Chris Cooper's Blog, page 48

Millionaire Gym Owner: Exact Average Timelines

Chris Cooper released his eighth book earlier this month, and it couldn’t have been written a decade ago.

“Millionaire Gym Owner” has been a work in progress for a very long time even if the actual writing didn’t take that long.

As Cooper has said many times, back in the day people did not retire from the fitness industry after a long, lucrative career. For decades, most trainers and gym owners just quit to become real-estate agents or firefighters.

The career path in fitness was a short arc that almost ended with a rip cord being pulled and a talented trainer moving on to a “real job” that could support a family.

So it’s a big deal to be able to document the paths of more than a dozen millionaire gym owners and serve up real-world strategies and tactics you can use to make a career in fitness.

Even better, we now have hard data on how long it can take you to create a solid career as a gym owner.

Here’s the data:

The average gym owner who works with a Two-Brain mentor will reach $100,000 annual net owner benefit—income, essentially—in two years, one month and nine days.The average gym owner will reach $1 million in net worth between two and 2.5 years after that.

These figures come from our data. They are not made up.

Remember this: The numbers are averages. You can move faster. You can also move slower. Or you can get so frustrated with your mistakes that you never make any progress at all.

To get you on the way, I’ll give you two pieces of advice. I wish someone had shared the stuff with me in 2010.

1. You should earn a significant of money from your gym.

This isn’t obvious to fitness entrepreneurs who open businesses to help people or pursue passion projects.

But you can and should expect to earn six figures as a gym owner. If you do the right things, this figure is reasonable and achievable—and you can reach this level with just 150 members (we have data that proves this, too).

2. You should get help from a mentor and track ROI on your investment.

You might be able to get to $100,000 without help. But you can do it much faster with assistance (about two years, if you can focus and take action).

But it would be unwise to throw money into mentorship without ensuring that you’ll get a return. Ask questions of any prospective mentor, and if you don’t get a stat like this, keep looking: 93 percent of Two-Brain clients see ROI in 12 weeks or less.

Take Action!

I’ll invite you to pick up a copy of “Millionaire Gym Owner” through the link below.

But before you do, remember the stats: Wherever your business is right now, you could achieve $1 million in net worth in about 4.5 years if you do the right things. If you’re not sure where to start or what to do, start here.

I hope to read about your story in Cooper’s next book!

“Millionaire Gym Owner” is now out—get it here!

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Millionaire Gym Owners All Do This (Every Single One)

I want to give you another strategy to help you become a millionaire gym owner—and this is a big one:

You must invest in yourself.

The key to success isn’t just knowing what to do. Anyone can read a book or take a course to learn what steps they need to take.

What really determines how successful you are is how well you do what needs to be done. And the key to that is having the right mindset and skills.

The more you can do to improve your skills and mindset, the greater your chances of achieving the business outcomes you want.

My new book is now out:
Get “Millionaire Gym Owner” free on Kindle until Feb. 16!

The Biggest Threat

When I am mentoring gym owners, I always ask them what they think the biggest threat to their business is. They’ll typically answer with something like “competition” or “the economy.” But it’s not the correct answer.

So here’s today’s exercise:

Imagine that your competitor down the street knows everything about you. That competitor knows what you plan to do, when you are going to do it and why you are going to do it. The competitor also knows about every insecurity you have and gets a text message every single time you don’t feel you’re good enough.

Now imagine what that person would do to your business.

“That would really suck” is the response I get when I lay out that scenario for a gym owner.

Well, here’s the truth: The person who knows all your weaknesses is you.

A part of you is trying to keep you comfortable. It doesn’t want to live at the edge of this chaotic, pressurized zone. It wants to go back to being comfortable and not feeling threatened.

That’s the part of you that’s going to show up when you start to do well. It’s also going to show up when you start to struggle. If you don’t understand that part of yourself, it’s like having a competitor who knows everything about you and will actively work against you.

If you don’t recognize your own shortcomings and invest in yourself to correct them, you can end up becoming your own biggest competitor.

That happens when you let yourself be distracted by novelty or unimportant details. Or when you bully yourself with negative thoughts all day and keep yourself awake all night, ruminating on your failures instead of your successes.

Too often, the biggest roadblocks to wealth for gym owners are between their ears.

Yet, as owner of your business, you are likely its biggest asset. Because it’s your ideas, your leadership and your skills that got the business to where it is, and they’re vital to driving it forward.

Investing in yourself means upgrading your business’s strongest asset and removing its biggest barriers to growth.

Invest in Your Skills

The most successful gym owners have skills that the least successful do not.

I’m not just talking about the practical skills that help you do your job better. Mindset skills will make an even bigger difference.

Over several years working with thousands of gym owners in Two-Brain Business, we’ve identified some of the skills that make the biggest difference, and we know how to improve them.

Some of the key attributes shared by millionaire gym owners are:

Focus—locking in on the right tasks and getting them done.Visualization and manifestation—seeing your ultimate goal clearly and setting up a plan to accomplish it.Investor mindset—determining how to get the greatest return on your money and your time.Abundance mindset—working to “grow the pie” instead of fighting for the largest slice.Virtuosity—mastering the fundamentals instead of trying every new idea.  

All these skills have compounding value, meaning they become more valuable over time, because:

A little competence in each area is helpful; higher skill levels pay off even more.No one can copy them; they can’t be stolen.The government can’t tax you on them.You don’t lose them. If one business fails, these skills will help you build the next faster.They can be improved regardless of outcome—if you win, you learn; if you lose, you learn.They multiply your other investments.The time and effort invested in learning them has lifelong returns.

Although investing in your skills has a long-term payoff, the challenge is that skills are hard to quantify. Sometimes, a gym owner might not realize they’re gaining important skills while doing other work.

One key mindset shift is to think about the skills you’re gaining whenever you work on tasks you dislike.

For example: “I really hate collecting these metrics every month. But every time I do it, I get better at understanding how my business is running, and I learn how to keep it growing forever.”

Or: “I really dread doing these coach evaluations. But they get easier with practice, and they improve my service to my clients.”

Start Investing Today

As a fitness entrepreneur, you almost certainly don’t need to get another coaching credential. But you do need to invest in your skills as a CEO.

The pressure on entrepreneurs doesn’t go away as you gain experience. In fact, it increases. So you must learn to manage that pressure and thrive anyway.

Decisions have more zeroes attached to them and deeply affect a growing number of people. You do less “work” and spend more time managing the people who do the work. The stakes are higher. Competitors will actively attack you because of your success.

Red tape is everywhere, and progress comes painfully slowly at times. Impostor syndrome, insecurity and self-doubt are always waiting to pounce on you in weak moments. You’ll never have enough time.

The only way to ensure continued success is to constantly improve yourself. Get your mindset locked down and acquire the skills you need to address any challenges. Then upgrade those skills regularly. Pursue virtuosity as an entrepreneur.

If you’d like a precise plan and a mentor to guide you through it, book a call here.

The post Millionaire Gym Owners All Do This (Every Single One) appeared first on Two-Brain Business.

The Perfect Wealth-Creation Strategy for Gym Owners

In my new book, “Millionaire Gym Owner,” I lay out four overarching strategies for wealth creation.

I’m going to focus on one here: The barbell investment strategy.

This one comes from Nassim Taleb, a mathematical statistician, former option trader, and risk analyst who also has an affinity for deadlifting.

Taleb recommends balancing some conservative investments with one or two high-risk investments. That’s it. Like a barbell, your investment portfolio is heavily weighted on both ends. You don’t spread your investments—and attention—across a host of different things. You focus.

It’s tempting to throw some money here and some there. But it’s best to invest where you have some expertise. And you’re better off getting really good at one or two types of investments instead of dabbling in a dozen.

For example, if you’re not really interested in learning about stocks or real estate, just park your extra income in something boring and stay focused on your gym.

Barbell Investment for Gym Owners

I personally love using the barbell strategy to guide my investments.

As a gym owner, my business is my high-risk investment.

It pays me a good income because I’ve learned to be a good entrepreneur. But just because I’m a good entrepreneur with a lot of interests doesn’t mean I should own 10 different types of businesses.

Instead, I should maximize one type of business, take the profits out, and put them in conservative investments that won’t take my attention away from my core business.

I could start another business, but it would just be something for me to obsess over and fiddle with. I’d make new mistakes and get frustrated. And I’d definitely lose focus on my primary business.  

For example, I love bikes. And if I opened a bike shop, I’d lose money and struggle for a few months—or even a year—while I figured out how to staff it and manage inventory. I’d own a business in an area of passion, but my gym would suffer.

Instead, I own a gym, make money, and spend lots of time in other people’s bike shops.

Boring, Attention-Conserving Investing

Where do I put the excess money from my gym? Into conservative investments.

The exact investments change over time, but at present I’m looking for bonds or other high-security spots where time is on my side. I can play the long game there because my short game is to be all in on my gym. I get the money out of the gym, put it in places where I don’t have to also invest my attention, and just let it grow quietly.

You can find all sorts of funds you can invest in easily, such as insurance funds, index funds and bonds. Their advantage: Once you’ve made an investment, it usually requires little more from you.

Most of these options offer relatively secure returns and are typically good homes for your first external investments, while also being an important part of your ongoing investment strategy.

Of course, you might be really attracted to crypto, flipping houses or some other investment. Those options will take a lot more of your time and energy, but if they make you happy, then go after them!

Just make sure to balance those higher-risk investments with conservative securities—the other end of the barbell—and know that your attention is the most valuable asset you have. Don’t split it too many ways, or you’ll lose it.

“Millionaire Gym Owner” is now out—get it here! The Kindle version is free until Feb. 16!

The post The Perfect Wealth-Creation Strategy for Gym Owners appeared first on Two-Brain Business.

Why Chris Cooper Wants You to Be a Millionaire Gym Owner

Mike Warkentin (00:02):
“Millionaire Gym Owner”: It’s more common than you think. In fact, it’s so common that Chris Cooper’s eighth book is a profile of 14 gym owners who’ve achieved $1 million in net worth. The Kindle version is out now. Check the link in the show notes, and the audio book is coming soon. We’ll tell you how to get it. I’m Mike Warkentin. This is “Run a Profitable Gym.” Please hit “Subscribe” wherever you’re watching or listening. Now with me today: Chris Cooper, founder of Two-Brain Business and author of “Millionaire Gym Owner.” Chris, I’m going to dig right in. Why did you write this book, and why should gym owners care, especially gym owners who right now aren’t anywhere near millionaire status? They’re drowning.

Chris Cooper (00:37):
Yeah, thanks Mike. Super good question because most of the gym owners that we work with, they didn’t get in this for the money; they got in this to serve. What I found though is that after battling through that rough state where you’re just like trying to survive, you look up for a second and you think, “OK, I’m doing OK, but like, how am I going to last 20 years of this? My kids are getting older; they want to wear clothes. You know, my family likes groceries, and how am I going to stop working 70 hours a week? Like, what’s going to happen when I’m 50?” Or you know, for me, I got a powerlifting injury, and it was like, “Oh my goodness, what happens if I can’t work anymore? Like, we’re done.” And so, you start to think about “What am I putting away? How am I planning to exit this thing?”

Chris Cooper (01:24):
“Like, how am I going to retire?” A lot of our parents, they had these career jobs where they had a pension or a 401k or whatever set aside for them; their retirement was predetermined. An entrepreneur doesn’t have that. You have to create your own options for retirement, and you should start doing that right now. So, this book exists to teach entrepreneurs how to do that, but more than anything else, it tells them how to create wealth. The cool part about being an entrepreneur is that retirement doesn’t have to mean the same thing for you that it did for your parents. You could retire right now. You could take many retirements throughout the year, or you could just be done at like age 45 or 50 if you want to. It’s up to you. But if you don’t start creating that wealth for yourself right now, it will never happen. And eventually you’re going to hit age 50, realize that you bought yourself a job for 30 years, you’re burned out, you’re broke, and you’re going to have to keep going for another 20. I don’t want that to happen.

Mike Warkentin (02:21):
A lot of gym owners are younger. I mean, I was younger when I started my gym. Same thing with you—20 years ago or whatever it was for you now—and you got a lot of energy, and it seems really fun to do the grind. You get up at 5 a.m., close at 9 p.m., but then all of a sudden families start cropping up and life expenses start cropping up, and you do start to think, “What am I going to do here?” And like when you started your gym, was there a path to retirement? Or was it just like you run your gym till you burnout, and then you quit, and you sell real estate? Like what was that path? What did it look like?

Chris Cooper (02:47):
Yeah, I mean, I didn’t even realize that I needed a path until about three and a half years in. And we had my daughter, and I took a morning off to go to the hospital to see her, and then I worked in the afternoon, and I’m like, “Well, wait a minute. This isn’t sustainable.”

Mike Warkentin (03:02):
What did your wife say to that? I got to ask, what did your wife say when you’re like, “I got to go coach.”

Chris Cooper (03:06):
She is incredibly patient. Yeah, she understands that this is part of the trade-off, but also she was like, “When’s it going to get better?” And I think that was the key. And so, I started at that point realizing like, “Holy crap, you know, I can work really hard, and I think I’m pretty smart, but I’m not just figuring this out. And so, OK, well I’m going to look for somebody else in the industry who’s done what I want to do and just do what they—I’ll copy them.”

Mike Warkentin (03:31):
Did you find anybody?

Chris Cooper (03:33):
Nobody. No, nobody. Like, I looked around locally, and it’s like, “OK, well there’s a 60-year-old guy; he’s doing personal training, but he’s still working like a 50-hour week, huh? How is that guy ever going to stop this?” And then I was like, “OK, well let’s look around the broader industry. I was writing for T Nation at the time, and even the writers there who were giving business advice, they were like 50 years old and grinding every single day, right? Like, look what happened to Poliquin. And so, then I was like, “Man, the, the only way this happens is if I create it,” and I mean, even Greg Glassman. You know, I found CrossFit in like 2007, and here’s this 60-year-old dude, and it looks like he’s still grinding pretty hard. Like, OK, so if I’m ever going to be able to have freedom of time and freedom of money, which is what retirement is, I need to set that up. But if it’s up to me to set it up, why can’t I set it up so that it happens at age 50 instead of 60 or 45 or whatever?

Mike Warkentin (04:30):
So I’m going to ask you about the people in the book and some of the strategies they they’ve used, but give me, right now, if a gym owner’s listening at any stage, whether they’re doing well or not well at all, how long would it take them to get to a $100,000 annual income and then about $1 million in net worth? Do you have a timeline for that?

Chris Cooper (04:49):
Yeah, I mean, when we start with a gym—so they start with mentorship right before they even open their doors. I mean, they’re making 100k a year in less than two years. What delays that process and takes some gyms longer is that we have to undo a bunch of the mistakes that they made. This was certainly me. Like—

Mike Warkentin (5:05):
That was me too.

Chris Cooper (5:06):
It took me, I don’t know, like five years to get there. Because I had to fix everything that I’d done wrong. But then once I got to 100k, the path to a million in net worth was actually pretty fast, like two to three years. And that’s because now I was open to just taking other people’s advice instead of making a bunch of bad guesses. So, what we see typically is if a gym—perfect scenario, they start with us before they even open their doors. Within about two years—it’s actually two years, one month, nine days—they’re making about 100k in annualized revenue, income.

Chris Cooper (05:40):
And then two, 2.5 years after that, they can get to a million. And the key though is they do it in steps. So first, you make your income, then you’re making a little bit more than you need, and you start making investments, and then after your investments create wealth, then you start thinking about impact in your community and creating a legacy and creating a business that’s not going to fold, like when you decide it’s enough or you’re going to retire.

Mike Warkentin (06:06):
So I’ll just round it out, listeners, if you’re out there and no matter where you are—and whether you haven’t started a gym, you’re thinking about it or whether you’re running a gym that’s not doing well, or whether you’re running a great gym—in about three years, you could earn or achieve $1 million net worth status if you follow the right path. And that’s—Chris said—that’s the average. Some clients of ours do it faster, some do it slower, but that’s the average. That’s pretty great. So again, think about it: In what other career could you do that?

Chris Cooper (06:32):
Yeah, I think maybe we better define what net worth means.

Mike Warkentin (6:35):
Yeah, go for it.

Chris Cooper (6:36):
Income is what your gym pays you every year. We call that net owner benefit because not everybody takes dollars out of their gym. Like maybe the gym pays for their cell phone or whatever, right? But the net benefit that you get from the gym. Net worth is looking at you as an entrepreneur and saying: If you sold everything that you own for cash, including your business, your building, whatever, and you paid off all your debts out of that cash, and you still had a million dollars left over, you’re a millionaire. And we actually had to define that because we’re in the age of like Instagram millionaires, where somebody makes $80,000 one time, takes a picture leading up against the Lambo, and like they’re calling themselves a millionaire. So, we say that a million dollars net worth is what makes you a millionaire. We audit people on this. We don’t let them just say it. And then when they actually achieve that status, we send them a big plaque. Congratulations, this is—you’ve done it, like you’re a successful entrepreneur. We interview them, and we put them in books like this one. And so, this book is really about like 14 out of the 50 Two-Brain gyms who have produced millionaires and their paths.

Mike Warkentin (07:40):
Let’s dig into that a little bit. So, tell me: Who are these people that are in the book? And then give me some of the strategies, like tease a little bit without giving the whole book away, but what have these people done to achieve this $1 million net worth? Which is such an impressive thing considering that I know that some of them in the book were struggling badly even a few years ago.

Chris Cooper (07:57):
Yeah, I mean there’s more than one story in the book of a gym owner who wasn’t breaking even three and a half years ago, and now they’re a millionaire. And like, while we don’t say that’s the typical path, that is what can happen. And we include it in the book as an aspirational path to inspire you. So, the first thing they did was fix their business. They started making an income, they reinvested the excess, and now here they are. But there’s a lot of different ways that you can do it. And entrepreneurship gets pretty fun when you have options like this. So, I didn’t just want to tell the story of how I did it. What we did was we interviewed these people extensively, like for hours. What exactly did you do? How much money did you put into your first Airbnb? How much money did you put into this?

Chris Cooper (08:39):
What did it mean that you bought overfunded whole life insurance? How exactly does that work? And like how did that open up these other avenues, and what did you do with that money? So, for example, I’ll talk about Taryn Dubreuil. Four years—she went from kind-of-broke gym owner to millionaire, and she built her gym up to the place where it was paying her a little bit more than she needed. Her family always used to vacation in Arizona. And so, her first investment was an Airbnb property in Arizona. Took her, I don’t know, nine or 10 months to put that deal together because she had to learn about Airbnbs, and she had to learn about buying property in another country, and she had to find the right people. And then through our Tinker program, she made those connections and got that education and then bought her first Airbnb, and then it started paying for itself right away.

Chris Cooper (09:25):
And she bought another one down the street in the same town. And so, that’s part of her wealth strategy that got her there. Other people, they just put money into like other businesses. So, Tommy Alfinito, he took money from the gym—his gym was crushing it, making more than he needed to earn—and he opened up a whiskey distillery, right? Super awesome, but I’m not going to do that. I buy buildings and bonds—boring businesses. It’s like our 3-B strategy, right? Buildings, bonds and boring stuff. But again, it’s because I’m like 48 years old, and I just don’t have the passion to go start a distillery anymore. I just want my money to be working for me while I sleep. And then you’ve got people who are super-duper aggressive with this stuff, like Shawn Rider, and he’s going to talk in the book about the Barbell Investment Strategy.

Chris Cooper (10:12):
He’s going to talk about overfunded whole life. He’s going to talk about his building strategy, which is different, again, from mine. So, what I wanted to do is not just say, “Here’s a bunch of options,” but like literally step by step, “Here’s how this person did it; here’s the steps they took.” And then, you know, one of the greatest points in the book, and my favorite is Kenny Markwardt. And what he’s saying is at this level, you’re probably going to have to try a few things before you figure out what you really like. So, for example, some people in the book said, “I’m going to open a second gym.” And then they discovered that wasn’t their passion after all, and they consolidated back to one gym. Or the opposite could happen too. “I’m going to go buy crypto; actually, I hate this. I’m good at owning a gym. I’m going to open a second location, or I’m going to buy out a neighbor.” And the book walks you through those steps too. So, it’s tactical like my other books for gym owners, but I also want to make those strategies stick by telling stories from people who’ve actually done it.

Mike Warkentin (11:13):
It’s interesting because I know the people that are in the book, and they’re scattered all over the place. So, there are different strategies that will work in different places. And there’s also just different types of entrepreneurs. Like for me, I would not want to run a second location in a gym. It’s just not something I’d want to do. I kind of gravitate more to what you would do. I’d want to put money into safe things where I don’t have to think about it. Tommy, who we’ve had on the show: “I’m going to start a completely new business in a completely new market, and I’m going to make whiskey.” Like how incredible is that? But the point that I’m seeing here is that these entrepreneurs now have options, and they can choose what they want to do because they’ve got the time and the money. Talk to me a little bit about the time because it’s not just—like 1 million net worth isn’t just about the money; there’s got to be a time element in there too, right?

Chris Cooper (11:53):
Yeah. And I know a few gym owners who have gotten to a point where their gym is doing well, like maybe the gym is even doing a million a year in revenue. That’s amazing. But they’re grinding 67 hours a week still—like it’s just not sustainable. And they sell out, close down, and they’re out of the industry now. Or there are other people too who—they got their gym to barely breaking even, and now they’re going to go start a software company or something. And now the software company is making them money, but the gym is dragging their time down, and there’s—you know, freedom of time is—it’s awesome. It’s the best part of entrepreneurship. But it can also be a bit of a barrier too because you grind for seven or eight years; you’ve got this business, “Yes, I’ve got a little bit more money than I need, and I’ve got a little bit of free time.”

Chris Cooper (12:40):
“What am I going to do now?” You know, my first instinct was like, “I’m opening a coffee shop; I love coffee.” And luckily a friend of mine said, “Why would you want to ruin the other thing that you care about?” You know, but I’m super guilty. Like I’ve started probably seven or eight companies since Catalyst became successful and closed them all except for Two-Brain because my time is my greatest investment. Some people though too, like, they’ll say, “OK, now I’ve bought back 10 hours a week; I don’t have to go in on Fridays. I’m not spending Sundays programming anymore. I’m actually going to put that into time with my family.” And David Allen tells his story in the book where he’s like, “I’m smart; I’m good at business. Now I know what to do, but my kids are only going to be three and five once. And so, in this season of my life, that’s where my time is going.” So, there’s a lot of that too.

Mike Warkentin (13:31):
Now, the whole wealth thing is becoming a bit of a political issue and so forth. Tell me why it’s important for a gym owner to want to be a millionaire. Like what happens to a community and the people around that gym owner when the gym owner achieves 1 million net worth or more and freedom of time?

Chris Cooper (13:45):
Yeah, I mean, so the reason that wealth now gets crapped on is because we were all brought up in this culture where wealthy people were bad, like they only got their money by taking it from other people. And even if you look at Disney movies, all the villains are wealthy and all the wealthy people are villains, right? Like, there are very few positive role models. And when somebody is successful to the point of inspiration, like Bill Gates, Elon Musk, the media is going to try and find something wrong with them. Like Elon Musk can’t keep a girlfriend and. Bill Gates, uh, I, I don’t know what the problem with Bill Gates is these days, but like—

Mike Warkentin (14:22):
Something, they find something. Yeah.

Chris Cooper (14:24):
Yeah. And, and we learned from an early age that you trash the people who are ahead of you because they must have cheated to get there. That’s not—

Mike Warkentin (14:33):
It’s jealousy.

Chris Cooper (14:34):
It’s jealousy. Yeah, sure. But that’s not the reality. The reality is that the people who became wealthy most of the time are very generous with that wealth, you know? And there’s nobody more generous than gym owners who opened up their gym to serve, not even expecting to ever reach this point. Like, you want to put money into the hands of those people. You don’t want to put money into the hands of the shysters and the tricksters. And so, making gym owners wealthy, it benefits the community because they create jobs, they pay more taxes than anybody else—like, I’ve paid over a million in taxes this year—they employ people in careers that these people are passionate about, and they save fucking lives. Like that’s what they’re doing with this money. They’re not buying private jets; they’re not investing in oil spills. They are saving more and more lives, and they’re reinvesting in their gym, making it bigger. They’re reinvesting in their staff, giving them better careers; they’re paying more taxes. You know, they’re making their local communities better. And that’s why gym owners need to become wealthy so they can push all these other hucksters and shysters to the side.

Mike Warkentin (15:41):
I’ve talked to a lot of wealthy gym owners on this show, and inevitably when I speak to them, one of the first things they mention as important is careers for staff members. They’re all, to a fault, passionate about creating great jobs for other people. We’re not talking like $35,000, you know, grind-it-out gym, personal trainer jobs. They’re talking about like $80,000 a year gym jobs with benefits and satisfaction. And that’s really cool for me because it’s really difficult to do that. And they’re actually doing incredible work to create these opportunities for people to thrive and expand the fitness industry and reach more people and improve health. And there’s a whole trickle-down effect that’s fairly obvious to everyone in the fitness industry and somehow not obvious to people who aren’t in the fitness industry. And then in addition to that, I’ve heard so many things from these gym owners about the things that they do in their community, and whether it’s like sponsorship of events or scholarships or donations of things or investment in other things, once they have this money, they’re able to do something good with it.

Mike Warkentin (16:37):
So these are good people doing good things with money, not hiding it away and buying private islands that they fly to and so forth. It’s an interesting thing when good people get a little bit of extra money. So, let’s look at this as we close this show out. Gym owner is out there listening to the show, maybe a little bit overwhelmed by the thought of achieving a million-dollar net worth status in three years or less. Step one is going to be that current business. How do they do that, Chris? Like how do they—right now the fires are raging. How do they put out a few fires and start moving forward to get that first business into a good spot?

Chris Cooper (17:10):
It’s very difficult to do by yourself. I mean, we’re all kind of out there in our own heads. You need somebody who’s objective—who is number one: going to tell you what you have to fix. Number two: have fixed it themselves so that they can say, “Here is how you fix this.” And number three: holds you accountable for doing it. So, we say that every gym owner needs a goal, a plan and somebody to hold them to that plan, just like your clients do in your gym. Like if your client has a clear goal, a good plan to get there, and you’re coaching them to get there, you’re going to keep them around. That’s going to solve your problem. And they’re going to actually hit their goal. And that’s what we do with mentorship. It’s: The gym owner has a goal, they have a plan, and they have somebody holding them to the plan who’s actually done it.

Chris Cooper (17:53):
I mean, in the fitness industry, there are so many people out there saying—giving you advice who have never actually done it in their gym. And so that’s really, really important to me. So, the first thing is you fix those fires, but that’s not it; like, it’s not enough to just break even. And that’s kind of the point of the book. You have to have a strategy for growth and maybe your goal for growth is: I just want to provide better income for my trainers. Wonderful. The first step is: Let’s prove that your gym can provide a good income for you, right? Like you are the one that’s the first test of your model. So, if your gym can’t give you a good income, it cannot give somebody else a good income either. There are a lot of gym owners out there who are, as you said, generous to a fault. Right?

Chris Cooper (18:35):
They’ll commit to paying somebody a $50,000 a year salary before they’re making any money themselves. And that—it seems like generosity, but it’s actually like risking that other person’s career because you haven’t proven that your business can pay anybody 50,000 a year. You are the crash test dummy. It has to pay you first so that it can prove it can do it. And then the other thing that they try to do is they try to make investments too soon, or they’re generous with money they don’t have. So, “Hey, my business is breaking even. I’m going to go buy a building.” OK, but when the roof of that building leaks, not only is it going to bankrupt your mortgage, but it’s also going to put your business in jeopardy because now you got to suck the money from somewhere. So, it’s really important that gym owners take this path of making income, then make investments, and then worry about your long-term impact in the community.

Mike Warkentin (19:29):
The path is laid out in the book, and you can read the book and check out who these people are. And honestly, you can work with some of them as a mentor. And if you want to talk about how to do that, link in the show notes. You can book a call, find out exactly how this path would work for you and your unique business. Chris, congrats on book eight. I see a bunch of them behind you. This is—did you ever think you’d get to eight?

Chris Cooper (19:49):
I didn’t think I’d get to one, so eight’s great.

Mike Warkentin (19:53):
That’s cool, guys. And this book, “Millionaire Gym Owner” is now out on Kindle. There’s a link in the show notes; you can get it. The audio book is coming soon, and we will tell you exactly where you can get that if that is your jam. But for now, get that link in the show notes and then take your steps today to start moving from wherever you are to 100k net owner benefit and then to $1 million net worth. Chris, thanks so much for being here.

Chris Cooper (20:12):
Thanks, buddy.

Mike Warkentin (20:12):
This is “Run a Profitable Gym.” I’m Mike Warkentin. That was Chris Cooper. If you want to continue this conversation, please head to gymownersunited.com, and we’ll see you there. Thanks.

The post Why Chris Cooper Wants You to Be a Millionaire Gym Owner appeared first on Two-Brain Business.

Millionaire Gym Owner: Yes, You Can Retire Wealthy

About 15 years ago, I hit rock bottom.

I was working over 80 hours a week in my gym. I was in my fourth year of gym ownership and my 12th year of fitness coaching, and I was slipping backward financially: We’d just missed our second paycheck in a row, and I had to ask my parents for grocery money.

The hard work and long hours didn’t bother me, and I knew I could overcome the cash shortage. But for the first time in my career, I accepted the fact that things weren’t getting any better.

The truth: My lowest point as a gym owner didn’t come when I couldn’t pay the rent.

It came when I realized I couldn’t just keep working hard and waiting for things to turn around. I wasn’t smarter, luckier or more dedicated than other entrepreneurs who had failed in their businesses. Even if I were, smarts, luck and dedication didn’t seem to guarantee success—and I had no idea what would.

Then I started thinking about the future.

I had a baby who didn’t need much—yet. Eventually, she’d need school clothes. And more food. And she might want to go to college. And maybe she’d have a little brother or sister. And someday, my old truck would run its last trip to the gym.

How would I ever pay for any of that?

Hell, how would I ever stop working 16-hour days or take a one-week vacation?

And how would I ever be able to retire?

Then I thought, “I bet someone else already has this figured out.”

Looking for Inspiration

I started looking for examples of people who had worked as a trainer for 30 years, socked away enough to retire, bought a little place in Florida, and learned to like golf—people who didn’t worry about money anymore.

But there were none.

I couldn’t find a single personal trainer or gym owner who had stuck with it until they could retire. I couldn’t find anyone to copy.

I had to make my own plan. I didn’t know how to do it—or even where to start. I just knew that time wasn’t on my side, and things were only getting worse.

In fact, I was starting to doubt the entire field. Most of the other “personal trainers” in our town were just kids working part time to pay for college or to cover their gym membership while waiting for their acting careers to kick off.

When I thought about it, I couldn’t name a single fitness trainer who had worked until age 60 and then retired wealthy—or even retired at all. I couldn’t even name a trainer over the age of 50, period. The thought of saving enough money to retire seemed impossible!

It certainly didn’t seem possible to run a gym, have time for family and enjoy a great income with a little left over to invest. And even if I could make a little more than I needed, I had no idea how to invest the money.

Looking into the future, I didn’t see a rewarding career with a relaxing retirement like my friends could anticipate. I saw only a downward spiral of rising bills, worsening burnout and mounting debt.

In fact, the financial advice I most often received was this: “Get out now and find a real job.”

Finding a Model

I didn’t want to give up on my dream, but I needed to pay my family’s bills, stop working all the time and eventually have enough money to retire.

Kindle version free until Feb. 16!

I needed a model to follow. Even more, I needed proof: I needed someone to say, “I’ve done it, and here’s how.”

I couldn’t find a single example in the fitness industry, so I started looking outside the industry: How did other entrepreneurs retire without pensions or employers who automatically deducted 401k payments from their checks?

My aim in my eighth book, “Millionaire Gym Owner,” is to give you a roadmap so you can take the income from your gym and invest it to create wealth.

I had to figure this out from scratch—through years of learning, trials and many errors. Now that I’ve done it, I want to share the path with you.

And I want you to travel much faster than I did.

“Millionaire Gym Owner” is now out—get the Kindle version free until Feb. 16!

The post Millionaire Gym Owner: Yes, You Can Retire Wealthy appeared first on Two-Brain Business.

How I Gave Myself a $40 an Hour Pay Cut as a Gym Owner

Confession: I made my first dollar in the fitness industry as a personal trainer, then promptly forgot how to sell personal training.

Back in 2009 or so, I sold an hour of my time for $40 or $50, then focused on trying to fill group boot-camp sessions at $7.50 per person.

For the next six or eight years, I focused only on groups, even when my “group” was a single person who rolled out of bed at 5 a.m. to come to a “class” that was actually costing my business money.

So I started out making $45 an hour but promptly and accidentally cut my rate to $7 an hour.

Don’t make the same mistake I did!

I’m not sure if I focused on the group model because the energy in a functional fitness class is addictive or because I assumed larger classes would eventually equal larger income.

Either way, I rented a space and tried to pack it with people. And I succeeded in select slots, like noon and 5 p.m. But I failed in most of the other slots, which were attended by two to four people who paid about $7 per class if I divided membership fees by attendance—I only did this math years later.

As you can imagine, money was tight because I offered too many poorly attended classes and didn’t have a plan to acquire the clients I needed to fill them. The business survived only because I absorbed a lot of the labor costs personally. My gym broke even on paper but could never afford to pay me, so I was working for free, and I wasn’t running a real business.

As I started to focus on increasingly dismal financial statements, I’d notice small bumps in gross revenue from month to month. When I dug in, I tracked them back to our eight-session one-on-one on-ramps, which we sold for about $400. For comparison, our unlimited group-class membership was priced at $150 a month.

I’d been told to start using on-ramps in a random conversation in the bleachers at some fitness competition, and my hesitant implementation was a major win: Sporadic high-value on-ramps were keeping the business afloat.

But instead of realizing that one-on-one training was a valuable service that solved clients’ problems and gave us access to a new pool of people who didn’t want to train in a group, I used on-ramps simply to get people ready for group classes.

We closed every on-ramp with an assumption that people would select a group membership. Not all did. Never once did we say, “After on-ramp, you can keep training one on one.”

And we didn’t tell people about personal training for years. We just assumed they’d ask for it if they wanted it.

Oops.

Explore Your Options: Get Coop’s New Guide

I share all this because this mistake cost my business—and family—tens of thousands of dollars.

Let’s be clear: If you are focused on group classes at your gym, you do not have to stop doing that. Group classes are great, and they can create a very strong revenue stream in a fitness business.

But you should bring people into your fitness business with one-on-one on-ramps, and you should offer personal training and semi-private training as options in addition to group training.

Two-Brain data is clear: One-on-one training and small-group training are high-value services that increase revenue and solve clients’ problems, which improves retention.

Chris Cooper’s newest guide has quick implementation plans for both on-ramps and PT programs in gyms.

As a bonus, it has three other high-speed tactics a gym owner can use to generate more revenue without raising rates.

I’d encourage you to get the guide and at least review its contents. Had I done that in 2010 and taken action, I’d probably be retired right now.

Don’t worry: You don’t have to change your focus. If you love group classes, keep offering them.

But don’t miss out on high-value opportunities to serve people in other ways and earn more while you do it.

Get Chris Cooper’s new guide here.

The post How I Gave Myself a $40 an Hour Pay Cut as a Gym Owner appeared first on Two-Brain Business.

The No-Ads Cinnamon-Roll Secret to Huge Average Revenue Per Member

Mike Warkentin (00:02):
You are getting another batch of secrets on “Run a Profitable Gym.” This time, it’s how gym owners post incredible average revenue per member at their businesses. I’m Mike Warkentin. I talk to the best gym owners in the world every single month. If you want to hear their secrets, please hit “Subscribe.” Now, our December 2023 leaderboard for average revenue per member—that’s ARM or A-R-M—it went from $427 to $798. That’s amazing. It doesn’t mean that every client at the number one gym pays 800 bucks a month. Some might pay more; some might pay less, but on average they’re paying about $800, and they all see incredible value in the services they receive. Michaela Munsterman of Elite Medical Exercise in Austin, Texas made our leaderboard, and she’s here to talk about ARM. Michaela, welcome. How are you today?

Michaela Munsterman (00:45):
I’m doing great. Thank you so much for having me.

Mike Warkentin (00:48):
I am excited because you have an interesting business, and we’re going to dig into that right away, but I want to know first: your ARM number—you’ve made a great leaderboard—how has this number changed over time? Because for me, for example, mine started way down in the 70s, and then when I started working with Two-Brain, it started creeping up into 150. My wife took over the business; it’s higher now, but how has yours changed over time?

Michaela Munsterman (01:07):
Yeah, similar to yours. I’ve been working with Two-Brain for two years with Ashley Mack and Jolene. And you know, what Two-Brain does is helps put a plan, bring clarity—also, you know, you’re able to express what you do. They help bring in that value, and then it’s able to grow over time, which is exactly what ours has done. We’ve done some things differently, but ultimately Two-Brain has had a big guiding hand that has helped.

Mike Warkentin (01:35):
You remember your very early sc—like how long have you been in business?—I guess is the first question I’ll ask on that.

Michaela Munsterman (01:39):
Six years.

Mike Warkentin (01:40):
Do you remember what your average revenue per member might have been six years ago or even two or three years ago?

Michaela Munsterman (01:45):
You know, I was so young that that was probably something I wasn’t even watching, which I should have, but I was about 26 when I started.

Mike Warkentin (01:54):
It’s interesting because I didn’t track that number either. It wasn’t even a thing until I started working with Two-Brain. I was like, “Oh, I should maybe check this.” And then when I looked at it, I was like, “Oh, I probably need to change some things here because this is not going to support my business.” So, when we did that, things started to work much better, and that number changed. I’ve had gym owners on the show where they’ve started at say, you know, where I was down in the 70s or 80s, and then they’ve got up to like $300, $400, and there are some who are in that $700, $800 range, which is incredible. We’re going to get into yours a little bit deeper. What—tell me first of all—what’s the rundown of your business? You—I think you’ve got an interesting model. I want to know exactly what you’re selling there. What are you doing?

Michaela Munsterman (02:29):
Yeah, we do medical exercise. And so, what that means is we work with people who have joint limitations, low chronic pain—discharged from physical therapy. Maybe they’re working with a chiropractor on a restriction, but they need stability, and maybe they’re just also new to exercise and they need a safe, positive, encouraging place to do that. And anybody who comes through the gym has to become a medical exercise specialist. And so that is a certification that is pretty intensive—takes about a year to do. But it was created by Dr. Michael Jones who is a physical therapist and recognized that there was a gap when people got discharged into the fitness world. And so, what he’s done is created this whole material to help us understand shoulder impingement, hip replacement, spinal stenosis and gives us the anatomy, the pathology, and the critical thinking skill to really work with these individuals. And he does it in such a way that you have to think and use your brain, and it’s not just a list of exercises. So, it’s a really special niche. It’s incredible with the people that we get to work with, but it’s such an important certification I think, to understand people’s limitations and be able to help them.

Mike Warkentin (03:40):
Wow, OK. So that’s interesting because a lot of gyms will work with apparently healthy individuals, quote unquote, and they specialize in that where people are, you know, for the most part—they may have a ding or dent from football or something, but they’re in pretty good shape. You are working with people who are leaving, like, a medical setting with a joint replacement or something else and helping them get active again. Have I got that right?

Michaela Munsterman (03:59):
Yes. Yeah. Yeah. Exactly.

Mike Warkentin (04:01):
Oh wow. That’s an amazing thing. Now how did you figure out that you wanted to do this? Was it something that you pursued as a career choice or something you just noticed there was a hole in the market? Or how’d you figure this out?

Michaela Munsterman (04:09):
That’s a great question. You know, I got really lucky because I probably would’ve ended up in the CrossFit world, which is wonderful because I was a powerlifter and a big athlete. But I hurt, I hurt when I played, and I went to school and understood different anatomy strength training, but I never understood joint restrictions. And so, when I graduated, I went and did this internship in Katy, Texas at Medical Fitness Pros, and I got to work closely with them and Dr. Michael Jones, the creator of the MES cert, and it just rocked my world. It just totally changed how I thought about exercise, how I programmed about exercise. And then I started to see results and just fell in love. And then as the years went on, there’s—you know, we’re not really well known. And so, I wanted to open up my own gym and make a dent and help these individuals who really could benefit from medical exercise.

Mike Warkentin (05:02):
Wow. So, you have to have special credentials to work at your gym as a trainer? Correct?

Michaela Munsterman (05:07):
You don’t necessarily have to come on, but you do have a certain window you have to get your certification within to take on and especially work with high-level medical-based conditions.

Mike Warkentin (05:20):
OK. And nuts and bolts here. Like how many staff people have you got? How much space have you got? What kind of stuff are you looking at? I see your gym in the background looks incredible. Yeah,

Michaela Munsterman (05:26):
Thank you. Thank you. We’re 1,000 square feet. There’s a total of me and two other trainers, and so I’m the owner. And then we got some incredible trainers that are—one’s almost about to be an MES, and one’s about to start the program.

Mike Warkentin (05:40):
OK. So, 1,000 square feet, which is great because you can work with people in that, but it’s, I imagine—I don’t know about real estate in Austin; I think it’s a little pricey, if I’m not mistaken. That doesn’t create a huge overhead; am I right?

Michaela Munsterman (05:50):
It’s still a little bit of a large amount, but it’s manageable because Austin is an inexpensive market.

Mike Warkentin (05:57):
That’s—I do remember hearing that somewhere from one of our other gym owners, but 1,000 square feet and Chris Cooper’s talked about this, where you can do really well in a smaller space. I went the other way, and I thought I needed 6,000 square feet for a giant functional fitness gym. And I never filled it properly and eventually realized that scaling down was a good thing. My wife now trains people just out of the space that’s about the size of a two-car garage, which is about 500 square feet. So, we’re on a similar path there. She—my wife does small groups, very small groups. You are just personal training, or did I hear small groups as well?

Michaela Munsterman (06:28):
Oh, we kind of have a system of what we do. Basically we have a consult, and then if we move forward, we have an assessment and from that we’ll do an exercise prescription that includes maybe one-on-one for 50 minutes, one-on-one for 30 minutes, semi-private or group classes as well.

Mike Warkentin (06:45):
OK. And what’s your max group size?

Michaela Munsterman (06:46):
Eight. We won’t do more than eight.

Mike Warkentin (06:48):
Yep, that sounds about right. For a space like that; that sounds just perfect. And I want to ask you about where you find these clients, but first of all, you said you do a consultation process, I imagine with people who are leaving a medical setting and getting into exercise, there’s probably a lot of nerves, there’s probably a lot of restrictions, there’s probably a lot of issues and maybe even a note from the doctor. How does that go?

Michaela Munsterman (07:06):
Yeah, that’s such a great question. So absolutely, that’s one of the reasons we have a complimentary consult in the first place is one: to make sure that they’re in our scope of practice because we are not physical therapy. So sometimes we’ll have people come in and we’re like, “You know, you’re not quite ready for us. You need to go back to physical therapy.” So that’s a big part. But also understanding their goals and their needs. And then if we pursue forward, then we also get to connect with their PT, their doctor, to kind of understand where they’re coming from, and then we’ll do our assessment where we look at their joints from head to toe, passive range of motion, active range of motion. And that helps us kind of get really a roadmap and so we can make a correct exercise prescription versus a guess of, “Oh, just come twice a week just because. No, we have really an understanding of how long it’s going to take to help maybe decrease pain, improve function. And that’s what we’ll do through our assessment process.

Mike Warkentin (08:02):
These medical care providers as you just mentioned, what is their reaction to you? Like how do they—do they accept you? Do they just like right away, “Oh, thank God you exist”? Like what is their reaction to giving their patients to you?

Michaela Munsterman (08:13):
Yeah, we kind of get a broad spectrum, but a lot of times because we are a new career path, they’re like, “Oh, this exists?” And we’re like, “Yes, yes, absolutely it does.” And so, we’ll go in and educate what we do and how we’re a really good fit to be within the medical community and not only for them to refer to us, but also getting acquainted with them so we can have a good referral back. And that way we really advocate for the client to have this amazing wellness community on the same page.

Mike Warkentin (08:47):
OK. So, we’re going to dig into that now because I’m going to ask you where you find these high-value clients, and I think it’s going to lead into some talk about referrals and networking. So, tell me, where do you find these amazing people who want to leave a medical setting and get healthy and fit with you?

Michaela Munsterman (09:00):
Yeah, well, one, I’m blessed. Like that’s just part of it. I’m just blessed because I have amazing clients, and I’m so lucky. It’s so fun. So that’s one. But two: We work with the older population, 55 and above, typically because they’re dealing with some form of medical based condition, but they recognize the chapter of life that they’re in. And so, they’re motivated because they want to live life without limitations. So, they’re very motivated and so they’re so fun to work with. And so that’s one: The quality of clients that we have is: These people want to get better, and it’s not a fad for them. And then because they are really into getting better and they come here and they really feel those results, they’re eager also to tell their friends and family that this is a safe place. You’re going to improve function; you’re going to decrease pain within our scope of practice.

Michaela Munsterman (09:54):
And so they’re eager to tell their friends and family, and they’re awesome people. So, their friends and family are awesome. So that’s one way through affinity marketing, which Two-Brain has also really helped hone in that system for me, so we can capitalize on getting more high-quality clients. And the other part that we do is we try to get out in the community of the medical world and let them know we want to be the next step in the medical profession. And so, I have a little bit of aversion to social media, and so I’ll go boots-to-ground and introduce myself to these doctors, these PTs, these chiros. But I’ll also do something to try to make their bellies happy, so I’ll make homemade salsa, sourdough cinnamon rolls and drop this off so I can introduce myself, make them happy, but also educate on this next step and what we can be—a wonderful next step for their patients and our clients. And then we’re really bringing, bringing in this unified front for them because it’s not usually just one entity. They need all these things. And so, if we can come together, it really creates a positive result. And so, that’s what I’ll do as well as part of my marketing, and that brings in really high-end quality clients as well.

Mike Warkentin (11:07):
OK. So, I’m going to ask you the obvious question in just a sec, but what an inspiring thing. Like I’ve worked with older adults; we had a Legends program, we called it, and we were with like 55 plus, mostly retirees or a few people in the late stages of their careers. What an amazing group. Like you’ve noticed that for sure. They want to work out. They’re very different from their peers. A lot of their peers are just like sitting on the couch, retired, don’t want to do anything, or they’re complaining about injuries and things like that. These are highly motivated people who want us. They’re vibrant. They want to keep living; they want to keep doing stuff. They want to play with grandkids and travel. I’m guessing your clients were much like mine. Am I right?

Michaela Munsterman (11:39):
Yes, yes. They’re fabulous.

Mike Warkentin (11:41):
Serving what is like a huge market—a market that has some money to spend and has some time to do it and wants to get healthy. Like what a great market. Now I’ve got to ask this one: So, you just show up at a doctor’s office with amazing smelling food, and tell me how this goes.

Michaela Munsterman (11:56):
Well, a lot of times it’s with the front desk where you introduce yourself, and sometimes you know, you don’t get in, but sometimes you do. And so, you have your elevator pitch of what you do, and then you just follow up with like, “Hey, I hope you enjoyed the salsa. Let me know when I can come by and do a Lunch-and-Learn.” And so, you have your foot in the window to expand into that relationship.

Mike Warkentin (12:20):
Wow. So how often do you end up speaking to the first point of contact at the door? And how often do you get to speak to one of the, you know, we’ll call them care providers, whether it’s a doctor or a therapist or whatever?

Michaela Munsterman (12:31):
It depends on the entity actually. So, with PT, a lot of times you are able to communicate directly to the director, the chiro. A medical doctor, a lot of times you actually have—you would—at least in Texas, you are required to buy the whole floor lunch or breakfast or something, and then you can actually speak to the doctor directly.

Mike Warkentin (12:53):
OK, sure.

Michaela Munsterman (12:54):
So there’s actually a little bit of different systems, but with the PTs and the chiros, they’ve always been really friendly and really open to hear—especially when we represent the medical exercise like we represent and we’re professional, and we’re not just some Joe Schmo in sweats coming in.

Mike Warkentin (13:10):
And you’re offering—I mean, we’ll say this in a funny way, but it’s not like you’re coming in, you’re saying, “I want your clients.” You’re saying, “I can help your clients take the next step.” And so, if these care providers want to get their people active and moving again, you are a great service because they’re not personal trainers; they’re therapists. And so, helping their clients and giving them the next step probably solves a huge problem for them.

Michaela Munsterman (13:30):
Yeah. Yeah. Absolutely. We’re not necessarily saying, “We’re here to take clients” by any means. “We’re here to be a unit with you, so we can understand what you’ve been working on, and we can build on their success.” And then also, if we have a hiccup, we can go back to it. But because of insurance, we’re also running into a lot of clients that—or their patients—but insurance is going to say, “I’m going to pay for 20 sessions, and that’s it.” And the PT knows that they need more, and they don’t have an option. And so, we’re trying to educate them: We’re that option, so they don’t have to feel defeated when insurance stops.

Mike Warkentin (14:07):
So do you have a local network now of care providers who are just like—they know who you are, they know what you do, and they’ll just tell their clients, “Go see Michaela?” Is that happening?

Michaela Munsterman (14:16):
That’s, that’s the goal. It’s starting. It’s starting.

Mike Warkentin (14:20):
OK. So, when you do the—and what’s the, how does the relationship go? Like, is it kind of a back and forth where you stay in contact? Like Chris Cooper talked about how he created a relationship with a local chiropractor, and they would go back and forth, and he started referring clients to this chiropractor, which was a great deal for the chiropractor. The chiropractor sent back, and it was all about helping the client both ways. Are you seeing that kind of thing develop in your experience?

Michaela Munsterman (14:43):
I believe so. It’s all kind of client-based and experience-based, and ultimately, it’s advocating for the client and what they need. So that’s what we’re really after, and that’s what will create the umbrella effect. But it’s all client dependent-based.

Mike Warkentin (14:58):
OK. Now so, you mentioned affinity marketing, which for listeners, if you don’t know that term, that is basically using your current clients to get to their friends and family so you can help them too. And there is an exact system that Two-Brain has—very effective—to help you find those clients, the friends and family of those clients, because they are warm leads. They already know, like, and trust you to some degree because they know their family member is already working with you. There is a system for this. Referrals don’t just happen. You have to ask for them. And there is a system. You also mentioned working with local providers. So, you’re actively going out in the community. Chris has often talked about just grabbing, you know, a pot of coffee and heading to the business next door and saying, “Hey, I run the gym over there, how are you doing?”

Mike Warkentin (15:36):
And just have a natural conversation. You don’t have to sell them anything, but they might just all of a sudden know that you’re a great person, and they like coffee, right? And then all of a sudden, they start talking. You can actually formalize things where there’s other gyms that have said, “OK, I’m going to work with a hairstylist, and that hairstylist is for weddings—is going to refer the wedding crew to a personal training package to get ready for the wedding,” or something like that. There are all these ways to formalize things. Do you do any marketing in terms of paid advertising or anything like that?

Michaela Munsterman (16:02):
No, I don’t.

Mike Warkentin (16:02):
OK. So that’s fascinating. So, you’re building a business purely on word-of-mouth and local networking, which is pretty cool.

Michaela Munsterman (16:09):
Yeah, despite some of the advice I’ve given, but that’s truly how I want to grow business and how I want to do it. I work with the older individual because I’m an old soul, so a handshake means a lot to me. So that’s how I want to do business. And it did—it has worked. And so, we’re not necessarily entrepreneurs, so we do everything like how everybody else does. And so, I wanted to find a way that feels authentic and represents me, and that’s what I’ve gone after. And so far, we’re seeing a consistent steady growth, which is what we can handle and what we’re going after.

Mike Warkentin (16:43):
OK. So that’s really neat. Do you know exactly how many clients you want? Do you have that number in mind? And you don’t have to tell me what it’s, but I’m just curious: Do you have that mapped out already?

Michaela Munsterman (16:50):
We do. By this time next year, we hope to double.

Mike Warkentin (16:53):
OK. So that’s cool. So, you have your numbers in place, and you are seeing growth organically. Well, I won’t say organically. You are actively, you know, growing this thing, but you’re not paying a marketing agency. So, you are—do you think you’re on track to hit that number just by asking for referrals and connecting with local providers?

Michaela Munsterman (17:10):
It’s going to be hard. It ain’t going to be easy, but yes.

Mike Warkentin (17:13):
That’s super neat. Would you ever advertise, or is that something that’s completely off the table for you?

Michaela Munsterman (17:17):
I’m not going to say I would never, but to the point, maybe if I have somebody else managing that would be an opportunity to grow. But I also really like the uniqueness and the quality of clients. And so, I think the way that we’re doing it is creating a community versus an open net. And we’re so happy to have everybody, but what we’re creating is something really special. When somebody comes through the door, and they light up because they see their friend in passing. And so, we are doubling that over and over the way that we’ve structured our business and it’s—Austin’s a big town, but it feels like we have a small town in our gym, and I just love that, and that’s the way I want to keep going.

Mike Warkentin (17:57):
And it’d be interesting too, if you ever do get into advertising. I mean, that’s an interesting one because you’d have to figure out the way to do it as authentically as you can because you’re not looking to, you know, capitalize on injuries and misery and so forth. Obviously, you’re looking to connect with people who are really wanting to be active and move through that. So, you would have to kind of place yourself very inter—it’d be an interesting kind of experiment to play with. I’m sure you’ve thought about this at some point.

Michaela Munsterman (18:20):
Yeah. Yeah. We’re definitely—you know, as you grow you’ve got to keep expanding and keep your eyes open, and things toward what’s going to benefit you and what’s going to serve everybody as a whole. So that’s an avenue that we might go down eventually.

Mike Warkentin (18:34):
OK. So, let me ask you a couple other questions here. Do you charge for a consultation, or is it you’re membership-based, or is it by session, or how do your packages, how are they structured?

Michaela Munsterman (18:45):
Right. Our consult’s complimentary. Our assessment is just the assessment, and then from there we will prescribe a package that typically rounds out to be a monthly, or there’s a small discount if you go ahead and commit to monthly. And so, but every package that we do is kind of structured out to a monthly thing, so that can help us understand and manage our numbers and understand where we’re going and what we need to improve or keep doing.

Mike Warkentin (19:16):
And then that’s going to be predominantly PT with maybe a little bit of group or some version of that. Those are the two main pillars of the revenue, correct?

Michaela Munsterman (19:22):
Right. We have one-on-one, semi-privates, groups, and corporate accounts; that has also really helped our ARM is getting two corporate accounts and that we also want to keep expanding on.

Mike Warkentin (19:32):
What—how do those corporate accounts work? What’s involved there?

Michaela Munsterman (19:35):
Yeah, so we do—since we work with older individuals and we have that specialty and that education and knowledge to work with these individuals, we go to independent living facilities and educate them on what we can do with exercise. And so that’s how we’ve gotten these two accounts is we go over there, and what we run into in our industry is our hour rate is so much. Well, these corporate accounts—we are traveling, we’re working with a large sum of people, so we’ve been able to increase our hour rate. So that has also helped the ARM where we are able to make a little more within our limited day.

Mike Warkentin (20:14):
Yeah. And how did you connect with those corporate accounts? Was that another, you know, fresh salsa situation or something else?

Michaela Munsterman (20:20):

You know, again, blessed, blessed a lot. Kind of just getting connected to the right people. But a lot of it starts with a cold call, and so that’s how we’re continuing to progress our research is a cold call and hopefully get in front of the right person, and you pitch your idea and roll with it.

Mike Warkentin (20:40):
Yeah. You know, even if you’re blessed or lucky, I know that people who have great success, it’s because they’re doing something right. And you obviously created a service that people want to know about and talk about. So, I think you’re earning the blessing if you’ll put it that way. Do you have anything else that you sell there? Do you have any supplements or T-shirts or anything else or any little things that you tack onto ARM?

Michaela Munsterman (20:58):
Yeah, one other service that we provide is what we call “Troubleshoot.” And so, if we have a client that is twice a week, but they come to us and say, “Hey, I have a vacation planned in Japan in a month; I want to make sure I’m prepared.” We would classify that as a Troubleshoot and say, “OK, great, let’s add another day in the week, so we can help make sure we achieve this goal.” Or it can be a little pain restriction that has popped up and so it needs a little bit more intention and so we’ll add an extra day or an extra couple of sessions to work on these areas of Troubleshoot. And the way I could see that working in CrossFit is if a client is in a group class, and they’re doing a clean, and you can recognize that the form isn’t just quite right, but it’s sometimes hard to give that one attention in the group, pulling that client aside and saying, “Hey, you look really great in class. I’m noticing these mechanics within your clean. I want to help you so you can really maximize. I’m going to do this in three sessions. Can I book you on Tuesday? And we knock this out.” And so that’s a little Troubleshoot and just those little sessions add up at the end and they kind of tip the scales on the revenue, which is helpful.

Mike Warkentin (22:09):
When you say it like that, it doesn’t sound like a sales pitch to me at all. It sounds like a no-brainer.

Michaela Munsterman (22:14):
And that’s exactly—because what we try to do in our whole basis of our industry and what I tell my other trainers to think of is we are pro—if you see a need, provide an opportunity, and you’re providing a solution, and it’s up to them if that’s going to fit for them or not, but at least that’s part of our job is to provide solutions. And so, if you go with it like that, it’s not sales, you are helping.

Mike Warkentin (22:38):

Chris Cooper wrote the book, “Help First.” I’ll put a link in the show notes to it if you want to read more about that concept. But Michaela is living it, and it’s not selling if you’re just saying, “I can help you accomplish this goal faster with less pain; do you want help?” “Yes.” The answer is yes. And “Here’s the price.” We’re done. You know, it’s an easy conversation, and that’s a really key part of the Two-Brain protocol is that Help First concept. We’re not selling and forcing things, we’re actually just helping people out. I love that you’re kind of doing it like that. That’s such an interesting way, like I love the Troubleshoot in your business versus like in a functional fitness gym, CrossFit, whatever, just saying, “Hey, I noticed that you’re really bad at double-unders, but it’s a simple fix if we spend 45 minutes together twice a week. Would you want to do that for a week?” “Yeah.” Done. $80 or whatever it is. You know, it’s such a—I love that you’re doing that. Anything else that clients can purchase there? Is it add-on or anything like that?

Michaela Munsterman (23:26):
I think that’s kind of our main services that we provide. Yes.

Mike Warkentin (23:30):
So, let me ask you this. So, you’ve created this really like, I just—I haven’t spoken to someone that’s doing what you’re doing, so I really appreciate your insight into this. It’s fascinating. What would you say to someone out there—because there are people out there saying, “I could never charge $400 or $500 a month per client.” What would you tell that person as some small steps—thinking as a six-year gym owner now—to get them from say, under $100 to even $150 or $205, which is a great first goal?

Michaela Munsterman (23:55):
Yeah, that’s a great question. I think a couple of things that you can go at it is one: As you’re looking to maybe raise prices or go to that level, really write down your value of what you do and kind of reframe what if you don’t charge your value. Especially if you’ve worked really hard with your schooling, your education, your experience, and you’re not charging for that value. You know, are you really doing yourself a service? And so, seeing what you can write down that you do provide and then reframing how you’re—when you potentially think of a client like, “Oh, they’re not going to like me,” or “Oh, it’s going to be too much,” reframe to saying, if the client’s like, “Oh yes, this is great. I’m so happy for you.” And being able to practice living that in that space. And it’s surprising how you can kind of try those jeans on, and they start to feel pretty good, and then your confidence builds up with that. But ultimately, you know, we’re doing the—if you don’t charge really what you’re worth and your value, especially if you’ve worked so hard for it as an industry as a whole, we’re doing a little bit of a disservice. And so being able to remember that.

Mike Warkentin (25:05):
That’s a great piece of advice. And I’ll get on the soapbox here a little bit and just say that if you don’t charge what you’re worth, your family is ultimately going to suffer. Your staff members are probably ultimately going to suffer, and eventually clients are probably going to suffer because you’re not going to be able to stay in business. That’s just a fact. And like I went down that path where I thought I had to charge these low rates, and I thought that was my value. Eventually the gym is in financial trouble. And what happens next? Well, I think about leaving the industry, and all my clients lose, and my staff members lose. That’s not a good thing for anyone. So, gym owners, a great first target for ARM: $205. And it doesn’t have to be—you know, it can be a combination of things. A lot of gym owners will say a group membership or whatever it is, plus a personal training session a month, maybe that’s $225 in total.

Mike Warkentin (25:45):
That’s a great first target. And remember, not everyone pays $205. Some pay more, some pay less, and that meets in the middle. Think about that. If your ARM is low, you might need to raise it through a rate increase. We have a template for that. You can sell additional things. There’s T-shirts, supplements; Chris Cooper has hundreds of ideas that you can use to tack on revenue. The Intramural Open is another good one that’s coming up right now shortly. You can get that guide in the Gym Owners United forum if you want. But the idea, I love it—what you said, just write it down: how valuable you are. And like for you, did you have a moment? Like did you always know how valuable you were, or did you have a moment where you had to do that exercise for yourself?

Michaela Munsterman (26:19):
Oh, I speak from experience. Yeah, I speak from experience, you know. I absolutely lived in that space. But with Two-Brain and having a coach with me, being able to help kind of guide that process and also be in my corner through the process, and it has—it’s served the business tenfold where we’re able to grow. I am not stressed out to the max. And when you are able to operate in that space, your service overall is better; your culture is better. You know, it doesn’t—coming from an environment that’s less than doesn’t produce the fruit that most likely you’re looking for.

Mike Warkentin (26:54):
When you did that exercise, did you look at what you wrote down and say, “Whoa, this is pretty incredible what I’m doing. This rate is more than fair”?

Michaela Munsterman (27:02):
Yeah. Yeah, I did.

Mike Warkentin (27:02):
Yeah. That’s pretty neat. Have you ever had to raise your rates?

Michaela Munsterman (27:04):
Yes.

Mike Warkentin (27:05):
How’d that go?

Michaela Munsterman (27:06):
For the most part, it was fine. It was totally fine. There was hardly any pushback. And a lot of times, because of the value and people want us to stay around, they’re happy; they’re happy for us. And there might be a little grunge, you know, but you know, people, they’ve got to do that. You know, they’ve got to, they’ve got to push back a little bit. They’ve got to give you a hard time. But at the end of the day, they’re going to stay because they recognize the value and how hard you work because this is no small feat to do by any means. And so, I think they’re really happy to support you. And there’s also present—if there is pushback, present different options. There’s always another path that people can go on. And coming from that place as well is knowing like, if this isn’t going to work for somebody anymore, cool; I’ve got this option that probably will.

Mike Warkentin (27:57):
Yeah. And the reason I ask is because when I was looking at my average revenue per member, our rates were too low. And I knew that in 2013, and I should have raised them then, but I didn’t until like, I think it was 2018 or 19, and the business was in trouble at that point. So, if you’re listening, gym owners, and you’re thinking about raising rates, I would recommend that you talk to a mentor. There is an exact template that helps you do this and minimizes all the risk and helps you create a healthy, sustainable business that keeps serving your clients. I want to thank you for all this. This is a really cool conversation about something that I didn’t know much about, and this is such an interesting—I love that you are doing it without advertising, purely through affinity marketing and creating a local referral network. I think if Chris Cooper were here, he would probably give you a big high five.

Michaela Munsterman (28:37):
Well, yeah, and if anybody’s interested in medical exercise, it’s a great program. A lot of times we’re working with individuals that have a joint restriction. So, I have no discount code or anything like that. I just believe in the entity. I believe in the career opportunities. And so Medical Exercise Training Institute is where to go. It’s an awesome certification.

Mike Warkentin (29:00):
If more people can get moving and, you know, pain free and staying active and rehabilitating, what a great service that is. Thank you so much for your time and sharing your story. I appreciate it.

Michaela Munsterman (29:09):
Oh, absolutely. Thanks for having me.

Mike Warkentin (29:11):
You’re very welcome. That was Michaela Munsterman, and this is “Run a Profitable Gym.” Thanks for watching and listening. Please subscribe wherever you are for more episodes. And now, here’s Chris Cooper with a final message.

Chris Cooper (29:21):
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 The No-Ads Cinnamon-Roll Secret to Huge Average Revenue Per Member appeared first on Two-Brain Business.

Big-Time Booster: On-Ramps Drive Revenue, Retention

If you want to generate more revenue in your gym without raising rates, use an on-ramp process to welcome new clients.

Years ago, the goal was just to cram lots of people into group classes as fast as possible. This plan was borrowed from the martial-arts community, and it did not work well in functional fitness gyms.

Now we know that on-ramps are a key feature of great gyms. On-ramps set clients up for long-term success and boost revenue in gyms.

If you don’t have an on-ramp, it’s time to create one. And if you have one, it’s time to audit and improve.

Retention and Revenue

Here’s what the data says about on-ramps:

If a client comes in through a free trial and joins group classes—not a sure thing by any means—they’re likely to stick around for just under eight months.If a client is brought in through a consultative process and properly on-ramped, they’re likely to stick around for 14 months.If a client makes it to the 14-month mark, they’re twice as likely to stay for two years.If we can keep a client for two years, we can change their lives because at the two-year mark they generally don’t quit exercise.

On-ramps solve retention problems and drive up the lifetime value of your members.

Data also shows on-ramps increase the monthly value of clients because they’re exposed to real coaching and will be more inclined to choose “platinum service packages.”

Think about it: If every client does one-on-one sessions in your gym on entry, they’ll know that direct attention from a great coach produces amazing results.

So they might select PT instead of group classes or “hybrid memberships” with PT in addition to group classes. Some will gravitate toward semi-private training where they get lots of personal attention. Or group-class clients might book the occasional one-on-one skill session to work on something specific.

In every case, more revenue is funneled into the business.

Furthermore, one-on-one on-ramps allow the coach to form a close relationship with the client, make a better prescription in the future (“add one PT session per week”), and tailor coaching to the client—even in a group setting.

How Long and How Much?

How long should your on-ramp be? If you’re in Western Europe, the data shows that you’re likely to serve early adopters. These people should have an on-ramp, but it should probably be shorter—maybe five to 10 sessions. If you’re in North America or one of the larger cities in Australia where CrossFit and functional training have been around for a while, you can and should have a longer on-ramp.

What should you teach? That’s up to you. Teach clients everything they need to know to get results fast and find success in your gym (we give Two-Brain clients an on-ramp template they can use as a starting point).

What should you charge? Base the price on your PT rate. For example, if your PT rate is $80 and your on-ramp is six sessions, charge $480. You can also add in nutrition coaching, accountability and other elements to boost value—charge more for add-on services.

How to Add an On-Ramp

You don’t have to overcomplicate things. Here are the four steps to getting an on-ramp in place:

1. Review “The Prescriptive Model.”

2. Write down everything a client will need to succeed at your gym. Break it up into about five to 10 one-hour sessions.

3. Add an appropriately priced on-ramp to your billing software.

4. Use the Prescriptive Model in your next free consultations and lay out the best path for the client, which now includes your on-ramp.

If you start using a multi-session on-ramp based on PT rates, every single client who comes into your gym will boost your average revenue per member significantly.

Even better, those clients will be primed to purchase high-value services, and they’ll be much more likely to stay longer.

If you already use an on-ramp, review it today. Is it priced appropriately? Is it long enough? Is the curriculum an A+? Are you using the on-ramp as part of the Prescriptive Model and generating more PT sales?

If you don’t use an on-ramp, now is the time to create one.

The post Big-Time Booster: On-Ramps Drive Revenue, Retention appeared first on Two-Brain Business.

Transaction Fees: Eat Them or Pass Them On to Clients?

Transaction processing fees: They add up, and they can eat into your profit margin.

If you want to keep more money in your business, you have some options. I’ll lay them out here.

First, some data.

Real Numbers From Real Gyms

Wodify has a reporting tool that can help a gym owner determine whether to absorb or pass on processing fees.

In our private Facebook group for clients, we asked gym owners to run that report or post their numbers. This is real data from Two-Brain gyms:

One gym owner showed us a screenshot from the Wodify report: The potential savings are $12,320 a year.On $328,000 of processing, one owner absorbs $9,300—but she adjusts her membership prices accordingly so she doesn’t give away her profit.One gym owner who adds a 2 percent credit-card surcharge said the fee generates more than $10,000 every year.Another gym owner passes on $900 in processing fees per quarter.One gym owner runs about $15,000 in transactions per month and saves $400 each month.

These numbers are significant, so it’s worth considering your options.

1. Price Fees Into Membership

This plan works only if you set your prices properly—and many gym owners do not.

For example, if you just copy the monthly rate from the gym down the street, you’ll likely copy the errors of that gym owner, who probably didn’t consider value and profit margins.

Your rate should reflect your true value and ensure you generate a profit. We want to protect a 33 percent profit margin in gyms, and you must balance profit against fixed costs and the costs of delivering the service.

Many gym owners don’t do this. Or they consider staffing and fixed costs such as rent but leave processing fees out of the equation.

If you choose to include processing fees in your membership price, ensure your prices cover all expenses and generate the profit you need. And if processing rates change, make sure you’re prepared to adjust your rates, too (a mentor can help).

 
2.  Switch to ACH

Automated clearing house (ACH) transfers cost less than credit-card transactions.

From Hubspot.com: “ACH payments typically charge a fee between 0.5 to 1.5 percent, far lower than credit cards’ fee that ranges from 1.5 to 3.5 percent.” 

The downside of ACH transfers? They generally take longer. Most online resources recommend you budget one to three business days for the processing of ACH transfers. And if a payment is declined, you might not find out right away.

Delays aren’t a problem if you watch your cash flow and plan for the lag. Delays are a huge problem if you’re relying on a Jan. 31 payment so you can make Feb. 1 rent.  

If you go this route, make sure you have the cash reserves you need to cover payroll and other expenses.

3. Pass Processing Fees on to Clients

You can choose to add a transaction fee to payments to cover your costs—or offer a reduced rate for those paying with other methods.

If you’re using Wodify, the company is working on an option to have transaction costs show up on a member’s statement as a “service fee,” much as Ticketmaster does. The benefit of this presentation is that the client understands this fee was not added by the gym and isn’t related to the services being provided. The service price remains the same. 

Wodify CEO Brendan Rice told me he’s seen very little pushback from clients in gyms that have used a simple setting adjustment to add a transaction fee in the Wodify system.

“We have, I think, around a thousand gyms using it now. And the feedback has been overwhelmingly positive—and overwhelmingly positive in terms of client feedback and reception when gyms do roll it out,” he said. (You can listen the whole interview here.)

Before you choose this path, quickly research your local laws.

For example, as of December 2023, Connecticut, Maine and Massachusetts did not allow surcharging. There’s a limit to what you can add as a surcharge, and you will find regional variations. For example, Colorado limits surcharging to 2 percent.

Other countries and jurisdictions will have their own policies. Make sure you stay onside of all laws.

Resource: “Credit Card Surcharge Laws by State Explained”

Wodify has templates to help you roll out a change like this. The language is along these lines: “This change will benefit you because we’re going to reinvest in the gym. This is why we’re doing it. On your next invoice, there will be a service fee for credit transactions.”

Here’a s bonus chunk of text you might adjust for your business: “We are making changes to our billing process to provide new options: Starting [DATE], memberships paid by credit card will include a [X] percent processing fee. To minimize the fee, you can switch to ACH billing.”

Pick Your Path

The worst plan of all is this: Just running your transactions without realizing you’re giving up a percentage to a processor.

At the very least, review your processing fees today so you have a better idea of how much money you’re actually getting when you run that $250 transaction. And stay on top of this because a small change in processing fees can take a chunk out of your cash flow.

A great gym owner will research all the options and pick one of the paths laid out above.

If you ensure your business handles processing fees properly, you can significantly improve the number on your bottom line without raising rates or acquiring new clients.

The post Transaction Fees: Eat Them or Pass Them On to Clients? appeared first on Two-Brain Business.

Easy Ways to Increase Revenue Without Raising Rates

Chris Cooper (00:02):
This is “Run a Profitable Gym.” I’m Chris Cooper, and with me today is Brendan Rice, the CEO of Wodify. He’s got two new ways that you can make more money without raising your rates. Brendan, welcome, and thank you in advance.

Brendan Rice (00:14):
Thanks, Chris. Thanks for having me. Excited to be on.

Chris Cooper (00:17):
I’m super stoked about this, and there’s two really, really awesome ways that you’re going to share that Wodify can help its users make more money without raising their rates. The first one was a huge epiphany, and it’s just you can pass on processing fees to each client. So, I’ll let you describe how that works. Let’s start there.

Brendan Rice (00:37):
Yeah, absolutely. So, processing fees, I’ll kind of give some backstory of how we arrived at the decision to build this feature. But to go all the way back, about six years ago, we rebuilt and rethought the way we handle payment processing in Wodify. So, we chose a new partner, Stripe: They’re now kind of the global leader in payment processing. And we took a more difficult approach to fully integrated payment processing. And one of the reasons we did that is we realized most payment processing solutions were disjointed. They lived outside of your system, and that created challenges with reporting transparency and reconciling your accounting and all sorts of other problems. So, we said, “There’s a better way to do that.” The other thing we noticed is most gym owners had almost zero visibility into their processing fees because as an expense, it doesn’t hit your accounting system the same way things like the cost of your software does or the cost of your rent.

Brendan Rice (01:43):
It’s kind of this hidden expense. And a lot of companies that manage payment processing have variable rates or fees or add-ons. So, we realized there were kind of two problems there, and we solved it by building a fully integrated payment process: We call it Wodify payments. It lets you see line by line breakdowns of your fees. We integrate with QuickBooks, we do all these other things, and we have flat transparent rates. So that was about six years ago. And more recently, we built the feature you’re talking about, which is we identified that’s still one of the largest hidden costs for gyms, and it’s a variable cost for gyms because their revenue fluctuates and so therefore the processing piece fluctuates. So again, this is all because we built fully integrated payment processing; we realized we could create a simple feature. It’s one toggle, and it enables gyms to, instead of absorbing all those fees themselves, pass it along on each transaction as a separate line item to their members. So, depending on the gym, on average, the customers we’ve seen uptick it are saving between 400ish on the low end to 1,000 or 1,500 and even more than that in some cases on the higher end.

Chris Cooper (02:53):
Yeah, that’s really outstanding. And you think about like what a gym would have to do then to make that a thousand bucks otherwise, because it’s not just a thousand dollars in top-line revenue; that money actually drops all the way to the profit line. So, if you’re not familiar with processing fees—correct me if I’m wrong here, Brendan—but when you charge somebody 100 bucks at your gym, the payment processor, Stripe or Visa or whoever, is going to take about 4% usually right off the top. And so, you’re going to get $96 that actually hits your bank account. The problem is that your accounting software, even if it’s QuickBooks, might record the full 100 as income. And sometimes I’ve heard of people even paying corporate income taxes on the full 100 without remembering to subtract their processing fees. Do I have that right?

Brendan Rice (03:39):
Yeah, exactly. That’s kind of what I was alluding to by calling it a hidden cost. And the other thing, just from a business strategy standpoint, is a lot of times you might not factor that into your own business model or revenue projections. You think, “Okay, I charge $100 for membership. I have 100 members; I’m going to have $10,000 a month in revenue.” And the processing fees really do make a difference. You pointed it out well there, in terms of the profit standpoint; if a gym adds $1,000 in profit using your State of the Industry data, that’s about a 25% increase in profit. So, it’s a huge swing in your business without—kind of a theme of this podcast—without adding new members, increasing your actual kind of stated monthly rates. The fact that it shows up as a separate line item with our system, you can actually—I think by default we call it an administrative fee—but you can actually change that term to whatever you want. And we’ve had it live for about six months. We have, I think, around a thousand gyms using it now. And the feedback has been overwhelmingly positive and overwhelmingly positive in terms of client feedback and reception when gyms do roll it out.

Chris Cooper (04:46):
You guys helped with that step a lot too. So, it’s not just $1,000 to the gym’s revenue; it’s $1,000 straight to the owner, which is really tough to do even by adding more members. I mean, your costs to do that go up: You’ve got cost to acquire the member, cost to serve the member. This drops straight to the bottom line. The only hiccup that I would’ve foreseen would’ve been: How do I present this to my members? But you guys even helped with that. Tell me exactly like what that message needs to be.

Brendan Rice (05:13):
Yeah, for sure. So, we have some really useful email templates and some copy and paste language that folks can use that you can find in our help documentation on this. So how we developed that: We’ve never—we’ve built this feature, but we’ve never run a gym, turned on this feature and had to explain it to clients. So, when we launched it, we partnered with a handful of owners that actually helped us develop the feature and think through all the small elements of it, like manually overriding it on certain invoices. There’s a lot of little things that go into it and setting thresholds. If you don’t want to pass on fees on like a $1 bottle of water, you can do that. So, we had this group of maybe like 50 customers that helped us develop the feature.

Brendan Rice (05:58):
Then when we rolled it out, we just talked to them—had phone calls and figured out what worked, and what we found was bits and pieces from all those different customers of “I said this,” or “I talked to a member this way about it.” And we just consolidated all that, refined it a bit and put it in a few examples in email templates. So, I’d encourage folks using Wodify who want to try it, or if you come over to Wodify to literally copy and paste and then maybe make some tweaks to match your language. But at a high level, I mean a lot of this communication, you just want to make it simple and direct. Just tell the customer what you’re doing, what it means for them, and then why you’re doing it and how it’s going to benefit them. So, the actual vernacular is in those documents, but that’s kind of how it boils down—is just to explain like, “This is going to help you because we’re going to be able to reinvest in the gym. Here’s why we’re doing it, and here’s what it means. In your next invoice, you’ll see a new line item for administrative fee, service fee.”

Chris Cooper (06:54):
And as you say, the pushback has been very minimal, right? I think we’re all used to paying service fees now.

Brendan Rice (06:59):
Yeah, I mean, the pushback has been shockingly minimal. I expected a little bit more, and I also expected fewer gyms to adopt it, to be honest. We had a goal of about 10%, I think, of our customers, and we’re reaching 20% now. And I think a lot of it is just because, like you said, it’s not an unusual thing for consumers, and like a lot of things—you know, maybe like price increases or other changes to your business or new equipment or changing a class schedule—it seems really scary at first, and you do it; there’s less pushback than you expected, and three months later you can’t imagine— Like, that’s the other thing, once you do this, going back is like almost—imagine just taking $1,000 of profit off your books every month. So, yeah, it’s been really exciting to watch it kind of roll out and develop.

Chris Cooper (07:49):
That’s great. Most of the time a rate increase does work, but it’s scary. And so, a lot of the time as a business coach, I’m telling somebody to do that after they’ve done these other things. And this is a really easy way to increase revenue, increase profit without doing the scary thing. Alright, Brendan, so I love this; I love the genius of it, and thank you for thinking the step beyond of not just “Here’s what to do,” but also “Here’s how to do it the best possible way.” Man, that is great. What got me super-duper extra fired up was a phone call from you about two months ago when you said, “We’ve taken this a step further now.” Do you want to tell us what the new initiative is all about?

Brendan Rice (08:25):
Yeah, absolutely. So, we’ve taken this a step further because of all the things I just talked about. We were pleasantly surprised and very encouraged by the model and the economics of this feature that we built. And so, we thought, “How can we take it a step further?” The other background to this new plan and offering we have is that we’ve built a lot of software. Wodify started in 2012 as digital performance tracking. Today, we call ourselves a customer retention platform. We have a massive product that—one way to think about it is over the years, we’ve invested probably well over $50 million in building Wodify, just in terms of engineering and product development. And you can access that software for a couple hundred bucks a month. So, it’s kind of cool, right? Like it’s—we’ve taken all this money from gym owners who have trusted us as their software for 10 plus years, we’ve reinvested, and we’ve built this massive piece of software.

Brendan Rice (09:24):
So one of my goals is to get our software in as many gym owners’ hands as possible because we built this awesome tool that can help you build a better business. One of the challenges we have is—this is kind of a give and take one—is not every gym, and especially newer gyms, can afford enterprise-style software, even if that’s $300, $400, $500 a month. But we want to be able to offer that. And the other thing is we want to keep building new features and being able to put it in as many customers’ hands as possible. So, I’ll kind of cut to the chase with those two dynamics at play, which is that we’ve added—we’ve built on the passing on processing fees feature to deliver a new way to access Wodify, which is completely free to gym owners in terms of per month subscription costs, 0% processing fees, and then we add a service fee to each transaction that’s a bit higher than just the processing fee.

Brendan Rice (10:22):
But what that does, it allows us to cover the cost of everything: the software, the processing fee, and it lets us give those customers all of our features and functionality—no usage limits. So, it’s super exciting because it lets us unlock that full set of features we’ve built rather than saying, you know, “We have a really low cost plan, but you only get like a really basic thing.” We want to be able to give that gym that’s just starting the most advanced and robust software we can because we know that’s going to help them build a better business. So, we’re calling it “Free Unlimited”—super excited about it. It’s publicly available now. We’ve been in beta for about a month. We already have—I think they—we only have about 15 or 20 customers on it. Same thing as passing on processing fees. Feedback is awesome so far, and we’re kind of opening the floodgates now. We’re really excited.

Chris Cooper (11:15):
Yeah, I think it’s an amazing idea, and it’s great. So, if you’re a gym owner, think about this. Your landlord comes in your door, and he is like, “I’m not going to charge you rent anymore. What I am going to do is I’m going to have a turnstile outside the door, and everybody’s going to put $2 in when they come into your gym, and that’s your rent. You don’t have to worry about it anymore.” Like, think about how much relief that is for you. Even though Wodify is like an investment, not an expense—it makes you money—I think it’s even better if it doesn’t cost you anything, and it still makes you money because now you’re just passing those costs on. And again, you know, we’re all used to paying processing fees on everything now. So, if you’re passing on the payment processing fees and the cost of your gym, like the software that runs your gym, your tracking and all the other things that Wodify does, that’s massive. You still get the upside, and your clients don’t even really notice.

Brendan Rice (12:09):
Yeah, exactly. And I think the other things that helped us make this decision that hopefully will give people confidence is, again, we looked at other industries and we learned—so it’s not common in the gym or fitness industry, but we looked at things like ticketing and other industries where this is very common. And we brought that here in a way that is hopefully not as frustrating and annoying. Like you go buy a concert ticket, you’re paying like 40, 60—sometimes higher—percent transaction fees. So, we’re not going to get there. We’re not going to completely piss off all your clients. It’s closer to a processing fee. But the other thing that we realized is if Wodify was simply a tool to process credit card transactions, this would probably be a harder thing to roll out because your clients would probably be a bit more frustrated with it.

Brendan Rice (12:57):
But with this feature—again, we bootstrap it as service fee or administrative fee. You can change it to whatever you want. You can call it a community fee, a technology fee. And everyone who goes to a Wodify gym knows that that gym uses Wodify, and they get significant value from it. They’re using our app for communication and engagement and tracking their workouts, and there’s all these other features that go into it. So even if a client is upset about it or asks you questions about it, and you can explain, “Hey, one of the things that Wodify enables us to do is monetize in this way, and it lets us have this technology,” it really helps sell the full picture. And clients understand that they’re going to a premium business that uses premium software. And this is kind of all part of that.

Chris Cooper (13:39):
I’m going to call mine, “Blame Brendan.”

Brendan Rice (13:42):
That’s just that line, that line on every invoice.

Chris Cooper (13:46):
Here’s something that happened to me that I did not perceive. Don’t go on to Reddit and check this story. You’ll rot your brain. But like, there are threads on Reddit called, “I hate Chris Cooper,” and it’s all people whose gym raised their rates, and none of them blame the gym owner. They all blame me. And hey, I am willing to take that bullet for gym owners any day of the week. I know you would be too. So, the bottom line here is, like, a lot of us know that we have to raise our rates, but we don’t want to feel guilty about it. And more than anything, we don’t want our clients to say, “Oh, I’m mad at you.” If you can blame Wodify or blame Two-Brain or whatever, great. It’s easy, right? “Ah, hey, it’s Brendan Rice’s fault. It’s not my fault.”

Brendan Rice (14:29):
Absolutely. Throw on that Brendan, put my cell phone number in the invoice line, have them call me. But it really does—and I mean, I’ve reflected on it too because we did—we thought a lot about rolling this feature out, and I feel so good about it because I could look any gym owner or anyone that goes to one of these gyms in the eye and explain exactly why we’re doing this, who it benefits, how it benefits them, and I really think that both owners and their clients alike will hopefully—I mean there’s always exception—will hopefully completely understand, “Oh, I pay an extra six bucks a month to this entrepreneur who poured their life and their investment in starting this gym, so I can come become healthier and have a really great workout, and this is going to give them a 25% raise and help them stay in business.”

Brendan Rice (15:14):
And there’s so many parts of it that are just like—I feel way more wholesome about than Ticketmaster throwing 60% on their fees for a Taylor Swift concert. So, I hope again—like we don’t think we know all of the implications of this. We’re staying really close to these early customers as they roll it out. But again, so far, the feedback has been awesome. And I really love—I mean, I was actually just on a phone call before this with our sales manager. We just signed up a brand-new gym; they’re opening February 1st, and they were just so pumped about—like a lot of the times we demo our software, and people get excited, but then they’re like, “Oh, I don’t know if I can afford it, or maybe I can only afford that.” And just to be able to be like, “Hey, let’s grow together. Like this is awesome. You can get started tomorrow.” We still give— This free unlimited plan—again, you get access to everything. You still get our dedicated onboarding team; you get our customer success team. You get everything to make you successful. There’s no kind of restrictions on it because you’re not paying the standard model.

Chris Cooper (16:16):
Yeah. In fact, with all that onboarding stuff, I know that you’re actually out some money upfront. You’re investing in the gym remotely. But what a gift. I mean, you know, entrepreneurship, we say, is the path to freedom, and owning a gym is one of the easiest businesses that you can start. Thank goodness you guys just made it a lot easier. So, thank you. You know, I think if you’ve got $15,000, you can still start a gym. Here’s one less expense that’s going to start making you money right away. And it’s an amazing gift to gym owners, Brendan. It really is.

Brendan Rice (16:49):
Awesome. I really appreciate you helping us kind of talk about it and explain more of the “why” behind it and how we conceptualized it. And I am really excited to see how it takes off this year.

Chris Cooper (16:59):
Cool, man. Is there a specific place people should go to get information on these two things—the transaction pass-on and also the software pass-on?

Brendan Rice (17:07):
Yeah, so if you’re not using Wodify, you can just go to Wodify.com, and we have a link there to talk to our team, so we can give you more information. We also have a landing page that explains the free unlimited model in more detail, if you just click on pricing from there. And then if you’re using Wodify, please reach out if you’re interested in passing on the processing piece or switching to the free unlimited model. You can email support@wodify.com, and we’ll get you either switched onto the plan, or we can send you the documents we talked about: the email templates. Even with the Free Unlimited, we created—kind of got inspiration from you—we created a video with one of our team members kind of almost role playing exactly how to tell a client. So, thank you for that tip. We got that—I think it’s going out at the end of this week as well. So, we’ve got a lot of resources for both existing Wodify customers—if you’re not using Wodify and you’re interested in any of this, please reach out to us, and we’ll tell you more about it.

Chris Cooper (18:04):
Great. Thanks, Brendan.

The post Easy Ways to Increase Revenue Without Raising Rates appeared first on Two-Brain Business.