Open Your Own Rock Climbing Gym

Climbing indoors on man-made cliff faces has grown in popularity since it was introduced more than 40 years ago. Indoor rock climbing appeals to kids and adults alike, making it a potentially lucrative gym opportunity for those with the passion, skills and abilities to make it work. 

If you’ve got those three attributes and have ambitions of opening your own rock climbing gym, then you’re at the right place.  In this article, I’ll lay out an eleven step plan to take your rock climbing center from a nebulous dream to an official opening.

Here’s what we’ll cover:

• Assess your readiness
• Do your research
• Differentiate
• Decide if you’re going to franchise
• Form a legal entity
• Find a location
• Obtain insurance
• Write your business plan
• What does it cost to open a rock climbing gym?
• Secure funding
• Market your rock climbing gym

Assess Your Readiness

The very fact that you’re contemplating opening a rock climbing gym pre-supposes that you are an avid climber yourself. If you’re not and are simply in this to make money, you may as well stop now. Without a deep, inner passion for the service you’re offering you will really struggle to make it through the lean times.

Having a passion for climbing, though essential, is not enough, however. Before you go down this track, you need to ask yourself some searching questions. Here are a half-dozen to get you started?

1. Have you got experience working in rock climbing gyms?
2. Do you have managerial experience? 
3. Are you able to live without an income for 6-12 months?
4. Do you have at least $30,000 start-up capital and the ability to raise more funds?
5. Are you a self driven person who will do whatever it takes to make your business succeed?
6. Do you like working with kids?

If you’ve answered no to any of these questions, you should either delay your plans to open your own facility and get a couple of years experience as an employee at a rock climbing gym or save the start-up capital you need to be in a position to move forward. 

Do Your Research

Before you start moving ahead with your business idea, you need to establish whether or not the business is viable. The only way to do that is with thorough market research. The more data you can collate, the better. 

Your starting point should be existing rock climbing gyms. Make personal visits to every rock climbing gym within a 100 miles radius of where you live. Take each one for a trial run to discover what they’re doing well and what they’re falling down on. What services are they not providing to the community? 

Obviously the market draw for your gym won’t be a 100 mile radius, but the more rock climbing gyms you get to check out, the more ideas you’ll generate about how your facility can be better. Your market draw will be within three miles of your proposed location. At this stage, you won’t have a firm location locked down, but you should have a general idea of the community you want to serve. 

If there are any rock climbing gyms within that area, you need to be extra diligent with your research about them. This will be your direct competition. So, analyze what their niche market is, what the unique selling point is, what gear they have, and what they’re lacking, how extensive and challenging are their walls, and what other services they’re offering. 

If you notice that a lot of their members also go to a gym, could you add a functional fitness area to your facility that includes such gear as battle ropes, weight sleds, tires and sledgehammers so they can combine rock climbing with their workouts under one roof? 

Your competition research should also pan out to a nationwide analysis. You can obtain data on all the climbing gyms in the United States at Climbing Business Journal. Use that treasure trove of information to create a spreadsheet of the fees that are being charged across the country. Look at the demographics of areas that have a large number of rock climbing gyms. How do they compare to the demographics surrounding your proposed location? 

It is worth the expense and effort to contact gym owners and offer to buy them lunch so you can use them as a sounding board. Ask them about how things are going for them, where they think the market is heading and what advice they would have for a new gym. Of course, you should target gym owners who are not going to be your direct competition or they’re likely to give you misleading information. 

As part of your market research, I recommend doing a survey within the community that you wish to serve. Go out into the local mall, sports events, adventure park and other areas where your potential members congregate and talk to them.  With a clipboard and pen in hand ask people if they would like to see a new rock climbing gym in the community. Drill down on extra services such as a snack bar, weights and cardio area, and senior classes and ask them if they’d use them. 

At the end of your research, you should have a definitive answer to this question …

Is there a need for a new rock climbing gym and will the community support it?

If the answer is no, you have just saved yourself from a world of pain. If it’s yes, advance on to the next step. 

Differentiate

As a result of your research, you want to be able to identify a gap in the market that allows you to differentiate. This is especially important if there is already a rock climbing gym in your community. Coming in as a new startup to compete against an established business is a bit of a David versus Goliath challenge? Unless you’ve got a point of differentiation, you’re really going to struggle.

So, ask yourself what you are going to do differently from the competition. When you are able to create a point of difference you will, in effect, be eliminating the competition – no one else will be doing what you do. So, think about filling a hole in the market or catering to a market segment in a much better way than the competition is doing. 

One potential area of differentiation is to market toward the senior population. Rock climbing offers huge benefits for seniors in terms of improving balance, strength and coordination. It’s also a fun, social activity that makes a great social outing for senior groups. There’s a lot of potential to educate seniors about strength and balance training that can be built into your services. 

Decide If You’re Going to Franchise

At this point you need to make the pivotal decision of whether you will go it on your own or buy into a franchise. A franchise will provide you with proven methodology to setting up and operating your business. It will also allow you to benefit from the use of an established brand name. 

Franchisees become part of a community, providing them with access to experienced mentors who are able to guide them through the initial stages of the business. Franchising will also provide business connections and allow the franchisee to benefit from established supplier relationships. 

Here’s an overview of the pros and cons of buying into a franchise:

Pros

• Brand Recognition – your business brand will be instantly recognizable, giving you instant credibility.
• Marketing – you will benefit from nationwide and local marketing that the franchisor carries out, as well as readymade marketing materials.
• Out-of-the-box tools – you will be able to seamlessly ease into the established processes and tools that the franchisor has going, including accounting procedures, booking procedures and social media marketing.
• Customer consistency – prospective members know what they’re getting with a franchise. That makes their decision a lot easier.
• Lower set up costs – often the franchise fee is offset by the bulk equipment deals that the franchisor has with suppliers.
• Statistics show that franchisees have a higher survival rate than independently owned businesses.

Cons

• Costly franchise fees
• Lack of creative freedom – you are required to stick to the established methodology of the franchisor.
• Lee freedom to differentiate.

Form A Legal Entity

You should now construct the legal framework for your gym’s operation. You can shield yourself from legal responsibility for your company by establishing a distinct legal entity. The legal structure of your company will also affect its tax status.

You have several options here.

You could establish a sole proprietorship if you want to run the firm alone. A partnership could be formed between two people who start a business together. However, if everything fails, neither of those forms will protect you from business creditors. That can only be done by a limited liability company (LLC). Doing so is more expensive and involves navigating bureaucratic hurdles. 

Find a Location

The success of your gym will be greatly influenced by its location. You won’t be around for very long unless you are located in an area where there are enough individuals nearby who can both afford your rates and fill the gym. 

Although there are many successful centers in small-town America, the expanding suburban communities emerging outside of the main cities are the most attractive places for a successful rock climbing gym business.

When it comes to choosing your location, you will obviously need to choose a site that has very high ceilings. To accommodate your most experienced and adventurous climbers, you’ll want your highest wall to reach up three stories. Buildings of that height will usually be found in industrial areas. Finding a single storey building with a ceiling that is super high will mean that you don’t have to think about demolishing the floors in between – something which will be very costly and probably won’t go down well with the landlord!

The building will also have to have a very sturdy support structure. 

Obtain Insurance

You must have insurance protection before you open your new gym to ensure that you are fully protected from loss, damage, and liability resulting from injuries..

Starting with general liability insurance is a good idea. Professional liability will cover negligence errors, such as those that might occur if an injured member sues your employees because they weren’t given the necessary instructions. You should also obtain worker’s compensation insurance if you have employees.

Write a Business Plan

A well written comprehensive business plan is a rock climbing gym start up essential requirement. Your key business partners, including your landlord and those who you are receiving financing from will need to see it. Your business plan is also going to be your business blueprint, providing you with a guide through your first 12 months as well as an education about your business.

Your business plan will give you confidence when you are questioned by your landlord or your potential lender. You will be able to clearly define the risks involved and the mitigating factors that you will undertake to meet the challenges presented. 

You should develop a comprehensive business plan. There are many templates online that will guide you through this process. The one provided by the Small Business Association is especially helpful.

In addition to your main business plan, you should also prepare a mini version. This is what you will show to your landlord and other interested parties. Of course if they ask to see your full plan, you should also have that available. More than likely, however, they will want to see a Cliff Notes version that shows clearly that you’ve done your homework and that presents your financial numbers in a simple, clear manner.

Here are the five key parts of a good mini business plan:

Executive Summary

The executive summary is like a five-minute elevator speech that explains what you do, what your point of difference is and how you are going to become profitable. 

Business Description

In this section, you will explain why you’re in business and what you are selling. In addition to the tangible things that you are selling such as gym memberships, supplements, personalized training sessions and swag, make mention of the intangibles. Talk about how you are solving problems for people and providing solutions for them.

Market Research & Strategies

This market research analysis should focus on a 3 mile radius around where your gym is going to be located. That equates to about 15 minutes of drivetime. Include information about the demographics of the community as well as your competition – how many members they have, how long they’ve been operating, what they charge, what type of marketing they use, and the market niches they target.

After presenting your market research, you should now lay out your strategy to differentiate yourself from competition and attract members to your facility. Clearly explain what you will do better and/or differently to the existing gyms. By presenting a truly unique selling point, you will be able to eliminate the competition in the mind of the reader. 

If the reader of this section of your report goes away thinking that your only competitive advantage will be based on price then you have failed in your job with this section.

Management & Personnel

In this section you need to identify who is going to run the business, and what the management structure is going to be. If you have a mentor who is willing to help you get the business established, ask if you can include their profile in the section of your business plan. This can be quite persuasive, especially if that person has a successful business background. 

You should also include information about the number of employees and what their roles will be. 

Financial Document

Your financial document will be your pro forma budget and will have 3 parts:

• Your start-up costs
• First 12 month operating and profit breakdown
• Five year projection

What Does It Cost to Open a Rock Climbing Gym?

The answer to this question is a bit like that to the proverbial ‘how long is a piece of string?’ So, let’s base our calculations on an average sized facility with 3000 square feet of climbing surface, along with an education center and a retail area. 

To get a facility like this to grand opening day readiness, it will cost you between $150-175,000.

Keep in mind, however, that we are living at a time when material, transportation and labor costs are constantly on the rise. 

Here’s a breakdown:

Climbing Surfaces 

You should budget around $40 per square foot of climbing surface. Extra elements like arches,top out boulders and steep overhangs will increase that cost. 

If you want to install a freestanding wall, expect to pay anywhere from $10,000-40,000. 

Flooring

In your bouldering area, flooring will cost around $25 per square foot. 

Holds

You should have one hold per square foot of climbing wall. You won’t have them all being used at the same time, but you do need to have a supply of turnover stock. This will allow you to regularly refresh the wall to keep it interesting. Your holds will average out at around $13 each. Large handholds are substantially more than that while small foot jibs are a lot less. 

Start Up Retail

An investment of around $3000 will give you a starting retail inventory.

Ropes & Harnesses

Rock climbing ropes will cost between $150 and $500. You can expect to pay the same amount for harnesses

Auto Belays

Auto belays will cost you around $3000.

Climbing Shoes

Climbing shoes vary in price, with budget models going for around $50 and the premium performers retailing for close to $200. You will be able to recoup the cost of shoes by renting them to your patrons.

Insurance

Budget between $5,000-10,000 per year to cover your insurances. 

Facility Rental

Rental costs vary widely depending on what part of the country you are in and how far off the beaten track you are. They could be anything from $10-$35 per square foot. 

The building will have to have a very sturdy support structure. 

Remodeling 

More than likely you will have to make some alterations to the building. This may include installing bathrooms, locker facilities, a reception area or showers. These improvements could cost anything up to $30,000. 

You should be able to negotiate a lease holiday as compensation for the improvements that you are making to his business. 

Licensing Fees

Local government licensing fees will also vary according to your location. You should set aside between $3000 and $5000 to cover these fees.

Employees

Your staff should be a made up of trained climbing instructors and general duty workers. Expect to pay your general duty workers about $20 per hour. A trained climbing instructor will expect to receive $45000-50,000 per year. 

Plan to factor in employee health benefits of between $300-600 per employee per month, as well as worker compensation of between $225-1200 per month, depending on where you are.

Marketing

You will need an initial marketing budget of at least $5000, including the cost of setting up a website. Your ongoing monthly marketing budget should be around $1000.

Ongoing Expenses

You should budget between $1000-2000 per month to cover electricity, heating and water expenses. Add in another $200 a month for internet services, phone and web hosting. 

Miscellaneous Expenses

When you are running your own service business, it can seem like there is no end to your costs. The most obvious miscellaneous expenses are cleaning products, bathroom supplies, and maintenance expenses. 

I recommend budgeting around $150 per month and cleaning products, $50 on bathroom supplies and $500 per month for ongoing maintenance. 

Secure Funding

Unless you are the fortunate recipient of a large inheritance or recently won the lottery, it’s probable that you will need to secure financing to fund your rock climbing gym. Most business lenders will require you to come up with 20% of the start-up costs.

 If we use an average of $160,000 for a medium-sized facility, you will need to have a deposit of $32,000. This should be money that you have saved rather than borrowed. You will have your work cut out making repayments on the other $128,000, so the last thing you want is to have to pay back money to your friends or family. If this means delaying your start-up until you have the deposit money, then so be it.

Once you have got your 20% deposit in the bank, you are ready to start approaching investors. 

Here are some potential sources of funding:

Bank Loan

A bank loan is the obvious first port of call when seeking funding. The challenge is that you need to be able to show a history of profit. This presents a challenge for a new start-up. It is more than likely they are going to want some form of collateral or a cosigner who can guarantee the loan.

The bank may also require you to show a history of working in the rock climbing industry. Most will also require you to have a minimum credit rating of 680 and an income of at least $50,000.

Asset Based Lending

Asset-based lending involves financing your equipment. Look for opportunities to pay off your purchases as well as to lease some of your equipment rather than buying outright. 

Small Business Funding

Small business grants are being given out to new businesses every day by both federal and state agencies. Check out the following online resources to see if you qualify:

• Grants.gov – here you’ll find a database of Federal government small business grants.
• Small Business Development Centers – as well as pointing you to small business grants, these centers can also provide guidance and training.
• Minority Business Development Agency Centers – The MDBA promotes minority owned small businesses. Among other things they help business owners secure funding. 
• State Trade Expansion Program (STEP) – The STEP program is funded by the SBA.
• Hello Alice Grant Platform – This is a platform created by and for small businesses. They offer all sorts of support, including grants.

SBA Loan

The Small Business Administration (SBA) operates the 7A Loan Program, which offers small business loans for start ups with special requirements. They offer lower interest rates than banks and have less stringent requirements. The down payment is 10 percent.

If all else fails you might be able to secure a small business credit card or mobilize the power of the web by crowdfunding your startup business. 

Prior to approaching anybody for funding, you need to be prepared. If you’ve ever seen an episode of Shark Tank then you know what it can be like to be in the ‘tank’. Know your figures back to front, have your 5-minute elevator pitch down pat, along with a 30-second cut to the chase version ready to go. 

Market Your Rock Climbing Gym

You are now ready to start letting your community know that you exist. Your marketing campaign, both for your launch and ongoing, should have two interweaving pillars:

• Offline
• Online

Offline Marketing

Direct marketing is a tried-and-true offline marketing tactic that you should not ignore. When used in combination with other strategies, direct mail is an excellent marketing tool.

A direct mail piece won’t be very effective on its own. Along with the other layers of promotion discussed below, however, it can be very effective. You must run a direct mail campaign for at least 90 days for it to be effective. You should distribute three separate messages throughout that time.

You should send out 5000 mailers each month for three months leading up to your grand opening. Cover a three mile radius of your location. Mailers should include a QR code linking to your website.

Here’s what each of the three mailers should focus on:

• Mailer #1 should introduce the new rock climbing gym.
• Mailer #2 should offer a free introductory coupon that can be downloaded from the website.
• Mailer #3 should reinforce mailer #2’s message and add an element of FOMO.

In addition to your direct mail campaign, I suggest you invest in a radio campaign to build up to your opening event. You should also team up with other complementary businesses, give presentations at schools, gyms and other local businesses. 

Online Marketing

You need to have a vibrant social media presence from the very start. That means that you need to been on top of the following:

Website

You need a professional website that is clear, quick to load and easy to navigate. Make sure that it looks good both on a desktop PC and a phone. Ensure the site is exciting and vibrant with some great shots and user testimonials. Include an FAQ section and a blog that is information packed.

The website must be easy to navigate and your branding should be consistent across it.

Social Media

Focus on social media platforms that are very visual, such as Instagram, Facebook and Pinterest. Populate them with great rock climbing action shots. 

In terms of paid social media marketing, I advise beginning with Facebook advertisements. These are a very efficient approach to reach niche markets on a budget. When creating your advertisement, do your research to determine the problems that your target audience is experiencing, and then clearly demonstrate how you will address those problems.

A viewer is far more likely to pay attention to your advertisement if they believe that you are aware of their issues and understand where they are coming from.

When managing a Facebook ad campaign, you should adhere to the 40/40/20 guideline. Your ability to comprehend your market, pinpoint their problems, and present the appropriate message to them will account for 40% of the campaign’s success. You can accomplish this with Facebook’s targeting tools to an extent that was previously unimaginable.

Your offer determines the other 40% of your success. It must be intriguing enough to compel the audience to act and pertinent to them.

Your copy and inventiveness account for the final 20% of your success. This is the result of the words you pick, the photos and videos you add, and every other aspect of your advertisement. 

Through your social media platforms, you need to build up anticipation for your grand opening. 

Summary

We’ve now taken your rock climbing gym idea from a  vague ambition to the grand opening day. To get from one to the other will take several months of solid research, hard grind, and plenty of networking. Here ‘s a recap of the steps we’ve followed …

• Assess your readiness
• Do your research
• Differentiate
• Decide if you’re going to franchise
• Form a legal entity
• Find a location
• Obtain insurance
• Write your business plan
• What does it cost to open a rock climbing gym?
• Secure funding
• Market your rock climbing gym

Take your time as you progress through these steps – and don’t skip any of them. By working systematically and methodically, you will be building a foundation for future rock climbing gym success.