Chris Cooper's Blog, page 40

Two-Brain Summit Preview: Jason Khalipa and the AMRAP Mentality

John Franklin (00:02):
Welcome to this week’s episode of “Run a Profitable Gym.” I am your host this week, John Franklin, the CMO of Two-Brain. And with me, I have a very special guest. It is the fittest man in the world, the ex-fittest man. Do you call it fittest man or ex-fittest man, or are you always the fittest?

Jason Khalipa (00:21):
You know what term I like? Former. Former. How about that?

John Franklin (00:24):
The former fittest man, the once fittest man, the founder of NCFIT Gyms, TRAIN HARD online training, the host, of course, of the Jason Khalipa podcast. And just a general thought leader and someone the Two-Brain community looks up to as a whole. None other than the man, the myth, the legend: Jason Khalipa. Thanks for making the time to do this, man. We always appreciate when you come on the show.

Jason Khalipa (00:48):
Yeah, no, I’m glad I’m here. You know, today—it’s funny. You know, we have a variety of different business verticals, different things going on, but last night I was hit up by one of our coaching directors, and she’s like, “Dude, we could really use your help tomorrow.” And this has not happened in many, many, many months. And so, I went in, and I feel like I was back in the trenches a little bit, coached the 6 a.m. class. So, I’m fired up to talk to you right now about all things business and fitness.

John Franklin (01:17):
So yeah, your head’s close to the product right now, and we appreciate that. When I think of Jason Khalipa and I listen to some of your content, one of the things I don’t think is burnout. Have you ever experienced that feeling before in your life? You know, we were talking a little bit about it before the show, but you don’t strike me as someone who ever gets tired.

Jason Khalipa (01:35):
No, no. I mean, if anything, I have a terrible attention span, and I don’t get tired easily. And it’s something that, from a business perspective, I think it’s been great for us. And I also think at times it’s been difficult because I have been reactive at times, and I’ve been really working on those things as a leader in the organization—recognizing that if you are a leader in your organization, the skill sets that you have, the rest of your team may not have. Or—and they shouldn’t; like, they should have other skill sets, but if you are one of those “hard charger,” “got to go, got to go,” sometimes that could turn some people off. You need to recognize when to turn it on, when to turn it off. But in general, yeah, I’m that guy. I’m that just kind of “got to go” guy.

John Franklin (02:18):
Well, look, you’re obviously a successful businessman, a successful gym owner, and we talk a lot about that on the show, but one of the things that we care a lot about at Two-Brain is crafting well-rounded, successful entrepreneurs. And it sounds like you’ve been having some thoughts on what that means recently. Can you kind of give us an insight into what you’ve been thinking about in terms of what it means to run a business?

Jason Khalipa (02:45):
Yeah. I mean, well, if you look at my background, when I first got into CrossFit in 2008, there weren’t many business resources. And I came from a background where I came up in the traditional gym system, and I was in—through high school and college, I had mentors who were very business focused. Less coaching focused, more business focused. And when I got into CrossFit, it was very much so coaching focused and less business focused. That was just the way it was. And so, over the years, I tried to blend those two, and I tried to communicate with HQ and other gyms. We did things like “Box to Business.” We’ve done all kinds of different things to try and support gym owners, to treat their gyms, to create profitable gyms, to provide trajectory for themselves and their family. That’s always been important to me. And you can look at my track record since 2008, trying to put out content and trying to share those types of things for the better part of almost two decades.

Jason Khalipa (03:37):
And as those like 15, 20 years have come around, the industry’s evolved, and I’ve evolved. And I think that that’s important to note is that you’re not going to be the same leader, the same owner, the same person you were 10 years ago. And frankly, you shouldn’t be. And I think it’s important to speak authentically about the things that you’re going through, the things that you experience, the things that you want to share with others, because chances are, if you’re experiencing those, other people are as well. And so, that’s kind of how I’ve evolved over the years, is that you go from a single site to multiple sites. You go from having no kids to multiple kids. You go from having—it is just your mindset shifts, your perspective changes. And I think it’s important as a gym owner not to get burnt out, to recognize what your why is and to reinvigorate yourself on a regular basis of the work that you do matters.

Jason Khalipa (04:26):
And I think that’s really important to note. And so, things that I’ve been going through lately are like: What I want to speak on at the Two-Brain Summit? Like, what is important to me? Because if it’s important to me at the time, I could speak passionately about it and speak from experience. And I think that that ultimately will help resonate with the gym owners that are there. And last year I spoke on the idea of forging elite leadership, and it was kind of like a play on forging elite fitness, obviously. And I spoke about three factors: I spoke about to forge elite leadership, which I found was like—at the time I had just finished a leadership course, and I was really inspired by the way that this course impacted the way I looked at things. And I didn’t think that in our space we talked enough about leadership.

Jason Khalipa (05:07):
So I felt like I wanted to talk about it. And the reception seemed good on this. I spoke about three different things: I talked about the art of detachment, I talked about AMRAP mentality, and I talked about making to give. This year, I want to kind of evolve that more and definitely dive into AMRAP mentality, which is about mindset, about prioritizing and executing on what you’re doing at that given time. But because of life and because of business, there’s other things I want to continue to speak on. I’ve been kind of having a brainstorming session, actually with you just before we started recording, on exactly how I want to mold the talk about what’s important to me today. And that’s kind where I’m at right now. I can talk more about it, but I want to give it a second. I went long-winded.

John Franklin (05:48):
It’s fine. I was actually at that first “Box to Business” Summit. I think it was almost 10 years ago now. And yeah, I remember you did a talk, and it’s like, “Yeah, if you have employees, you should write down what they’re supposed to be doing.” And everyone was like, “Pff.”

Jason Khalipa (06:03):
Mind blown.

John Franklin (06:04):
And that was the state of CrossFit business at the time. “Yeah, your class should be consistent.” Everyone was like, “This is insane. This is some cutting-edge stuff.” But that’s an aside. So yeah, I’m looking at your TRAIN HARD site right now, right? And I’ll pull it up if you’re watching on YouTube here. And obviously there’s pictures of the man himself just looking absolutely huge. And then on here we have “train, protect, provide.” Let’s talk about that. What does that mean, and why did you choose to put that in the most important part of your website here?

Jason Khalipa (06:36):
Yeah, I mean, so, back to what you were saying: So, “box to business” 10 years ago was like, “Hey, have your employees as W2 have job descriptions.” And it was like, “Whoa.” You know, “Start class on time.” It’s like, “Oh my gosh.” Have your team wear a uniform.” “No way.” But now it’s like, that’s just second nature. You know, you have to evolve, or you’re going to perish is kind of like the theory. And CrossFit has evolved, and the gym owners have evolved. And for me, I’ve evolved. And so, TRAIN HARD, so, our business today, as of April 24th 2024, it has three different verticals. So, we have NCFIT, brick and mortar gyms and corporate wellness. That’s one. We have the NCFIT Collective, which are session plans, programming and coaching tools for gym owners. That’s another vertical.

Jason Khalipa (07:24):
And then we have the TRAIN HARD aspect, and TRAIN HARD is not for the same demographic. So, our brick-and-mortar gyms are for exactly that. They’re for members that could find our locations and join us. Perfect. Our collective is for B2B. It’s a business-to-business model where we support gym owners and coaches, but we weren’t doing a very good job speaking to the end consumer who wanted to engage with us, in particular me and what I’m interested in. And so, we rolled out TRAIN HARD as a metaphor for something that’s really important to me. Like I believe that we should train hard so we can protect and provide—and I’ll share more about what that means to me—and also reach an audience that isn’t just CrossFit, meaning I love ju-jitsu; I’m super into ju-jitsu. I like the tactical games; I like all those things.

Jason Khalipa (08:13):
And so, I wanted to provide a solution for people who are in their garages or in their gyms worldwide who wanted to engage with us, but couldn’t make it into one of our gyms and weren’t a gym owner. And we wanted to roll out a brand that was consistent with that instead of it being part of NCFIT. And I think as any gym owner listening, I think it’s a good learning lesson that we’ve had, where your brand can’t be everything to everybody, and following your passion, I think, is important. And so, for me, that’s why we chose to roll off a new brand instead of having it underneath NCFIT, because we were trying to be everything to everybody for gym owners, for brick and mortar and for end users, and just came off too much. So this way I could speak on the things that I’m passionate about underneath the TRAIN HARD umbrella, while also speaking about the things that I’m passionate about to gym owners and coaches on the NCFIT side.

John Franklin (09:02):
So let’s talk about it. You’re passionate about it. What does this mean? Obviously, I get the train part. What about the protecting and providing, and how do those tie together?

Jason Khalipa (09:11):
Well, and this is something I’m thinking about for the Two-Brain and I’m still kind of—I’m still refining what this looks like, and I’m going to test it and test it and test it. When I say test it, I mean I’m going to record myself given this presentation. I’m going to really—my goal for the Two-Brain Summit, and I hope everybody listening is going to attend, is to overdeliver. Just when people walk away, be like, “Holy shit. Like, that guy prepared. He executed, and his goal was to add value into my life and share things that are important to him.” That’s really important to me. Not because of money, fame, none of that. It’s because I care. I care that these people are showing up, taking time out of their day and their gyms to grow and learn and evolve. And I have a duty as a presenter to give my full heart, my full soul, my full attention into that speech, that presentation, because they’re giving their full self to be there.

Jason Khalipa (10:06):
So what does “train, protect, provide” mean? And this is something that maybe it’ll come up at the Two-Brain. It means that what we do at our gyms matters. What we do in the garage, it matters. What we do as men, as women, as adults—especially those with kids—it matters. And if you’re a gym owner listening, the service you provide is going to make a dramatic impact on people’s lives. And it’s not just going to make a dramatic impact as they come in. They have the best hour of their day, they grow emotionally, physically, all that kind of stuff. Yes, of course they’re going to leave there feeling better than when they walked in. No question. But how about this idea? They come in, they train—or maybe they, someone uses our app and they train—and it gives them the ability to protect.

Jason Khalipa (10:49):
And as a father, I can’t think of two things that are more important to me than to protect and provide for myself and my family. And in most cases, community. I do weekly free workouts for men every week. We’ve been doing it for seven months here, just in the parking lot. But anyways, when you think about what protect means, I think oftentimes people gravitate towards fighting or whatever, but I actually think that the likelihood of you getting in a fight—I mean, imagine, I don’t know exactly how old you are, John, but how many fights have you gotten in your life, especially as an adult? Probably very few, right?

John Franklin (11:20):
Post-college, it’s a small amount, you know?

Jason Khalipa (11:23):
Very small amount, right? But how many times are people listening having to run after their kid, having to go and lift something, having to go climb something, having to go do something to protect themselves or others physically? That happens more times than not, especially for me, because I’m out doing hikes and doing different things. And if you don’t have that physical ability, if you don’t train, you’re not going to be able to protect yourself and your family, especially like, I don’t know if you’ve seen those videos of like the shopping cart with the kid in it that’s going into the street, and the person sprints after it and grabs it. That’s an example of what we’re providing. But I also think there’s this idea of “provide,” and this one I think is even more important, and this is something I want to talk to gym owners about.

Jason Khalipa (12:04):
We train so we can protect, run, jump, climb, lift, and if needed sure, fight, of course. But the “provide” piece I don’t think we talk about enough, which is providing experiences—and also financially, which I’ll get into—but experiences, I think, are so important. As a dad, as a husband, my goal is to—all I’m going to have left is experiences with my kids and experiences with other people around me. And so, I never want my physical fitness to inhibit what I need or want to do ever. I always want to be able to provide those things for my kids. I always want to be the dad who’s like, if the kid asks something, like, “Let’s go,” and “Do you want to go do this? Let’s go.” But training allows me to provide those experiences because I never have to worry about physically being incapable of doing those.

Jason Khalipa (12:52):
And that is a gift that gym owners are giving to their members every single day. You’re giving them the gift to provide, to go on vacation and never have to worry about “name the thing they want to go do” because they don’t have the physical capability. And when you dive down to that deeper level, it’s super meaningful as a gym owner to look at the impact you can make across hundreds, thousands, x amount of people and how you’re allowing them to train so they can protect themselves and their families and provide experiences. But on top of that, we’re also giving athletes another gift, which is to provide financially. You know, I’m a big believer that someone comes into the gym, they have a great workout, they mentally and physically are in a better position, and when they go to work, they show up differently. They show up more prepared; they show up more—they show up with a better perspective. They show up in a clearer state of mind. And I believe that over time they will be able to provide more financially for their families because they’re training, because they show up with that type of self-confidence and worth. And those are gifts that we’re, as gym owners, giving. And those are gifts ourselves that we can get by training: train, protect, provide.

John Franklin (14:02):
I talked to Moe from Beyond The Whiteboard this week, and apparently he went to one of your weekly workouts, and he said that he felt like he wanted to run through a wall after he finished with it. So, whatever you’re doing out there, he said it’s pretty magical. I’m a new father, so I have two small kids. This idea of providing experiences for kids and showing up and providing as a husband is something I think about a lot because it’s so easy to just fall into this rut and this routine, and unless you’re like being very conscientious about the way you show up as a father and as a husband, I can see how a lot of that can go by the wayside and turn into bigger problems down the road. I’ve seen videos of you working out with your kids. I’ve seen videos of you going to the park and playing with your son and doing different things. Do you have a framework or a way you think about doing stuff with your children or doing stuff with your wife? Is it like every Thursday’s date night, every Tuesday’s workout day with the family? Like, how are you going about and thinking about showing up as a husband and father?

Jason Khalipa (15:03):
Well, this is something else that at the Summit—again, right now you’re kind of firsthand, if you’re listening to this and you’re going to the Summit, you’re firsthand kind of hearing some of the things that are important to me right now. Right? But date night has been important to me forever. When our daughter got diagnosed with leukemia, the first thing that I was told is to keep a date night. And we’ve been pretty diligent about doing that. And that’s a little bit more structured. I think in regards to kids, and this goes for any gym owner in their business, is being intentional. I think being intentional is really all it is. And if you’re intentional, if you’re really reflecting, like, “Hey, am I doing the best I can with the information I have,” if I’m really out there being intentional with my approach as a gym owner, as a father, as an athlete, whatever, you know, there’s really no way to have regrets.

Jason Khalipa (15:44):
And it’s something I reflect on a lot because as an athlete, you ask yourself when you’re competing, “Did I do the best I can?” It’s like, if every day in training you are doing the best you can to prepare yourself for the CrossFit Games, however you stack up at the games, it is what it is. You’ve put yourself in the best position. That same thing applies I think as a husband, as a father, is like: Can you have micro check-ins on a regular basis to see, “Hey, how am I doing?” daily? So, you don’t reflect later on and say, “Man, I made these huge mistakes.” Because you were asking yourself on a regular basis. So, at that point you’re making the best decision you could. And so those are some of the things that I think about all the time is like intentionality as a dad.

Jason Khalipa (16:20):
You know, my daughter’s 13, my son’s 10. And you know, I think what we do matters as gym owners, man, and just in fitness in general. You know, my daughter’s getting back from 10 weeks—she was gone at a residency program for some health issues she’s been having, and she’s been gone for 10 weeks. And as a dad, it is so difficult, but the training allows me to stay calm, to stay controlled, to learn these microdoses of adversity that I could then overcome and then take that in our daily life. And I think that those are—I keep going back to, as a gym owner—these are gifts that we’re providing to our members that maybe we don’t realize because it’ll help us stay inspired to leave the Two-Brain Summit and keep kicking ass for the next year until the next Summit. Because the work we do, it’s hard. You know, coaches don’t show up. This happens; that happens. There’s always stuff going on, right? But the work we do is also impactful in more ways than I think we oftentimes see it as.

John Franklin (17:21):
I think I’m going after you, like right after you in the Summit, and I’m just sweating right now. I’m going to get off this call and just start practicing. I’m already—you’re raising the game for someone here, you know, at least me. Because I’m like, “Oh my god, I’ve got to go after this guy.” OK, so I get it on a high level. I understand the concept. Now, it’s a room of a thousand gym owners. Some of them are going to be doing this well; some of them are going to be doing it poorly. Like, how do you live this? How do you live this brand, how do you live the Jason Khalipa lifestyle and train, protect, provide?

Jason Khalipa (17:56):
Well, I think, and the train, protect, provide thing is just where I’m at as of today, but I also think like the lessons that we talked about last year, they’re even more important to me today than they were last year. Meaning the AMRAP mentality, being present, being focused, being—you know, so the AMRAP mentality, this really came to be in like 2016 at the time I was trying to—or 2014 or even earlier. I was trying to win the CrossFit Games, competing year-round. At the time we had like 20-something locations, brick and mortar. And I recognized that unless I prioritized and segmented out my day, like first off, I wasn’t reaching my potential in those different areas. And secondly, I wasn’t going to have strong relationships because I was one foot in, one foot out. I’d be with the kids but thinking about competing at the Games. I would be on conference calls but trying to ride the assault bike, and it just wasn’t working.

Jason Khalipa (18:50):
It wasn’t working, not being present. And so, I started asking myself like, “When am I the most productive?” And typically, it came from when I’m in AMRAPs. Like, if I ask you to do seven minutes of max pushups, like, dude, you’re just going to do it. You’re not going to stop and answer your phone. You’re not going to go talk to anybody. You’re just going to crush it. And that was the mentality that I started incorporating in my life, and I still do today where it’s broken down into certain segments, and I’ll just share it with you. So, the AMRAP mentality is “as many reps as possible.” Most people listening know what an AMRAP is. You would then segment out your day. So like, for example, this morning I got up at five, I went to the gym, I came back, I’ve now been on three hours of calls or whatever it is.

Jason Khalipa (19:29):
After this, I’m going to go to ju-jitsu or to go train. And I think that’s a good example of switching gears and prioritizing. So, the way I like to break up my day is when I’m at something, I’m being very present and focused in it. I then switch gears like riding a bike, and I then become present and focused on the next thing, and I work hard within that domain. So right now, I’m not being distracted by anything else. I’m just talking to you. After this, I’m no longer going to worry really about this conversation. I’m going to prioritize my next thing that I want to do, which is training. After I’m done training, I’ll then not think about that anymore and prioritize my next focus, which will be work again. And then, boom, as the night comes on, we’ll have family dinner, et cetera.

Jason Khalipa (20:10):
And so the AMRAP mentality is about kind of segmenting your day in these micro-focuses, being present focused there, working hard, and then evaluating what your deep why is for each one of those focuses you have. And that’s what we’ve talked about in the past at Two-Brain. And I think the reason why it’s important as a gym owner is that your day is action packed. But oftentimes I think we’re a lot more busy doing but never actually completing anything. Like, we’re scrolling Instagram when we should be just like locked in writing emails back to members. We could prioritize our workouts for an hour or two, but all of a sudden if you try and prioritize other things, you get distracted really easily. And so, you’re taking that same mindset, and everything we do, I think will support productivity. And I have a full talk on this. That’s going to be a piece of what we’ll be discussing at the Summit as well.

John Franklin (20:59):
So every year after the Summit, we have a large debrief where we talk about not only the speakers, the people who attended, the vendors, basically like a full tear-down, and a universal piece of feedback shared about not only you but your team was that you guys were incredibly present. You know, you were on the floor; you were not putzing around on your phone. You were engaging with guests off the stage and on the stage. And you guys were just like a great partner and a great ambassador. So, I’ve seen you live this, and I appreciate that, and that’s part of the reason why Two-Brain likes NCFIT so much, but just kind of talking with you and consuming some of your content, this doesn’t seem like something that comes naturally to you. Just being able to plan and be focused and stay task-oriented for long chunks of time. So how did you develop this skillset? Is it like anything else, like training, you just kind of do it a lot, and you get better at it? Or was there some type of like “come to Jesus” moment that allowed you to make the switch?

Jason Khalipa (22:04):
Well, definitely, you have those moments, and this was a long time ago. It was like—I was walking with my wife, my daughter, and Ashley asked me something. I just had no idea what she was talking about because I wasn’t present and focused there. I was just thinking about the CrossFit Games—this is many years ago—and I just reminded myself like, “Dude, what am I doing? Like what am I doing?” Like a good example is for owners who are coming up to this Summit, and sometimes I’ll see this at presentations: I just don’t get it. It’s like you’re going to spend your money, your time to come to something to improve your business. That’s the goal. The goal is “I want to take something away, so my business gets 10 x return of

what I invested here from time and money.”

Jason Khalipa (22:41):
But then when they come, they’re unengaged. They’re just kind of like sitting there. Sometimes they’re even on their phone. It’s like, “Bro, what are we doing?” Like if you make the decision to commit, like let’s go all in. And when we made the decision last year to show up at Two-Brain and coach classes and do all the things, like the commitment was made. And so, once we make the commitment to a specific thing, it’s like reaching our full potential within that is something I think about all the time. And it’s hard for me to focus, but I don’t think there’s another option because what I refuse—I’d rather feel the tension of me continuously asking myself, “How am I doing?” than look back and regret not reaching my full potential on anything I’m doing. Even this conversation right now—like what would bother me even more is finishing this conversation, but I’m super distracted on whatever else is going on and being like, “Did I really do a good job with John?”

Jason Khalipa (23:34):
And “I don’t remember even if I answered his question well.” Those things really would hold me back. And it’s the same thing, like when I was on conference calls all the time with Asia, we were opening up like 20 locations in Asia, and I would always be doing it when I was on the bike. And I had to really put myself in check and be like, “Dude, you couldn’t wait like an hour to get on the assault bike?” Like, just prioritize what you need to prioritize because otherwise you’re going to regret those conversations, and maybe there was something you missed, and that sucks. So, that’s kind of where I’m at. And it’s a continuously working circle. Like I don’t claim to be perfect at this. This is just something I’m aware of. And for that reason alone, it allows me to be intentional in my approach.

John Franklin (24:13):
So do you have unscheduled time, or are you just one of those mutants that schedules every minute of every day?

Jason Khalipa (24:18):
No, no, no, no, no. So, I definitely have unscheduled time because it’s important to also have time to reflect and brainstorm and work on the business and not in it. You know, I don’t really coach regularly. I am I—from an ownership perspective, I am definitely not in the gyms. Like I’ll go to the gyms, but like in general, I’m looking at it from a different perspective because we have the TRAIN HARD over here; we have this going on over here. But from that, it’s important that you give yourself time for critical thought. And I think that if you jam pack your schedule too much, you don’t give yourself enough time for that critical thought. For me, a lot of that happens in the sauna early in the morning or on rucks typically. But if you don’t give yourself those allocated times, I think that you’re missing out, and your business won’t reach its potential because you’re not having free time to brainstorm.

John Franklin (25:12):
People love a good morning routine. And so, is the sauna how Jason Khalipa starts his day every day?

Jason Khalipa (25:19):
Yeah, yeah. No, it is as of as of the last couple of months. It is. And I’ll tell you why. So, it used to be—I mean, well this morning I was at the gym. Tomorrow morning I’ve got a group of guys coming over, so that’s going to be a little bit different, but then we’re going to jump in the sauna. What I found is that if you are waking up in the morning with a specific level of stress for whatever reason—it could be family, it could be business, it could be whatever, and a lot of people listening went through some major stress during COVID—but if you wake up and you already feel like a sense of anxiety, you’re not going to be able to attack the day the same way you could if you took on that day with a more composed approach.

Jason Khalipa (25:55):
And that goes for the way you talk to your team, it’s the way you talk to your spouse, it’s the way that you show up. And so doing the thing you need to do to feel the way you want to feel is very important. And so, identifying what that is for you, if that’s a walk, if that’s whatever. For me, the sauna is a great way to kind of level set and then jump in the cold plunge, and it just like kickstarts my day like nothing else. And especially, like I said, with Ava being gone for the last couple months, it was a time where my stress is a little bit higher. Kind of like, I almost felt like similar anxiety, a little bit different to when our gyms were being shut down for COVID. And I need to do what I know I need to do in the morning to help me show up for my team and myself, my family. And so, that’s why that’s my routine now is because that puts me in the right state of mind to be the best I can.

John Franklin (26:45):
And are you like a 5 a.m. every day—like a Chris Cooper: You wake up before the sun and grind away? His is like writing, so yours is a sauna. He just goes and smashes on a keyboard for an hour and a half, and that works for—that’s his grind, and it works really well for him. Are you waking up super early?

Jason Khalipa (27:02):
Yeah, I mean, I’m definitely before the sun, but not as early, not like five, but I mean, some days five; some days, we have groups that meet up on the weekends every weekend at 6 a.m. so generally around six. But I think what’s important there too is like, don’t get too wrapped up in this morning routine where you end up spending hours and hours just doing a bunch of shit because you heard it on the internet as something that’s going to help improve your life. Like what really matters is productivity and getting work done. But if starting your morning off the right way helps you be more productive and get your day off to the right foot, then that’s the key for it. So, finding what works for you is important.

Jason Khalipa (27:42):
And you should get ideas from other people like me or whoever, but you’ve got to find what works for you. So, I’ll tell you what, as a leader in your organization, it’s important that you show up a certain way for your team, and there’s a lot of stress to show up a certain way. And the only people who know what that feels like are other leaders, other owners. And so, coming from an owner-leadership perspective, I hear you. I see you. I know how you feel, how when you show up on calls, when you show up in meetings, you’re the guy and or the girl. And you have to be that person. You have to be the inspirational component that allows your team to thrive. But if you’re not at your best self, then you can’t be there. You can’t be that person for them. And so, you need to do what it needs to take to show up. And if that’s pre-meeting meditation, if that’s whatever that is for you, you’ve got to know what that is. So that you can help your team thrive.

John Franklin (28:33):
It’s funny that you brought up having some people over and hanging out in the sauna. Like I literally saw—let me see here, I can share my screen. I literally saw a post from Eric Posner. He owns Swerve Fitness, which is like a chain of cycle places. He’s out of California as well. And he mimicked the exact same thing. He’s like “Here’s this life hack for entrepreneurs. I just invite groups of investors, creatives, and entrepreneurs together, and we just bake at 200+ degrees and talk about our goals.” And he said that’s been like a transformational thing for his network. Like there’s something about frying your brain with other guys that allows you to think differently or bond on a different level. I don’t know what it is, but you know, you make me want to buy a sauna now.

Jason Khalipa (29:14):
Yeah, well, I mean, so the sauna thing—I mean, again, what I’m currently doing today, and this is why I said that things evolve. Ten years ago, I spent 90% of my time in the gym. Now, I spend a lot of my time outside the gym. I spend a lot of my time in the garage, on the ju-jitsu mats, outdoors, getting into different disciplines, and a lot of the stuff like on the weekends, every weekend for the last 32 weekends, I’ve been hosting free men’s club workouts in a parking lot. And I don’t ask for anything. I don’t say anything. I just say, “Hey guys, I’m going to be here at this time doing this thing. Come join me.” And people would ask like, “Why wouldn’t you just drive them to your gym?” And of course I’d want to drive them to my gym, but this is something that is very meaningful for me, and I want to try and remove all the barriers possible.

Jason Khalipa (30:01):
This is not a business thing for me. This is a personal thing that I want to help support my community, be the fittest community in the world. And I asked myself like, “What am I doing to support that?” And I wasn’t doing enough. Because there are barriers. And as soon as you start talking about having them in your business, now all of a sudden, you’re talking about money and waivers, and it’s just once a week, so it’s kind of weird. What are you doing? So instead, it’s like, “Hey, we’re going to meet in a parking lot,” and if people want to join the gym, of course they can. But that’s what we’ve been doing now for 32 weeks. We get a lot of guys out there just to train hard and show up for their families better when they get back home. And that’s important to me.

John Franklin (30:33):
That’s so cool. I watched a video of the GORUCK founder, and I think every Sunday in his neighborhood, he hosts like a workout/ruck, and then they all have beers after. So, kind of an interesting idea. Maybe I’ll have some friends over on Sunday, start the movement. You should affiliate this thing. You should; this is a cool movement. Maybe this is a business.

Jason Khalipa (30:52):
Well, I mean, it is just like we’re trying to get guys, and this isn’t exclusive to guys. The ones that we’re doing are because that’s where I’m initially trying to connect at. I am seeing a need, especially for guys who want to get together and do hard things together and suffer shoulder to shoulder. I see a need for that, and I connect with that because I am a guy myself. Women should be doing it too, right? One hundred percent. But right now, that’s what I’m seeing. And the bonds, the discussion, it’s only going to make me show up better for my family, for everybody around me. And that will have value on our business—maybe not financially, because you’re not going to get people who are going to come to this men’s club once a week to join our gym. That’s not the intention. It’s going to level me up because I’m going to create more bonds and connections and whatever. I’m going to learn more, and then I’m going to be able to lead better when I’m back at the gym. So, for that, I’m grateful for it.

John Franklin (31:49):
So, speaking of spending less time in the gym and speaking of these other disciplines that you’re doing, I actually did a TRAIN HARD workout in anticipation of this call. So, if you notice why my back’s so huge that’s why.

Jason Khalipa (32:03):
I thought I noticed something; your back’s—

John Franklin (32:05):
Why I’m busting out of this chair. Yeah, I’m going to buy another one. And it’s like triple the volume I usually do. So, I’m getting huge. How has some of this bled over into the Collective? So, in case—like the NCFIT programming for gym owners, if at all?

Jason Khalipa (32:21):
Yes, I mean, our flex track is available for the gym owner. And a good way to think about it is like our current NCFIT Collective is, is definitely focused for the CrossFit gym. So, it’s going to have a little bit more complexity in it. The TRAIN HARD is a little less complex. So, you know, today’s NCFIT workout had snatching and handstand pushups in it. TRAIN HARD would not have those two movements. And it’s just a different way of training where TRAIN HARD’s mentality is more like, “How do I create a baseline of fitness to be able to go train, protect, provide?” whereas our NCFIT gyms—I don’t want to say they have more sport component—but they definitely have more complexity. And I think that there are benefits to both. I think that one of the benefits to having complexity in CrossFit is that it keeps people inspired and fired up to continue coming into the gym for many, many years. I mean, it’s one of the very unique fitness programs that keeps people around for a long time because there are those new skills to chase. But I chased them for many years, and now I chase other skills like ju-jitsu, and I’m looking for a really solid program to develop my overall base. And that’s what TRAIN HARD provides me.

John Franklin (33:25):
So if you sign up for NCFIT programming as a gym owner, you have access to all these. I see a little bit: compete, flex, go. They have access to all of those.

Jason Khalipa (33:35):
You have compete, you have flex, you have the NCFIT workout, which has a performance and a fitness track, which is great. And you get your daily session plans and all of those good things. I think what we’re doing on the Collective side is like just the beginning of—like right now we’re putting out, I believe, the world’s best session plans and programming. So, if you’re looking for that as a gym owner, I believe we’re putting out the best. We own gyms, they’re successful, and we use the same plans we use.

John Franklin (34:01):
What’s different about them? I’m sure people have tried a couple different services on here. This is a—you know, sell away. We want to hear it.

Jason Khalipa (34:10):
I think for me it’s the fact that when you could generate gyms that are doing six figures a month, I think that there’s something to be said about the program—it matters. And when you have a lot of members who come in and they’re providing you feedback, you could adjust accordingly. So, it’s the daily videos; it’s the fact that every workout is tested. It’s the fact that it’s being tested by coaches who are coaching in a gym. Like we’re not a competitor gym. That’s just not what we do. We own brick and mortar gyms that are for the general population. And I think for a lot of people listening, that’s the type of gyms that they have. So, for that reason, I think that we could thrive in that area. Obviously, I think what also makes it unique is that the people who are writing the session plans and testing the workouts are coaches themselves, and they coach regularly. It’s not like they just used to coach. I don’t write the session plans because I’m not as qualified to now. Like, yes, I’m a CrossFit Level 4 coach, I’ve taught on Seminar staff, but I still don’t write them because I’m not in the trenches every single day like these guys are. So, for that reason, that’s why I think we’re the best.

John Franklin (35:12):
How are you feeling about CrossFit HQ and the affiliate community right now?

Jason Khalipa (35:15):
I think that CrossFit has made a lot of steps in the right direction. A lot. And it’s funny because I used to have similar conversations like what they’re having now many years ago, and obviously, ownership has changed; things have changed, but I think they’re trying really hard to move the brand and the community in the right direction. And my hope is that it’s not too late. My hope is that there is growth to be had, but I think time will only tell. I think that they’re doing a lot of the right things. And again, my question would be, I think we need to reflect back and look back on this a year from now and see if it made the changes that CrossFit wants it to make. Because I do think—I think they’re making all the right pivots, but maybe not, maybe they need to be happening faster, or maybe they should have happened several years ago to get to the growth that they’re looking for. But as of right now, I do think that they’re doing the best they can to support gym owners to grow the brand, but they have a lot of, they have a lot of—it’s not easy being HQ, especially with new ownership and leadership because you have to thread the line between your OG affiliates and where the brand was and where it wants to go. And they’re still trying to figure out what that dynamic looks like, in my opinion.

John Franklin (36:33):
And I’ve definitely seen a lot of action happening.

Jason Khalipa (36:36):
Yeah.

John Franklin (36:37):
You’re obviously thought of as a huge leader and influencer in the space. When we look at our data from the State of the Industry Report, it shows that the average affiliate owner is still struggling. You know, they’re still making less than the median household income in virtually every market. So, as someone who owns affiliates, travels to affiliates, has taught however many thousands of people how to do CrossFit, if you could affect change across the affiliate community, when we’re talking from a business standpoint, what would you advise your average affiliate owner to do? Where are we running—or where are we falling short as a community?

Jason Khalipa (37:19):
I mean, I think in general—and this is going to sound super broad—I think in general we need to treat our business like a business and not a hobby. I think at its highest level, that’s what it comes down to, is that if you’re getting into CrossFit because you love it and you want to open a gym because you love it, I think that’s fine. You could—two things can be true at once. You could love CrossFit, but also be interested in running a very successful, profitable business. And I don’t think those are mutually exclusive. And I think that for a while in CrossFit it was negative to talk about making money. And I think we need to remove that stigma and recognize that unless we make money, unless we show growth, we’re never going to be able to impact more people’s lives because you’re always going to be hamstrung by this hobby mentality.

Jason Khalipa (38:01):
And so, I think the goal should be as an industry to reflect and say, “Hey, what am I uniquely good at? Am I uniquely good as a coach? Am I uniquely good as a leader? Am I uniquely good as whatever?” And then identify other people to surround yourself with to step up. I think a lot of people—if you look at it like a restaurant—I think there’s quite a few people get passionate about CrossFit, who fall in love with it and get life changing results, and they decide to open up a CrossFit gym, and maybe they’re really good at coaching, let’s just say. But if that’s like the food you’re delivering on the table, everything else matters. Like, you can’t have a successful restaurant unless you have a nice front desk experience, unless you’re able to make a reservation, unless you’re able to have a clean, excellent location.

Jason Khalipa (38:49):
All of those things start to matter. Even if the food is great, you probably won’t go back again if you can’t make a reservation. And so that’s a good way to look at the business is like, “How do I take something I’m passionate about but recognize that it is not a hobby, it is a business? And how do I surround myself with people that could help me set up front-desk procedures, set up business practices, make sure the coach on the floor is excellent and consistent every single time, have a facility that’s clean and organized, and have a lease that’s in an appropriate location?” That’s what I think the industry needs to look at as a whole. And instead of like, you know, “I’m opening this up because I love it” because you could do both at the same time.

John Franklin (39:23):
So, it’s not mutually exclusive. The people who say that they’re doing it because they’re passionate about it, that’s OK, but make money as well because then you could do it for longer.

Jason Khalipa (39:31):
Well, I mean, I remember, dude, this was like years ago; I’ll never forget this. It was like 2009. We opened up our second location, and I remember someone said to me like, “Hey, so why are you selling out and opening up a second location?” I’m like, “What?” I was like, “Bro.” At the time, I’m like teaching seminars, I’m like teaching—I’m on CrossFit. I’m like, “Who’s selling what?” And I remember saying to myself like his perspective was that if I wanted to grow financially to support myself and my family, that for some reason I was selling out. But at the end of the day, that’s the only way this whole thing survives. The only way this ecosystem survives is if gym owners are financially secure, so they could then compensate their team in a financially secure way so that those coaches can then impact the members in an effective way. And unless that system is there, it’s just going to be broken. And you’ll have a lot of gyms with 50 to 60 members that are barely struggling to get by, and they get sold to the next person and sold to the next person instead of looking at it like a business where they could build a thriving community, where they could then give to things they care about, and then they could support gym owners with a wage that allows them to actually live. So yeah, that’s the way I look at it.

John Franklin (40:39):
You heard it directly from Jason Khalipa: “Treat your business like a business.” And if you want to fast track your fitness business success, you’ve got to come to the Two-Brain Summit June 8th and 9th in Chicago. We’re talking about virtuosity. Jason is going to give the finished version of the talk we did here today. And there’s an incredible lineup of industry leaders all across the fitness industry, not just from the affiliate community. I will say there are only 50 tickets left. That is not marketing-ese; that is the actual number. And we are recording this three weeks before it’s going to come out. So, there may be less. So run over to twobrainsummit.com, and we’re going to end it here. We really appreciate you listening to this episode of “Run a Profitable Gym.” Jason always brings the heat. If you enjoyed it, be sure to like, subscribe, leave a comment. And as always, Jason, we appreciate your time. Thank you so much for being a great partner and an amazing part of the community.

Jason Khalipa (41:36):
Thank you for having me.

The post Two-Brain Summit Preview: Jason Khalipa and the AMRAP Mentality appeared first on Two-Brain Business.

Closing Sales: Tips Every Gym Owner Needs

Closing the sale—do you know how to do it?

Don’t worry: You can learn.

Quick refresh: You should meet with prospective clients to talk about their goals. A great salesperson will really dig in and “peel back the layers of the onion” to discover the “why” behind the goals. (I wrote about this process in detail here.)

At this point, you present the plan to get the person from the current state to the goal. This is your pitch: “Based on what you told me, I would recommend X, Y, and Z.”

So how do you deliver the price and get people to sign up?

Handling Objections

When you present a personalized plan as a true pro, it’s important to ask for a person’s confidence. Like this: “Do you believe that everything I’ve presented to you is going to get you to where you want to be?”

This is a yes or no question because we want clarity.

If you get a “no,” you can find out what’s needed. Have you missed something important?

This isn’t handling an objection; it’s making sure you have all the info you need. With that new info, you can update your prescription. This process of refining should increase the person’s confidence because this plan is clearly personalized.

If you get a “yes,” take the person through the investment. (Two-Brain helps clients create a professional pricing binder that makes everything very clear.)

Say something like this: “The investment for you to get started today is this. How do you feel about that?”

Then let the person respond.

Some sales coaches recommend you state the price and then leave a pregnant pause in which you sit silently and wait for a response. With our “question” approach, you’re asking for a response so you can move forward without making it awkward and tense. You keep the conversation going.

At this point, five objections are common, and two of them are smokescreens:

1. Money.
2. Logistics.
3. Fear.
4. “I need to think about it.”
5. “I need to talk to my partner.”

Let’s address the last two first; they are not real objections.

Smokescreen Objections

Client: “Can you gimme a couple days to think about it?”

Salesperson: “Yeah, that’s no problem. Just before you go, let me ask you this: What’s coming up for you that is leading you to take some time to make the decision?”

Client: “I’m just not an impulsive person, and I want to make sure I’m making the right decision.”

Salesperson: “Got it. OK. And how do you feel about the decision itself? Do you feel like this is the right decision to help you accomplish [INSERT GOAL]?”

Client: “I do, but it’s a lot of money. It’s a little more expensive than I thought it was gonna be.”

And now you have the real objection.

Same deal with “talk to partner”: “That’s not a problem. It’s fair to go home and talk to your partner. I’d want to talk to my partner about this as well. Let me just ask you a question before you go. I know you said your goal is really important to you. Is there any reason your partner wouldn’t want you to [INSERT GOAL]?”

And here you’ll get a real objection: money, logistics or fear.

Real Objections: Money, Logistics, Fear

If you get a money objection, you’ll need to help someone find the funds in their budget to accomplish an important goal with a valuable service. In some cases, you might have to downgrade the prescription:

“No problem. Instead of PT three times a week, let’s do group classes. You’ll still get results, and you can always switch to PT later if you want to speed up.”

Logistics issues include things like “kids starting school” and “work is crazy.” Here’s the approach:

“You came in today to solve a problem. I understand that it’s a busy time at work, but you also said you need to blow off some steam and take care of yourself or you’ll burn out. I don’t want you to kick the can down the road and have the situation get worse than it is now. Can we pull out your calendar and see what we can fit in?”

And here’s a great way to sell PT, a high-value service that can solve all sorts of logistics issues: “If you can’t get to three one-hour group sessions a week in the evening, what do you think about two 45-minute PT sessions at 1:45 on Monday and Friday? Would that tailored plan help you take the first steps toward your goal?”

Here’s how to deal with fear, which is common in people who are thinking about starting something new:

“So you said that everything is great, like this is exactly what you’re looking for, but you’re a little fearful of moving forward. What would you do if you knew that you couldn’t fail in this program? Would you still do it?”

Typically people will say, “Yeah, but what if it doesn’t work for me?”

You say: “Well, why wouldn’t it work for you if it’s worked for all these other people that are on the wall behind me?” (Your sales office should have pictures of happy, successful clients.)

You’ll then be able to address concerns, keep establishing expertise and encourage the person.

Another approach to fear: “We can either make our decisions because of fear or despite fear. What decision do you need to make to put yourself in a position to accomplish the goals you laid out for me?”

Selling Is Helping

Handling objections is really just having a conversation, and it’s best to keep your emotions out of it. Remember, your life won’t change if the client doesn’t sign up, but the client’s life will change dramatically for the better on sign-up.

If the person leaves without committing, you’ll never help them. They’re almost certainly gone forever.

You, as a gym owner and coach, must have conviction that you can change the person’s life. If you truly believe that—your current clients are proof!—it’s your duty to help a person make the right decision on the spot. Some people won’t, but that shouldn’t stop you from trying to help them anyway.

To sell more—and to help more people—you must get over your own fears and insecurities. And you have to practice selling. It’s a skill you can learn.

If you don’t work on your skills and develop confidence in the sales office, you won’t be able to connect with people who really need you in their lives. It’s that simple.

Want to learn more about sales and objection handling? Check out this video:

The post Closing Sales: Tips Every Gym Owner Needs appeared first on Two-Brain Business.

How to Dig Deeper and Sell More Services

Here’s an immature sales process that’s costing gyms clients:

“What do you want to accomplish in the gym?”

“Lose 10 lb.”

“OK. I recommend personal training. Want to sign up?”

The basics of our Prescriptive Model are in there—which is good. The gym owner is asking for the client’s goal and recommending the best solution. But something is missing.

It’s the “why,” and if you can dig it out of prospective clients, you’re going to close way more high-value sales.

Ask More Questions!

In the “discovery phase” of sales, you’re acquiring valuable info. You don’t want to make any assumptions.

Good salespeople clarify the statements of prospective clients. They probe, follow up and learn the whole story.

What brought the person in? Why today? How long has the problem been a problem? Have they tried anything in the past? Why were previous efforts unsuccessful? And so on.

In the discovery phase, you must learn about the problem, you must understand the desired future state, and you must create urgency that prompts action.

Urgency has two parts. Urgency comes when a person understands the cost of inaction—when you show the gap between the goal and the current situation. Urgency also appears when a person accepts responsibility for the problem and thinks, “Nobody’s going to save me, and nobody’s going to do this for me. I must take action.”

When there’s urgency, a person is ready for a pitch—your solution. And you’ll get less hesitation because urgency tends to overwhelm objections.

The depth of your questions creates that urgency. If you stay surface level, you get surface-level answers—and more objections.

Going Deep in Sales

Good salespeople discover the goal and offer a prescription to accomplish it.

Great salespeople find out the true source of pain, create emotional investment and urgency, and then prescribe a solution that’s received with fewer objections, if any.

Compare this exchange to the one above:

Client: “I just wanna lose like 20 pounds.”

Salesperson: “Okay, got it. 20 pounds. And how long have you been wanting to lose the 20 pounds?”

Client: “I had a kid about a year ago, my second. And then life’s been busy. It’s very difficult being a mom and balancing work and my relationship. And so it’s something that I’ve wanted to do for a long time now. I just need something to get me back on the wagon.”

Salesperson: “When you say ‘long time,’ you said that you had a kid a year ago—did this desire to lose the 20 pounds start before then?”

Client: “Well, I was pregnant, so it wasn’t realistic to lose weight at that point in time. But, yeah, it’s been a while. I want to have my old body back. My pre-pregnancy body is my goal. I want to fit my old outfits.”

Salesperson: “Got it. And so what have you been doing to work on losing the 20 pounds?”

Client: “Honestly, I haven’t been doing much. I know it’s been something I’ve needed to change, but I’ve been kicking it down the road because I’ve been putting the needs of others before my own needs. I’m a mom—that’s what I do.”

Salesperson: “Got it. And has something happened recently that made you show up today to have a conversation about finally putting something in place to change that?”

Client: “One kid is starting school in two months.”

Salesperson: “That’s good to know. So it sounds like you have a little bit more freedom of time with the oldest one going off to school. So you’re trying to prioritize yourself to start to lose this weight?”

Client: “I just have a little breathing room, and I can get out of the house for an hour a couple times a week. Before, that just wasn’t even a consideration.”

Salesperson: “OK. When you said that you wanted to lose some weight, you said 20 pounds, and it seemed like that was specific. What’s the significance behind 20?”

Client: “That would just put me at what my pre-pregnancy weight was.”

Salesperson: “OK. And were you happy at that weight?”

Client: “Definitely happier. I just felt a lot more confident, a lot younger, like I had more energy.”

Salesperson: “OK. So is that the ultimate goal or do you think that you would want to do something beyond that once you hit the first 20?”

Client: “I think I’d have to get there first, but you always wanna look better. There’s no end state in these things. I do think getting to my pre-pregnancy weight would give me a lot more confidence and give me a better feeling when I look in the mirror.”

Salesperson: “Got it. You mentioned that you kicked the can down the road to get to this point that we’re at today. I’m curious: What happens if you don’t do anything today?”

Client: “I just keep going. I could be talking to you next year having to lose 30 pounds instead of 20.”

Salesperson: “And what is that gonna do for your quality of life?

Client: “It’s certainly not gonna improve it.”

Salesperson: “And is that something that you’re prepared to settle for?”

Client: “No, I know something needs to change. This isn’t something I can do on my own. There’s too much I have to keep track of—my husband, my two children, work. I just don’t have the head space to think about how to get back to where I was.”

Salesperson: “OK. And when you say ‘something needs to change,’ do you have an idea of what that looks like for you?”

Client: “I think just moving, getting to the gym and starting to take time for myself is really gonna be that first step in the process.”

Salesperson: “Got it!”

If you present a detailed, personalized prescription now, you’re going to have a much easier close. You’ve created urgency: The prospective client has taken responsibility for change and stated the cost of inaction.

You’ve also got a clear gap between the current state and the goal; now you provide the bridge. You’ve asked a ton of questions and can present every aspect of the plan as part of a solution provided by a true pro. You’ve moved from “generic fitness stuff” to “I’m an expert, and if I consider your unique situation, I know you should do exactly this to accomplish that.”

Even better, a lot of objections have been dealt with already, and you have info that will help you deal with others if they pop up.

The process wasn’t pushy or slimy, and it only took a couple of minutes.

Dig for Detail

If you settle for surface responses and skip the details, you might not get the opportunity to change the person’s life. And that’s really what it’s all about: helping people achieve their health and fitness goals through coaching.

So do you care enough to ask more questions and lead the conversation?

I hope you said “yes,” because if you didn’t, prospective clients aren’t going to want you to lead them toward fitness and health on a daily basis.

In the next post in this series, I’ll teach you how to close.

The post How to Dig Deeper and Sell More Services appeared first on Two-Brain Business.

Mastering the Close: Front-End Sales Strategies for Gym Owners

John Franklin (00:02):
Hello and welcome to this episode of Run a Profitable Gym.” I am your host for this session. My name is John Franklin. I’m the CMO here at Two-Brain Business. And joining me today is the head of sales at Two-Brain Business and the owner of Vault Health & Fitness, a network of four different gyms doing over seven figures in revenue. It’s his first time on the show. Welcome, Mr. Matt Temby.

Matt Temby (00:25):
Hey, thanks for having me, John.

John Franklin (00:26):
Were you always a sales expert or was this something you picked up through the annals of being a gym owner?

Matt Temby (00:34):
No, I was terrible in sales. I come from a corporate background in retail and then opened my first two gyms at the same time, which was a big mistake. And then, kind of stumbled through sales until eventually I found mentorship and then I learned that I should actually have a sales process. It’s a lot easier to make money that way.

John Franklin (00:51):
And the story of how you found mentorship is kind of a dramatic one. How did you come—how did you get on my radar? How did you find Two-Brain Business?

Matt Temby (01:00):
Yeah, I didn’t know that Two-Brain existed. A lot of people who come to have conversations with Two-Brain, they’ve been following for a really long time; they’re familiar with Chris’s work. I was not in that camp. I was coming out of COVID. It was July of 2020. I had opened both of my gyms in 2018, left my corporate role in 2019. So, I didn’t have any money coming in for about 16 months. And I was about 12 weeks out from filing bankruptcy. And I had missed a flight to a cousin’s wedding out to Kansas City, cried all day. My mom told me that everything was going to be OK, and I assured her it was not OK. And then I found a paid ad from Two-Brain that night, kind of went down the rabbit hole, started reading some articles, watched some videos, listened to the podcast. I had a call on a Monday, and I started that day, and that was about four years ago.

John Franklin (01:48):
I got you. That was my ad. Alright. And so, things have obviously—things have obviously turned around since then. The way you came on my radar is obviously you had a lot of success with the program, and then I was looking for people who had succeeded and wanted to hop on the sales team. I found you, we interviewed the first time, and you didn’t get the job. You didn’t sell me; you didn’t close me. So, we ended up bringing you on a second round. I saw a little bit of opportunity there. I saw you were coachable and moldable, and then, you came on, you blew my expectations away, and now you run the entire sales team, and you’re a better closer than I am. So how did you go from someone who couldn’t get a part-time sales job to being the number one sales expert in an organization known for selling?

Matt Temby (02:44):
Yeah, I think when I first started on the sales team, and rightfully so, I didn’t get the job the first time. I didn’t do a very good job of closing you. When I first started, it was about creating structure and having a format that I could follow consistently and a flow that I was confident in because with sales, if you don’t have confidence and conviction, the person across from you is going to feel that regardless of if you’re selling mentorship or for most of the people who are going to be listening to this episode, we’re selling to consumers that want to change their life through health and fitness coaching. So, if they are timid and they’re scared, which most of them are when they get to sitting across from us, and we’re timid and not confident, they’re not going to buy. So, it was about building my confidence with what was working well for me. And then since that time, beginning of 2022, I’ve invested in mentorship for sales training. So, if there’s a skill that you want to learn, there’s somebody out there that’s doing it better than you are, and you can acquire that skill.

John Franklin (03:42):
Yeah, I mean, it got to the point where I was just like, “Matt, I’ve kind of taught you everything I know now.” And so, you were just like, “OK, that’s fine.” And then you found people who were better than me and then better than those people. And now you’ve gotten really good in such a short period of time. It’s really impressive. So, mentorship was one thing you did. Obviously selling with conviction and developing a good sales mindset is important. Like what did you do to hone in on those things and develop those abilities?

Matt Temby (04:15):
Yeah, so part of it is practice. And then reviewing game tape is really helpful. So, a lot of the sales that we do at Vault is all online. It’s through Zoom, so those are recorded. It gives me the opportunity to watch those conversations that the team’s having and give feedback to team members on things that they can either do better in discovery phase, which is the first part of actually leading a sales conversation, which I’m sure we’ll talk about more in a minute. The pitch, which is like presenting the solution, here at Two-Brain we call that the prescriptive model, and then the close, which is overcoming objections. If you can’t overcome objections, you’re not going to make a lot of money in sales or in your gym because you’re not going to have a lot of people that you’re going to be helping.

Matt Temby (04:56):
Something that you had actually shared not that long ago within Two-Brain is called “The Jolt Effect.” And in that book, they talk about 40 to 60 people, or 40 to 60% of people, don’t make decisions on the thing that they’re looking at. So, if you think about how many people actually show up, they say, “Hey, I need to think about it,” or “I need to talk to my partner about this,” and then they just go back home and sit on the couch. That’s the true competition for other gyms. Those people that come into your gym for a No Sweat Intro, they’re not signing up at F45 or Orange Theory; they’re just going back to the couch.

John Franklin (05:30):
Some of them are, but to your point, about half, maybe a little bit more, are just going to do nothing. So that’s why it’s something that I stress with you and now you stress with the team that it is important to get a commitment of some kind on a sales call because it’s what the prospect wants to do. But a lot of times there’s indecision, and that may be because they’ve been burnt by a company before, or they don’t know if they’re ready to commit in the case of a gym membership, or they don’t know if this is the right gym. And we need to help them realize that whatever the solution is you are selling is the right solution. So why don’t we run through some of the frameworks that you teach at your gym to help create strong closers?

Matt Temby (06:16):
Yeah, so it starts at the beginning of that sales conversation. So, it’s really about overcoming the person because that person, typically the people that we’re servicing within our gyms, our avatar is somebody who does not work out regularly or has never had a workout program before. So, by the time they’re actually sitting in front of us, they’re fairly intimidated. This is uncharted territory for them. But we want to just get right into it, and we have to make sure that we’re leading the person because they’re going to make a decision on if they want to work with us specifically or not. So, asking what they’re looking for specifically in terms of their health and fitness is a great spot to start the discovery phase. Anything that a prospect is going to share with you or a potential client’s going to share with you, you want to make sure that you clarify what they said.

Matt Temby (07:04):
So you don’t want to make assumptions, right? So, they might say, “Hey, I want to get healthy.” Alright, well, in my mind and in your mind, you might have a picture of what healthy looks like, but we don’t know what it actually means to them, so we need to clarify what that is. We might need to probe and ask follow-up questions. And then once we understand what they’re actually talking about, then we can build. Because if that specifically is why they’re here, there’s probably more to it. And so, we need to start to build that story of what brought them in front of us, how long this thing has been going on for, what they’ve tried to do to solve that in the past. And then ultimately what will happen from that discovery portion of the conversation is that you’re going to end up finding a lot of pain typically because people are trying to solve a problem.

Matt Temby (07:47):
And then the larger that gap gets, the more urgency that they will have. But there’s really three parts to discovery. So, the first part to discovery is really understanding what the problem is, which is why we just ask that as soon as we start. The second part is understanding the goal, like what’s the future state for this person? What’s the thing that they desire? And then the last piece is urgency, and there’s really kind of two pieces to urgency. The first part is cost of inaction. So, let’s just use a female avatar who’s in her mid-forties, and she wants to lose body fat. So, if she wants to lose 25 pounds, and she’s been trying to lose this 25 pounds for the last three years, and there’s probably a lot of things like little comments from her partner, or the way that she looks in the mirror before she goes out to a birthday party with the girls, like these little things kind of chip away at her confidence over time, and it’s probably created a lot of pain in her life.

Matt Temby (08:40):
And so the cost of inaction of, like, “OK, you lose 25 pounds. How are you feeling?” She’s feeling awesome; she’s got more energy. And she just kind of has that kick in her step again. Well, what happens if she does nothing? It’s just going to continue to get worse because the track record over however many years it’s been since she’s wanted to solve this problem, it would be unreasonable for her to think that it’s just going to magically solve itself. So, we have to paint the picture of, like, “OK, this is the thing you want,” and then you have to rip it away. And we’re not doing that to be rude. We’re not doing it to be disrespectful or mean. We just have to bring them back to the reality of the situation that they’re currently in. Like, you’re doing nothing, and it’s your decision to do nothing.

Matt Temby (09:20):
Or maybe she’s done other things, and she’s either failed to execute or was the wrong program with not the right information or lacked implementation and accountability to actually get her the thing that she wanted. So once there’s urgency where somebody is raising their hand and saying, “I understand that it’s my fault that I’m here, whether it’s decisions I was consciously aware of or unconsciously aware of, they were still my decisions, and I am in control of this, and nobody’s going to come to save me, and nobody’s going to do this for me.” At that point, once they’ve committed to taking action and changing their behavior, which is what sales truly is, then you can go into the pitch, but not before then because you’re going to end up with a “think about it” or you’re going to end up with a partner objection that’s going to be hard for you to overcome if you haven’t led them to the point where they take accountability.

John Franklin (10:07):
Right? So, we have: What’s the problem? What’s the desired goal or outcome? And then we need to create that urgency. One of the things that I’ve heard you talk about is the depth of questioning is what creates that urgency. If you stay surface level, you get surface level answers. So, a lot of times when you’ll be sitting down for a consultation in your gym and you ask someone a question, they’ll say something pretty generic like, “I want to lose weight,” or “I want to get healthy,” or “I just want to feel a little better.” And so, if you’re a novice salesperson, you’ll just kind of go down the script and kind of get a check next to each one of those boxes. What I think separates someone who’s good and who’s great is who can kind of dig and figure out what the true source of the pain, what the true source of the problem is. What are some tips you have for doing that?

Matt Temby (10:55):
Yeah, you really have to kind of peel back the onion until you get to the spot where there’s pain. So, we’ll just go back to that same avatar. She comes in, she says that she wants to get healthy and feel confident again. “OK. Well, tell me a little bit more about what that looks like for you to feel healthy and feel confident again.” “Well, I—”

John Franklin (11:15):
Let’s just roleplay it. Let’s just roleplay it. Take me through.

Matt Temby (11:18):
Do you want to be the—

John Franklin (11:20):
Yeah, I just want to lose like 20 pounds.

Matt Temby (11:24):
OK, got it. 20 pounds. And how long have you been wanting to lose the 20 pounds?

John Franklin (11:28):
So I had a kid about a year ago, and then life’s been busy. It’s very difficult being a mom and balancing work and my relationship. And so, it’s been something that I’ve wanted to do for a long time now. But I just need something to kind of like get me back on the wagon.

Matt Temby (11:44):
OK. When you say long time, you said that you had a kid a year ago—did this desire to lose the 20 pounds start before then?

John Franklin (11:52):
Well, I was pregnant, so it wasn’t realistic to lose weight at that point in time, but no one feels they’re sexiest when they’re in their third trimester of pregnancy. So, yeah, it’s been a while. I want to have my old body back. My pre-pregnancy body is my goal. I want to fit in my old outfits and be able to fit in my pre-kid jeans.

Matt Temby (12:11):
Got it. OK. And so, what have you been doing to work on losing the 20 pounds currently?

John Franklin (12:17):
Honestly, I haven’t been doing much. I know it’s been something I’ve needed to change, but it’s just been something I’ve been kicking down the road because it seems like I’ve been putting the needs of others before my own needs because I’m busy, I’m a mom, that’s what I do.

Matt Temby (12:32):
Got it. OK. And has something happened recently that you showed up today to have a conversation about finally putting something in place to change that?

John Franklin (12:40):
My kid is potty trained, and they’re starting school in two months.

Matt Temby (12:45):
OK. So, it sounds like—

John Franklin (12:46):
My oldest, my oldest. I have two kids.

Matt Temby (12:51):
Oh, alright. Well, that’s good to know. So, it sounds like you have a little bit more freedom of time with the oldest one going off to school. So, you’re trying to prioritize yourself to start to lose this weight.

John Franklin (13:01):
I just have a little breathing room, and I can get out of the house for an hour a couple times a week, where before that just wasn’t even a consideration.

Matt Temby (13:10):
Got it. OK. Now, when you said that you wanted to lose some weight, you said 20 pounds, and it seemed like that was pretty specific. What’s the significance behind the 20?

John Franklin (13:19):
That would just put me at what my pre-pregnancy weight was.

Matt Temby (13:23):
OK. And were you happy at that weight?

John Franklin (13:26):
Definitely happier than what I was, just felt a lot more confident, felt a lot younger, felt like I had more energy.

Matt Temby (13:33):
Got it. OK. And so, is that kind of the ultimate goal, or do you think that you would want to do something beyond that once you hit the first 20?

John Franklin (13:40):
I think I’d have to get there first, but you always want to look better. There’s no end state in these things, but I do think getting pre-pregnancy would give me a lot more confidence, make me feel better, give me a better feeling when I look in the mirror.

Matt Temby (13:55):
Got it. OK. And, you know, I’m just kind of curious what would happen—because you mentioned that you kind of kicked the can down the road to get to this point that we’re at today—what happens if you don’t do anything?

John Franklin (14:06):
I just keep going like I’m going, and I could be talking to you next year, having to lose 30 pounds instead of 20 pounds.

Matt Temby (14:16):
OK. And what is that going to do for your quality of life? Because you said that you wanted to kind of get back to feeling sexier again.

John Franklin (14:22):
It’s certainly not going to improve it.

Matt Temby (14:24):
OK. And is that something that you’re prepared to settle for?

John Franklin (14:27):
No, I mean, I want to make a change, or I know something needs to change because this isn’t something where I can do it on my own. Like, there’s too much—I have to keep track of my husband, my two children, I work. I just don’t have the type of head space to think of how to make these other changes and habits that I need to get back to where I was.

Matt Temby (14:53):
OK. And when you say that something needs to change, do you have an idea of what that looks like for you?

John Franklin (14:59):
I think just moving, getting into the gym and starting to take time for myself is really going to be that first step in the process.

Matt Temby (15:06):
Got it. OK. So that’s where instead of just taking you at your initial response, you can keep going, and so you get a lot more information from the prospect because that starts to build that gap. And so like you said, “Hey, it’s my fault,” and you took accountability, so you’re a good prospect, somebody that’s probably going to be a little bit easier to close of, “Hey, I know that something needs to change, that’s kind of why I’m here, and I know that if I don’t do anything, this is going to get worse, and I’m probably going to have 10 more pounds that I need to ask your help to lose next year.”

John Franklin (15:40):
And it doesn’t feel pushy, and it only took a couple extra minutes to get that information. But you have a lot more to work with to fight inaction later on, right?

Matt Temby (15:51):
For sure. Yeah. If you settle for the surface responses, you are just going to be checking boxes on the conversation, and you’re not going to have the opportunity to change that person’s life. And at the end of the day, this isn’t about making more money. From a business perspective, obviously, that’s important, but this is really about changing somebody’s life in your community. And if you’re not a leader at the beginning of the conversation, that person is never going to say, “Hey, I want you to lead me on a daily basis,” whether it’s one-on-one semi-private, large group nutrition, coaching, whatever—that person’s not going to sign up with you because you didn’t prove to them that you can lead them at the beginning of the relationship. So, they’re saying, “Hey, I’m kind of concerned. I don’t have the confidence that you’re going to be able to lead me to the thing that I actually want.” So, they’re rejecting you, not the program that you have.

John Franklin (16:41):
And what would you say to a gym owner who’s like, “This sounds—this doesn’t match with the vibe of my gym,” or “I don’t like my sales to feel salesy”?

Matt Temby (16:53):
Well, what I say to that person in that regard, I would ask them about their goals to start. Like what are they trying to do with their business. If they’re trying to make a larger impact on their community and they think that they could be doing better. Now maybe they’re doing free trials, which a lot of gyms used to do that, and a lot of gyms still do that. I would ask them how that’s working for them, and if they think that they could be doing better, I’d ask them if they’re happy with the results, and if they’re not, then I’d say, “OK, well let’s talk about a different way that we can actually help people on a deeper level.” Because I don’t know anything about that person who goes into a free class.

Matt Temby (17:32):
I don’t know what their goals are. I don’t know what their limitations are. I don’t know what their past workout history is. And so, really, I’m doing that person a disservice. And a free class at this point is really a commodity. It’s no different than just turning on the lights. I expect the light to go on. And so, there’s no differentiation between what you’re doing and what the F45 down the road is doing. And if you have a really large group model, let’s just say, you have 20 to 30 people in that room and you dump Nancy, who’s a 65-year-old female who’s never worked out with weights before into that group, she’s probably not going to have a good experience. And the likelihood of her getting hurt is actually significantly higher. And the coaching level just goes down because your coach is trying to get that person to have a good experience so that they sign up to the gym so the gym grows as opposed to coaching everybody else who’s already paying you to reach their goals.

Matt Temby (18:26):
So I would encourage you to have a more structured process and understanding what that leads to in the long term: That person’s probably going to pay you more money for other services because you can just address and give them an action plan of “You said you wanted A, B, C; let’s do X, Y, Z to help you get there. This is the timeline it’s going to take.” So, you can set reasonable expectations and so there’s not like buyer’s remorse 30 days in when they just think that 20 pounds is going to melt away, but you didn’t walk them through what they should actually expect. So, there’s a lot of upsides into having a true structured sales process. It’s not just about making money; it’s about helping that person better.

John Franklin (19:05):
Right? Like you can’t help Nancy if you don’t know what Nancy wants, right? If you’re one of those gyms saying, “Here’s my gym. This is where the rowers are. We have a lot of barbells. Our coaches are better than the gym down the street. It costs $140 a month. There are no contracts; there’s no hard pitch. Let me know if you want to sign up.” Like again, does that person know you can solve their problem? Have you done anything for that person that leads them to believe that you are an expert, much less should command a premium price to solve their problem versus getting a more bespoke solution like this where you can say, “Hey, I hear you. I can solve this. We do this all the time.” And then providing them exactly what they need. So. kudos to that. Once we’ve gotten the problem, we’ve kind of painted the dream outcome, what is the next step in the sales process?

Matt Temby (19:51):
Yeah, so at this point you’re going to make a prescription, a recommendation. This is what people would refer to as the pitch. And so, this is—when we talked about building that gap in the first part of the conversation and discovery, this is building the bridge to get her from this side over here to the side that she wants to be on. And the best way to do this—like if you have a lot of confidence in what you do, less is more. She doesn’t need to know about the coaching app that she’s going to have access to or your functional training day or all of these other things. She just needs to know, “Hey, we’ve done this with hundreds of people before, a lot of them very similar to your situation, and this is the outcome. And so based on that and what you said that you’re trying to accomplish today, these are the steps I want to take with you for the first four weeks. After that, you’re going to sit down with my coach, and they’re going to make the next recommendation for you.” So, this is the pitch. She understands what’s going on, he or she understands what’s going on, and then we’re going to get to the close.

John Franklin (20:53):
And does everybody get the same pitch?

Matt Temby (20:56):
No. Everybody’s going to get the pitch that’s best for them. And so, if you have—in your business, if you have team members who are helping with the sales process, they need to be empowered to do what’s right for that person. I’ve always told my team, if you start seeing me make recommendations that are just based on money and it’s not based in that person’s best interest, it’s probably time for you to get another job because the ship has gone astray somewhere along the way.

John Franklin (21:22):
So you make the pitch. Usually, how will you deliver the end state of the pitch. So, I’m assuming you’ll walk through, “Hey Nancy, based off of what you told me, I would recommend X, Y, and Z.” And then how do you deliver the price and ask them to sign up?”

Matt Temby (21:40):
Yeah. So, you want to make sure that they believe in the plan. So typically, what we do in our gyms—because we do have a nutrition program that an RD leads—we’ll kind of break it down into two pieces. Like “Here’s your fitness side of things; here’s the nutrition side of things.” Even if there’s no recommendation for nutrition, we’ll just say, “Hey, based on everything that you’ve told me that you’re trying to accomplish, I don’t think that you need nutrition at this point.” We just let them know that we do have programs, but at this point I don’t think that it’s imperative for them to go down that path to reach their goals. And then I’m going to ask them for their confidence of “Do you believe that this—everything that I’ve presented to you in terms of fitness—is going to get you to where you want to be?” and they’re going to give me a yes or no.

Matt Temby (22:20):
I’m going to ask a binary question there. So binary question, just getting clarity of it’s this or that; it’s yes or no. I want—like, you’re not asking an open-ended question. If she says, “No,” I’m going to ask her what her hesitation is or where she thinks that we may have left something out, so I can address that. Because it’s not an objection at this point. It’s just like, “Hey, there’s something that’s missing, and we’re having a straightforward conversation.” If she says, “Yes,” I say, “Great,” and then I’m going to walk her through the investment. So, a lot of gyms are just going to have one-size-fits-all for pricing. What I would recommend is you get a little bit more advanced and actually have two different pricing structures. You can have your paid-in-full that is not discounted because that’s not something that we teach.

Matt Temby (23:02):
But that’s the regular price. And then you have a finance option where it’s like, hey, maybe that person can’t pay $1,000 to get started for whatever your intro package is. And so then, if we isolate that conversation around money, if they have the money and they just don’t want to part with all of it at one time, “Great, I can break that down for you.” And so that’s how I would deliver that pitch is, “The investment for you to get started today is going to be this. How do you feel about the investment?” And then I let her respond so that you don’t need to have this big awkward pause. Like some people will teach that where you have a staring contest, and nobody says anything until the other person blinks or coughs, and then you feel like you got them. You’re just going to get straight to it. Because typically, if that person wants to do this, then it just comes down to like, do you actually have the money, or are we having a different conversation of finding the finances within your budget? And if they have the money and they just don’t want to give it to you, then it’s going to be one of the other objections.

John Franklin (24:00):
I would guess the most common one that people in here would hear from someone, is, “Hey, yeah, that sounds good. I think it’s going to get me where I need to go. Can you give me a couple days to think about it?” How are we handling that?

Matt Temby (24:13):
Yeah, that’s no problem, John. You know, just before you go away and take some time to think about that, what’s coming up for you that is leading you to wanting to take some time to make this decision?

John Franklin (24:24):
I’m just not an impulsive person, and I want to make sure that I’m making the right decision for me. I’m just not somebody who signs up for things right on the spot.

Matt Temby (24:36):
Got it. OK. And how do you feel about the decision itself? Do you feel like this is the right decision that’s going to help lead you to losing the 20 pounds that we talked about earlier?

John Franklin (24:47):
I do, but it’s a lot of money. It’s a little more expensive than I thought it was going to be coming into the conversation.

Matt Temby (24:53):
OK. So now we have the real objection. So, it’s a money objection. It’s not a “think about it” objection. So, of the five objections, there are two that are smokescreens: That’s a “think about it”; that’s a partner objection. And then you actually have money, fear and logistics. Those are the three real objections. And so, you have to pierce the smokescreen that somebody has of like, “Hey, I want to talk to my partner about that.” Well, if it was a partner thing, then I’d say, “Yeah, that’s not a problem. Like, that’s fair to go home and talk to your partner. I’d want to talk to my partner about this as well. Let me just ask you this question before you go away. Is there any reason that your partner wouldn’t want you to lose the 20 pounds that you shared with me that is really important to you?” Then you’d probably say—

John Franklin (25:32):
They’d probably say, “No,” and then they’d give you, “It’s a money thing,” or “We’re saving up for a vacation,” “We want to buy a car,” or whatever. Or the kids—I’d have to hire a nanny, something like that. And then it would come down; then you get to a money one. OK, what’s an example of a fear because you said something important there. So “think about it” and partner are smokescreen objections. That is usually something that requires further questioning to get to what the actual issue is. And the three real ones are money, which is pretty straightforward. The second one is logistics. So that’s like, “Hey, I told you my kid’s starting school in two months. I can’t start today.” Right? Like “I just don’t have the time until this kid’s out the house.” Right, and so for that, how would you handle something like that?

Matt Temby (26:20):
Yeah, logistics is pretty straightforward. So, it’s like, “Listen, Susan, you came in today wanting to solve a problem. I understand that your son’s starting kindergarten in a couple months, and you want to spend those summer months with him. But you also said that you wanted to have more energy so you can actually play with your son this summer. So, what do you think about the plan of breaking this down to just two days a week? Originally, we talked about four days. So, if we reduce the frequency just to get you started, right? Because I don’t want you to kick the can down the road and have the situation be a little bit worse off than you are today. Would that be helpful in helping you take the first steps to get started towards your goal?”

John Franklin (26:57):
And then you just move down that line of questioning until you find something that could work, or again, you do a follow up, but you want to make sure that you’re exhausting all those avenues first to actually get someone to commit and make some type of a decision. Alright, now talk me through fear. What’s a real—like, at what point do you know, “Oh, fear is the actual objection here.”

Matt Temby (27:20):
Sometimes you just have to label it, right? So, it would be like, “Hey, you said that everything is great. This is exactly what you’re looking for, you know that you need to do this, but you’re not ready to move forward. Do you have a little bit of fear of moving forward?” So, if we really wanted to go deep dive, there’s four fears: There’s a fear of me, there’s a fear of you, there’s a fear of yesterday, there’s a fear of tomorrow. And we could unpack each of those if we really wanted to. But when you’re looking at fear, a great question to ask is, “What would you do if you knew that you couldn’t fail in this program? Would you still do it?” Typically, they’d say, “Yeah, of course, but what if it doesn’t work for me?”

Matt Temby (27:57):
Well, why wouldn’t it work for you if it’s worked for all these other people who are on the wall behind me? And then they would go through, like, “Well, what if I don’t have time?” or “What if I don’t show up?” or “What if I’m just not strong enough?” And so, then you’re just addressing the thing of, “OK, you’re fearful of this.” And then another good question that you can ask is—or just kind of a statement really—is we can either make our decisions based out of fear or despite fear, and the person who you want to be where you lose the 20 pounds and you’re back to feeling confident, what decision do you need to make in this situation to put yourself in position to become that person? And so, if we can strip things down to really just a simple human conversation where we take our emotions out of it—because at the end of the day my life doesn’t change. If she signs up, her life will change significantly. If she doesn’t sign up, her life won’t change. It’ll probably just kind of continue on the way that it’s going. And she probably isn’t happy with that, which is why she’s sitting in front of you. And this applies for men too. I’m just using Susan as an example.

John Franklin (29:03):
Speak through that again. Because I think that’s an important way to think about it. A lot of some people will hear this and be like, “Oh, you’re just trying to push a decision on this person.” But really you want to act from a position of indifference, right? Is that the way you want to think about it?

Matt Temby (29:19):
Yeah. So, internally, a while back, we used to talk about the “be back bus,” right? Like the client says, “Hey, I’ll be back,” or “I’ll talk to you on Monday. But what we fail to realize is the person that’s trying to lead this situation is that the “be back bus” is a one-way ticket out of town, and you’re never going to see that person again. And if you as a gym owner or you as a coach at a gym, if you have conviction in what you do, that you’re the best in your town at X, Y, and Z, you can change that person’s life. You have to do everything that you can to help that person fight through the fear, fight through whatever they’re going through right there because this is the best opportunity that they have to make a decision that will change their life—if you have something that will actually deliver that.

Matt Temby (30:07):
So, if you are a little bit timid, and you’re like, “Oh shoot, I’m glad that this is going to be over, they’re going to be gone. I can go lift some barbells.” That person is going to leave. You’re never going to see that person again. You might hear from them; they might just pick up and say, “Hey, I’m not interested.” But you can’t have a real conversation with them at that point because they’re just—you’re an order taker in conversation number two. They’re saying either yes, or they’re saying no, or they’re going to say that they need more time, but the only conversation that you have where you can be transparent and just face-to-face is right now. So, you have to get over your fear and if you are fearful, it’s probably because you lack the knowledge, skills and experience to be successful in your role as a salesperson in that moment. And as gym owners obviously wear wearing a lot of interchangeable hats, but you have to get really good at this skillset because that person needs you, and you have the opportunity to change their life and probably impact their family’s life in a positive way, but not if you’re afraid and not if you don’t have the skills to help them work through that in that moment.

John Franklin (31:09):
So that runs us through the process and how we get through there. And I think there are some nuggets in there for both novice and advanced salespeople. Earlier in the conversation, you said something that was important, and I wanted to bring it up on the tail end here: So, one of the things we do on the Two-Brain sales team is we review calls relentlessly, so we are constantly auditing calls, we are providing feedback, and we are making improvements to the process. You mentioned that you do all your gym sales calls on Zoom so you can monitor, audit, give feedback. Is that the only reason you do it on Zoom? And if you’re talking to a gym owner who doesn’t do it on Zoom, would you recommend moving to a virtual setting so you could get that feedback? Or is there another way around that for people who like having people in the gym?

Matt Temby (31:59):
Yeah, we have recently switched to the Zoom process. One, logistically, it’s easier. We have a couple specialized team members now who handle the majority of our sales. Sometimes clients or prospective clients will want to come into the building and check it out even though we say, “Hey, the dumbbells that we have look just like the dumbbells that you’ve seen in other facilities; they actually work just the same way. But if you really want to come in and see us, we’re happy to meet with you in person.” And so, just the logistics of getting another coach scheduled sometimes is a little bit clunky, which is why we prefer to do it on Zoom. The other reason I prefer is kind of the point that you just made is I would love to see the conversation with the team members because if they’re not leading with confidence, just like everything that we’ve talked through, we’re probably missing the opportunity to help more people.

Matt Temby (32:48):
And then, if you put like a more business-focused perspective on it, if you’re doing a lot of organic marketing, and if you’re doing paid marketing, each of those leads who have these conversations cost money. And so, you want to be able to get a profitable return on that. So, you want to make sure that you’re not just flushing money down the toilet because your team is either unskilled, or they don’t have enough reps to be good at the things that you want them to be good at, so it’s kind of a double-edged sword. And to answer the last part of your question—sorry for rambling there—is I would encourage other gym owners to be able to do it. If they’re like a solopreneur and they don’t have anybody else on their team, and they go home at lunch and the prospect is available in that dead time, great.

Matt Temby (33:32):
Instead of you having to rush back up to the gym, especially if you aren’t good at lead nurture, and that person might not show up, like if your show rate’s like 60%, then you might end up at the gym like an hour and a half earlier than you wanted to when you might have wanted to take a little nap after that. So, doing it on Zoom, there are a lot of pros there, and there’s not a whole lot of cons unless somebody actually wants to meet with you in person to make sure you’re a real person.

John Franklin (33:55):
And just to be clear, a lot of people will read Two-Brain guides or resources and want to remove themselves from certain tasks in their business. I am of the opinion that sales is the last, if not one of the last, to go for a reason that you mentioned: that it is very, very expensive to have a subpar closer on your team. Maybe we can use some math to kind of highlight that. So, if Matt and I are working for the same gym and Matt’s close rate is 80% and mine is 70% and the life—what’s the lifetime value of a client at one of your gyms?

Matt Temby (34:40):
Like 4,000.

John Franklin (34:41):
4,000 bucks. Alright. Yeah, so if Matt delegates all the sales to me, for every 100 sales appointments at a 70% close rate, I’m going to close 70; Matt will close 80, right? That’s that 10% difference in close rate we talked about. The true value to the business is $40,000, so that extra 10% in close rate at a $4,000 lifetime value means that for every 100 sales appointments I do, I cost the gym $40,000 in revenue. So that is the true cost of having a subpar, untrained closer on your team. And it’s one of the reasons why I think if you are a gym owner, you have to manage that process for yourself in the beginning. You have to get really good, and then when you do delegate, you have to monitor it really closely, at least in the beginning until you have someone who is closing at your level, if not a little bit better. Maybe you can talk about how you went about delegating the sales in your gym.

Matt Temby (35:45):
Yeah, so I started with wearing multiple hats, with having multiple gyms, and then stepping into the role with Two-Brain—that’s kind of grown over time. Just logistically speaking, I couldn’t take all of the sales meetings. So, I started to train the team. So, I built out like, “Hey, this is the process.” We always had the basic No Sweat Intro. And then over time, we had expanded to that because we were selling other things on the front end. And then I kind of stripped that away because I was like, “Hey, this is very process driven. It’s a great spot for you to start. If you don’t have a sales process at all.” Kind of the things that we’ve talked about in this conversation, you can get a little bit—as you build your skillset, you can get a little bit deeper and really help your team more.

Matt Temby (36:25):
And so I started to train the team. We would film things; they would watch that. We would do a lot of role plays together in a group. We would do role plays one-on-one, and I set up all my sales tracking information. So, I could see, like, “OK, how many leads do we have coming in? Of those leads, how many are booking appointments? What’s the set/show/close rate?” And then starting to give feedback on those things as well. And then for the two people who I have closing for the gyms, they get paid commission. So, they work the leads; they get a set rate per close, and it’s structured as a tier, so=o they’re incentivized to hit the next tier up. So, if they’re at 10 closes, the 11th close triggers all of the previous 10 to be worth more money, incrementally more.

Matt Temby (37:11):
Once they get to 15, same thing. If they hit the 16th one, it’s worth more for all of them. So, they’re going to be hungrier to make sure that each lead because these are people who raised their hand and said, “Hey, I’m interested in the thing that you have.” It’s our duty as professionals to give good service and say, “You reached out for this thing.” And we also have to understand that these people are typically fearful. And so, it might take five days of calling twice a day and shooting a text once a day and sending an email every other day to get that person. And it might not be this week, it might not be this month, it could be a few months down the road, but just remember they reached out to you for a reason. Like I’m not cold calling, dialing in the white pages in the phone book. Like that’s not how that works. So, somebody is interested in you; you have an obligation to give good service and follow through with that person. And so, then you can kind of monitor what your team is doing, and they’re going to service those people better if they’re paid to do it.

John Franklin (38:09):
Well, Matt, we’re getting close to the time limit here. This has been great. Listeners, if you got some value out of this, be sure to like, leave a comment, let us know. We’ll get Matt back on the show. He can peel back the curtain and show you as much as you’d like, and if you want a full breakdown of Matt’s sales process and how he trains and how he thinks about sales, he’s going to be speaking at the Two-Brain Summit in Chicago on June 8th and 9th. There are honestly like a dozen tickets left, so by the time this airs we might be sold out. But if we aren’t, go to twobrainsummit.com and buy your ticket. We will be shutting down the sales page once we sell out, which will happen before the event, so if you are on the fence, consider this your final call, and I hope you got a lot of value out of this episode of “Run a Profitable Gym.” Thanks for watching, and we will catch you later this week.

The post Mastering the Close: Front-End Sales Strategies for Gym Owners appeared first on Two-Brain Business.

The Secret to Slime-Free Sales and Gym Growth

My email inbox looks like yours: It’s full of sales pitches.

Some of them are clever, but many of them are so awkward and slimy that you feel like you need a shower after you read the message.

Stuff like that makes everyone hate sales. Especially entrepreneurs who own coaching gyms.

We don’t want to feel like the obnoxious, high-pressure salesperson screaming about cupholders and trim packages in the car lot. And we certainly don’t want to trick people by promising a Ferrari but supplying a rust bucket with engine knock after we pocket the cash.

But we do have to sell—that’s the truth.

If we don’t, our businesses will fail—and people who need us won’t get help.

That last part is critical: People badly need our help, and it’s our duty to offer it and encourage them to improve their health. If we fail prospective clients, they stay sick and unhealthy. So we have to sell. But we don’t have to use slimy tactics.

In 2017, I wrote a book called “Help First,” and it contains my philosophy for marketing and sales.

Here’s the short version: Help first is usually an invitation to aid someone.

Sometimes it means that you’re doing something for free in the beginning. Sometimes it means that you’re teaching somebody for free in the beginning. Whatever the approach, there’s always a purpose to what you’re doing.

So, for example, I might offer to do a free seminar for a client who runs a financial brokerage, or I might publish a free guide to help people take small steps toward eating better.

The truth is that there is always an intent, but that doesn’t mean it’s devious or slimy.

The intent is honorable: I want to provide enough free help to give a person some momentum. I want that person to get a win and think, “Yes, I can do this!”

And then I want the person to sign up for the service that will really help. Because when that happens, I can change a life.

And so can you.

Help First—Not Forever for Free

Here’s an important point: You help first, but you don’t help forever for free. You don’t have to offer free memberships or donate huge amounts of time without compensation. You are running a business, and it must be profitable so you can keep helping people forever.

And this is also true: If a person isn’t paying for your expert coaching, that person is not yet fully invested in achieving their goals. People waste free stuff all the time. But they take action when they’ve put money on the line.

So when you’re setting up the Help First strategy, be intentional: “I’m going to give away free health and fitness information on this platform to improve lives in my community and tell them how to go further when they’re ready.”

Here are two important reminders:

1. Make sure the help you produce has a point. It must give members of your audience a way to get momentum so they feel like they can keep succeeding. People must experience small wins.

2. Make sure people know what to do next if they want more help. This next step should be clearly laid out and very easy to take. No secret codes, no broken links, no missed calls. “Do this to get started right now.”

People Need You

Here’s what to do today.

Say to one of your best clients, “Hey, I’d be happy to come into your workplace and talk to the other people about eating healthier and reducing stress. What do you say?”

Then pack as much value as you can into a 30-minute free session that includes a Q&A. Summarize your presentation in a very short PDF guide—it can be just one or two pages. Be sure it includes your email address, phone number and a link so people can book a free consultation with you.

End your presentation with this line: “I love talking to you all about this stuff, and I want to continue the conversation. Write down your email address and I’ll send you the free guide I mentioned earlier. And if you have more questions later, you know exactly how to get hold of me fast.”

What you’re doing at that seminar is answering questions and earning trust. You’re making connections. Then you’re giving access to more information that will help people take a tiny step forward.

From there, you’re giving them the opportunity to talk to you privately with personal questions.

Then you’re giving them the opportunity to meet up and see if your personalized plan is right for them—this a No Sweat Intro or free consultation (read more about the process here).

Forget your hangups about asking people to take the final step to pay you for coaching. If you really care about helping people, you must ask them to commit and pull out a credit card. If they don’t, they won’t reach their goals. It’s that simple.

Help First is the simple start to establishing a relationship. It’s taking the lead, it’s giving before getting, and it’s a warm introduction to a relationship that can change lives.

It’s guiding people and helping them win for free, and then it’s helping them hit the jackpot for a fee that reflects the value of the jackpot.

Does that sound slimy?

I didn’t think so.

Now go help someone today!

The post The Secret to Slime-Free Sales and Gym Growth appeared first on Two-Brain Business.

A Better Business Is Just Months Away If…

When you aren’t making any progress at all, it can feel like success is a long way away.

I’ve been there: The fitness business putters along, losing as much money in some months as it made in others.

The boat floats on donated labor, endless hours and an ever-dwindling supply of passion.

Clients come, and an equal number leave. Bad staff members tend to hang around, and good ones tend to move on.

You could once see success and profit on the horizon, but those lights winked out a long time ago, and you’ve resigned yourself to the unsatisfying status quo.

But the reality is that success is only a few months away.

The longer you struggle without moving forward, the more frustrated and cynical you become. When something never moves, you start to feel like it can’t be moved.

“I’m no good at this. The market sucks. This business will never grow.”

I’ve said stuff like that, and the sentiments are not uncommon in the gym biz.

But in a small business, great changes can be made quickly, and they usually have a dramatic effect.

You can’t bend Nike or Apple in a new direction overnight by firing one employee and raising your rates by 5 percent.

But in a small business, a few changes make all the difference in the world. And once they’ve been made, the gym becomes unstuck.

I’m not going to Disney-fy the situation and suggest fixing a business isn’t hard, messy work. Doing the hard stuff in a gym business is stressful.

But I’m also not going to tell you that your business will take a decade to fix. That’s only the case if you decide not to take action. And if you avoid all action, you’ll never fix your gym.

If you act—and do the right things at the right time—you can turn your business around very quickly. I’m not making this up. I interview top gym owners all the time, and many of them can document extreme improvements in very short periods.

Here’s a guy who used just six months of mentorship to make huge improvements to his business:

Here’s a legendary turnaround in just six months:

Here’s what’s possible with steady progress over a period of years:

I’ll give you a key stat: It takes the average Two-Brain gym owner just over two years to reach $100,000 per year in earnings, regardless of starting point.

That last part is incredible: If you’re not earning anything from your gym right now, you could reach six figures in about two years, even if your gym is a tire fire. And many people reach $100,000 net owner benefit much faster.

The point: Swift progress is very possible if you do the right things. You must take clear, decisive action every day. A mentor can tell you what to do and provide accountability so you do it.

When your metrics are improving and you’re earning more, your mindset will shift. Small increases in momentum will start to add up, and you’ll think, “Hey! This thing is actually moving forward.”

At that point, you’ll feel empowered and energized, and your once-far-off vision of success will seem very achievable.

To start building the momentum you need, do something hard to improve your business today. If you’re not sure what to do or need support when you do it, click here.

The post A Better Business Is Just Months Away If… appeared first on Two-Brain Business.

Don’t Buy That Gym: Horror Stories, Red Flags and Real Tips

Mike Warkentin (00:02):
“Florida Man Buys Gym Infested With Pythons for 2 Million.” That’s not quite right. Wait. Oh, “Florida Man Selling Gym That’s Literally on Fire at Slight Discount.” That’s closer. But Nick, you are an actual Florida man. Can you give me a headline?

Nick Habich (00:17):
Yeah, “Florida Man Doesn’t Buy Bad Gym.”

Mike Warkentin (00:20):
Aha. That might actually help some of our listeners. So, let’s dig into that today. When should you not buy another gym? We’ll discuss that today with mentor and gym owner Nick Habich. This is “Run a Profitable Gym.” I’m your host, Mike Warkentin. Please hit “subscribe” so you do not miss a show. You want to get them all so that you can build your business and retire wealthy. My guest Nick, he runs Shark Bite Fitness and Nutrition Cape Coral, Florida. And like I said, he’s an actual Florida man, and he has bought and sold several gyms. So, we’re going to dig into it and tell you when should you not buy something that might be a millstone around your neck. So, Nick, let’s start at the top. What’s your experience when you’re buying or selling gyms? Like what have you done? What’s happened to you?

Nick Habich (00:58):
Yeah, Mike. So, I’ve been around for about 10 years now. We opened our first gym in 2014, originally, a CrossFit affiliate. I’ve had the joy of buying quite a few locations. I’ve had the joy of avoiding buying quite a few locations. And I’ve had the joy of getting rid of a few locations. We bought our first gym—I guess I bought my business partners out in 2017. So that’s basically like buying a gym.

Mike Warkentin (01:21):
That exactly is that, yep.

Nick Habich (01:23):
Yep. Bought another gym earlier that year to absorb into that gym and then bought another location in 2020 exactly one week before the pandemic shut us all down.

Mike Warkentin (01:34):
Oh. There’s probably a good story about that that we’ll get into it on another one, but it sounds like—so you’ve got experience with this, and I’m sure along the way you’ve seen some offers to buy and said, “Ah, that smells a bit funny.” Am I right?

Nick Habich (01:47):
Yeah, for sure. I’ve turned down way more than I’ve bought, that’s for sure.

Mike Warkentin (01:50):
Now, and that’s probably why you’re on our mentor team, because you don’t want to buy everything that comes up for sale, no matter how good a deal it is. So, let’s talk, do you have any horror stories from the buy-sell world? Like what’s some of the stuff out there that we really want to avoid, and what’s nasty?

Nick Habich (02:03):
Yeah, there are a ton. I think one of the really important things to remember is that, while this may not be fun to hear, most gyms are not profitable.

Mike Warkentin (02:12):
Mm-Hmm.

Nick Habich (02:13):
Right? So, the vast majority of gyms that exist are not actually making money. And you can verify this by speaking to most gym owners that are in Two-Brain; most profitable gyms are not looking to sell. So, if you have access to buying, there’s a strong chance that unless there’s some other motivation involved, like a retirement or somebody moving on to a new career, that gym that you can buy is probably not something you should buy.

Mike Warkentin (02:38):
Yeah. It’s interesting. You know, I’ve never been in the market really for looking at gyms, but a few have come up for sale, and I’ve kind of poked around, even looked at some financials and, there was one that I looked at, and I looked at their financials, and it was like a black hole. It was one of the worst things that I’d ever seen. And I literally said to my wife, I was like, “I wouldn’t take this gym off their hands if they paid me $50,000.” Right. Like, it wasn’t even worth the price of equipment because it was just going to be a disaster. Have you seen anything that bad or other instances where it’s just like, “This thing needs to end, or this is not a good thing to buy”?

Nick Habich (03:09):
Yeah, I’ve seen a lot of them; there’s an uncomfortable cycle that happens in gym ownership is, until you start treating it like a business and professionalizing it, a lot of us have done in most of the gym world, the cycle is this: Somebody’s extremely passionate about helping others, so they open up a gym. They run that gym for some amount of years; they get incredibly burnt out. They sell it to some new person who is incredibly passionate but also doesn’t know how to run a business. They run it for a couple years; they get incredibly burnt out—cycle repeat, cycle repeat, cycle repeats. So, in a lot of the P&Ls I’ve seen, oftentimes the owner had this idea that “I can fix the problem that was done before,” or maybe even worse, didn’t really address the problem and just thought like, “I am incredibly passionate about this; I can make this work.” But then that cycle just repeated and repeated and repeated, and now doubling down or tripling down, you’ve got members who’ve been there for four or five, six, seven, eight years who are used to not paying affordable rates or appropriate rates. And the culture is such that making money is not an important factor. So, the new owner has to deal with that as well. I think that’s a really, really common trend.

Mike Warkentin (04:12):
Yeah. And you know, it’s interesting because there are gym owners out there, they’re rare, but I have interviewed them on this show who will actually look for gyms, and they’ll do their due diligence and say, “I can turn this around.” And they actually have a track record of doing so, and they know how to do it, and they put a timeline in place, and they do it, and then they have valuable assets that they can either sell or hold and profit from. But that’s super rare. You know, what’s more common is exactly what you’ve laid out where it’s like, “Oh man, owning a gym is awesome. I’m going to crush it, and then I’m burned out.” And then the next person says the same thing and it just goes over and over again. And along the way, one of these things happens is that you see owner operators who are super invested in their business, they overvalue what they’ve built, right?

Mike Warkentin (04:49):
Because they’ve got tons of sweat equity; they put in all this time scraping gum off the rower seats and stuff like that. And they know that like, “Man, I put in a ton of work,” and they say, “Well, my gym’s worth one hundred grand.” And it’s not, you know? So, when you’ve looked at these P&Ls, and you look at the numbers there, when you see what they think it’s valued at, what do you see—like, what’s often there in your mind, and are you seeing mistakes or inflated values?

Nick Habich (05:12):
Definitely mistakes and inflated values. And like you said, we tend to overvalue things that are important to us, right? So, this is important to me, therefore it must be valuable to others. And you can see why somebody would make that mistake, right? Someone who’s put in two, three, four, six, 10 years of their life into something, it’s almost impossible to put a true financial number as to what that means to them, right? But if we’re looking at this from a P&L standpoint, if the net owner benefit times three is inappropriate, then it’s not worth that number, right? So oftentimes, I think the most recent one I looked at was probably four years ago—I have to be careful about some of the numbers here because I signed an NDA—but they were asking for a number that was six figures, and the owner hadn’t taken home more than $2,000 or $3,000 a year for the last five years, and they weren’t paying the coaches.

Mike Warkentin (06:03):
So there’s no profit essentially.

Nick Habich (06:05):
There was none there. There was absolutely none. You know, and then factor in the fact that some of those members would probably be lost on any kind of change that happened culturally, you would immediately go to unprofitable and, and profit is even there being a vague word because there is no profit if nobody’s being paid.

Mike Warkentin (06:22):
Yep. And I built that; that was the gym that I built because it was my gym was a hobby when I started, and I didn’t pay myself, and on paper, the gym showed a profit at the end of the year, but I didn’t take a salary. So, all the money or the work that I put in was unpaid. If you had paid me—and again, Two-Brain recommends as an owner that you pay yourself for every role and task that you do for exactly this reason—if I had done that, the business would’ve been unprofitable, but on paper it’s like, “Oh, it’s making a modest profit at the end of the year,” but it worth a 3x multiple on that because there was no profit. So, I mean, I’ll point that out to listeners. I’m not a financial expert, but if you see that an owner is not making any money and their gym is not profitable, it’s not worth a lot. Right? Like, at that point, Nick, would you ever buy a gym that was unprofitable personally?

Nick Habich (07:03):
Yeah. I think there are reasons that you could do that, right? So, for example, one of the ones that I bought back when I had business partners was unprofitable. We bought an unprofitable gym. It came with assets though that we couldn’t otherwise attain.

Mike Warkentin (07:16):
Now that’s a different story.

Nick Habich (07:17):
Yeah, totally. Right? So, one was a ton of undervalued equipment. We didn’t have a lot of equipment. They didn’t want to be a gym owner anymore. It worked out really, really well for us. We were able to almost double our equipment at nowhere near the cost that it would’ve been to buy those things new. Another one was, we acquired a new location, like a physical location, a bigger space, at a really affordable rent number; that made it worth buying the technically unprofitable business just to get that. But neither of those reasons were to acquire that gym necessarily. We shut that gym down immediately. It didn’t exist as soon as we bought it.

Mike Warkentin (07:53):
No, so you bought assets essentially and a building, right? Or whatever you want to call it.

Nick Habich (07:56):
Exactly. Yeah. It was that, even though it sounded like a gym buy. But if you were going to buy an unprofitable business or a non-profitable gym, I mean, you would have to look for ways that you could very easily change that unprofitability, right? So, if I was looking at something that had an extremely low ARM, or average revenue for member, see, “Do they have the ability to raise this?” And if they do, then could I change the profitability pretty quickly? Does that gym have incredible staff members who are looking for opportunities? If so, maybe I would do that. Honestly though, without those, I would probably not do that.

Mike Warkentin (08:31):
Yeah. Because there, I mean, you’ve been in the game long enough, and as a mentor, you know in our toolkit the things that you can do to improve a gym really fast. So, it’s like, yes, I could get rid of all the legacy rates, and I could increase rates by this much, and I’ll do my math and find out from a great staff member, this many people will leave, this many people will stay. I’m going to be positive. I can get to profitability here. This staff member sucks. I get a fire. Like there’s all this stuff that you can do, but here’s the thing—I’ll ask you this. Like, would it be better to just start another gym at that point with the help of a mentor potentially and not have all those knots to untangle?

Nick Habich (09:05):
Yeah. Right. Like, that’s the calculus that has to be done. I mean, is the startup cost of a new location going to save you more money than it would be to potentially burn cash as you change this gym over, right? I mean, I think that that’s the other really important thing to look at here too is “How much money are you paying for this gym?” You know, if you can get the gym for free, if you can effectively pay nothing for it, then it might make sense to buy a non-profitable gym and fix the issues there. But if you’re going to put down 50, 100, 150, $200,000 to do that, like you said, it might make more sense to just start fresh with no bad habits and no bad issues.

Mike Warkentin (09:39):
Right? Like you could—Chris Cooper’s put this together—but you could start a gym, and we even have a “Start a Gym” course. You could start a gym for like—if you’re really clever in a small space, like 400 or 500 square feet with like two barbells, a plywood box and a couple of dumbbells, and you might be all in for like 15 grand or something like that, maybe, if you’re really clever about it. And then you can expand and scale up as you see success. And if you have the help of a mentor, you’re going to avoid all the huge monstrous mistakes. I’m not saying you shouldn’t buy a gym, but if you want to start a second one, there are easier paths and faster paths to success than untangling all these horrible knots. Because I’ve heard some stories, and you probably have too: Someone buys a gym, and there’s just like this deep rot, and it’s in the clients, it’s in the staff, it’s just horrible, and to rip it out, you almost have to gut the place to the studs. And at that point, you might as well just started with your own building, right?

Nick Habich (10:31):
Yeah. Yeah. That’s a real thing, right? If you—the same way that somebody maybe overvalues their own gym, there is just history associated with that gym that you may or may not be privy to that may not be beneficial, that may not match with your culture. One of the ones we took over for about eight months, the owner hadn’t been coming to the gym, and his wife was opening the doors and then letting people work out and then leaving. And that was their version of coaching, right? And I think that people could look at that and say, “Hey, area of opportunity, like I can attack this; I could do better.” But those members had become very accustomed to that culture, so you come in and you say, “This isn’t the way we do things,” all of a sudden they don’t want to be there anymore.

Mike Warkentin (11:10):
And then there’s the other thing to think about. If you have a very successful gym, and let’s say you’re a top Two-Brain gym owner, maybe you’re in the Tinker group, and you’ve got like—this gym is running A1. You’ve got a great general manager. You put in maybe four hours a week just meeting with staff, but you’re doing other stuff, and you want to maybe open a second gym. You then have a replicable model that you can just say, “I could just take this that’s working, put it over there, build it again, rather than buy someone else’s problems.” Right? Like you could just rubber stamp your success and do it there again, faster in a thing that you already know, right? Like, you know how to build a gym. Doing a second one works; untangling knots can be just brutal. You know? Would you look at something like that? Like if you—again, you’re not in the market right now necessarily, but if you were going to do that, would you think about replicating your gym and just starting another one?

Nick Habich (11:57):
Yeah, I would say that if I had the appropriate staff member who wanted to grow and replicate that with me, I would do that. Otherwise, no. But I like what you just said, the deep rot or the behaviors associated with that gym, when you buy the gym, you buy those too. When you start your own, there’s no expectations other than the ones you set.

Mike Warkentin (12:17):
Yep. And if you’re a good gym owner, especially if you’ve had mentorship and you’ve built something that’s solid and you’re at the Tinker level, which is our upper-level gym owners who don’t necessarily work very much on their gyms, you are a good entrepreneur. You know how to cut a lot of corners and get a lot of speed and just like, “I’m not going to make that mistake.” Like, for example, in my second gym, “I’m not going to just set my rates at $150 for an unlimited group membership because that doesn’t indicate the value that my coaching provides. I’m going to set them at exactly this number plus my hybrid option and my ARM is going to be 285 right out of the gate. I’m going to run Two-Brain’s Founders club, and I’m going to start with 58 members on day one who are paying. I’m going to be profitable within two weeks, and I’m going to expand.” Like that plan sounds, to me, pretty good, right? Mm-Hmm.

Nick Habich (12:54):
Mm-Hmm. A whole lot easier. Yeah.

Mike Warkentin (12:56):
Yeah. So, talk to me about this. So, when you look at P&Ls and stuff—you’ve seen this stuff; gym owners have potentially inflated these sale numbers. So how does someone start looking at this and saying—when do you know that a sale number is kind of legit or kind of out of whack? What do you think?

Nick Habich (13:14):
Yeah, I think an important thing to do is to gain access to a P&L and to also gain access to the billing software that they use.

Mike Warkentin (13:20):
Mm-Hmm. Have you done that? Like, can you ask for that in a sale?

Nick Habich (13:23):
Yeah, you totally can. Oftentimes when a sale’s happening, they’ll ask you to sign an NDA, a non-disclosure agreement. And as long as you’re willing to sign that, they’ll usually start giving you access to whatever you need to get access to. I’ve never gotten so far with any I didn’t buy that I had to get to bank accounts or anything, but the reason I say you want to see the P&L and the billing software is that oftentimes they don’t line up.

Mike Warkentin (13:42):
Oh, tell me—yeah, talk about this.

Nick Habich (13:44):
When they don’t line up, that’s a clear sign that you’re going to run into a problem. Right? So, I think it’s more common that somebody’s willing to share the billing software information. And if you know any of the popular billing softwares, it’s also very easy to have a billing issue with one of those. Or maybe you think they’re billing monthly, but they’re actually billing bimonthly, or they’re supposed to be billing weekly, or that somebody’s membership has been comped and nobody realizes how many members have been comped at that point.

Mike Warkentin (14:09):
I sold a paid in full to 10 people, and they never paid again.

Nick Habich (14:13):
I’ve got a story about that one. We’ll hit that in a second.

Mike Warkentin (14:15):
Let’s hear—finish your thought, and then tell me that one. Let’s just go to both.

Nick Habich (14:17):
But it’s very important that we see that those numbers are at least relatively near each other, right? And whichever one they showed me first, I would want to see the other one too. So, whatever they wanted to show me, I’d want to ask for the other one.

Mike Warkentin (14:29):
Because that’s true. Like I’ve seen in my own billing software this number, but there’s tax included there; there’s a whole bunch of other stuff. And then I look at other stuff, the P&L, there’s all the expenses that eat into that number, and sometimes the “Oh, $25,000 in Zen Planner” or whatever equals about like 18, and your expenses are 22.

Nick Habich (14:47):
Yeah. Super, super important. We’ve already talked about this one, but I think just staffing cost is really important, right? If you want to create a professional staff, you’re probably going to have to pay them something. I know that in the recreational fitness space, it is not wildly uncommon for some coaches to work for free or maybe to work for undervalued prices. But if you—or excuse me, undervalued wages—but if you want to grow this business, that staff is probably not going to grow this business. So, somebody will need to get paid here. If it turns out that there’s $2,000 or $3,000 a month in profit, but there’s no staff pay and there’s no owner pay, you start paying those staff, that $2,000 or $3,000 goes away immediately.

Mike Warkentin (15:23):
Yep. That’s a big one. I’ll balance that with another thing that I’ve seen where sometimes there are too many staff members, and they’re overpaid. And that’s a different problem altogether too, where if you look at a P&L and you’re like, “Wow, my revenue is here, my staff costs are way up there, and three of them are terrible,” you might have a different problem there because sometimes these things crop up. And interestingly enough, I interviewed Ben Bergeron a little while ago, and he was talking about the early years of CrossFit New England where he looked at his staff, he’s like, “This doesn’t quite work here.” And he had to make some cuts. He made a whole a big change and sat everyone down and said like—I think it was called the “official picnic table conversation,” it became known as in CF any lore—and he just said, like, “Some of you’re not going to be here anymore because we’re making a change, and you didn’t sign up for that. So, let’s discuss and go forward.” So, you look at that; there are sometimes staff members embedded in there that are like, maybe they’re old school, maybe they’re dug in deep, maybe they’re not very good, maybe they’re pulling down too much money for what they’re giving.

Nick Habich (16:13):
Yeah, I had exactly that scenario when I bought my third buy, but second location. I had a meeting with all the staff members. Luckily the previous owner and I are friends, so I was able to get very deep into what was available. I got real numbers on everything. We had a big staff meeting, and I spoke to everybody, and I said, “You guys have been doing things a certain way, and I’m happy for you, and I’m proud of you for that. We’re going to be changing things a lot. This is going to change a lot. Here’s the expectations that are going to be going forward. I understand that some of you are not going to want to do that. Here’s your understanding of what’s going to be happening. So, you need to make a decision about what you want to do.” And honestly, I think we had four out of 12 of them stay with us after that meeting. And it was better for both parties because of it.

Mike Warkentin (16:53):
Yeah. Way better. And good for you for being clear about it. But that’s the kind of like fire sale you have to—you remember “Entourage” when Ari went through with a paintball gun and shot everyone who was being fired, and that’s like—you might have to do that in some of these scenarios because they didn’t sign up for that. And if you’re making a U-turn, you can’t force people onto that bus with you, and they shouldn’t be there, you know? Tell me about that paid-in-full situation. What do you have there?

Nick Habich (17:15):
Yeah, so the gym that we acquired so that we can get the better space and the equipment, we made a handshake deal, an agreement on an amount of money; between then and the signing of the deal, that owner decided to sell like 30 or 40 paid in full memberships in cash to the current members. So in like six months, eight months, nine months, 12 months, basically whatever anybody would say yes to at just wild, wildly discounted numbers. We didn’t find out about that until after the paperwork. So, we had almost none of their members now paying a month in membership.

Mike Warkentin (17:49):
What did you do?

Nick Habich (17:51):
We went back and forth on this a lot. I don’t know if this is exactly how I would’ve handled it now. We’re talking like 2016 or 2017 now. We honored the amounts that they paid, but unsurprisingly, they were basically paying the average of like 70 bucks a month or 80 bucks a month. So, at the time, our membership was like 130 a month, and I think we were already the most expensive in the area by a lot. Not surprisingly, not many of those people wanted to pay that when it was time to re-up. So, we were in a poor situation there.

Mike Warkentin (18:19):
Wow. So that’s—I mean, that’d be a tough one. That I imagine, like you just—you expect something, and you look and you’re like, “What has this person done on exit? And now I’m screwed.” I mean, that would be a major red flag that you’d have to keep your eyes open for, but you might not know what’s happening.

Nick Habich (18:35):
Yeah, I mean, as simple as saying, like, “Hey, you can’t do this,” or “Don’t be a scumbag,” put that in the handshake agreement, you know?

Mike Warkentin (18:42):
Yeah. Wow. But, and so even in addition to that, there are gyms out there that have done all sorts of legacy stuff, and we know discounts are brutal in gyms. Like it does not support a profitable gym for the most part. And you’ll see these gyms, people will have 50 people who are at 17 different rates, and they’re all too low. And this is like 40 or 50% of their client base. And if you acquire this, what do you do with those people? And like, I’ll put this to you as a mentor; let’s say I’m that gym owner and I come to you, and you’re my mentor, and I say, “Nick, what do I do?” Like, what would you say in that scenario?

Nick Habich (19:17):
Yeah, right. Like what you’re saying right there is why I think it’s so important. And you see both the P&L and the billing software, right? Because for example, if I see unlimited membership times 100, it’s very easy to make the mistake and think that that 150 times 100 equals that amount of money, right? But if we’ve got discount A through discount Z layered into those things, we don’t really know how much money’s coming in. And not all the billing softwares will very easily lay out who’s paying 150 and who’s paying 86, right? Given the opportunity, I would want to get the income statements as well, right? I would want to get the bank account, actual income, to try and match up with what we have. I know that seems like monotonous work, but it’s worth it to know what you’re really paying for.

Nick Habich (19:56):
But as a mentor, if you came to me in this situation, I would want to see where we were in this. And funny enough, I did just work with a gym in Alaska through this about a year ago. Bought a gym, that gym had every amount of rates you could think of. The fact is if we want to keep these people, we probably can’t fix this problem right now, right? But we can create a plan where over time we level people out appropriately, right? If you’re—we generally teach in Two-Brain not to raise anybody more than 15% at one time, right? There’s a serious emotional and psychological situation that happens when you do that, right? But we can get everybody where they need to get over time. So, I would say we would look at what amounts are appropriate, like what do we actually want to be at? What do we believe is our right number? And we have a whole system of how we decide what the correct rates are for a gym. Once we get to that number, we see how far we are from that. We create maybe a 1, 2, 3 year plan to get everybody to that level.

Mike Warkentin (20:49):
And I’ll balance you by saying, if I’m that gym owner and I’m like, “Oh my God, this is a three-year plan,” it would be great to hit the rewind button and maybe not buy that gym in the first place and say, “You know what, Nick? I want to start a second gym. Can you help me set my rates at a market value that’s going to equal profitability within the first three weeks?” And you’d be like, “Yeah, dude. Let’s look at your expenses. Let’s look at this. Let’s look at your value. Let’s put this number together using math, and then let’s sell it, and I’ll teach you how to sell it and market your gym, and we’ll fill it with founder’s club program, and we’ll start with profitability.” And I’d be like, “That sounds a lot better than a three-year stepwise increase on a bunch of people that probably don’t want to pay another dime.”

Nick Habich (21:25):
Right? And that’s not their fault, right? The other gyms set that standard. No, you’ve got to deal with it. Yeah.

Mike Warkentin (21:29):
No, and I’m not trying to be down on buying gyms, but the point of the show is to say, “When should you not buy a gym?” So, we’re going over the horror stories. There are good times, like we said, but I’ll give you another one that I think is interesting, and you pointed this out: looking at big numbers. You’ve got to dig in. For example, average revenue per member. Let’s say someone has that number and says, “My average revenue member is 205.” And you’re like, “Well that’s not bad.” And you’re thinking about it, but then you start looking and you’re like, “This is based on a couple of really big sales, a really big retail order went in, a specialty program went in. This was the biggest month of the year, and the actual rate down the line, if I go to the next month, is going to be 140.”

Mike Warkentin (22:05):
Like, there’s a problem there. So, when you start looking at these big numbers and averages, I’d go with you Nick, look—dig into them. Like really dig in and say, “Where do these numbers come from? What’s the breakdown that equals this? Like, what am I adding up to get this average?” And then I would also encourage people to look not just at one month’s financial statement or a balance sheet for a business; start digging into like a bunch of them. Like, has this thing been profitable for a while, or was it profitable last month and now we’re selling, right? Because have you seen stuff like that where the financials are just in the red, in the red, in the red, in the black—it’s for sale.

Nick Habich (22:36):
Yeah. I think that that’s not wildly uncommon. I think that most people, if you’re in the market for buying a new gym, especially if you’re in the Two-Brain ecosystem or something similar, I think you’ve got to look back and remember where you were prior to joining Two-Brain or joining something like this and think about where your business understanding was, right? That’s probably the level of business understanding of the people selling to you.

Mike Warkentin (22:56):
And it wasn’t good for me. It was bad.

Nick Habich (22:58):
Yeah. Mine either, you know. I was barely tracking how much income we made, let alone any other metric that was important, right? So, I would just operate with that understanding and that they probably don’t know what they’re talking about. So, even if they say they’re in the black right now, they may not be reporting numbers correctly. I know I wasn’t at that time.

Mike Warkentin (23:17):
Yep. What would you want to see in metrics? I’ll give you like two big numbers. Like what would you want to see—two numbers—that would convince you that a gym might be sustainable that you might want to purchase? Like are there any numbers that really stand out for you that you would really put a star beside?

Nick Habich (23:32):
Yeah, I mean the first one, I think—and this isn’t super sexy, but it’s really important—is I’d want to see really low expenses, really low recurring expenses.

Mike Warkentin (23:39):
You want to see low expenses.

Nick Habich (23:41):
Right, because you can change a lot of things, but I can’t change your $9,000 a month rent, right? I mean, maybe you can. There are rare exceptions, but odds are you cannot, and you’re locked into that number, right? So, it’s way easier for me to make a gym profitable if the recurring expenses are $6,000 or less than it is if they’re $14,000. So that for sure, that’s the number one. Next I would probably look for a low ARM, a low average revenue per member, right? Because there’s opportunities to fix that. So, for example, bringing in—and it doesn’t necessarily have to be raising prices, at least not right away. It could be something like just instituting new services. So, bringing in say, nutrition coaching or personal training or semi-private or a barbell club or kids or something, right? There’s an opportunity to raise that ARM up a little bit. But I would—probably, the number one thing I would look for right now is net cash flow. Regardless of whether it’s actually like “hashtag profitable,” whether the owner is taking pay or not taking pay, I would want to see how much money is left at the end of the month. Because that gives me a very understandable amount of “What can I do? What changes can I make right now with no other changes having been made?”

Mike Warkentin (24:45):
You bring up an interesting point. I’m going to plug gymlawyers.com; our friend Matthew Becker there, he reviews leases and so forth. You would want to take a look at the lease of a gym that you’re buying and see if there is any horrible stuff in there, because sometimes there is, and sometimes you will be tied to that lease that you didn’t sign that’s coming your way. So that’s a huge part of the business. And Nick pointed out, you might have—in certain businesses, like you can’t fix them. Like if you, for example, took this glorious, beautiful retail storefront in downtown Manhattan and your rent as just some ridiculous number, you may never be able to sell enough memberships. Like it may be unfixable. And you’ve got to look at that, and I would encourage you to look at a track record of profitability. Like if I saw something, at the stage where I’m at, I would want to see a business that’s profitable and is working well and shows it’s going to profit $4,000 a month or whatever it is, and it’s been doing that for two years. At that point, you can start saying, “Oh, this is worth a multiple of this, and I’m willing to invest that to get this, and that works.” But I would be very frightened if I saw the ups and downs and extreme revenue things and problems like that. Have you seen some expenses that have just been crazy on a balance sheet where you’re like, “What is that?”

Nick Habich (25:54):
Yeah, for sure. And the one I keep going back to is rent, because that is it. Like it’s very possible that you can’t fix this business. I know it’s not fun to say this, and everybody wants to believe that if they work hard enough, they can solve any problem. But where I live, if your rent is $12,000 a month, it’s not happening. You can’t do that. That is not an option. You cannot sell enough memberships at the size needed to make that work. That would be—I’ve seen that on multiple P&Ls, and I’ve also seen a couple where they’re about to kick into an extension that may or may not be in the lease. And the owners are aware that like, “Oh no, we’ve never shown we can do this. I don’t want to lock into three or five more years of this, so I better get rid of this now.”

Mike Warkentin (26:35):
Yeah. And sometimes in those leases there are like annual increases that pop up or build back fees—I think in triple net I think is the U.S. term; there’s a different one up in Canada, whatever it is. But I’ve seen people where all of a sudden what you are paying is now extreme. And so, you’ve really got to dig into that one. And so, Nick’s done a good job of pointing that out. If you’re looking at buying a gym, don’t stop at the P&L, take a look at that lease and see what’s in there. Because you might really be tying yourself to a cannonball going overboard. Talk about temptations. So, what are some of the temptations? Because I remember back in the day—this was maybe 2010 or something like that, and I was at a business conference, and people were talking about buying second gyms, and it was sexy. Like, this was the thing where if you had a CrossFit gym, it’s like, “I want to be the guy with two CrossFit gyms.” What are some of the temptations in 2024 for people who are looking? What really starts getting them to get the checkbook out?

Nick Habich (27:25):
Yeah, I was that guy. So, I understand. Temptation is the fact that you’ve done this successfully once, why not go ahead and do it again? Right? And just because you can do something doesn’t mean you necessarily should do something. That doesn’t necessarily mean that that is the right use of your time and energy and emotion. So, if we go back to Founder, Farmer, Tinker Thief, you should not be looking to acquire anything new until you’re at least in the Tinker phase, right? Because if you can’t take your attention off your current thing, you should not be looking for a new thing. You should be working on your current thing,

Mike Warkentin (27:55):
Which is going to be great.

Nick Habich (27:57):
Yeah, right? And to be less theoretical and more tactical, if you can’t step away from sales and coaching at your gym, you should not go get another gym. If you’re still the person doing sales and coaching at your gym, you should not full stop, should not go acquire another gym. If you can successfully replace yourself in those and successfully replace yourself in, say, the management of that gym, the management of the day-to-day operations, then maybe start looking. But if not, don’t, right? Now, assuming you can do those things, looking to acquire another gym immediately puts you back into Founder phase. So, all those hard days at the beginning of your gym where you were there in the morning and there at night, and you were talking to people about why they shouldn’t spill chalk everywhere and why it’s not okay to throw kettlebells at the wall or how they have to wear a deodorant, or they shouldn’t come to the gym. Like any number of these things, welcome back to that phase. And is that the best use of your time when you just worked so hard to get it so that you’re not there? When talking one of my mentees through this process, my recommendation was they don’t do it. And they didn’t, thankfully. Their goal was to make an extra $4,000 a month. OK, let’s do that without acquiring $16,000 a month in expenses. Let’s do that— Right, right, right, right.

Mike Warkentin (29:09):
Yeah. So, I mean, I’ll summarize what you’re saying there. Like, there’s ego. I think ego is a temptation where you want to be the person who’s got multiple locations, like you’re that guy or the girl—that’s an issue. I think the other one is the temptation of glorious financial success where you’re like, “Oh, if I’ve got one and it does this; I’ve got two, it’s going to double that.” But like two gyms is not twice the work. It’s more than twice the work because all of a sudden your attention is—like, you’re split in five different ways because you’ve got a bad problem staff member there, and you’ve got one on this side; now you’ve got two, and they’re— It just spirals, and all your multiple—the more clients you have, the more bad clients you have in that mix, right?

Mike Warkentin (29:44):
So, all of a sudden, you’re multiplying stuff. And you made a great point, and this is something for people to think about. If you are—if you want to make more money, you might be able to do that at your current business really easily with the help of a mentor who just says, “Dude, you just need to do this.” And you’re like, “Oh, OK, I didn’t see that.” Right? So that’s a definite concern for people where they can just do something better at their current location. And Nick mentioned the Tinker level. Basic summary of the Tinker level is that you have a gym, it is running very well, it does not take up a lot of your time, it is paying you about $100,000 a year or more, and you are on your way to $1 million net worth. At that point, you’ve got a little more money than you need.

Mike Warkentin (30:22):
You’ve got a little more time than you need, and you can now invest this in something else. But I’ll tell you this, just because you can do 30 muscle ups for time does not mean you should do that workout every day. You should say, “What is the most effective thing that I should do?” And you might say, “Maybe I want to open a distillery.” We had a Two-Brain gym owner who did that and thought it was a great idea, and he is doing an awesome thing. We’ve had other gym owners who have gone into Airbnbs. We’ve had other gym owners who have done multiple locations. There are all different things that you can do, but it’s like, you can’t do all of them. What are you going to do? And how will you stop it from sucking, killing, your golden goose. That’s the other thing, right? Have you seen that one where someone’s like, “I’ve got a great gym; I’m going to buy another gym.” And all of a sudden both gyms suck. Has that happened?

Nick Habich (31:00):
I’ve seen that so many times. So, so, so, so, so I work with a lot of the multi-location gym owners in Two-Brain. And I’ve seen that so many times, and it makes sense, right? Because you don’t realize how vital you are to your gym.

Mike Warkentin (31:14):
You cannot replicate yourself.

Nick Habich (31:16):
Exactly. And I know we teach people in Two-Brain not to run into the icon problem where it’s Nick’s gym or Mike’s gym, but there is a level of that that you can’t really get away from at our size and style of gyms. And you are the only thing that can’t be replicated, right? Like you can only look in one direction at once. You cannot look in two; it’s impossible. So, when people make that leap a little earlier than they should—and you know, little transparency, I made that leap a little earlier than I probably should have—you start to notice that the place that you used to have all your attention on is just not doing as well.

Mike Warkentin (31:46):
The spinning plates.

Nick Habich (31:47):
Exactly. For me, my first gym was our cash cow. That was the thing that was supporting everything else. I was so focused on our second gym and then opening up the third gym, that the first gym started to struggle. That’s a really common story. Yeah.

Mike Warkentin (31:59):
Mm-Hmm. Yep. And it’s just because your focus is elsewhere. And that’s not to say—like there are some entrepreneurs who are so good at this that they can actually do that, but it wasn’t me. It wasn’t you. And maybe it is you now, but you still don’t want to, you know? So, it’s interesting, and Chris has talked this so many times: Don’t kill the golden goose, right? Yeah. So, there’s that thing, like you start looking out and up instead of down and in, and you lose your focus, and all of a sudden the thing that was great is now terrible. You’re bleeding members at two locations. So, what did you do? When you had that situation, did you just start unloading gyms and refocus, or what’d you do? How’d you fix it?

Nick Habich (32:32):
Yeah, that’s exactly what I did. I just killed the third gym. I said, “It’s not worth it. It’s not worth risking what we built with these other locations just for this new sexy idea that I had. Let’s kill that. Let’s refocus.”

Mike Warkentin (32:45):
Did you sell it, or did you just shut it down?

Nick Habich (32:47):
I just shut that one down.

Mike Warkentin (32:48):
Yep. So, there you go. And then what happened to your other gyms?

Nick Habich (32:50):
So, we ran them successfully for three more years. I closed the second one down last year. December of last year.

Mike Warkentin (32:57):
And did that increase your focus on your other tasks?

Nick Habich (32:59):
Oh yeah. Yeah. I mean, unsurprisingly, the first gym became significantly more profitable again.

Mike Warkentin (33:04):
And there you go. You know, so it’s a really interesting thing. So, let’s close this out. I’ll ask you this as a summary for people: What are some of just the bullet points? When should a gym owner absolutely not buy another gym? And I’ll tell you this, so I’m going to start it off with one thing that I harp on on the show every time to get it started. If you do not have a concise set of standard operating procedures in your current business—and I’m talking rock solid SOPs that every role and task is assigned, and the performance levels are indicated and reviewed regularly—if you do not have all this laid out and your business is not formalized and out of your head on paper, you should not look at buying another gym. Nick, what else have you got?

Nick Habich (33:42):
I love that one. If I can’t come to your gym and read your staff playbook and do your job, you shouldn’t start a new gym.

Mike Warkentin (33:48):
And I’ll take you one further. I’ll even say if you don’t see a playbook in another gym, you might not want to buy it, but that’s just me. But anyways, go ahead.

Nick Habich (33:56):
I would say that if you don’t have a very large cash reserve or access to a very large cash reserve, you should not buy another gym.

Mike Warkentin (34:01):
And there are ways to get that, but also know that debt comes with interest payments.

Nick Habich (34:05):
And I would just tell you, if you’re not ready to completely leave your first gym alone, don’t buy another gym.

Mike Warkentin (34:10):
That’s the “hit by a bus” test, right? So that means that if you can’t leave your gym for like a month, and you come back and it’s on fire, you should not be looking at another gym. Your gym—and that goes back to kind of my SOPs, but it has to be running like a machine where if you’re gone, it still goes. If you need to be there steering it constantly, why would you want another ship to pilot? You can’t do that.

Nick Habich (34:31):
Yeah, I would say the last thing is that if there’s honestly anything else you want to be doing and is important to you, don’t open up another gym because it’s going to stop you from doing any of those other things.

Mike Warkentin (34:40):
Yeah. And I’ll reiterate what I think was a great point that you made, and I think people will forget this: If you are an upper-level, Tinker-level gym owner and you decide to buy a second gym, you are now a Founder again. So, you have to go right back to the beginning. If that doesn’t interest you, don’t do it. If it does and you’re like, “I like uncoiling things, and I like building, and I like getting dirty and getting some stuff under my nails,” do that. But if you don’t, you should definitely not do that. There’s something else you can do. And some of our top gym owners—one of the things that Chris has talked about is have a plan for your spare time and your free time, and do something that really engages you. It might not be building another gym. It might be spending more time with your kids. It might be opening a distillery. It might be something else. So, really decide: Do I want to get back in the muck up to my knees?

Mike Warkentin (35:28):
Alright Nick, I want to thank you so much for giving us some info here and opening your horror stories from the past, but also cool for you for getting through some of that and noticing it, pulling it back and now refocusing because now you can help other gym owners do that. So, when you work with the gym owners who are looking at other gyms, do you feel like you can give them the advice they need to make smart decisions fast?

Nick Habich (35:50):
Yeah, most definitely. I mean, I put my 10,000 hours in there.

Mike Warkentin (35:53):
Yeah, so exactly. So, guys, we do have mentors that can help you with this kind of stuff. And if you’re looking, book a call, and we can talk about mentorship and can help you guys figure out “What should I do right now?” It might be buying a gym; it might not, but there are all sorts of resources that can be applied to your situation. So, Nick, thanks so much, and we’ll talk to you again next time from the heart of Florida.

Nick Habich (36:11):
Thank you.

Mike Warkentin (36:12):
All right, that was Nick Habich. This is “Run a Profitable Gym.” This is where the world’s best gym owners tell you exactly what they’re doing so that you can have the same success. And our mentors are constantly on here giving you all the info you need to help you run a better business. Please hit “subscribe” on your way out. And now here’s Chris Cooper with a final word.

Chris Cooper (36:28):
Hey, it’s Two-Brain founder Chris Cooper with a quick note. We created the Gym Owners United Facebook group to help you run a profitable gym. Thousands of gym owners, just like you, have already joined. In the group, we share sound advice about the business of fitness every day. I answer questions, I run free webinars, and I give away all kinds of great resources to help you grow your gym. I’d love to have you in that group. It’s Gym Owners United on Facebook, or go to gymownersunited.com to join. Do it today.

The post Don’t Buy That Gym: Horror Stories, Red Flags and Real Tips appeared first on Two-Brain Business.

The Bad Exit: When You Should Not Sell Your Gym

Very frustrated gym owners sometimes make aggressive, desperate moves.

I get it. I’ve sat on a park bench after a 13-hour day and been unable to see a way forward.

Walking away seems like the best solution—or at least a way to bring a swift end to your misery.

But I’ve seen a lot of bad exits over the years, and if you’re frustrated, I hope my advice will help you avoid making huge mistakes right now.

Don’t Sell When It’s Sinking

Your business is an amazing thing—and I know you might not be able to see that at present.

But think about it: You make people stronger and fitter and healthier. When they pick up that barbell, they feel like a superhero. When the wedding dress fits, they feel like a million bucks. When they can bend over to play with grandkids, their quality of life improves.

You know all this—you started a fitness business for a reason. But you might have forgotten how valuable your business is to your clients (and your town) because it just isn’t running well and might not be worth much on paper.

I understand, but you had a noble purpose when you started your gym, and I’d like you to exit in a noble fashion: Leave the business in the hands of someone who can grow it better than you can.

In my town, a local gym is going under. Its stewards have for years refused to do the hard things required to save it. And now its closure will leave a monstrous hole in our community. Had the people in charge been good stewards, they would have given control to someone who was willing to do the hard things to save it—and preserve a pillar of the community for its patrons.

So don’t sell your gym in a fit of rage, when you have leaks to patch and fires to put out at the same time.

Take just six months to fix the business and sell it when it’s on an upward trajectory so someone else can continue the mission.

If you sell because it’s losing money or because you don’t want to make the hard decisions, that’s not selling. That’s just giving up—and I know you aren’t a quitter.

Even if you want to sell, put in just a little more work to ensure the business lives on (a mentor can help you right the ship and profit on exit).

Don’t Sell Without a Plan for Monday

Again, I know it’s easy to fantasize about being rid of a millstone around your neck.

But here’s the reality: If you just toss the millstone but don’t know “what’s next,” you’re still going to be very stressed.

You’ll just trade the stress of running a fitness business for the stress of being unemployed. Or miserably employed—it can be hard for entrepreneurs to suddenly clock in at 9 a.m. and take marching orders from the boss.

So what are you going to do when you’re a former gym owner?

If you don’t have an answer, don’t sell just yet. Right now you have a purpose, a job and income—even if you work too hard for too little.

Don’t fold the tent until you know your next move and can make it with confidence. If you’re just pulling the rip cord and expecting everything to improve, it probably won’t.

So get a plan in place. When I see gym owners sell without a plan, I get worried. When I see an owner say “I’m selling, and this is what’s next,” I know they have clear next steps laid out, and they’re likely to find success.

Not Sure? Get Help!

If you’re at a point where your family is struggling, you’re close to bankruptcy and you’re mentally beating yourself up, then sell your gym. Take a year off and come back—we’ll always welcome you.

If you choose that path, I hope the advice above helps you make the best exit possible.

But I really hope you stay in the fitness industry. We need people like you. And if you have even a little bit of energy left to fight for your business, let’s talk.

The post The Bad Exit: When You Should Not Sell Your Gym appeared first on Two-Brain Business.

How to Maximize Gym Value—Fast

Can you make a gym more valuable so you can sell it in six months?

Yes—very much so.

In fact, working with a mentor to increase value before sale has huge ROI.

Think about it: No one wants to buy a condemned house with broken windows. But a house that’s seen some recent love and could use a little more? People buy those all the time.

Easy question: Would you pay more for a gym that’s losing $1,000 every month or a gym that’s making $1,000 every month?

We can turn gyms around very quickly to help an exiting owner maximize sale price, but you can use the exact same tactics to improve the value of your gym if you want to hold onto it.

7 Steps to a More Valuable Gym

Here are seven surefire ways we help clients increase the value of a fitness business:

1. We write down everything it takes to run the gym and get the systems and processes out of the owner’s head. Why we do this: Who wants to buy something without an instruction manual?

2. We teach everything to the staff members so they can run the gym when the owner’s gone. Why we do this: A business with solid staff is worth more because the new owner doesn’t have to plug holes right away.

3. We set up long-term retention systems to keep clients around longer. Why we do this: If a business increases its length of engagement and lifetime value of clients, revenue is greater and cash flow is more predictable. New owners care about that stuff a lot.

4. We build a Career Roadmap for each person on staff so the gym can keep its best people around for the new owner. Why we do this: Would you want to buy a business if you knew a key staff person was planning to exit ASAP?

5. We systemize the marketing so the current owner can predictably say, “We get five new clients per month.” Why we do this: Steady, predictable acquisition of new clients looks great to a prospective buyer, who doesn’t have to figure out how to add members right away.

6. We track metrics we can leverage to show the business is growing. Why we do this: A seller often has emotional attachment to the business, but that isn’t worth anything. Solid metrics are worth a lot to a buyer.

7. We mentor the owner through the tough transitions that must happen before anyone will buy the gym. Why we do this: No one wants to buy a ship that’s clearly sinking.

If gym owners are looking to sell, these are the key steps we recommend. If they take them, the value of the business improves.

And then, almost every single time, something amazing happens: The gym owner says, “I love my business now. I don’t want to sell it anymore!”

This is because the actions that make your business easier to sell also make it easier to keep.

A Strong Business Gives You More Options

I want you to build a business you’re proud to own.

That means you’re serving a noble purpose, you have caring staff dedicated to service, you have great clients who fulfill you, and the future is bright and predictable.

Almost nobody wants to sell that business, right?

On some rare occasions, an owner should sell—but for now, here’s my advice: If you’re burned out and broke and you think “I can’t take much more of this,” you’re actually in a good position.

You’ve probably learned more than a few tough lessons, and your experience allows you to get some emotional distance and do hard, necessary things without putting everyone else first.

In my case, it went like this: After years of keeping my prices lower than anyone else’s, I raised everything at once.

“Well, my back’s to the wall here. If this doesn’t work, I’m gone anyway. I might lose a few clients, but if I close, I’ll probably never see them again anyway. What have I got to lose?” I said.

So I did the hard thing.

But if everything had been going well—or even just OK—I probably wouldn’t have had the resolve to raise rates. And I have 100 other examples of reality forcing me to do things I should have done earlier—like getting staff members to follow the rules.

There’s really something to be said for reaching a point where your only option is to take clear action.

To sum up:

If you’re ready to give up, take six months and make your business more valuable. Then sell it.

And if you just want to run a more stable, valuable business that pays you what you deserve, collect your resolve and prepare to work hard for six months to push your business from struggling to solid.

In each case, we can help you avoid mistakes and make changes fast: Book a call here.

The post How to Maximize Gym Value—Fast appeared first on Two-Brain Business.

The Big Exit: Selling Your Gym the Right Way

Chris Cooper (00:02):
What does a successful exit from your gym business look like? I’m Chris Cooper. This is “Run a Profitable Gym,” and I want to start a conversation about people who finish the right way. When we all open a gym, we think we’re going to own this forever. This is all we’re ever going to want to do. I can even remember when we moved from our personal training studio to a CrossFit gym turning and saying to Mike, “I just want to do this for the rest of my life.” It felt great, but eventually we might change our minds. We might decide to do something else. We might decide that it’s time to exit because we’re burned out, or we’re broke, or we’ve got a job offer from a software company, or we just want to go sell real estate. Other times, we’re forced to close down. Maybe the landlord changed our lease, or maybe the lockdowns from a global pandemic forced us to close the doors, and we just couldn’t get through it.

Chris Cooper (00:51):
We couldn’t get open again. Maybe the fifth time you have a total staff turnover, you just think, “You know what? I give up. I’m done with this. I’m wasting my time.” There were certainly times when I felt like I would sell my business for $13. There were also times when I thought, like, “I need to go get a real job and feed my family.” Today’s guests, though, had good exits. That means that they reached a point where they were ready to close their gym, sell their gym, pass it on to somebody else. I’ve got two guests today: One is Taryn Dubreuil, and one is John Franklin. And both of them had very different exits from their gym. John, in fact, had three different types of exits out of his five gyms, and they’re going to share everything with you: how they came to a valuation, who they sold to, how they had that conversation.

Chris Cooper (01:37):
But more than anything else, they’re going to share what helped them make the decision to sell, what made them realize now it’s time. There are a couple things that they have in common: Number one, they both had a clear next step. Both of them would say that if you don’t know what your next step is going to be, don’t sell your gym. Number two is they knew what their gym was worth. And they would both tell you also if you don’t know what your gym is worth or if your gym is worth very little, spend six months making your gym saleable and valuable so that you can get some money for the hard effort that you’ve put into it. If you’re anything like me, you see these posts on Facebook and LinkedIn, and it’s a gym owner closing his gym or her gym, and they’re trying to put a happy face on it.

Chris Cooper (02:23):
“Ah, it’s been a great 10 years. I’m going to miss it so much.” But deep down, you know something failed, something went wrong. They’re not deciding to quit. Something is forcing them to give up and go get a job at a software company or go sell real estate. And then you see their post on LinkedIn, and it’s like, “Hey, I’m looking for clients at my new thing.” And your heart kind of breaks because it feels like their dream maybe didn’t come true. So, I want to share with you some stories from people who’ve had good exits, who moved on to something even better. And hey, who knows, maybe they’ll open up a gym one day, or maybe they won’t. Maybe their legacy will continue; maybe their impact is actually growing. I can’t wait for you to meet these two if you haven’t met them on our podcast before. If you want to chat about this, just go to gymownersunited.com. I always love this conversation and that is a caring, thoughtful group that will give you great feedback. Without any further ado, let’s start with Taryn Dubreuil. Welcome Taryn Dubreuil to the podcast.

Taryn Dubreuil (03:23):
I’m super hyped to be here. I love being on the podcast.

Chris Cooper (03:26):
Oh, that’s awesome. So glad to hear it. Let’s start with: Why did you open a gym in the first place?

Taryn Dubreuil (03:31):
It’s actually a really cool story, but it boils down to, like everyone else, I had this life-changing, pivotal moment from finding CrossFit for the first time that I wanted to share with everyone else. My family—my brother had a near death experience with type 2 diabetes, and my parents weren’t trending on the best path either. And I came across CrossFit, and it was just like this thing that completely changed my life in that moment. You couple that with our local gym was burning down, and I was standing on the top of another building across the street with a guy I used to work with and CrossFit with who just happened to turn around and say, “You know, there’s no better time than right now.” And the next thing I knew as a 20-year-old, I was opening a gym. It’s the same storyline that most of us have. You have this thing, it has the potential to change a lot of people’s lives, and you just want to take that opportunity because who wouldn’t want the opportunity to create that type of influence in the world, right?

Chris Cooper (04:33):
Yeah. And not every gym owner we talked to in this podcast was a CrossFit gym owner, but I’ve shared this with you before: I think Greg’s biggest gift was not fitness. It was the opportunity to be an entrepreneur, you know? So, you started that gym kind of from scratch. Literally it was burning down. I think a lot of us say, “Ah, the thing was burning down,” but literally you watched it burn. You took that jump. We’ve had this on the podcast before where you shared like the first couple years you thought you were just going to figure it out, it didn’t go well, but you did turn it around, right? So, at its peak, how, how good was the gym? Give us some numbers.

Taryn Dubreuil (05:06):
It was about a 600K a year gym. It was producing me an income that was unlike anything I had ever believed I would be able to do personally. We had a GM; we had full-time staff. Like we checked all the boxes of what a definition of a successful gym and gym owner would look like. And that’s an incredible thing, right? Coming from the storyline of how my gym went. So yeah, at the peak, it was phenomenal.

Chris Cooper (05:35):
In fact, one of my favorite stories about you is showing up to your gym in a brand-new Land Rover and the staff getting mad about the rating increase.

Taryn Dubreuil (05:43):
Yeah, that’s a lesson of things you’ll never do again.

Chris Cooper (05:48):
Yeah, exactly. But the gym was good to you, and you even had a really awesome section in the book “Millionaire Gym Owner,” but eventually, you know that that peak had passed, and you decided to sell anyway. So maybe you can kind of guide us step by step through that transition from millionaire gym owner to “I’m ready for the next thing.”

Taryn Dubreuil (06:09):
You know, people ask me this question a lot, like, “Why would you—why exit from the gym if it was doing so well?” And it’s an interesting thought because there’s a thousand business books out there about how to sell a business, how to exit successfully from a business. But somewhere out there, there’s this unwritten book that denotes that as a first-time entrepreneur or whatever, your business needs to be the thing that you just do for the rest of your life. Like, I knew that I didn’t want to be a gym owner for my entire life. I wanted to be an entrepreneur. And so, that’s going to look like different things. So, at the end of the day, the way that I chose to exit out of this is because the storyline played out in exactly the manner that I wanted it to.

Taryn Dubreuil (06:57):
You build this successful thing; the successful thing allows you the opportunities to go invest in other investment opportunities. Together, those two things buy you money and time, and you go and find other interests with that money and time. And then at some point you come back full circle and you’re in a position to make decisions on where your time and money and energy and attention are best spent. So as far as I’m concerned, this is an immense success story for how I wanted that business to serve me in the exact way that it did, if that makes sense. But I get asked that question a lot, and I just don’t see exiting it in the way that I did as a negative thing. I see it as a very successful opportunity that I was even in a position to consider this. Right? And that’s an important asterisk on the story is the business was as at a point and checked all the boxes to put me in a position to be able to consider this option, right?

Chris Cooper (08:00):
Yeah. So, when you started, you were 20 years old and did you think, “I’m going to own this for a decade”? Did you think “I’m going to own it for five years,” or did you think, “I’m going to own it forever?”

Taryn Dubreuil (08:09):
I mean, at the time I thought I was going to own it forever. And what that looked like—the overall goal has always been the same. When I opened it, I was training so hard to try and punch my Games ticket, and I was working with CJ Martin, and I had been in San Diego for so long. Like San Diego was kind of where my heart laid. And I knew that at some point in my life I wanted to live there. Like that was—San Diego was amazing. So, my goal has always been to get the heck out of the Canadian winter and whatever that looked like. And so, that was kind of what I knew was the end game, and I just thought that the gym was just going to be a piece of that. Turns out it’s not, and that’s OK. Like it helped me check the box on being able to relocate my life and build my businesses in the way that it could support that thing or that dream, I guess.

Chris Cooper (09:00):
I think as 20 year olds, we just don’t have the perspective to make decisions like that. So, when you finally decided, like, “OK, it’s time to exit the gym.” What—did you first try to sell? Let’s start there.

Taryn Dubreuil (09:13):
Yeah. I mean, you always want to try and make an income off of this thing that you have worked very hard to build, right? So, the most logical place that I started was offering it to my GM. You know, she made the most logical sense. She had just as much, if not more, passion than I did in the business and who we were serving. She had been working with mentors for the last two years. So, she understood from a business perspective the moves that needed to be made to continue to grow the gym. But you know, her life circumstances were different. She just had a brand-new baby. And I can understand not wanting to bring this type of risk into your life that comes with being a business owner when you have a brand-new baby. So contextually, it didn’t make sense for her.

Taryn Dubreuil (09:58):
And I get that, and I knew that. I knew that going into it. But you make that offer anyway. I offered it to my client success manager, to my coaches, and under the same lines too; they all have full-time jobs, and they’re comfortable with their lifestyles. They’re all much older than I am, and I knew it was a shot in the dark, but you do it anyway because they’re passionate about it. They love what they do, and you just, you take those moves. I asked a few trainers who I knew in town who might want the opportunity to own their own gym. And I had asked a few investors as well who I know were looking for great investment opportunities, which those conversations never amounted to anything. But at the same time too, and I’ll be the first to admit this, I actively was not trying that hard either. I think once I had made the decision that it was time for me to part from what it—like to part towards what my next chapter was going to be, it came more down to a decision on time than it did on money. And so, I chose not to search actively too hard for a buyer, and that’s a conscious decision I made.

Chris Cooper (11:04):
We’re going to come back to that, but I want everybody to just kind of put a pin in that—like, eventually, your time is worth more than money. And I know if you are running a gym right now, maybe if you’re struggling, that concept might just not land because you just don’t understand how it’s possible. We are going to talk about that with Taryn. But Taryn, I know some gym owners when they have another opportunity or they want to move, they’ll take any option to sell. They might finance the gym themselves and let people make payments. Like why did you choose just to exit? And that’s it. The story ends here.

Taryn Dubreuil (11:37):
It came down to time was truly what it was. At the end of the day, that’s what it was about. I knew that if I were to sell it, there was going to be some involvement of myself in it for a period of time. Being a small town, you can’t get away from the icon factor no matter how hard I tried. I owned this business for 14 years in a small town. And so, I wanted to make sure it was successful if I was going to—like that transition was successful if I were to sell it. So, the whole concept of me having to stick around to ensure that transition to be successful really did not weigh heavy for me. It was—when it came down to it, the difference of what I could sell it for versus what I would make if I just closed it and sold the assets was 100K. And to be in a position to look at 100K and be like, “You know what? That’s just not worth my time. I can turn around in my other business and snap my fingers with 100% attention and effort and produce that 100K much faster.” It was a no-brainer for me. And that’s ultimately what came down to and that 100K not being worth it.

Chris Cooper (12:48):
So just to reiterate what Taryn just said, she could sell her equipment for whatever that was, 30 or $40,000 or whatever, and then like for another 100K, she could sell the whole business, which is like all the members and the lease and all the other assets you have. That difference of 100K, Taryn realized, was not worth staying tied to the gym for now because she could make that 100K easier somewhere else. And I just want to restate that because it’s important that Taryn actually broke this down to a number. A lot of gym owners will say, like, “Oh, maybe I should just sell.” But the reality is that number one, their business isn’t worth anything yet. It’s not worth it to sell. And number two, they don’t have anything else that’s worth more to go to. So, what actually was it that made it worth it to you to exit and walk away from the 100K sale that you might have earned?

Taryn Dubreuil (13:40):
I mean, let me walk through kind of the steps. It literally boils down to five steps. It was build the gym to support my income needs and my lifestyle needs, which I did. Check. Build a business to allow me to invest in other income sources, other passive income sources. Check. I did that. I built an Airbnb empire. The next thing was take the time and attention and go and find other things that interest you. Check. I did that. I was like, “Hey, I’m going to become a mentor. I actually really love coaching in this space. Take that interest and potentially start another business,” which is what the path I chose was. So, I started Perfect Day business mentorship. And that ultimately puts you in a position for step five, which is now review all of the commitments that you have and things that are running: Does it align with your perfect day or whatever it is that you’re moving towards? And you have this opportunity to choose cost of opportunity versus time. And so that’s my logical reasoning of how I went through everything and put myself in a position to have that opportunity to even take that chance, right? If you skip any of those steps, or it’s not necessarily you have to open another business, but if you skip any of those steps, you’re not going to be in a stable position to be able to make that decision. Right? You’re probably making that decision emotionally rather than logically.

Chris Cooper (15:04):
So, it’s not that you have to start another business, but there has to be another opportunity that’s larger than the delta between what you have now and what you could get for it. I think that makes sense. And so, your opportunity was worth more than 100K dollars, more than you would earn if you kept the gym for another six months trying to find a buyer or did like an owner-financed buyout.

Taryn Dubreuil (15:30):
Yeah, I mean, because trying to split my attention between multiple things—which I mean, hey, I was on your podcast a year ago talking about how I’m an expert at doing this, and I still abide by those things like 100%, but putting 50% of my attention and energy into this new company of mine was still growing it at an exponential rate. And I knew that without 50% of my attention going towards the gym, just how much faster that would go. And so that opportunity was just greater than staying in the gym just to stay in the gym at that point.

Chris Cooper (16:06):
And I think that’s what makes your story so interesting, Taryn, because in the fitness space, we see this a ton on Facebook. Wow, I got so emotional, I hit my keyboard. But we’ll see people and they’ve got a gym that looks successful from the outside and then the next thing you know on Facebook, they’re like, “Wow, it all comes to an end. Mission accomplished. We changed all these lives. Eight great years. Thank you so much.” And then on LinkedIn, their profile is like, “Hey, I’m looking for a job as a realtor” or something like that. Like, it just doesn’t feel like that was a successful exit. And the difference I think is that you’ve got a clear plan for the next step that’s maybe going to have even more impact than what you’re currently doing with the gym. So, let’s just like—what is that next step for you, and what do you tell people who want to sell their gym but don’t have that next step mapped out yet?

Taryn Dubreuil (16:53):
The next step is—it’s like do the thing, get good at doing the thing, turn around and teach the thing and then you can teach a broader audience the thing that it carries over to, right? Because the concepts are the same. And so, the next step for me is continue building Perfect Day Business Mentorship, relocate my life to Arizona because I now have the opportunity to do that and be able to run my business from anywhere in the world and build my lifestyle in the way that I wanted to. You know, the concept of like, you build this thing to do this thing so that you can turn around and continue doing other things, like that’s an amazing—that’s the opportunity you want to get caught in, right? And so, that’s the next step for me is like, I’ve done those things, let’s turn around, let’s teach other people how to do those things. And so, I’ve had people come to me and we’ve had this conversation, people who are thinking about closing their gym or whatever it might be. But the first question is like A, what replaces that income? Like you worked hard to get that income from the gym. It needs to be something that you’re non-dependent on as you turn around and start focusing on other things. And can you supplement that with something else? Or is that opportunity greater thereof whatever your next thing is, right?

Chris Cooper (18:13):
Yeah. And that’s exceptionally rare. Like I want to make this clear, like even though Taryn is like—she’s got this mapped out step by step; she’s still an absolute unicorn. Glassman explained this to me years ago where he said, like, there’s a massive difference between being a good bricklayer and being a good teacher of bricklayers. And to be a good teacher of teacher of bricklayers is a magnitude harder. And Taryn is good at every one of those steps. So, if you’re tempted listening to this to say, “I’m going to close down my gym and just start mentoring other business owners,” you probably want to make your gym successful first, you know?

Taryn Dubreuil (18:49):
Yeah. Coop, let me redirect this though. You know, when I first started as a mentee in Two-Brain, that’s what it taught me to do, right? It was like Two-Brain taught me how to build a successful business. And then when I joined Tinker, it taught me how to be a successful entrepreneur. Tinker gave me the opportunity to turn around and find my next interest, to build the gym into a position where I had time and money available to me to do those things. You know? So, the trajectory of the storyline of how Two-Brain Business builds successful gym owners is exactly how this played out. Just because I don’t own a gym at the end of the story doesn’t make it any less successful or less off the path of how that gym ownership progression is supposed to go. Like, this is exactly how the storyline plays out. It might look a little bit different for others, but the process of how I got here is exactly what we teach inside, you know? I didn’t do anything different than anyone else has the opportunity to do.

Chris Cooper (19:47):
But you did it better than almost anybody else. And I think—I don’t want you to miss that because you’re too humble to admit it. So yeah, that’s awesome. And that’s what the next step is for you: You’re working with other entrepreneurs locally and worldwide who own different types of businesses. That’s super awesome. What, to you, was it worth to exit in the end? We know it was more than $100K.

Taryn Dubreuil (20:10):
There’s nothing tangible on it, but just this is—I actually really like—this question is hard to answer, but I really like this question. I spent two years thinking about this decision. I’ve worked really hard with Bonnie Skinner to come to why I was even entertaining this decision. And when it all, when I peeled away the surface level layers of, “Well this is all I’ve ever done. I really love health and fitness. I’m a coach. This is all people know me. This is my identity.” Like when you peel away all those surface layer things, at the end of the day, owning a gym for me and the things that I got away from owning a gym was a platform to create impact. I love helping people. Like I love helping people win. I don’t care what that looks like. If that’s you getting on your bike and riding today, because you made a commitment to me to do that.

Taryn Dubreuil (21:03):
Or you go out there and you build this successful business. And that’s the thing that—it doesn’t matter. If I have this opportunity to help you take one step in the right direction in your life in any way, shape, or form, then that’s what gives me purpose. And that’s what the gym—it gave me a platform to do that. And so, what I came to realize is that I have this platform; it exists in many different forms. And so, all this is is the next step to keep continuing influencing people and impacting them in just a different way. But the premise is still exactly the same. It just looks different nowadays.

Chris Cooper (21:40):
So, Taryn, I’m tempted to leave it there, but I’ve got one follow up question: When you sign up an entrepreneur for Perfect Day Business Mentoring and they’re not physically active at all, like they have no fitness—they own whatever company, right? They’re the CEO of IBM. How often do you tell them to start working out?

Taryn Dubreuil (21:59):
I mean, it should be part of the process. Yeah. Like we—your business is only going to take you so far. And I think one of the things I said the other day is that at the end of the day, your health is the only thing that’s irreplaceable. Like your business could tank; you can build another business. Your marriage could break up; you can get another—you can make another marriage. Obviously, these are things I don’t want to happen, but like everything is replaceable except your health. So, if you don’t take care of your health, your business doesn’t matter.

Chris Cooper (22:31):
Got it. So good. Alright, thanks Taryn. Hey John, welcome back to “Run a Profitable Gym,” and we’re going to get into your history, but where I’d love to start is: Why did you open a gym in the first place, and then how big did you build your gym empire? And then we’re going to get into why and how you sold.

John Franklin (22:51):
Wow. First time, maybe not the first time, but first time in a long time on this side of the microphone. And as always, thanks for having me. Yeah, I started my gym because I was 23 and wasn’t good at making life choices. I had found CrossFit like many other people out there. It had transformed my life. I was working a corporate job that I hated. And a CrossFit gym just seemed like an easy way to make a living while you’re hanging out with your coach friends and your members who you all love. And that story is one that I’ve heard a lot talking with Two-Brain gyms and one that doesn’t play out as well. But the one thing I did have going for me was timing. So, I started in my first gym in 2013, which I think was the best time in history to start a CrossFit gym.

John Franklin (23:40):
So despite having no clue what I was doing, I opened the door of my first gym with 100 members. I opened a second gym six months later, and that had 200 members from the get. And then from there, just continued to make stupid mistakes and learn as I go. At the peak, I had five gyms. We were doing just under about 2 million in annual revenue across the five locations. So that works out to 400-500,000ish per location, which was at the time really good for CrossFit, but now we hear gym owners doing way more than that. And yeah, that was it. That was peak gym owner empire. So, I don’t want to go too long. And so, you can steer the conversation, Mr. Cooper.

Chris Cooper (24:25):
Sure, man. But obviously with five gyms, you are not coaching classes anymore. You’re being a CEO; you’re a good CEO. I know personally, like you love that work. And at 2 million in annual revenue, you’re doing pretty well. So, what led you down the road of selling the first one and then eventually selling all of them?

John Franklin (24:45):
Yeah, so doing pretty well. Like, I wasn’t making insane money, so I was operating out of New York City, so I wasn’t operating in like 40% margin as some of the people here are. You know, I was more in the 10 to 20% depending on where we were. So, 10 to 20% of 2 million, still pretty good. But if you’re living in New York City, that doesn’t go a long way. Right? Where some of you would hear that and maybe if you’re in Birmingham, Alabama, you’re the third richest guy in the town. In the New York City area, that gets you a starter home, maybe. So yeah, I was doing alright, but I was never somebody who was particularly passionate about programming, and I’d always been particularly interested in the business element.

John Franklin (25:34):
And I kind of found my corner of the world just doing the marketing and sales for gyms. Like I love doing that for my gyms. That was the last piece of work that I delegated. And you’re right, I was not coaching classes. In fact, when I started to sell, I lived in a different country. So around five years of operating, I got an opportunity to do some marketing work for a much larger business. And they made an offer I couldn’t refuse basically. And so, I had a great management team in place, and I literally picked up my family and moved to Canada. Yeah, yeah. Canada. And I noticed that there was a little more opportunity for me there. And while the gyms were running themselves, there was no issue; there were other opportunities coming my way.

John Franklin (26:20):
So, at the time, you were approaching me about taking a more serious role within Two-Brain, there were some opportunities to buy some businesses that looked intriguing. And I was scared that I was one catastrophic event away from being pulled back into the gym and derailing all this opportunity that I had coming at me. And so, obviously I didn’t have a crystal ball, but we can talk about how I went through the sales process. I sold my last gym at the end of 2019. And so had I held onto those, which seemed like passive, no-brainer investments to hold onto, I probably would’ve got my teeth kicked in because having five gyms in the New York City area during COVID and not living in New York City sounds awful.

Chris Cooper (27:05):
Yeah. So, you developed skills in your gym first. You saw how those skills could translate to other things; that created other opportunities for you outside of the gym. I’m guessing this is probably around 2018.

John Franklin (27:17):
Yeah, I mean, I was building up expertise as someone who was a decent writer and marketer in that 2016 to 2018 timeframe. Like 2018 was probably when I wasn’t embarrassingly bad. Like I was starting to be OK at the skill of marketing, and I was getting better at sales. And yeah, I refined those crafts, and I worked a corporate job for less than two years, so I have no formal sales and marketing training. It was all stuff learned through the school of hard knocks. So, all five of my gyms were completely bootstrapped. New York City is one of the most, if not the most, competitive gym market in the world. We’re going against venture-funded concepts that were spending literally millions of dollars trying to get revenue or trying to get members.

John Franklin (28:12):
And I need to keep my doors open, my staff people paid, and the only way I could do that was by getting more members. Because we had pretty high churn, like for context, it was like 7% monthly churn where we were in the Lower East Side. And I’m sure there were plenty of things we could do better operationally, but the reality is where that gym is located, like that’s where you go—you work a job for a year or two and then you leave. So, you’re just kind of fighting gravity there. Even if you’re the best operator in the world, like you’re not going to have 1% churn in a gym in the Lower East Side. So, you had to be good at marketing, or you would go out of business.

Chris Cooper (28:51):
OK. So, as we’ve heard from the other guests on this show too, like one of the keys for them to decide to sell was that they had this other very clear, established opportunity. They weren’t just going to get a job working for a software company or something or become a realtor. They already knew that this other thing was like clearly waiting for them, and they weren’t jumping off a second cliff. You discover that and then you say, “OK, that’s it. I’m going to sell.” When you make that decision, are you thinking like, “I’m going to sell them all,” or is it like, “I’m going to sell one or two, buy back some time”? Like what went into that thought process?

John Franklin (29:28):
Well, I sold four, and I shut one down. So, I had one that was just a dog, and from the moment I opened it, it was a dog. And that’s a story for a whole different podcast. But that one was more of a liquidation, and that happened before the other four. But I think I learned how fragile—even though the business was running well, that experience taught me how fragile some of this stuff was. Like, you’re one operator away from just being dragged back into it, even at five gyms. And so yeah, I was looking onto the next thing, but I knew I wanted to sell all four of them, but I wanted to sell them one at a time because there’s two ways you can think about your exit.

John Franklin (30:13):
You can maximize for dollars and then you can maximize for the transition as well. So, in two of my—actually in three of the sales, I sold to the general manager. So, I sold to somebody who was on staff, and two of the three of them, they were already equity holders in the gym. And so, while I didn’t get top dollar for those sales, it provided me with a quick close. It provided no disruption to the community, and it gave somebody who helped me succeed in the front end, which, while I was off in Canada making money, doing what I love doing, they were supporting me as my business partner operating the gym. So, I felt like it was just better to do that and faster and worked out well for them and worked out well for me. And then one of them I just went for as much money as I could possibly get. And so that one was the New York one with the higher churn.

Chris Cooper (31:11):
So out of the five, one you decide, “I’m just going to close down, not worth fixing.” Three you sell to a staff person or an equity shareholder, and the last one, the fifth one, you sell to somebody else,

John Franklin (31:26):
An outside party. Yeah. So that was a strategic buyer. That was someone who was just buying up gyms in the New York City area and had heard through the grapevine that mine was for sale.

Chris Cooper (31:35):
OK. Let’s start with just maybe going a little bit deeper on selling to an employee or an equity partner. Like where did these equity partners come from, and how did you approach the employee about buying you out?

John Franklin (31:48):
So they came from existing gyms, so from a very early stage in the business, and for better or for worse, I was almost all-in on salaried staff. And so, I had people who stayed with me for a very long time and developed well, and this was like the era when everybody was leaving to start their own CrossFit gym. Right. And this was when CrossFit went from a couple thousand to like 10,000 in a four-year span. One of my locations, we literally had a CrossFit, like across the street. Like you could see the sign of both gyms if you were standing on the sidewalk. So, I would hire people and say, “Hey.” I like—when I was in the key hiring phase, I had those two gyms I talked about initially that were successful. And I said, “Hey, I’ve got these two gyms that are successful.”

John Franklin (32:40):
“I’m going to open more. If you come work here, you can get a stable coaching job. But if you want to develop into an owner and your dream is to one day own a gym, like I want to facilitate that for you.” And that’s what I did. So, three of my staff members from those two locations went on to partner with me to open gyms, and then, I had a couple who went and did their own thing as well. So, but of those three, I always had the conversation like, “Hey, I will partner. I’ll facilitate the finance. We’ve got the sales and marketing thing dialed down; I can help you with that.” And when we set those partnership agreements from the onset, we had exit provisions. So, when we sat down at the table, we had very thorough agreements and it’s like, “Hey, if one partner wants to sell, this is how that process would work. This is how the financing would work.” And that was a result of being burnt in a different business endeavor by a guy who actually went to jail for being a bad human being. So, I picked up that scar the hard way, but I knew going into these relationships that you want to have an eye on the exit, even if you don’t have any plan to exit.

Chris Cooper (33:43):
Smart to lay it out in advance. At least, like, “Here’s how we will put a value on this business.” I think one of the smartest things that I’ve learned in our own Tinker program is when you take on a partner or even talk to somebody about potentially buying you, you don’t have to agree on the price upfront, but you need to agree on “Here’s how we’ll determine the price” in advance. And then it’s not even a negotiation, it’s just like, “Here’s the price.” So, when you sold to the person who was just buying out gyms, like an outside investor, did they approach you, or did you see it happening and you went to them?

John Franklin (34:16):
I had tasked one of my more resourceful staff members to do some outbound. So just “hey mistering” a bunch of other gyms in the area to just say, “Hey, we might be in play. Are you interested?” And they heard about that through him and that started the conversation.

Chris Cooper (34:34):
How do you do that without your members finding out and just jumping ship and devaluing your company?

John Franklin (34:39):
Well, there wasn’t an icon problem, right? So, I hadn’t been in that gym in over a year. So, the fact that I was selling or the ownership was changing hands, like I don’t think they cared because they weren’t going to that gym because John Franklin owned it. And dealing with a strategic buyer, their intention was to keep the facility open, and they’d probably want to keep the staff in place. Like the gym was doing well, and it was profitable. And so, there’s no reason for them to fire the staff or make dramatic changes to the community. And yeah, the reason there are so many good deals to be had off market with the gym space is because people are deathly afraid of listing their business on the internet. They don’t want people to find out that they’re looking to sell. If you go through a business broker, there’s like pieces of—you can have a little bit of anonymity, but I don’t think that’s like a huge deal if your members find out, especially if you’re transparent about why and your intentions, right? Like I don’t think just because you are thinking about selling or you’re transitioning into a different career or you want to move or anything like that, like that’s instantly the reason why everyone’s going to leave—unless you’re somebody who’s coaching every single one of the classes, in which case your gym isn’t worth anything anyway.

Chris Cooper (35:49):
A good point. You know, I think a lot of gym owners, they’re so secretive about it that like only one person knows about it. And so, they’re really weighing only that one bid, you know? So how did you determine a number in the last case where the outside buyer came in, you didn’t have a preexisting contract that said, “Here’s how we’ll determine a value.”

John Franklin (36:10):
So, business valuation I’ve learned is more art than science, but the reality is if you’re selling a single location gym, your sales price is going to be somewhere in the neighborhood of one to three times earnings. So, if the gym—so not revenue. If your net owner benefit—or seller discretionary earnings is what the business buyer community would be—but you know, it’s the profit plus whatever perks you get from owning the business added back in. So, if that number is 100,000, depending on a bunch of different variables, your gym’s roughly worth somewhere in the neighborhood of 100,000 to 300,000. And so, for mine, obviously I was an absentee owner, so I wasn’t taking a salary from the business. That was a huge advantage. It had good staff in place, and there were strong systems. So, there was an operating history and a history of profitability.

John Franklin (36:59):
So, my sales prices were more towards the higher end of that range for that particular instance. For the ones where I was selling to staff, it was more towards the middle to lower side of that range because I was prioritizing speed and a good transition, right? So, the way I was thinking about it was kind of like going through a process that would take six months to a year and a bunch of stress—like for context, the one that I sold to the other party took more effort and time and stress and legal fees than the other three combined by a massive margin. And so had I done that process for another four times to maybe squeeze out an extra 100,000 to 300,000 throughout the process, where I was at the time and the opportunities I was looking at, that wasn’t worth it to me. But depending on your specific circumstance, that’s what you need to consider as well because selling a business is not like selling a car. It is a pain in the ass, and it takes an incredibly long time.

Chris Cooper (38:01):
So, what are some things, John, that would erode that value? So, let’s say, like, I’m making $100,000 a year in profit for my gym, and I’m going to sell for 300,000. What are some things that would knock that number down from the 300,000 mark? I guess you mentioned that—

John Franklin (38:17):
You’re the face. Yeah. So, it’s called—so Chris Cooper training, Chris Cooper classes, everybody wants to train with Chris Cooper. I’m definitely going to be, as a buyer, I’m going to say, “Well, if Chris Cooper leaves, that’s a problem.” You know, that’s definitely a risk I don’t want to take. So, putting your name on the door and being the icon of that business is definitely a negative when it comes time to sell. And then people are going to look at your lease. So, if you have a lease that is month to month, then you can get kicked out at any specific time. Or if you have an above market lease, or the landlord in transition requires some buyer to take on some massive personal guarantee—that is something that hurt me in a couple of my sales where the lease wasn’t as good or optimized as it could have been.

John Franklin (39:07):
And that’s not something you’re thinking about ahead of time. There’s systems and processes, so will the gym run well for the new owner? And profitability is a reflection of that. Like if you’re over $100,000 before your salary kicks in, you have to have decent systems to hit that with a small brick-and-mortar gym. And then contracts are another one. So, I think the prevailing wisdom in the CrossFit community is everything should be month to month, which is fine, right? Like you have confidence in your community, but—and if you’re selling to a strategic buyer, they may overlook that, but if you’re selling to someone who isn’t from the gym space, they’re going to have more comfort buying, and they’re going to be comfortable buying at a higher price if they know 97% of the membership base is locked into a one year contract and can’t leave. So that’s something to consider when you’re making the decision of whether to go month to month or enforce contracts in your business.

Chris Cooper (40:03):
OK. Yeah, that’s great stuff, man. You know, another thing that I think you kind of alluded to is that it’s not just that you’re the face of the business, but if you’re actually working in the business, and you’re paying yourself for doing some of the coaching, that is not going to be appealing to an outside investor who doesn’t want to buy themselves a job.

John Franklin (40:22):
Right. And there are certain elements where it’s easier to tell a story, right? So, if I’m the guy doing the sales and marketing, and I’m selling my business, I can just spin up like, “Hey, there’s an agency down the street that does exactly what I do. It costs 1,000 bucks a month. Let’s bake that into the proforma and calculate earnings off of that.” Right? Where if it’s like you’re the guy on the floor, it’s just such a relationship business that there’s no way I’m kind of getting around that as a potential buyer.

Chris Cooper (40:49):
Well, John, thanks a lot man. And I think a lot of people are going to be really interested in this interview because you touched on like, what are the prerequisites for you to sell? You had a bigger opportunity; you had somebody that would kind of carry on a legacy of the gym and had passion to grow it. And also like the timing was right. And I really want people to understand that too. Like, just because you are ready to sell your gym for 13 bucks today, it’s often a good idea to take six months, build it up into something really great, and then sell it so you get the reward you’ve been working toward for the last decade.

John Franklin (41:22):
Hey, happy to help. And if anybody wants to shoot a question by me: john@twobrainbusiness.com, I’m happy to help you out.

Chris Cooper (41:31):
Hey, if you’re thinking about should I sell my gym, should I exit, you want to ask yourself: What’s the next step for me? And if you can’t figure out that next step, if there is no clear next step, keep your gym, make it big, and then sell it. Make it worth selling. For a lot of people, that process looks exactly the same as fixing their gym. And to be honest with you, over 100 times, I’ve had gym owners sign up with Two-Brain and say, “I want to make my gym saleable. Right now, it’s not worth anything if I’m not here.” They go through the program, four months into it, they’re like, “Actually, I like my gym again. I love it again. I want to keep it.” This happened to me, and I was 20 years into gym ownership, so I get it. But whether you want to build it to sell or build it to keep, hey, the process is largely the same. You’ve got to make your gym successful, or it’s not going to be worth anything. I’m Chris Cooper. This is “Run a Profitable Gym,” and if you want to talk more about this, go to gymownersunited.com. That’s our free Facebook group. There are 9,300 gym owners in there from around the world talking candidly, openly, and without judgment about these very topics.

The post The Big Exit: Selling Your Gym the Right Way appeared first on Two-Brain Business.