7 Ways To Recession-Proof Your Gym or Fitness Business

There’s no question that the fitness industry tends to suffer during a recession. And there’s a 45% chance of one happening by next year. Gyms and studios are often hit hard when consumers tighten spending. But with a little planning and sound business strategies, you can protect your business from the worst impacts.

In this article, we share practical ways to recession-proof your fitness business, whether you’re a gym owner or personal trainer.

We’ve spent 15+ years working in the fitness industry, from leading gym chains to global equipment manufacturers, so know the market inside-out. We proactively study the ever-changing landscape, highlight new trends, and conduct strategic analysis, so that you don’t have to. For the last 5 years, we’ve shared this expertise with the wider industry through our Research Reports which are available to purchase.

2024 Fitness Industry Report

The most comprehensive & up-to-date report on the fitness industry available. Includes revenue, growth, future outlook plus much more.

Can You Recession-Proof a Fitness Business?

Recessions are a semi-predictable part of life and a consistent threat to the fitness sector. They tend to occur every 12 to 14 years, bringing unemployment and low retail spending along with them. They’re tough for everyone, especially the fitness industry.

JP Morgan has said that a recession is now even more likely. They raised the probability of a U.S. and global recession starting before the end of 2024 to 35%. The likelihood of a recession happening by the end of 2025 is 45%.

The fitness industry needs to prepare. It might seem daunting but forewarned is forearmed. Smart business owners are already thinking about what they can do now to protect themselves from the most serious impacts.

Gym memberships and personal training are often one of the first things to be cut from household budgets. This makes fitness businesses particularly vulnerable to recessions.

But there are steps you can take now to help protect your business. Unlike the Covid pandemic where there was no pre-warning, we have time to prepare for a potential recession.

Taking action now can help your gym, studio, or personal training business to weather the tough times. Many of the strategies we’ll cover make sound sense at any time, enabling you to build a more profitable and resilient business in general.

Let’s look at ways that gyms and fitness businesses can weather an economic downturn…

1 – Identify The Areas Of Risk To Your Fitness Business

Start by reviewing the risks to your fitness business. Where are you most vulnerable?

Is there one weak link that could cause the whole house of cards to come down? It might be a clause in your commercial lease, a supplier, or a cash flow issue that you worry about.

Are you over-reliant on one source of income? Think about where your leads, sales, and revenue come from. If one of these sources went away, would you still be able to operate profitably?

Once you’ve identified the risks to your business, make a plan to address them. If it feels overwhelming, just focus on one at a time.

Just knowing what the biggest risks are will help you plan for them. Even if you don’t have an immediate solution, you’ll inevitably keep a closer eye on these areas which often leads to improvements.

2 – Diversify Your Fitness Business

Diversifying is a great way to spread the risk and can help you prepare for a recession. Not to mention sleep a bit better at night!

If you’ve identified a weak link in your business or over-reliance on something, then diversification can provide some protection.

For businesses that rely on one source of income, this means creating multiple revenue streams. Gyms that make all their money from memberships or trainers who only offer one-to-one sessions would fall into this category. If those customers went away, they’d have no money coming in.

Think about how you can make money beyond your core offering. If that one decreases, ensure you still have other ways to generate income.

Here are a few ways that gyms and personal trainers can diversify their businesses…

You might also like… 25 Proven Ways To Increase Gym Revenue or Practical Ways To Earn More Money as a Fitness Trainer.

You can apply the same diversification principle to your sales and marketing too. If you’re over-reliant on one source of leads, then add new ones.

Many of the gyms we work with rely on Google adverts and social media for their lead generation. But if a recession hits and they don’t have money for ads, they won’t get new members. And if their Instagram or Facebook page gets suspended, then their whole marketing strategy falls apart.

Diversifying your sales and marketing takes time, so it’s worth starting now. Start building your email list so that you’re not reliant on social platforms to communicate with your target audience. Create SEO-optimised blog posts so that your website ranks highly on Google without paid adverts.

You might also like… this quiz to help you find the perfect marketing channels.

3 – Make Your Gym Or Fitness Business Indispensable

During recessions, people cut back on discretionary spending. They prioritize the essentials, like rent, utilities, and food.

Is there a way that you can make your fitness business one of their essentials?

Current industry research shows that 40% of people consider wellness a top priority in daily life. That’s a huge proportion of consumers who see it as extremely important.

If members see your gym or fitness offering as indispensable to their everyday lives, then they’re less likely to cancel their membership. Instead of being a ‘nice to have’, it becomes a ‘must have’.

How do you make members feel like this about your fitness business? Here are three ideas…

• Support habit development – Help members and training clients to build a consistent workout routine that’s ingrained into their lifestyle by supporting them with habit formation. 
• Deliver exceptional value – Provide as much value as possible with extras like workshops and newsletters so that customers feel they get a lot out of their membership (beyond simple access to gym equipment or exercise coaching).
• Build a community – become a social hub where like-minded people connect and make friends so they’re less likely to cancel when money is tight.

The key is to market your gym in the right way so that membership becomes something they can’t give up. When times are tough, people like to treat themselves to feel better. It’s a phenomenon known as the lipstick effect because lipstick sales skyrocket during a recession. So think about how you can position your business as offering a treat, some well-earned ‘me time’, or a way to relieve stress.

You might also like… Fitness challenge ideas that build workout habits or social event ideas for gyms and studios.

4 – Become The Best In Your Field

When recessions hit, it’s often mid-market businesses that get squeezed the hardest. People flock to cheaper alternatives like budget clubs or virtual training to save money (another reason fitness businesses should diversify online!).

Premium clubs are also affected but not nearly as badly. Their clientele tend to be more wealthy and don’t feel the recession’s impact as strongly.

While not every fitness business can or should turn premium, everyone can become the best in their field. The creme de la creme is always in demand.

How can you become the top option in your local area or specialist niche? What can you offer that sets you apart from the competition?

If you’re an expert in your training niche, then you will always be people’s first choice. Whether you’re a gym owner or personal trainer, being a specialist pays off. It means that even during lean times, your business will get the pick of potential clients.

How can you do this?

Becoming an expert on something takes time, so it’s vital to start earlier rather than later. You’ll need to do plenty of learning around your chosen topic, and then demonstrate your knowledge to build credibility. Check out this fitness influencer guide for practical ways to build your authority and become a thought leader.

5 – Stay On Top Of Your Business Finances

We’re marketing professionals, not financial experts, so none of this is advice. We’re just sharing information on what’s worked in our business and for our fitness clients over the years.

Whether we’re in a recession or not, it’s vital to stay on top of your financial numbers. Know where profit margins are healthy and where they are slim. Keep an eye on outgoings so you know exactly where money is being spent.

This can help you to make quick and effective business decisions about where to focus during hard times. It may also help you maintain positive cash flow so that you have some breathing room during an economic downturn.

We review our outgoings several times a year. Sometimes we’ll find a recurring payment (like graphic design tools) that we’re no longer using, so can cancel and bank the savings. Often we’ll find a recurring monthly payment (like email software) that we can save money on by choosing an annual package instead.

Think carefully about whether to commit to long supplier contracts though. Sometimes a business will fare better in a recession if it can be flexible with cash flow. Being tied to monthly or fixed-term payments might overstretch a business if income drops. So, when a recession is on the horizon, consider negotiating shorter timeframes or adding a get-out clause to contracts.

Some fitness businesses choose to overpay debts in the build-up to a recession. It may not be very exciting but can put you in a strong financial position. Re-paying more than the minimum during good months will mean there’s less debt pressure on your business when times are tough.

Alternatively, some businesses move the overpayment funds into a separate account so they have more liquidity, but can use the cash for debts if needed.

6 – Offer Multiple Pricing Tiers

Offering multiple tiers is an effective pricing strategy for gyms and personal trainers in general. But it becomes even more important during a recession.

It gives customers the option to downgrade to a package that’s affordable for their budget. If you only have one pricing level and they can no longer afford it, their only option is to cancel. But if you have a range of prices, then it provides space to negotiate.

Offering several pricing tiers can dramatically reduce gym membership cancellations during a recession. And in tough economic times, some income is better than none at all. It might be the difference between remaining cash flow positive and not…

We have entire articles on pricing strategies for gyms and personal trainers so won’t go into the detail here. Take a look at those guides for more comprehensive info on the approaches you can take.

7 – Build a War Chest & Be Open Opportunities

Building a war chest is kind of like saving for a rainy day. Putting aside a small proportion of your profits each month will mean you have a greater safety net when a recession hits. But that’s not the only benefit…

Big companies like Amazon and Apple use their war chests to expand their businesses during recessions. While everyone else is panicking, they take advantage of cheap deals that downturns bring to the surface.

If your gym has some cash put by, then you may be able to jump on opportunities. Landlords may offer space at a bargain discount, allowing you to expand. Or fitness equipment suppliers will typically offer pricing discounts, so you can refurb your club for a fraction of the usual cost!

Having a war chest provides a buffer for your fitness business and allows you to be open to opportunities. It gives you peace of mind and flexibility to weather economic depression.

Recessions are tough but with a little planning and adaptation, they can be made a bit easier. Identifying risks and diversifying your business can help reduce the negative impacts. Becoming indispensable to customers and the best in your field will position you for success. Staying on top of finances will help you avoid being caught out and ensure you’re prepared for any eventuality.

Fitness Industry Predictions & Insights

Stay ahead of the curve with our fitness industry report. Ideal for business planning and strategic marketing, the 90-page report includes;

• Fitness industry revenue & growth by market segment
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• Gym market size, growth & membership statistics
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• Financial information for the largest club operators globally
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• Insights into the boutique fitness studio & personal training segments
• Latest industry trends & how to capitalise on them
• Growth markets, segments & audiences including Millennials
• Data on fitness tracker, app & equipment segments
• Outlook & evidence-based predictions for the future of the industry
• 14-day money-back guarantee, no questions or hassle.

2024 Fitness Industry Report

The most comprehensive & up-to-date report on the fitness industry available. Includes revenue, growth, future outlook plus much more.