How to reduce gym overhead costs in 2025

Is gym overhead taking too much of your revenue? You're not alone. Recent IHRSA data shows boutique fitness providers typically spend 65-70% of their monthly revenue on operational costs.

To lower operational expenses, it's essential to pinpoint your expenditures. By implementing automated systems and adopting efficient management strategies, numerous studios have successfully reduced their administrative costs by 10-15%, all while upholding excellent class experiences.

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Ready to reduce your overhead? Here are 10 proven ways to lower your studio's operational costs while growing your fitness community.

Impact of gym overhead cost optimization

For example, with studio overhead expenses for a boutique fitness studio generating £240,000 in annual revenue, there are significant costs, such as staffing, energy, and marketing, that are typical in a studio of this size. Reducing these overhead expenses can result in an immediate increase to studio profitability.

In this example, the current annual studio staffing cost is £96,000, with other major expenses such as energy (£18,000) and marketing (£24,000), which brings total overhead near £180,000 annually.

This leaves the studio with a profit of approximately £60,000 before the reduction in expenses (£240,000 – £180,000 = £60,000).

By implementing cost-saving strategies—such as a 10% reduction in staffing costs and a 20% reduction in energy expenses—the studio can save a total of £24,000 annually. This brings the total reduced expenses down from £180,000 to approximately £156,000.

After these reductions, the studio's profit margin increases to £84,000, which is a £24,000 profit improvement from the previous £60,000.

On a monthly basis, these reductions mean an additional £2,000 in profit, which can be reinvested into the business, used to enhance member services, or saved to improve overall financial health.

Reducing overhead costs in key areas not only increases profitability but also strengthens long-term business stability. Studio management software like TeamUp can further streamline processes, monitor expenses, and manage resources effectively, leading to continued growth and cost efficiency.

Categorize gym costs

Before looking at ways to reduce costs, the first step is to categorize your gym expenses. This helps you see where your money is going and makes it easier to manage your costs.

Here is an example of how to categorize gym costs:

Tip: TeamUp's reporting dashboard is designed to help you focus on high-priority tasks - from tracking your most engaged clients to identifying those at risk of churning. 

Now, let’s get straight to how to reduce gym overhead costs with these simple fixes!

1. How to reduce operational overhead costs

Operational overhead costs are the ongoing expenses required to run your gym’s day-to-day activities, such as utilities, maintenance, and staff salaries.

Reducing operational overhead costs is key to running a successful gym and keeping more of your hard-earned revenue. 

We’ve broken it down into three simple strategies:

Opt for affordable software plans

Investing in gym software can significantly reduce overhead costs while improving efficiency.

According to a report by Fitness Business Insider, gyms that adopt efficient software solutions can save up to 30% on administrative costs annually.

For example, TeamUp offers affordable plans starting at just $104 per month, making it a cost-effective choice for small to medium-sized gyms.

Use VoIP for phones

Switching to VoIP (Voice over Internet Protocol) for your gym's phone system is a smart way to cut communication costs. Unlike traditional landlines, VoIP uses the internet to make and receive calls, significantly reducing monthly phone bills.

According to a study by Nextiva, businesses can save up to 60% on phone expenses by adopting VoIP systems.

Here's a table showing 5 popular and affordable VoIP providers and their pricing:

*Information correct as of February 2025.

Bundle internet and phone plans

Bundling internet and phone plans is an effective way for gym owners to reduce operational costs while maintaining reliable connectivity. Many service providers offer discounted packages for businesses that combine these essential services.

For example, according to Faster Capital, bundling can save small businesses up to 40% compared to purchasing standalone plans.

Providers like  Comcast Business and Spectrum Business offer packages starting as low as $66 per month, which include high-speed internet and unlimited phone lines. Check out some other affordable options here:

*Information correct as of February 2025.

2. How to reduce facility overhead costs

Facility overhead costs are the expenses tied to maintaining the physical aspects of your gym, such as rent, utilities, and equipment maintenance.

Reducing facility overhead costs can make a big difference in your gym’s overall profitability. Small changes in location, space usage, and energy efficiency can lead to substantial savings. 

Here are four strategies, with supporting stats, to help you cut down on facility costs:

Relocate to a lower-cost area

Switching your gym to a lower-cost area is a strategic way to cut facility overhead costs, particularly for companies facing high lease expenses.

Studies show that moving headquarters to states like Texas can save businesses 15–20% on employee wages and significantly reduce operational costs. 

Here are some practical tips for relocating your gym to a lower-cost area:

• Research local costs: For example, moving from New York City to Austin, Texas, could reduce leasing costs by up to 50%, with average commercial rent in Austin around $35 per square foot versus NYC’s $75.
• Negotiate lease terms: Landlords in less competitive markets might offer up to 10–20% discounts for longer lease agreements.
• Prioritize accessibility: Relocating within a 5-mile radius of transport hubs can increase foot traffic by 30%, helping retain members.
• Evaluate demographics: Conduct surveys or use tools like Census Bureau data to ensure your target audience resides in the new area.
• Partner with a broker: Real estate brokers often identify spaces that are 15–25% below market rates.

Think outside of the box:

Moving to a lower-cost area can reduce expenses but requires careful planning. Members choose your studio based on convenience, so any location change needs to balance cost savings against member retention. Consider surveying your members about their commute preferences before making location decisions.

Sublease unused space

Unused spaces in your gym can become an additional income source. Rent them out to personal trainers, physical therapists, or fitness instructors who need a space for their clients.

 For example, leasing a 300-square-foot room at $15 per square foot can bring in $4,500 annually. This strategy is especially effective for covering overheads like rent and utilities. 

Before subleasing, check below instructions:

• Review your lease agreement: Ensure that subleasing is allowed in your current lease terms. Some agreements may prohibit or limit subletting.
• Set clear terms: Define the rental duration, cost, and responsibilities clearly with your tenant. Consider utilities, maintenance, and insurance.
• Screen potential tenants: Choose reliable tenants who align with your gym’s values and services. Background checks and referrals are key.
• Use trusted platforms: List your available space on reputable platforms like Craigslist, LoopNet, or commercial real estate websites to find trustworthy renters.

Check this list to find more reliable renters:

*Information correct as of February 2025.

Use energy-efficient lighting

Switching to energy-efficient LED lighting is one of the simplest ways to lower your gym's electricity bills. Use motion-sensor LED lights in lesser-used areas like storage rooms or restrooms to further optimize energy use.

Using LED lights in your gym offers a dual benefit: cost savings and aesthetic enhancement. This is because LED lights:

• Last up to 50,000 hours at full capacity (metal halides last 35,000 hours at most, while CFLs last only 10,000 hours on average)
• Produce brighter lights while significantly cutting energy consumption
• Emit lighting that is constant
• Have no wait time before getting to full brightness

Train staff to handle minor repairs

Training your gym staff to handle minor repairs can save you both time and money. Simple fixes like tightening equipment bolts, replacing light bulbs, or addressing minor plumbing issues can cut repair costs by up to 20%.

 For example:

• Teaching staff to fix treadmill belts or maintain HVAC filters reduces the need for frequent professional visits. 
• Offering basic repair training not only empowers your team but also keeps your gym functional and attractive for members. 

3. How to reduce employee overhead costs?

Employee overhead costs refer to the additional expenses associated with employing staff, beyond their salaries. These include benefits (health insurance, retirement plans), training, payroll taxes, and other related costs like uniforms or employee amenities.

As a gym owner, acting and thinking smart is essential to tackle the challenges and stay profitable. Mismanagement or poor decision-making can trap you in unnecessary costs and inefficiencies.

By optimizing staff schedules, leveraging technology, and outsourcing non-core tasks, gym owners can significantly cut expenses. Here’s how:

Cross-train employees to handle multiple roles

Training staff to take on various roles like handling front desk duties, assisting with equipment maintenance, or helping with customer service can minimize the need for additional hires. It also boosts flexibility in your team. 

Tip: Consider creating a structured training program, so staff is ready to jump into different tasks when needed, saving time and costs.

• Use part-time staff during non-peak hours

Gyms like Crunch Fitness employ part-time workers for evening shifts or weekends, avoiding full-time salary expenses during low-traffic hours. This flexible staffing approach balances cost efficiency with excellent member support. 

Outsourcing can be approached as follows: 

• Accounting services: Hire external firms for bookkeeping and payroll instead of hiring full-time accounting staff.
• Cleaning services: Use cleaning services and pay only for the time they spend cleaning, so you don’t need a full-time cleaning team.
• Marketing agencies: Work with marketing agencies for specific campaigns, avoiding the cost of a full-time marketing department.

4. How to reduce miscellaneous overhead costs

While many expenses may seem small individually, they can add up quickly, impacting your bottom line. 

Here are the most effective ways to reduce your miscellaneous overhead costs:

Use online accounting software

Gym owners can save on miscellaneous overhead costs by using cloud-based accounting software, which streamlines financial tasks and reduces the need for in-house accountants. 

Software like QuickBooks or Xero allows you to manage your books, track expenses, and generate reports without hiring full-time staff. 

Tip: Look for tools that offer gym-specific features like membership tracking or payment integrations to further simplify your financial management. All these features are available at TeamUp.

Handle simpler legal/accounting tasks in-house

With the right tools, many legal and accounting tasks, such as filing taxes or processing payroll, can be handled in-house. User-friendly software can also save you money on hiring full-time accountants or lawyers.

Conclusion

Start by understanding where every pound goes in your studio. Smart choices in management software, energy use, and staff training create immediate savings without compromising the quality of your group fitness classes.

Focus on what matters most - delivering exceptional fitness experiences to your members. Track your expenses, implement cost-saving measures gradually, and measure the impact on your bottom line.