Fitness Studios: Understanding How Space Equals Money


Fitness Studios: Understanding How Space Equals Money

Space equals money, and if you’re a studio owner, every time you pay your rent, it’s a multiple of your space. More space equals more money. If you’re an aspiring owner, every time you rework your financials to try and squeeze a little more space into your vision, the cost rises.

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The trick is to develop enough space to conduct your training and your classes in the way you want, satisfy your clients, and generate as much income as possible in the given space.

That’s space utilization, and there’s a million approaches depending on your space, your discipline, your philosophy, etc.

Remove the Guesswork

The first order of business is to have a firm idea of what you must have and a good idea of what you’d like to have. If the revenue generated from any of the activities related to the equipment is central to your success – it’s a must have.

Several fitness designers have good online resources, and one of the best we’ve found is Precor’s design tool. Using this technology, you can work and rework your space until your facility is as efficiently designed as possible.

Understanding space utilization is an important component to the ultimate success of your fitness business. Revenue per square foot is a basic, simple calculation (Annual Revenues ÷ Studio Square Footage, e.g. if your annual revenues are $300,000 and your studio occupies 3,000 square feet, your revenue per square foot is $100, which would be well above the industry average).

 Understanding How Space Equals Money

Vendors Will Help

Most quality suppliers, like Precor, offer a design service as part of their purchasing process. Similarly, there are studio architects and interior designers who specialize in this area.

AFS Can Help: AFS conducts extensive, annual research on this topic, available to members and non-members.

Turn Unused Space into Revenue-Producing Space

Some studios find themselves in the enviable position of having space to fill. Their core training area, including equipment needs, is covered. The check-in area, and perhaps changing rooms, are there. So what do you do when you have 2,500 square feet to work with and there’s still 500 square feet remaining?

In talking with hundreds of studio owners in recent years, we’ve come to the conclusion that the proper balance is dictated by complementary space usage. That’s complementary as in compatible, synergistically, not complimentary as in free.

For example, a boxing ring in a yoga studio makes no sense, even with dynamic programming. But does your HIIT gym have a hydration station where you’re selling pre- and post-workout replenishment? It should. Have you considered that a mini cycling studio could skyrocket your profitability? How about small group training to occupy those 500 square feet?

In other words, it doesn’t take much to turn unused space into revenue-producing space. From another perspective, you’re actually losing money by not turning vacant space into usable, viable square footage.

 Understanding How Space Equals Money

Ask and Listen

A good strategy for improvement is to ask your clients about their likes and dislikes. What more can you provide that would further engage them and enhance their loyalty to your studio? Create that sense of personalization that they want and need – the very element that differentiates you from the big boxes.

The cycling studio concept mentioned above has real-world impact. Precor has done extensive research on the impact of Spinning® and the numbers are eye-opening.

As for small group training, there’s an abundance of learning material available. Among the best is from the American Council on Exercise.

AFS Can Help: AFS has developed a variety of free, downloadable guides, including Ten Tips for Designing a Dynamic & Functional Fitness Studio, which explores the concept of space utilization.

Revenue per Square Foot vs. Revenue per Member

According to the AFS 2015 Studio Operating and Financial Benchmarks Report, only five percent of studio operators are measuring revenue per square foot. On the other hand, 39 percent of studio owners in the same study indicated that they measure revenue per member. Which is a better key performance indicator (KPI)?

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The fact is, they’re both important. Don’t disparage revenue per square foot. It’s one of the most important KPIs for a fitness business because it tells investors or potential buyers how effective the studio is at monetizing its space.

While the tried-and-true revenue per member calculation doesn’t necessarily tell the whole story, it is an accurate gauge of member engagement, loyalty, and personalization. For this simple calculation: (Annual Revenues ÷ Number of Members, e.g. if your annual revenues are $300,000 and your studio has 250 members or clients, the revenue per member is $1,200).

Understanding the Targets

For almost all fitness businesses, if functional training is not the centerpiece, it certainly can be an attractive addition to revenue per square foot.

The Queenax™ system by Precor® is an amazing training area with a small footprint. It can drive large revenue in a small space and dramatically take your revenue per square foot well beyond the $73 industry average.

 Understanding How Space Equals Money

Beyond functional fitness, you might add a juice bar, kids martial arts classes, supplement sales, or other means of generating revenue in otherwise unused space. The most important business decision you can make is recognizing that the space is underutilized and doing something about it!

AFS Can Help: AFS has developed relationships on behalf of its members in several categories of ancillary revenue that can enhance revenue per square foot.

For example, for a kids martial arts program, the Martial Arts Teachers Association is a great resource. To set up a simple supplement business, the Ten Institute can help.


Download the full guide and learn what every studio owner needs to know about fitness equipment, including acquiring your equipment, cleaning and maintenance, utilizing your studio's space, building a brand experience, and insuring your studio.

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The Association of Fitness Studios (AFS) is the only trade association dedicated to providing the education, tools, and resources for fitness studios to enhance their profitability, while providing the platform for entrepreneurial fitness professionals to start their own businesses. Learn more at

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