What Are the Startup Costs Like for a New Martial Arts Gym?

So you're considering opening a new martial arts gym? There are many things to consider and decisions to make before you can take the next steps. If you're like almost everyone else who's considering opening a small business, money is an important factor. 

You know that you need a large cash reserve to open a new martial arts gym, but how much? This guide can help you understand the startup costs for opening a new martial arts studio, and where the money goes. 

Space for Your New Martial Arts Gym

As real estate agents are fond of saying, it's all about "location, location, location." When you're opening a new martial arts gym, you'll need an ideal location that sees a lot of traffic passing it each day. This traffic is your pool of prospective students, and you need them to see your new studio. 

Before you start looking at commercial properties, it's beneficial to know how much space you're going to need. Commercial real estate is rented by the square foot at a rate of per year. You'll need room for at least:

• Classes 
• Visitor and viewing area
• Bathroom and changing rooms
• Reception area
• Office for administrative work

You'll need around 1,200 square feet for the classes and around 1,000 square feet for the other areas. The cost of rent depends on the area you live in. If you live in Seattle, you'd expect to pay more than someone living in a small town in Alabama. 

The average yearly cost of renting a commercial space in a major city runs between $25 and $75 per square foot. If the space for your new martial arts gym is 2,200 square feet, then the yearly cost of rent would average between $55,000 and $165,000 per year. 

As part of your startup cost, you'll more than likely need to pay the first and last month's rental payments. Also, it's a good idea to have three months' worth of rental payment in reserve as part of your startup costs, so around $23,000 to $65,000. 

With numbers like this, it's essential that you lease only the space you need and look for good deals. You might want a little space to grow, but don't go overboard. 

Insurance

There is some insurance that you're required to have per regulations from federal, state, and local regulations. For example, if you have employees, you're going to need a workman's compensation policy. 

You might think that you can skip coverage and save money. However, this can put you in a dangerous position. When you're teaching adults and children a new form of martial arts, which is a very physical activity, there's a high possibility of an accident or an injury. 

Without the right liability insurance policy for your martial arts gym, you could find your new martial arts gym in danger. A judgment or settlement against you could wipe out your cash reserve or place your personal assets in danger. 

While you look for only the best employees and run a background check before hiring someone, you might find yourself liable for something one of them did or said. Insurance can provide you with a layer of protection in this situation. 

Also, you're responsible for damages to your rental property. A burst water pipe can create water damage that could cost a small fortune to repair. The right insurance can cover these damages. 

You can expect to pay around $1,100 per year for insurance. It's a good idea to include a year's worth of insurance payments in your startup costs. 

Licensing Fees

Depending on the type of martial arts gym you want to open, you might need to pay licensing fees. Most martial arts disciplines have a governing board. They ensure that the studios operating under their name have the right credentials and training. 

You need to check with the governing body for your branch of martial arts to learn the steps and fees for licensing. You should expect to pay as little as several hundred dollars each year and as much as several thousand for licensing fees. 

Equipment

You'll need at least mats for your new martial arts gym, but you might need gloves, punching bags, and more. You don't need to buy all the equipment; you can lease it. However, you need to add several months' worth of equipment financing payments into your startup costs. 

Depending on the type and amount of equipment you need, your financing payments can range between $50 and $200. You might even be able to find a financing program that allows you to make monthly payments based on your income. 

Website

No one looks for a martial arts gym in a phone book anymore. You need a website to compete for students with other studios in the area. It's a good idea to have your website up and running before you open. This can help build excitement. 

The good news is that you don't need hundreds of pages, so the cost is reasonable. You need a professional to build and maintain your website. The cost should run you around $100 per month, and you should expect to have enough cash reserve to pay for several months as part of your startup costs. 

Marketing

Marketing is essential for any business, especially in the first few months or years. Since you're looking for students to sign a yearly contract, you need to find them quickly to start making money. 

Marketing can include a variety of things, such as:

• Emails
• Social media
• Mailings
• Ads in the paper or online
• Events

You can handle some marketing yourself, but you need a professional who can garner the most interest in your new martial arts school. This can cost anywhere from a few thundered a month to a thousand or more. 

When you're opening a new martial arts gym, you should expect the total startup costs to run you between $60,000 to $100,000. Nexo Fit wants to help you succeed. Our team can offer your background checks, insurance, equipment financing, website design and maintenance, and more.  to learn more.