Chris Cooper's Blog, page 62

Side-Hustle Gyms: Three Essential Lessons (and Resources)

I’ve owned a gym since 2011, but I’ve had a “day job” the entire time.

Here’s what I’ve learned—the hard way—about gyms as side hustles.

1. You’ll Run out of Energy if You Go Big

Back in 2011, when we opened our gym, I was full of energy. I considered the business a backup plan to my day job, but it was also a passion project.

In a huge city, only a few functional fitness gyms existed, and I was certain more were needed. So we leased a 6,000-square-foot facility and launched with a full schedule of classes (and about 15 members).

I remember getting up in the dark and rushing to the gym to coach a very small morning class, then running to work all day at the other job, then running back to the gym to coach from 5 to 9 p.m.

The days were very long, but I survived on excitement and passion. Then I ran out of both.

By 2017, I wanted out. The gym was losing money, I was exhausted, and I felt like I was always being pulled in two directions.

Lesson: No matter how excited you are about opening a gym, you cannot work 12-hour days forever. Trust me. I thought I could do it, and I lasted about six years. Then I hit a wall.

Avoid my mistake: Follow Chris Cooper’s plan to start your side hustle small so you don’t burn out.

2. You Must Develop Staff to Grow

Like so many others, I had the “only I can do it properly” mentality.

So I did everything—including dozens of jobs I was bad at, didn’t have time for or simply hated.

My lowest point: Getting up at 5 a.m. to mount a vacuum on the roof to suck wasps out of a nest hidden behind a crack in the cinder blocks.

I always said “I want to own a gym, not run it,” but I never took any steps to delegate tasks so I could be the CEO of a thriving business that helped people.

I had created an unprofitable business and filled far too many positions personally. The business ate up all my spare time, sometimes with jobs I despised, and didn’t pay me a dime.

Eventually, I started to get very cranky, and I had only myself to blame.

Lesson: If you ever want to grow your side hustle from a very small coaching practice to a larger enterprise, you must learn to delegate.

Avoid my mistake: Follow Chris Cooper’s plan to offload tasks.

3. You’re Going to Have to Make a Choice

At some point, you’ll be faced with a decision: Go all in on the gym; maintain your side hustle at a manageable size and keep your day job (this is A-OK); or sell or shut down the enterprise and commit to the day job.

When I hit my limit, I chose the last option: I contacted Two-Brain to help me get the gym ready to sell so I could focus on a day job I enjoyed. Instead of selling, I ended up stepping out of the business, and my wife took over.

The business has evolved into something she loves: a PT, small-group and nutrition-coaching service that can be run with an owner-operator serving a limited number of high-value clients. I went all in on a day job I love, and I’m happy just to focus on that.

You’re going to have to choose a path with your side hustle, too. There’s nothing wrong with coaching a few people on the side forever if that makes you happy and generates some income. You can also decide “this isn’t for me” and walk away before you’re broke and angry.

But if you determine that your side hustle should be your main gig, make the transition properly.

Lesson: Don’t let passion or exhaustion make your decisions for you. Review hard data, choose your path carefully and move along it with purpose.

Avoid my mistake: Follow Chris Cooper’s plan to make your side hustle your sole focus.

Help Is Available

Whatever path you choose, know this: You don’t have to guess.

Fitness entrepreneurship used to be a black hole of experiments, desperate moves and bad advice. Now, Two-Brain has models that help passionate people create strong, stable fitness businesses.

The three links above will give you a basic plan that will save you a lot of misery as you figure out which direction you want to go.

And if you decide that it’s time to go all in and turn a small side hustle into a thriving fitness business, Two-Brain can tell you exactly how to do that: Book a call here.

The post Side-Hustle Gyms: Three Essential Lessons (and Resources) appeared first on Two-Brain Business.

Gym Owner Goes From $0 a Month to Top 10 Earner

Mike Warkentin (00:00):
This is “Run a Profitable Gym.” Today, I’m going to tell you two things. I’m gonna tell you first of all what the top gym owners in the world earn each month. These are actual behind-the-curtain stats, and you’re gonna get them in about 30 seconds. Number two, we’re gonna talk to a gym owner who is on that list, and he’s gonna share some of his secrets with you. Before we go further, hit subscribe. Elite gym owners come on this show every month, and they share their secrets. I don’t want you to miss any of that. Now as promised, verified stats from Two-Brain Business: the top 10 gym owners earned between $17,000 and $44,000 U.S. In June 2023. These are rolling three-month averages. So this is sustainable income. I’ll let you do the math of “times 12” and see what that equals for the year. But these are great, great numbers. Now that you know the actual numbers, my guest is gonna give you some tips on how you can reach them, too. His name is Justin Dickson. He owns Salt Lake City CrossFit, and another gym, but we’re gonna focus on that one for today. Justin, welcome.

Justin Dickson (00:44):
Thank you. Thank you for having me.

Mike Warkentin (00:46):
I am pumped up to share some secrets with the community, so here we go. Right into it. How has your net owner benefit changed over time? Like where did this thing start and how has it improved?

Justin Dickson (00:55):
That’s kind of a long story. I think some gym owners will probably find this encouraging: our gym was not always successful. There was a point in time where I actually didn’t know if we were gonna make it. There was quite a long history of ups and downs because back when we started there was no direct path to understanding how to run a gym. It was just trial and error. And I made every single error you could possibly make. I learned things the hard way. I think I went an entire quarter without being able to pay myself for while. So we got through that and now things are much better.

Mike Warkentin (01:36):
What’s the one thing—I’m gonna dig in, but this is the quick question—what’s the one thing that changed that for you?

Justin Dickson (01:42):
So if I had to boil it down to one thing, I mean, there’s not really one thing that you can say that does it because there’s a whole series of things that has to happen. And then, in hindsight, there’s probably three stages that I went through, where I had to go through those stages to really get to where I am. But the short term, if I had to boil everything down to one thing, is higher-value offers. You know, if you wanna make more money, you have to get your clients to pay you more money. So you have to be more valuable. So that’s the kind of the stage that we got to when we really started making some money.

Mike Warkentin (02:21):
Okay, we’re gonna dig into the background, and we’ll get into the weeds there. And I wanna pull out some details for listeners. But first, gimme the rundown of your gym situation. I know we have two. Gimme the rundown of Salt Lake City and tell me what you do there, what you sell, how much space you’ve got. Gimme the basic 411.

Justin Dickson (02:35):
Yeah, so our downtown location, we have about 10,000 square feet, approximately 300 members. We’ve got a staff of 11 people, probably four full-time staff. And we do group classes, personal training, nutrition, health coaching, accountability, you name it. Basically we try to solve problems for people—whatever it takes to get there, that’s what we offer.

Mike Warkentin (03:07):
“Health Coaching” sounds like a high-value service to me. Am I right?

Justin Dickson (03:10):
Yeah. Yeah. I think that a lot of times as gym owners, we get pegged into this, you know, we have to offer exercise and nutrition, and there’s really this whole line of healthy habits that need to take place in order to really maximize those.

Mike Warkentin (03:26):
Okay, I like it. So you got a fairly big facility there, 10,000 square feet. You got a big staff, you obviously know how to run and manage that. Gym owners, if you are looking at staff management, we have a show in our archives about managing big teams and growing your team. So check that out. And net owner benefit, this is an important one. It’s not just your earnings from the gym, like in terms of your wages. It could be like dividends, it could be salary, it could be other benefits that you get, like some people use their car or their cell phone or things like that. So net owner benefit is an all-encompassing number that basically gives out your exact total benefit for being the owner of the gym. And it should be large because you are taking a risk and you are taking responsibility and you have staff—all these other things. So, Justin, tell me a little bit about your net owner benefit strategy. Is it salary, dividends, benefits, like share as much or as little as you like here, but I’d just be curious into what goes into your number.

Justin Dickson (04:15):
Yeah, it’s all of those. And I think there’s, I mean, the simple answer for that is that there’s really three things—write off as much as legally possible. With that, you want to keep your expenses as low as you can and provide as much value to your clients as possible and charge a reasonable rate for that. That’s kind of the three things there. But I have a W2 income that I have, I write off everything that I can legally write off and I take dividends. I have a home office. I work mostly from home because, as you know, if you’re in the gym, you’re not really able to focus and try to get a lot done there because there’s so many awesome people at the gym and you’re always talking to ’em. So I work mainly from home. And so I have a home office. I write that off, and everything is included in there.

Mike Warkentin (05:11):
That’s perfect. And so, listeners, if that is like crazy science to you, talk to an accountant. An accountant will tell you exactly what Justin said: what you can legally do. And that’s the whole thing is you wanna give the government exactly what they’re owed, not a penny more, and write off things as you can, derive as much benefit from the business as you legally can. So ask your accountant about that. If you need some help, I’ll throw out the name John Briggs. He wrote “Profit First for Microgyms,” and he will help you do exactly that. So that’s a reference that I’ll give you guys. So circling back, we’re gonna dive into what you’re talking about there. You said there was kind of three stages that you went through in driving this number up. So kind of walk me through that. What happened to you? You said you went from not paying yourself for three months to now you’re in the top 10 of gym owners—in elite company. Talk to me about this one.

Justin Dickson (05:57):
Yeah, so I’d say there’s probably three stages to this. And it’s not like I came out the gate with these things in mind. I stumbled through this whole process. And so it’s only in hindsight that I realized that these things are like stages that I went through. And the first one’s really personal development. Because we’re talking about you have to make more money here, so you have to be able to charge more money. That means you have to be worth more money. You have to know how to manage staff, and you have to know how to communicate with people. There’s a whole list of things that you have to do. So that first stage is really personal development, and it’s all about trying to level up. If you can’t write programs for people, if you can’t help people beyond just telling them what to do, you have to get them to wanna do it.

Justin Dickson (06:46):
And you have to get ’em to do it to be able to create value. I think, early in my years as a coach I would just tell people like, “Oh, this is what you need to do.” And then they wouldn’t do it. And I’d be like, “Oh, that’s not my fault.” But as we become better at coaching, you realize that there’s this whole level of skills that you have to develop to really make yourself more valuable. And so that first stage is really about personal development, trying to level up. And all of these stages overlap. It’s just that more of your focus in the beginning has to be on you leveling up because you’re never done. You’re never done. You’ve always gotta consistently try to learn more about everything that you can. So that stage is never done.

Justin Dickson (07:28):
And the next stage is systems. You have to systemize everything. Everything in your gym, you have to systemize it. And if you don’t systemize it, you really can’t move forward because you’re always taking a step back. And after systems is really educating your staff because you are one person. If you wanna make more money, you have to be able to get your staff to level up as well. Because otherwise you’re gonna spend all your time servicing everything. And there’s only so much you can do in a day, so you’re really gonna be capped at a certain point. So in hindsight, it’s those three things. It’s personal development, systems and then educating your staff.

Mike Warkentin (08:07):
Listeners, I’ll pull this out for you very quickly. Personal development, you have to work on yourself. You can’t just coach the class. If you wanna run a business, you’ve gotta figure out how to be a CEO. And that requires leveling up in all sorts of things. Communication, interpersonal relationships, management, all the other stuff. The thing that helps you do that—and again, the Two-Brain gong goes off—systems. No one who comes on the show, on our leaderboard, does not have systems. If you ever wanna be a successful gym owner, the tough love is you must have systems. That’s the only answer. That’s the only way you can delegate. Once you have systems, then you get into management and making sure your staff sees the vision and mission for your business, buy in, is invested, having great careers.

Mike Warkentin (08:47):
Again, Two-Brain has a whole system of career road mapping to help you do this, but you become a manager of people, a CEO, because the owner-operator model, which I did, did and I failed at, that owner-operator model has limits. You can only do so much. If you wanna grow into a larger situation, you’re going to need staff. And that means you need to be manager of people, not a teacher, just of squats. Right? There’s nothing wrong with being an owner-operator, you can do that, but there are limits to it. So let’s dig in here. I wanna ask you specifically about your high-value offer. So you’re talking about that there’s some psychological stuff that goes on there, right? “Can I really charge this much for this thing?” Talk to me about the mentality of like creating a high-value offer and then justifying it to yourself and developing the confidence to sell it.

Justin Dickson (09:27):
Sure. Well, really what I looked at is I would have people come into the gym and they would have problems that needed to be solved. And the first thing I did is I looked at kind of what we were offering, and in the very beginning it was group classes and foundations of some sort. And what I was realizing is that that doesn’t solve people’s problems. They have this whole list of things that they’re gonna need help with. You know, some people, all they need is a place to work out. Some people, they just need community. Other people, they want programming. Other people, they need everything. They need personal training, they need nutrition, they need habits accountability. They need all of these things. And so what I did is basically listened to everybody that had come in and what they needed.

Justin Dickson (10:14):
And then I put this entire thing together that’s like “this will solve almost everybody’s problems.” I mean, it’s a slower, longer process. It’s a longer commitment. But this is kind of what’s going to solve everybody’s problem. And then we can get creative in between there. And so then I started asking myself questions like “what if we are charging $10,000? What kind of service could I offer?” And so then I put all that together and then I said, “Okay, well most people probably aren’t gonna pay $10,000, so what can I offer for $3,000?” And then basically I boiled that down to what we could put in there. And then I put together a series of offers in between there. And most of those meet people’s needs. We’ve found that there’s very few that don’t meet people’s needs that are in there.

Justin Dickson (11:08):
But, like I said, it’s a higher-value offer, but you’re solving a lot of problems. And people, when they come in, you explain how that’s gonna solve their problems. And they buy into that because these people are carrying so much pain with them. They’ve tried a lot of different things. They’ve, you know, failed it so many different times. And then you paint the picture of what you’re willing to offer. And then they look at that and they say, “Yeah, you know what? That’s exactly what I’ve been looking for.” And so that’s kind of how we arrived at the offers.

Mike Warkentin (11:42):
So you solve two problems at once. You created an offer that solves the problems of your clients, and it solves the problems of “where does my revenue come from?” Right? So what you did was exactly what gym owners should do—and I did not do this—is figure out “how do I solve my client’s problems? What’s the best thing I can give them?” Put it together and then sell that. I figured “what’s the lowest price I can charge to get people in for these group classes?” That was the wrong way to do it. And I was where you were, where I wasn’t paying myself at all. So you figured out a different way to do it. Do you know offhand the average intake cost of a client? Like what does it cost to sign up at your gym if you’re comfortable sharing it?

Justin Dickson (12:18):
So our group classes are $160 a month.

Mike Warkentin (12:22):
And is there, in the package that you just described, something that goes up to $3,000? Is that like a longer intake package or is that an actual coaching package?

Justin Dickson (12:30):
Yeah. So that’s a 12-month package. It includes nutrition accountability, exercise, group classes, personal training. It’s the whole thing.

Mike Warkentin (12:40):
Okay. So it’s a big deal. And that’s the $3,000 platinum package.

Justin Dickson (12:44):
Yeah, that’s exactly what it’s called.

Mike Warkentin (12:46):
Okay. There you go. I got it. And it’s a 12 month commitment.

Justin Dickson (12:50):
No, I’m sorry. It’s 12 weeks.

Mike Warkentin (12:52):
12 weeks. Okay. So 12 weeks, $3,000. And below that you have two tiers. So you’ve got this bracketed offer where I’m guessing it’s like gold, silver, platinum, or something like that?

Justin Dickson (13:01):
Yeah. Well, we actually have two tiers for our 12-week offer. We have an eight-week offer and we have a four-week. That’s kind of our fast track.

Mike Warkentin (13:12):
Okay. Now, not totally the topic of the show, but I’m gonna ask it anyways because I got an itch for it. Your retention: I bet it’s pretty good. Am I right?

Justin Dickson (13:19):
Yeah. I think we’re close to 20 months.

Mike Warkentin (13:24):
20 months. Yeah. So the industry average is like eight. So 20 is spectacular. That’s bordering on two years. Listeners, things to think about: you get people in with a high-value service, and you’re screening out people who can’t afford your service. There’s nothing wrong with these people, but if they’re just not the right fit for your gym, that’s okay. You get these great people in and then you keep them for a long time and at high value, which is the secret to revenue for your business. But, even better than that, keeping people for two years, you are actually changing their lives. We all know you can’t change someone’s life through fitness in three months, but you can get close to doing that in two years, and that’s an average. So Justin’s got clients that have been there for way longer. That is life-changing health and fitness, and it’s a sustainable income for him. It is a sustainable income for his staff, and its careers, and the whole thing works. So that’s a really cool thing. So 12 months, or, sorry, 12 weeks, pardon me, $3,000, that’s the high end. And you cover basically every problem that I could have as someone coming into your gym. It’s all taken care of in that package.

Justin Dickson (14:21):
Yeah. Yeah. And I think that that’s like you said, if you get people to stay for three months, they’re generally gonna stay for two years. But more importantly than that is that if you’re solving the problems, they’re gonna stay with you for life. You know? I think typically what happens in the gym, in the industry—I think we’re getting out of this thanks to Two-Brain putting all this information out here—but what generally happened in the early days is, you know, everyone was just like, “Let’s get you into this CrossFit gym, and let’s get you doing this.” And then they would charge, you know, basically look at the gym next door and charge $5 less than that and be like “I’m just gonna jam everybody in this gym.” But there was a lot of people that, like I said, that’s perfect for, and then there’s a lot of people that’s not gonna work for, and so you would lose all those people that that’s not gonna work for. And so when you offer these things, you’re basically helping the people that just need the group classes, and you’re also helping all these people that need these higher-value offers. Basically you’re just solving more problems.

Mike Warkentin (15:33):
That is the basis of a business. You’re solving health problems. And I love that, not just fitness problems, but health problems, because there’s more value in health, and that’s actually what we deliver at a gym level. This is some nuts and bolts numbers and business stuff. But I wanna ask you about the emotional thing. You didn’t pay yourself for three months. What did that feel like when you started to pay yourself? And like, did you just do like a trickle, like “I get to give myself 500 a month,” or what happened? How did it feel to get past that three-month period with no income?

Justin Dickson (16:00):
Well, first of all, I think that every gym owner that’s been in that situation knows the stress. There’s a lot of stress. I mean, you have a family, you have bills to pay. There’s a lot of things going on, and there’s enormous amount of stress with that. And for me it was just like, I just blocked it all out and focused on—I think now it’s probably easier because there’s a lot of people that are really successful, so you can see that it’s gonna be done. But back when we started in 2008, there wasn’t that track history, and all the gyms seemed to be kind of going through that down series at the same time. You know, CrossFit kind of took off a little bit, and everyone opened all these gyms, and then it just went “boom.”

Justin Dickson (16:45):
And during that period of time, that was really stressful. And so I think I just blocked it all out and focused on trying to provide as much service to the clients as possible. And eventually, you know, we got through that, and there’s just such a stress relief from that. And then at a certain point, you just started to make money, and your whole life changes at that point because it’s not just like “how do I eat? How do I pay my bills?” It becomes, you know, you’re focusing on “how can I provide more value? How can I help more people?” But when you can’t help yourself, it’s really hard to help other people. So yeah, there’s that point where it switches, and that’s where all the magic happens.

Mike Warkentin (17:33):
Chris Cooper’s literally writing a book about this called “Millionaire Gym Owner.” It’s coming out toward the end of 2023. The idea is if you become a millionaire gym owner, you are going to have some extra to help other people. And because you are a service-based business and a great person who wants to help other people become healthy and fit, you’re not just gonna probably blow that extra money on yachts. You’re probably going to open another gym and help more people, or you’re gonna give back to your community, or you’re gonna do all these other things that help improve the world. You’re gonna create careers at the bare minimum as you expand and grow for your staff. So there’s a lot of really good things. Money is not a forbidden topic anymore in the gym industry. It once kind of was, where it’s like “we’re doing it for the clients.” Yes.

Mike Warkentin (18:11):
But you also have to support your family. You also have to support your staff, and eventually, if you do well enough, you can support the community around you. So watch out for that book, “Millionaire Gym Owner.” It’s coming toward the end of the year. I love the story. I love going from that three months without being paid to something where you can actually kind of start looking around yourself and saying like, “Okay, I can do this. I can start helping other people,” you know? Where did Two-Brain fit into this? Talk to me about the mentorship angle. Talk to me about where Two-Brain helped you out here.

Justin Dickson (18:41):
Yeah. Well, first of all, I wish I would’ve found it sooner because I went through all the stuff on my own, just learned every lesson the hard way. And what Two-Brain does now is I look at, like, I go and look through everything that they had ’cause I think I joined last year, like probably last year. And it systemized everything. Every lesson that I learned the hard way is all right there. And so basically what it does is it shortens the learning curve for anybody. And if you are making less than a hundred thousand dollars a year, you know, a lot of people say, “Well, I can’t afford the price of mentorship.” And let’s say that you’re making 30 grand a year. Well, you should be making a hundred at least. And so you’re losing out on $70,000 a year.

Justin Dickson (19:35):
So that’s the price of—I think mentorship is gonna pay for itself there. But it shortens the learning curve there because what took me 16 years you could probably learn in three. And so it’s definitely, definitely worth that. Where I’m at with it now is that, you know, I went through and I looked at everything, and I’ve gotten to this point where now I’m in the Tinker Group, and I’m around a lot of other gym owners that are in my similar situation. And so it’s learning kind of what’s next. It’s learning what everybody else is doing, people that are already successful. And so for me, I wanted to be around that. I wanted to be around people that are in my stage right now. Andin looking back, I didn’t have people to talk to. I didn’t have people to learn from. There wasn’t any of that available back then. And so, you know, I wanna be a part of that now. And so that’s really where, where Two-Brain fits in.

Mike Warkentin (20:43):
So you’re an old-school gym owner. We’re kind of the same. I think I opened, I started the boot-camp class in 2009, so you’re a little ahead of me with the gym there, but we’ve been along for a long time. As a long-term gym owner, did you notice it was kind of a warp-speed button when you signed up with Two-Brain last year, even as a guy who’s been in the industry for over a decade?

Justin Dickson (21:01):
Well I guess the best way to answer that is some of my metrics went downward because I took a step back and I looked at like what I needed to fix. And because Two-Brain comes out with some really good metrics of where things should be, and so in looking at that, I looked and said, “Well, we’re a little bit below there and we’re way above here.” And so then I can look at the things that I need to solve. And what that did was actually create a better foundation for me to build from. And so like, it wasn’t a direct—it was more like it allowed me to kind of take off from there.

Mike Warkentin (21:44):
Pruning the tree might be an apt analogy, right? Where you gotta take a few things off. For me, it was like a whole bunch of discounts and some people left over that, but then it was long-term thing. Is that accurate analogy for you?

Justin Dickson (21:54):
Yeah, for sure.

Mike Warkentin (21:56):
Tinker—listeners, that is our upper-level group for gym owners. Once you have a hundred thousand dollars income, more or less, and you’ve got your stuff together, you’ve got a foundation under you, things are running really well, and you do not have to directly oversee every aspect of the gym, you can ascend to the Tinker level, which is “what else can I do?” It’s often open another gym. Some people open a distillery, some people get into Airbnbs, real estate, crypto, all these other things. It is basically a CEO-level group where people like Justin and other people at his level get together, talk about what they can do next. There’s a lot of talk about service, a lot of talk about family, a lot of talk about important things that affect the communities around them. What happened to you when you joined that group? What happened your mindset and your net owner benefit when you got into that space with those kind of cool people?

Justin Dickson (22:44):
Yeah. Well I probably joined it a little bit late. Cause at that point I had already built a house. I already started an Airbnb. I started crypto.

Mike Warkentin (22:52):
That’s good.

Justin Dickson (22:54):
Again, I was learning some hard lessons. And so it was good when I got into that group because now I hear people, they’re like, “Hey, I wanna do this, I wanna do that.” And I’m like, “Man, I learned that the hard way again.” But now before I make any more moves, I’ve got this group of people around me that I can learn from. And so I’ve definitely slowed down from all these things that I though I should be doing and listen to the group, and I’m able to talk to more people that are involved in it before I make decisions where I’m learning the hard way again.

Mike Warkentin (23:28):
So you limit the mistakes. And I’ve been in some of those meetings doing some media for these guys and the Tinker group is really cool, where you can bounce ideas around, and someone exactly like you will say, “Hey, you’re thinking about investing in this. Maybe consider this.” And you’re like, “Whoa, I hadn’t thought of that. That could have you just saved me $20,000.” You know? So that kind of stuff is really, really cool to see in that group. Sometimes it’s as much as saying “don’t do this” as it is “yeah, you should look at this investment.” And there’s a lot of focus in that group, and there’s a lot of really, really cool ideas. So upper-level gym owners, if you wanna think of what’s next, look at that Tinker group, and if you’re not at that level yet, you can get there. And then exciting stuff happens. I wanna ask you for some advice. So gym owners, they’re not earning much from their gym yet, they’re back where you were, maybe they haven’t paid themselves in a couple of months, or maybe they’re paying themselves a small salary. What’s your top piece of advice for increasing net owner benefit? What is step one for someone who is struggling right now?

Justin Dickson (24:18):
Yeah, I think that that has to be self-evaluation. There’s always a bottleneck to the business, and you’ll have to figure out where that is. And generally in the beginning, it’s you. Most gym owners don’t want to hear that, but it’s you. There’s some skill that you haven’t acquired. There’s something that you’re not doing that’s not contributing to that. And so my advice for early gym owners that aren’t making money is you gotta figure out how to level up, you know? Because at some point you’re gonna acquire so many skills that it’s impossible for you not to succeed. And so if you’re not doing well in the beginning, you gotta look at yourself and figure out what that is.

Mike Warkentin (25:02):
Listeners, I’m gonna give you a plan. If you are struggling, book a call with Two-Brain Business. They get on a call, they’re gonna evaluate your business, and they’re gonna look at different metrics, and they’re gonna help you say “where is the greatest area of opportunity?” and tell you what you need to do. So if you can’t figure that out, book that call. Talk to our people. They’ll give you some ideas, and if you’re the right fit, we’ll work with you one on one and tell you step by step “here’s what you need to do to grow as an entrepreneur, not a fitness coach.” We’re not gonna tell you how to teach a squat better. You could already do that, but you might be in your own way where you maybe don’t know how to market your gym.

Mike Warkentin (25:38):
Maybe you don’t know how to create an offer, maybe you don’t know how to retain staff, retain clients. Whatever it is, we can help you solve that problem. So personal development is a huge thing. And like Justin said, investing in that can be a huge payoff because if you’re not making a hundred thousand dollars a year yet, you can—and you should because you deserve it. So now for gym owners who are doing well, they’re doing okay, maybe they’re making a good living or they’re making close to a hundred thousand dollars or something like that, what’s a step for these guys to drive that number up to maybe get into the top 10 leaderboard where you’re at?

Justin Dickson (26:08):
Sure. So obviously if they’re making money, they’re doing something right. So personal development is probably at a good level. Their systems have to be down for them to make money. And the next stage is really developing staff. Right now, that’s kind of the stage that we’re in is a hundred percent of my time is on developing staff. You’re only one person, and unless you wanna do everything, you’ve gotta get your staff to be able to do it. And so basically the stage that I’m in right now is trying to teach my staff everything that I know. And the cool part right now is I’m challenging myself to see how fast I can get somebody in and get them to level all the way up. That’s my focus right now. And so I think that’s the last stage of that.

Mike Warkentin (27:03):
So, gym owners, I’m gonna give you two resources in the show notes. One of ’em I mentioned earlier, the first is going to be the value-ladder exercise. If you don’t know how to get yourself out of roles and start getting staff people in place to take off the hats that you wear and put them on themselves, the value-ladder exercise is a step-by-step way to do it. It’s very simple. I’m not gonna go into the details here, but it’s basically offloading tasks, and there is an order and a process to doing it. I’ll put that in the show notes for you. The second one I’m gonna give you a resource. It is Chris Williams. He’s in the Tinker Group with Justin. Chris runs a gym in California, I think two, pardon me, two gyms in California, and he manages a staff of 20 people. His focus as a CEO is staff development and ascension.

Mike Warkentin (27:39):
And he won an award at our summit for doing this. I have an interview with him where he can talk exactly about this concept that Justin said, because if you wanna grow more income, you’re probably going to have to do it with help from your staff. And if you can’t retain staff and develop them, it’s not gonna happen. So Justin, I wanna thank you so much for being here. I love these shows when I get to talk to gym owners on the leaderboard. I really appreciate you sharing it because back in the day, this kinda stuff didn’t happen. We just made the mistakes ourselves and bashed our heads against the wall. So thanks for sharing.

Justin Dickson (28:07):
Yeah, thank you for having me.

Mike Warkentin (28:08):
It’s my pleasure. That was Justin Dickson. This is “Run a Profitable Gym.” This is where the world’s best gym owners tell you exactly what they’re doing so you can have the same success. You do not have to make all the mistakes that I made and that Justin made. You can just get the answers and then take action. Please subscribe for more episodes on your way out. And if you’re on YouTube, please hit the like button or leave a comment. I would love to hear from you. Now, here’s Two-Brain founder Chris Cooper.

Chris Cooper (28:31):
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 Gym Owner Goes From $0 a Month to Top 10 Earner appeared first on Two-Brain Business.

How to Bridge the Gap From Day Job to Fitness Entrepreneur

You’re tired of your day job and excited by the prospect of owning a gym.

But you’re caught: The leap to entrepreneurship is very risky. Not everyone makes it to the other side. And if you have a family, that risk is dramatically higher because you don’t want to impoverish them if you don’t land where you want.

I’m sure your social feed is full of messages like “just go for it!” and “leap and build your wings on the way down!”

Imagine you’re standing at the edge of a chasm. On the far side is the successful life you want. But the gap between your side and the far side is pretty big.

To actually “make the leap,” don’t jump at all. Build a bridge.

Here are the steps:

1. Look Down

If you take a minute to observe the chasm, you’ll see the failed gym owners who didn’t make it. These people were just as passionate as you are, just as hardworking and just as dedicated to the craft of coaching.

Sadly—and it is sad—they didn’t make it. They’re out of the industry because they didn’t understand that owning a successful gym means learning how to run a business.

It doesn’t matter what method you like—there are thousands of failed CrossFit boxes, 9Round franchises, boot camps, martial-arts studios, yoga studios and personal-training practices down there.

I very nearly found myself among the wreckage. Now, keeping others from hitting the bottom gets me up every morning.

I’m not telling you to look down to discourage you. I just want you to remain optimistic while understanding the real risk you’re taking.

2. Measure the Gap

Let’s start with your current income.

Based on your current household expenses, how much of your current income do you actually need? Could you live on 70 percent of your current salary for six months? What about 50 percent?

You might want to talk this number over with your spouse.

The number you land on is your first earnings target for your coaching career: the absolute bare minimum.

For example, if your current job pays you $100,000 per year, but you could survive (barely) on $50,000, then $50,000 is your first target as an entrepreneur.

3. Narrow the Gap

Start coaching people on the side, at night and on weekends. Before you have revenue, time is your only point of leverage. Build toward your target number in your spare time.

Let’s face it: The fitness industry isn’t 9-5 anyway. You’re going to have to work 5-9 a.m. and 5-9 p.m.—for a few years anyway. You might as well start now and use the first year to build a client base without taking any risks.

Focus on building toward your first target number. For me, this was $45,000 per year with about 40 clients. When I opened my gym, I knew I’d start with at least some income.

4. Build a Bridge

Don’t try to make a huge leap. Plan a series of calculated jumps.

Follow my instructions from the first post in this series. If things work out, then commit to a space—but minimize your long-term commitments. Do not sign a long-term lease.

And don’t hire anyone on a salary or take out a five-year equipment loan.

Investment: Under $10,000 (plus space)

Your total investment at this stage should be less than the price of a used car, your clients should be doing small-group or semi-private training, and you should have a maximum of two part-time staff members to manage.

You should be able to make $50,000 per year with 50-70 clients. That should max out your space without totally crushing your weekends and evenings.

This was how I spent my first year in my own studio. If I’d skipped this step, I probably wouldn’t have survived.

5. Scale Down Your Day Job

When you’re almost to your minimum income goal, you can scale down “at the office.” Try to go part time or move to asynchronous work (you complete projects but don’t clock in).

Do your day job between clients if you can. This will mean you’re not really giving 100 percent to that job, but let’s face it: If you’re dreaming about entrepreneurship, you’re probably not giving 100 percent to the day job anyway.

6. Take the Final Leap

Your gym will grow faster if you’re working in it all the time. That’s a fact. Even hiring a manager won’t produce the results you will produce as owner.

At startup, though, you can’t always control the speed of growth. We can get you set up for success and profitability in our StartUp Program—the new record is 115 clients paid up front on opening day—but if you can buffer your risk for a while first, you’ll be safer long term.

I’ll be honest: I didn’t follow my own advice here. I made the decision to open a gym, and, two weeks later, I was there full time. I was the sole earner in my family with a new baby and a new mortgage. But I had some advantages that others don’t. I had:

A. A client base ready to come with me (I predicted 30, but it wound up being closer to 50).

B. A solid acquisition plan for more clients (I was already getting clients through a local blog).

C. Partners who would lend me the money ($16,000—even though I wasted most of it on stuff I didn’t need).

D. The ability to work 14-hour days.

E. A very supportive partner who was also all in on the entrepreneurial opportunity (and understood the risk).

F. The possibility of starvation as a very real and imminent threat. I was terrified to fail, and that helped me make some hard decisions that others avoid.

Get in the Right Way to Stay There

I started writing this series because a good friend asked how she could do some personal training in the evenings. She’s good at her current job and wants to help local people get fit. Her story is the same as thousands of others: A great person is looking to help other people live healthier, happier lives.

But, as with many of us, she didn’t see the real cost: time away from her kids, commitment to another schedule, conversations about money. I asked, “What would make this worthwhile for you instead of just buying yourself a second, lower-paying job?”

Her choice was to take three to five clients to try it.

Don’t get me wrong: I want to 10X the number of gyms, coaches and trainers in the world. But I want them to get into fitness and stay in fitness instead of pulling the ripcord a year into their $5 boot-camp side hustle.

Starting with your eyes open wide will help you successfully leap over that chasm instead of plummeting to the bottom like so many others do.

The post How to Bridge the Gap From Day Job to Fitness Entrepreneur appeared first on Two-Brain Business.

How to Run a Gym Remotely (and Catastrophe-Free)

I’ve seen many owners try to completely abdicate responsibility for running their gyms—and then watch the businesses die from a distance.

Here’s how to run a gym from afar the right way.

1. Delegate Before You Abdicate

If you want to step back, you must hire people to fill the roles you, the owner, currently hold. Test them in the roles for at least three months, evaluate their progress with key performance indicators (KPIs) and mentor them to improve.

Here are the key roles you need to fill to manage the gym:

Marketer/lead nurturer—someone has to generate new leads and convert those leads into appointments.Salesperson—someone has to convert those appointments into clients.Client success manager (CSM)—someone has to keep those clients around.Admin—someone has to bill those clients.Property manager—someone has to make sure the lightbulbs work.Programming—someone has to find or write the workouts.Cleaner—someone has to keep the place clean.Media creator/social-media person—someone has to keep your place visible.Head coach—someone has to make sure the coaches are coaching well.

If you wear any of these hats, you have to hire someone else to wear them for you.

Here’s what you can expect to pay for each role, at minimum (obviously rates change in different areas):

Marketer/lead nurturer—$25 an hour (about one hour a day, asynchronous work, aka “done on demand”).Salesperson—$25 per No Sweat Intro (as required. I don’t pay for NSIs, but most do. In my gym, the person doing the NSI gets the client as their reward.).CSM—$25 an hour (about one hour a day, following your Client Journey).Admin—$25 an hour (three hours a week).Property manager—$330 a month or about 10 percent of your rent.Programmer—$40 an hour (one hour a week to tailor or write general group programming. You can buy it for $49 a month. Don’t overpay for constantly varied, high-intensity programming.).Cleaner—$20 an hour (five nights per week).Head coach—$35 per goal review or staff evaluation.Media creator—$50 per delivered piece (blog, YouTube video or podcast)Social media—$25 per hour (one hour a day, or $400 a month).

Some of these numbers are driven by local market rates (like cleaner); some are driven by broad market rates (like social media and programming—you can outsource both pretty cheaply).

Total staff expense for all of these? About $2,600 a month in my gym, with about 20 hours a week of total work.

You’ll notice I didn’t include coaches here—that’s because these are the roles required to manage the gym. If you’re still coaching and want to run your business remotely, you’ll obviously have to pay someone else to coach, too.

These roles don’t all have to be filled by different people. Some can wear multiple hats. For example, the head coach can do goal reviews, evaluations, NSIs and more.

2. Consider Combining Roles for a “General Manager”

A very broad skill set is required to manage everything listed above, but it is possible for one person to do all of it in about 20 hours a week.

You can find value if one person is responsible for overseeing everything. The downside is that this person becomes a linchpin who might also come with deficiencies in some areas: If they’re only good at some parts of the job, or if they leave, you’ll be in a real bind.

If you have a person who can do all of these things at the required level, multiply the total expenses (around $2,600 a month in the example) by 1.15. That extra 15 percent is for bearing the burden of responsibility. The job becomes overseeing everything and fixing problems without you.

A good GM will see that lightbulbs need changing and get the lightbulbs changed.

A weak GM will see that lightbulbs need changing and text you about it.

It’s worth an extra 15 percent to have a good GM.

Remember: If you don’t have a general manager, you’re the general manager. The same goes for any of the roles above.

3. Mentor Your General Manager

Just as you, the owner, have a mentor, your GM needs a mentor. Unless you hire a mentor for the GM, you’re the mentor.

One reason a GM might not take the initiative to change the lightbulb: They don’t know what to do. Another reason: They don’t know who to call. Still another: They don’t have access to money.

As you mentor them, you’ll solve these problems for yourself, too.

“Oh, you don’t have money? I’ll buy some $100 gift cards for Home Depot, and you can use them to buy cleaning supplies every month.”

“Oh, you don’t know who can change a ballast? Here’s my contact.”

“Oh, you aren’t aware that’s your job? No problem, let’s write an SOP so you can own the process.”

Delegate and Support

Running a gym remotely means you’re hands off, but it doesn’t mean you’re disconnected.

Remember this: Any role that’s left unfilled will fall on you, whether it’s cleaner or mentor. And if you don’t support the person in each role properly, the role will fall back in your lap.

If you want to ensure you delegate jobs properly, check out my series on gym automation.

The post How to Run a Gym Remotely (and Catastrophe-Free) appeared first on Two-Brain Business.

The Side-Hustle Gym: Tips for Crushing It Part Time

Chris Cooper (00:00):
How do you run a gym and still keep your day job? Or, if you want to, how do you bridge the gap between that day job and enter a career that you’re passionate about and just own your gym? I’m Chris Cooper, and this is “Run a Profitable Gym.” And today I’m gonna tell you exactly how to do that. So whether you hate your day job and you just wanna help people get fit or you want to keep your day job and you also wanna run a gym, I understand. Despite owning Two-Brain Business, which is a huge company that I absolutely love, I still own my gym, Catalyst. So here’s how you can open a gym without quitting your day job. For now, we’re gonna start there. If you do wanna quit your day job, stay tuned because I’m gonna cover that later on in this episode.

Chris Cooper (00:45):
First, if I was starting a gym from scratch but keeping my day job today, I would open my gym and charge more than the other gyms in town. Now I doubt you expected that advice, especially right out of the gate, but hear me out. You don’t need the money. You’ve got a salary somewhere else, right? That means that time is your most valuable resource, and you might be able to or willing to even give up your mornings, your evenings, your weekends to help other people. And you know, thank you for doing that. Thank you for your service. But are you willing to do that for free, and are you willing to do it forever? Many working professionals send me messages like this: “Hey, Coop, I wanna open up this gym. There’s nothing that’s affordable in my area.” Or “I wanna make CrossFit available to people who really can’t afford to pay the price anywhere else. I don’t need the money. I’ve already got another job.” But if you’re already making a good income, your free time is very precious. What would I have to pay you to miss your kid’s baseball game tonight? How about that trip to the beach this weekend? What’s that worth to you? That’s the real value of your time. If you wanna figure out what your time is worth, start by calculating your effective hourly rate. What do you earn per hour at your day job? And then price your time higher in your new gym than that figure to start. Then we’re gonna add the expenses on top. Now you can download our “Gym Owner Business Plan” by clicking the link below. You can put some numbers in and you can figure out what you actually need to make to make this worth your while—because you can’t just volunteer for nothing for forever.

Chris Cooper (02:23):
Okay? Now if you’re doing this as a sideline, you’re passionate about it, it’s an act of service, go small on space and member count. Trying to build a 300-member gym while you’re working full time as a school teacher is gonna be almost impossible. You’ll definitely have months where you’re taking part of your salary and putting it into the gym because a big gym will require a big rent payment and a high member count will require a lot of staff and staff management and staff pay. Starting smaller is a much better idea. So try starting as a personal trainer, and you can download a personal trainer business plan by clicking the link below this, too. Start with like five clients and minimal expenses. So your your time plus maybe $500 as an investment to test it out. Use a park or a church or your school or your garage.

Chris Cooper (03:13):
Anything that you can rent short term for little money. Now I know this doesn’t have the sexy cachet of opening a giant CrossFit box, but that’s a full-time job. So think of this step as the bullet before the cannonball, where you try out your side career before you buy yourself another full-time job for very little money. So your investment at this stage is really just time. Your financial investment in this trial is under 500 bucks for some basic equipment, and this should create around $15,000 in side-hustle income for you per year. One quick note here: If you run this test group out of your home or garage, make sure the people in the group know that it’s a short-term trial so they don’t come banging on your garage door after you’re ready to stop. I know a few teachers who do up to $40,000 per year out of their garage in the summer.

Chris Cooper (04:04):
They do it by charging more, not by taking more clients. They can charge more because they’re a niche expert, like hockey or figure skating or something like that. They’ve been doing it for literally decades, with no plans to quit their main career teaching job. So after you’ve run this little test, and, say, after three months you’re happy, you’re profitable and you’ve got five clients, then you can consider making the leap to full-time gym ownership. I’m gonna tell you how to do that next. But following these small steps, the bullets before the cannonballs, will set you up for a less painful and risky transition later. Now, there’s an obvious alternative to doing this test, and that’s just get a coaching job at a gym. Keep your main job and take a few classes or personal-training clients on somebody else’s platform. Coaching can be your vocation without it being your primary job.

Chris Cooper (04:54):
You can love the gym without owning it. Many gym owners tell me “I would rather have just stayed a coach, but I needed more money, and I thought owning the gym was the only way to do it.” Hell, I was that coach. But if you dream of having your own space and you wanna be a real entrepreneur or you wanna serve people full time, then you need to learn the skill of patience anyway. And that means taking the path most likely to set you up for full-time success even if it delays your gratification for a couple of months. So now I’m gonna give you the exact steps to transition from a full-time career into owning a gym and becoming a full-time gym owner, right? So maybe this is for you because you’re tired of your day job or you’re just excited by the prospect of owning your gym, but you’re caught.

Chris Cooper (05:39):
For most of us, the leap to entrepreneurship is a massive risk, and not everybody makes it. And if you have a family, then that risk is dramatically higher because you don’t want to impoverish them either, right? I’m sure your social feed is full of positive messages, like “just go for it” and “leap and build your wings on the way down.” But I wanna tell you how to actually do it instead of just giving you an empty affirmation. Imagine you’re standing on the edge of a chasm, okay. Now here’s you, and on the far side of the chasm is the successful life that you want, but the gap here between your side and the far side is pretty big, and it could be catastrophic. If you don’t make the leap successfully, you could go broke. So here’s how we bridge it. So first look down, see all the failed gyms that didn’t make it.

Chris Cooper (06:28):
These people whose gyms failed and went bankrupt, they were just as passionate as you are. They were just as hardworking, they were just as dedicated to the craft of coaching. They had all the high-level certifications, but sadly, and it is sad, they didn’t make it. They’re out of the industry because they didn’t understand that owning a successful gym means learning how to run a business. It doesn’t matter what method you like. There are thousands of failed CrossFit gyms, 9round franchises, boot camps, martial-arts studios, F45s, spin studios, yoga instructors and personal trainers down there at the bottom of the chasm, right? And that was very, very nearly me. Keeping others from hitting the bottom is still what gets me up in the morning because I was there. I’m not saying this to discourage you. I just want you to remain optimistic while also understanding the real risk of failure here.

Chris Cooper (07:22):
Alright, so let’s get back to the gap. First, I want you to measure the gap. So let’s start with your current income. Based on your current household expenses, how much of your current income do you actually need? Could you live on 70% of your current salary for six months? What about 50% of your current salary for six months? You might want to talk this over with your spouse. And so whatever number we come up with here, if it’s 50% of your current salary, that’s your first earnings target for your coaching career. That’s the absolute bare minimum that you need to make right outta the gate. So, for example, if your current job pays you a hundred thousand dollars per year, but you know that you could barely survive on $50,000, then $50,000 is your first target. The next step here is to narrow the gap.

Chris Cooper (08:08):
So start coaching people on the side at night, on weekends, before you have revenue from your own business. Time is your only point of leverage, so build toward that target number in your spare time, and that’s how you narrow the gap. Let’s face it: The fitness industry is not nine-to-five anyway. You’re gonna have to work 5 a.m. To 9 a.m. And 5 to 9 p.m. For the first few years anyway. So you might as well start now and use the first year to build a client base without taking the risk of opening your own thing. So you’re gonna build toward that first target number. Now for me that was $45,000 per year, with about 40 clients, and then when I opened my gym, I knew that I would start with at least some income. My family wouldn’t starve. The next step here is we wanna build a bridge from where you are to the dream life across the gap.

Chris Cooper (08:58):
So don’t try to make the whole leap at once. So start by following my instructions to narrow the gap. And if those work out, and you get a couple of clients, and you’re training them in your garage or you start training them outta the church basement or whatever, and it’s going well after three months and you’re making money, then you can commit to a space. But don’t make any long-term commitments. That means don’t hire anybody on a salary. Don’t sign a long-term lease, and don’t take out a five-year equipment loan. Your investment should be about $10,000 in equipment plus space. And there’s a reason I picked $10,000. Your total investment at this stage should be less than the price of a used car. That means that your client should be doing small-group or semi-private training and you should have a maximum of two part-time staff to manage.

Chris Cooper (09:45):
It’s just too much to manage more people. You should be able to make about $50,000 per year with 50 to 70 clients, and that should max out your space and not totally crush every evening and weekend for you. This was how I spent my first year in my own studio, and if I had skipped this step and jumped straight to something that could hold 200 people and required three staff to run, I probably wouldn’t have survived. I would’ve gone bankrupt. So when you’re almost to your minimum salary goal, then you can scale down your day job. You can try to go part time or you can move to asynchronous work—like you’re completing projects instead of clocking in—and then you can do your day job in between clients if possible. This won’t mean that you’re really giving a hundred percent to your real job, but like let’s face it: If you’re dreaming about entrepreneurship, you’re probably not giving a hundred percent to your day job anyway.

Chris Cooper (10:37):
So now that we’ve narrowed that gap as much as we can, and we’ve built as much of a bridge with our current job as possible. Now it’s time to leap. And of course your gym will grow faster if you’re working in it all the time. That’s a fact. Even hiring a manager will not produce the same results that you would as the owner At startup, though, you can’t always control the speed of growth. We can get you set up for success and profitability in our StartUp program. The current record is 115 clients paid in full up front on opening day—insane!—but that’s not everybody. And if you can buffer your risk for a while first, then you will be safe for long term. I’ll be honest: I did not follow my own advice here. I made the decision to open a gym and, bam, two weeks later I was there full-time.

Chris Cooper (11:25):
I was the sole earner in my family. I had a new baby and a new mortgage, but I had some advantages that others don’t, right? I had a client base that was ready to come with me. I predicted I would have 30 clients on opening day, but it was closer to 50. I had a solid acquisition plan for more clients. I already knew how to get clients by blogging, and it was proven to work—it was working for me. I had partners who would lend me the money, $16,000 and I wasted most of that on stuff that I didn’t need and don’t even use anymore. I also had the ability to work a 14-hour day. I just have that work capacity from being raised a farmer. I have a very supportive partner who was also all in on the entrepreneurial opportunity, and she also understood the risks.

Chris Cooper (12:11):
And I also had the very real threat of starvation. It was imminent; it was real. I was terrified to fail, and that helped me make some hard decisions that others avoid. Like when it was time to raise rates, my choices were do not eat this week or raise rates. That puts things in perspective. So I started writing this series and recording it for you because a good friend asked me how she could do some personal training in the evenings. She’s a really good teacher, and she wants to help some local people get fit, and her story is the same as thousands of others—and maybe yours. It’s a great person looking to help other people live healthier, happier lives. But, like many of us, she didn’t see the real cost—time away from her kids, commitment to another schedule, conversations with people about money. And so I asked “what would make this worthwhile for you instead of just buying yourself a second lower-paying job?” Eventually her choice was to just take three to five clients to try it over the summer. Don’t get me wrong: I wanna 10X the number of gyms and coaches and trainers in the world, but I want them to get into fitness and stay in fitness instead of getting in and two years later pulling the ripcord because their $5 bootcamp side hustle can’t pay them what their time is worth. So starting with your eyes wide open will help you leap over that chasm instead of crashing like so many others do. Alright, now, how to do this absolutely remotely. It is possible to own a gym and not work there. Most of the time. My office where I’m recording this is in the same parking lot as my gym. I own both buildings, in fact, but I don’t work at my gym since founding Two-Brain in 2016.

Chris Cooper (13:52):
I’ve gone months without even stepping into my gym these days. I’m there about three hours per week to train with my friends. In the noon group, I spend an additional hour every week mentoring the general manager, but I don’t get called when the roof leaks or when a trainer can’t make her class time or when a client wants to sign up. For all intents and purposes, my gym runs without me. There’s probably more than one way to do this, but I’ve seen many owners try to completely abdicate responsibility for running their gym and then watch it die from a distance. So here’s how to do it properly. First, delegate before you abdicate. Hire people to fill the roles that you currently fill as an owner. Test them in the roles for at least three months. Evaluate their progress with KPIs and then mentor them to improve.

Chris Cooper (14:39):
Here are the roles that you need to manage the gym. First, a marketer—somebody’s gotta generate new leads. Second, lead nurture—somebody has to convert those leads into appointments. Third, sales—somebody has to convert those appointments into clients. Fourth, a CSM—somebody has to keep those clients engaged and around long term. Fifth admin—somebody has to bill those clients on time. Sixth, property manager—somebody has to make sure the lightbulbs are working. Seven, programming—somebody has to find or write the workouts for your groups. Eighth, cleaner—somebody’s gotta keep the place clean. Nine, media and social media—somebody has to keep your place visible. And 10, head coach—somebody has to make sure the coaches are coaching well. If you still wear any of these hats, then you have to hire somebody else to do them for you. I would argue that while the advertising role can be done from a distance, it’s such a small part of your marketing that your marketer should be local.

Chris Cooper (15:43):
Here’s what you can expect to pay for each role at a minimum. And obviously rates change in different areas, but so should the rates for your gym. So you should be able to pay for these people. So the lead-nurture person is worth about 25 bucks an hour. They’re spending about an hour a day, but it’s asynchronous work. It’s done on demand. You have to make sure they understand that. The sales role is about 25 bucks per No Sweat Intro, and that’s set up as required. I don’t actually pay for NSIs, but most do. In my gym, the person doing the NSI gets the client, and that’s their reward. The CSM role is about 25 bucks an hour. They spend about an hour a day following your client journey and keeping clients on track. Your admin is about 25 bucks an hour.

Chris Cooper (16:26):
They’re gonna spend about three hours a week billing people and paying people. Your property manager is about $330 a month or about 10% of your rent. Your programmer is about 40 bucks an hour, with an hour a week to tailor your general group programming. And you can buy programming for 49 bucks a month. So don’t overpay for constantly varied functional fitness, right? Your cleaner should make about 20 bucks an hour for five nights a week. Your head coach should make $35 per goal review or staff evaluation. Your media should make $50 per delivered piece, which is a blog, YouTube, or podcast. Your social media should make about $25 an hour, so an hour a day, or $400 a month. Now, some of these rates are driven by local market rates—like the cleaner. Some are driven by broad market rates—like social media and programming.

Chris Cooper (17:15):
You can outsource either of those pretty easily. Your total staff expense for all of these roles put together is about 2,600 bucks a month in my gym for about 20 hours a week of total work. Now, I didn’t really include goal reviews or NSIs in that total cost because those are paid on services that generate revenue directly, so they’re only paid out when new revenue is coming in. You don’t need to have that discussion to understand the point or this podcast, and I also didn’t include coaches there because these are the tasks that are required to manage the gym. If you’re still coaching and you wanna run your business remotely, you’ll obviously have to pay somebody else to coach, too. These don’t all have to be different people. Some can wear multiple hats. For example, the head coach can do goal reviews, evaluations and NSIs and programming or whatever else.

Chris Cooper (18:03):
The next step is to consider rolling all of these roles up into one general-manager role. Now, that’s a very broad skill set that I just walked through, all those different roles, but it is possible for one person to do all of it in about 20 hours a week. The value here is that one person is responsible for overseeing all of it. The downside is that that person becomes a real linchpin. If they’re only good at some of that job or if they leave, then you’re gonna be in a real trouble. Now, if you have a person who can do all of those roles, multiply their total expenses in my example, that was 2,600 bucks a month, multiply that by 1.15—that extra 15% is for bearing the burden of responsibility. So their job becomes overseeing everything else and also fixing problems without you. A good general manager will see that lightbulbs need changing and they will get the lightbulbs changed.

Chris Cooper (18:59):
A weak general manager will see that the lightbulbs need changing and they will text you about it. Remember, if you don’t have a general manager, then you are the general manager, and it’s the same for any of the roles that I just mentioned. The next step is that you have to mentor your general manager, just as you, the owner, have a mentor. Hopefully by now your general manager needs one, too, and unless you hire them a separate mentor, which is actually what I do, then you are their mentor. One reason a GM might not take the initiative to change the lightbulb is that they don’t know what to do. But another reason is that they don’t know who to call. And another is that they don’t have access to the money to solve the problem. So as you mentor them, you’ll solve these problems for yourself too.

Chris Cooper (19:42):
“Oh, You don’t have the money. I’ll buy some a hundred-dollar gift cards for Home Depot and you can use those to buy cleaning supplies every month. Oh, you don’t know how to change the ballast. Here’s my electrician con contact. Oh, you aren’t aware that that’s your job? No problem. Let’s write the SOP so that you can own this process next time.” Running a gym remotely means you’re hands off, but that doesn’t mean you’re disconnected. Any role that’s left unfilled will fall on you, whether that’s cleaner or mentoring your managers. So if you’re working at another job somewhere else, the last thing you want to do is clean the gym all day on Saturday. Save your free hours for the stuff you like—coaching and running client barbecues instead of buying yourself the lowest-paying job in the world working for the world’s worst bos—yourself. I’m Chris Cooper.

Chris Cooper (20:29):
This is “Run a Profitable Gym,” and whether you want to keep your job, leave your job, own a gym, do that solely or run it as a sideline, I hope these tips help you. You can meet other people just like you if you go to gymownersunited.com and join our free group. We’ll welcome you in and we can talk about this and all kinds of other stuff. There’s over 7,700 gym owners in that group right now. A lot of ’em are gonna be in the same boat you are. They’re helpful, friendly, and they will give you amazing advice. My mentors are in there, too, to offer a broader experience from a proven data set. Thank you for your service and have a great week!

The post The Side-Hustle Gym: Tips for Crushing It Part Time appeared first on Two-Brain Business.

How to Open a Gym on the Side With Just $500

Maybe you hate your day job or maybe you just want to help people get fit.

I understand. Despite owning Two-Brain Business—a huge company that I love—I still own my gym.

Here’s how you can open a gym without quitting your day job … for now.

(If you do want to quit your day job, I’ll cover that in the next posts in this series.)

1. Charge More Than the Others in Town

I doubt you expected that advice, but hear me out: You don’t need the money. Time is actually your most valuable resource.

You might be willing to give up your mornings, evenings and weekends to help other people (thank you for your service). But are you willing to do it for free? And are you willing to do it forever?

Many working professionals send me messages like this:

But if you’re already making a good income, your free time is precious. What would I have to pay you to miss your kid’s baseball game? How about that trip to the beach this weekend?

That’s the real value of your time.

If you want to figure out what your time is worth, start by calculating your “effective hourly rate,” or EHR. What do you earn per hour at your day job?

When setting up a side-hustle gym, price your time higher than that figure to start.

Then we’ll add your expenses on top.

Investment: $0

2. Use Our “Gym Owner Business Plan”

Download it here and put some numbers in it.

Investment: $0

If you’re doing this as a sideline, go small on space and member count. Trying to build a 300-member gym while working full time is going to be almost impossible. You’ll definitely have months where you’re taking part of your salary and putting it into the gym because a big gym will require a big rent payment, and a chasing a high member count will require staff members who must be paid.

Want to start smaller? That’s a better idea. Try the “Personal Trainer Business Plan” instead.

3. Start With Five Clients and Minimal Expenses

Investment: Time plus $500

For your facility, use a park, church, school, your garage—anything you can rent short term for little money.

I know this doesn’t have the sexy cachet of opening a big CrossFit box, but that’s a full-time job. Think of this step as the “bullet before the cannonball”: Try out your side career before you buy another full-time job.

Your investment at this stage is really just time. Your financial investment in the “trial” is under $500 for some basic equipment.

This should create around $15,000 per year in side-hustle income for you.

One note: If you run this test group out of your home or garage, make sure the members know it’s a short-term trial.

I know a few teachers who do up to $40,000 per year out of their garages in the summer. They do it by charging more, not taking more clients. They charge more because they’re a niche expert (hockey, figure skating, etc.). They’ve been doing it literally for decades with no plans to quit their “main” career.

And Then? Or What Else?

If, after three months, you are happy and profitable with five clients, then you can consider making the leap to full-time gym ownership. I’ll tell you how to do that in the next post in this series. Following the steps listed above will set you up for a less painful (and risky) transition.

There’s an obvious alternative to the plan I laid out for you: Get a coaching job at a gym. Keep your “main job” and take a few classes or personal-training clients on someone else’s platform. Coaching can be your vocation without being your primary job. You can love the gym without owning it.

Many gym owners tell me “I would rather have just stayed a coach, but I needed more money, and I thought owning the gym was the only way to do it.” Hell, I was one of those people.

But if you dream of having your own space, you want to be a real entrepreneur or you want to serve people full time, then you need to learn the skill of patience anyway. And that means taking the path most likely to set you up for full-time success—even if it delays your gratification for a couple of months.

The post How to Open a Gym on the Side With Just $500 appeared first on Two-Brain Business.

What Does the Average Gym Owner Really Make?

According to ZipRecruiter, the average gym owner in the U.S. makes $131,526 as of July 25, 2023.

I’d dare to say that number doesn’t give you much info at all.

Here’s why.

The ZipRecruiter data—which is vague—suggests 42 percent of gym owners earn between $14,999 and $48,999 a year, and another 20 percent earn between $49,000 and $83,499. (Source: click here.)

So here’s another statement based on that data:

According to ZipRecruiter, 62 percent of gym owners make less than $84,000 a year.

I’m not a math wizard, but if 62 percent of gym owners make $48,027 less than the average gym owner earnings, it’s likely that some outliers are pulling the average way up.

More odd numbers: ZipRecruiter says that the average gym-owner salary in every U.S. state except Arkansas is above $100,000. (Source: click here.)

I won’t go so far as to say these numbers are wrong. But I will say the salary stats are very high when you compare them to verified data collected by Two-Brain Business.

ZipRecruiter’s numbers might be tied to a very specific group of gym owners whose exact characteristics are not supplied—perhaps owners of franchises in a huge national chain. From the ZipRecruiter site: “Salary estimates, histograms, trends and comparisons are derived from both employer job postings and third-party data sources.” Hmm.

For perspective, here are real, verified 2022 stats from our “State of the Industry” report:

Half of our survey respondents take home less than $4,000 per month—$48,000 per year.The average Two-Brain client’s monthly earnings are $4,854 per month—$58,248 per year.

This is real data collected from real microgym owners. I’m not presenting it to dishearten you but to show you that random internet searches will reveal numbers that don’t always give you the perspective you need to make smart business decisions.

Imagine you’re a new entrepreneur who’s looking to open a gym. Average earnings of $131,526 look pretty sweet: “And that’s just the average! I’m going to be rich!”

So you push ahead without realizing that the vast majority of gym owners actually earn much less than that if they don’t have a mentor (more on that later).

Uh-oh.

Real Data Helps Gyms Owners

The quick exercise above should make it clear that verified, analyzed data supplied with perspective is critical to success in the gym business—and it isn’t always available.

Two-Brain Business is changing that. Every year since 2020, we’ve published a landmark “State of the Industry” report that gives gym owners the numbers they need to make smart decisions. The data it’s based on is so extensive that other fitness industry groups and major corporations regularly ask us to share it with them.

We make the annual report freely available to everyone—even though it costs a lot of money to produce—because we want gym owners to avoid mistakes, grow their businesses and serve more clients.

You have the chance to contribute to the 2023 report and get it before anyone else. Our short survey will take you about 7 minutes to fill out, and your numbers will help us produce the most complete analysis of the fitness industry.

Please take some time to enter your data:

Click here to fill out our 2023 “State of the Industry” survey.

Your participation ensures we can present the clearest picture of our industry and help gym owners make the best choices.

Good News!

If we circle back to the stats at the beginning of this article, here’s some good news: The average Two-Brain client takes home more than $1,000 more than the average gym owner every month ($4,854 vs. $3,787).

Takeaway: Mentorship works.

More good news: Even if the majority of gym owners make less than six figures, according to ZipRecruiter, gym owners can reach $100,000-plus in earnings in about two years with mentorship—no matter what their current salaries are.

This isn’t a made-up stat. It comes from our analysis of Two-Brain client progress. And remember that two years is an average. That means some gym owners are reaching $100,000 in earnings in a year or less. In fact, as of July 31, 2023, Two-Brain had certified 32 millionaire gym owners.

So if you’re disheartened by your current earnings or any of the stats I’ve discussed, know that six-figure earnings are possible as a gym owner, but you won’t reach that level just by checking out ZipRecruiter’s stats, opening a gym and hoping for the best.

If you want to earn $100,000 or more from your gym, you must have a data-backed plan—and Two-Brain has an exact blueprint to help gym owners reach six-figure earnings fast. To hear more about it, click here.

Our “State of the Industry 2023” report comes out Nov. 13.
Please take seven minutes to add your data to the pile.

The post What Does the Average Gym Owner Really Make? appeared first on Two-Brain Business.

Critical Gym Data: How to Get It and Grow Your Business

Mike Warkentin (00:00):
Do you wanna know if gym owners paid themselves more in 2023? We sure do. We’re preparing our 2023 “State of the Industry” report for gym owners, and today on “Run a Profitable Gym” Chris Cooper is gonna tell you a few numbers that he’s watching really closely from year to year. Even better, he’s gonna give you some tips on how to change those numbers at your gym right now. Before we go, I have a huge ask from me and Coop: Please go to the show notes, click the link to the survey. We need your numbers. Fill it out. It takes about six minutes. It’s completely anonymous, but your data and your insight is gonna help us present the clearest picture of our industry. So please click that link in the show notes. The result is gonna be the “State of the Industry” guide. It’s coming out in mid-November. You’re gonna get it for free. So without further ado, Chris Cooper, welcome to “Run a Profitable Gym.”

Chris Cooper (00:45):
Thanks, Mike. Always love chatting with you about this stuff and about numbers, and especially because these are all the numbers that I really wish that I had 15 years ago, 10 years ago when I was fixing my gym and just didn’t have. So I’m glad that you and I, John and our partners can put this together.

Mike Warkentin (01:03):
It’s a huge deal. And, you know, the first time we did it, it was so neat to have this thing in our hands. And now it’s so cool that other industry groups and other companies are asking you for the data, and we’re the only ones that have it.

Chris Cooper (01:14):
It’s crazy. Like big, big lobbies, even in the States like IHRSA are asking to use it. Fitness Industry Canada. Lobby groups, like they come back to this data because it’s objective, it’s legit. Like we have an independent analyst go through it, and they’re actually kind of shocked that we make it available for free to gym owners worldwide even though like we have to invest in making it. It’s just such a powerful tool. And my favorite thing in all of last year was the guys ripping it off, right? Like you saw the YouTube videos and they’re reading it but not showing the cover. It’s amazing.

Mike Warkentin (01:50):
Just flipping the pages, and I can see the pages that we created, and they’re not saying where it’s from. Yeah. But it’s all good because I know the idea of giving it away for free is to get the information in gym owners’ hands. Because if you and I had had this when we started gyms in the middle of the two thousands, we’d be in a different spot than we are right now. So this information can help gym owners. And, guys, again, please, if you want this guide, fill out that survey link in the show notes. We’re gonna get this guide to you, and you can literally use it to just supercharge your business over the next year in 2024. So please fill that link out. So Chris, let’s dig into some of these numbers. We’ve got some areas of opportunity. We’ve got some really cool stats. I know you have five things that you were kind of keeping your eye on among the many different numbers in there, but five things that kind of stood out that we’re watching from year to year. So give me number one, what are you thinking? What are you looking at?

Chris Cooper (02:34):
Nutrition coaching? So we’ve been talking about nutrition coaching since about 2016 on this podcast. One of our first guests ever was a nutrition coach who was starting a program down in South Florida. And the interesting thing is that while everybody knows that nutrition coaching is really important to your client’s success, it doesn’t appear to drive a lot of revenue. And so there’s about 78% of the gyms in our microgym survey—and by survey, I’m, I’m actually talking about the whole data set. You know, well over 10,000 gyms last year. Sometimes 16,000 gyms participate in this. Last year, 78%, or a high number, had a nutrition program. But what’s interesting is that on average only about 5% of their revenue is coming from nutrition coaching. And that’s revenue. So when you take the coaches pay outta that, the cost of certification, the cost of maybe additional insurance, it really doesn’t leave much.

Chris Cooper (03:30):
And, and some gyms are paying for special software for the nutrition program and stuff like that, too, right? So to me, this is a signal like, “Okay, nutrition coaching is important, but let’s invest our resources somewhere else in something else that’s gonna grow our gym faster and just give our clients what we can, which is like a healthy habits checklist, andcoach them on habits. Don’t get in any kind of legal trouble. But don’t go way out of our way trying to get like the PN L2 certification or anything like that because we’re limited in what we can actually prescribe anyway.” The other option is if nutrition coaching is the cornerstone of your gym, then you just go all in and you try and double your revenue on nutrition coaching in the next year. But, you know, at 5% revenue, there’s easier paths to grow your gym it looks like.

Mike Warkentin (04:24):
And that’s super interesting. So you have a couple of different options, listeners, but I’ll tell you this: Clark Hibbs, Yellow Rose Fitness, he does 20% of his gross revenue that comes from his nutrition program. So if you have the interest in growing that program and the skill and the people, you can do it. Now, Clark, his wife does it in a spare bedroom in their house, 20% of their gross revenue, and they’re just using simple habits-based nutrition coaching. It’s not this super-elite weigh-and-measure, scales, macro-tracking system with a custom app. It is just a very simple program. It’s very effective and it does make money, but that doesn’t mean you have to go that route if it’s overwhelming to you and if there are other places that you can invest. So this is a really interesting stat. Chris, do you think this number’s gonna go up in 2023? Do you think we’re gonna see more than 5% of revenue? Or do you think that’s gonna stay about the same?

Chris Cooper (05:10):
It’s tricky because, and again, like this is empirical now, this is not outta the dataset, but talking to hundreds of gym owners in Two-Brain, they’re saying that the challenge is that people will sign up for nutrition coaching, but they’ll stay there for maybe two to three months. And so you’re almost better off to run challenges. You know, in a perfect world, everybody would have a nutrition-coaching program because we know that’s really at the base of the pyramid of fitness change. But the reality is like if you’ve got limited funds to invest in something that’s gonna grow your gym in the next year, nutrition coaching might not be your top priority—as much as, I hate to say it. And I don’t like selling access, but the reality—and this is why we do data instead of just “what does Chris like?”—Is that gyms selling 24-hour key-card access are making a bigger percentage of their total revenue from doing that than they are from nutrition coaching, and there’s less expenses going out. It’s like you buy this thing once and usually that’s it, you know?

Mike Warkentin (06:11):
Okay. So if gym owners wanted to try today, maybe not a full-blown nutrition program, but a challenge two or three times a year, is that something you’d recommend?

Chris Cooper (06:19):
Yeah, a hundred percent. So like three, four times a year. Even if you run a challenge, you’ll probably make as much gross revenue as you would just by selling an ongoing nutrition-coaching program. Your costs will be less, and it looks like your clients are more likely to get excited about it and sign up for it. And maybe that’s how you start building a habit with them.

Mike Warkentin (06:39):
Okay. So there’s something you can do today: just do a simple nutrition challenge that might work for you. And you don’t have to go all in. Now, Chris, gyms with kids in youth classes, is this a similar situation? What’s the stat here and what are you watching this year?

Chris Cooper (06:53):
So this is kind of the inverse. So while the gyms who run kids in youth programs do generate a good proportion of their revenue from that, like between eight and 11%, only 39% of gyms actually offer that. And what’s crazy to think about is that outside the microgym, CrossFit, HIIT, boot-camp industry, if you segregate out the afterschool industry, the programs, the gyms that are set up just for kids, they make way more money than we do in general. And it’s not like they’re more mature entrepreneurs or anything like that. You know, there are cheer gyms doing a million dollars a year. And the reason is that they understand the value of activities for kids. Most of us parents would pay three or four times as much to have our kid in an activity than we would for ourselves.

Chris Cooper (07:45):
And so that’s why these numbers start to make sense, right? So like, this is why parkour gyms are doing really well, ninja gyms are doing really wellgymnastics and dance studios. They all charge more than your typical HIIT gym does. And it’s because you’re selling to kids. And what’s really interesting here, too, is like if you look at even like jiu-jitsu, right? It’s not just that the kids are signing up and paying a monthly rate to go to do this class. And it’s not just that the parents are willing to do anything to wear the kids out. It’s that the parents also want to find something their kids love, and the parents want mementos and, the the parents want to go to the belt ceremony or the dance recital or the ninja competition, right? And then the parents want photography of those things.

Chris Cooper (08:32):
Anybody that’s listening to this, even if you own a gym, you already know that if your kid loves playing basketball and the price of basketball is $300 a month, you’re gonna find a way to pay for that. And so the interesting thing is that like 39% of gyms offer kids classes, and it does create, you know, up to 11% of their gross revenue. But that number should actually be a lot more. I think there’s a massive opportunity there just to change your pricing model and maybe value the price at at what it should be. And so we’ve got this from a big data set, but also empirically Jeff and Mikki Martin from Brand X tell me the exact same thing. Most people undercharge for their kids program. I certainly did. I charged half what I was charging for adults. I don’t know if I was pricing my program by weight or what, but there’s a massive opportunity here for gyms.

Mike Warkentin (09:25):
So if a gym has a program right now and they’re listening to this, what’s something they can do today?

Chris Cooper (09:30):
Raise the price by 15%. So, you know, most gyms are not running a membership-based youth program—that’s what the numbers say anyway. They’re running it on like six-week blocks. All you gotta do for your next six-week block is say, “Here’s the price for the next six weeks,” and raise that by 15%. I don’t think you’re gonna see a parent bat an eye. And that’s immediately gonna improve the revenue that you’re getting from a service that you’re already offering without increasing your expenses. If you’re not running a kids program, look for an amazing coach, and then look for age-group opportunities. Like, I don’t think you’ve got to roll out three different age groups three nights a week. Just look at your best clients and say, “How old are their kids? How many clients have a kid in this age bracket or that age bracket?”

Chris Cooper (10:15):
And then start with a six-week group for one age bracket with an amazing coach. And that’ll tell you whether you’ve got a viable future with kids programs. I love doing kids programs. I think it’s like part of our mission to give kids a way to find their fitness, something that they can stick with for the rest of their life. And even if they’re only with me for a year, teaching a kid how to squat properly, pick up something heavy, that it’s safe to roll around on the floor and climb a rope, you’re giving them a gift that’s gonna last them 80 years. It’s amazing the impact you can have at this age, but it’s also the amazing the impact that this age can have on your business.

Mike Warkentin (10:53):
And raising the price by 15% isn’t gouging parents. It’s just recognizing that you underpriced your service. You know, I did the same thing where, you know, my membership was 150 bucks, which was too low, and I’m like, “Oh, kids classes should be a hundred bucks,” which was also too low. It should have been at least $150 and probably well more than that, but I had no idea what I was doing when I started these programs. So, guys, it’s not about gouging. Parents have money set aside for kids’ activities, and they expect to pay for them. And you know, Chris used the example of signing your kid up for hockey—that can cost up to $7,000. So a $300 kids program? Not that much on the radar, right? Like you can definitely—the value that you have there—represent that in the price and make sure that your kids have a great program with a great coach who’s making a great living. Now, Chris, our next stat is along those lines. So talk to me about highest-earning staff members. And this is a really interesting number we gotta go over.

Chris Cooper (11:44):
Yeah. So we separate out the owner from the staff member in the data set. So this is like the highest-paid person who is not the owner in the gym.

Mike Warkentin (11:53):
Not the owner.

Chris Cooper (11:54):
And the average here is $28,709. Now that’s not high enough, right? We’re not thrilled about that stat, but it’s actually higher than the industry average. And so what this tells me is that microgyms are paying better than the big chain gyms are. So if you look on any employment, website, Glassdoor, whatever, you’re gonna find the average income for a trainer is maybe about $23,000. So microgyms are actually paying above that line, right? But one reason that the staff aren’t making more—’cause none of us are happy with that number. We want to create careers for our coaches—the main reason that the staff isn’t making more is that the owner isn’t making enough. Like we’re gonna talk about what owners make in a moment. Owners are barely making more than that, right?

Chris Cooper (12:43):
So the gyms have to become more profitable first, and then the staff will earn more. It’s not about taking the pie that’s available and cutting the staff out a bigger piece. Like that’s not sustainable. It’s about growing the entire pie for everybody. Okay? Another reason is that the owner just has too many staff, and there’s always a balancing act between like full-time, part-time staff. I do think you want to have both, right? However, as you progress with your gym and your gym becomes more successful and your profit increases, you wanna start to transition some people into full-time staff. I don’t have any full-time coaches right now. I wish I did because that that covers some gaps. But the reality is there’s a time and a place for it. Statistically though, if you’ve got a lot of part-timers, then the highest-paid person at your gym is just gonna decrease because they’re not there full time.

Mike Warkentin (13:35):
And we have a tool for Two-Brain clients, the Career Roadmap, that allows you to sit down and actually piece together with that coach exactly how they can make what they need to make by putting jobs together. So sometimes in some situations, you’ve laid out some things where you’ve got all these different jobs, and they could be coaching, admin, specialty programs, whatever it is. You can actually put them together and maybe that eliminates some part-time stuff, but it does create a full-time career, right? Like you can do these things. And on the other side of it, there are some times, like for me it was super-passionate, super-talented firefighters who wanted to do some coaching on their days off. And those people were really valuable to me. So this number, do you think this is gonna go up this year?

Chris Cooper (14:11):
I hope so, because what we’re seeing, you know, if you look at kind of like the bell curve of Two-Brain gyms—and Two-Brain is big enough, by the way, to like influence these stats—so if we’re getting statistics and data from 11, 000, 12,000 gyms worldwide, you know, thanks to our partners, you know, there’s 900 gyms in Two-Brain. And so as the Two-Brain gyms grow and actually make more profit, they’re actually pulling the curve up with them. So one thing that I’d love to see is every gym across the board increase their rates by 10%. If all you did was that this year, that would increase what you take home by 10%, and it would increase what your staff takes home by that same 10%. And so that alone would bump this number of $28,709 up over 30 grand for the first time in the history of the industry. That to me is kind of the threshold where now we’re a serious career and nobody’s just getting into personal training and fitness for two or three years while they’re going to college for their real job.

Mike Warkentin (15:10):
So, guys, if you wanna change this number at your gym, something you could look at doing today is a rate increase. But know that there is an exact plan and a step-by-step process to doing this that’s been proven to work and retain clients. Two-Brain has it, and we just give it to our clients. So don’t just do it; talk to us first because we can help you do that. Now, Chris, related to staff, staff are great, but you have to care for yourself first as the owner. Talk to me about what owners are taking home and what we think is gonna happen this year.

Chris Cooper (15:37):
So last year gym owners took home on average $3,787 in net owner benefit every month. So net owner benefit is like your wage from the gym plus your profit distributions, plus, if your gym is paying for your cell phone or whatever. I break it all down in the “State of the Industry” guide. So $3,787 is okay. It’s technically higher than the industry average, but it’s not survivable. Like you can’t make that little money and expect to have a gym that lasts you 10, 20, 30 years. Anything under $48,000 is too low. And especially, you know, considering that a lot of this data comes from urban areas where you really need a hundred thousand a year to survive, it’s not enough. So what that means is like, “Okay, I’m making $3,787 a month that’s contributing to my family’s income, but that can’t be my primary family income. So either I have to have another job or my spouse does.” And any little challenge could kill the gym. So, you know, the price of groceries just went up 30%, price of gas goes up 30%. Now I’m asking myself these questions driving home of like, “Can I actually afford to own this gym anymore and should I go get that job at the call center or that that real-estate job working with my uncle?” And unfortunately that’s usually what kills the gym. It’s not that the gym can’t get any clients, you know. That’s usually survivable. And it’s not that the gym is signed into this massive lease. You know, often you can get outta that. What kills the gym is when the gym owner is not making enough money and they basically have to take a job somewhere else, and that kills the gym.

Chris Cooper (17:20):
So what I’d love to see is this number of net owner benefit rise to at least $4,000 per month. Just make some incremental gains. What that’s gonna do is it’s gonna attract more people to the fitness industry. And that’s actually going to help all of us because as we all get better at being the CEO and the entrepreneur, we all grow, and the pie grows, and we attract more people to exercise for the first time. So, you know, these are all like a balancing act, right? It’s a paradox—like the gym owner makes more, the gym does bette. The gym does better, the gym owner makes more. But the reality is if I can keep a gym owner in the game for another five years, they’re gonna serve more people, save more lives, make more money, create more careers. And so, you know, we do focus on improving net owner benefit a lot.

Mike Warkentin (18:11):
And I’ll tell you this, the results of that are in our last year’s stats: The average Two-Brain gym owner makes more than a thousand dollars per month more than that $3,787. So that’s stats for Two-Brain clients. They make a thousand dollars more per month just by being Two-Brain clients and following what we’re giving out. That’s super interesting. And then you gave me another stat the other day about how long it can take someone to start with Two-Brain and get to a hundred thousand dollars in annual income, which is way more than $4,000 a month. So what is—how long does it take the average client to do that now?

Chris Cooper (18:42):
Average client is two years, one month, nine days. And it’s really interesting because when people start with Two-Brain, there’s a very broad spectrum. Some people are doing pretty well when they start. The majority of people are not doing that well. And some people are like at their wit’s end, like I was right? Like, “Here’s my last $500 check and it’s probably gonna bounce.” I don’t recommend starting with a mentor when you’re gonna bounce the first payment. Like we’re gonna give you enough free stuff that you can use that to build up a little bit. But the reality is like we know how to get owners to a hundred thousand dollars a year net owner benefit better than anybody else. We’ve done it hundreds of times. And what we’re studying now is how to do it faster. And we call this “virtuosity,” which is basically like, “If I can get people there in an average of two years, one month, nine days, how do I do that in less than two years? How do I do it in 16 months?” And so that’s really the focus of our internal study right now.

Mike Warkentin (19:37):
So that net owner benefit number, the gym owner wage is changing for our clients, and we’re watching them as they move through the program add money month by month to their wages, what they take home to their families. It’s super cool to watch. If you’re interested in just seeing what stuff is all about, head to Gym Owners United and jump into that group. We give away tons and tons of free stuff. Chris has seminars in there, all sorts of great resources, including guides that tell you literally how to get to a hundred thousand dollars per year in income. You can get those guides in that group, and of course, if you want even more help and more speed, work with us and we’ll help you do that. Now Chris, going on, this is a really interesting one for me. The median price for group training. And the reason why this is super interesting for me is it’s almost exactly what I charged at my gym, which was too low. Let’s go over this one.

Chris Cooper (20:21):
Yeah, so we took a median here because if you have a data set that has a lot of gyms, like in New York City, for example, their average is gonna pull everybody up and give you a misleading figure. So $160 is the median price for group training. That’s your unlimited option, right? So if you’re a CrossFit gym or a bootcamp or a HIIT gym or whatever, that’s like what the average gym is charging for their unlimited class option. Okay? that’s too low. You need to get to an average revenue per member of about $205. Now you can do that a few ways. You can raise the rates. You can add personal training or add another service. Like we talked about nutrition coaching is one option. Kids is maybe better. Even access is on the table to bring that ARM up above $205.

Chris Cooper (21:13):
If you can get your ARM at $205, you can make a hundred thousand dollars a year with like 150 clients. And if you’re in a big urban setting like Atlanta, New York City, San Francisco, you should be charging way more than that anyway because the cost of living is higher and your price should go up proportionally with that. Unfortunately, the opposite kind of happens. You know, years ago somebody in Atlanta told me “you can’t charge more than 79 bucks a month for CrossFit.” And that’s how they were thinking. And of course, you know, people like Miles Davis, Ric Thompson, Andy McCann, they charged 200 bucks a month for CrossFit and made it worth it. And that’s how they brought their ARM up. So this median rate for group training, it’s too low.

Chris Cooper (21:58):
There’s another perspective here, too, which is that if a client comes into your gym and they want general group programming, the same programming that like everybody else is getting, the same workout, the same level of coaching, it’s, you know, corrective—I wouldn’t call it an “industrial model,” but it’s not like you’re getting your own personalized program, your own personalized appointment time, your own one-on-one attention from a coach when you’re in a group setting. When you frame it that way, the group setting actually becomes like your lowest-priced option. And so the way that a lot of gyms approach this now is a client comes in and they’ll say, “What’s your goal?” And then they’ll measure the client and then they’ll say, “Okay, well based on your goals, if you wanna get to your goals as fastest, I recommend one-on-one training with us.”

Chris Cooper (22:48):
You know, and they’ll call that their “high-ticket option” or whatever. And then if the client says like, “I can’t really afford it,” then the next best option for that client is semi-private. And if the client is like, “I can’t really afford that,” “No problem. You’re still gonna get there with our group training. It might take a little bit longer, but some people actually like group training because it’s a lot of fun. How’s that sound?” And, Mike, I did my first NSI in like five years yesterday, and she’s like, “Sounds great. Sign me up for group training.” And it was like a higher price point than I’ve sold in the last 20 years, but she was eager to sign up for it because it’s what she could afford. It will get her to her goals, but it’s not as personalized, not as flexible on, you know, in scheduling time. And it might not get her to her goals as fast as one-on-one coaching and nutrition coaching would, that’s all.

Mike Warkentin (23:40):
But still an unlimited group membership, which is what I had for $157.5 or whatever it was. And I think that included taxes. So I took home less than that. I think if I broke it down by the average number of classes attended per member, I think I was making like $6 tp $7.50 per person per class or something like that. And we can all agree that that’s not that great because your group classes, while they are your discount option, they’re not worth $75 or $80 for personal training, but they are worth more than $6. And I didn’t understand this until you had me do the math, divide that up, figure it out, and like, “Whoa, I am delivering way more value than six bucks.” And I think a lot of gyms are doing the same thing.

Chris Cooper (24:18):
Especially when you look at some other stats from here, which is like average group size. And when you multiply that, the average membership price times the average number of people in a typical group, like most gyms are running way too many groups for what they’re charging. And sometimes they’re underwater. Like they’re paying the coach 25 bucks and they’ve got two to three people showing up for the 6 a.m. Class. Those people on average are paying six bucks per class. Like you’re losing $7. You’re losing money by opening the gym that early and forcing that coach to get outta bed, right? So it doesn’t make sense. And a lot of gyms are chasing this losing model unfortunately. And now they’re realizing more and more like, “Oh my goodness, time is not on my side. The longer I follow this model, the worse things are going to get.” And so that’s where they come to Two-Brain for mentorship and turning the ship around.

Mike Warkentin (25:11):
Gym owners, that’s a prime example of why you need this guide. You can take a look at our stats and you’ll find out when are the most popular class times, what is the average attendance in classes, should I run giant classes of 20 people? Answer is no. Should you focus on smaller groups? Yeah, because retention’s better. All this stuff is in there. And then you can use that and say “if I’m only getting two people to my morning class and no one’s showing up and I’m only charging an average of six bucks a head, I’m losing money and I’m paying my coach $25.” That’s the average—also in the guide. All these stats are in this guide. You could literally use them to compare your numbers to and say, “Do I need to change something? How can I get to this great number? What do I need to do?” You can make smart business decisions. None of this was available when Chris and I started our gyms. It was basically Chris and me talking to people in the bleachers at fitness events and saying “what are you doing?” and trying to figure it out. That’s literally what happened. Now you can get this guide for free, all the info in it, and you can use it to make great decisions in your gym. And then in the Gym Owners United group, you could talk to 7,700 other gym owners including Two-Brain mentors and get some real help to grow your business. And then on the other end of that is mentorship, working with Two-Brain. But take the first step. Go to the link in the show notes, and please fill out that survey. Six minutes, seven minutes maybe at the max. Chris has got the guide there. You’re gonna get that guide for free in mid-November, and it’s going to help you grow your business. So please, with our thanks, please go and fill out that survey for us. It would really help us. Chris, how fired up are you to see the numbers that come in from that survey?

Chris Cooper (26:41):
So fired up, man. You know, and I used to get really excited about seeing you twice a year at regionals and the Games and stuff even though we were working because the great thing about conversations with you is I knew you were telling the truth and neither of us had anything to gain by inflating our numbers. “Well, Mike, I’m at 400 members,” right? Like neither of us had anything to gain from that.

Mike Warkentin (27:02):
“I Have 109.”

Chris Cooper (27:04):
But even back then, like you and I would go to seminars or we’d meet other gym owners where they would inflate that stuff, and the CrossFit message board for example, people are like, “We’re doing great,” and meanwhile they’ve got three part-time jobs and they can’t pay the rent. You see that online. People actually think they are doing great, and they’re not doing that great. It’s kind of impossible to filter out what’s actually great. What does “great” even mean? And now, I mean, you can do that on your toilet. You don’t have to find Mike and Chris and somebody that you trust to be honest and transparent with you. I mean, honestly if you got this guide and you put it on the back of your toilet, you’ve got five minutes every day to make your gym better.

Chris Cooper (27:50):
And so what you do is you look at “okay, geez, the cost of gym space average. Okay, well I’m overpaying for gym space. Maybe that’s something I should think about.” Or you flip it here and it’s like, “Okay, well the average revenue is $15,900 a month. The average Two-Brain revenue is $21,309 a month. You know, group training price is 160 bucks. Hey, what would happen if I went up five bucks for the hundred members at my gym? Well that’s another $500 to drop straight to my bottom line.” I mean, you’ve just had like the best poop of your life. You’ve made $500 on the toilet, right? It’s great.

Mike Warkentin (28:26):
I remember vividly those conversations where you’re talking to another gym owner and it was almost like you’re trying to like figure out “okay, how can I ask this?” And you’d kind of, you know, build up some rapport and you’re like, “So are you making any money at your gym?” You know, and you’re asking for those delicate financial numbers, and sometimes you would get honest people who would tell you and you’d be like, “Oh, okay.” And you’d put your whole life in perspective, and then you could get some ideas, and you could make some changes. Again, those conversations were super awkward. They were hard to get because you had to find people. This guide gives you all of that stuff. So please hit the link in the show notes, fill out that survey. We will send you this guide and it will help you improve your business group. Thanks so much for being here today. Yeah

Chris Cooper (29:06):
Man. So happy to do this. Listen, years ago I was sitting at a kitchen table with Greg Glassman, who founded CrossFit, and I asked him the question point blank: “Why should I continue to pay the affiliation fee?” And he said, “If I were doing CrossFit at my gym, I would feel it. It’s my duty to pay the founder.” And I said, “Good enough. I’m in.” I think honestly, all of us gym owners, we’ve been too separate for too long. We’re a bunch of islands out there. I think we owe it to ourselves and to one another to participate in global movements like this. Gymownersunited.Com is a great example. You know, you go to gymownersunited.com, you join a free Facebook group, there’s like 7,600 gym owners in there, transparency, support. Nobody is making fun of other people.

Chris Cooper (29:59):
There’s no like Michael Jackson-eating-the-popcorn memes ’cause there’s no battles. It’s just people helping people. And this is the kind of movement that we need to create if we want to elevate the entire industry. The second thing the industry actually needs is data. And I think really all of us are responsible to share what’s actually happening. Now, I don’t need you to go out and be likeUh we lost 50 members last year.” It’s anonymous, but we still need your input because we have to know where we’re starting from and we have to see what the greatest opportunities are. You know, you can count on Two-Brain to publish 95% of the stuff that you and I build for free. We’re gonna publish stuff to help you as long as we know where people actually need help. And for way too long we’ve heard from these organizations, right? Like our franchisor: “This gym has 800 members.” Or from CrossFit: “This gym must be successful. They have 400 members.” We hear that. But the reality is that’s not helpful information, and it can even be misleading. And so I think it’s up to gym owners, especially independents, to come together outside of our parent companies and say like, “What is actually working here?” Right? We need people who have no bias, no dog in that fight to say “here’s what the actual data says.” And data doesn’t lie. It’s proof. We do this in a way to be as objective as possible. You know, while I did give you some personal opinions on this stuff, the reality is we hire an independent analyst so that my biases can’t even enter into that. And then we produce it free because I think this is how we improve the entire movement.

Mike Warkentin (31:36):
Get the guide, click the link in the show notes with our thanks. We appreciate it. This has been “Run a Profitable Gym.” And that was Chris Cooper. See you next time.

Chris Cooper (31:44):
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 the group. It’s Gym Owners United on Facebook, or go to gymownersunited.com to join. Do it today!

The post Critical Gym Data: How to Get It and Grow Your Business appeared first on Two-Brain Business.

Hard Data for Gym Owners: 5 Things We Learned in 2022

The power of numbers is huge.

Numbers help us make decisions without guessing. Our “2022 State of the Industry” report had dozens of insights that guided gym owners to make better decisions, make more money and waste less time.

Here are just five examples from a 56-page book packed with data:

1. Nutrition Coaching Isn’t a Revenue Driver for Most

Stats revealed nutrition coaching is popular but doesn’t generate much revenue in most gyms.

While a large percentage of gyms now have nutrition programs, the average gross-revenue bump that a gym receives is only 5 percent. When you subtract the cost of credentials, additional insurance and coach compensation (44 percent of gross) from income, that doesn’t leave much. Some gyms are also paying for an extra app on top of all that.

For me, this was a signal to invest elsewhere. While good nutrition is critical to my clients’ success, I can’t write them meal plans anyway, so we focus on using the “healthy habits” checklists that are available to all Two-Brain gyms.

The other option is to go all in on nutrition coaching and try to double the revenue. But if the average gym is only generating 5 percent of gross revenue through nutrition, there are easier paths for fitness entrepreneurs, such as adding a couple of clients to their existing programs.

Action to take: If you have a nutrition program, run challenges two or three times per year to boost enrollment. If you don’t have a nutrition program, coach your clients on habits and focus on other options first.

Fill out the 2023 survey here: 2023 State of the Industry Survey

2. Kids Programs Can Do More

Only 39 percent of gyms offer kids or youth classes. While the average percentage of gross revenue contributed by youth classes is higher than that kicked in by nutrition services—9 vs. 5 percent—fewer gyms offer youth classes. This is interesting because other fitness-type programs for youth typically cost far more than adult fitness programs, so money can be made serving kids.

For example, the average cost of a gymnastics class for kids is about double the average CrossFit gym’s average revenue per member. The average cost for a cheer gym is triple that. And if your kid went to a parkour gym, they’d pay more than most semi-private gyms charge for a month (which is quite a bit).

Even though most microgyms undercharge for kids training, these programs are still quick to fill, easy to grow and can be a great “intrapreneurial” opportunity for the right coach. If the gyms who do offer kids programs simply charged more, the average percentage of gross revenue figure would go up. And expenses would stay low: The programs don’t usually require any new equipment, tracking apps or other recurring monthly costs to run.

Action to take: If you have a kids program, raise the price by at least 15 percent. If you don’t have one, look first for an amazing coach and then for age-group opportunities among your current clients.

3. Staff Pay Is Still too Low—but There Is Hope

In 2022, the highest-earning staff member in a gym—excluding owners—only made US$28,709, on average. Obviously, this isn’t enough. But there are a few lessons here:

A. Most microgyms still pay above the industry average. While $28,709 isn’t great, it’s actually higher than what staff could make at most chain gyms.

B. One reason staff aren’t making more is because the owner isn’t making more. Gyms need to become more profitable first, and then staff will earn more. Staff pay grows as “the pie” grows.

C. Another reason staff aren’t making more is because the gym owner has too many staff members and the pie is sliced into too many pieces. I’m in this position myself right now: I have a passionate coaching “bench” of people who want part-time work. So while the gym is actually paying a lot in wages, no single staff person is taking the majority of the funds.

Action to take: Increase your gym’s profit by 15 percent. Do this by raising rates or adding high-value services, and keep your staff pay at no more than 44 percent of revenue. As your gross revenue goes up, so does their earnings ceiling. Do not cut out a bigger slice of the same pie for your staff; grow the pie and everyone wins.

4. Gym Owners Are Learning to Be CEOs

In 2022, the average gym owner took home $3,787 in net owner benefit every month. That’s higher than staff members but still not enough: $48,000 or less per year isn’t a survivable wage. Any little unexpected problem—or even just life in a high-rent area—could kill the gym because the owner simply can’t afford to work there anymore.

The bright side is that this number is going up, and owners are making a little more than they would as coaches. This means they’re getting better at being CEOs—they just need to keep getting better. For comparison, the average Two-Brain gym owner took home $4,854 per month—more than $1,000 more per month. That shows gym owners can learn how to earn more.

Action to take: Set up a payment strategy for yourself, like Profit First. Increase profit by increasing average revenue per member or decreasing expenses. Don’t make client headcount your priority—adding more clients adds more revenue but doesn’t always add more profit. And profit is what pays you.

5. Group-Training Fees Are too Low

In 2022, the median price for group training was $160. We used the median here because we didn’t want geographic differences in the data set to pull up the average.

I’ll be blunt: $160 per month for a coaching service is low, and this figure hasn’t increased in at least three years. While Two-Brain gyms are far ahead of the curve here, the first target for the average microgym should be $205.

Action to take: Increase your membership price by dropping your lowest tier, raising rates, moving to biweekly billing, passing credit-card fees along to clients or moving them all to ACH.

Be Part of Our 2023 Report!

The great thing about numbers: You can trust them.

You can actually organize your priorities for 2024 based on the metrics we’ll present in our “State of the Industry” report in mid-November. With hard data in your hands, you’ll be able to prioritize the big things that move the needle, save the small wins for later and avoid the things that look good but don’t really grow your business much.

To get the report and ensure your numbers are included in it, fill out our 2023 State of the Industry Survey.

The post Hard Data for Gym Owners: 5 Things We Learned in 2022 appeared first on Two-Brain Business.

Key Business Metrics and Why Gym Owners Must Track Them

Every day, I’m in at least 50 chat conversations that start with “how’s the gym?”

Nine times out of 10, the response I get is “it’s OK.”

But is it really?

How’s your gym really doing? And how do you know?

If you don’t know how the average gym is doing, you don’t know what “OK” means. And if you don’t know how the best gyms are doing, you have nothing for comparison.

You need a business scorecard—something more than your bank account—to tell you if you’re keeping pace with everyone else, sprinting ahead of the curve or losing ground as an entrepreneur.

Every year, we publish our “State of the Industry” guide. This is the largest set of numbers in the industry. Nothing else is even close. Our guide will tell you how gyms are doing and allow you to compare your fitness business to others so you can improve it.

To succeed in this business, you need a scoreboard so you can track your progress without guessing. (Two-Brain gyms already have this as part of our program.)

Here are the primary six metrics you need to track:

ARM (average revenue per member)—what the average client pays you in the average month.Clients—how many people pay you every month.LEG (length of engagement)—how long the average client stays in your gym.EHR (effective hourly rate)—the value of your time.ROI (return on investment)—the value you’re getting from the stuff you buy (equipment, space, your staff’s time).NOB (net owner benefit)—what you take home from your gym business.

There are other metrics, of course—for example, marketing metrics such as set rate, show rate and close rate—but starting with the six listed above will let you see your progress. And you should see it—whether you’re improving or failing, you need to know where you’re at so you can take steps to increase speed or correct course.

Every month, we publish leaderboards for each of these six key categories (here’s one). We do this to tell you how the best gyms in the world are doing. Then we find out how the leaders posted such great numbers, and we share their secrets with you—again, for free, even though it doesn’t generate any revenue for Two-Brain and costs us hundreds of thousands every year.

We also run seminars in Gym Owners United—our free group for gym owners—to help entrepreneurs improve their businesses.

And every year we go even further to produce the most comprehensive industry report for gym owners. We tell fitness entrepreneurs:

How much gym owners pay themselves.How much people are paying coaches.How much people are spending on rent.How much people are charging for group classes and PT.How various revenue streams contribute to gross revenue.How long gyms retain clients.How much it costs to acquire a lead.And more.

Want to participate and get the data so you can use it to benchmark yourself and improve your business?

It will cost you only about six minutes. You can share your data anonymously and receive an essential measuring stick for gym owners in mid-November.

All of us need this report. And none of us could produce it alone. Your entries add value for gym owners around the world. Please click the link below and be part of the greatest movement of gym owners in history:

2023 State of the Industry Survey

The post Key Business Metrics and Why Gym Owners Must Track Them appeared first on Two-Brain Business.