“I Backed the Spreadsheet, Not the Hype”

From accounts desk to asset-backed entrepreneur, Steve McClory’s route into padel has been anything but typical. Before co-founding Code Fitness in 2013, McClory spent more than a decade working in finance, developing the commercial instincts that would later define his approach to sport. A two-week stint as a newly qualified personal trainer was all it took for him to decide he wanted to own his own facility. What followed was a steady, spreadsheet-led expansion—moving from a rented unit to buying land and constructing a purpose-built gym designed not just for cash flow, but for long-term wealth creation.

That same financial discipline underpins Equinox Padel, his £418,341 two-court development built on land he already owned. McClory didn’t back padel because it was fashionable; he backed it because the return on capital stacked up—provided the build costs were controlled and the asset structured properly. With panoramic courts, a steel roof engineered for year-round UK play, and zero personal cash invested, Equinox reached £53k revenue in its first quarter at under 50% occupancy. For McClory, the lesson is clear: in a gold-rush market, the winners won’t be the loudest—they’ll be the operators who know their numbers inside out.

Your route into padel entrepreneurship hasn’t been the typical sports-club pathway. Can you talk us through your background?

Before I became a PT or gym owner I worked in accounts from leaving school until the age of 30. I’ve always found the financial side of business really interesting. That background gave me the foundations for everything I have done with my gym and padel club.

I always liked sport and fell into becoming a part-time gym instructor by accident. I did the training course for my own knowledge and then ended up doing some evening shifts at the local council gym alongside my accounts work. This work was so different and I loved it, helping others achieve their goals. Which led me to quitting my accounts job to give being a personal trainer a go at the age of 30. Sometimes you just have to give things a go so you don’t look back thinking what if.

I was a personal trainer all of two weeks before I decided I wanted to own my gym. One of the other personal trainers where I was working wanted to set up his own PT studio, so after many conversations and planning in his mum's kitchen we agreed to try and set up a gym. This led me to co-founding Code Fitness with Luke Watson in 2013. We went from a rented unit to buying our own land and building a facility from scratch in 2018.

I always saw value in the asset of the building rather than renting. I know now for example, a similar sized building to our gym that another gym rents for £8000 a month, whereas our loan repayments are less than half of this. So not only do we have less in monthly payments to pay out, we are building wealth within the building and land.

We had land next to our gym sat empty for 7 years as the plan was to build offices at some point but this took a turn when more people started to work from home. We were happy just to bank the land until we decided on a good use for it. That good use came along when we both played a game of it once. The love of padel started.

The next thing to work out was if it was financially viable to build padel courts. Initially we were going to build outdoor courts, but there were two reasons why we didn’t. One was the UK weather. I love a game of padel outside when the weather is great but not so much in the rain. The second reason was that I wanted another high-yield asset that could sit on our existing infrastructure. I didn't back padel because it was trendy. I backed it because the numbers on the spreadsheet told me the return on capital was undeniable if we controlled the build cost.

Walk us through the hard numbers: you’ve openly shared that building Equinox Padel cost around £418k before a ball was hit.

Here is the actual cost for the project:
•The Padel Courts (x2): £68,583
•The Roof (Steel & Cladding): £118,850

Groundworks
•Foundations & Concrete: £73,165
•Site Clearance, Drainage & Prelims £40,298
•Court Surface, Paving & Fencing, : £43,005

The Facilities & Fees:
•Electrics & Lighting: £18,760
•Car Park: £19,095
•Facilities (Cabin, Fit-out, Decor): £22,908
•Planning & Professional Fees: £13,677 (Architects, ecologists, building regs)

Total Project Cost: £418,341
There’s no cost in for the cost of the land because we already owned it.

We prioritised getting the best for what people will actually play on, so the courts, lighting, flooring, panoramic glass. This is why we went with Padel Galis Wilson Mundial courts. We wanted the panoramic look. We wanted people to know when they were playing here they were playing on the best. This was our main priority.

We then focussed on the structural elements: groundworks, steel, and the roof. I wanted a long term asset. If we had covered them in the more traditional padel coverings we wouldn’t have had an appreciating asset and that’s what I believe we have with what we have built.

In the UK, if you don't have a proper roof, you don't have a year-round business. We didn't spend money on a lavish clubhouse or fancy changing rooms. Mainly for the cost. The £418k could have easily gone up and up but I wanted to make sure costs were controlled and this was a viable long term business. Even when we didn’t plan on putting the roof on at the beginning we still did all the groundworks so it could be done at some point. It’s also one of the only businesses where the bank will lend you money to half build a building. If the market took a bad turn we can easily convert the building into something else.

The biggest budget surprise was the implications of BNG (Biodiversity Net Gain) on new builds now. We didn’t have that when we built the gym because it hadn’t been introduced yet. All I’ll say to anyone planning on buying land and building, if there’s any form of nature growing, you will need a very good ecologist and you’ll want to work with your council to come up with best solutions. You’ll see there is no line for BNG cost in the project, this is because we didn’t end up paying it because of certain legalities. We may not have paid it but it still had financial costs to it, like delaying the opening by over 6 months.

Funding with zero personal cash: in your recent post you explain you leveraged bank debt and internal business investment so your personal cash in was effectively £0.

It changes the psychological pressure completely. Because we used business leverage and bank debt rather than using personal savings, we aren't desperate for cash flow to pay ourselves back. It allows us to make long-term decisions for the club rather than panicking if we have a quiet week.

The banks were sceptical. Padel is new to them, and they struggle to value it. They don't have 20 years of data like they do with a commercial gym. We had to lean heavily on the strength of Code Fitness to secure the lending. If we hadn't had that then we would have had to look to other means for raising the capital. The equity in our current business just made the process that bit easier.

Here’s how it was valued. I’ll add a bit of perspective, we told the bank it would cost us £310K to build the courts and cover them.

Valuations: Gym & Land: £1,110,000 Gym & Padel: £1,205,000

This was the note from the valuer: "This reflects an increase of £95,000 after the proposed works. Against the proposed works costs of approximately £310,000 this would appear to make the proposal unviable from a property perspective.However, from our conversations with the borrower the proposals will offer an operational and business/income benefit that cannot be quantified in property terms."

Therefore having the padel courts and covered building added £95k if we were to sell, when it cost us £418K. On paper, from this valuation, it made no sense to build. This isn’t valuing the gym as a business or padel as a business, this is the bank looking at sellable assets, but even on that basis I think they are way off.

Revenue vs occupancy: after three months you reported roughly £53k in revenue with ~45% average occupancy across two courts.

We’re now averaging 58% and this will increase. It tells me the demand is real, especially during peak hours.

All I’ll say is that if anyone is looking at any stats then please look at the bigger picture. We’re in Fernwood, a village that’s part of Newark. We’re not in a big city. I’ll guess clubs in a big city have a far higher occupancy and are far busier in off-peak hours. But the costs will be different to set up in a city. This is why understanding the financials is so important. People can use what I’m putting out there on LinkedIn to give them an idea but there are a lot of variables to take into account when setting up any business.

We launched at the price point that we did because we have a premium product in the way of the courts. The risk is if someone set up a bigger padel club with more facilities and with really good courts. The risks are there, it’s just being able to pivot and adjust during a developing market. There is another 4 court centre a 10 min drive from us. The biggest point here is that demand is higher than supply so it’s an easier market to be in at the moment. This will change.

Hitting £53k in the first quarter with less than half the courts full proves the model works for our set-up, our overheads, and so our business. If we had 4 courts with 4 full time employed staff, and we were taking a wage from this then it’d be a different story.

We are forecasting a net profit of £90k now in year one. In my view, utilisation doesn't need to hit 80-90% for this to be a success. At 50-60% occupancy, we are already generating a 77% true ROI. I’d rather have 50% occupancy at a healthy margin than 90% occupancy with a race-to-the-bottom pricing strategy.

Membership and ancillary income: How material are these recurring income streams vs pure court bookings?

Memberships are the safety net. Pay-and-play revenue is great, but it fluctuates with the weather and holidays. Memberships cover the fixed costs.

Our strategy is community-first, but not at the expense of cash flow. We use leagues and recurring memberships to help with loyalty, but we are careful not to discount heavily just to get occupancy levels up. We offer a members social padel one evening a week along with good court price discounts. The memberships are well worth it if someone is playing regularly. Memberships bring up their own admin issues so if a club went full membership, full pay and play, or a hybrid version like we do I believe they can all work.

The ancillary spend of equipment, drinks, events is pure bonus. Actually the events currently aren’t because any money we make from running an event goes into the prize pot. I never budget for any of the ancillary spend because compared to memberships and court bookings it’s a very small percentage of income. This is why I always look at the hassle involved in the extra income activities and sometimes they’re not worth it for us. But things like ball sales are a must as players will always expect to purchase new balls.

The business figures are calculated on memberships and court hire. If we have to rely on other sales to cover the costs, the business model is flawed. That doesn’t mean a club can't set up with an amazing club house and coffee shop. We have a coffee shop in our gym next door and there’s a local pub next to the gym. So for us the spend and hassle of setting up a bar or coffee shop at Equinox didn’t stack up. Doesn’t mean we never will, just not one of the starting priorities.

Operational cost realities: UK padel pricing and utilisation can vary wildly. How do you manage operating costs?

Automation is the answer. Equinox is designed to run with minimal human intervention. We use technology for booking, access, and lighting. We don't need a receptionist sitting there for 12 hours a day.

Because we operate it alongside Code Fitness, our staffing overhead is effectively zero, it’s absorbed by the existing team. If you were running a standalone club with two courts, then you would need to account for staffing costs which would then change your margin. The key to it all, is know your numbers inside out.

If we were indoors we would have to have air conditioning which does cost a lot to run and would considerably increase energy costs. This is why the outdoor courts survived what happened with the boom and then pretty much crash of padel in Sweden, because the outdoor running costs were so low. I think anyone setting up a padel club should do a little research on what happened in Sweden and work out what you would do as a business if the boom here proceeds with a crash. Supply and demand will always be prevalent in any type of business, padel will be no different.

Risk and future growth: how are you stress-testing Equinox’s financial sustainability?

I stress-test by assuming the worst. What happens if occupancy drops to 20%? What happens if energy prices double? We’ve been there with the gym with energy prices. Because we have low fixed staffing costs and we own the asset, our break-even point is significantly lower than a club paying high rent and staffing a front desk.

If the market softens, we are safe because we aren't over-leveraged on a rental lease. Our break even point is a low occupancy because of how the business has been structured. If I were doing it again, or looking at the next build, I’d be cautious about location. It’s easier to make businesses like gyms and padel clubs work in the right location and the right location would depend on a few things. For us, when we bought the land we wanted it to be near where people live. I think if we were in a city then it could work well being near where people live or work. Because of the rise in the number of clubs, just building one and people using it works now when the supply is low. When the supply catches up you need to be where the people are, we all love convenience.

Looking five to ten years ahead: What’s your prediction for how the UK padel market actually plays out?

I’ll start by saying it’s a massively growing sport because it’s such a good game. It will continue to grow around the world in areas where it hasn’t been about for a long as the likes of South America and Spain. The growth will be for years. Then there will be a correction.

Right now, there is a gold rush mentality. People are opening up courts with no business plan, thinking it’s a license to print money. It isn't.

In five years, the poorly run clubs in bad locations will fold. The market will consolidate around operators who understand the true cost of growth. and customer retention. Pricing will likely compress as supply catches up with demand, so if your model relies on charging £40 an hour forever, you’re in trouble. The winners will be the ones who built efficiently and didn't overspend on vanity metrics.

I posted about this on LinkedIn recently, saying "The £40 average Padel court is going to die".

My prediction for Padel: it will go the exact same way as the gym industry.

1. Budget Padel: Unmanned, basic, cheap, £20ph.

2. Lifestyle Padel: Country clubs, spas, £60+ph.

3. The Player's Club: Where the money goes on the sport, £40ph.

The gap in quality right now is huge, but the gap in price is small. That will change.