market sizing; # of members in a gym-chain and annual revenues for the chain

Hi there,

Your approach is from the demand side. You can also use the supply side as a constraint and work from there. So how many people can actually be present in a gym, the percentage utilization for the peak and off peak hours, and peak and off peak seasons. You will get an average that you can work with.

As long as you can show the interviewer the logic and they can follow you, that's key.

Does this help?

Best, Aws

Agree with the above answers that demand side approach might not be very suitable here. Remember that there could also be multiple chains out there and as such there needs to be an assumption on market share %.

Using the supply side approach, you could work out the sizing based on the following components, with some assumptions to be made

- Capacity of a gym at a given point of time e.g. X machines with 1 person for each machine at any time

- Avg opening hours of a gym in a day

- Avg spend of time of customer in the gym e.g. 1hr? 30mins?

- Typical occupancy rate of the gym

- Avg frequency of customer visiting the gym e.g. once a day? once every 2 days?

- Assumption on % of people who pay for the gym but don't show up

Hope this helps. :)

Hi,

The population approach is flawed since there are many people coming from other districts who just work in that area

It's better to calculate the average occupancy of the Gym (Number of training machines, occupancy on different days / seasons + pool, etc)

Also, you should take into account that 30-50% people hold the memberships but go just a couple times per month

Best