Starting up a BJJ gym can be a dream for people training the sport. However, for others it is a reality. In the last decade, there have been BJJ gyms springing up all over the world and the market is now larger than ever. With that being said, there must be a saturation point for the market. There will come a point where there are too many schools per population and some will have to close down.
Although there is still a lot of money to be made in teaching BJJ, there is an argument that the sport could go down the same path as judo. Judo has never had the culture of making money like BJJ does, but even still, there are really not many judo schools that offer classes 2-3 times per day with full time instructors. A lot of other martial arts will barely have any professional teachers and it is almost solely a part time gig.
The point is that you must view opening a BJJ school as a business (unless you want to do something for your local community). If you are going to be teaching BJJ full time, you must make a full time income, otherwise your hobby may become your nightmare.
Table of Contents
Location Is Crucial
We once featured an article on the best cities for training BJJ in the USA. One key metric of this small study found that there were sometimes large discrepancies between the population and the amount of BJJ gyms. Orlando FL, for example had one gym per 15000 people, whereas Austin TX, had one gym per 48000 people. This data shows that there is a lot more room in one city for a new BJJ gym compared to another.
Even with this data, it’s not quite that simple. Ideally you want the perfect area which would be:
- Low Rent
- Large Population
- High Disposable Income
Unfortunately, it’s almost impossible to find these things. However, finding a location where your target audience has a disposable income is absolutely vital. If you set up in a city that has a lot of people but is very poor, the last thing on people’s minds will be training BJJ.
Overall if you can find a place with a big population that wants to train BJJ then you’re on the right track. Then it’s up to you to try and find a good location within this area.
General Costs Of Starting Up A BJJ Academy
Rent – $1000 p/m
Mats & Wall Padding – $5000
Paint – $300
Labor & Bathroom / Shower Installation – $2000
BJJ Equipment (Timer & Intro Gi’s) – $500
Misc items – $500
Sign(s) – $500
Hidden Costs
Advertising
Many people assume they can just put their academy on Facebook and Instagram, then this will be enough for them. There is a chance that this could be enough, especially if you are a well-known athlete. However, most of your customer base will be people who have never heard of BJJ before or want their kid to try a class. These people have no idea who Roger Gracie is, let alone yourself.
There are many options online, with the most common advertising being google ads. This allows you to set and manage your own budget, whilst seeing approximate costs per click before paying. Your budget can be anywhere from $0 – $100000. It is up to you how much you spend and whether you think advertising is worth it.
Software
You may not have thought of this, but it is becoming more essential. By using gym software, you are going to free up your time to do other things.
If you have 75 members, it might be difficult to track everything, as well as remembering waivers, paying your insurance, rent, utilities etc.
Fortunately BJJLink offer a fantastic app to do this for you. The price is only $30 per month, but remember this is another outgoing you must consider.
Affiliate Costs
Whether you want to sign up to an affiliate or not is really a personal decision. You have to be honest with yourself and calculate whether or not you can make more money under a large team banner, or whether you’re going to go it alone. You must also remember that there are several rules and restrictions with certain brands, you will be your own boss, but still not be able to do everything you want to do.
There are no published costs online for affiliate startups, but it’s been rumored that the top BJJ brands command around $5000 – $8000 in start up fees alone, which does not include monthly costs.
One cool affiliate worth mentioning is BJJ Globetrotters. This was set up by Christian Graugart and is 100% free to join. There are a few small rules you must follow, but nevertheless, if you’re on a budget this is definitely worth signing up to.
Your Time
This is perhaps the biggest hidden cost there is. Many people have little time, but put such a low value on it. If you have never been your own boss before then you cannot understand this until you do it.
Having a BJJ academy is not simply teaching 30 hours of BJJ per week. You must do a lot of dirty and menial tasks that you may not like to do. The toilets won’t clean themselves, the utility company may have overcharged you by $60 last month and there may be a light that needs fixing. None of these tasks will be solved by anyone else other than yourself.
Even though these tasks may require just 30 minutes of your time each, they all add up. You may find yourself losing 1 or 2 hours per day to basic things going wrong. Over a month this amounts to approximately 45 hours. When you start to look at time from this perspective you can see the real hard work and effort it takes to keep going.
Why Cashflow Is So Important
Cashflow is something you might not know about, but something you MUST learn. 82% of small businesses that failed had poor cash flow management. If all of your members are paying on time and you’ve got the upfront costs of starting a BJJ covered, you may think that your cashflow is covered. This is a reasonable assumption since memberships are mostly paid month-to-month and are taken directly from a member’s bank accounts.
However, running a gym is often more complicated than this. As an example, your affiliate may require you to pay for 20 new gis, rashguards and other accessories upfront. Even if you were to make a big profit reselling these products in your own gym, the outgoing cost of these things may be quite a large amount of money. Your landlord won’t be accepting payment in rashguards either, so you will need cash.
Another example of this would be if your whole air conditioning system broke. In some states or countries, AC is essential and can’t be ignored. If there is a big upfront cost for this, even though your gym might be making large monthly profits, sometimes the cash is needed right now. This is why it’s good for all new business owners to understand the basics of cash flow management and not fall into this trap.
You’re Likely Going To Lose Money In The First Year
Another reason why cash flow is so important is that the gym is likely going to lose money in its first year. Whilst there are many studies which say silly things such as “almost all businesses lose money in their first year”. This really depends on the industry and what your costs are.
Sadly BJJ is an industry where you are likely to lose money at first. The only real reason for this is that your costs are mostly fixed whilst your income is not.
You will be paying the same amount of rent each month regardless of how many members you have. If you expect to have 100 members by the end of year 1, you may only have 25 members after 3 months.
If it takes 75 members to break even, then you are going to be losing money until you reach this point.
“Back Of The Napkin Test”
Also known as the “back of the envelope test”. The simple premise behind this idea is that if something cannot be proven or calculated on the back of a napkin, then it likely won’t work. To put it simply, the calculation must be very simple. You do not need to include every area of income, cost, time and other variables, but the business idea must make sense.
To put this into a BJJ context, you must know rough estimates of your income minus your outgoings. Then if your time is worth this amount or more, you have a successful business idea. If you were going to make $300 profit after everything has been accounted for, perhaps your time would be better spent doing something else.
Overall Costs With Approximate Numbers
Startup Costs
| Deposit | $1000 |
| Mats | $5000 |
| Paint | $300 |
| Labor & Conversion | $2000 |
| Signs | $500 |
| Misc | $500 |
The total startup cost comes in at $9300.
You may well have to pay a bigger deposit or spend more on converting an office into a mat space with functional showers. If you needed to do a big bathroom conversion you could likely add another $5k to this price. Keep in mind there are also no affiliate fees and the misc expenses are really quite low. You may end up spending a lot more on things such as reception desks, chairs, TV’s, tablets and many other things. $9300 is probably the very lowest you could start up for unless you had some outside help available such as free labor.
Ongoing Costs (Monthly)
| Rent | $1000 |
| Insurance | $100 |
| Utilities | $300 |
| General Misc & Maintainence | $150 |
| Advertising | $150 |
The total monthly cost comes to $1700.
Your rent may be higher or lower than $1000 but this is just a fairly small sized gym in a reasonable city location. Insurance will actually scale up and may start off costing less than $100 per month. As you get more members this is the one cost that will increase.
Utilities will set you back quite a lot depending on if you have showers and AC.
The advertising budget is really dependent on what you want to spend. It could be $0 if you really didn’t want to spend money. But remember the point of advertising is to make money.
