Chris Cooper's Blog, page 77

Leaderboard: What Top Gym Owners Take Home Each Month

How much does your business pay you to be the CEO?

When you open a business, you stop being a coach and start being an owner. You acquire different skills, you wear different hats, and you’re paid differently.

The success of your gym isn’t measured by how many members you have. It’s determined by what your gym pays you as CEO.

And the kicker? You can make $100,000 with 50 members if you want to. But if you have 500 members and you’re not earning anything from your gym, you’ll close.

Some of us take salaries from gyms. Some take profit distributions. Some charge their gym rent as landlords. To avoid overtaxation, some have their businesses pay their bills (like cell phone charges or car loans). Some do all of the above. Net owner benefit (NOB) is the total of salary, profit and the “extras” your gym provides for you.

For example, a gym owner might make $100,000 in NOB this way:

$66,000 salary ($5,500 per month)$20,000 profit ($5,000 quarterly distributions)$6,000 health insurance$6,000 vehicle$2,000 cell phone/extras

Total: $100,000 NOB (or $8,333 per month)

The graphic below shows the top gym owners worldwide for NOB in January 2023 (we publish the actual gym names for our clients but not publicly).

An important note about this leaderboard: It reflects three-month rolling averages. That means the people on it didn’t just have one big month. They consistently reached this level of owner benefit each month for an entire quarter.

Check it out:

How did they do it? Here are the commonalities of every gym on the leaderboard:

They use the Prescriptive Model.They have high average revenue per member (ARM).They use client success managers (CSMs).They have mentors.

For a deeper dive into the best practices of these high-earning gym owners, check out this YouTube video:

The post Leaderboard: What Top Gym Owners Take Home Each Month appeared first on Two-Brain Business.

Gym Owners Who Earn $20,000 a Month? Yes, It’s a Thing.

Chris Cooper (00:00):
Some gym owners are taking home more than $20,000 per month. How are they doing it? I’m Chris Cooper, and this is “Run a Profitable Gym.” Today, I’m gonna show you what our top gym owners earned in January. Not how much revenue the gym made but what the gym owner actually took home to their family. Here’s how we’re gonna do this. First, the big reveal: I’m gonna show you the top three earners on our leaderboard. Now, every month we publish leaderboards for a bunch of different metrics internally. And we share those numbers inside Two-Brain, and we interview the people who are at the top to find out what they’re doing differently. We publish some of those interviews on our podcast to help gym owners who aren’t even in Two-Brain learn from them. And you’re gonna hear that later this week. So after the big reveal, I’m going to talk about the things that everybody, every gym in the top 15, had in common.

Chris Cooper (00:47):
They all were doing the same three things to earn a higher income for their family—all 15 unanimously. I’m gonna tell you what those three things were. Third, I’m gonna tell you what stops most gyms from getting to higher profitability. And finally, fourth, I’m gonna tell you why you should care. It’s gonna sound funny that I’m leaving that to the end. But here’s the reality: We wanna track net owner benefit—your income from the gym—because that’s really the measure of how successful your gym is. Net owner benefit, it’s a measure of how good you are as a CEO. Net owner benefit is the sum total of everything that you make from your gym. So that could be your income, it could be your profit distributions, it could be that your gym pays for your cell phone or your truck, which is right outside my window here.

Chris Cooper (01:33):
It’s the net benefit that you get as owner instead of as coach. And hopefully you can make more as an owner than you would working for somebody else. Now, on this chart that I’m about to share with you as I reveal our top three owners for net owner benefit, I’m gonna share their rolling three-month averages. So this is how much money they made per month over the last three months. It’s not how much they earn over the last three months, but I want a three-month average. And here’s why. Sometimes people will say, “Oh, I made 20,000 bucks last month,” but they took a big profit distribution. They don’t earn $20,000 every month. For these people, when I say they earn $20,000 and they’re all over $20,000 a month, this means they do that every single month. It’s not a projection. It’s not a guess. It’s not “if things keep going well, this is what’s gonna happen.”

Chris Cooper (02:22):
This is what they actually took home. Okay? We don’t use projections. We also don’t really care about headcount. You know, headcount is for show; revenue’s for dough. But net owner benefit is what actually feeds your family. And so when I talk about what these three gyms have in common, here’s a peak ahead. What they don’t have in common is a lot of members. They’re all over the board with members. But I’ll get there. Look, here’s the bottom line: if you’re not making a good income, your gym will not last. I learned this the hard way, and I’m gonna share a story about my lowest point as a gym owner in a few moments. But first, who are the top earners in net owner benefit from the last few months at Two-Brain. The third place, and this is outta the U.S., this gym owner took home $20,293.33.

Chris Cooper (03:10):
So $20,293.33 in January. Okay? They also took home a similar amount over at least the two previous months, so that we can expect that to just continue. It’s not a fluke. It’s not a one-time end-of-year payout or anything like that. Second place in January, also from the USA, was $20,340 even. And first place was also from the USA. The top three were all from the U.S. In January, this gym owner took home $21,267.71. That’s their regular salary from the gym and profit together. Now, all of those top three were in the U.S., and if you’re watching this in Europe, you’re probably saying, “Yeah, but the U.S. doesn’t have the energy fears that we have.” Or if you’re watching from Australia or Canada, you can say, “Yeah, but the U.S. doesn’t have a crap currency right now.” However, while the top three were all inside the U.S., there were some very high-ranking gyms from Sweden, Norway, the U.K. and Australia all in the top 15.

Chris Cooper (04:10):
The top gym outside the U.S. was just under $20,000 in take home last month. It was $19,896.94. This gym is actually in Sweden. So now the top three, again, $21,267.71 cents. Imagine taking that home in a month from being a gym owner. Like the top reason that you opened this gym is not to make money, right? That might be reason like number three or four. You’re really doing this to change lives. And these people are changing lives, and they’re receiving their reward for it. Second place again, $20,340. Third place: $20,293.33. So what did these gyms all have in common? When I went down the entire leaderboard, the top 10, which we only publish inside Two-Brain with actual names and gym names, I found that they were all doing the same three things. Now the top 15, again, were worldwide.

Chris Cooper (05:05):
So the U.S., Sweden, Norway, U.K. and Australia were all in the top 15 in January. But they all had different size of gyms. They all had different ownership structure. They all had different amounts of coaches and how much they paid their coaches and how many clients they had. But they had three things in common though, and that’s what helped them be this profitable. So the first thing they had in common was a Prescriptive Model. None of them in the top 15 did “come and try a free class. Hope you sign up. Put your credit card in on the way out the door. We’re just gonna toss you into classes and hope it sticks.” Not one gym in the top 15 does that. They all have a Prescriptive Model where somebody comes in—they sit down with that person, talk about their goals, measure their starting point, and then as an expert coach recommend the best course of action for them.

Chris Cooper (05:54):
“Here’s how often you should work out. Here’s the type of workouts that you should do.” And probably judging by how much profit they had, they were probably prescribing nutrition with exercise. They probably weren’t just selling exercise. So there might have been personal training, there might have been group training, there might have been nutrition coaching or habits coaching, depending on the client. For some people it was just group classes, but their price point is high enough to actually make their gym profitable. Now, profit doesn’t mean you’re greedy. Profit means that you are successfully running a gym that’s gonna be around for the next 30 years, provide meaningful opportunities for your coaches to make a good career and stick around to actually change people’s lives. If you open a gym and you close three years later because your family isn’t getting fed, that affects the hundreds of people whose lives you could have changed.

Chris Cooper (06:42):
All right? So the first thing that they had was the Prescriptive Model. So they, you know, they did an intake interview, they made a prescription. Three months later, four months later, they measured the client’s progress and changed the prescription if it was warranted. Okay? That’s really important. The second thing that all 15 gyms had in common was a high average revenue per member (ARM). Now, that doesn’t mean that they were charging really, really high prices, though they would tend toward the right-hand side of our scale, right? They’re probably charging around $205 ARM per month. Now, before you say “I can never charge 205 bucks for a CrossFit membership at my gym,” this is the average revenue per member, not the average price of a membership. That just means that when some people want more, they can get more without going somewhere else. If I wanna do my workouts one on one with a trainer or in a semi-private setting with a few of my buddies, I can do that.

Chris Cooper (07:35):
I don’t have to leave the gym and go somewhere else to do that. So they all had a high ARM, and they focused on ARM, okay? Client headcount was all over the place. Like there were gyms in here with under 200 clients. There were gyms in here with over 400 clients, but what they all had in common was a very high ARM, and that’s what made them sustainable. The third thing that they all had in common: every gym that I looked at in the top 15 had a client success person. So this is a part-time person whose primary job it is to get people showing up to the gym. Look, we run the hardest business in the world. And the reason it’s hard is because even when people get excited about starting at a gym, they’re usually never excited to continue at a gym at least every day.

Chris Cooper (08:19):
You know, I love going to the gym, but not every single day. So it’s helpful to have somebody in the gym who’s responsible for retention, reaching out, giving me a call—”Cooper, where you’ve been? It’s been three days. Are you coming to the Wednesday noon group?” You can’t rely on your clients to just do that. You can’t rely on your staff to do it. They’re busy. They’re focused on other things. You need somebody whose job it is at least 10 hours, 15 hours, 20 hours a week to just focus on retention. We call it the client success manager (CSM), and we teach it in Two-Brain. This is not an expensive role. This is not like a general manager salary or anything. It’s just your friendliest, happiest person who’s gonna remember to send that birthday card because you’re too busy to do it. Okay? So the three things that all of the top 15 gyms had in common were a Prescriptive Model, a high ARM and a CSM person dedicated to retention.

Chris Cooper (09:08):|
Their client headcount really didn’t matter, the size of their gym really didn’t matter, how many coaches they had on staff really didn’t matter the most. Profitable gyms focus on those three things: a Prescriptive Model, a high ARM, and somebody who’s dedicated to retention. Okay? So what stops gyms from earning more net owner benefit? You and I are both not on that top 15 list, okay? My gym is not the top in Two-Brain—not even close anymore. And maybe your gym isn’t either, and you’re saying like, “Well, how come I can’t get on there? What do I have to do? What do I have to add?” The reality is there’s probably something that you need to stop doing, okay? What stops people from getting a higher net owner benefit is three things. They have no focus, they have no plan, and they are distracted.

Chris Cooper (09:52):
Like your deadlift, your net owner benefit improves when you consciously pay attention to it and you are very clear and purposeful about increasing it. Your deadlift might have improved a little bit just with general fitness when you started doing fitness, but after your deadlift hits like 300 or 400, you have to be intentional about improving it. And when you open up a gym like me, you might be able to just commit to paying yourself 900 bucks a week because your family will starve if you don’t. But over time, if you want to increase your profitability, you have to be intentional about it. And if you’re intentional about it, you’ll build better systems and you’ll build a better gym and you’ll earn more revenue. So earning more yourself is kind of a forcing function to build a better business that helps everybody around you too.

Chris Cooper (10:38):
Okay? So lack of focus is why most people can’t increase their net owner benefit. Lack of a plan is another reason. There are some great plans out there to increase net owner benefit. One of them is called Profit First. My friend John Briggs wrote this book called “Profit First for Microgyms,” and you can follow Profit First if you need a plan. You can also just follow like a pay-yourself-first strategy of pulling out your checkbook, like a real checkbook, and writing yourself a paycheck every single Friday for the next six months in advance. You can add other tweaks to that plan, too. Like you can automatically write yourself a 6% raise every quarter if you want to, you know, write these checks in advance, deposit them in the bank. Then it’s outta your hands. You don’t have to make the decision on whether to pay yourself or how much every single week.

Chris Cooper (11:22):
Okay? That was—that’s still my strategy. The third reason that I said that a lot of gym owners are unable to increase their net owner benefit is entrepreneurial distraction. Because it’s easy when you’re an entrepreneur to start something new and it’s hard to grow what you currently have. Like most people, they grow to the level of their knowledge about marketing and then stuff gets really uncomfortable. Okay? Like, “Well, I don’t know how to improve my sales. I don’t know how to improve my marketing. I don’t know how to improve my retention, so I’m gonna go start something else.” Right? This is the reason that most gym owners don’t make a hundred thousand dollars a year. They’re always starting a new thing because they don’t know how to grow their current thing. It’s also the reason that most gym owners will never make a net worth of a million dollars in their career.

Chris Cooper (12:09):
It’s why they’re burned out, overwhelmed and ready to quit way too early. It’s distraction. And distraction is the inability to focus on what’s most important right now to grow your primary business and do the work required, even if it’s boring. It’s what makes you be attracted to the new marketing thing, the new promise by the guru, the new tactic or whatever, instead of doing the things that you know work over and over—or delegating them to somebody else. And I’ll be honest with you, this is my Achilles’ heel. Every single month somebody approaches me with some new offer or an opportunity or a business idea. And in my earlier days when I was less disciplined, I would be so fired up to do this. I would start these new companies or I would like start working on the project. I’d go register the domain.

Chris Cooper (12:55):
I’m not kidding. I have over 80 domains registered in GoDaddy and another two dozen registered in Google Domains because these are ideas that I was about to act on until I learned how to stay focused on my primary business and just grow that. So for example, I did this a couple times: “Oh, man, my gym needs more members and more revenue, but I’ve also got a great idea for concussion testing that nobody else is doing.” And so I’d go build a concussion-testing program called concussionpro.com. I don’t even know if that website’s still up. And it would take me like two months of study and putting it together and checking it out, and then I’d have no idea what to do with it or how to sell it. I might sell two or three concussion-testing packages. And after that was all said and done, I was three months down the track, my gym still needed more members and hadn’t grown.

Chris Cooper (13:42):
And my whole career is this like long road of companies that I’ve started and then killed or like sold for a dollar. Some of them I sold for a decent profit, but the reality is it slowed the growth of my primary business. If I had poured the same amount of time into growing Catalyst and then Two-Brain, I would’ve been way further ahead. But instead, I was attracted to the “easy-hard route” of starting something from scratch because that’s the road that I know and I’ve done it over and over and over again. Think about this. You’ve been hired to be the CEO of your company. You were hired by yourself and your family, but you can only be CEO to one company at a time. If you hired somebody else to be CEO of your gym and they said, “Well, actually, I’m also gonna be CEO of that yoga studio down the street,” you would say, “Hey, what the hell are you doing? You’re supposed to be focused on growing my gym.” But there’s nobody to hold your feet to the fire as CEO of your gym. And so you give yourself a little bit of leeway, right? You chase, and you start all these other things. You get distracted. You design your own T-shirts instead of just hiring somebody to do that for you because maybe you can make an extra $3 per shirt, but it’s gonna take you three days, when really you could be growing your business, right? It’s true in gyms, it’s true in software companies. Most software companies grow to about a million bucks in revenue, and then they don’t know how to grow to $5 million. So they add a new product line instead, right? They think “I gotta build something new” because they’re technicians. And coaches are technicians, and we build. We’re builders.

Chris Cooper (15:06):
We’re not marketers and salespeople. So instead of learning the hard thing, we just get distracted by growing and starting new stuff all the time. Why do gym owners start a second gym? Or buy one before their first gym is even paying them a hundred thousand dollars per year? Because they don’t know how to reach a hundred thousand dollars a year in net owner benefit. So they go start another company that might pay them $35,000 a year, and they think like, “Well, three 35s equals a hundred.” But the reality is when you add a second gym, it’s four times the work. And adding a third gym is like six times the work. But still, we choose novelty over routine, even when routine is what’s effective. We chase the easy-hard work of starting over instead of the hard-hard work of staying focused and doing the boring stuff until it works.

Chris Cooper (15:51):
Now, I tried to break this down in my book “Founder, Farmer, Tinker, Thief” and explain the entrepreneurial journey so that you would know where exactly to focus on different tasks and what you could ignore for now—like what you could put on the shelf until you reach the next phase. So here’s the summary. In the Founder Phase, just focus on breaking even, paying all of your bills with revenue from your gym, and then earning a thousand bucks a month. That’s it. If you can do that, you don’t need staff to do that. You don’t need a big space or a lot of equipment, but you will need the basics of business. You’ll need some good systems. However, those same systems will allow you to scale and expand later. And if you start with that goal in mind, you’ll actually make it through the next phase faster, which is called Farmer Phase.

Chris Cooper (16:35):
In Farmer Phase, your job is to get to earning a hundred thousand dollars for yourself from one location. So hire low-cost skills first, follow the Profit First method to make sure that you’re increasing that owner benefit. Increase the ARM on the clients that you have. Build a model around 150 clients for now, and you know, focus on making a full-time career for yourself. Don’t focus on making full-time careers for other people if you’re not earning a hundred thousand dollars per year. Okay? The third phase is called Tinker Phase, and this is where you start making careers for other people. Now you are making a great income, at least $80,000 to $100,000 a year, and you’re reinvesting by buy yourself time. So you’re hiring a general manager, maybe, right? And you’re scaling up your business. Now you’ve got working systems and models that don’t require your constant oversight.

Chris Cooper (17:25):
You’ve got some freedom of time. You can build, you can buy another business, you can do something online—whatever. You can expand your empire. And then in the Thief Phase, things are rolling on their own. Your goal is to make lots of money and give it away. A lot of people told me that they love that book, right? And I just published “The Simple Six” to be even more granular for gym owners because daily distraction is a massive problem. Now we’ve got social -media alerts popping up all over the place. I’ve probably got like five little red circles since I started recording this. And so you go into the gym at 5 a.m. and right away you’re pulled into a Facebook conversation or something. 9 p.m. shows up, you’ve been busy all day, you haven’t even had a moment to work out yourself, but your gym hasn’t grown.

Chris Cooper (18:09):
You’re grinding and not growing. So the “Simple Six” book starts with this premise: every day, do one thing to grow your business before you do anything else. And that goal is to get you to $100,000 net owner benefit, at least. What should you do in that first half hour? Well, that’s what the Simple Six is there to help you decide. Because look: you’re smart enough. I know you can work more than hard enough, so why aren’t you actually making what you’re worth? Enough to make this a viable career that just pays for your whole family? It’s focus, right? It’s distraction. I use mentors to get me focused, and you can, too. You can book a call with my team in the link below this video. Now, really briefly, I wanna talk about why this is so important. I was probably three or four years into gym ownership before it hit me that someday I would need to retire.

Chris Cooper (18:56):
So when that happened, I hit my lowest point. And it’s interesting to realize the lowest point of gym ownership for me did not happen on my worst month for revenue or even my most unprofitable month. Instead, I actually hit rock bottom during an above-average month. The gym was pretty full. I was coaching more than 40 clients per week one on one. We were paying the rent. I wasn’t missing paychecks, I was paying off my loan. I had one full-time staff person, but I couldn’t figure out how we would even take on more clients because I was full. He was full. We had some part-timers who just couldn’t work anymore. We couldn’t grow. And it still wasn’t enough. Like I was barely paying the rent, even with a packed schedule, right? My staff weren’t making enough. They were working full time, but it wasn’t enough. My clients would only train with me, and I was working from 6 a.m. until 9 p.m. and seven hours every Saturday, too.

Chris Cooper (19:49):
Like, I couldn’t work more. I couldn’t work harder. And at that low point, I was like, “Oh, no. Is this all there is?” I couldn’t see a way to pay myself even another a hundred dollars a week, let alone save for my kids’ education, let alone retire. And even worse, when I looked around the whole fitness industry, I couldn’t find a single example of somebody who had worked as a trainer for 20 or 30 years and then retired to a life of ease. Like they didn’t have to worry about money anymore. That was 2008. 10 years later, a decade later, I had built a retirement plan for myself, but I was still the only one that I could find who had that kind of plan. You know, I had bought my first building and it was now paying me rent. I had reinvested in some other places, so I had a plan, but I couldn’t find anybody else.

Chris Cooper (20:38):
And so I said, well, any plan is better than none. And so I started teaching my plan to our highest level gym owners, and that became our Tinker Program. Last year, the Tinker Program certified more than 25 millionaires. We had 26 people who did our net-worth calculation, and they found that they have a net worth of over a million dollars. So what this means is if they sold everything they own and used that money to pay off all their debt, they’d still have at least a million dollars in cash sitting in their hand right now. That’s just barely enough to retire, but it is enough, and they’re still growing. I mean, most of these people are younger than I am. They’re not even 45 yet. And here’s how they did it. These people could possibly retire right now if they wanted to.

Chris Cooper (21:20):
They’ve got security. They can keep practicing fitness coaching people, saving lives for as long as they want to without worrying about putting food on the table. They’ve got the security of knowing that they can continue to impact lives as long as they want to. So here’s how they reach the million-dollar point, what I would call “functional retirement.” They don’t have to work anymore if they don’t want to. So the first option is to scale up your business. So some of these successful gym owners expanded their fitness empire by first building a really great gym with 150 clients and then duplicating that gym, adding more locations or growing their client base to the next level of 250 or adding different services. So some diversified into overlapping markets like opening a ninja gym or like a nutrition consulting practice. Some duplicated their operation over and over and over again in nearby town.

Chris Cooper (22:12):
And some simply added a higher-ticket offer to their primary business, which was already self-sustaining. All of them invested in mentorship to grow their business, and they had kept investing as they scaled up from Founder to Farmer to Tinker. Some actually leveled up to become mentors for Two-Brain. Because we recruit from among the most successful people, we find the people who can actually coach other people really well and who have done it themselves, and that’s who we hire to be mentors. And that’s why the value of Two-Brain just keeps going up. So I wanna make a quick note here. When I say that they reinvested in their business, I don’t mean like they just left money in their checking account. That’s not reinvesting, that’s just being lazy with your money. You have to actually think like an investor and you say, “If I pulled this money out and I was gonna put it back into the business to grow it, what would I actually spend that money on?”

Chris Cooper (23:04):
It’s not more rowers. You have to think about “how do I actually leverage this profit to grow the business beyond the level it currently is right now?” Okay? So the key to this strategy, basically of scaling, is to just keep reinvesting in your business. The pros are that it’ll probably grow faster than the stock market, right? You’ll have more than 5% growth every year. The con is that it’s gonna require a lot of your time, but if you’re passionate about running your fitness business and that’s it, then this is probably the option for you. The other option is to reinvest your profit outside your business. So after reading “Rich Dad, Poor Dad,” I decided to buy a building. This was probably around 2014, and I figured the building would house my gym as long as I wanted to own it, but then I could rent it out to other people if I decided I was gonna retire or sell my gym.

Chris Cooper (23:51):
So by 2012, I knew I was gonna do this. It took me two years to find the building and save up a down payment, but I did it and bought it in 2014. By 2017, I paid it off. I still own it. Now, my gym pays me rent on top of my net owner benefit, and I reinvest that rent somewhere else. Other people reinvest their profit in short-term rentals, like Airbnbs or long-term rentals like multi-family units, or they might buy index funds. I use some of that. They might do overfunded whole-life insurance, especially in the States. They might just put their money into bond markets, okay? But the list goes on and on. The key to this strategy is to take the profit from your gym business and put it somewhere where it will grow without your oversight so you don’t have to constantly think about it.

Chris Cooper (24:32):
The con of this strategy is it’s tempting to go start a related businesses. So, you know, if you’re listening to this and you’re in Two-Brain especially, you’re probably in the top 10% of gym owners around the world. Like, that’s just how it is. However, you might say, “Well, I also love coffee. I’m gonna go start a coffee business.” And what you forget is that you’re in like the bottom 10% of all coffee-business owners worldwide. You don’t know anything about it. So you’re starting that learning curve from scratch. I bought the easiest business to own in the world, which is self-storage—just kind of for fun. And it was just such an easy opportunity. And I’ll tell you, there’s still a learning curve there, right? It’s not just taking people’s money and giving them the key to the building or whatever.

Chris Cooper (25:18):
What’s non-negotiable between these two strategies—scaling up and reinvestment—is that you have to level up yourself as a leader. Whether you’re in the Founder Phase, whether you haven’t even started a gym yet, you’re in the Farmer Phase, you’re in the mix of it, you’ve got some staff, you’re trying to grow to 150, trying to earn a good income, or you’re in the Tinker Phase where you’re expanding your empire or learning about reinvestment—you need to grow as an entrepreneur, right? You have to level-up your knowledge and your leadership. Being the local expert on energy metabolism still makes you the local beginner on buying real estate. Sorry, none of your deadlift prowess translates into the bond market. You can’t carry that over. And as you tackle these new opportunities and you build this larger platform for your family, your leadership skills have to grow to match them.

Chris Cooper (26:05):
You’ll no longer be on the gym floor correcting squats all the time. You might have to hire a manager and teach them and lead them. You might have to spread your attention across two different gyms, and you might have to learn how to resist the urge to open a taco truck. You know, that’s just how it goes. Our Tinker Program was built to help successful gym owners make long-term plans, including expansion, reinvestment and retirement. Of course, we focus a ton of attention on leadership development, too, because that’s what matters most. So you can click below this video to also learn about our Tinker Program. Look, no matter what kind of gym you own, I want to help you because I know that you opened it to help other people. The best way that I can help you is to make your gym and your lifestyle sustainable, to keep your gym open for 30 years, to create opportunities for other people, to pursue their passion for coaching, and to keep you fed and not fighting with your spouse about the grocery bill. I don’t want gym owners to go hungry, and that’s why we celebrate and also teach people how to earn more net owner benefit. Thanks for listening. This is “Run a Profitable Gym.” If you wanna talk more about this, you can go to gymownersunited.com. That will lead you right to our free public Facebook group, where we answer questions about our podcast and we can talk about whether mentorship is right for you, if you’re at that point, too. Thanks. I’m Chris Cooper. This is “Run a Profitable Gym.”

The post Gym Owners Who Earn $20,000 a Month? Yes, It’s a Thing. appeared first on Two-Brain Business.

Bariatric Surgery and Meds for Kids: A Gym Owner’s Perspective

Weight-loss drugs and bariatric surgery for kids?

They’re in play now, and gym owners would be wise to acknowledge it even if they aren’t willing to support the new recommendations from doctors.

Early in 2023, the American Association of Pediatrics (AAP) updated its guidelines for treating obesity in kids and adolescents. This is from Healthline.com:

“Medications, lifestyle changes, and surgical interventions are on the short list of … new recommendations for physicians treating childhood obesity.”

The AAP’s own release can be found here.   

You’ll also note the dramatic increase in ads for weight-loss medications such as Ozempic, Rybelsus and Wegovy (generic name: semaglutide). Manufacturers of weight-loss drugs are spending a lot of marketing dollars right now.

Gym owners and trainers can be forgiven for throwing their hands in the air. In our community, we work on a client’s lifestyle, and medication and surgery are way outside our scope of practice. It’s easy to worry that some people will prioritize these options even if another path might produce the desired results. Every trainer would love the chance to help a client lose weight—or avoid gaining it—without invasive procedures and side effects.

But don’t worry: The AAP hasn’t forgotten about diet and exercise.

Where Do Gym Owners and Trainers Fit?

“Comprehensive obesity treatment may include nutrition support, physical activity treatment, behavioral therapy,” the AAP release states.

It continues: “Intensive health behavior and lifestyle treatment (IHBLT), while challenging to deliver and not universally available, is the most effective known behavioral treatment for child obesity. The most effective treatments include 26 or more hours of face-to-face, family-based, multicomponent treatment over a 3- to 12-month period.”

That, to me, sounds a lot like working with a great coach who can help a kid learn to move and eat to support that movement. Of course, obesity is complex, so other care providers can be involved in an intensive plan, such as doctors, nurses, nutritionists, dietitians, counsellors and so on.

Here’s a success story featuring a kid who was diagnosed with obesity at 9 and had success with a counseling program and lifestyle changes: CBC.ca.

The key point here: The new drug and surgery recommendations get all the attention, but the AAP is essentially saying that other interventions are the most effective.

That means gym owners and coaches should have even more support in their fight to help everyone—including kids—become healthier.

Focus on the People You Can Help

The reality is that intensive interventions aren’t an option for many kids, due to cost, availability or other factors. And that approach won’t work for those who won’t fully invest in the process. We know weight loss takes commitment, and some clients just won’t stick with a program. And then there’s a group of people who simply won’t pursue any prevention or remediation strategies at all. So that’s where drugs and surgery fit in many cases: as part of a last-ditch effort.

But for a significant percentage of the population, lifestyle work is an option. Many households do have the money to get their kids into programs and buy healthy food, and I can’t imagine many parents would want to send a child under the knife if another path were available.

And that’s where gym owners come in. We know, as a professional group, that sound nutrition and regular exercise improve health at any age. Sticking within our scope of practice, we can use the renewed focus on childhood obesity to remind people that we have a non-invasive, side-effect-free, fun program that can be used to prevent or address obesity.

Parents with the means to invest in the health of their kids need to hear that message. Mainstream media is going to send them streams of articles about fat shaming, body positivity, socio-economic barriers, broken health-care systems, incompetent bureaucrats and politicians, and a worldwide over-reliance on pharmacology. And Big Pharma is going to send them an endless string of ads that promise the world and list side effects in ultra-small print. It isn’t worth wading into that ocean and fighting the wave.

The smart play: Speak to parents who aren’t interested in surgery or drugs for their kids. They’re out there, and they need to hear that diet and exercise can work wonders with young ones. Yes, obesity is complex. But healthy eating strategies and regular exercise are pillars of any prevention or treatment plan.

The best part: Kids who learn how to eat and move are set up for a lifetime of good decisions and improved health. Every single kid who trains at your gym represents a huge win that can echo over decades.

If you’re disappointed or even angry about the new recommendations for treating obesity in children, start a kids program. In our 2022 “State of the Industry” report, stats revealed only 39 percent of survey respondents have kids programs. In gyms that do have kids programs, the revenue stream contributes just 9 percent to total revenue. Both numbers are too low.

If you already have a kids program, start showing off your success with children who currently train with you—with permission, of course. Write about your youth programs and explain how they solve problems. Make videos with happy parents who see your services as an important part of raising a healthy child. Talk to local groups for parents. Ask other current clients if their kids need coaching or if they have friends who need help with their children.

Whatever you do, don’t review the new guidelines, shake your head and walk away.

You can help a lot of kids live much healthier, happier lives if you find ways to connect with their families.

The post Bariatric Surgery and Meds for Kids: A Gym Owner’s Perspective appeared first on Two-Brain Business.

$2k to $10k in Monthly Revenue—The Sales Model That Made It Happen

Kyle Counts (00:00):
Hey, guys. This is Kyle Counts with Condition One CrossFit in Sullivan, Missouri. After jumping on the Two-Brain model, I was able to double my revenue coming outta my on-ramp.

Mike Warkentin (00:08):
Whoa. This is “Run a Profitable Gym.” I’m your host, Mike Warkentin. Hit “subscribe” right now so you don’t miss any more shows just like this. Today, we’re going over the Prescriptive Model. Now I know it doesn’t sound as cool and sexy as Profit Max 3000 or the Surefire Sales System, but Kyle, what did the Prescriptive Model help you do?

Kyle Counts (00:29):
Helped us double revenue, man.

Mike Warkentin (00:31):
Just like that. It doubles revenue or greatly increases revenue for gyms. It also helps increase retention. So if you wanna do those things, listen to this show. Now on the Two-Brain blog, Chris Cooper has the exact description of how the Prescriptive Model works. I’m gonna get a link in the show notes for you so you can click it. Here is the short version, so we can get this outta the way and let Kyle explain how it works at ground level. In the Prescriptive Model, you meet with a client, and you find out about their goals and the obstacles that they’re facing. Then you prescribe the best plan to help that client accomplish those goals. You close the sale, meet with the client every 90 days to review progress. You celebrate wins, you adjust the plan as needed, and you keep moving forward. It’s simple. That’s just a concept. But again, you used it to do what, Kyle?

Kyle Counts (01:17):
Double revenue.

Mike Warkentin (01:18):
Double revenue. So Kyle is going to tell us what happens with that concept at ground level in a gym. So Kyle, let’s get the basics in place. When did you start using the Prescriptive Model and why?

Kyle Counts (01:31):
So we went to, you know, CrossFit’s this weird model, right? Like everybody loves CrossFit, and Greg Glassman was brilliant when it came to coming up with, you know, a style of workout that makes people want to come in and do all that. But he wasn’t great at was teaching any of us how to run the business side. Like how do we do that? And I don’t think he always was upfront with how he started. You know, one of the things that I learned from my Two-Brain mentor when I very first started was, hey, the model that CrossFit uses in group classes is not how Greg Glassman started his business. The reason it ended up with that was because Greg Glassman started out with his personal-training clients. So just by having a few high-end clients, you give yourself an opportunity to then have those group classes. So with the Prescriptive Model, when I went to that conference, and it was the very first affiliate summit that they did, and Jeff Jucha got up, Jeff talked for like an hour, and I’m sitting there going “where’s this been for eight years?” It was I think June or July of 2021. And by December of the same year, I was more than double what I had been before. So, I mean, the simplicity of it is what makes it go.

Mike Warkentin (02:56):
So you put this thing in in about 2021. We’re in 2023 now, and you saw revenue dramatically change.

Kyle Counts (03:06):
Yeah, I would say so. Just to give you the numbers. When I very first started with Jeff, that first month, the month before I started, I was at about $1,800, $1,900 a month. And I like to lean on that “it was COVID” ‘cause it’s embarrassing to say that I let my business get that bad. By the end of 2021, I was somewhere around$ 5,000. And at the end of 2022, well, yeah, the end of 2022, we had our best month ever. We were probably around $10,500.

Mike Warkentin (03:40):
Okay, so you that’s like a five X almost at that point.

Kyle Counts (03:44):
Yeah.

Mike Warkentin (03:45):
Okay. So this is a big deal, and that’s like life-changing, business-changing stuff. So tell me, what were you doing before this? Like what was your intake process?

Kyle Counts (03:54):
And see, I think that’s the problem. There wasn’t one.

Mike Warkentin (03:56):
Okay.

Kyle Counts (03:56):
Nothing, and that’s the issue, right? And I come from a sales background. I don’t come from a gym background. My background is I sold insurance. I sold investments. Like I did all of those things, right? So the sales side was never an issue, but what I never did was I didn’t ask people why they left. And I think for most of us, we’re always afraid it’s gonna be us, and it very rarely is us. But what I also didn’t do was I didn’t ask anybody what they wanted when they got here.

Mike Warkentin (04:26):
Did you just assume they want group classes?

Kyle Counts (04:29):
You just assumed they wanna get in shape. “Oh, I wanna be healthier.” But if you don’t ask specific questions, you don’t know what “healthier” means to them. Because what “healthy” means to me is not what “healthy” means to somebody else.

Mike Warkentin (04:42):
That is a big one.

Kyle Counts (04:43):
So by not asking the questions, I didn’t know how to train these people in a way that was going to make them stay. So you had this whole—we would grow, we would shrink, we would grow, we would shrink, we would grow, we would shrink. It would never get any sustainable long-term growth. And so by asking the questions, I now had a model to go, “Okay, this person’s here because they wanna lose 10 pounds.” Well, once they’ve been here three months, now I can have a conversation and say, “Hey, Mark, are you down any weight? What have we done for that? Have we done our job? We haven’t. Okay, well let’s adjust something.” And now what happens is that client wants to stay because they feel like you’re actually helping them reach their goal.

Mike Warkentin (05:27):
Okay. So like 2021, before you’re working with Jeff, I go to your website, what happens? Do I just email you? Or what’s there? What do I see?

Kyle Counts (05:36):
Email, call, not much.

Mike Warkentin (05:38):
Whatever. Right?

Kyle Counts (05:39):
I mean, it’s there, but it’s there because we need a presence. But it wasn’t necessarily­—it definitely wasn’t driving any revenue. And there was really no rhyme or reason to what we did. It was just, “Hey, we need a website because that’s what you do.”

Mike Warkentin (05:53):
Okay. So I’ve gotta figure out how to get into your gym, and then I’m gonna just email you or message you somehow. And I’m gonna say, “What do I do?” And do you just say, “Come in for a class”?

Kyle Counts (06:02):
I’ll say, “Hey, come in. I always give the first class for free.” And then we would talk, and I would talk about CrossFit. I would give the definition of CrossFit. This is how we move. And I love helping people learn to move. So I have a little bit of a different philosophy than a lot of CrossFit coaches. But being able to connect with somebody was the easy part. If I could get you in the gym, I could keep you for at least two or three months. The problem was I didn’t keep a lot of ’em after that because I didn’t know what they wanted. I didn’t know how to help ’em.

Mike Warkentin (06:35):
Yeah. Your experience mirrors mine. I did the same thing. You know, “come in for a free trial,” and I would either lead them through a class or sometimes I’d do this class with them. “So do you wanna sign up?” They’re all sweaty. It worked for a while back in like 2010, 2011. But then it didn’t work very well after that. People didn’t wanna figure out how to get into my gym. They had goals beyond getting better at deadlifting or getting better at Fran or whatever. They wanted to lose weight, look better, play with their grandkids—whatever it was. I didn’t even know what those goals were because I assumed that they wanted to do fitness in a group setting at high intensity. And I never asked ’em that stuff,

Kyle Counts (07:11):
Which is why they called me.

Mike Warkentin (07:12):
Exactly.

Kyle Counts (07:14):
Because I loved it. So they have to.

Mike Warkentin (07:16):
We had an almost identical experience. So talk to me about changing that. So you find out about the Prescriptive Model and it’s step by step laid out. We’ve got all the stuff in our free resources, which you can look at in the show notes, but also we have mentors who teach gym owners how to put this in place. So tell me about that.

Kyle Counts (07:32):
Once Jeff and I sat down—so I called him and he told me what the cost was. And listen, I’m the biggest skeptic in the world. I’m a sales guy. My dad was a car salesman. My dad owned a car dealership. Like, I get it. I have been through the sales cycle in my life. But you learn that if you actually just talk to people, you can figure things out. So Jeff’s like, “Hey, I know it’s expensive. Let me tell you a couple of small things that you can do.” And he gave me the story of how Greg Glassman started personal training. And when he got to where he had too many clients, he then went to “well, let me put this person and this person together because they’re similar in their goals and they’re similar in what they’re doing, and then I’ll charge each a little bit less.” And he kept doing that until he didn’t have enough time in the day and everything was a group class. But we as CrossFit owners, we don’t know that model. So we just know group classes. So that’s what we did well. So I was like, “Okay, well, I have this client that I’ve had for a really long time. She’s always wanted to lose weight, but we’ve never been able to get it.” And she would be here for six months and be hard at it. And then I would lose her for a year, and then she would come back, and it was this non-stop back and forth with her. And I sat her down that first day, and I was like, “Listen, I think you need something different, and this is what I think you need.” And even as a salesperson, I was reluctant. I am in a town of 7,000 people. I was reluctant to ask for $50 an hour. I mean, almost like, “I can’t believe I’m saying this out loud.” Like, “She’s gonna pay me $500 a month? Nobody pays me that much money.”

Mike Warkentin (09:13):
What happened?

Kyle Counts (09:13):
And I asked her, and she goes, “Yeah, that’s great. I think that’d be great.” And I was like, “That was way easier than I thought it was.”

Mike Warkentin (09:22):
So you told her what you think she needed to do to accomplish her goals, right? And gave her that prescription. That’s where the name comes from.

Kyle Counts (09:31):
Right. Before I did that, I said, “Hey, you’ve been coming a long time. I kind of got this new thing. Like, can I ask you some questions?” And that’s what I did. Like there’s the No Sweat Intro form that Two-Brain has. I put my logo on it, and I printed it off, and I asked her the questions. And then when I got to the end, I said, “Based on what you’re telling me, this is what I would recommend.” So it’s not even like I just figured it out on my own. I asked the questions, and she said, “Yeah, that’s great.” And I was like, “Oh, all right.” So then I had somebody else call, and they were like, “Hey. My husband”—it was a client of mine; her husband was wanting to lose some weight. And I was like, “Okay, well, have ’em come in.” Like “I don’t do things the same as I used to. Have ’em come in. We need to talk first, but we’ll sit down and have a conversation. Then we’ll kind of decide where to go from there.” Same thing. Ask the questions. These two are still paying me. Now everybody else that pays me for personal training is paying me $70 an hour. They’re not. They’re the first two. But Jeff said, “Hey, get these two people. If you get enough in to pay for me, then call me.” It took me three days and I was like, “Oh, okay, well that’s $900 a month. So, all right, I guess I’m gonna call Jeff.” So I did. And then it just kind of snowballed from there.

Mike Warkentin (10:56):
Okay. So I’m gonna unpack a couple of things because there’s some groundbreaking stuff that people won’t necessarily see. So first of all, you were afraid—as a sales guys with a sales background, dad owned a car dealership—to ask for $50 an hour in a personal-training setting in a small town. You did it and immediately got it. They don’t care. And now you’re charging $70. Right?

Kyle Counts (11:19):
Hundred percent. And I get it.

Mike Warkentin (11:21):
So that’s a huge mindset shift, and that’s a huge change because there’s so many gyms out there that are underpricing their services because they don’t see the value.

Kyle Counts (11:29):
Well, and it’s hard to ask for that. And I’m a guy—listen, I’m a guy that, like, my biggest sale in the life-insurance business was $70,000 a year,

Mike Warkentin (11:37):
Not $50!

Kyle Counts (11:38):
I asked a business to pay me $6,000 a month. And I was afraid to ask that. I’m like, “Am I worth that?” I know I am now. Like I’ve seen it. And I think what a lot of these gym owners will find is if they’re willing to bet on themselves in that way, what they’ll find is that they’re able to change the lives of their clients. And that just gives you more confidence to ask for the money. Listen, somebody comes in here, I’m worth $70 an hour. I’m probably worth $150 an hour to be honest because I can change your life. If I was living in a bigger town, I would get—‘cause I’m not just gonna train you. I’m gonna change your whole life.

Mike Warkentin (12:14):
And so that’s the other thing in the Prescriptive Model: you have this conversation. You use this strategy called “motivational interviewing.” You find out “what does this person want and why?” Then, as the fitness professional—everyone listening is a fitness pro and has the skills to make people fitter—you tell them exactly what they need. “So I wanna lose weight.” “Okay, you need to work out with me three times a week. You need to do a nutrition habits-based program. And I wanna tack on one personal-training session if you’re going in a group setting.” Or something like that. Whatever it is, you give them this prescription, and you say, “How does that sound?” “Whoa, that sounds like the perfect plan to accomplish my goals.” You open up your sales binder, which you’ve already got pre-prepared. Two-Brain has templates for clients by the way. And you point to the price—

Kyle Counts (12:55):
Which I still use, right?

Mike Warkentin (12:57):
You still use it?

Kyle Counts (12:57):
There’s no reason to make this stuff.

Mike Warkentin (12:59):
It doesn’t have to be complicated.

Kyle Counts (13:02):
It’s just black and white

Mike Warkentin (13:03):
Put your logo on it and you show them the price. Now many people will just say, “Cool and let’s ride,” and away we go, and you set them on your onboarding program. Or if there’s some objections there, like, “Oh I just really can’t afford that,” you say, “Okay, you know what? I understand. We have this tier,” and you show them a different tier. Maybe you adjust the prescription a little bit. But whatever you do, you get that thing in place, and it’s very easy to do. You can do it as a gym owner. If you’re scared of sales, you can teach a person to do it. So you can offload the sales role. It’s very simple process. Here is the big one, and Kyle, I wanna focus on this because it’s huge. You schedule a Goal Review Session in 90 days. You can do it at slightly different intervals, but 90 is kinda the sweet spot. And at that Goal Review Session, Kyle, what happens? What do you do and why is it important?

Kyle Counts (13:48):
You ask them where they’re at. How do they feel about where they’re at? “Did we accomplish the goal we set out to when you started? If we haven’t, are we on track?” Because for my first client, she needs to lose a hundred pounds. So we’re not gonna lose a hundred pounds in 90 days. But are we making progress? Yeah, we’re down 26 pounds.

Mike Warkentin (14:10):
25%.

Kyle Counts (14:10):
We’re on the right track. “We’re on the right track to get where you want to go.” And what it does is it—you don’t know what happens in someone’s life over 90 days. It’s a short time period, but if you’ve ever had something crazy in your life happen, you know that in 90 days everything can change. So when I sit down with them in 90 days, not only am I getting “did we accomplish the goal in the first 90 days? Did the goal change between now and then? And are we on track to continue hitting that goal?” but what it also does is it allows me as the business owner is to instead of… The training side is easy. If anybody’s on this call and you have a gym, you know the training side is not where you struggle. You’re on this call because you struggle on the back end. If you’re constantly talking to people about their goals, you know what they want. They know you care, and they stay. They just keep coming in. Because you’re pushing them toward their goals and they know you give a shit.

Mike Warkentin (15:07):
Yeah. And clients don’t always see progress, right? If they’ve got this huge goal, a hundred-pound weight loss, maybe she’s focused on that. Maybe she wants to weigh whatever­—it’s 180 pounds or something like that. She might be so focused on that goal that she doesn’t see the number going down from 280 to 275, 270. And it seems silly because you’re outside that. But when you are inside that box, your own brain, you often don’t see changes happening. So it’s really important as a coach to say, “Yep, this is working. We’ve taken measurements, we can show you that this is actually happening. You’re doing an amazing job.” You can celebrate that. And clients, I’ve seen it happen, will be like, “I had no idea that this was happening.” Right?

Kyle Counts (15:43):
Yep. I can give you an example. We’ve got an InBody machine. And I’ve had a client, she has been coming, she was with me at CrossFit for four years, and she came to me six months ago, seven months ago and said, “Hey, you know, I really want something different. Like, I’m retired now. You know, my husband has passed, you know.” She’s not looking to date, but she just wants to feel better about herself. And she’s not big, but she wanted to be in better shape. Now she’s struggled the last, I don’t know, four or five weeks because she feels like she hasn’t lost weight. And I’m like, “When was the last time we did an InBody?” And I pulled her chart ‘cause I’m not gonna have this conversation with her, right? I’m doing this on my own. Like, okay, when was the last time Pam and I did an InBody, right? Let me pull her chart. So I pulled her file out and I looked at it and said, “Okay, it’s been five months since we did an InBody. We’re getting close to that review. So I’m just gonna speed the review up instead of waiting another three weeks or four weeks to do the 90-day review. Let’s just do it now, and let’s hop her on the InBody, and let’s see what happens.” Now the weight loss, she’s only down two pounds. But she lost 16% body fat. Now you can’t know that unless you’ve done the scans, right? Same machine, same scans, same everything. And so her mindset completely shifted ‘cause while she hasn’t lost the weight that she wanted, she understands that what we’re doing is working.

Mike Warkentin (17:06):

Wow. So that’s a huge retention thing, right? Because if she didn’t know that progress was happening, she might leave because she doesn’t see it happening. Right? So you have a huge retention tool in these 90-day Goal Review Sessions. They’re proven through Two-Brain data to increase retention at gyms. Two-Brain clients, average retention numbers are more than double that of the average gym owner. Our “State of the Industry” 2022 study showed that. So we’ve got a retention tool. Now you showcase. You can put this clan on a podium, right? So this client is now happy about this progress. You have an opportunity to say, “Hey, can I just pull out my phone and, you know, film a video of you talking? I wanna show you off.” And this person is often going to be very excited to do that. Now you’ve got a marketing asset that you can put up and show to prospective clients who have the same goals and say “that person is just like me. I wanna accomplish that.” Another thing you can do with a happy client, ask for a referral. Two-Brain has a whole template for that. And that’s a perfect time to do it. If the person isn’t getting the progress they want, that is a perfect time to say, “Okay, let’s take a look at some ways to speed this up and make it better.” And you can adjust the prescription—let’s say your personal training plan. Like, “I wanna make some adjustments to this.” That builds trust in the relationship. The other thing that you can do is you add something to the program. So I had many clients who just did fitness with me, and they didn’t lose weight. What’s missing? Obviously nutrition. Add a nutrition plan. What happens then at the next 90-day meeting? They’re making progress. Now that’s an upsell for the gym. It’s a huge increase in average revenue per member, but it also gets the clients results and gets the clients results faster. That is an increase in value, speed. Increased speed of results is worth money to clients. And we often see about 30% of clients in Goal Review Sessions will upgrade their prescriptions, and it will result in about a 30% increase in average revenue per member. Those are stats that Two-Brain has collected from our clients. Kyle, have you seen that kind of thing happening in your gym?

Kyle Counts (19:03):
Yeah, absolutely. And one of the things, again, like you use those Goal Review Sessions as you sit down with somebody, you may also find out that you’re gonna have clients that will get into the personal training, but they know it’s a stretch for their budget. Right? Group classes aren’t gonna get it done. Now we need to add the nutrition program, but they really can’t afford that extra a hundred dollars a month or whatever it is. You’re gonna charge for it, but guess what? You want a referral and that extra hundred? Super simple: “Hey, do you have a friend that’s like you? What if you brought that friend in and I lowered the cost for both of you? You work out together. Maybe I’ll keep your cost the same and I’ll give you the nutrition for free.” Now I just picked up another client. I mean, it’s a slight discount off the $70, but even if it’s $50, I just picked up another $600 a month. Cool. I’m good with that.

Mike Warkentin (19:52):
All because you’re having a conversation.

Kyle Counts (19:53):
So they give you the tools and they give you the tools in a practical form. Like I think that’s the biggest difference, right? There’s one thing just like, you know what? You can go on YouTube, you can go on Instagram, you can find people that give you all kinds of information, and a lot of it’s really good when it comes to fitness, but if it doesn’t work for you, or you’re not right there with them, they can’t help you if it’s not practically useful, right? Like this stuff is useful, it’s easy for you to follow. The hardest part for me is not gonna be the hardest part for one of you. The sales part isn’t the hard part for me. The hard part for me is doing all the reviews and stuff. I have a system. I didn’t have any paid employees before this, and now I have an employee that makes almost $40,000 a year. And you know what I don’t like doing? I like doing the reviews. I don’t like remembering when it’s time to do the reviews. So I just tell Cullen, “You tell me when it’s time to do ’em, and I’ll do ’em. And then you be in charge of telling me when, and if I don’t do what I’m supposed to, I give him a bonus.” That way it makes me accountable. Like, we all are gonna have those things in your business that you’re not great at. Cool. Have somebody help you. Hire somebody to do it. So, I don’t know, to me like Two-Brain’s so good at just making things easily understandable and followable for anybody who wants to try it.

Mike Warkentin (21:22):
So is the Prescriptive Model difficult to implement?

Kyle Counts (21:25):
No.

Mike Warkentin (21:26):
Are there any obstacles that slowed you down and how’d you solve them? Anything important?

Kyle Counts (21:32):

Honestly the obstacles are just your own mentality. Like we all have an idea of what this was supposed to look like or what the job was supposed to be. And when you start really getting into the minutiae of “hey, these are the things that you have to do to make sure that your gym is running the way you want,” there are certain things you’re just gonna have to do that you didn’t want to do or you didn’t know you were gonna have to do before. So if you can just get out of your own mindset and say, “Hey, listen, instead of trying to tell you what I’m gonna do, I’m just gonna listen.” I mean literally like Jeff will tell you I’m a very smart guy. I’m very good with people. But when it came to this stuff, I have tried it my way, and it hasn’t worked. I have not made enough money, and I was ready to walk away. I literally was like, I’m sitting there thinking, “Okay, do I ride this thing out until my youngest graduates high school in two years and then I’ll just move on, let it go, and go back to work and do something else?” Until I found Jeff at that meeting and called him and started doing this. And I’m like, “Okay, now that business is great, why would I walk away from it?”

Mike Warkentin (22:35):
Now, would it be a mistake to say that the Prescriptive Model is just a gym-changing, life-changing thing for a gym owner?

Kyle Counts (22:44):
No, it really will be. I mean, truly like, my oldest graduates from school, college, on Saturday and I leave tomorrow morning at 10:45 to fly to New York for his graduation. I’ve got four clients tomorrow morning. I’ve got three clients tomorrow afternoon. I’ve got three more clients Thursday afternoon, and I’ve got four more clients Friday morning, and two more clients Friday afternoon, along with all of my group classes. I don’t have anything to worry about. I’m leaving, and it’ll be fine. It runs without me. I mean obviously it’s better when I’m here, but I don’t have to be here for this place to go.

Mike Warkentin (23:30):
Oh, it’s so great to hear because that gives you the freedom to do things with your family, which is what an entrepreneur should be able to do. And you would’ve been outta the industry if not for this. So, I mean, that’s a great coach that would not be there running a gym and helping clients in a small town that obviously needs you. So lemme ask you this as we close this out. Gym owners out there are listening, and they’re maybe skeptical about this. What would you say to them about the Prescriptive Model to help them understand why it’s important?

Kyle Counts (24:02):
Just give it a shot. The biggest reason that we were not successful in the past is we did not know what the client wanted. If you don’t know what the client wants, you cannot give that to them. If you can’t give the client what they want, no matter how much they like you, no matter how much they like the environment you bring, no matter how much they like the people at your gym eventually they will walk away. I guess it’s kind of the same thing when it comes to workouts. If you’re a coach out there and you design a workout and your client comes in and says, “Yeah, but I don’t wanna start with that movement. I wanna start with that movement.” And I can tell you how I would feel about that. And I’m sure all of the coaches out there would say the same thing: “No, no, no. There’s a method to the madness. There’s a method to why we’re doing it in this order.” Just like with the Prescriptive Model, it’s so simple to go, “Listen, this has been done by thousands of gym owners now, and it works.” I’ve got friends that I knew that owned gyms about an hour from St. Louis. They’ve owned gyms in St. Louis since I’ve been around CrossFit. I knew ’em when I was doing the Open 12 years ago. That’s how old I am and how long I’ve been doing this. And they’re doing this, too. They’re using the Two-Brain model as well. And these are guys that—they were successful before and now they’re just more successful. It’s like anybody that I’ve talked to that gets on this road finds a way to make more money than they thought they could.

Mike Warkentin (25:37):
So listeners, if you’re out there, I would encourage you to click the link in the show notes and you can read all about the Prescriptive Model if you are visual or if you would prefer to read it rather than listen to it. But that is Kyle’s story, and it’s not unique. That story with the Prescriptive Model has been repeated by many, many Two-Brain clients. If you wanna go further, book a call with us. That link is also in the show notes and you can talk to someone about how this model will help your business and all the other assets that Two-Brain has for clients. Kyle, it helped you five X revenue. We said double, but it sounds like five X.

Kyle Counts (26:10):
Hundred percent. And we’re still growing. We’re still growing. Like we have had two months since I started that we haven’t grown. And they were like one person we didn’t grow. Okay?

Mike Warkentin (26:21):

So you’ve got it figure it out now. Kyle, thanks so much for being here and sharing your story, and have a safe flight tomorrow.

Kyle Counts (26:28):
Thank you.

Mike Warkentin (26:28):
That was Kyle Counts. This is “Run a Profitable Gym,” where the world’s best gym owners tell you exactly what they’re doing so you can have the same success that they are. Please subscribe for more episodes on your way out. If you’re on YouTube, I would love it if you hit the like button and even left a comment. That would be great. Now here’s Two-Brain founder Chris Cooper with a final word.

Chris Cooper (26:49):
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 $2k to $10k in Monthly Revenue—The Sales Model That Made It Happen appeared first on Two-Brain Business.

How to Get Referrals From Your Gym Clients

You and I both know that the best new clients come from your current clients. That’s not a secret.

But if you’re just sitting around, praying and hoping that your clients will refer their friends, you’ll starve to death.

You have to ask for referrals. And the best time is during a Goal Review Session.

Here’s the process:

1. You measure the client’s progress.

2. You ask if they’re completely happy with the progress.

3A. If they haven’t made much progress, make a new prescription. Like this: “Well, Jane, in your shoes, here’s what I’d do … .”

3B. If they’ve made great progress, make them famous. Like this:

“Jane, I’m so proud of you! I think your story could inspire a lot of people!”Jane (humbly): “Well, I dunno … .”You: “Of course! Do you have any idea how special you are?”You: “Look, I have my camera right here. I know it’s a lot to ask, but could you give some wisdom to those who are just starting their fitness journey? Maybe just something you wish you’d been told when you started here six months ago?” (Hold up the camera and press record.)

4. Thank them and ask them to bring in a specific person. You’ll need to know the client well before you do this. (Two-Brain clients can follow the Affinity Marketing process to prepare for Goal Review Sessions and 10x their results by clicking here.) Example: “Jane, I know your spouse loves to golf. He’s never going to want to come in and hit hard workouts—he’s told both of us that already! But as a ‘thank you,’ what if we invited him in to do some golf exercises and stretches? Just a little bonus from me to you. You think he’d go for it?” Then get the spouse’s contact info, text him an invite, and set him up with an appointment.

The Prescriptive Model and “Help First”

The Prescriptive Model starts the conversation and creates the environment that makes asking for referrals very natural. It’s not selling. It’s helping your clients by helping the people around them.

I wrote a whole book about this concept: It’s called “Help First.” When you truly believe in your service, it’s your responsibility to share it with the world—even if that means being uncomfortable when talking about it at first.

Practice asking for referrals on your dog, your spouse or your staff members if you need to. Get the reps so you’re comfortable when you have a real client in your office.

Remember: You can’t save anyone if you don’t get people in the door first!

The post How to Get Referrals From Your Gym Clients appeared first on Two-Brain Business.

Clients Aren’t Getting Results? Here’s Exactly What to Do.

Tara was one of my favorite clients.

She was a local news celebrity, and she’d quit smoking a few months before I met her. Unfortunately, when she stopped smoking, she gained 30 lb. She hired me to help her drop the weight.

We started with a measurement session, including skin-fold calipers, a tape measure and—yup—the scale. Then we went straight into constantly varied functional movements performed at high intensity.

Six weeks later, Tara’s deadlift was really awesome (over 200 lb.). She wasn’t scared of box jumps anymore. She could do a 21-15-9 workout in half the time. And she was actually jogging.

I was so proud of her and all her improvements—until we did her measurements again.

Six weeks in, she was up 3 lb.

She was incredibly sad. But I’d been here before, so I told her about body fat and metabolism (you know the drill). I got out the calipers and squeezed the hell out of them, trying to show her that she was losing fat. It was barely a consolation, but she agreed to try another six weeks.

Four weeks later, she showed up smelling like cigarette smoke.

“I just need to drop this weight!” she said. Then she broke down and cried.

The problem wasn’t that my programming was bad, or that I didn’t know enough, or that I didn’t have enough certifications.

The problem was that I’d confused my goal (improved fitness) for her goal (weight loss).

That was a huge mistake.

Generating Real Results for Clients

Fitness coaches have a tough time getting out of our own heads. We suffer from novelty bias (the last thing we learned is the best thing ever), from expertise bias (we think everyone knows what we do about fitness), and from preference bias (if we love CrossFit or some other program, we want everyone to love it, too).

The Prescriptive Model can help. A key feature of the model: quarterly goal reviews with clients. Here’s why these meetings are essential for client success and business improvement.

1. Goal reviews keep clients around.

My friend Brian Bott, who has two very successful gyms on Long Island, told me “the best program you give a client is the second program.” He explained that the first prescription you give a client is probably pretty good, but you’re still sighting in your rifle. If you tell a client that your prescription will keep getting better over time, they’ll be eager to keep investing their time in your coaching.

2. Goal reviews build trust.

You don’t have to have every answer. If your first prescription doesn’t get results, then you can say, “OK, we’re going to add some nutrition coaching to your program.” The client will trust you more because they’ve invested in your coaching and you have a strong relationship: They won’t want to start over with a new coach. However, if you don’t measure their progress and don’t tell them how you’ll change their plan, they’ll be left to guess—and that usually means they’ll leave your gym and try something else.

3. Goal reviews identify opportunities for new offerings.

When several clients mention the same goal—like running their first 5-km race—you can build a new program, like a Couch to 5k group. This helps the clients with their goals, increases revenue for the gym and creates an opportunity for coaches who love running to generate more income while focusing on an area of interest.

4. Goal reviews determine your programming.

Forget about whose programming is best—the best programing for your group classes should reflect the strengths and weaknesses of the group. If you have an option to do broad, general and inclusive workouts in a class setting, you must still track the progress of each individual in that class. Is each client getting stronger? Is aerobic capacity improving? If not, that’s the time to change your programming—not when a new Games athlete starts selling their SpicyHOT Program over Instagram.

Results = Retention

Building a client-centric business means getting your clients better and better results. That’s never a one-time decision. It’s a process of constant audit and improvement. It means cutting things that aren’t working and adding value with things that actually matter.

Many coaches subconsciously avoid tracking client metrics because they’re scared to see that their program isn’t getting clients the results they want. But tracking real results will make your business better and better.

If you track results and always work to generate better results faster, your clients will see constant forward progress, and they’ll keep training with you for years.

The post Clients Aren’t Getting Results? Here’s Exactly What to Do. appeared first on Two-Brain Business.

The No. 1 Way to Increase Client Value and Retention in Your Gym

Chris Cooper (00:00):
What is the No. 1 model for increasing client value and keeping them around long term and getting the best results? It’s called the Prescriptive Model. I’m Chris Cooper. This is “Run a Profitable Gym,” and if you wanna ask questions about this episode or just talk about the Prescriptive Model more, you can jump into Gymownersunited.com and ask anything that you want there. My team and I are usually in there volunteering our time for free to answer questions and help gym owners become more successful. Today we’re gonna talk about the Prescriptive Model. We’re gonna cover three big topics. The first topic is what is the Prescriptive Model and why is it so effective? The second is how do you actually walk through this with a client? What does it look like in practice? And the third is where do people usually get hung up? Like why are gyms not just using this all the time?

Chris Cooper (00:47):
What’s really interesting is that after I’ve been teaching this now for nearly a decade, I really appreciate when I see it in other businesses, and you’re going to see why as we go through this. So think of yourself as a consumer when you’re buying another service from somebody else, but also try and place yourself in the mind of a client who’s coming into your gym for the first time. 10 years ago, doing stuff like free trials, it worked because you had this audience in your local market of early adopters. People who were already sold on your service, be that CrossFit or weightlifting or Pilates or whatever that was. They already knew they were going to buy when they came in the door. That doesn’t exist anymore. And building a client-centric business means always adapting your service as much as possible to maximize client results. Client results are what we’re selling here, not a method.

Chris Cooper (01:38):
And so the free trial where people just come in and try stuff, that doesn’t work anymore, and signing people up and just hoping they stay forever because they love the service as much as you do, that doesn’t work anymore. We need to be able to orient our entire business around getting a client what they want instead of just selling the thing that we like. Let’s start with going through the Prescriptive Model step by step. The Prescriptive Model starts with what we call a No Sweat Intro. This is a consultation where somebody comes into your gym, they talk about the goals that they want to get, and then we’re going to offer to sell them what they need to get there. But the first thing that we’re going to do at an NSI after we’ve established their why—after we’ve talked about their reasons for wanting to do this—is measure their starting point.

Chris Cooper (02:27):
That’s an objective measurement, okay? That’s really important. When people come in and they wanna lose weight, you need to know their weight that they’re starting from. When people come in and they say, “Oh, I wanna firm up or tone up or whatever,” you gotta measure their body-fat percentage. Now, you don’t have to do this, you know, in the most expensive possible way. I use an InBody 270. I love the 270 because it’s accurate enough. It’s consistent. So I know that a client is gonna get the same results. Here we go. Here’s an InBody that I did on myself this morning. Okay, they’re gonna gonna get a printout like this. They’re gonna be able to see their progress on these little lines down here. They’re gonna be able to take a picture. You’re gonna be able to talk about it. You can also use a tape measure, a $9 plastic pair of skin-fold calipers—whatever you use.

Chris Cooper (03:14):
Consistency is more important than accuracy. Even if you’re off by 3%, 5% in their first pinch, as long as you’re consistently off by the same amount, you can show them progress, and that’s what matters. So the point of doing an objective measurement is so that we can show progress later on. A lot of people will include mobility assessments and stuff here, and that’s okay if the client says “I need to improve my mobility or my flexibility” or “I’m stiff all the time.” But what’s important is that you come back and do that assessment again later so that you can show them progress. Way too many gym owners will do something like, you know, Functional Movement Screen. When a client’s coming in the door, they’ll test them once. They’ll say, “Oh, wow, you’re really bad at this.” And then never do the test again.

Chris Cooper (03:59):
So the client is left to wonder “am I getting any better? Why did we do that test in the first place?” So that objective measurement is really key because that is going to tell you “here is what you need. Now that I know where we’re starting from, and I know your goal, I am the expert who can map backward from this goal to where you are right now. Okay? I can break it into steps for you.” So you’ve done a couple of things. No. 1, you’ve shown that you’re an empathetic listener at the NSI, and we teach this step by step in our mentorship practice, okay? Then we have established your authority and expertise by saying, “Okay, here’s where we’re starting, and now it’s our job to tell them the truth. Here we go. If you want to reach that goal from where you are now, the best path is my prescription.”

Chris Cooper (04:46):
You don’t have to use the word “prescription” if you don’t want to. Some people are nervous about it, you know. It might have a connotation to do with the medical field or whatever. I say “prescription.” “Here is your best prescription.” A lot of the time when we’re a gym owner, we filter that prescription before we give it. So we give the prescription with conditions. And what I mean by that is we will apply our own budget. So you think, “Okay, well, what this client actually needs is to see me four times a week and follow this nutrition plan, but that costs $700 a month. I saw what they were driving when they pulled up to the front door. I don’t think they can afford $700 a month. So I’m just gonna present them with the option to do our most basic general group fitness—same programming as everybody else, no additional help, no nutrition coaching program—because that’s the budget I think they have.”

Chris Cooper (05:34):
And this is a massive mistake. You do not get to dictate somebody else’s budget to them. Instead, what you’ve gotta do is have the conviction and the courage to say, “Here is what is best for you.” And then let them decide, right? You don’t control their wallet and don’t make filters on their budget based on your budget. There are way too many gym owners who cannot afford their own service, and they project that onto everybody else. But your best clients are probably making more money than you, and ultimately they have to decide what their priorities are. I see way too many gym owners ranting about people who will pay $4 a day for coffee but won’t pay $3 a day for a gym membership. The reality is you’re probably filtering those people out with your own insecurities about budgeting. All right? So you make the prescription: “Here is what you need, okay?”

Chris Cooper (06:25):
And then you say “now you need three workouts a week, and you need a sensible nutrition plan that you can follow that’s based on habits” or whatever your philosophy is—macros, calorie counting, whatever, keto. You make that recommendation, then you start qualifying what that prescription would be by tailoring it to what the client wants. So here you’re telling the client “here’s what you need.” Now you’re gonna ask the client “how do you want to do this? Okay? So would you prefer to do your workouts in a small-group setting or would you prefer to do your workouts one on one with me?” Okay, that’s the first question. If they say “one-on-one,” you say “okay, great. PT.” If they say “group,” you say “okay, no problem.” We’re gonna talk about their on-ramp process in a moment.

Chris Cooper (07:18):
Your nutrition program: “Do you think that your biggest challenge with nutrition is knowledge or accountability?” “I pretty much know what to eat. I just, you know, I don’t do it.” “Okay. We have an accountability program. So the program that’s gonna work best for you is one-on-one personal training, where we meet up three times a week in the gym, and also our accountability program to make sure that you’re eating on track. But I’m also going to give you some extra help. I’m gonna give you our nutrition guide. I’m gonna give you our shopping guide, our shopping list. I’m gonna give you access to our private app that will let you track food and plan your grocery list. I’m also gonna give you some free videos on how to eat and how to do meal prep and some stretches to do in between our workouts. Sound good? Great.”

Chris Cooper (07:58):
Okay. Now what you’ve done is you’ve made that prescription for them. You say, “Okay, the investment in that prescription is X. Okay?” And again, you’re letting them make the choice based on their budget and priorities. You have no idea what their budget or priorities are. All right? The key, though, is that whatever first prescription you make, it is not gonna be completely dialed in. Like you just met this person. No matter how good you are at programming, you don’t know their entire exercise history, and you don’t know what they like and dislike. You don’t know what they’ll respond to yet. So we often say that the second program is the best program because now you’ve had a time to dial it in. So what happens after three months? You make this first prescription, whatever it is, and you sit down with the client and you do a goal review.

Chris Cooper (08:41):
The goal review is basically your NSI starting with the objective measurement again. So whatever you measured them in the first time—was it body fat? Was it flexibility? Was it strength? Whatever. Blood pressure, weight—you wanna do that measurement again. Now, you don’t have to do all those measurements for everybody. You just measure what they care about. Okay? So you wanna be able to show them progress. So a lot of people, a lot of gym owners, actually shy away from this because they’re maybe subconsciously worried that their clients are not getting progress. But the thing is this creates a virtuous cycle of value for the client, and also for the gym. So you do the measurement. Okay, client lost a lot of weight—wonderful. “You know, do you wanna keep going with what you’re doing? It’s obviously working.” They say “Hell, yeah, 90-day plan, high five, away we go!”

Chris Cooper (09:35):
If they don’t get results though, that’s okay. They’re not going to quit because now they’ve invested in you for three months, right? You have sunk costs in your relationship, so they’re better to keep going with you if you give them a new prescription. So you can say, “All right, looking at our results here, there are some positives, but we’re not really where either one of us wanted to go. Agree? Okay? To really get our foot on the gas pedal here, what I recommend is that we add nutrition coaching so that we can really focus in on that.” Or you might say, “I’d like you to add in some non-exercise activity like walking every single day. We’ll see where that gets us. Okay?” So you’ve upgraded the program. Now your advice is actually more valuable than it was in the first place because anybody else that they start over with, they’re gonna have to go through this same process of trial and error to figure out the best prescription for them.

Chris Cooper (10:29):
And knowing you, you’re a great coach, you’re gonna get there. You know, if you don’t hit the target on your first try, and few of us do, don’t worry. You’re gonna get there on the second try. Or at least you’re gonna get closer and closer, and ultimately you’re going to have the best prescription for this client. As a client progresses, their desires change, their body changes, right? So their goals change. And having this goal-review process means that you can stay on top of them. The worst thing that you can do is bring a client in, sign ’em up, and then never track their progress, never change their prescription—just assume like, “Oh, they love doing my yoga, they love doing my CrossFit, and they just will forever.” When in reality, they need to see progress, and they need to have their prescription changed. Sometimes, you know, some clients leave your gym and they’ll say, “I just want a break,” but what I’ve learned over time is that a change is as good as a rest.

Chris Cooper (11:23):
And so you give them something different to do, like a new goal: “Hey, you’re gonna do a Spartan Race.” Or, “Hey, it’s February. Let’s really focus on dropping body fat between now and June, where normally you only care about performance.” You know, this is great, right? You’re keeping the client engaged. They’ve got new goals, new areas of focus and new progress. And so they go through that prescription, and three months later you bring them back in for another goal review. “How are we doing? Did we do even better? We’re on the right track. We’re making progress. We’re getting closer. You know, I really wonder if maybe we should tweak your exercise prescription. I’m gonna have you start wearing a heart-rate monitor. I want you to do two days a week in Zone 2, one day in Zone 3, one day in Zone 5—you’re gonna come to class for those.”

Chris Cooper (12:08):

And as you build trust over time by using this model, then the value of the client increases, and so does the retention because your value to them increases. You have invested time and energy into them. You’re starting to see the results, and you continue to invest in them. You are pouring value into them, and they will continue to pour value into your business. Signing somebody up—”Here, you go. Go do my workout program, my high-intensity interval-training boot camp. Stay as long as you can”—that is not what creates long-term retention. If the client isn’t being measured, they won’t know if they’re getting results. You know, they might see some if they’re measuring themselves, but they won’t see all of them. It’s too hard when you’re in your own body to see results. If you’re not measuring their progress and then adjusting their plan, they might just say, “Oh, well, this, you know, boot camp doesn’t work. I’m gonna go do something completely different. I’m gonna try weightlifting or something instead. I’m gonna try running or jogging.” And if you’re not talking to them, then they’re just gonna have to make that decision on their own. Your job is to act as a trusted coach. It’s not just to put out the best programming. It’s to adjust the prescription when it’s not working to optimize it so that it is. You know, we teach business owners all the time. You go through this process of systemization, then optimization, then growth, and then scale. It’s the same with a client. When a client comes in, your first prescription is like the workout system that they’re going to have, right? And so you’re building habits. They’re coming to the gym three times a week.

Chris Cooper (13:43):
They’ve got the foundational habits down. The next step, though, is to optimize it. You have to make it even more effective so that they’re getting better results in faster timeframes, right? And that’s what the Prescriptive Model is all about. So there’s many, many places where people screw this up. The first is they don’t do it an NSI. They do a free trial. They think that “somebody who comes in and tries my thing, CrossFit, is just gonna love it … ‘cause that’s what happened to me.” But you are not your best client. You were an early adopter. You fell in love with the method, be that boot camp or Pilates or yoga or whatever it was, and that was enough for you. That is not enough for them. You need to be able to say to a client “let’s talk about your goals, and then I’ll tell you whether I can get you to those goals or not.”

Chris Cooper (14:36):

There is a percentage of people for whom you are not a good fit, and you want to filter them out here because if you let them just jump into your group class and then try to filter them out, you’re just gonna create bad feelings, and you will never get that client back. Instead, what you wanna do is say “we can’t help you right now” or, you know, point them to somebody who can. As a gym owner in a coaching gym, you have a service to which people will ascend. That means you’re the top of the pack. So maybe they need to start with a walking program, or maybe they need to start with just a couch-to-5K program. Maybe they need to start with a personal trainer somewhere else. But eventually, if you’re running the best program, they will listen to you.

Chris Cooper (15:15):
They might not be your best client right now, but eventually they will be. And so if somebody comes in and does an NSI and you’re way outta their budget or they’re just like, “Wow, I am not ready for that,” that’s fine. What you can do is say, “In that case, if I were in your shoes, I would recommend this. Start a walking program for three months. Okay? I’m even gonna give you a walking program. Here you go. Let’s book an appointment for three months. You’ll come back in, we’ll reassess, see where you’re at, and we’ll see if you’re ready. Then how does that sound? Okay?” The thing is if you are actually the best, people will eventually want to be your clients, but they might not be ready right now. And so if they’re in front of you for an NSI, you can do that.

Chris Cooper (15:58):}
If you’re not doing an NSI and they just come in, they try your thing and they’re like, “Wow, no, this wasn’t for me,” they’re not coming back. Okay? So an NSI is when you start the coaching relationship, even if you’re not gonna be coaching them every day. The next mistake that people make is they don’t do any objective measurement. So they’re not measuring what the client cares about. What they’re doing is selling the thing that the coach cares about. We’re gonna build a client-centric business, so we wanna make sure that the client is getting the results that they want. If you’ve owned a gym for a while, I’m sure you’ve seen this client comes in: “I wanna drop 30 lb.” “Great, we’re gonna sell you CrossFit.” Three months later the client is like, “Wow, I’m stronger. I’m faster. I feel good. I’ve got these new friends. Still don’t fit into my jeans. Geez, I don’t know, this is, this is okay, but like, it’s not really getting me what I wanted, you know?” And within six months they’re gone. This is why the retention rate in microgyms is so low. It has nothing to do with price. It’s us trying to force what we like onto the client and the problem that they’re trying to solve instead of asking the client and then actually measuring our results. Okay? The third thing that gyms don’t do is change their prescription. So whether the client’s getting good results or not, they never say, “You know what? You would do better on a nutrition program.” Or, “You know what? I think that two days a week you should cut down to like Zone 2 heart rate and become a little bit more metabolically flexible. You’ll burn more fat.” You know, they don’t do that, and the reason is that they don’t wanna undermine themselves or they just don’t want to take the time to do it.

Chris Cooper (17:30):
The other thing that happens right here, the big opportunity that a lot of gyms miss, is they flip around from program to program, right? So they’ll go like NCFIT—“Oh man, that was awesome.” Then they’ll go to like Box Programming—”Oh, that was good. Yeah, so good.” You know Beyond RXD—”Oh man, that was awesome, right?” And they’ll jump around, but they don’t have a reason for jumping ever. It’s just like, “Well, the clients like this. I like it. It’s fun. It’s not fun—it gets results.” Whatever. What you should actually be doing with your programming is taking the sum of all of your clients’ results and saying like, “Hey, are we getting what we want here?” Right? It’s not like “how spicy is the workout?” It’s not even like “how good are the coaches’ notes?” It’s “is this programming getting my clients’ results in my most basic general group-class option?”

Chris Cooper (18:17):

And if it’s not, that’s when you switch programming. But if you’re not bringing people in, doing objective measurements on them, looking at results and kind of zooming out and looking at like the meta result for the gym, you don’t know if you should switch programming or not. You know, maybe you’re bored with the programming but it’s getting amazing results. Keep it. You know, maybe you’re thinking about going to Level Method, but you’re not sure. Are you really going to change the client results at all? I mean, that’s what you should be looking at, right? So this objective measurement gives you a viewpoint into whether your clients are getting results or not. The next thing that gyms don’t do enough is make nutrition a secondary prescription. In the old days, you know, we would just talk about nutrition and macros and Zone or whatever. Paleo in those days. We’d just talk about it in class, and then we’d kind of like, you know, leave the client on their own to figure it out because we were bored of it. We didn’t feel like nutrition experts. We didn’t open a gym to talk about macros, and so we just kind of left it off to the side of the road. The reality is, though, that most clients need that, and what they need usually is a little bit of knowledge and a ton of accountability. Okay? So knowledge, right? Which you could deliver just through a seminar or YouTube videos, and then a lot of accountability, like five times a day, maybe not that much, three times a day, checking in: “Hey, what’d you have for lunch? How was it? Send me a picture.” At 8 p.m.: “Hey, before you go to bed or start winding down, why don’t you go enter your stuff in MyFitnessPal.”

Chris Cooper (19:50):
“You know, I noticed that you snack a lot between 8:30 and 9, right?” Like, this is my nutrition coach talking to me: “Coop, at 8:30 p.m., why don’t you open up MyFitnessPal and track your food for the day? Because what that’ll tell you is what’s available if you need a snack.” And a lot of the time after tracking my food, I’ll say, “I actually don’t need a snack,” or, “I’ve got about 30 grams of carbs left. You know, maybe I’m just gonna have an orange.” Or, “Boy, I really need to up my protein, you know. I’m gonna go have some of this instead.” And so at least it’s like guided snacking, and it’s a cue to stop, but this is really high value. And then, of course, most gyms don’t do their goal reviews often enough. Look, if you think that doing goal reviews is gonna take up a lot of your time and you might not have the bandwidth to do it yourself, you gotta ask yourself “how much time is it gonna take to replace these clients?”

Chris Cooper (20:42):
Because the reality is it’s so much easier to retain a client by having a 10-minute goal review with each one each quarter than it is to learn marketing, try to bring people in, try to set them up for NSIs, do lead nurture, try and sign them and then fight to maintain them for the first 90 days. It’s so much easier to just meet with your top clients, at least, minimum, if not everybody, every quarter, review their goals, measure their progress, and give them a new prescription. You will build trust, you will build sunk costs in your program. Ultimately, even if you have to tell a client “hey, I think you should take two months off,” then you can still bring them back afterward because that can be your prescription. Craziest prescription I ever made that people just don’t believe, this woman named Robyn came into my gym, and she’s an accountant.

Chris Cooper (21:30):
It was March. She was completely overwhelmed and burned out. The high-intensity interval training that we were doing at the gym was not solving her stress problem, which was her biggest problem in life. She wasn’t sleeping. Her meals sucked. I said, “Robin, you need a break. All I want you to do is five days a week, you walk. Any day that you do any accounting work at all, at home, at the office, you have a walk.” And I sent her some videos on easy walking meditation. She did walking for 30 to 45 minutes. And I said, “Okay, you’re gonna do this for two months. At the beginning of May, you’re going to come back. So let’s make an appointment right now. And if you’re still overwhelmed and stressed at that appointment, then we’ll think about what to do from there. But we’re going to assume that by May all the taxes will be done and you’ll be ready to work out again.”

Chris Cooper (22:18):
And guess what? She called me two weeks earlier, said, “I’m feeling really good. I think I’m ready to come back right now.” And I said, “Okay, if you’re sure, let’s go.” That built a ton of trust because it showed that I wasn’t constantly trying to sell her on the other thing, which brings me to my last point. When you’re doing these remeasures and making new prescriptions, a lot of people will talk about the value, the increasing value of the client. And it’s true, about 30% of the time, 30% of your clients will upgrade the service that they’ve got. That’s usually because the service that they bought in the beginning was the wrong service in the first place. They chose the budget option or you recommended the budget option. And so they’re doing something that’s not getting them results, right? But this is an opportunity to get them on the best prescription for them.

Chris Cooper (23:06):
All they can say is “I can’t afford it.” And if they say “I can’t afford it,” you say, “Well, okay, with your budget, the best option for you is to continue with the general group programming.” But sometimes after some trust is built, that’s when they’re more likely to say, “Yeah, actually I do wanna add nutrition to my program, so let’s tick that box now as well as increase my exercise.” Now, the gym owner might think things like, “Oh, this is an upsell,” but it’s not. It’s just a course correction. You know, like the example I just shared with Robyn, that was like a down-sell. She didn’t pay me for two months. But the key is that you’re giving the client the best prescription no matter what the cost, no matter what filters or, you know, mental barriers you have. You are using your expertise as a coach to say, “This is what will help you fastest.”

Chris Cooper (23:56):
That’s our duty to the client. And the Prescriptive Model gives you a way, a process, that you can think through all of that and schedule it out, systemize it, then optimize it. You’ll keep your clients getting lots of progress, keep your clients around and keep them high value. Hope this helps. If it does, please subscribe to this channel, and we’ll get you more videos twice a week to keep helping you grow your gym. If you want to talk about it, go to Gymownersunited.com. That’s our free public Facebook group where we chat with 7,000 gym owners worldwide, and we often jump in to give some data-based expert opinions. Take care.

The post The No. 1 Way to Increase Client Value and Retention in Your Gym appeared first on Two-Brain Business.

The Prescriptive Model: The Key to Revenue and Retention in Microgyms

The Prescriptive Model has been proven to help gym owners close more sales, retain clients longer and generate more revenue per member.

We teach all Two-Brain Business clients exactly how to implement this model in gyms, affiliates, studios and franchises, and we provide stacks of done-for-you resources that allow these fitness entrepreneurs to use the plan with great success.

Clients who use the Prescriptive Model at their gyms have a much easier time closing sales with high-value clients. We track sales metrics in hundreds of gyms, and the free consultation at the beginning of the Prescriptive Model beats the free trial when it comes to closing rate. The model’s simple structure also helps gym owners—and their staff members—learn to sell their services without slimy, high-pressure tactics.

The cyclical nature of the Prescriptive Model also keeps gym clients engaged. The first 90 days of membership are critical to retention in a fitness facility, and our model contains precise tactics that measurably improve retention. In the gym industry, average client retention is 7.8 months. The average Two-Brain client’s retention is more than double that: 18.8 months. (Source: “2022 State of the Industry Report.”)

Finally, the Prescriptive Model has a profound effect on total revenue and average revenue per member. It allows gym owners to present high-value solutions to prospective clients in a simplified, direct, genuine manner. Rather than bombarding people with options, a coach clearly presents the best option and then adjusts the plan if needed. But in many cases people jump at the best option, which generates more revenue for the gym. At subsequent meetings to review progress, clients regularly upgrade their packages.

Simply put, the Prescriptive Model is the backbone of the most successful gyms in the world.

The Prescriptive Model: Key Concepts and Structure

You and I own coaching businesses.

That means we sell results. We don’t sell our programming or our equipment or our “culture”—we sell an outcome.

The best way to ensure clients get the results they want is to:

1. Know exactly what results they want.
2. Know exactly where they’re starting.
3. Work backward from their desired result to map the entire process, then keep them on track.

Here’s how the Prescriptive Model works:

The Prescriptive Model: The Exact Steps

Below, I’ll go over the Prescriptive Model in more detail, and I’ll provide a host of resources if you want to dig in.

If you prefer a video overview of the Prescriptive Model, it’s on our YouTube channel:

Here are the exact steps to the Prescriptive Model for gyms:

1. A potential client books a No Sweat Intro or free consultation. Most professionals have a consultative process, not a free trial. Think of lawyers, chiropractors and accountants. A client should come into a coaching business the same way: with a consultation. In that meeting you must use motivational interviewing to find out what the client is really trying to accomplish and why.

2. Take an objective measurement of some type. This is often an aesthetic metric because people are usually coming in concerned about their aesthetics. So you take a body-fat percentage or a biometric measurement. You have to measure what the prospective client cares about.

3. Using your wisdom and experience, determine the client’s needs. You’ll match your services to those needs by making an exact prescription that will get the client to the goal.

4. Flip to the relevant page in the pricing binder. If needed, modify the best prescription based on what makes the person feel most comfortable (“Would you prefer to do these workouts in a small group setting or one on one with me?”), what fits the person’s schedule, and what the new client can afford.

5. Sign them up and begin onboarding. Ensure you book a Goal Review Session within 90 days. Your client journey should include regular contacts with new clients before that meeting. They must receive daily communication from you for at least the first 90 days. This can be done in person—even in a group setting—or it can be done through text, video or email. Many gyms use a client success manager to ensure new clients get settled in quickly.

5. At the three-month mark, meet with the client for a Goal Review Session. In that session, take another measurement. Use this data to showcase the client’s progress and adjust your prescription if needed. You’ll know more about the client now and can add precision to your initial prescription. This increases your value to the client: “A trained fitness pro is giving me a new prescription based on 90 days of data and progress.”

6. Make a new prescription with two options. Option A: “Keep doing what you’re doing.” This is the choice clients will go for if they’re perfectly happy and results are coming at the pace they want. Option B: “If you’re tempted to speed things up, I recommend this adjusted plan.” This is the choice clients will select if they want to buy speed. Remember: Increased speed is very valuable. About 30 percent of the time, a client will wind up upgrading a membership in a Goal Review Session.

7. If a client is happy with progress, you have a golden opportunity to create some media to show them off. Make the client famous. This is great for the client, and it will help the gym’s marketing efforts. It’s also a great time to ask for a referral.

8. Book the next Goal Review Session within three months. Stay in contact with the client according to your communications plan.

9. Repeat this cycle forever.

Sell and Create Results

This is how you build a client-centric business: You sell a result, you do whatever it takes to create that result, you measure progress toward that results, and then you work on delivering the result faster.

As you get better at delivering results to clients, you increase in value as a coach and business owner. Your business will profit and you’ll make more money. Your sales metrics will improve. Your average revenue per member will improve. Your retention will improve.

But your clients also win when you use the Prescriptive Model. Instead of trying—and usually failing—to solve their own health and fitness problems, they’ll get the perfect plan from a true professional. Then they’ll get results, as well as regular check-ins and adjustments that will keep them on track. If they want to, they can choose to move even faster. Along the way, you’ll have every opportunity to celebrate their progress and ensure they change their lives with your help.

The world’s top fitness professional use the Prescriptive Model. To improve your fitness business and help more people faster, implement it in your gym.

Additional Resources

Podcast: “The Exact Steps to Building a Sales Engine at Your Gym”

Book: “Gym Owners Handbook” by Chris Cooper

Two-Brain mentors teach clients exactly how to implement and use the Prescriptive Model to create strong, profitable fitness businesses. To find out more about mentorship, book a free call here.

The post The Prescriptive Model: The Key to Revenue and Retention in Microgyms appeared first on Two-Brain Business.

TikTok Shaming and Your Gym: Got a Code of Conduct?

Is your gym prepared to handle TikTok shaming?

In case you haven’t run into it yet, gyms are becoming a sort of battleground as influencers post videos in which people in the background may or may not be “creeping” on them as they work out.  

The videos are so common now that entire response trends have arisen.

“Gym experts” analyze the original videos to determine if the background people are actually creeping or just going about their business.Third parties—usually men­—make comedic videos in which they deal with “unwanted” attention or work hard not to look at anyone else in the gym lest they get shamed online.General commentators are offering their takes on situations in which influencers who post racy pics to OnlyFan become enraged by a sidelong glance in the real world.

So is your gym prepared for the TikTok Wars?

Microgyms and coaching gyms are not as common in the shaming videos as access-only gyms. But we all know functional fitness athletes love to film themselves, and many coaching gyms also offer open-gym time, when patrons can do their own workouts. And gym selfies are kind of a big deal these days.

All of that highlights the need for clear media policies at your gym. In fact, policies that cover every aspect of your business should be determined when you are calm, cool and collected, then widely disseminated so everyone is on the same page:

“We don’t offer discounts for anyone.”“We don’t do refunds after two weeks have passed.”“You will be billed for cancelled PT sessions if you don’t provide 12 hours’ notice.”

Two-Brain founder Chris Cooper has talked about this for years. Clear policies allow consistent delivery of excellent service by every staff member. And they eliminate reactive decision making, gray areas and arguments.

So what’s your policy on media creation in your gym?

Dumbbell Woman posts her selfie and says Bench-Press Man was staring at her during her workout. Both are angry. What does a gym owner do?
Social Media and Your Gym

First, your waiver should have a media section that informs patrons that they will be filmed and photographed, and you will use these assets as you see fit—perhaps even in advertising. If you don’t have something like this in your waiver, consult a lawyer to get what you need. (We recommend Matthew Becker of Gym Lawyers.)

Next, what’s your policy on members posting content from your gym?

Obviously, client engagement is amazing marketing. You want people showing off PRs and amazing progress at your gym. But what if someone posts a video and shames another member? What if the shamed member is clearly behaving badly? What if that member was just looking at the clock and not the poster’s body?

It’s an uncomfortable situation that can get out of hand very quickly.

The best plan: Ensure your gym has a clear code of conduct in place. Make sure everyone knows about it. Outline what is acceptable and what is not and explain how the code is enforced. You don’t have to specifically mention TikTok shaming. You can just state what is and is not considered acceptable behavior in your business.

In my gym’s code of conduct, we used a broad line: “I will treat everyone in the community with respect at all times.” And, yes, we had to enforce this more than once.

Two-Brain mentor Andrea Savard has this line in her code of conduct: “We do not tolerate harassment or unwelcome comments and actions. We will take prompt action if such problems occur, including failure to follow any rules or regulations, for reasons of nuisance, disturbance of others, moral turpitude or fraud, or if we determine that your actions may endanger yourself or others.”

So here’s a reminder before you have a TikTok incident at your gym: Create a code of conduct now if you don’t have one. If you do, review it and ask these questions:

Is my code up to date?Am I prepared to enforce it? (This one is huge. Don’t make rules you won’t enforce.)How will I enforce it?Do all staff members know about it?Do all current members know about it?Are incoming members made aware of it?

Finally, run through the TikTok scenario in your head: Someone posts a video and suggests another member in the background is gawking.

With reference to your code of conduct, how will you address the issue?

If you create a plan now when you’re calm, you’ll be prepared when things get heated. And if you follow the steps above, your business will be able to deal with any issues. Because you will have an issue at some point, perhaps involving TikTok.

Every long-serving gym owner has had to deal with troublesome behavior at some point, and many have had to fire clients.

Prepare now, then take calm, clear action to protect your business and your clients when you need to.

The post TikTok Shaming and Your Gym: Got a Code of Conduct? appeared first on Two-Brain Business.

Ask a Lawyer: Limiting Your Exposure With Gym Employees and Contractors

Mike Warkentin: (00:02)
Employees and contractors, what are your legal exposures? It’s a hotly debated question in the gym world, and the answer is gonna have a huge effect on your business. I’ve got a lawyer with me. He owns a gym. He’s going to tell you exactly what your legal exposures might be and how to limit your risk. This is Run A Profitable Gym. I’m your host, Mike Warkentin. Do me a favor, hit the subscribe button, whatever platform you’re on. I would really appreciate it. Now my guest, Matthew Becker, he is the founder of GymLawyers.com and he runs Industrial Athletics in Pittsburgh. We’re gonna dig into employees and contractors so that you can reduce your risk and make smart decisions for your business. Matt, welcome to the show. How are you?

Matthew Becker: (00:44)
Hey, good morning, Mike. I’m doing really well. How are you this morning?

Mike Warkentin: (00:47)
I always love having a gym-owning lawyer here to answer questions that I wish I had the answer to 10 years ago, and that will help our listeners right now. So I’m gonna dig right in. Employees, contractors, third party contractors. Where do the risks arise? Where do the risks arise for gym owners and how can we limit them?

Matthew Becker: (01:04)
Okay. Yeah, so great question. So as we get into this, let me start just by saying what I’m gonna shy away from. It will be covered a little bit in conversation, but what I really don’t want to spend our time talking about today is what concerns we have to worry about with the IRS. ‘Cause there’s a million resources out. You go to my website, I think you and I have talked about it before, I’ve talked about it with Chris, about what we need to do in order to consider somebody an employee versus an independent contractor as far as control is concerned. Well, what I would like to focus on is what legal exposures we need to be concerned about as gym owners, depending on how we decide to classify our staff members for tax purposes.

Mike Warkentin: (01:52)
So you’ve got your ducks in a row, you know what you’re doing. You decided I’m either contractors, employees, third party. Now the question is, what are my risks and how do I limit them?

Matthew Becker: (02:00)
That’s correct.

Mike Warkentin: (02:02)
Okay, let’s do it.

Matthew Becker: (02:03)
So we’re gonna break these down. Each staff member or person that we are dealing with is going to be falling into one of three categories. We’re either gonna have the employee, we’re gonna have an independent contractor, or technically this last category is an independent contractor, but it’s gonna be slightly different. It’s going to be a third party company that comes in and uses our facility under what we call a facility sublease agreement. Okay? And so what are all of our legal exposures through between those three categories? Let’s start with the employee.

Mike Warkentin: (02:43)
So this is going to be very common. Yeah. Super common one.

Matthew Becker: (02:45)
The staff member that comes in and we’re paying them as employees, which basically means we are paying them under tax purposes or we’re matching their federal contribution, and we can give them benefits and we can give them scheduled time off or sick leave or PTO, or anything like that. And this is by far the least concerning when it comes to legal exposure on our part as gym owners. However, it’s also the most costly for us as gym owners because of the tax purposes, right? We have to pay their federal matches, but also we have to maintain workers’ compensation and unemployment insurance. And so that’s where we come into play with, what are the legal exposures that we run the risk of when we have an employee? Okay. So whenever you have an employee, you have to have workers’ compensation insurance.

Matthew Becker: (03:43)
And that basically covers, if the employee comes in, trips, falls, and injures themselves, or is helping a member lift the weight or whatever, and injures themselves on the job. They can be compensated for their time off if they need to take that time off. Okay? So that protects us. That insurance protects us against an injury lawsuit that comes from the employee. Not completely protection, not a bulletproof protection, but protects us from them. Okay. But there’s a cost associated with that. That insurance policy, we have our general insurance policy for the gym itself, which oftentimes our general liability insurance policy is going to cover employees and trainers. I’m not talking about covering the employee and the trainer in the sense of an injury that the employee or the trainer gets involved in. I’m talking about that employee or that trainer injuring their client. Okay. 

Mike Warkentin: (04:55)
So like liability insurance, essentially?

Matthew Becker: (04:57)
Yeah. Yeah, exactly. Your general liability policy is going to cover you from legal exposure when we’re dealing with employees or trainers. And I keep making that distinction because your general liability insurance policy will potentially cover your independent contractors. And we’re gonna talk about that more specifically when we talk about independent contractors. Okay. But we’re as protected as possible when we have an employee, because our general liability insurance is gonna cover us. We have workers’ comp insurance that is gonna cover us. If anybody goes to sue the employee for anything that they did, it automatically comes back on the business and we’re as covered as possible. Okay. The problem is, it’s also the most costly for us.

Mike Warkentin: (05:51)
Okay? So you could make mistakes there by just not filling out your paperwork and not paying the remittances that are due. Would that be an error that the gym owner could make?

Matthew Becker: (05:59)
Yes. If the gym owner doesn’t maintain workers’ compensation policy, that is gonna be a big, big issue. Because similar to the IRS, you can get audited sometimes by your workers’ compensation organization that governs that for your state, especially. This comes up if an employee gets injured and they go to make a worker’s compensation claim. Or if you go to fire an employee and they go to make an unemployment compensation claim and you don’t have those proper insurances in place, now you are really legally exposed.

Mike Warkentin: (06:41)
Okay.

Matthew Becker: (06:42)
And sometimes in certain states, you’re more running a risk of being audited by worker’s compensation to make sure that you’re paying into worker’s compensation insurance than you are by the IRS. And the worker’s compensation can actually come in and they can start questioning how you have your tax designation for staff. Because if you’re considering everybody to be independent contractors and you’re not paying workers’ compensation, then the state’s losing out on money. And it’s losing out on money similarly to the way that the IRS is losing out on money and it wants its money. So you run the risk of getting an audit there.

Mike Warkentin: (07:23)
Ok. So employees: important considerations there, you have to get everything in line according to the standards in your jurisdiction. I’m up in Canada, we have similar stuff. It’s not exactly the same, but it’s pretty close. You have to make payroll withholding remittances and you have to do unemployment insurance and pension and all that other stuff. So make sure that you’re up to date on that. What else have we got?

Matthew Becker: (07:42)
Yeah, so we’ll take that as, you’re the most protected, but also, it’s the most costly. So gym owners have very, very thin profitable lines sometimes. So we’re gonna try to cut some of those costs. So the second category is we’re gonna decide that we’re now going to start to consider our staff members to be independent contractors. So we can reduce our costs now because we don’t have to pay for employment tax matching for the irs. We don’t have to maintain workers’ compensation policies, and we don’t have to maintain anything involving unemployment because you can’t technically fire an independent contractor. They don’t work for you really, right? I mean, this is where we kind of get in this little gray area, but they don’t technically work for you, so you don’t really fire them, you just sort of terminate your contract with them. And so they cannot turn around now and sue you for unemployment compensation. And I won’t go off in the weeds in that statement. Just they technically can’t sue you.

Mike Warkentin: (08:53)
It is a hot debate. I’ll tell you that.

Matthew Becker: (08:54)
You know, it. I’m not going down that road. I promise we’re gonna stick with the legal stuff here, not taxes. Anyway. Alright. So now we start to run into some concerns about, are we treating these staff members truly as independent contractors? And what are some legal stuff that starts to blend the lines between employee versus independent contractor? Yes. Tax purposes, we’re worried about that element of control, right? The more control we exhibit over the staff member, the more they’re an employee versus an independent contractor. But some of the discussions that we get involved with, with other gym owners when it comes to independent contractors is, how do we start to set these independent contractors up legally to protect the gym owners as much as possible legally? Okay? And first and foremost is, we need an independent contractor agreement.

Matthew Becker: (09:59)
So when we’re fighting against workers’ compensation, we’re fighting against the IRS, for tax purposes, the work, the independent contractor agreement will not be an end-all be-all of, well, I had this staff member sign an independent contractor agreement, so I’m good to go. They’re an independent contractor, I don’t have to worry about it. It doesn’t quite work that way. But the independent contractor agreement is sort of one layer of additional protection and help for your categorization of those people as independent contractors. And from an attorney’s perspective, paper everything, right? So we have this independent contractor agreement, and within that, we start to set the expectations that are going to be between us as the gym owner and you as the staff member that are going to, again, lean toward that independent contractor designation. One of those is having your independent contractors form their own LLCs, okay? And this is one that we get a lot of pushback on, okay? But if you think about it for a second, an independent contractor is a self-employed individual. I, as a gym owner, am a self-employed individual. I, as a gym owner have my own LLC. That’s one of the ways I designate myself as a self-employed individual to enjoy protection from a limited liability company. I want to treat my staff member as a self-employed individual, so they too should have their own LLCs, okay? And you should be paying into that LLC to protect you to show that you are paying another company for the services that they are providing

Mike Warkentin: (11:53)
Listeners. Matt has another show where he talks about the concept of piercing the corporate veil. I’m gonna put a link to that in the show notes because it tells you the things that you can mess up with a corporation that removes the protections that it should give you. So I’m gonna put a link to the show notes and that if you wanna learn more about that. All right. Sorry Matt, continue.

Matthew Becker: (12:12)
No, no. All, all good. All good. Okay. So that’s sort of legal requirement number one was: get the written agreement. Number two is now get them to do their own LLC. Number three is requiring your independent contractors to maintain their own insurance. And this is another one of these pushbacks we get, because you’re gonna have an hourly coach that comes in, let’s talk CrossFit, right? Majority of listeners probably have some sort of CrossFit group-based service here, right? You’re gonna have your coach come in and they’re gonna coach a class, right? Just an hourly class. And if you’re following the Two-Brain model or the State of the Industry book and you read that and you see that the average price to pay an hourly coach is $20 an hour.

Matthew Becker: (13:03)
So you pay your coaches $20 an hour, right? And then you get on the phone with me and I say, well, if you’re gonna treat that hourly coach as an independent contractor, that hourly coach really needs to have their own insurance policy. That’s a hard thing to do. And it gets even muddier when gyms are trading hourly coaching for free memberships with their coaches, and that’s how they’re getting paid, right? Because now you’re gonna go out and ask that that coach that’s kind of working for you for free, to maintain their own insurance policy. But here’s the problem. If you’re a staff member of mine and I’m treating you as an independent contractor and you injure somebody, okay? And the gym gets sued. I have to be prepared to accept the liability of that lawsuit for you as an independent contractor. Okay? And a lot of gyms are gonna say, well, okay, I get that, I’ll do that. But then I have to ask the question, well, if you were hiring any other business to come into your gym and they got sued, would you want to cover the liability for that business? And oftentimes the answer is no.

Mike Warkentin: (14:23)
For example, if you hired a contractor to come in and replace your plumbing, and all of a sudden a pipe burst and scalded, God forbid a client or something, would you wanna be responsible for the poor plumbing work? Yeah. Is that a fair example?

Matthew Becker: (14:35)
That’s a fair example because you’re paying that contractor as an independent contractor, right? Right. And so part of being an independent contractor means they maintain their own liability. And some states have real specific rules about this stuff. Wow. Okay. That they have to maintain their own liability. But if you are willing to cover that liability on behalf of your independent contractor, you’re now muddying the waters and you’re giving yourself a lot of legal exposure for somebody that you’re considering to be an independent contractor.

Mike Warkentin: (15:06)
Okay. So what I’m seeing here is that this arrangement to be as insulated as possible, is that you have to require of your independent contractors a little bit of extra work. They have to form an LLC. And up here in Canada, it’s quite a little bit different, but there is a cost associated doing that, right? Yeah. You have to file annual corporate tax returns, I believe, and I’m sure that’s the same down there. There is a legal cost of incorporation and so forth, and then liability insurance is another cost. So an independent contractor in that arrangement would have, the coach would have some additional costs, correct?

Matthew Becker: (15:38)
Yes, that’s correct. 

Mike Warkentin: (15:40)
Many won’t wanna do that necessarily, I think, if you push them. Right?

Matthew Becker: (15:43)
No, they’re not gonna wanna absorb that cost. And the other potential issue that you walk into as a gym owner, and here’s where we can’t avoid the discussion of the taxes, okay? But we’re just not really going down that road. But we’ll go down that road for a second. So, you know, we have employees, we have independent contractors. What’s the proper tax designation? What’s the proper amount of control, or benefit that we can give to our staff member? And as soon as you start providing your staff members benefits, workers’ compensation insurance, unemployment compensation insurance, or general liability insurance, you start to walk that really fine line of: are you providing your staff member benefits? And as soon as you start to provide them benefits, they can no longer be categorized as an independent contractor. Ok? Okay. So we’ve got, you need the agreement, you need a written agreement. We really need them to be establishing themselves as LLCs. It’s the cheapest and most inexpensive way down here in the States to do it. And we really need them to maintain their own insurance policies because it’s gonna protect you as a gym owner, not only from these whole tax designation things, but from general liability. If the independent contractor gets sued, do you as the gym owner want to be pulled in to have to cover that?

Mike Warkentin: (17:16)
Okay. And I think I see some benefits to the contractor. I’m gonna lay ’em out as I see ’em. You tell me if I’m correct. One would be if they have an LLC and they’re set up as an LLC, a lawsuit is likely going to not be able to take their personal assets because their corporation would be at risk. Is that correct or no?

Matthew Becker: (17:36)
Yes, that’s correct. Okay. Go back and listen to the Piercing the Corporate Veil to make sure that we don’t just give an unqualified yes, if you file an LLC, you’re protected, right? Nothing in the laws.

Mike Warkentin: (17:47)
It offers some protection, not airtight, but it is better than not having it at all, especially if you follow the right procedures. Okay? And then the second thing is, and I’m gonna use a Canadian example, so correct me here on the US side. But if you’re a contractor and you’re not having withholding taxes and paying into pension plans and things like that, you now have that money that you can invest now as you see fit, potentially get a better return on the investment than the government might do with your money. And you can access it how you see fit. You still have to pay taxes. But I’m talking about pension kind of stuff. The other thing related to that is if, for example, if you’ve paid into a pension plan, the Canada Pension plan up here for years and you die, that’s it. Whereas if you have your own independent investments, those investments are gonna be passed on to someone else in a different way. So does that relate to the U.S. example as well?

Matthew Becker: (18:38)
Yeah. Yeah, a lot of that is very similar. Exactly how all the pensions and everything work. I can’t speak to individually. But yes, you take that extra money, you can now turn around and you can use it to benefit yourself, and not just hand it over to the government.

Mike Warkentin: (18:59)
It would be a self-directed retirement plan essentially, if you are following that path. And again, don’t take this as hardcore tax advice. Neither I nor Matt are experts in that. John Briggs Incite Tax and Accounting would be a great reference point for you if you have questions specific about this stuff. But we’re touching on it just as an idea of where there are some benefits from the contractor side. All right, keep going, Matt. Yeah.

Matthew Becker: (19:21)
Yeah. And frankly, if I ever end up having to go work for somebody else, God forbid, because none of these ideas ever pan out in the long run, I will probably go and ask that I could be an independent contractor or a self-employed individual with whoever wants me to work for them. Because once you get in involved in it, there’s a lot of tax benefits for being a self-employed individual, but you gotta follow the proper paths. Okay? And ultimately, the last caveat before we move on to subject number three is you as the gym owner, you also need to reach out to your accountant. If you’re with Incite Tax, good. John Briggs is gonna defend you until the day he dies about having your staff members as independent contractors.

Matthew Becker: (20:12)
And he’s gonna help you set it up that way. Other accountants are not so clear-cut and dry about the matter. And if you end up getting audited, it’s gonna be your accountant who ultimately has to produce the evidence that’s going to defend you one way or the other. And if you’ve got an accountant who is really uncertain about you categorizing your staff members as independent contractors, then you really need to take that into consideration whether you go ahead and categorize all of them as employees, or you find yourself a new accountant.

Mike Warkentin: (20:48)
That reminds me of a quick Tom Cruise story where apparently, Matt Damon was relaying this, says Tom Cruise was telling this crazy stunt he wanted do. His stunt man was like, you can’t do that. And Matt says, so what did you do instead? He’s like, I got a new safety guy. So you might wanna find a new accountant if you need it. I’m just joking. Of course. But that’s the point. So Matt, now let’s move on to third party kind of stuff. I’m guessing this would involve something like, I sublease an office to a physiotherapist or something like that. Am I right?

Matthew Becker: (21:14)
Exactly.

Mike Warkentin: (21:15)
Okay. How do we insulate ourselves here as best we can?

Matthew Becker: (21:17)
Okay, so this is like the true instance of an independent contractor. And where we oftentimes see this pop up is we have to ask the question of who is the gym client paying? So in the instance of the employee and in the instance of the independent contractor coach, or even your independent contractor personal trainer who’s working on some sort of a four-ninths model, okay? The money should come into the gym, and then the gym is moving this out, or paying the coach, okay? In instances where we see, well, the gym or the client is actually paying the coach or the trainer, and then the trainer is paying the gym, now we walk into an instance of sort of a true third-party independent contractor, and we’ve got other legal considerations now that we have to take on.

Matthew Becker: (22:15)
So yes, Mike, you said, we’ve got a physio who is renting space, or we have a high school football team who wants to come in and use the gym because you have access to various types of equipment that they can’t get at the high school. Or you have extra space, so you’re gonna have somebody come in and teach some other sort of class, but they’re coming in as their own business and they’re paying you a fee essentially in order to use your facility, okay? And we call these facility subleases, because now we have this person who’s coming in. They’re likely going to have their own LLC, so that’s a good start. And then let’s say they agree to pay you $300 a month in order to use your facility, or they say, we’re going to service your clients through our physio practice, and we’ll pay you $20 per client or something like that.

Matthew Becker: (23:20)
Great, cool, awesome way to get some passive income. However, there are three things now legally that we need with this individual. The first is this facility sublease agreement, okay? Similar to the independent contractor agreement. This is going to lay out the expectations with this third party so that we’re all on the same page about how much are they paying, what kind of access do they get? Do they get to use some of your equipment or do they get to only use their own equipment? Can they store things in your facility? How much of your facility do they get to use? How do we terminate this agreement, right? So we have to have this agreement that outlines all of these legal contracts or legal connections and relationships. Number two, go ahead, Mike.

Mike Warkentin: (24:16)
No, no, that’s that. It’s paperwork, guys. So get your paperwork done and make sure that it’s there. And if you don’t know how to do it, talk to a guy like Matt or a girl. Continue.

Matthew Becker: (24:24)
Paper this stuff. Number two, the second thing, this company or this person now needs their own liability waiver, okay? And you need a copy of that liability waiver so that you can have somebody like us or another attorney review it to make sure that it’s sufficient. Because again, rewind our conversation back about 10 minutes ago when we were talking about whether or not you as the gym owner want to cover the liability for your independent contractor. And when we were just talking about a group coach, we’re like, oh, yeah, yeah. You know Jim, he’s coaching for the gym, so sure. We’re gonna cover that in the liability. Well, now you’ve got some physio coming in and they’re working on your clients. If your client sues that physio, you gonna wanna uncover that liability? 

Mike Warkentin: (25:11)
Absolutely not.

Matthew Becker: (25:11)
The answer should be no, ok? I do not ask my question for you. Your answer should be no, you do not wanna cover that liability. So they need their own liability waiver, and in case you aren’t guessing what’s up next, they need their own insurance. And you need to be named as an additional insured on that insurance. So we’ll have gyms and they come to us and they say, well, you know, we just have these personal trainers and yeah, they work for my gym, but the clients pay them and then they pay us. And we don’t wanna deal with that. And they’re independent contractors. And so we just want the money to go to them because we think it muddies the water if the money comes to us, the gym, and then we pay the trainer. Like, fine, that’s great, but now we need to layer this stuff in. Does that trainer have their own liability waiver? Does that trainer have their own insurance? Do you have some sort of a sublease agreement with this trainer outlining all of these terms? Because if you don’t, then you’re really exposing yourself legally to any problems that could come up if this third party company trainer injures somebody or has a contract dispute or something like that.

Mike Warkentin: (26:33)
Okay. So this stuff is interesting and as a gym owner sitting here, and in year one as well, you sit here and think this is pretty far away from teaching squats, right? You’re dealing with lawyers and contracts and accountants and tax codes and all this stuff, but that is the price of entrepreneurship, right? And it makes a strong case for two things. First is building in a profit margin in your business, right? Or an expense margin, we’ll call it, where you’ve set your rates so that you make enough to cover expenses like this because you need to. And you can do it yourself if you’re very clever. If you’re not, you would be wise to retain experts who can advise you and lead you through it, okay? So yeah, think about that for a second.

Mike Warkentin: (27:13)
You gotta make sure that your business is set up to cover all the bases that you need to cover. And if you don’t know how to do that, that’s where Two-Brain comes in. That’s another expert that will tell you how to do this. And then you’ve got a guy like Matt who can review this stuff for you. So Matt, if someone is like, okay, this is blowing my mind, but I wanna limit my risk. How do I get this fixed without, ’cause I don’t wanna learn the tax code, the legal requirements. How do they work with you to get this stuff sorted out?

Matthew Becker: (27:36)
Yeah. Yeah. So of course, I wouldn’t be surprised if somebody’s head’s spinning right now with trying to figure out how to resolve all of this stuff. And so we welcome gym owners to just call us. You can go to the website, Gym Lawyers, plural, GymLawyers.com and, and request a consultation. It’s all free. You can go to the contact site portion of the website, my cell phone’s right there, you can text me or call me. An email address is there, you can send me an email. Any way you want to get ahold of me, because I’m happy and more than willing to get on the phone and have another 30 minute conversation to hear about your gym, your trainers, how you’re setting this stuff up, and then make suggestions about what you need to add, whether it’s a written agreement, whether it’s requirements that they need to get their own LLC, whether it’s simply a requirement that the clients have to now start paying you, the gym owner, instead of your trainer.

Matthew Becker: (28:36)
So that we’d avoid some of those other legal exposures that we have. I’m happy to talk about any of this stuff more in depth.

Mike Warkentin: (28:43)
Risk limitation isn’t a problem when bad things aren’t happening. When bad things happen, you would’ve wished you had taken some steps. So that’s the thing, guys. If you are thinking about making this a serious business and taking all the steps you can to reduce your risk limit exposure, check out GymLawyers.com and then same thing, John Briggs, Incite Tax and Accounting. Another good one with the tax code. If you wanna dig into that kind of stuff, check this stuff out and get your paperwork in order. So this has been Run A Profitable Gym. That was gym owning lawyer Matthew Becker. He’s from GymLawyers.com. Check him out. Thanks for listening. On your way out, I would love it if you guys would subscribe or hit like, or leave a comment or review, whatever platform you’re on. Give us a little bit of love. It would help us out a lot. Now here’s Chris Cooper with a final message.

Chris Cooper: (29:27)
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 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.

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