How to Build a Successful Fitness Business That Lasts

Running a fitness business is hard. Competition has increased enormously, costs continue to rise and there are more options available to consumers than at any point I can remember. At the same time, the expectations placed on owners have expanded. You’re supposed to understand marketing, sales, leadership, finance, technology, AI, customer experience and whatever new training modality has become popular this month.

Against that backdrop, I think there’s enormous value in speaking with somebody who has been around long enough to distinguish what has genuinely changed from what we’re simply making more complicated.

My recent guest on Profit Made Simple, Justin Tamsett, is certainly qualified to do that. Justin, or JT as most of us know him, has spent 38 years in the fitness industry. He’s owned a club, worked in sales and management, coached business owners and spent years bringing fitness business operators together through his REX Roundtables. He’s also played an important role in my own career, so this was a conversation I’d been looking forward to having.

We covered a lot including the evolution of the gym industry, leadership, peer learning, member experience, trends, fads and AI. What struck me afterwards, though, was how often we came back to the same idea.

The industry has changed enormously, but the foundations of what it takes to grow a fitness business haven’t changed nearly as much as we think.

When JT entered the industry, a gym was fairly easy to define. You were generally talking about a large traditional facility with weights, group fitness and perhaps a circuit room. The primary business model was gym membership, and the variety available to consumers was nowhere near what exists today.

Now the word “gym” can describe almost anything.

It might be a large health club, boutique studio, personal training facility, strength gym, reformer studio or group training business. The physical size of facilities has changed, training modalities have multiplied and consumers have far more choice about where and how they exercise.

That’s positive because different business models can appeal to different people, potentially making structured exercise accessible to a broader part of the population. The challenge is that the increase in supply hasn’t necessarily been matched by the same increase in demand.

There are far more fitness businesses competing for consumers, but we haven’t suddenly created ten times as many people who exercise.

That means differentiation matters, but it also creates another opportunity that JT and I discussed. Many fitness businesses are fighting over people who are already comfortable exercising. One of the biggest opportunities may be learning how to communicate with the person who has never joined a gym and doesn’t currently see themselves as someone who belongs in one.

That’s a harder problem than convincing somebody to move from the gym down the road, but solving it would be far better for both the business and the industry.

When I asked JT what separates people who build long careers in fitness from those who eventually leave, the first thing he mentioned was purpose.

The people who remain in the industry for a long time tend to have a clear understanding of why they’re there. They know what they’re trying to achieve and can connect the work they’re doing today with something that matters to them beyond simply getting through another week.

Running a business is freaking hard.

There will be months where sales aren’t where you want them, a valued employee resigns, costs increase or something you were convinced would work simply doesn’t. If the only reason you’re doing all of this is because owning a gym once sounded like a good idea, those periods become much harder to tolerate.

Purpose doesn’t magically solve business problems, but it can provide context for why they’re worth solving.

It also doesn’t need to be some grand statement about changing the world. Maybe you want to build a great place for people in your community to train. Perhaps you want to create careers for coaches, provide financial security for your family or prove that fitness can be delivered differently.

JT’s second observation around longevity was one I particularly liked. Successful people tend to know what a win looks like.

That sounds obvious until you consider how many business owners continually move the finish line.

You reach 100 members and immediately decide you should have 150. Revenue reaches $500,000 and suddenly anything below $1 million feels inadequate. You hire a manager and instead of acknowledging the freedom you’ve created, you immediately start thinking about opening another location.

Ambition isn’t the problem. I’m extremely ambitious myself, and I don’t think there’s anything wrong with continually wanting to improve. The danger is building a game you’re psychologically incapable of winning.

If you never define success, you never get to experience it.

That has consequences. You don’t acknowledge progress, don’t reward yourself or your team and gradually create a sense that nothing is ever good enough. Over a long enough period, that becomes exhausting.

Fitness business owners need meaningful targets. Tracking the right fitness business KPIs — including revenue, profit, member numbers, retention and owner hours — can help define what success actually looks like. But you also need to recognise when you’ve achieved something.

A win should still count before you move on to the next one.

One of the principles JT and I strongly agree on is that fitness businesses shouldn’t only learn from other fitness businesses.

Whenever I’m travelling or visiting another business, I’m constantly looking at the experience. Restaurants and hospitality are particularly interesting because they’re obsessed with details that fitness businesses can sometimes overlook. How were you greeted? What did the room feel like? What happened when something went wrong? What tiny touches made the experience memorable?

JT shared a great example involving British Airways. When the airline wanted to improve how its maintenance teams operated, it could have simply studied another successful airline. Instead, it looked at Formula One pit crews because few environments require teams to work with greater speed, coordination and precision.

That’s the mindset I think more gym owners should adopt.

If you want to improve customer experience, don’t only visit the gym down the road. Look at exceptional hotels and restaurants.

If you want to improve operational efficiency, study industries where small inefficiencies have enormous consequences.

If you want to build a premium brand, study companies that have created premium experiences outside fitness.

Benchmarking yourself against competitors can help, but it can also put a ceiling on your thinking. If your only ambition is to be slightly better than the gym down the road, you’re limiting yourself to ideas the gym down the road already understands.

JT has been running REX Roundtables for years, and that’s actually how he and I initially met. I was part of the NSW roundtable and got enormous value from being in a room with other business owners who were prepared to discuss what was working, what wasn’t and the problems they were trying to solve.

I asked JT about this because I feel we’re seeing less face-to-face peer collaboration than we once did. Technology has made it incredibly convenient to consume information or ask questions without ever getting into a room with another owner. AI makes that even easier.

There is obvious value in that convenience, but I don’t think it replaces what happens when a group of good operators actually talks.

Running a business can become isolating because there are certain conversations you can’t always have with your employees, members or family. Sitting with other owners gives you access to people who understand the problem because they’re dealing with their own version of it.

You also discover very quickly that you’re not as unique as you think.

Somebody else has dealt with the staffing problem you’re facing. Another owner has tested the pricing model you’re considering. Someone has already wasted money on the software you’re about to buy and would be delighted to save you from repeating the experience.

I’ve experienced the same thing through our fitness business coaching at Fitness Profit. Some of the most valuable moments don’t necessarily come from me teaching something. They come from an owner hearing how another owner solved the exact problem keeping them awake at night.

Information is everywhere now. Perspective is still valuable.

This was one of the most important parts of my conversation with JT because it’s a problem I see across the fitness industry.

We promote people based on how good they are at the job they’re currently doing.

The best personal trainer becomes the PT manager. The best group fitness instructor becomes the group fitness manager. The strongest salesperson gets promoted into sales management or club management.

Then we’re surprised when they struggle.

The problem isn’t that they weren’t talented. It’s that leadership requires a completely different set of skills.

A great trainer knows how to coach a client. A manager needs to set expectations, give feedback, manage performance, handle conflict, create accountability, delegate and communicate across a team. Being exceptional at writing programs doesn’t automatically teach you how to have a difficult conversation with an employee.

In many cases, we promote somebody and provide almost no development around those new responsibilities. They were confident and successful in their previous role, then suddenly find themselves responsible for people without ever being taught how to lead them.

We effectively set them up to fail.

The same problem occurs when an excellent personal trainer decides the obvious next step is opening a studio. Being a brilliant PT doesn’t mean you automatically understand marketing, cash flow, hiring, pricing, sales or business strategy.

Owning a business isn’t simply the next level of personal training. It’s a different job.

If you want better leaders inside your fitness business, leadership development needs to become an intentional part of the business rather than something you hope people acquire through osmosis.

This may be the biggest lesson from the entire conversation.

Look at the fitness industry today and it’s easy to become distracted by the physical product. Some facilities being built now are extraordinary. Fit-outs have reached a level we couldn’t have imagined years ago, technology is embedded throughout the member journey and new modalities continue appearing.

All of that can contribute to a great business.

But at the end of the day, what people often remember most is how you made them feel.

JT took the conversation back to the rise of CrossFit. Many of the early CrossFit boxes were hardly architectural masterpieces. They were often basic industrial warehouses without the polish we associate with modern boutique fitness.

Yet they created incredibly strong communities.

The lesson wasn’t that facilities don’t matter or that you should stop cleaning your gym. It was that human connection can create enormous loyalty even when the physical environment is relatively simple.

Members want to feel seen, heard and valued.

Your team does too.

Technology should help us become better at delivering that experience rather than convincing us we no longer need to.

If AI saves a coach 30 minutes of administration, fantastic. Use some of those 30 minutes to speak to members. If your CRM identifies somebody whose attendance has dropped, don’t admire the sophistication of the dashboard. Contact the person.

The technology is the tool. The relationship is still the product.

After 38 years in fitness, JT has seen plenty of fads. He’s also spent money on some of them himself, which probably makes him particularly qualified to talk about the difference.

His analogy for the role of a business leader was excellent.

Imagine sitting on a surfboard beyond where the waves are breaking. Your job is to look towards the horizon, identify which wave is going to build and decide whether it’s one you want to catch.

Some waves disappear before they reach you. Others develop enough momentum to carry you a long way.

JT’s distinction between a fad and trend largely comes down to longevity and consumer behaviour. A fad tends to arrive quickly and disappear quickly. A genuine trend reflects a deeper change in what consumers want or how they behave.

That deeper layer matters.

Take fitness racing. You could look at a particular event format and simply ask whether that specific brand will remain popular. A better question might be what consumer behaviour is driving participation in fitness racing more broadly.

Competition, community, achievement and status may all sit underneath the visible product. Those underlying behaviours can remain relevant even if the particular event or brand changes.

That’s why blindly copying whatever is popular on social media is dangerous.

Before investing in another modality, piece of equipment or service, ask what consumer trend it represents, whether that trend is appearing broadly enough to matter and whether it can genuinely help you keep your gym relevant without pulling you away from your core business model.

Something can be a legitimate trend and still be completely wrong for your gym.

We couldn’t have a conversation about the future of fitness businesses without eventually talking about AI.

JT’s view is that AI will expedite a huge percentage of the tasks gym owners currently complete. I agree. We’re already seeing AI for fitness businesses accelerate content creation, analysis, reporting, sales processes, administration and dozens of other activities.

Where both of us have concerns is when owners stop treating AI as a collaborator and start using it as a replacement for thinking.

Ask AI one vague question, accept the first answer and implement it without applying any context or judgement, and you’re not becoming a more sophisticated business operator. You’re simply outsourcing the decision.

JT made a good point here. Used properly, AI can actually encourage critical thinking because you don’t have to accept the first response. You can question it, challenge assumptions, add context and continue refining the conversation until the output becomes useful for your particular situation.

I use voice heavily for exactly that reason. I often think more effectively when I’m talking something through, so being able to speak naturally to AI allows me to work through an idea rather than simply typing a sterile prompt and waiting for an answer.

The final step still matters enormously.

JT calls it “JT-ifying” the output. I’d simply call it making sure the finished product actually sounds like you, reflects your business and passes through a human brain before it reaches another human being.

AI should accelerate your thinking and execution.

It shouldn’t remove you from either.

There’s another AI question that receives far less attention.

What are you going to do with the time you save?

Imagine a task previously took an hour and AI now allows you to complete it properly in 20 minutes. You’ve just created 40 minutes of capacity.

That sounds fantastic, but only if those 40 minutes are used well.

The same thing happens when owners delegate. If you’re trying to build a fitness business that runs without you, removing yourself from day-to-day delivery is only part of the equation. You might finally remove 20 coaching hours from your timetable, then gradually allow those hours to disappear into low-value tasks. Six months later you’re technically spending less time coaching but the business hasn’t benefited from the additional capacity.

The owner needs to redeploy some of that capacity into activities that move the business forward.

For me, three obvious areas are leadership, sales and marketing. Spend more time developing your people. Build better relationships with prospective clients. Create stronger marketing. Review the numbers, study consumer behaviour and think strategically about where the business needs to go next.

Efficiency isn’t valuable simply because you finish work faster.

Its real value comes from what the freed capacity allows you to do.

The best advice JT had received from his time in the industry is to be:

Happy, hungry and humble.

I think those 3 words describe a useful mindset for anyone who wants to build a successful fitness business over a long period.

Be happy enough to recognise what you’ve already achieved and enjoy the business you’re building. Stay hungry enough to continue improving rather than becoming complacent. Remain humble enough to accept that you don’t have all the answers and can learn something from your team, your peers, other industries and even competitors.

A successful fitness business needs sound financial fundamentals, effective marketing and sales, but long-term success also depends heavily on leadership, the ability to improve gym member retention and the quality of the team. Owners need to understand what success means for their particular business and continually adapt as consumer expectations change.

Start by identifying where the biggest constraint currently sits rather than adding more strategies indiscriminately. Review acquisition, sales conversion, member retention, profitability, leadership and the member experience. The greatest opportunity may be very different from one fitness business to another.

Gym owners need to communicate expectations, delegate, give feedback, manage performance, handle conflict, make decisions and develop other people. These skills are different from technical coaching skills and generally need to be learned deliberately.

Look beyond equipment and facilities and consider how members feel throughout their relationship with the business. Pay attention to how they’re greeted, whether coaches know them, how quickly problems are resolved, whether their absence is noticed and whether they feel genuinely valued by the team.

Look beyond how much attention something is receiving online and examine the consumer behaviour underneath it. Genuine trends tend to have broader adoption, greater longevity and a connection to deeper consumer needs. You should then decide whether that trend is relevant to your particular market and business model.

Use AI to accelerate repetitive work, analyse information, develop ideas and improve workflows, but maintain human judgement over the finished output and important decisions. Treat AI as a collaborator rather than automatically accepting the first response it produces.

Not automatically. Technical performance and leadership capability are different things. A strong personal trainer can become an excellent manager, but they need development in communication, accountability, delegation, feedback and people management rather than simply receiving a new title.

Community creates relationships that extend beyond the workout itself. When members feel known, connected and valued, the gym becomes more than somewhere they access equipment or attend a class. That human connection can play an important role in engagement, experience and long-term loyalty.

After 38 years in fitness, JT has seen the industry reinvent itself several times. He’s seen traditional gyms evolve into an enormous variety of clubs, studios and boutique concepts. He’s watched sales and marketing change, technology become embedded throughout the member journey and new training modalities arrive, disappear and occasionally transform the industry.

There will be plenty more change ahead.

AI will become more capable. Facilities will continue improving. New training concepts will emerge and consumer expectations will shift again. Ten years from now, there will probably be parts of the fitness industry that look very different from what we recognise today.

Most importantly, you need to remember what business you’re actually in.

We sell training, coaching, memberships and experiences, but underneath all of that we’re still dealing with people. Members want to feel seen, heard and valued, and the people who work for us want much the same thing.