Fitness isn't just your hobby; it's your calling. Now, you're ready to turn that passion into a profitable endeavor by opening up your own gym. This exciting journey raises a critical question: "How much does it cost to build a commercial gym/fitness studio?" The initial investment for a gym/fitness studio can significantly vary based on the location, size, design, and the types of amenities you would like to provide.
Nonetheless, as a general guideline, you should anticipate initial start-up costs in the ballpark of $148,050.00 to $547,100.00+ to successfully open the doors of your gym. We recognize that such a wide cost range seems more confusing than helpful.
To assist you in navigating these financial waters, we have developed a comprehensive guide to help you accurately estimate the build and setup costs for your gym/fitness studio. We break down the various elements involved in this process and if you make it to the end of this guide, you'll gain a clearer understanding of the financial commitment needed to bring your dream gym/fitness studio into reality.
NOTE*
In the estimates provided below, we'll consider both the low and high ends for each range, using a 1000 square foot space for our example. While we mention gyms and fitness studios in the following points, it's important to note that the considerations discussed apply to a wide range of fitness and wellness establishments, including:
- Yoga Studios
- Pilates Studio
- CrossFit Gym
- Spin or Indoor Cycling Studio
- Dance Studio
- Functional Fitness Studio
- Physiotherapy & Rehab Clinics
- HIIT (High-Intensity Interval Training) Studio
- Martial Arts Studio (e.g., kickboxing, karate)
- Boxing Gym
- Mindfulness and Meditation Studio
- Climbing Gyms
- Boot Camp Studio
With that being said, let’s jump right in!
Location - Choosing the Right Location For Your Gym/Fitness Studio:
$2,000.00 - $18,000.00
Property expenses, both at the start and ongoing, are likely to be one of your largest financial commitments. The extent of this expense greatly depends on both the location, size and existing condition of your space. The cost of a gym's location can vary significantly depending on your city and whether you opt for a highly visible storefront or a more secluded space. (For example a warehouse in an industrial area).
At the time of writing this guide, in Toronto & the GTA, the monthly lease rate can range from $2 to $18+ per square foot, totalling to an annual lease cost of anywhere between $2,000 to $18,000+/month for a 1000 SF space. If the location you select is an empty unit that already comes equipped with key amenities like bathrooms and changing rooms, you could justify a higher cost per square foot, since your essential infrastructure is already in place.
You should also budget for security deposits. It's important to note that the amount of the security deposit can sometimes be more than one month's rent and is subject to negotiation between yourself and the landlord. This amount is held in reserve and can be used by the landlord in case of missed payments or breach of lease terms by the tenant.
If purchasing a property is your chosen route, a down payment of 20-50% is generally required by lenders. For more specific details tailored to your location, it's advisable to consult with a mortgage broker or a qualified real estate agent.
When you're on the lookout for a gym space, it's important to ask the right questions to ensure the location meets your business needs. Here's a list of essential questions to keep in mind:
- How accessible and visible is your location?
- Will your renovation trigger City Developmental Charges?
- What kind of population surrounds the area, and does it match your target audience?
- Is there sufficient parking or easy access to public transportation?
- Are there any local zoning or by-law restrictions that could affect your gym?
- Is there existing competition nearby?
- What additional costs, like utilities and maintenance, should you expect?
- Does the space offer the flexibility to modify or expand in the future?
- What are the specific terms and conditions of your lease?
- Is the gym space part of a shared building, or is it stand-alone?
- If the building is shared, is your space at the end or sandwiched between other businesses?
- Is the space suitable for special gym equipment and high-impact activities?
Considering these factors will help you make an informed decision that aligns with your business objectives and operational needs.
Licenses, Permits & Insurance - Required Licenses and Permits For Your Gym/Fitness Studio:
$31,050.00 - $55,100.00
Operating a gym in Ontario, Canada requires specific licensing and insurance requirements to ensure legal compliance to protect you, your business, your employees, and your clients. It's important to note that various levels of government have distinct licensing requirements. Thus, it's crucial to ensure compliance with all permits, licenses, and regulations at the federal, provincial and municipal levels. Here are some key requirements to consider:
Business Number Registration For Your Gym/Fitness Studio:
$60.00 - $600.00
While the specific requirements may vary depending on municipality, registering your business serves as official proof and permits you to operate your business in Canada. This is a requirement required for various business activities including setting up a business bank account, interacting with the CRA, establishing payment portals, opening wholesale accounts, filing taxes, handling payroll, and applying for loans or credit accounts. The cost for this can range from $60.00 if you do it yourself or $600.00+ if you have a lawyer or accountant take care of this for you.
Check with your local city or town hall for specific requirements. For more information for the city of Toronto, check out: https://www.toronto.ca/business-economy/new-businesses-startups/business-regulations/
Zoning Certificate of Occupancy For Your Gym/Fitness Studio:
$30,000.00 - $50,000.00
A Zoning Certificate of Occupancy is an essential permit that approves either a “new use” or a “change in the use” of a building or unit to ensure compliance with your local Zoning By-laws. For instance, transforming a retail store into a Gym, or repurposing a vacant unit into a gym/fitness studio.
Depending on the existing use of your space, you may incur city development fees. These fees are determined by the city and are based on several factors including the total square footage of your space. From our previous experience, we've seen development charges ranging from $30 to $50+ per SF. It's important to note that these Development Charges (DC) are subject to annual increases and depend on a wide range of factors.
You may also have the opportunity to negotiate these charges with your landlord, which may potentially reduce your overall expense. This is why it is important to work with a qualified professional when searching for a space.
Feeling confused? Don't worry, you don't have to navigate this process alone. Project92 Construction can assist you with navigating this process. Addressing these details is an integral part of our design and permitting process to ensure the success of your project.
Commercial General Liability Insurance For Your Gym/Fitness Studio:
$330.00 - $1500.00+
Commercial General Liability Insurance for your gym/fitness studio is crucial as it covers injury or damage claims made by third parties. There are inherent risks involved in an environment like a gym, where physical activity and use of heavy equipment is common. Without general liability insurance, your business could be exposed to significant financial liabilities in the event of any accidents or unforeseen circumstances. Having robust general liability insurance safeguards your gym and your financial stability while ensuring the safety and security of your clients and visitors.
Professional Liability Insurance For Your Gym/Fitness Studio:
$330.00 - $1500.00+
If your gym employs personal trainers or offers fitness classes, professional liability insurance (also known as Errors and Omissions Insurance) will protect you against claims of negligence or harm from the services your team may have provided. It allows you to focus on your work without the constant worry of potential legal claims, knowing that you have financial protection in place.
Property Insurance For Your Gym/Fitness Studio:
$330.00 - $1500.00+
Property insurance covers damages to the physical location of your gym, including equipment, due to events like fire, theft, or natural disasters. Securing the right insurance is not just a prudent business decision, it's an absolute necessity for keeping you, your clients and your gym safe and sound. Insurance costs depend on a variety of factors and you should consult with an Insurance broker for a more accurate quote based on your business type, size, and requirements. You can anticipate annual premiums starting from $330.00 - $1500.00+.
When speaking to your broker, it's important to ask the right questions to ensure your policy covers all of your business needs. Here's a list of essential questions to keep in mind:
- What are your coverage limits and what do they mean for your business?
- What are your policy exclusions?
- Are there deductibles, and how does it work?
- How are your insurance premiums calculated?
- Are there any discounts available for bundling multiple policies?
- How will renovations or expansions of your gym affect your insurance policy?
Design & Permits - Building Permit and Design For Your Gym/Fitness Studio:
$5,000.00 - $24,000.00+
Once you have your location secured and your paperwork in order, the design phase is another crucial step before embarking on your build. This will lay the groundwork for what will become a construction masterpiece. At this stage, you will collaborate closely with a team of skilled architects, engineers, and interior designers. Together, we will craft comprehensive plans that transform your vision and specific needs into viable and practical designs.
This involves creating architectural drawings, structural plans, electrical layouts, plumbing plans and HVAC design & calculations and interior designs. When partnering with Project92 Construction, you can leave the complexity of coordinating multiple designers with us. Your project manager will seamlessly collaborate with all the necessary designers involved in your project, ensuring every detail is interconnected for a smooth and efficient building process. We've got it covered!
The expenses associated with designs and permits can vary, generally falling between approximately $5,000.00 to $24,000.00+, depending on the size and scope of your project.
Construction - Understanding Construction Costs For Your Gym/Fitness Studio:
$100,000.00 - $350,00.00
Once your design and permits receive the green light from the city, it marks the beginning of the construction phase for your project. At this stage, it's important to understand that construction costs can vary widely, and much of this variation hinges on the initial condition of your chosen site. An approximate budget for construction can range from $100.00 - $350.00/SF.
For instance, if the location you've selected is an empty unit but comes with essential amenities like bathrooms and changing rooms already in place, this can significantly reduce your initial construction costs. The presence of these pre-existing facilities means you won't have to allocate funds towards building them from scratch. On the other hand, if your chosen space requires more extensive work – such as the installation of new plumbing systems, electrical wiring, or mechanical systems (Heating, Ventilation, and Air Conditioning) or even specialized areas like saunas, pools – then you should be prepared for higher expenses. These kinds of installations not only require additional materials but also skilled labor.
Having an open and honest discussion about your budget and the extent of your renovation during the design phase is absolutely crucial. A skilled designer will collaborate with you to create a space that not only fulfills your requirements, but also works within your financial constraints. It's this collaborative approach that ensures your vision is realized while also maintaining a practical and manageable budget.
Here are some common items you will need to consider when building your new gym/fitness studio.
- Demolition
- Heating, Ventilation, and Air Conditioning
- Electrical
- Plumbing
- Framing
- Drywall
- Paint & Wallpaper
- Flooring, Tiles & Mats
- Sound Separation
- Fire Separation
- Custom Millwork
- Computer and POS system
- Furniture
- Signage
Equipment - Required Equipment For Your Gym/Fitness Studio:
$10,000.00 - $100,000.00
The cost of gym equipment can be a bit like shopping for shoes – it all depends on your style and how many pairs you want! Consider for instance the difference between a yoga studio and a CrossFit gym. In the case of a yoga studio, your equipment needs are relatively minimal, often limited to yoga mats, blocks, and perhaps a few props. These items are essential for yoga practice but generally fall within a lower cost range.
Alternatively, a CrossFit gym demands a more extensive array of equipment to cater to your diverse and intense style of workouts. This can include items like weightlifting benches, power racks, treadmills or rowing machines. The diverse range and quantity of equipment necessary for CrossFit training naturally result in higher overall equipment costs. It's crucial to recognize that your choice of gym type, the variety of workouts you plan to offer, and the preferences of your clientele will all influence the type and quantity of equipment required.
Typically, a compact functional fitness studio covering around 600 SF may allocate a budget ranging from $10,000 to $25,000 for equipment. In contrast, a more extensive commercial gym in a larger space with more equipment could see expenses ranging from $60,000 to over $100,000+.
So, How Much Does It Cost To Build A Gym/Fitness Studio?
The journey from passion to profit in the fitness industry is an exciting one. Hopefully, we've provided valuable insights to help you answer the pivotal question: How much does it cost to build my gym or specialized fitness studio? To summarize, let's tally up all of the costs we discussed above.
Location Costs
Low = $2,000.00
High = $18,000.00+
Licenses, Permits Costs
Low = $30,060.00
High = $50,600.00+
Insurance Costs
Low = $990.00
High = $4500.000+
Design & Permits Costs
Low = $5,000.00
High = $24,000.00+
Construction Costs
Low = $100,000.00
High = $350,000.00+
Equipment Costs
Low = $10,000.00
High = $100,000.00+
Total Costs
Low = $148,050.00
High = $547,100.00+
At Project92 Construction, we bring a wealth of knowledge and expertise to the table. Our experience in building state-of-the-art fitness facilities ensures that we can provide invaluable insights into not just managing the complexities of construction but also optimizing your investment for a successful and profitable gym business.
Best of luck on your exciting journey to build your dream gym! May every step of the process be smooth and successful. Here's to a thriving and healthy future for your gym!
