The indoor climbing industry is rapidly growing, with climbing gyms generating approximately hundreds of millions in revenue in North America annually . This surge in popularity presents a promising opportunity for entrepreneurs looking to enter the market. However, success requires a thorough understanding of the demand, competition, and financial feasibility of opening a climbing gym. This blog focuses on conducting effective market research and evaluating the viability of Opening Your First Climbing Gym.
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BootCamp Details
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CONDUCT THOROUGH MARKET RESEARCH
Identify Your Target Audience
Understanding your potential customer base is crucial. And you can't do that until you have identified who your brand is. What type of offering will you have? Put simply, who is your brand and why should anyone care? In order to start identifying what type of climbing gym you should open, consider the following factors:
Demographics: Who is likely to visit your gym? Young professionals, college students, families, or fitness enthusiasts? What is the density in your desired market area? Are there enough customers or potential customers to sustain your business?
Climbing Interest: Is there a growing interest in climbing in your area? Look for online climbing communities, existing outdoor climbing locations, or local university programs. But don't get lost down this rabbit hole. As gym operators, we have to be educators. There is not a large enough group of "climbers" in any city in the world to sustain a business in perpetuity.
Spending Behavior: What are customers willing to pay for gym memberships, classes, or gear rentals? Don't look only at direct competitors either, consider other recreational offerings like group exercise, yoga, fitness gyms, etc.
Surveys, social media polls, and focus groups can provide direct insights into potential customer expectations and demand.
Analyze Local Competition
Investigate existing climbing gyms and fitness centers in your area:
Identify Competitors, but don't get stuck on this: How many climbing gyms exist within a reasonable distance? Are they well-established or struggling? Generally, if there is another direct competitor this should NOT stop you. Our industry and likely your market are not saturated. If anything, the presence of climbing gyms show that the market is primed for this type of business.
Other Offerings: What other business will be fighting for the attention of your customers? Crossfit? Mini-golf? Core Power Yoga? The Movie Theater? These could all be considered competition and should be a part of your competitive analysis.
Pricing Models: How do their membership fees compare? Is there room for a competitively priced gym?
Customer Reviews: Analyzing online reviews can help you identify service gaps or areas where you can improve the customer experience or see entire holes in the marketplace
If competition is high, you need to go back to the question "Who is my brand, and why should anyone care?" Simply offering a newer nicer gym won't cut it. And is not a long term solution to market success.
HOT TAKE: if there is another direct competitor this should NOT stop you. Our industry and likely your market are not saturated.
Assess Location Viability
Selecting the right location can determine your gym’s success:
Population Density: Higher population areas often provide a larger customer base.
Proximity to Schools and Businesses: Being near universities, tech hubs, or business districts can attract students and working professionals.
Accessibility: Ensure your gym is easily accessible by public transportation and has sufficient parking.
Zoning and Permits: Verify that the chosen location is zoned appropriately for a fitness facility.
A feasibility study can help you evaluate different locations based on these factors before committing to a lease.
ASSESS MARKET DEMAND & FINANCIAL FEASIBILITY
Gauge Market Demand
Identifying demand in a given market is a combination of intuition, confidence, and doing the right research above to check yourself. And it is an important step in your process. This will ultimately plug into many key decisions:
What size or type of gym to open
Where to open it
What types of amenities and products to offer
Develop a Revenue Model
Understanding your revenue potential is key to ensuring financial sustainability. Trust me when I say you cannot just guess. Lenders and investors WILL sniff you out and you won't get funded if you don't have a well considered financial model with believable assumptions behind it. Consider:
In most gyms in North America, membership is the #1 revenue stream, by a lot. Typically making up 50-60% of the revenue pie. So have a very believable and executable revenue model for how you will attract and retain members.
Use your market research and your vision to guide the rest. Youth, family, fitness, ancillary offerings, retail, guiding programs and on and on can contribute to your revenue model but you have to have a believable way to execute on whatever you decide to offer.
Calculate Startup and Operational Costs
Estimating costs accurately will help determine if your gym can be financially viable. Again, this needs to be believable. Financial experts that will be sitting down with your model will ask a lot of questions and you need to have answers:
Start Up Costs: Rent, leasehold improvements, and climbing wall construction, climbing holds, operating runway for things like payroll and marketing, and on and on
Ongoing Operational Expenses: Equipment and Maintenance, Climbing holds, mats, ropes, and rental gear.
Staffing: Salaries for trainers, front desk staff, management and maintenance personnel.
Marketing: Initial promotional efforts, website development, and social media advertising.
Comparing these costs against projected revenue will help determine whether you need external funding or adjustments to your business model.
SECURE FUNDING
Explore Funding Options
If market research supports your business idea, securing funding is one of the next steps. There is no perfect equation for success here. I would just suggest not doing anything crazy like risking your home on starting your business. That said, what I am finding most aspiring owners having success with is a combination of the following:
Personal Savings and Small Angel Investors: Many gym owners start with personal investments and/or small investors (think "friends and family"). This gains them the 10-30% equity they need into a lending situation to cover the remainder
Loan Programs: It's very common in the US for aspiring owners to apply for and receive an SBA loan. The exact terms may differ a bit depending on the lender. So be ready for the equity in to vary, and some lenders may ask you to have the entirety of the loan collateralized. And it's highly likely you will be asked to personally guarantee the loan, meaning if your business fails you will personally be on the hook.
Grants and Local Programs: Some regions offer grants for fitness and community development projects. Do your homework. You can save some cash!
GETTING STARTED IS ONLY THE BEGINNING
Opening a climbing gym requires more than passion—it demands thorough market research and careful financial planning. By understanding your target audience, analyzing competition, selecting the right location, and assessing financial feasibility, you can increase your chances of building a successful and sustainable business. With a solid business strategy, your gym can thrive in this growing industry.