photographs of your gym’s interior, exterior, equipment, and community spaces will help create a positive first impression for potential buyers. Key areas to photograph include:
- Gym layout and equipment (Show off your best equipment and well-organized spaces)
- Client areas (Highlight amenities like locker rooms, lounges, or recovery zones)
- The atmosphere (Capture the vibe and community feel of the gym)
Good photos showcase your gym in the best light, making it look clean, modern, and ready for business. If possible, hire a professional photographer to capture the gym’s full potential, ensuring a visually appealing presentation.
Step 9: Write a Compelling Description
Along with great photos, an enticing and well-crafted description of your gym is essential in attracting the right buyer. Write a compelling narrative about your gym’s journey, achievements, and what makes it unique. Key points to include:
- Gym’s history (How long has the gym been in business? What milestones has it reached?)
- Key selling points (Mention any special services, community programs, or client-focused offerings)
- Clientele (Describe the type of members you serve and any loyalty programs in place)
- Location (Highlight the gym’s proximity to major roads, public transport, or local amenities)
A clear, persuasive description will make your gym stand out and pique the interest of prospective buyers. If writing isn’t your strength, consider hiring a professional copywriter to craft the perfect pitch for you.
Step 10: Find the Best Buyer Without Causing Panic
When you start looking for buyers, it’s important to do so discreetly, so you don’t cause panic or uncertainty among your current clients or staff. You want to avoid alarming them, as it could affect membership retention and daily operations. Instead of publicizing the sale, use targeted methods to find potential buyers, such as:
- Contacting other gym owners (Look for individuals who may be interested in expanding their portfolio)
- Working with brokers (Specialized brokers can help connect you with serious buyers)
- Reaching out to industry investors (Those already involved in fitness businesses may be interested in acquiring another gym)
Maintain normal operations and keep communication with clients and staff as usual. You can also approach current staff or clients who might be interested in taking over the business.
Step 11: Announce the Sale When It’s Sure
Once you have finalized a sale agreement with a buyer, it’s time to announce the sale to your clients, staff, and any relevant parties. However, make sure that all the details are confirmed and the transaction is nearly complete before making the announcement. Key points to consider:
- Transparency (Be clear about the ownership change and how it will affect clients)
- Reassurance (Ensure clients that the gym’s quality and services will continue under new ownership)
- Positive tone (Frame the announcement in a way that shows the gym’s continued growth and success)
The last thing you want is to create confusion or disappointment if the sale falls through at the last minute. Be strategic in how you announce the news to avoid unnecessary disruption.
Step 12: Prepare for the Possibility of No Sale
Not every attempt to sell a gym will be successful, and that’s okay. Sometimes, market conditions or a lack of interested buyers can delay or prevent a sale. If the sale doesn’t happen, don’t panic.
Don't doubt that your gym will sell
Its market value is solid, and even if an immediate gym sale is unsuccessful, you can always revisit it later.
Consider these steps:
- Reevaluate your strategy (Is the asking price too high? Should you make improvements before relisting?)
- Grow the business further (Use the extra time to boost memberships or enhance gym offerings)
- Explore other opportunities (Look into diversifying your business or attracting new buyers in a different market)
Not selling immediately doesn’t mean failure – it could just be a temporary setback, and you can always try again later.
FAQ
A gym’s worth can vary depending on factors like its location, membership size, equipment quality, profitability, and market conditions. Typically, it’s valued using a multiple of its annual earnings before interest, taxes, depreciation, and amortization (EBITDA).
To value a gym, consider its revenue, profits, customer base, equipment value, lease agreements, location, and potential for growth. You can use valuation methods like income-based (EBITDA), asset-based, or market comparison approaches. A due diligence process is essential to assess financial health.
A gym selling process can be presented in the following points:
- Prepare Financials: Ensure financial performance records are up to date.
- Evaluate the Business: Determine its value through appraisal or using methods like EBITDA.
- Market the Gym: List it with brokers or on online platforms.
- Find a Buyer: Screen potential buyers for financial capability.
- Negotiate: Agree on terms, including price and transition details.
- Transfer Ownership: Finalize legal documents and ensure a smooth handover.
