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CanadaSteve
Joined: 08 Feb 2012
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 Posted: Sun Feb 19, 2012 8:31 pm Post subject: Buying/Running a gym in Korea |
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I know there is at least one waegookin-owned gym in Itaewon, but how many others are out there?
If anyone has experience or knowledge of the potential profits, startup difficulties, licensing process and other hurdles to overcome for starting a gym in Korea, please let me know your thoughts. |
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pkang0202
Joined: 09 Mar 2007
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| Posted: Sun Feb 19, 2012 8:49 pm Post subject: |
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I don't know about running a gym. I do know that gyms come and go pretty fast in Korea. Usually what happens is a newer or newly renovated gym will open up and all the customers will flock to there.
Gym prices are getting out of control so I think you can get a lot of customers by simply having better prices.
Gyms have clothing, but I have yet to see a gym give you socks as well. I think having gym socks as well as the shorts/shirt would be a great amenity to have.
In itaewon, with a lot of foreigners, I think having hard to find exercise equipment is a deal breaker. Kettle bells seem to be something that is hard to find. Also, things like Diet Boxing (Taebo) are popular with Koreans.
Staff wouldn't be hard to find. You can find physical education or sports fitness majors who can work at your gym. The gym I'm at is expensive but the staff are really helpful. The workers/trainers that are there are really attentive. They don't just give pointers/advice to people who are paying for personal training. I've had a lot of trainers come up to me while I am doing freeweights and offer some advice, or show me a new exercise.
I'd say cleanliness is one of the biggest things to worry about in the gym. What used to be in gyms back home, that I don't see here, is a paper towel dispenser with a disinfectant dispenser. I think being able to spray some disinfectant on a papertowel and wipe down a machine is great. Who wants to wipe the sweat off their brow with the same gym towel used to wipe butt sweat on a used machine?
Anyways, jsut some points off the top of my head from a customer's standpoint. |
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fosterman
Joined: 16 Nov 2011
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| Posted: Sun Feb 19, 2012 9:25 pm Post subject: |
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average monthly membership 80.000won
100 members @80.000 = 8 million a month.
-rent, staff, paying off the machines, laundry, taxes, electricity, phones, marketing, internet etc.
how much is left for you on 8 million gross?
now of course let's say you can get 200 members signed .
is that difficult? 200 people. well I don't know. you tell me. |
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highstreet
Joined: 13 Nov 2010
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| Posted: Sun Feb 19, 2012 11:14 pm Post subject: |
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| fosterman wrote: |
average monthly membership 80.000won
100 members @80.000 = 8 million a month.
-rent, staff, paying off the machines, laundry, taxes, electricity, phones, marketing, internet etc.
how much is left for you on 8 million gross?
now of course let's say you can get 200 members signed .
is that difficult? 200 people. well I don't know. you tell me. |
Are you having a conversation with yourself? |
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CanadaSteve
Joined: 08 Feb 2012
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| Posted: Mon Feb 20, 2012 12:54 am Post subject: |
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@pkang: some excellent input, thanks
@fosterman... What i need to know is the average number of members sold at a mid-sized gym is... it's hard to guesstimate average actual membership numbers |
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rainman3277
Joined: 13 Sep 2009
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| Posted: Wed Feb 22, 2012 4:14 pm Post subject: |
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| CanadaSteve wrote: |
@pkang: some excellent input, thanks
@fosterman... What i need to know is the average number of members sold at a mid-sized gym is... it's hard to guesstimate average actual membership numbers |
Wouldn't it make more sense to ask the gym owner in itaewon instead of posting on a chat board which are always full of know-it-alls? I have worked in gyms for several years. It shouldn't be tightly kept secret. You might be surprised home much he tells you. If you are serious though, I can tell you 100-200 members is peanuts and you will never make it. Your rent alone is going to be more than 8 million garunteed, unless your gym is the size of a classroom. You should be aiming much higher, like 500-1000 members. Its the members who pay and dont go that give you your profit. and there are tons at every successful gym. Gyms are all about sales people these days. Front desk, managers and especially trainers. PT are this generations used car salesmen, so hire good ones.
That's my know-it-all 2 cents  |
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Captain Corea
Joined: 28 Feb 2005
Location: Seoul
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| Posted: Wed Feb 22, 2012 4:39 pm Post subject: |
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| Pkang - my gym offers socks as well. I don't use them, but they try to hand them to me every day with a locker key. |
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CanadaSteve
Joined: 08 Feb 2012
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| Posted: Wed Feb 22, 2012 5:22 pm Post subject: |
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| rainman3277 wrote: |
| CanadaSteve wrote: |
@pkang: some excellent input, thanks
@fosterman... What i need to know is the average number of members sold at a mid-sized gym is... it's hard to guesstimate average actual membership numbers |
Wouldn't it make more sense to ask the gym owner in itaewon instead of posting on a chat board which are always full of know-it-alls? I have worked in gyms for several years. It shouldn't be tightly kept secret. You might be surprised home much he tells you. If you are serious though, I can tell you 100-200 members is peanuts and you will never make it. Your rent alone is going to be more than 8 million garunteed, unless your gym is the size of a classroom. You should be aiming much higher, like 500-1000 members. Its the members who pay and dont go that give you your profit. and there are tons at every successful gym. Gyms are all about sales people these days. Front desk, managers and especially trainers. PT are this generations used car salesmen, so hire good ones.
That's my know-it-all 2 cents |
And if I knew the gym owner, lived in Itaewon or had nothing but time to travel around and hound strangers for inside information on their business profits, that would be a great idea!
It never hurts to ask.
Your figures, IMO, are off. 8m/mnth rent is only if your gym is a) huge or b) located in some prime-arse real estate. Rent for a 60 pyung hagwon space on a major street in Mokdong, for example, is about 4-5m a month (not including take over fees, reno fees and deposit).
At 80k/month for membership (not factoring in any other sales, such as PT), you'd hit 8m a month with 100 members in revenue.... and 80m a month with 1000 members. Not factoring in startup costs, which would be significant, guesstimate:
rent = 5m
security fees + ultils = 500k
cleaning = 500k
front desk staff (x2) = 2.4m
"trainers" (floor staff x 4) = 6m
marketing = 1m
other = 1m
For a basic operation you'll need around 15-17m revenues a month, or about 200 members. PT would be gravy, as would additional membership numbers, dropins etc.
500 members would bring in some 40m a month in revenues, which sounds great except for the fact you'd need larger facilities, staff and overhead, and while you can always expand or move to larger spaces, you're proper stuffed if you overextend yourself out the gate.
I just wanted to know if most korean gyms find it easy to hit the 200 mark, after which point one can start making profit and paying off startup investment, or if most only dabble in numbers below that |
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fermentation
Joined: 22 Jun 2009
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| Posted: Wed Feb 22, 2012 5:39 pm Post subject: |
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Equipment wise, please have a real squat rack, more than one bench and enough free weights rather than filling your gym with machines.
| Quote: |
| What used to be in gyms back home, that I don't see here, is a paper towel dispenser with a disinfectant dispenser. I think being able to spray some disinfectant on a papertowel and wipe down a machine is great. |
Another thing Korean gyms need to catch up on. My university gym back in the States had towels and detergent water placed around equipment so people can wipe them off. |
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rainman3277
Joined: 13 Sep 2009
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| Posted: Wed Feb 22, 2012 10:13 pm Post subject: |
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| CanadaSteve wrote: |
| rainman3277 wrote: |
| CanadaSteve wrote: |
| @pkang: some excellent input, thanks @fosterman... What i need to know is the average number of members sold at a mid-sized gym is... it's hard to guesstimate average actual membership numbers |
Wouldn't it make more sense to ask the gym owner in itaewon instead of posting on a chat board which are always full of know-it-alls? I have worked in gyms for several years. It shouldn't be tightly kept secret. You might be surprised home much he tells you. If you are serious though, I can tell you 100-200 members is peanuts and you will never make it. Your rent alone is going to be more than 8 million garunteed, unless your gym is the size of a classroom. You should be aiming much higher, like 500-1000 members. Its the members who pay and dont go that give you your profit. and there are tons at every successful gym. Gyms are all about sales people these days. Front desk, managers and especially trainers. PT are this generations used car salesmen, so hire good ones. That's my know-it-all 2 cents |
And if I knew the gym owner, lived in Itaewon or had nothing but time to travel around and hound strangers for inside information on their business profits, that would be a great idea! It never hurts to ask. Your figures, IMO, are off. 8m/mnth rent is only if your gym is a) huge or b) located in some prime-arse real estate. Rent for a 60 pyung hagwon space on a major street in Mokdong, for example, is about 4-5m a month (not including take over fees, reno fees and deposit). At 80k/month for membership (not factoring in any other sales, such as PT), you'd hit 8m a month with 100 members in revenue.... and 80m a month with 1000 members. Not factoring in startup costs, which would be significant, guesstimate: rent = 5m security fees + ultils = 500k cleaning = 500k front desk staff (x2) = 2.4m "trainers" (floor staff x 4) = 6m marketing = 1m other = 1m For a basic operation you'll need around 15-17m revenues a month, or about 200 members. PT would be gravy, as would additional membership numbers, dropins etc. 500 members would bring in some 40m a month in revenues, which sounds great except for the fact you'd need larger facilities, staff and overhead, and while you can always expand or move to larger spaces, you're proper stuffed if you overextend yourself out the gate. I just wanted to know if most korean gyms find it easy to hit the 200 mark, after which point one can start making profit and paying off startup investment, or if most only dabble in numbers below that |
60 pyung gym? for 5 mill in Mokdong? Possible. Include showers, changing room, front desk, you are looking at 40 pyung max to fit exercise equipment in.
1) Who cares if you know the owner. A casual conversation like a customer "so how big is this place?" or "how many members do you have?" are simple customer questions, not "hounding". In one afternoon you can walk into 10 gyms and know all the basic details you are looking for regarding memberships numbers.
But in the end it doesn't matter your first sentence was the most telling. Hoping on a subway and spending an afternoon asking some question to get answers from the horses mouth seems to be some kind of ordeal to you...so you're screwed already. |
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CanadaSteve
Joined: 08 Feb 2012
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| Posted: Thu Feb 23, 2012 6:07 am Post subject: |
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| rainman3277 wrote: |
| CanadaSteve wrote: |
| rainman3277 wrote: |
| CanadaSteve wrote: |
| @pkang: some excellent input, thanks @fosterman... What i need to know is the average number of members sold at a mid-sized gym is... it's hard to guesstimate average actual membership numbers |
Wouldn't it make more sense to ask the gym owner in itaewon instead of posting on a chat board which are always full of know-it-alls? I have worked in gyms for several years. It shouldn't be tightly kept secret. You might be surprised home much he tells you. If you are serious though, I can tell you 100-200 members is peanuts and you will never make it. Your rent alone is going to be more than 8 million garunteed, unless your gym is the size of a classroom. You should be aiming much higher, like 500-1000 members. Its the members who pay and dont go that give you your profit. and there are tons at every successful gym. Gyms are all about sales people these days. Front desk, managers and especially trainers. PT are this generations used car salesmen, so hire good ones. That's my know-it-all 2 cents |
And if I knew the gym owner, lived in Itaewon or had nothing but time to travel around and hound strangers for inside information on their business profits, that would be a great idea! It never hurts to ask. Your figures, IMO, are off. 8m/mnth rent is only if your gym is a) huge or b) located in some prime-arse real estate. Rent for a 60 pyung hagwon space on a major street in Mokdong, for example, is about 4-5m a month (not including take over fees, reno fees and deposit). At 80k/month for membership (not factoring in any other sales, such as PT), you'd hit 8m a month with 100 members in revenue.... and 80m a month with 1000 members. Not factoring in startup costs, which would be significant, guesstimate: rent = 5m security fees + ultils = 500k cleaning = 500k front desk staff (x2) = 2.4m "trainers" (floor staff x 4) = 6m marketing = 1m other = 1m For a basic operation you'll need around 15-17m revenues a month, or about 200 members. PT would be gravy, as would additional membership numbers, dropins etc. 500 members would bring in some 40m a month in revenues, which sounds great except for the fact you'd need larger facilities, staff and overhead, and while you can always expand or move to larger spaces, you're proper stuffed if you overextend yourself out the gate. I just wanted to know if most korean gyms find it easy to hit the 200 mark, after which point one can start making profit and paying off startup investment, or if most only dabble in numbers below that |
60 pyung gym? for 5 mill in Mokdong? Possible. Include showers, changing room, front desk, you are looking at 40 pyung max to fit exercise equipment in.
1) Who cares if you know the owner. A casual conversation like a customer "so how big is this place?" or "how many members do you have?" are simple customer questions, not "hounding". In one afternoon you can walk into 10 gyms and know all the basic details you are looking for regarding memberships numbers.
But in the end it doesn't matter your first sentence was the most telling. Hoping on a subway and spending an afternoon asking some question to get answers from the horses mouth seems to be some kind of ordeal to you...so you're screwed already. |
I already own a business that has me committed Monday through Saturday more than full time. Hoping casually gym-to-gym is just not an option at this point. Perhaps during a holiday season.
Also, as a business owner, I would never tell a complete stranger specifics about customer numbers, revenue or profit... or any specifics for that matter. I doubt other business owners would to a random walk-in off the subway either.
perhaps if my name was Harry and i had a lightning bolt scar on my forehead... |
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CanadaSteve
Joined: 08 Feb 2012
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| Posted: Thu Feb 23, 2012 6:09 am Post subject: |
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| fermentation wrote: |
Equipment wise, please have a real squat rack, more than one bench and enough free weights rather than filling your gym with machines.
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Already got that part figured out |
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Hyeon In
Joined: 16 Feb 2012
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| Posted: Thu Feb 23, 2012 6:58 am Post subject: |
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| CanadaSteve wrote: |
| fermentation wrote: |
Equipment wise, please have a real squat rack, more than one bench and enough free weights rather than filling your gym with machines.
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Already got that part figured out |
If you're serious about opening a gym, and you want to succeed, really really think about your target market.
To run a profitable gym you need to maximize customers while minimizing usage. If you have a few squat racks, a great range of free weights, a minimal number of machines... you might end up attracting a huge number of *Serious* gym rats. People who really want to work out and do the best for themselves. This sucks as a business. Unless you charge them $300 a month you'll be broke in no time, and have angry users because everything is being used every day. You don't want serious body builders or power lifters or any kind of customer who goes every day.. unless you have a ghetto ass gym with a tiny rent.
It's a great dilemma for people who are into working out / body building. They want to build the perfect gym for them. But if everyone was like them it'd be completely unprofitable. To make a profit you need a huge bank of members who spend less than an hour a week in your gym. Or charge an uncompetitively large amount of money.
I think there are probably easier ways to make a return on your investment than a gym, ESPECIALLY if you're passionate about exercise.
One way to maybe maybe break through this is to provide personal training at $40 an hour and pay your personal trainers $4 an hour. Either that... or drop the squat racks, put in an elastic vibrating fat wobbling machine and sign the adjummas up. |
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CanadaSteve
Joined: 08 Feb 2012
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| Posted: Thu Feb 23, 2012 7:05 am Post subject: |
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| Hyeon In wrote: |
| CanadaSteve wrote: |
| fermentation wrote: |
Equipment wise, please have a real squat rack, more than one bench and enough free weights rather than filling your gym with machines.
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Already got that part figured out |
If you're serious about opening a gym, and you want to succeed, really really think about your target market.
To run a profitable gym you need to maximize customers while minimizing usage. If you have a few squat racks, a great range of free weights, a minimal number of machines... you might end up attracting a huge number of *Serious* gym rats. People who really want to work out and do the best for themselves. This sucks as a business. Unless you charge them $300 a month you'll be broke in no time, and have angry users because everything is being used every day. You don't want serious body builders or power lifters or any kind of customer who goes every day.. unless you have a ghetto ass gym with a tiny rent.
It's a great dilemma for people who are into working out / body building. They want to build the perfect gym for them. But if everyone was like them it'd be completely unprofitable. To make a profit you need a huge bank of members who spend less than an hour a week in your gym. Or charge an uncompetitively large amount of money.
I think there are probably easier ways to make a return on your investment than a gym, ESPECIALLY if you're passionate about exercise.
One way to maybe maybe break through this is to provide personal training at $40 an hour and pay your personal trainers $4 an hour. Either that... or drop the squat racks, put in an elastic vibrating fat wobbling machine and sign the adjummas up. |
Some excellent points. Working on how to market something to the masses while appealing to the gym rat in me.
Truth is I just want to get out of Seoul and sell my current business at some point. Once I'm in a place more soothing to the soul, it would be great to do something healthy and that I am passionate about, and a gym would be a good fit for that.
You are obviously right with the need to attract members who never show, but at the same time, i want to be true to what I know to be right fitness-wise. I want to be very select about the machines and how I use the space.... and no, I'm not thinking that 60 pyung is enough space, that was given as a counter-example to the idea I'd need to pay 10m a month in rent.
Select machines, lotsa racks, lotsa dbs and a way to convince the ajumas that we'll help them get fit without a vibrating belt machine |
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12ax7
Joined: 07 Nov 2009
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| Posted: Thu Feb 23, 2012 7:48 am Post subject: |
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The trend in the last couple of years is to open a multi-floor gym with a sauna (attracts members and walk-ins) and a cafe or restaurant on the top floor. Workout equipment at these gyms runs close to a million dollars. I know someone who recently opened such a gym, and, true, the equipment is not appealing to my inner gym rat. I just couldn't stand it. Free weights are cheap, but they don't appeal to the ajumas, which has been the core membership of every gym I've been to in Korea in the last ten years (the small hardcore bodybuilding gyms I've been to have long closed). Fancy machines, the ajuma friendly ones, are not cheap.
You really need to do a lot of market research before taking the plunge.
Last edited by 12ax7 on Thu Feb 23, 2012 6:58 pm; edited 1 time in total |
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