Whether you’re an avid fan, a former athlete, or are simply looking for a new stream of revenue, starting, opening, and operating your own basketball gym can be a great way to stay in tune with the game. However, starting your own basketball gym is not all fun and games.
Below, we’re going to show you how to start a basketball gym and what is required from you, and your facility, to make it successful. Running a basketball gym is much like running a real gym and requires dedication, patience, working capital and just a bit of luck.
What is a Basketball Gym?
A basketball gym, contrary to more commercial gyms such as LA Fitness, Gold Gym, or Planet Fitness, are gyms specifically designed and geared towards basketball. These gyms serve as recreation centers for the local community and offer basketball centric classes, workouts, drills, and conditioning.
And, contrary to many other niched gyms, basketball gyms are typically much larger and require more square footage to house multiple basketball courts, treadmills, and space for proper basketball conditioning and strength training.
In addition to housing basketball courts and specific cardio and muscular equipment, basketball gyms also provide members with one-on-one or team exercises to help their members hone their basketball skills. Similarly, a basketball gym will typically host group classes on specific basketball drills and will also be a community center for members to play pickup games.
Location, Location, Location
As the old real estate adage goes, location, location, location.
If you are looking to start a basketball gym, then the location is your most important factor and will likely play a determining role in your success or failure. Many gyms are successful simply due to their ideal location, being close to major sources of foot and automobile traffic, while maintaining a significant presence within the community.
And similarly for a basketball gym, the location is everything.
However, determining an ideal location for your basketball gym can be a bit more difficult than choosing the location for a commercial gym. As commercial gyms tend to attract wide swaths of the population, basketball gyms simply do not.
You will want to find a location that is both centrally located and one that is near your target audience. Similarly, you will want to find a location that is not being served by already established basketball courts or nearby gyms which have available courts. These typically include larger gyms such as LA Fitness and more luxury ones such as Lifetime Fitness.
Plan Out Your Business
When it comes to starting a basketball gym, having a business plan can many times be the difference between success and failure. And although location is important, not being prepared and not having a proper business plan can doom a business from the get-go.
Before even signing a lease or coming up with a name, you should determine how much the startup costs are for a basketball gym. For a modest basketball gym, you can be looking from anywhere between $100,000 to $300,000. This will include setting-up basketball courts, purchasing gym equipment, and purchasing basketballs and other basketball related products.
Similarly, you should also plan out your ongoing expenses. This not only includes monthly rent expenses, but also employee expenses, utilities, insurance, advertising and marketing, and additional equipment.
Lastly, within your business plan you should determine how you are going to make money. Now, while of course the bulk of your monthly revenue will be coming from membership dues, you will need to determine how much to charge each member on a monthly basis.
While many commercial gyms charge between $30 to $50 per month, as you are a niche gym, you may need to charge more. It is also prudent to determine whether or not you will be offering discounts for certain members, including senior citizens, members under the age of 18, and families.
However, when it comes to monthly revenue, you should also explore additional streams such as providing vending machines, personal training, bootcamps, classes, and tournaments. These additional services will not only provide you with additional monthly revenue but will also help you attract new members.
Finally, when planning your business plan, you should determine what your expected costs are and how many members you need to breakeven. Although you will obviously be looking to make a profit, breakeven will help you to determine the exact number of members you need to keep your business afloat.
When determining how much to charge members, be sure to begin drafting the member agreement. This agreement will act as a contract between the basketball gym and the member and will ensure that you are paid each month.
Choose a Name for Your Basketball Gym
Another important aspect of starting a basketball gym is determining the name of the gym. This is an important step and one that will not only help you to differentiate yourself from the competition, but one that will help you begin establishing your brand.
Once you have determined your basketball gym name, be sure to check your state’s business records to ensure the name is available. similarly, you should check both state and federal trademark records to ensure you are not infringing on another businesses trademark.
Lastly, be sure to confirm that the name is not being used by anyone else online. This means checking the potential URL of the business, which can be done here. In addition, you will want to ensure that any potential social media handles, including for Facebook, Instagram, Twitter, and the like, are available.
Form a Legal Entity
As a business owner, you will want to form a legal entity to protect yourself from any mishaps and to properly report taxes. There are a number of different legal entities which you can choose from, and each has their benefits.
- Limited Liability Company (LLC) – Perhaps the most common legal entity, an LLC is a hybrid between a corporation and a sole proprietorship. As an owner of an LLC, you will be referred to as a member and if you are an individual owner, you will be known as a single member LLC.
- For taxation purposes, an LLC is considered a “pass through entity”, meaning business income passes through the business to LLC members who report their share of the profits or losses on their individual tax returns.
- For liability purposes, an LLC protects members from personal liabilities for business debts and claims.
- Sole Proprietorship – A sole proprietorship legal entity is one that is owned and run by one individual. Within a sole proprietorship, there is no legal distinction between the business and the owner.
- For taxation purposes, a sole proprietorship has pass-through taxation. This means the business does not file a tax return. Rather, the income or losses from the business are passed to the owner who reports them on their own tax returns.
- For liability purposes, a sole proprietorship entity has unlimited personal liability for any liabilities that the business incurs. This can be lessened via insurance and proper contracts.
- General Partnership – A general partnership is ideal if two or more people are looking to start a business for profit. These partnerships can be created easily, but a partnership agreement should be drafted to ensure no foul play.
- For taxation purposes, a general partnership is only a tax-reporting entity. This means that an annual information return must be filed with the IRS, but the partnership does not pay federal income taxes. Rather, each partner will pay taxes based on their share of the profits or losses.
- For liability purposes, general partnerships also have unlimited liability, and each partner is responsible for any liabilities.
Register for Taxes
As a business, you will need to register with a variety of state and federal taxes before you can open for business. This is done by filing for an EIN, or employer identification number. This can be done directly with the IRS and ensures that your business is legitimate.
Open a Business Bank Account and Credit Card
As a business owner, you will want to keep your business expenses and revenue separate from your personal ones. That is why you should only use a dedicated bank and credit card account for your business. When your personal and business accounts are mixed, you risk your personal assets in the event the business is sued or declares bankruptcy.
Obtain Necessary Permits and Licenses
Similarly, as a legitimate business, you will want to acquire necessary permits and licenses. Failure to do so can result in fines or even the closure of your business. These permits and licenses vary by state, so you should check with the SBA’s state licenses and permits guide for more information.
And although the landlord is typically responsible for acquiring a certificate of occupancy, or CO, you should ensure that your landlord has a valid CO before signing any lease agreements.
Get Business Insurance
Unfortunately, injuries do occur. And although you may think that, that will not happen to you, nothing can be further from the truth. That is why you should obtain proper business insurance. Business insurance will protect your company in the event of a covered loss. To begin, you should obtain general liability insurance, which will cover your business from a range of risks.
Build Your Online Business
In the 21st century, all businesses have an online presence. This not only includes a proper website, but also social media accounts. These presences will not only help you to attract new members but will also provide members with useful information regarding your business.
Similarly, as a small business, you will want to setup both a Yelp and Google My Business account. These services will allow your basketball gym to be found by the general public and will also provide them with general information regarding your business.
If you are unsure of how-to setup a business website or social media accounts, don’t hesitate to reach out to family and friends for help. If you’re still unable to, then hiring someone to help is an ideal solution.
Begin Your Marketing and Advertising Efforts
While the old adage of, build it and they will come, holds true to a certain degree, you never want to risk the success of your business to chance. Rather, you should begin your marketing and advertising efforts before you launch your basketball gym.
There are a plethora of ways you can market and advertise your basketball gym, with some being paid avenues and other being free. You will need to determine the best route for marketing and advertising your business to reach the most people and ensure a healthy level of foot-traffic and eventual member sign-ups.
Conclusion
Although starting your own basketball gym is a fun, exciting endeavor, it comes with a number of challenges and risks. However, if you concentrate on providing a superior level of service, attractions, and equipment, then you can succeed.
Be sure to follow our guide and that you setup your business correctly. In addition, marketing and advertising your business will help you to attract new members and continue growing out your basketball gym in your local area.