Gym Business Plan: Pricing, Break-Even and Cash Flow
Gym Business Plan: Pricing, Break-Even and Cash Flow
The short answer: A gym business plan comes down to four numbers: your monthly fixed costs, your average revenue per member, how many members you need to break even, and how many months of runway you have while you get there. Everything else, your pricing tiers, your marketing plan, your staffing model, feeds into one of those four. Work them out before you sign a lease, not after, because they tell you whether the gym you want to build can actually support itself.
Pick your member model
Your member model decides your price, and your price decides how many members you need. These are typical Australian weekly price bands by model.
| Member model | Typical weekly price |
|---|---|
| Open-gym 24/7 access | $15 to $25 per week |
| Group training and coaching | $40 to $80 per week |
| Reformer Pilates | $50 to $90 per week |
| Hybrid (a blend of the above) | Weighted average of your mix |
Most independent gyms run a hybrid model, blending open-gym access with group coaching and sometimes Pilates, which is why the break-even maths below uses a single blended price rather than one figure per tier.
Each model asks something different of your business. Open-gym access is the lowest price and the highest volume game: you need a lot of members and low staffing to make the maths work, because each member is paying for space and equipment access rather than a coach's time. Group training and coaching sit at a higher price because you are selling a coach's attention as much as the floor, which means your member cap is set by how many people one coach can run well in a session, not by square metreage. Reformer Pilates sits at the top of the price range and usually draws a different member again, often someone who would never have walked into a strength gym on their own, which is exactly why it widens who will pay to train with you rather than just adding another room.
The break-even maths
Here is the calculation with real numbers. Say your monthly fixed costs, rent, wages, insurance, software, come to $28,000, and your blended price across your member mix averages $60 per week per member.
- Convert the weekly price to a monthly figure: $60 per week multiplied by roughly 4.33 weeks per month is about $260 per member per month.
- Divide monthly fixed costs by monthly revenue per member: $28,000 divided by $260 is approximately 108 members.
- That is your break-even point: 108 members covers your fixed costs with nothing left over. Every member past that number is where your margin starts.
In practice, published break-even figures for a 200 to 300 sqm hybrid gym commonly land between 120 and 250 members, depending on the fixed cost base and blended price. This example sits toward the lower end because the fixed costs assumed here are lean and the price point is on the affordable side of the group training band. Run the free Financial Planner with your own rent, staffing and pricing to get your actual break-even number, free with a sign-up.
It is worth seeing how sensitive that number is to price, because it moves more than founders expect. Drop the blended price from $60 to $50 a week and monthly revenue per member falls to about $217, which pushes break-even up to roughly 129 members, 21 more members just to cover the same fixed costs. Lift the price to $70 a week instead and monthly revenue per member rises to about $303, bringing break-even down to approximately 92 members. A relatively small change in weekly price moves your break-even member count by double digits, which is why pricing deserves as much attention as your marketing plan.
The ramp: nobody opens at break-even
No gym opens on day one with a full membership base. Most founders ramp towards break-even over 6 to 12 months, and the gyms that ramp fastest are the ones that pre-sell hard before opening. A pre-sale campaign with founding member pricing, a discount locked in for members who join before opening day, gets people committed and paying before you have even switched the lights on.
A working capital buffer of 3 to 6 months of operating costs is what covers the gap while you ramp. A quiet first quarter is normal. Running out of cash because there was no buffer for it is the actual risk.
A founding member offer works because it trades a discount for certainty. You are asking someone to commit to a gym they cannot see yet, so a lower rate locked in for signing early is a fair exchange, and it gives you a firm number of members and a firm amount of cash before you have spent a cent on running the place. Set a real deadline on the offer, a date it closes rather than a vague "early bird" that never ends, and promote it hardest in the four weeks before your opening date rather than starting too early and losing momentum.
Where members come from
Referral is the cheapest channel you have and the one most founders under-invest in: a member who refers a friend costs you almost nothing to acquire. Local organic, a well-set-up Google Business Profile, local search visibility, community presence, builds slowly but keeps working long after you stop paying for it. Paid social gets you in front of people fastest, but it comes with a real cost per lead that needs to be weighed against what a member is actually worth to you.
That is the maths that matters: your cost to acquire a member (CAC) against what that member is worth over their time training with you (lifetime value). If CAC creeps close to or past lifetime value, you are paying more to win a member than they will ever be worth. Model this with the free Member Growth Planner, free with a sign-up, before you commit a marketing budget.
A simple referral structure, a discount or a free month for both the existing member and the person they bring in, is worth setting up before you open, not months in. It costs you almost nothing until it works, unlike paid social, which costs you the same whether the lead converts or not. Treat referral as your default channel and paid social as the one you turn up or down based on what your CAC to lifetime value ratio is actually telling you.
The numbers to check weekly once open
- New joins for the week.
- Cancellations and churn for the week.
- Total active members, and how that compares to your break-even target.
- Revenue per member, to catch pricing or billing issues early.
- Cost per new member from marketing spend, so CAC does not drift without you noticing.
Checking these weekly, not monthly, means you catch a problem while it is still a small one. A monthly report tells you churn was high three or four weeks after it started. A weekly number tells you in the first week, while you can still call the members who left and find out why, and while a small pricing or coaching issue is still small enough to fix before it shows up in your break-even count.
Use the free Pre-Sale Member Calculator before you open to set your targets, then track against them once doors are open.
Get your free 3D gym design: send us your floor plan and most founders have renders back within a week, then a video walkthrough and as many layout changes as it takes. Request your free design here, or plan your numbers with the free founder tools.
Frequently asked questions
How many members do I need to break even?
It depends on your fixed costs and your price, but a 200 to 300 sqm hybrid gym commonly breaks even somewhere between 120 and 250 members. Divide your monthly fixed costs by your average monthly revenue per member to get your own number.
What is a good price for gym membership in Australia?
Open-gym 24/7 access typically runs $15 to $25 a week, group training and coaching memberships $40 to $80 a week, and reformer Pilates $50 to $90 a week. Price against what your local market will pay and what your model actually costs to deliver, not just a competitor down the road.
How long does it take a new gym to reach break-even?
Most gyms ramp over 6 to 12 months rather than opening at break-even on day one. A strong pre-sale campaign shortens this by putting members in the door before you open, but a gradual ramp afterwards is still normal.
Should I pre-sell memberships before opening?
Yes. Nobody opens at break-even, and a pre-sale campaign with founding member pricing puts cash in the bank and members walking in from day one, instead of a slow build over your first quarter.
What do LTV and CAC mean for a gym, and why do they matter?
CAC is what it costs you to acquire one new member through marketing and referral. LTV is what that member is worth over their time training with you. If CAC is close to or higher than LTV, you are paying more to win a member than they are worth, which is not sustainable growth.
What numbers should I check every week once I am open?
New joins, cancellations, total active members, revenue per member, and your cost per new member from marketing. These five numbers, checked weekly, will tell you whether you are tracking towards your break-even target well before the monthly numbers would show it.
How much working capital do I need to cover the ramp?
Most founders keep 3 to 6 months of operating costs in reserve to cover the gap between opening and reaching a steady membership base. This is separate from your startup budget and needs to be sitting in the account, not spent getting to opening day.
Ready to see your gym before you build it? Request your free 3D design and have renders back within the week, or run your numbers first with the free founder tools.