BJJ Gym Profit Margins UK: What You Can Realistically Expect in 2026

Why is UK gym profit data almost non-existent? Most gym owners don't publicly share financials. It's considered private business information, and many owners operate with informal record-keeping that makes accurate reporting impossible. This creates a massive information gap where new gym owners make costly mistakes that could have been avoided.

Understanding profit margins is essential for sustainability. You can have 100 members and still go bust if your rent is too high, pricing too low, or costs out of control. Conversely, you can run a profitable gym with just 50 members if costs are lean and pricing is right.

This guide synthesises data from multiple sources: UK gym owner interviews on Reddit and forums, fitness industry profit margin reports, UK gym owner income studies by Glassdoor and Salaryexplorer, and analysis of publicly available gym financials where disclosed. It's the most comprehensive UK-specific BJJ gym profitability analysis available.

The difference between revenue and profit is critical. Revenue is total income before expenses—£10,000/month revenue sounds impressive. Profit is what remains after all costs. That same £10,000 revenue gym with £8,500 in expenses has just £1,500 profit (15% net margin). Many new owners focus on revenue growth whilst ignoring whether that growth is actually profitable.

Gross Profit vs Net Profit

Gross Profit: Revenue minus direct costs (cost of goods sold). For gyms, this includes instructor wages and equipment directly tied to delivering classes. Example: £10,000 revenue - £3,000 instructor wages - £500 equipment = £6,500 gross profit (65% gross margin).

Net Profit: Revenue minus ALL costs including rent, utilities, marketing, admin, insurance, software, and owner salary. This is what matters for gym owner take-home. Example: £10,000 revenue - £8,500 all costs = £1,500 net profit (15% net margin).

Profit Margin Calculation

Net Profit Margin = (Net Profit ÷ Revenue) × 100

Example: £3,000 net profit on £10,000 revenue = 30% net margin. This is healthy for a mature gym.

EBITDA (Earnings Before Interest, Tax, Depreciation, Amortisation)

Often used for business valuation when selling a gym. Less relevant for small gym owners focused on take-home income. For owner-operators, net profit after reasonable owner salary is the key metric.

Owner Compensation Considerations

If Limited Company: Owner salary counts as business expense. Take £12,570 salary (personal allowance, no tax) then take remaining profit as dividends (8.75% tax up to higher rate band).

If Sole Trader: Owner drawings come from profit. You pay Income Tax and National Insurance on all profit.

Instructor Time Value: If you teach 20 hours/week, what would you pay someone else to do this? Count this as implicit cost even if you're not paying yourself explicitly. Many owner-operators think they're profitable but aren't accounting for their own labour value.

Year 1 (Startup Phase)

Typical Net Margin: -20% to +5% (often break-even or small loss). You're building from zero to 50-60 members by year end. It's investment phase, not profit phase.

Member Count Target: 20-60 members by end of Year 1. Start at zero, aim for 5-8 new signups per month.

Challenges: Low member count means low revenue against fixed costs (rent, insurance, utilities don't change whether you have 10 or 100 members). High marketing spend to build awareness. Owner often works second job to cover personal expenses.

Owner Income: £0-£1,500/month typical. Many Year 1 owners teach evenings and weekends whilst working day job. Living off savings or partner's income is common.

Break-Even Month: Typically month 6-12 depending on signup rate and cost management.

Year 2 (Growth Phase)

Typical Net Margin: 10-20% as member base grows and word-of-mouth reduces marketing costs.

Member Count: 60-100 members. Growing from Year 1 base with improving retention.

Owner Income: £2,000-£3,500/month. Transitioning to full-time gym ownership becomes viable. No longer need second job for most owners.

Challenges: Scaling class times to accommodate growth. Potentially hiring first assistant instructor (cuts margin short-term but enables growth). Revenue stabilising and becoming predictable.

Focus: Optimising operations, improving retention, building community.

Year 3+ (Mature Phase)

Typical Net Margin: 20-30% for healthy mature gyms. This is sustainable, professional operation territory.

Member Count: 80-150 members. Stable base with steady growth and strong retention (85%+ annually).

Owner Income: £3,000-£5,000+/month (provincial gyms), £4,000-£6,000+/month (London gyms accounting for higher costs).

Business State: Running sustainably. Established reputation. Strong word-of-mouth. Predictable cash flow.

Focus: Shifts from survival to optimisation. Improving margins, considering expansion, developing instructors, adding revenue streams.

Exceptional Performers (Top 10%)

Net Margin: 35-45%. These gyms have optimised operations, strong brands, and excellent retention.

Member Count: 120-200+ members. Large enough for economies of scale but not so large they've lost community feel.

Owner Income: £5,000-£8,000+/month. Some top London gyms exceed £100,000 annual owner income.

Multiple Revenue Streams: Memberships (80%), private lessons (10%), merchandise (5%), seminars and workshops (5%).

Success Factors: Strong retention (90%+ annual), low member acquisition costs (powerful word-of-mouth), premium pricing justified by quality, efficient operations with documented systems, and engaged community that markets itself.

Struggling Gyms (Bottom 25%)

Net Margin: 0-10% or negative. These gyms are surviving but not thriving.

Member Count: Under 50 members (insufficient for profitability at typical cost structure).

Owner Income: Under £2,000/month. Often supplemented by other work.

Common Issues: Poor location with high rent, weak retention (under 70% annual), underpricing, high rent as percentage of revenue (over 40%), no systems or processes, owner burnout from doing everything, reactive rather than proactive management.

Small Gym (30-60 members)

Monthly Revenue: £2,500-£6,000 depending on location and pricing.

Annual Revenue: £30,000-£72,000

Best For: Part-time owner-operator model. Shared facility (rent with another martial art or fitness provider). Supplemental income rather than full-time business.

Profitability Challenge: Difficult to achieve full-time owner income. Fixed costs eat too much of revenue at this member count.

Example: 45 members at £64/month average (provincial pricing) = £2,880 monthly revenue. After £1,800 costs, leaves £1,080 profit for owner (£12,960/year supplemental).

Medium Gym (60-100 members)

Monthly Revenue: £6,000-£12,000

Annual Revenue: £72,000-£144,000

Best For: Full-time owner-operated gym. This is the sweet spot for sustainable solo operation.

Profitability: Sustainable owner income £2,500-£4,000/month achievable with good margins.

Example: 80 members at £100/month average (Midlands pricing) = £8,000 monthly revenue. After £5,500 costs (including £3,000 owner salary), leaves £2,500 net profit (31% margin). Owner takes £3,000 salary + £2,500 profit = £5,500/month total (£66,000/year).

Large Gym (100-150 members)

Monthly Revenue: £12,000-£20,000

Annual Revenue: £144,000-£240,000

Best For: Multi-instructor gym in dedicated facility. Requires additional staff but generates strong owner income.

Profitability: Strong owner income £4,000-£6,000+/month with healthy margins.

Example: 120 members at £133/month average (South East pricing) = £16,000 monthly revenue. After £11,200 costs including hired instructors, leaves £4,800 net profit (30% margin).

Very Large Gym (150-250+ members)

Monthly Revenue: £20,000-£35,000+

Annual Revenue: £240,000-£420,000+

Best For: Multiple instructors, multiple class times daily, established brand (typically 5+ years), London or major city location.

Profitability: Excellent owner income £6,000-£10,000+/month. Some top London gyms generate £120,000+ annual owner income.

Example: 200 members at £140/month average (London pricing) = £28,000 monthly revenue. After £18,200 costs including multiple staff, leaves £9,800 net profit (35% margin).

Regional Variations

London Gyms: 30-50% higher revenue potential due to premium pricing (£120-180/month typical vs £60-100 provincial). However, costs also 30-50% higher (rent, business rates, wages). Net effect: Similar or slightly lower margins than provincial gyms despite higher absolute revenue.

Provincial Gyms: Lower revenue per member (£60-100/month typical) but much lower fixed costs, especially rent. Result: Often achieve higher net margins (30-35%) than London counterparts despite lower absolute revenue.

Understanding where your money goes is essential for improving margins. Here are typical cost percentages as proportion of revenue for UK gyms.

Rent & Occupancy: 25-35% of Revenue Target

London: 30-40% typical (rent kills margins in capital). Commercial rent £3,000-£8,000/month for 100-200m² space.

Provincial: 20-30% typical. Commercial rent £1,000-£3,000/month for similar space.

Target: Keep rent under 30% of revenue for healthy margins. If rent exceeds 35%, you need to grow member count significantly or negotiate lower rent.

Includes: Base rent, business rates (£50-300/month depending on rateable value and location), utilities (electricity, gas, water totalling £100-300/month).

Business Rates Note: From April 2026, eligible gyms and leisure facilities use lower multipliers: 38.2p if rateable value below £51,000, or 43p if rateable value £51,000-£499,999. This reduces cost burden vs standard commercial rates.

Instructor Costs: 20-35% of Revenue

Owner-operated (teaches most classes): 15-25% (accounting for implicit instructor labour value even if not paid explicitly).

1-2 hired instructors: 25-35%. UK instructor wages: £20-40/hour typical (London higher, provincial lower).

Target: Keep total instructor costs under 30% unless operating premium multi-instructor model.

Calculation Example: Gym with 10 classes/week at 2 hours each = 20 instructor hours weekly. At £30/hour = £600/week = £2,600/month. On £10,000 revenue = 26% instructor costs (healthy).

Insurance: 2-4% of Revenue

Public Liability: £5-10M coverage costs £600-£2,000/year (£50-£170/month) depending on member count and coverage amount. BMABA offers club cover with £5M public liability, £1M professional indemnity, £500k abuse cover, and £10M employers liability for £149.99 total.

Contents Insurance: £300-£800/year (£25-£70/month) covers mats, equipment, and property damage.

Professional Indemnity: £200-£500/year (£17-£42/month) if offering personal training or programming advice.

Total Insurance: £1,100-£3,300/year (£92-£275/month) typically.

Software & IT: 2-5% of Revenue

Gym Management Software: £50-£150/month (billing, bookings, member management). Popular UK options: Gymdesk, Wodify, Pike13.

Accounting Software: £15-£65/month. Xero most popular (£15-£65), QuickBooks (£12-£115 after intro), FreeAgent (£19-£29 or free with some banks).

Website Hosting: £10-£30/month for WordPress or Wix with custom domain.

Email Marketing: £0-£50/month. Mailchimp free up to 500 contacts, paid plans £10-£50/month.

Payment Processing: GoCardless 1% + 20p per transaction for Direct Debit (UK standard).

Total Software: £85-£265/month typical.

Marketing & Advertising: 5-15% of Revenue

Startup Phase: 10-20% of revenue. Building awareness requires investment. Facebook/Instagram ads £200-£800/month, Google Ads £100-£500/month, local SEO £100-£300/month if outsourced.

Mature Phase: 5-10% of revenue. Word-of-mouth becomes primary acquisition channel, reducing paid marketing dependency.

Member Acquisition Cost Target: Under £100 per new member (includes trial marketing, time investment, and conversion process).

Equipment & Maintenance: 3-6% of Revenue

Mat Replacement: £1,000-£2,000 every 3-5 years (£17-£55/month amortised).

Cleaning Supplies: £50-£150/month (mats need regular cleaning, disinfectant, mops, vacuum).

Equipment Repairs: £50-£200/month (broken zips, torn bags, replacement pads).

New Equipment: £500-£2,000/year (additional pads, dummies, training equipment).

Professional Services: 2-4% of Revenue

Accountant: £1,000-£2,500/year (£83-£208/month). Essential for tax planning and compliance.

Legal Services: £300-£1,000/year (£25-£83/month) for contracts, terms and conditions, waiver reviews.

Bookkeeping: £0-£1,200/year (£0-£100/month) if outsourced. Many owners DIY with software.

Miscellaneous: 2-5% of Revenue

Governing Body Fees: £100-£300/year for BJJA, UKBJJA, or other affiliation.

DBS Checks: £40-£100/year for instructors working with children.

Bank Fees: £50-£200/year for business account and transaction fees.

Consumables: £100-£300/year (toilet paper, hand soap, first aid supplies).

Total Operating Costs: 65-75% of Revenue

Healthy mature gym operating costs fall in this range, leaving 25-35% net profit margin.

Example Breakdown (£10,000/month revenue):

• Rent & Occupancy: £2,800 (28%)
• Instructors: £2,500 (25%)
• Insurance: £150 (1.5%)
• Software: £150 (1.5%)
• Marketing: £600 (6%)
• Equipment: £400 (4%)
• Professional Services: £250 (2.5%)
• Miscellaneous: £150 (1.5%)
• Total Costs: £7,000 (70%)
• Net Profit: £3,000 (30%)

Location Economics: London vs Provincial

London Economics: Higher revenue potential (£120-180/month member pricing vs £60-100 provincial). However, higher costs across the board: rent (2-3x provincial), business rates (higher rateable values), instructor wages (£30-40/hour vs £20-30), marketing costs (Facebook ads more expensive in competitive London market). Net effect: Similar or slightly lower margins despite higher absolute revenue and profit.

Provincial Economics: Lower revenue per member but much lower fixed costs. Rent might be £1,500/month vs £5,000 in London. Result: Often achieve higher percentage margins (30-35%) than London counterparts (25-30%) despite earning less absolute profit.

Owner-Operated vs Hired Instructors

Owner-Operated Model: Owner teaches most classes, minimising cash instructor costs. Margins: 25-35% typical because labour cost is implicit (owner's time) rather than explicit (cash wages). However, limits scalability—owner can only teach so many hours per week. Owner burnout risk from teaching 15-25 hours weekly plus admin.

Hired Instructor Model: Owner manages whilst instructors teach. Higher cash costs (instructor wages 25-35% of revenue). Margins: 15-25% typical due to higher labour costs. However, more scalable—owner can grow beyond their own teaching capacity. Requires higher member count to justify wages (typically 100+ members needed).

Member Density (Students Per Square Metre)

More members in same space = better margins. Fixed costs (rent, utilities) don't increase with member count. Each additional member adds pure margin after covering variable costs.

Optimal Class Size: 15-25 students per instructor. Allows individual attention whilst maximising revenue per class hour.

Over-crowding Risk: Classes over 30 students feel impersonal. Poor experience drives churn. Safety concerns increase. Sweet spot is full but not packed.

Pricing Strategy Impact

Premium Pricing (Top 20% of Market): Higher margins if quality justifies price. Attracts serious students with lower churn. Requires investment in facilities, instructors, and positioning.

Market-Rate Pricing (Middle 60%): Standard margins (20-30%). Safe positioning for most gyms. Competes on quality and community rather than price.

Discount Pricing (Bottom 20%): Thin margins (10-20%). Requires high volume to compensate. Attracts price-sensitive members who churn readily. Difficult to raise prices later without significant pushback.

Retention Rate Impact on Margins

High Retention (85%+ Annual): Lower marketing costs (word-of-mouth becomes primary channel). Higher lifetime value (members stay 3-5 years vs 1-2 years). More predictable revenue. Better community (longer-tenured members build culture). Direct margin improvement: 5% retention increase can create 10-15% profit increase by reducing acquisition costs.

Low Retention (Under 70% Annual): Constant marketing spend to replace churned members. Lower lifetime value. Unpredictable revenue (always rebuilding base). Weak community (too many new faces, no culture). Margin killer: High churn makes profitability nearly impossible.

Facility Efficiency

Multiple Class Times Per Day: Better rent utilisation. If you're paying £2,000/month rent, running 2 classes per day (14/week) costs same as running 5 classes per day (35/week). More classes = more member options = higher member count = better margins.

Single Class Per Day: Poor rent utilisation. Facility sits idle 22 hours per day whilst you still pay full rent. Limits member count (everyone must attend same time slot). Kills profitability.

Target: 3-5+ classes per day (morning, lunchtime, evening, weekend) maximises facility efficiency and accommodates diverse member schedules.

Increase Revenue (Without Raising Prices)

Improve Retention: 5% retention increase = 10-15% profit increase by reducing member acquisition costs. Focus on better onboarding (structured beginner programme, buddy system), community building (social events, member connections), and curriculum quality (clear progression path, regular feedback).

Add Revenue Streams: Private lessons (£40-80/hour, 70-80% margin), merchandise (gym gis, rash guards, t-shirts for 5-8% revenue), seminars (£30-80/person, attracts new trial members), and grading fees (£20-40, covers costs plus margin). Target: 10-15% revenue from non-membership sources.

Optimise Pricing: Annual contracts provide cash flow boost (1-2 months free discount still more profitable than monthly with churn). Premium tiers capture willingness to pay (Gold membership with private lessons). Student/family discounts increase household spend whilst building community.

Fill Dead Time: Add early morning (6am), lunchtime (12pm), or late evening (8pm) classes. Each additional class time attracts members who couldn't train at existing times. Same fixed costs, more revenue.

Increase Member Count: Most direct path to higher margins. Marketing, referral programmes, and partnerships all drive member growth. Each member above break-even point adds pure margin.

Reduce Costs (Without Cutting Quality)

Negotiate Rent: Renegotiate lease after year 1-2 once you've proven stable tenant. Look for rent review clauses allowing adjustment. Consider longer lease (3-5 years) in exchange for lower monthly rate. Move to cheaper location if rent exceeds 35% of revenue.

Energy Efficiency: LED lighting (£200-500 upfront, saves £30-80/month), programmable heating (only heat during class times), and insulation improvements. Payback period: 6-12 months typically.

Software Consolidation: One platform for billing, bookings, and email (£80-100/month) vs separate tools for each (£150-200/month). Reduces both cost and admin time.

Marketing ROI: Track what works ruthlessly. Facebook ads generating £8 cost per lead vs Google Ads at £25 per lead? Cut Google, invest in Facebook. Local SEO generating organic enquiries? Invest more there. Kill what doesn't work.

Bulk Purchasing: Negotiate equipment prices for volume. Buy 20 gis from supplier at £35 wholesale vs 5 at £42. Annual insurance paid upfront vs monthly often saves 5-10%. Stock cleaning supplies in bulk.

DIY Where Possible: Create social media content yourself (£0) vs agency (£500+/month). Handle basic bookkeeping in Xero (£15/month) vs outsource (£100/month). Clean mats yourself initially (£0) vs commercial cleaner (£400/month). Graduate to outsourcing as you grow.

Margin Killers to Avoid

• Rent over 35% of revenue: Relocate to cheaper space or grow member base significantly. Unsustainable long-term.
• Excessive discounting: Devalues membership permanently. Attracts high-churn price-sensitive members. Race to bottom.
• Over-staffing: Hiring instructors before member count justifies cost. Each instructor needs to generate £1,500-£2,000 additional revenue to justify £600-£800/month wage cost.
• Poor retention: Constantly replacing churned members is expensive. Fix retention before scaling marketing spend.
• No pricing strategy: Charging too little for too long because "that's what we started at." Review pricing annually and adjust to match value delivered and market rates.

Healthy Gym Metrics (Target Benchmarks)

• Net profit margin: 20-30%+ (mature gym year 3+)
• Rent as % of revenue: Under 30% (London exception: 30-35% acceptable)
• Instructor costs as % of revenue: Under 30%
• Member retention: 85%+ annually (or 6-8% monthly churn maximum)
• Average revenue per member: £70-£150/month (location-dependent: London £120-150, provincial £70-100)
• Member acquisition cost: Under £100/member (marketing spend ÷ new signups)
• Lifetime value: £1,500-£3,000+ (depends on retention and pricing). 2-3 year average stay at £100/month = £2,400-£3,600 LTV.
• Break-even member count: Under 60 members (if higher, fixed costs too high or pricing too low)
• Cash reserves: 3-6 months operating costs (£10,000-£30,000 depending on gym size)

Warning Signs (Red Flags Demanding Action)

• Net profit margin under 10% after year 2 (business model not working)
• Rent over 40% of revenue (unsustainable, need to move or grow significantly)
• Instructor costs over 40% of revenue (over-staffed for member count)
• Member retention under 70% annually (16%+ monthly churn—members not sticking)
• No cash reserves (living paycheck to paycheck, one crisis from disaster)
• Owner income under £2,000/month after year 2 (not generating living wage)
• Declining member count month-over-month (business shrinking, not growing)

Action Triggers

If 2+ Red Flags: Immediate action required. Choose: reduce costs drastically (renegotiate rent, cut marketing, reduce hours) or increase revenue aggressively (price rise, marketing push, retention focus). Can't continue current trajectory.

If Margin Under 15% in Year 3+: Business model needs fundamental review. Problem is structural, not tactical. Assess: Is location sustainable? Is pricing adequate? Is member count sufficient? Can costs be reduced significantly?

If Owner Income Under Minimum Wage: Revisit viability. Are you building a business or funding a hobby? Many gym owners subsidise their gym from other income indefinitely. That's fine if intentional, but problematic if goal was full-time living.

Quarterly Financial Health Check Process

1. Review Profit & Loss Statement: Revenue vs previous quarter and same quarter last year. Are you growing, stable, or declining?
2. Analyse Cost Categories: Is each category within target percentage? Which exceeded budget and why?
3. Assess Member Retention: Calculate: (Members at end ÷ Members at start) over 3 months. Target: 95%+ quarterly retention (85%+ annual).
4. Calculate Revenue Per Member: Total revenue ÷ member count. Is it increasing (price rises, additional purchases) or decreasing (discounts, churn of high-value members)?
5. Evaluate Marketing ROI: New signups × lifetime value vs marketing spend. Each marketing channel profitable?
6. Check Cash Reserve Level: Do you have 3-6 months operating costs in reserve? If not, prioritise building buffer.
7. Compare Actual vs Forecast: How accurate were your projections? Where did reality diverge from plan and why?

Year 1 (Startup Phase)

Take-Home: £0-£18,000/year (£0-£1,500/month). Many owners work second jobs during this phase. Teaching evenings and weekends whilst maintaining day employment is common strategy. Expectation: Reinvest most or all profit back into business growth—marketing, equipment, facility improvements.

Year 2 (Growth Phase)

Take-Home: £18,000-£36,000/year (£1,500-£3,000/month). Transitioning to full-time gym ownership becomes viable for many. Still modest income but covers basic living expenses in most UK regions (outside London). Expectation: Building stability and sustainable operations.

Year 3+ (Mature Phase)

Provincial Gyms Take-Home: £30,000-£60,000/year (£2,500-£5,000/month). This is sustainable living wage in most UK regions. Comfortable life in Midlands, North, Scotland, Wales.

London Gyms Take-Home: £40,000-£80,000/year (£3,300-£6,700/month). Higher absolute income but London cost of living significantly higher. Equivalent lifestyle to £30,000-£50,000 provincial.

Expectation: Sustainable professional income. No longer working second job. Building towards financial security.

Top Performers (5-10% of Gyms)

Take-Home: £60,000-£100,000+/year (£5,000-£8,300+/month). Multiple locations or very large single location (150+ members). Strong brand, excellent retention (90%+ annual), optimised operations with documented systems, and multiple revenue streams working efficiently.

Success Factors: Typically 5+ years established. Famous instructors or competition pedigree. Premium positioning and pricing. Located in affluent areas or major cities. Owner working on business (strategy, systems) more than in business (teaching every class).

Part-Time Gym Model

Take-Home: £10,000-£25,000/year supplemental income (£830-£2,080/month). Owner maintains full-time job and runs gym evenings/weekends. Lower stress (not dependent on gym for living), lower reward (won't achieve high income), but sustainable lifestyle for those who want coaching as passion project with income rather than primary career.

Common Model: Shared space (rent from another martial art or fitness provider), 30-60 members, 4-8 classes per week, owner teaches all classes personally.

Income Data Sources

UK gym owner income data synthesised from: Glassdoor reports average UK gym owner salary £40,000-£48,500/year base (2024-2025 data), Salaryexplorer study showing £113,000/year (likely includes very large chains and premium boutique studios), RDX Sports research indicating £44,666/year average for small gym owners, and UK gym owner discussions on Reddit, forums showing wide range £20,000-£80,000 depending on size, location, and business model.

Case Study 1: Provincial Gym (Manchester)

Profile: Owner-operated, 3 years established, 100m² mat space.

Members: 85 members

Pricing: £80/month average (mix of unlimited £90 and limited £60)

Monthly Revenue: £6,800

Monthly Costs:

• Rent & Utilities: £1,800 (26%)
• Insurance: £120 (2%)
• Software & IT: £120 (2%)
• Marketing: £400 (6%)
• Equipment & Maintenance: £280 (4%)
• Professional Services: £180 (3%)
• Miscellaneous: £100 (1%)
• Total Costs: £3,000 (44%)

Gross Profit: £3,800 (56%)

Owner Salary: £1,700 (25% - teaches 20 hours/week)

Net Profit After Owner Salary: £2,100 (31% margin)

Total Owner Income: £1,700 salary + £2,100 profit = £3,800/month (£45,600/year)

Notes: Healthy margins due to low rent (provincial), owner-operated model (no instructor wages), and efficient operations. Could scale by hiring instructor and adding class times.

Case Study 2: London Gym (Zone 2)

Profile: Owner + 2 part-time instructors, 5 years established, 150m² mat space.

Members: 120 members

Pricing: £133/month average (mix of unlimited £150 and limited £100)

Monthly Revenue: £16,000

Monthly Costs:

• Rent & Utilities: £5,500 (34%)
• Instructor Wages: £2,400 (15% - 2 instructors teaching 15 hours/week total at £35/hour)
• Insurance: £180 (1%)
• Software & IT: £180 (1%)
• Marketing: £800 (5%)
• Equipment & Maintenance: £500 (3%)
• Professional Services: £300 (2%)
• Miscellaneous: £200 (1%)
• Total Costs: £10,060 (63%)

Gross Profit: £5,940 (37%)

Owner Salary: £1,740 (11% - teaches 10 hours/week plus manages)

Net Profit After Owner Salary: £4,200 (26% margin)

Total Owner Income: £1,740 salary + £4,200 profit = £5,940/month (£71,280/year)

Notes: Higher absolute income than provincial gym despite similar percentage margin. London rent (34% of revenue) is high but manageable due to strong member count. Hired instructors enable owner to focus on business growth rather than teaching all classes.

Case Study 3: Small Part-Time Gym (Shared Space, Edinburgh)

Profile: Owner-operated part-time, 2 years established, shared facility 80m².

Members: 45 members

Pricing: £64/month average (mostly limited memberships 2x/week)

Monthly Revenue: £2,880

Monthly Costs:

• Rent (shared space): £600 (21%)
• Insurance: £80 (3%)
• Software: £60 (2%)
• Marketing: £150 (5%)
• Equipment: £120 (4%)
• Miscellaneous: £70 (2%)
• Total Costs: £1,080 (38%)

Gross Profit: £1,800 (62%)

Owner Labour Value: £600 (21% - teaches 8 hours/week at £20/hour implicit value)

Net Profit: £1,200 (42% margin)

Owner Take-Home: £1,200/month (£14,400/year supplemental income)

Notes: High percentage margin (42%) due to low fixed costs and owner labour. Not sufficient for full-time living but excellent supplemental income. Owner teaches 4 classes per week (8 hours) whilst maintaining day job. Sustainable lifestyle model for passion-driven coaching.

When to Hire an Instructor

Trigger Point: Member count 80-100+ and you can't teach all classes yourself without burnout.

Margin Calculation: Will instructor generate more revenue than cost? Example: Hire instructor for £150/week (5 hours at £30/hour). Add 2 additional class times. Attracts 10 new members at £100/month = £1,000 revenue. Instructor costs £650/month. Net gain: £350/month plus owner time freed for business development.

Key Question: Will additional class times unlock member growth that's currently constrained by schedule?

When to Relocate to Larger Space

Trigger Point: Current space at capacity (can't add more mat space or run concurrent classes). Wait list of 10+ people wanting to join.

Margin Impact: Model new rent increase against projected member growth. Example: Move from 100m² to 200m². Rent increases £1,500/month (from £2,000 to £3,500). But capacity doubles from 100 to 200 potential members. Need to grow from 85 to 110 members (25 new members × £100 = £2,500 new revenue vs £1,500 rent increase) to maintain margins. Achievable if space was constraining growth.

Risk: Don't relocate speculatively hoping "if we build it, they will come." Only move when current space is demonstrably constraining growth (waitlist, turning away prospects, classes full).

When to Open Second Location

Trigger Point: First location profitable and stable (25%+ margin consistently), cash reserves of 6-12 months operating costs saved, documented systems (not dependent on owner for every decision), proven model that can be replicated.

Margin Impact: Second location will drag down combined margin initially (year 1-2) as it builds member base. First location subsidises second during startup. Only viable if first location generates £3,000-£5,000+ monthly profit to cover second location's losses whilst building.

Timeline: Expect 12-18 months before second location becomes profitable. First location must remain stable whilst attention divides.

When to Raise Prices

Triggers for Price Increase:

• Margin under 20% and costs rising (inflation, rent increase, insurance renewal)
• Haven't raised prices in 12+ months (annual increases expected)
• Positioned under market rate (charging £80 when competitors charge £100 for similar offering)
• Added significant value (new class times, facility improvements, hired better instructors)

Margin Impact Example: 5% price increase on £100 membership = £5 additional per member per month. 80 members × £5 = £400 additional monthly revenue (£4,800/year). If costs remain constant, this flows directly to profit. Expect 5-10% churn (4-8 members), so net gain is £280-£360/month (£3,360-£4,320/year) straight to margin.