I started doodling on a sheet of paper, just putting some thoughts down, and next thing I know, I've got an Excel spreadsheet typed up. I would like to open my own fitness center, but I really have no experience in the small business field. Some I'm learning as I go. My primary experience has been working at a corporate fitness center, at the Ohio State University rec center, and at numerous small college fitness/rec centers in various administrative roles. So working in the field is not new, but owning a business is......
I put together a list of everything I thought I would need to open a gym. I would appreciate some feedback on my list.
I am using ProMaxima as my primary vendor for equipment. They are pretty inexpensive and the quality of the equipment is pretty decent. I've ordered a lot of things from them for the high school I work at, and the stuff has held up while taking a beating.
Items that I really need some input on:
The cardio equipment I have picked. Good? Bad?
Cost of insurance
Cost of client tracking software
Where do I go for equipment to create ID cards to be scanned for a 24 hour center?
Where can i get big mirrors?
Anything I have left off the list?
Do I have the proper equipment for a small 24 hour center where I can also do some personal training and train athletes? I know that I don't have everything that may be desirable, but enough to get started?
The spread sheet is just the beginning. You should not move forward without a complete business plan though. I also strongly advise that you get together with a financial professional to do pro-formas.
Sometimes using a pre-fab system like a franchise is a good idea if you have the money to put up front because they have already worked out all the things you will encounter as a gym owner and you won't have to learn by trial and error (mostly error, trust me).
I am pretty suspicious from the outset about your equipment company, as I have never heard about them, and some of my biggest headaches have been getting support for off brands that I bought because they were "cheaper"... That was obviously only on the front end.
Client tracking/billing software is really easy if you don't use one of the franchises (if you do use one, they usually have their own in-house systems). I can refer you to one that I think does an excellent job.
I have two companies that I highly recommend on insurance. Again, that depends on if you go franchise or not. (If you start to get the idea that franchises can save you a lot of headache then you are onto something. Don't just go with a local broker to find you an underwriter. They will nail you to the fucking wall). I had bad experiences with two companies before finding specialized insurance for healthclubs for literally a FRACTION of the cost. I got sued by one because they claimed I underreported income, and their price was based on revenues. The fine print in their contract allowed them to audit me and send me an invoice rather than simply raising my upcoming rates.
Mirrors are easy... Don't get that far ahead of yourself yet. You have bigger fish to fry. They are cheap and easy to get done.
You have a ton of stuff missing from your list. Don't get in a hurry because that is when the costliest mistakes will get you. Let's take our time on this and be thorough.
I've owned a business. Your first two phone calls should be to a lawyer and an accountant. JP can testify to the fact that, it's not whether or not you will be sued, it's when. Both can really help with organizing your company, thinking through some of those inevetible mistakes you'll make. I agree with JP about the plan. Don't invest any money until you know what your going to do and how your going to pay for it.
Depending on the size of the town there are also a host of free resources available through local universities that can aid in business planning. There are also organizations such as SCORE that may be beneficial.
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Honestly, I glanced over your list for a mere 8 seconds, but you can really do without of some stuff in the beginning. You don't need plyo boxes, 5 TVs, 4 adjustable benches, etc....etc...
You should put money aside for marketing and promotions. I don't know your area/community, but you need to traget a population to market your FC to. As money comes in, then you can spend it on the other novelties.
It sounds like you really want a nice FC. Thats great. But what is going to make your place different from the rest? A business plan including market research, 5 year plan, services, and satffing is more important than what equipment to buy. Thats actually the easy part.
The service that Deserve mentioned that you might find at a local university is the SBDC network (Small Business Development Center).
I happen to be a Director of an SBDC. They offer one-to-one counseling free of charge. They can really help you with your business plan...and also pro-forma financials. If you tell me where you are located, I can tell you where the nearest SBDC office would be.
What you have so far is certainly A piece of the puzzle. But the big puzzle, the business plan, has far more pieces. And even the smaller puzzle, the financial projections, will require a lot more information.
Before you can honestly go much farther, you will need to understand more specifics regarding your initial costs and your monthly costs. Specifically, you need to understand more about how much your site is going to cost!
You might call a commercial real estate agent in your town and try to find out a good range of prices you'll pay to lease commercial real estate. You probably have some decent idea of how many square feet you would need to open the kind of facility you will want. If you think you need, say, 3000 square feet, you might find an agent that tells you that type of space typically goes for $22 per sq.ft. So you can figure your rent at $5500 per month. ($22 times 3000 sq.ft. divided by 12 months...and, oh, by the way, there will probably be more "triple net" charges, but at least you can START somewhere.)
As for your INITIAL layout, depending on your local market, of course, most commercial real estate owners are basically not going to lift a finger for you. If you need to install locker room facilities, for example, you're probably going to have to come up with the funding to do that. What is that going to cost? Maybe $30K? Maybe more? It depends on the site, obviously. Some sites may require more plumbing, more electrical...some structural work....you just never know until you know.
That brings up an interesting point... Let's just say that you're going to need...oh, how about a nice, round $100,000 up front. You're already close to $50K and you haven't factored in any leasehold improvements yet. You're also going to need some working capital. You have to be able to pay the bills your first few months in business while you build a clientele. I don't know this industry that well, but I'd suspect that $100,000 might be a reasonable figure to get a gym started....or actually on the low side of reasonable, depending on where you are located and what type of clientele you are looking to serve.
Where are you going to get $100,000???
Seriously, there is this funny mythology in this country...we seem to think that if we're smart and we have a good idea, the money will be there! I'm here to tell you, the number one reason that people don't get small businesses off the ground is that money does NOT grow on trees. Do you think you can write a business plan and walk into a bank and borrow $100,000? Uh...almost certainly not. Unless you've got mad connections, baybee!
A bank is going to want three things from you:
1) They are NOT going to be the only investor in your business. That means you had better come up with at least 20% down yourself...or maybe with a group of investors (get your elevator pitch worked up!).
2) They want collateral...full security for the $80K they are going to be lending you. Guess what? Leasehold improvements are NOT something the bank can sell! All that work you want to do on the locker room? Sorry...the bank can repo it and sell it, so they are not likely to loan on it. In fact, the market for used equipment is probably pretty soft. You'd be lucky to have a bank collateralize $20K on a bunch of used equipment and teevees.
3) They want you to prove that you can pay for the loan out of the operating cash flows of the business. So you WILL, as John mentioned, have to spend a lot of time researching your market. Who is your competition? How do you differentiate yourself from them? What products/services will you offer? How much will you charge? At what point do you break even? How much market share will you need to capture? Specifically, how will you design your marketing communications to target the demographic that you need and how can you be reasonably sure you will be successful?
So how much money do you have right now? Can you borrow against a 401(k)? Can you tap your home for equity? What are you going to risk, here? My rough take is that you'll be lucky to get a bank to pony up a third of what you'll really need. (I'm basing that number on my rough view of your collateral position.) You got seventy large? If not, it's time to find INVESTORS.
For many industries, this is the make-or-break skill for an entrepreneur. How good are you at asking your rich Aunt Sally for money? You say you don't have a rich Aunt Sally? Well, then it takes even MORE skill because you're going to have to hit up a bunch of strangers. They say the money for start ups comes from The Four F's....founders, family, friends, and FOOLS. When you get down to fools, you're going to have to be pretty persuasive.
Of course, there ARE other options. Fitness centers are a tough business to be in. I'd suspect that many of them are started by people with more money than sense...or that people get into this business because they like to train and they don't realize that OWNING a gym is nothing like training a client. Depending on where you live, you can possibly find somebody who is selling one right now at www.bizbuysell.com or some other similar business brokerage website. Sometimes you can get a good deal and you can find something like this for less than the market value of the assets just because somebody wants OUT. Of course, then you might be fixing something that's broken....better get your Marketing hat back on.
You can also lease your equipment rather than purchase. That reduces your collateral position and may make you less bankable. But it could also dramatically reduce your start-up costs. Since you're likely to be talking to investors, at least this might allow you to ask for less money from them.
Now, don't get me wrong...I know this might come off as somewhat discouraging. I certainly don't mean to be that way. I work with entrepreneurs like you EVERY DAY and I find that it is EXTREMELY rewarding when they succeed. The thing is, you DO need to understand some of the challenges that you will face.
People like JP have stared down these challenges and lived to tell the tale. I can't tell you how much respect I have for people who turn their passion into their business. It is NOT EASY to do! (Especially in this field.) Of course, again, people like JP might be able to tell you some more dollar-figure specifics than I can tell you. Entrepreneurs generally know their industry a lot better than I know their industry.
They say that every small business, in order to succeed, needs to master The Three M's:
Management--can you manage your enterprise or put together a team that can do it?
Market--is there truly a market for your product/service? Can you communicate with that market?
Money--Do you have it? Can you get it?
I really didn't even address that first M in this post, but hopefully I've given you a little bit of a flavor for what you might face with regard to your Market and Money.
(Wow...every time I post in this forum, I get long-winded! I'll stop now.)
Thanks vudu, that was very informative, helpful, and definitely a lot to digest! I do have a location in mind--it's approximately 5200 sq. foot. It is a lease property, which I realize is not optimal, but the location is the best in town and there aren't any viable properties for sale. Here is a link to the property and the area's demographics:
Might not be in the right part of town...might not be anything close to what you want other than that it's approximately the same size. It's tough to say what that type of valuation means to commercial lease prices. My original shot in the dark is probably quite a bit higher than you will actually find.
Interesting co-tenants...what was in that space before? Any chance you could get by with the smaller space in that same building?
Interesting that you posted that property....I had thought about checking it out. It used to house a plumbing and heating business. Not sure if the set-up would be real good. But it has a garage/warehouse section.
The property that I posted used to be a Fashion Bug ladies store. It is pretty new inside and just has fitness center written all over it. It's wide open, clean, has a desk area, columns with mirrors, dressing area, office area. Wish I had some inside pics. It's in a location where a lot of growth is occurring about a 1/2 mile away. It's in a shopping plaza that was really popular about 15-20 years ago. But since then, new shopping centers with Walmart, Kmart, and soon a Lowe's is opening, so this older plaza is less desirable. But it is still in the most congested area of the county.
I've got a bit of a plan about my center based upon what is already available in our area, so I'll try to post more about that tomorrow. Thanks for the info vudu!!
When I tried to get a loan from the bank, not only did they want me to have 20% of my own money, they also wanted a minimum of 6 months financial records showing a minimum $$$ value which was based on the ammount I wanted to barrow. I don't know if this will come up for you or not.
I don't know about about over in the states but here in england, for Commercial Property it is VERY difficult to get a mortgage company to lend over 80% of the purchase price. If the Property leasehold but has a premium they wouldn't even give you 50%.
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That's a good point, kingkop182. Commercial property IS more difficult to purchase. It's not nearly as easy as it would be to get a mortgage for a home. The SBA does have one VERY good program for purchasing real estate to run a business, however. It's called the 504 program. If you talk to your local SBDC, Maxx, and IF (that is a huge IF) you are interested in purchasing property, you should ask them about that.
I wasn't actually advocating that particular property at all. I was just looking for SOME commercial property in Cambridge to get a feel for prices, actually. That was the only space I found of approximately the same size. I don't know nearly enough about the area. Maxx has given some very pertinent qualitative info that should definitely be considered.
Of course, location is critically important for a business such as this one. It is a big part of your marketing strategy as it will affect who your potential customers might be. I could imagine some kind of a...I don't know...a boxing gym or something like that. Maybe it's in a crappy neighborhood and it's a dark, dingy place...and maybe that adds to the appeal for the people that you're trying to reach. But I think for Maxx, he is trying to package and market a more modern gym facility...maybe with a little bit of an accent on performance, but still plenty of goodies for the average gym attendee without a ton of fitness knowledge, but willing to learn.
If that's the case, you need the open space and the growing area. (And by the way, it wouldn't hurt to develop a little "elevator pitch" about your dream gym...something that rolls off the tongue and allows you to describe your dream gym to potential investors/customers/bankers... think about what it looks like as you walk in the door...what features stand out and why? What will you be known for?)
Here is what we have in our county in terms of exercise facilities:
New YMCA - expensive! Single membership = $50 sign-up fee, $30 per month or $354 per year.
locally owned fitness center - been in it's current location for about 10 years, not in a great neighborhood. Equipment is older. Single membership = $55 sign-up fee, $29 per month or $258 per year.
Locally owned 24 hour fitness center - small gym, bad neighborhood, not real accessible. Was really popular when it first opened about 5 years ago, but has not been well maintained and there is not any staff or personal training present. Single membership = $27.50
Curves
There is also a Sports Med facility that is offering a Sports Performance Program that focususes on plyos, stability exercises, etc, but doesn't do anything in terms of strength training.
We have 3 high schools in the county. One has about 900 students, the second has about 600, and the one I work at has about 350 students.
My plan is to open a 24 hour center that focuses on the beginner looking to get into shape, the serious advanced trainer, and the student looking to improve sports performance. I also plan to offer monthly and yearly membership discounts to high school and college students, military personnel, firefighters, law enforcement employees. The location I am looking at is also in an area next to some large industrial facilities which would allow 3rd shift workers to come in. Finally, there are about 12 hotels near this location, most of which don't have an exercise facility. So I thought I could set up some type of system in conjuction with the hotels to allow guests to work out.
I want to be more visible at my facility, unlike the other 24-hour center. I currently teach half the day and do athletic director duties the other half. So my plan is to give up athletic director and instead teach half the day, then go to the facility to do personal training with general clients and sports performance training with athletes.
My selling points will be affordable membership fees, discounts for above mentioned groups, on site personal training and sports performance, clean, modern, well-maintained, location, potential for expansion.
Just thinking about fees, I know this would have to be worked out into expense/profit sheet, but I was thinking:
No sign-up fee
Single membership = $25 per month, $240 per year, $20 for military/law enforcement, $15 for college students and high school students at least 16 with parental consent.
Also, our local radio station does a nice job with on-site remotes where they broadcast from your business for the day. I thought as a grand opening special, I would all ow anyone to work-out for free on the day of the broadcast, offer them $10 fee for the first month, and $200 for a year. Something to just try and get a lot of people to join early.
I know that all of this is the "easy" part, but it's also the fun part
Well, it sounds like you DO have a clear vision, anyway! That's a plus!
I love the thought of partnering with the hotels. There is a possibility that you could do that in a way that's free for the hotel guest if you can talk the hotel management into it. You could basically have the hotel issue them a coupon that they have to give to you in order to use the facility...then you get the hotel to pay you, say, $10-15 for every coupon you collect. The hotel guest gets to work out free....you get to collect some revenue from paying customers...the hotel can tell their guests that they have the opportunity to use an excellent facility as part of their stay. It's a win-win-win.
The radio show idea is a good one, too...of course, it's only a one-shot promotion. You'll need to develop some promotional ideas that develop your brand image over time, using frequency. Don't forget to include some marketing strategies that don't cost much, but might have great benefit....Maybe you could write a fitness column every couple of weeks for the local paper?
To be completely honest with you, I'm not sure I like the idea of being the LOWEST cost provider in town! I tend to encourage my clients NOT to compete on price, but rather to charge more and add value. You seem to be able to add value--location, clean, modern facility, etc...
Your price point is part of your marketing strategy...like it or not. People will have a perception of your facility based on the price you charge. If you are NOT going to charge a sign-up fee, you could charge $32/mo and still have a lower annual cost than the Y. Just thinking out loud...but I might start at a higher price and then run specials IF you need to attract more people a couple of months in. Take advantage of your "honeymoon" period when you open a new business. You can not easily raise your prices later without pissing people off, but you can lower them.
You're worth it. Charge a little more. EXCEPT...I do love the idea of targeting those groups you talked about. Give them steep discounts. Maybe even target those third shifters by going to those employers and marketing through them, offering discounts to the night shift...or even getting the employers to agree to pick up some of the tab by convincing them that healthy employees are productive and happy.
Oh...you DO need to have a spreadsheet for your start up costs (the one that you posted earlier) and you need to know what your monthly costs will be. Here is a page where you can download a cash flow analysis that will help you figure out some things. It looks intimidating at first glance, but I'm sure you can figure it out.
There is a line in there for capital expenditures, one for leasehold improvements, one for your capital cash injection and one for loans received. That stuff may all go into Month 1, but then your spreadsheets that you've already started can serve to break down the costs associated with the big numbers in each of those boxes. This spreadsheet also has a line for loan repayment, of course. If you have to borrow that $80K at five years @10% interest, your debt service comes to right around $1700 per month. If you add in rent and payroll and whatever else, let's just say your monthly expenses (including debt service) are going to come to...I don't know....$10,000. How many customers do you need at $25 per month to break even? Is that 400? (Or only 313 at $32! How price-sensitive IS your market? I'd argue that the extra $7 won't chase away 25% of the people...again, that's just me...)
In the revenue section, you can use some of the extra lines to show different revenue streams, such as regular price memberships, discounted memberships to your target groups, maybe some kind of retail revenue by selling tee shirts or even carrying some supplements. So you can further break things down by saying you need 200 full price members, then 160 discounted memberships...add in an average of 60 one-day, $10 hotel passes and maybe $300-$400 in retail...again, you can look at the entire picture. Add some discounted members and drop full-price members down to 180. Add or subtract retail revenue. Change your COGS margin on retail.
Anyway, that cash flow statement can be infinitely tweaked in excel if you want to add some more financial pieces to your puzzle-building. You can change and of the line titles and any of the numbers...just don't overwrite the formulas and you'll be fine.
Sorry for rambling again...those are just some quick thoughts off the top of my head. Again, my disclaimer is this: don't use my numbers for anything other than conceptual purposes because I don't know your industry or your area very well....
Vuduchyld - your posts are absolutely spot on, some real gems in there. I particularly like this one
" Your price point is part of your marketing strategy...like it or not. People will have a perception of your facility based on the price you charge."
This is so true, over here we have a beer called stella - it's far more expensive than it's direct competitors but is marketed as 'reassuringly expensive’. People think it's better becasue of the price and are not put off by it.
Continuing this into Maxx's facility, i'm not sure you want to market at either ends of the price scale particularly. Also I know you want to use 'no sign up fees' as a source of competitive advange but to be honest I would be reluctant not to have them. You may end up with high admin costs of new starters who'll leave quickly through no fault of your own, not having a sign up fee means this is coming from your operating revenue.
Also in terms of large companies in your area - you can charge them an annual fee for discounted memberships i.e say you membership is $30 a month with a sign up of $25, the company would pay you say $1000 and you would then waive the sign up fee for their employees. The company can legitimately advertise discounted rates at a top fitness centre in their job descriptions and you have a guaranteed lump sum each year.
__________________
*****************************
Walk on
With hope in your heart
And You'll Never Walk Alone
*****************************
There's no free lunch, especially when it's served with special sauce (lostdog)
***************************** My Log - PC Plod
Last edited by kingkop182 : 03-14-2007 at 05:07 PM.
Thanks guys, this info is all very helpful and valuable for me and probably others as well!! It sounds like I need to hire you guys to be my financial consultants and marketing team!
Ok, just got off the phone with the property agent. The property is leasing for $7.80 a square foot ($6.00 plus $1.80 for "pass-thrus"). At 5200 square feet, that comes out to $40,560, which equals $3380 per month. So, if I take that and my other monthly costs per month and say (or hope) that the would come to $4000 a month, that would mean I would need 200 paying ustomers per month at $25 a piece to at least make a small profit. (200x$25=$5000, profit = $1000).
$40,000 seems like an awful lot of money to be paying in rent. In 3 years, I will have paid $120,000, which instead could go toward buying/building my own facility.
Ok, now's the time to critique my math and economics....
Wow...$7.80 per square foot! That is SO much less expensive than you could find around here! Amazing...and Lawrence, Kansas isn't really the home of SUPER expensive real estate. The ratio of $6/$1.80 sounds about right.
As for your math...well, my big question in your expenses would be payroll. I'm guessing that you're going to have to have some people working there and I didn't remember seeing that before. Most industries have some benchmarks that they can use in order to figure hourly labor as a percentage of revenues or something like that. I can't imagine you could get by at much less than 25% or revenues for payroll.
Of course, the temptation may be to say that you don't need very many employees...but if you figure there could easily be 100 people per day in your club, you WILL need quite a bit of staff....front desk, people to clean the locker rooms (or add in an expense to outsource it), trainers...you might find it's wise to hire somebody with some experience as marketing/membership coordinator.
As for the high cost of rent...yup...it's a bummer. I've known many business owners who built a building or bought some real estate and built a great business....then sold the business and kept the building. That's nice because you pay off the building and then you get continuing profits from having that business that you built up as your tenant. But that's jumping ahead of the game a little bit. In your industry, unless you can buy a building way under market value, it's probably better to run your business for a couple of years, then expand into new space if you can support it.
Honestly, the business of owning commercial real estate is a business unto itself. There is a lot to be said for NOT tying your business down to some property that you own...at least not initially.
Did you mention anything about doing a break even analysis to calculate how much revenue he would have to generate to cover expenses and make an acceptable profit. That seems a steps that fits in the conversation somewhere.
__________________
Past performance is not indicative of future success.
Never argue with an idiot. They drag you down to their level and beat you with experience.
If you have to borrow that $80K at five years @10% interest, your debt service comes to right around $1700 per month. If you add in rent and payroll and whatever else, let's just say your monthly expenses (including debt service) are going to come to...I don't know....$10,000. How many customers do you need at $25 per month to break even? Is that 400? (Or only 313 at $32! How price-sensitive IS your market? I'd argue that the extra $7 won't chase away 25% of the people...again, that's just me...)
In the revenue section, you can use some of the extra lines to show different revenue streams, such as regular price memberships, discounted memberships to your target groups, maybe some kind of retail revenue by selling tee shirts or even carrying some supplements. So you can further break things down by saying you need 200 full price members, then 160 discounted memberships...add in an average of 60 one-day, $10 hotel passes and maybe $300-$400 in retail...again, you can look at the entire picture. Add some discounted members and drop full-price members down to 180. Add or subtract retail revenue. Change your COGS margin on retail.
I touched on it, but I probably did not give it the treatment it requires! Good point.
Yes, a break even analysis would be good, but I still need to get some monthly costs calculated.
Vuduchyld, that makes sense on leasing vs. owning. It just seems like so much money that's being thrown away.
As for employees, the plan is to start off with just my wife and myself. Since it will be a 24 hour center, there is not a need for front desk help. The other 24 hour center in town has exactly 0 empoyees. It is owned by a doctor and a hardware store owner. You have to call the doctor's office to become a member. They hire a cleaning service to care for the facility. So I think this would be one advantage to my center--Someone (me) will be there 4-8 hours a day, we clean the place ourself, and we save overhead costs.
Is there any type of info available that indicates what percentage of your members use the facility daily? For example, if we have 200 members, how many can we expect to use the facility on a regular basis? Obviously we have to do a good job of keeping the members coming back on a regular basis, but I'm just talking on average.....
I usually try to refer people to trade groups for information like that--frequency of use on average, or even average labor cost/revenue. I'm sure there must be some kind of association of gym owners...JP? Any other owners out there? I can look up some benchmark info in a research guide like an RMA or something for labor cost averages, but I wouldn't begin to know how to hazard a guess on frequency of use.
Wow...I'm surprised that they are trying to run a 24 hour center with no employees...nobody there, basically, ever! Any idea how many members they have? Another thing I tell people to do is to conduct some industrial espionage. If you act like a prospective customer, people will tell you a lot of information. Call and ask them how many members they have and ask them if they can tell you how many people come on average every day because you want to figure out how crowded it will be.
Do 24 hour centers have scanners for the front doors? Seems like if there is no staff, people can just come and go as they please.
Even if you have door scanners, would that stop person A from obtaining a membership and working out with 3 of his buddies who dont pay. Just never heard of or seen this approach.
I would buy if you can. Especially if you are in a growth area. I rent my space in a building where it is about $17 per square foot, and I have 8200 sf. I have been there for 6 years. I could have paid off a building by now!
Also, property ownership makes you more appealing to investors. It isn't just a "receivable" that they own, but a peice of property. It adds value to your business.
If you buy a building with enough square feet, you can set your business up in the largest portion of the building and then rent out to supporting businesses (like a chiro/pt, tanning salon, etc), and make enough in with your rent payments to make your loan payment.
I am looking at building a new place on the other side of town, in addition to my current facility, and if I do, it will be in a place where I don't have to shovel money into a furnace never to see it again.
The only advantage to renting is that you get to write it all off. If you are in a buyer's market, which is sounds like you are, I would try to negotiate for an even lower lease rate if that is the route you are going.
Another thing to consider is going with a pre-packaged system, like a chain. Anytime Fitness, Snap, and others. I know the contact people from several if you are interested in going that route. The franchise fees that you pay pale in comparison the money you lose learning by trial and error. If I were to do it again, I would probably start that way.
I would buy if you can. Especially if you are in a growth area. I rent my space in a building where it is about $17 per square foot, and I have 8200 sf. I have been there for 6 years. I could have paid off a building by now!
Also, property ownership makes you more appealing to investors. It isn't just a "receivable" that they own, but a peice of property. It adds value to your business.
If you buy a building with enough square feet, you can set your business up in the largest portion of the building and then rent out to supporting businesses (like a chiro/pt, tanning salon, etc), and make enough in with your rent payments to make your loan payment.
I am looking at building a new place on the other side of town, in addition to my current facility, and if I do, it will be in a place where I don't have to shovel money into a furnace never to see it again.
The only advantage to renting is that you get to write it all off. If you are in a buyer's market, which is sounds like you are, I would try to negotiate for an even lower lease rate if that is the route you are going.
Another thing to consider is going with a pre-packaged system, like a chain. Anytime Fitness, Snap, and others. I know the contact people from several if you are interested in going that route. The franchise fees that you pay pale in comparison the money you lose learning by trial and error. If I were to do it again, I would probably start that way.
I think JP and I are both thinking along the same lines in that we understand what kind of a leap it can be from technician to entrepreneur. Whether it's a cook who opens a restaurant, a hairstylist who opens a salon, or a trainer who opens a fitness center, there are some challenges along the way...and while people who are dedicated to fitness tend to be goal-oriented achievers, it's best not to take on ALL of those challenges at the same time!
JP's advice is to consider NOT re-inventing operating procedures that others have already invented (go with a proven system)...and he would tell you to buy real estate. On the other hand, I'm a little more lukewarm about the real estate for a pure start-up entrepreneur who has never run a business before. It DOES have some advantages, this is true. BIG ones. ESPECIALLY if you buy a building big enough to lease out some space to other businesses! Of course, that makes you a landlord and I can tell you from PERSONAL experience that rental property ain't always a bouquet of flowers. Ultimately, the right location is critical...so it's probably better to rent the right location than purchase the wrong location.
There are a lot of different ways you can do this thing. I guess the ultimate advice that I give people is to let your passions guide you. If you REALLY WANT to run YOUR OWN THING and not buy into a franchise or a system, then do it. (I'd still find out what trade organizations are available because you will want to benchmark/learn from others.) If the perfect real estate deal falls into your lap, jump on it, but I personally would NOT go into the real estate business simultaneously UNLESS you have a chance to buy at NO GREATER than 70% of market value.
I would certainly listen to the advice of JP, though. If you have any interest at all in going that direction, maybe it would make sense to buy a franchise and also look at real estate since some of the systems engineering will have already taken place and you'll get plenty of support from a management standpoint.
Opening My Fitness Center
No wonder everyone thought it was such a short list! 
Here it is......
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