Fitness is a booming trend, and with more and more corporate wellness programs covering the costs of gym membership, now could be the right time to indulge your inner entrepreneur and open a gym. (See also: 10 Characteristics of a Successful Entrepreneur.)
If you're not comfortable going it alone, there are many gym franchises to help you get started (Snap Fitness Inc., Koko FitClub LLC and Crunch Franchising, to name a few). With decent net worth, a little liquidity and some small business financing, you could be operating your own gym in under a year. (See also: When Is a Franchise the Right Investment for You?)
With gyms, as with every other type of business, success can often come down to location – and not just your street address. The city you choose to start a business plays a huge role in your profitability once you consider things like tax rates, licensing and permit fees, labor costs, and even customer demographics (age, lifestyle interests and median income).
That said, the following cities have a solid combination of features conducive to a successful gym business. All have friendly business environments, higher than average median incomes, a youthful demographic and above average access to financing. Take a look and see if one appeals to you for your new gym or fitness center.
1. Sioux Falls, South Dakota
Sioux Falls is a rapidly growing city of about 170,000 people with a broader metro area of around 250,000. The city has grown over 35 percent over the past decade and ranks as the fastest-growing Midwestern city.
Demographically, the city is youthful, with a median age of just 34, and it is evenly mixed between males and females. The median annual income of $54,000 is above the national average, and its cost of living index is well below average, indicating disposable income.
From a business perspective, Sioux Falls has topped Forbes' list of the best small cities for business for seven straight years. Credit costs are 26 percent below average, and its economy is growing at a brisk pace of nearly 5 percent per year. The state levies no personal or corporate income tax either, which is another perk. Plus, long and cold winters mean that young, fitness-conscious residents will fill the gym when the weather turns.
2. Charlotte, North Carolina
Charlotte has grown over 50 percent since 2000, and its youthful demographic (the median age is 34 here as well) is a natural fit for gyms and health clubs. The cost of living is below average, and median incomes are high – Charlotte is a major financial hub second only to New York City. (See also: Best U.S. Cities for Working in Finance Jobs.)
It's also a very image-conscious city, meaning its residents will shell out cash for personal care and services like a gym membership. The Charlotte Observer recently noted that the fitness industry in the city is moving upscale and that membership costs are on the rise, which could mean higher margins for a savvy gym owner.
The city has a very favorable business climate, ranking first and second in 2015 and 2016, respectively, by Site Selection magazine. CEO Magazine ranks the state as the third most favorable for business due to its low-tax, pro-growth policies. (See also: Top 8 States for Starting a Business in Retirement.)
3. Salt Lake City, Utah
With a metro population of around 1 million and a median age of just under 30, Salt Lake City is one of the fastest-growing cities in the nation for young people. Its low cost of living is another major appeal for prospective gym owners, which implies more disposable income and lower business costs.
Salt Lake City is also a high-tech and financial hub, meaning high salaries and a generally health-conscious workforce. The region's major employers also embrace wellness perks in their benefits packages, which is a boon for gym and health club owners. (See also: 4 Reasons Employee Wellness Matters.)
Forbes calls Salt Lake City the "new gold standard" for its growth-friendly business climate. It has a very light regulatory environment, low taxes, and as an added bonus, utility costs are about 30 percent below the national average.