Chris Cooper's Blog, page 90

What to Cut in a Crisis

For the next few months, your cash flow is your top priority.

You can survive a recession—and you might actually grow. As I shared in the first post in this series, some businesses actually grow during periods of economic volatility.

During COVID lockdowns, many gyms trimmed non-essential expenses, focused on their highest-value clients and doubled down on service delivery. When they emerged from lockdown, they were leaner and tighter, and they grew quickly as a result.

Here’s your plan to manage your cash flow in the short term.

Revenues

Focus on building your one-on-one and higher-ticket services. High-income clients are less affected by recessions. Don’t turn off your group option, but expect a bit more churn in your lower-priced coaching options.

Increase the number of touchpoints each client gets. Don’t leave them alone to wonder about your value or their budget. Many gyms are getting really good at “lead nurture” but then stop the calls and texts when the client signs up. You must sell your client on the value of your service every day; don’t assume they always see it.

Set up three-month plans for each client. Book their Goal Review Sessions, measure their progress, and then show them their optimal path for the next three months. People cancel recurring subscriptions, but they’re reluctant to give up on a plan halfway through. You don’t need to sell them a three-month contract; just review their goal, make a prescription, and show them how they’ll reach the goal.

When coaching workouts, tell every client how the workout is relevant to him or her or how to tweak it for his or her goals.

Publish tips on maximizing their grocery budget or how to trim other expenses instead of their fitness. (Two-Brain gym owners: We have a sample letter for you to use. Ask your mentor for the template!)

The bottom line: You’re running a coaching business. While access-only gyms are going to suffer (again), your clientele will be less affected. Just help them make smart decisions in advance.

Expenses

 
Perform an expense audit. Print out a list of monthly expenses from highest to lowest. (Two-Brain gyms, you can use the form in the Toolkit to perform this exercise quickly and painlessly.)

Start by eliminating expenses that don’t give you a positive ROI. Look at each expense and ask, “Do I make money from that investment each month?”

If you don’t, look first for a way to make money from it. Ask your bookkeeper, “How can I leverage your service better right now?” I’m sure he or she will have an answer; I’m also sure few people ask.

Ask your mentor, “What’s the best thing I can do to get the best value from your service this month?” He or she will tell you. (I wish everyone asked me this question.)

I listed mentorship and financial advice first because whenever a crisis hits, the first people I call are my mentor and my CFO. When times are tough, I need them more than ever.

Continuing down the list:

Examine your staff. Where are you getting a great ROI? Do you have a management layer that doesn’t produce revenue? Remember: Your staff should generate a return of 2.25x their cost. They do that by serving your clients so that you can spend time growing the business. Are you spending time growing the business every day? If you’re not sure how to grow your gym, ask your mentor.

Ask your part-time coaches, “Do you want to coach right now or do you want to take more shifts at your other job?” Give more work to your full-time coaches (just don’t exceed the 44 percent salary cap).

Finally, write a “cut” plan. You added expenses as your revenue grew; you must shed them if your revenue shrinks. What will you cut if your revenue drops 10, 15, 20, 25 or 30 percent? Plot those cuts out in advance–you’ll sleep better.

Of course, if your revenue really does drop 30 percent because of unseen market forces, you have a very fragile business. Deal with that fast.

Watch John Briggs talk about cash-flow management here.

This Above All

Remember your priorities:

Your gym exists to serve your family. They come first.

Your clients come second: They support the gym.

Your staff members come third: They support the clients.

You can’t cut your way to success. But right now you might have to take a few small steps backward to stay in the game long term.

Gym owners who focus on delivering value—and charging what they’re worth–don’t have to cut staff. But, unfortunately, gym owners who don’t protect their cash flow will have to take some very hard actions in the next year.

Things are going to get weird in the next few months. But the only way out is through. My job as a mentor is to make the journey as painless as possible—and even help you gain from disorder.

The post What to Cut in a Crisis appeared first on Two-Brain Business.

“The Shop Feel”: Keys to $340 Average Revenue Per Member

Mike Warkentin (00:02):

Can you believe that some gyms create enough value that the average member pays $340 to $522 per month? It’s true. We take a lot of crap on social media when we post about this stuff, “That’s impossible. You’re full of BS!” And so on. We see it all the time, but the numbers aren’t made up and I’ve got a gym owner on Two-Brain Radio today to tell you exactly how her business made our leaderboard. I’m Mike Warkentin. Please hit subscribe if you haven’t already, we’re always cranking out shows to help people just like you. And I don’t want you to miss a thing. So please hit subscribe. Now, a welcome to my guest. She is Lisa Palmer, she’s the owner and CEO of Gas Station Fitness and Nutrition in the United Kingdom. And we’re gonna dig into the average revenue per member per month or ARM. That’s the sexy acronym for it. Lisa, welcome to the show.

Lisa Palmer (00:49):

Thanks Mike. How you doing.

Mike Warkentin (00:50):

I’m doing well. And I’m really excited because this is a huge one. Like I said, we get so many people that don’t believe these numbers are possible. So you made our leaderboard with our average revenue per member of $341. And of course it’s pounds over where you’re at, so it’s a different number, but we often report US dollars just for ease of reporting. $341 is a huge number and yet people don’t believe these things are true. So people are skeptical about high ARM, but they’re common among Two-Brain clients. So I’m gonna ask you this. Were you ever skeptical that an ARM over $300 was possible? And how has your opinion changed over time?

Lisa Palmer (01:24):

Thanks. Yeah, for sure. I was, yeah. We’ve owned gyms coming up to 8 years now. When we first started sort of, we were kind of, our ARM was probably at about $120. Okay. We struggled to get past that point.

Mike Warkentin (01:40):

You’re almost triple now.

Lisa Palmer (01:42):

We’re almost triple now! And it hasn’t been, you know, looking back as to how we did it, it wasn’t necessarily sort of anything rocket science, it was purely just sort of refining the basic processes within our business, and really getting to know our membership base. I think one of the key things that’s worked well for us is filling our membership base with people who are serious investors in their health and fitness, and making sure that people are with us for the right reasons, and people who are within our gym are looking for more and more avenues to improve on their goals and the reason why they came to us in the first place. Beyond that, it was really quite simple for us as owners, myself and my husband. We just had to provide enough choice and enough resources and offerings for our members that they could pretty much treat us like a one-stop shop for anything health and wellness. So just getting to know our members, we’ve been really lucky to kind of keep putting on more and more offerings or specialty courses, different types of memberships, different offerings like nutrition or massage therapy. And because we’ve given our members even more choice, they’ve been able to kind of stick with their basic packages and then choose more and more on top of that, just to really refine what they want to achieve from their membership with us.

Mike Warkentin (03:03):

So we’re gonna dig into some of those things and talk about some specifics, so other owners can take some advice from you and then take action on it. But just to reiterate, so you started about eight years ago, your average revenue per member, probably about $120 and you were skeptical that it could make it higher than that. What was the thing that- when did you start to realize that $300 might be possible? Like, was there any moment or was there, like, what stuff were you doing that started to make that thing move? And when did you start to realize, “Hey, the sky’s really the limit here?”

Lisa Palmer (03:30):

I think when we started to realize that people put a different value on their health and fitness and their goals, we sort of had in our heads through the years, what we would be prepared to pay for a set offering. And what we’ve done is we’ve increased our offering and increased our value at the gym. And we have higher-priced offerings for those people who do want to pay a bit more and receive even more for what they get for their money. So, for example, in the last six months, we’ve spent a lot of time refining something called a transformation package.

Mike Warkentin (04:07):

Let’s just dig into that. Tell me about that. What is in that and what does it cost?

Lisa Palmer (04:11):

So our transformation package lasts for 12 weeks. You’ll have to excuse me. I can’t remember the exact figures, especially in dollars, but I think probably about $2,000 a month for our high end transformation package. And essentially what they’re getting is everything we have to offer. So they get sort of personal training, they get sleep therapy, they get daily mobility, they get classes, nutrition, biometric scanning, and then they get what we call the X factor whereby anything else within their lifestyle we hone in on and we try and make it better for them. So for example, a client we’ve had recently, he was a smoker. So although that’s not on our front end sort of spec as to what they get as part of the service, our coach spent a lot of time with him, sort of trying to wean down on the cigarettes, trying to give him other incentives in terms of how to cope with stress.

Lisa Palmer (05:05):

Other sort of coaching methods to try and work around cause he was a chef. So he obviously had a very stressful environment to work in. So we give everything we have at these clients and they pay a top premium price for it. Now I’m not saying that every client who comes through our door wants that particular package, but when we weren’t offering it at all before, we weren’t necessarily giving that option to those maybe small population that do want that sort of hand-holding. And that one to-one, that close contact with their coach. So it’s not really sort of, like I said, it’s not rocket science, but by giving people options, maybe one in every 20 clients, one in every 30 clients, they will choose that higher price offering. And last month I think we had about six, seven clients sign up to our transformation package. They get great value for it. They get amazing results. And because they’re so invested right from the beginning, you know, they’re really in that process with us. And we do get some incredible metrics and like I said, results from them.

Mike Warkentin (06:15):

So the first thing, if people are listening and saying, how the hell do I raise my average revenue per member is to figure out how can you add more value? And what that’s gonna be is programs that go beyond just group coaching, right? Group coaching. When I started my gym, that’s all we offered. That’s all we did. I thought that was a high value service because we were charging about $150 a month, which was too low, but that’s what we were charging. And it was more than the $30 gym membership. That is actually not a high value, offering group coaching in a group of 10. A coach’s attention is split 10 different ways. It’s an hour, it’s a big group. It is not personal attention. Even though you do get some personal attention, it’s not personal coaching simply by offering personal training. I would’ve added in a high value service.

Mike Warkentin (06:56):

If I had gone further to where you are at, and let’s take a few more steps. We leave a few in between there. If I had gone to high ticket coaching where- we’ll call it something like that- where it’s a high touch service, where you’re coaching them on all aspects of health and fitness and lifestyle, then I could include stress management, sleep, nutrition, mindfulness, all these different things, even habit stuff like stop smoking. That is a high ticket service. And I’m guessing you have really high levels of personal contact in this service, right? So then all of a sudden that is not $150 service. It’s not a personal training package of $600. This is like a lifestyle transformation. I love the name you’ve used and that’s worth $2,000 a month. People out there will say, I would never pay $2,000 a month for that. No one like that exists. And yet you tell me that these people do exist, and I know that they are out there. So let me ask you this. And we’ll segue back to some of this stuff before. Tell me, how do you find someone who’s ready to pay $2,000 a month for a transformation package? That’s gonna get into marketing and client avatars and stuff, but how do you do it? Where do you find these special people?

Lisa Palmer (07:58):

Well we don’t, it sounds cliche. We don’t find them. They find us.

Mike Warkentin (08:02):

Okay. But you put something out there that they see, right. That’s good.

Lisa Palmer (08:06):

You know, and, I think really the way we do our marketing is we show results and we show how much care, attention,

Mike Warkentin (08:13):

Social proof.

Lisa Palmer (08:14):

Social proof, you know, and that’s exactly. So our most recent transformation client came from another gym, five miles away. And he was working out in the gym and he was saying to his friends, I’m just not getting anywhere. And actually one of his friends said, you know where you need to go? You need to go to Gas Station Fitness and Nutrition. Now this guy, he’s not even a member with us. I don’t even know who he is as friends. But we’ve started to develop a reputation in our area of the go-to gym, if you want to see some results and you want a change in your lifestyle and your wellness. And don’t get me wrong. That’s not been something which has happened overnight. We’ve worked really, really hard as a coaching team over the last two, three years to build up our social media, to get client engagement, to get Google reviews, to do in-body scans before and after, you know, testimonials.

Lisa Palmer (09:04):

And I think that’s really starting to pay off now. We’re at a stage in our sort of, our business career where, exactly what I said, people are now finding us rather than us having to go out to them. And you don’t know these people. And I think the one thing I would say is: don’t assume that this person is not gonna sign up for a transformation package or the other way around, because I can’t- all of our transformation clients, they’re all totally different. They’ve come to see us for very different reasons. So unless you actually show every single one of your clients that particular offering, you’re never gonna be able to know which one is gonna go for that particular package. Now we have a pricing binder and the transformation packages start at the very beginning.

Mike Warkentin (09:48):

That’s the first thing you show them.

Lisa Palmer (09:49):

Yes it is. Yeah. So it’s the first thing we show them after we’ve listened to their sort of, their, we’ve got like a presentation to show our potential clients. So we’ve talked through what kinda offerings we have. We show various clients at different parts of our pathway. So this is a client who’s on a class pathway, this is a client who’s on a PT pathway, hybrid pathways. And then in terms of the pricing, the first packages we get to is transformation. And we let them just have a little read of it. And then if it’s not for them, they’re very quick, we’ll say, you know, what do you think? And they’ll say,  either they’ll say that’s the one for me, or they’ll just say, oh, it’s a bit too much, in which case we just quickly float on and we go through our other offerings.

Lisa Palmer (10:33):

But like I said, until you actually show them what you have in your facility, they’re never gonna know. So you’ve got to put it out there. And what we say to these transformation clients is especially with our VIP package, they’re getting five coaches. So that’s how many coaches we kind of throw into some of these clients and their transformation packages. And we have a WhatsApp group with all those coaches on, and we are talking behind the scenes about how this client is doing. You know, actually I think we need to spend more time on this element, more time in classes and more time on personal training or nutrition. So it’s a real bespoke, dynamic kind of movement, and collaborative working between all these coaches to get this client through the first 12 weeks to make a really, really big difference to their lives. We know it’s powerful, but I appreciate it’s not in everyone’s budget. And that’s why it’s so important that although it’s at the front of the file, we do quickly move on if it’s not particularly something they’re looking for. So that’s-

Mike Warkentin (11:32):

So I’m gonna, for lack of a better term, dumb this down for people like me, who, as a basic gym owner, this would sound very intimidating, right? I’d be like, wow, it sounds like there’s just so much going on here. I don’t have a clue how to start this, but I’ll tell you it’s not that hard. And here’s how you do it. The first step is you have to have a high value offering that you can tell people about. So create a program that will solve problems for your ideal client. You need to figure out what your ideal client is, but then you create a program for that person and create the program that will solve all their problems fastest. If that program is not group coaching, then it’s probably personalized coaching with a bunch of other stuff.

Mike Warkentin (12:07):

Okay. So that’s step one. You gotta have a program. Step two, you’ve got to put that program in some sort of pricing binder so people can see it. If you just throw it on your website and assume people will ask for it if they find it, they’re never gonna find it. You need to show it to them. And in that you need a sales process. Sales processes sound intimidating, but they’re really not. The thing that I’ll tell you, the one tip I’ll give you right here. And there’s videos of about this in our archives. Don’t assume that the person sitting in front of you won’t buy what you’re showing that person. Okay? Because that’s a huge mistake. I might not buy a $2,000 personal training package. Cause I’m a personal trainer. I can do the stuff myself. Another person won’t feel like that. They’ll say, oh my God, I can pay $2,000 and get everything done for me?

Mike Warkentin (12:47):

Sign me up now. If you go into that sales meeting with your own budget in mind and project it onto the client, you’re going to not sell it, right? You have to show it to the client and let them make the decisions. Check out Jeff Burlingame’s sales videos in our archives, and you will find all sorts of ways to do this. Okay? So those are your steps. Those are your first steps. Have something, present something, and then back it up with a sales process that ensures that people see it and can make a decision on it. The fourth thing that you’re gonna do when you get someone into that program, document the heck out of it. Okay? Because you want that social proof. So the next time someone says- they go to that pricing page in your binder, all of a sudden, there’s a picture of Tim who signed up four months ago and had amazing transformative results and is only too happy to tell the world about it.

Mike Warkentin (13:33):

That person says, wow, I wanna be like Tim, signs up. Four easy steps. And again, it’s taken Lisa years to get to this point, but you, with these steps can accelerate that process and get there sooner. So don’t be intimidated by the stuff here, ’cause I would’ve been, but it is possible. And we’ll break it down to those easy, easy steps. So transformations, I love that one. That is a huge deal. Do you package other services like hybrid services? And one of the things that I’ve often found when I interview gym owners with high ARMS is that they’re packaging things. So it’s group training and maybe nutrition coaching, or group training and something else, maybe one PT session, or it’s a package of all three or four of those things, or it’s a bunch of other stuff. What other packages do you have that increase your ARM besides high ticket stuff?

Lisa Palmer (14:23):

Yeah. Yeah, for sure. So I think probably about 40% of our membership base are hybrid members. Yeah. So exactly that. So they could do like a three class a week package with one PT session in the week. So we offer hybrid packages, which either have three classes or five classes. And then we add on either four PT sessions a month, eight PT sessions a month, or 12. 

Mike Warkentin (14:45):

And what would the price of something like that be? And just ballpark it if it’s not, the conversion doesn’t go.

Lisa Palmer (14:50):

Probably around, anything up from- I’m just converting it into dollars. Oh, probably anything from about $400 and up. That’s one of our basic ones.

Mike Warkentin (15:04):

And so that’s a key part of your ARM number, which is over $340. If you’re selling hybrid packages to 40% of your members at $400, that’s a huge deal. Let me ask you this. In these packages, people are doing group classes. When they add in that personal training option and change to a hybrid program, do they get better results?

Lisa Palmer (15:21):

Just insane. The level of results is incredible after. Usually when people convert onto a hybrid package, within two months, they’re hitting PRS that they haven’t hit for years of training. And I’d say that is, we don’t sell hybrid packages. So when you first join up with us, rarely do people go straight onto a hybrid. They don’t understand the value of it. You know, it takes a little, they just wanna get stuck into classes and get into some sort of routine or they just wanna do PT only. It’s usually the class members who start on class and then they see Julie next to them who start at the same time as them suddenly she’s nailing pullups and handstand breast ups. And it’s all down to the PT sessions that she’s been having with James or Frosty.

Lisa Palmer (16:07):

And we don’t really push the hybrids in our gym. It’s just that the fact that the clients, because we’re such a close community, they see exactly that. They see the results that others are getting from the hybrid packages. And they want to, obviously, I suppose you say accelerate their own growth and development within their fitness journey. So it’s an easy win for us because the clients are happier because they’re getting better results and quicker results. The coaches are obviously doing really well. They’re really engaged with business cause they’re really getting that one-to-one contact with these clients. So all of our coaches, probably about 80% of their salary is from PT clients. A lot of them are hybrid. And because they have gone to a hybrid package rather than what we used to do in just doing blocks of 10 PT sessions, there’s that element of commitment from the client as well. And what do we know commitment and consistency result in? Results. So that’s been a really big game changer for us. You know, the clients are really enjoying having that accelerated growth in their fitness.

Mike Warkentin (17:07):

The reason I ask is because we often see criticism of people saying, oh, I’m gonna have to gouge people to force them into personal training and spend more money than they want to. That’s not the case. Like what you’re doing here is you are offering a service that solves a problem for a client faster, right? And if the client wants that service, they’re gonna pay for it. If they don’t, it’s not forced upon them. And it’s not about gouging or finding ways to take their money. It’s saying, I have a faster path to get you from point a to point B. And so let’s say point B is I wanna lose 15 pounds or I want to learn double unders for our competition. That path is going to be shorter. You’re gonna get across the channel faster if you have a personal coach and direct attention.

Mike Warkentin (17:46):

And the example I’ll give you, very short, is I had a guy at my gym constantly. Very good athlete, very strong, very fit. Couldn’t do double unders. And you’ve seen these guys for sure. They just can’t do double unders. And so they practice a little bit in class. Then the workout starts and they’re terrible and they get frustrated and mad because they can’t compete with anyone else. All because of double unders. Had I offered a hybrid program where this guy could have signed up for five or eight personal training sessions, we probably could have fixed double unders in, I don’t know, three or four weeks. He would’ve been so much more happy. He would’ve stayed at the gym longer and I would’ve solved his problem. And he would’ve looked at the $400 as a great investment. So these packages are not gouging. They’re not trickery. It’s helping people get the results that they want. Do you agree, Lisa? Have I summarized that right?

Lisa Palmer (18:29):

I totally agree. And there are still people in our gym who are just on three times a week class membership, that’s fine. And we’ve been on it for two years and guess what? They’re very happy. They’re like, maybe a desk worker. And that just kind of ticks them over in terms of the general lifestyle and their wellness. And they’re happy with that. And because they are reaching their own goals, that’s absolutely fine. But if someone keeps coming to us saying, exactly what you said Mike, I’ve been trying to get my doubles for the last six months and I’m getting really frustrated. Then it’s so lovely being a gym where we have a wealth of solutions for them and they get to pick what they want to do. So we meet with our clients every 90 days to sit down with them and we’ve got a performer, which we fill out and at the bottom of this performer, it says good, better and best.

Lisa Palmer (19:18):

And that’s basically our solution for them. So they’ll say to us, I wanna get some doubles in the next three months and we’ll say, okay. So the good option is to maybe go to a gymnastics class more regularly. The better option is to go to the specialty course, which we’re gonna run in a month’s time. And the best option is to spend a little bit more one-to-one time with one of our coaches. So that way you are giving that client choice. And the only way we as a gym have been able to offer that choice to clients is by providing those services. So if we just stick with class only, we are doing our members a disservice, because there’s gonna be a point in time that they want more. And we have been able to deliver that.

Lisa Palmer (19:59):

So we have, I call it a shop. We have basically a shop in our gym, a virtual shop in the air where members literally can just pick out what they feel they need at that moment in time to fit their goals. We obviously guide them on their choices, but it’s so lovely having that huge- so I think we offer about 25, 30 different offerings within our gym. And they’re all based on the fundamentals of nutrition, PT classes. But for example, if someone’s going away on holiday, why don’t you offer them online PT or remote accountability or remote virtual nutrition whilst they’re away when they need it most, because they’ve worked really hard for six months, and then they’re going away for a month. You know, we want them to stay consistent. We want them to keep up their results and their progress.

Lisa Palmer (20:49):

So if they’re really engaged with your gym and your process and their goals, they will snap your arm off if you give them choices in terms of how to carry things on. They don’t wanna stop, but they can’t see way past it when they go on holidays. So give them choices and they will snap your arm off. Admittedly, there are some people who do go on holiday, but then have an action plan in place that when they get back, what I would recommend is that you do maybe this, this, and this to either catch up, or we just have a goal review when you get back to make sure that you feel comfortable getting back into classes again. So you just have to coach them and wrap them up in a cotton ball and sort of tell them what they need in order to achieve their goals.

Mike Warkentin (21:30):

I’m gonna highlight a quote from you that you said a few minutes ago, because it’s really important. Listeners, Lisa said this: if I only offer group classes, I’m doing my members a disservice. Think about that for a bit, because you are not giving them the fastest route to their goals. Certain people may want group classes. And if that’s what they want, that’s totally fine. Checkbox. You’ve done that. But if they wanna move faster and you’re not offering hybrid programs, personal training, specialty courses, all the other stuff, you are doing a disservice to them because you could be helping them to a greater degree. And self-interest, it will make you more money. It will make your coaches more money. Key part that I wanna go over here, Lisa, that you mentioned, it’s called the prescriptive model. And this is so, so, so important to the ARM process.

Mike Warkentin (22:15):

You’ve mentioned Lisa, a ton of stuff that you offer. No client could come into your office or look on your whiteboard or whatever it is. And just be like, ah, there’s like 25 things up there, all these different options. They don’t have a clue. They don’t even know seldom exist. They’re not gonna navigate that path themselves. But in the prescriptive model, which is a whole process as laid out by Chris Cooper, who’s the Two-Brain founder. You are going to meet with clients at a minimum of every 90 days, three months. And you’re going to ask them, you’re gonna measure something, ask them, are you moving in the right direction? And then you’re gonna revise their prescription. And what that prescription is is to give them the best possible plan for them to accomplish their goals. Lisa has that broken down into good, better, best, which allows them to make decisions.

Mike Warkentin (22:55):

But what she’s doing now is taking the whole giant McDonald’s menu of all the burgers and fries off the wall, sitting down with that person and saying, what do you wanna accomplish? Here’s what you need to do to get there, prescribing that. And most of the time people are going to say, yes, I want that. And they’ll pick one of the three options or whatever it is. Then you’re going to do that process repeated again in 90 days. And as you keep doing this, this solves a huge problem for you. That problem is, your members don’t know what you’ve created and what you offer. If someone comes into your gym, they only do group classes. They only do personal training. They might not even know what you do. When I started offering hybrid stuff, and this was toward the end of when I had my physical space, I asked a member, said Hey- or my wife did- do you want some extra help on your muscle ups in a personal training session? And he was a group class member. He said, you guys do that? And I slapped myself in the head because I had no system in place to get this information to my members. The prescriptive model is that plan. Lisa, what happened when you put the prescriptive modeling in place? Did you notice your ARM move automatically?

Lisa Palmer (24:02):

I think it was more to do with what you just said, Mike. It’s more of an awareness. So we make a real, conscious effort that when we meet with our clients, it is not a sales process. It can’t be. Because if it’s portrayed as that, or it’s conducted like that, the members are not gonna engage with you. You know, it’s really important. And the members see that we have only their goals at the fundamental heart of our business. And so when we are meeting with them, for these client reviews, sometimes, we always try and make sure that one of the options that we give them is of course no extra cost to them. So, listen, I look back at your training and you are attending two classes a week rather than three, which is what you’re paying for.

Lisa Palmer (24:44):

So let’s see how we can get that third session into your timetable. But like you said, Mike, we then coach them and we say, you can carry on doing your three classes a week and you will get better. But if you are saying that you want to do your doubles within a month, then you will need to do something extra to accelerate that process. If you are saying you are happy to wait for six months to get your doubles, then three classes a week will probably be just fine. So it’s really important that you use the client check-ins to educate your members, not just on what other services you offer, but also in terms of timeframes and you are coaching them on their goals. It’s rare. In fact, we actively discourage our coaches selling in those kind of environments. Sometimes people just go away.

Lisa Palmer (25:29):

And the fact that you’ve actually put in the best column, PT, you’ve just put it in the forefront of their mind that that is a potential offering. And it might be that by the time they come back, 90 days later, if they haven’t hit their goals again, they might be more receptive to going down that route if they’ve still got that same goal. So, you know, as opposed to the kind of the front end, where we have new leads coming in, and it’s very much focused on sales with our members, it’s much more nurture and coaching. And the nice sort of byproduct of that is because they trust you, when you suggest things like PT as an option, they’re more likely to adopt it. Either then, or certainly for the next goal review.

Mike Warkentin (26:07):

Concept that Lisa has just outlined. If you don’t know it, it is called Help First. Chris Cooper wrote a book about it. He’s often told that it is his best of all his books, which is a huge number at this point. “Help First”, the quick summary is that selling is not selling. If you are helping someone accomplish their goals, if someone says I wanna lose 10 pounds, it’s very important to me, I must have this. And you sell. If you offer them a plan to do that and they buy it, that is not selling, that is helping. Right. And again, obviously it is selling, but you get the concept. If this doesn’t make sense to you, or if you wanna learn how to change your mindset about this, “Help First”, we’ll put that link in the show notes, is Chris Cooper’s book, and you should read it.

Mike Warkentin (26:48):

It will change your entire approach to the fitness industry. Second thing that’s really important, Lisa, that you brought up is that people who are in your business and know, like, and trust you and are engaging with you on a daily basis are more likely to make purchases than cold leads, outside people. That doesn’t mean that you shouldn’t market and you shouldn’t build your audience. And you shouldn’t talk to people out there in the internet sphere. But the people that are in your gym are more likely to buy your stuff. They’re also more likely to refer friends who will buy your stuff. That process cannot be ignored. If you want to build ARM, you must put in a prescriptive process to talk to your current clients, alert them to stuff that’s out there and ask them who else in their life you can help.

Mike Warkentin (27:29):

And again, help. Right? Not selling, helping. They will almost invariably give you someone to speak to that is going to be a hot lead that will almost certainly sign up. You back that up with advertising and marketing and all the other stuff that touches people outside so that eventually they come and see you, but you cannot go wrong by talking to your current clients. Lisa, I need to ask you this. You talked about the shop mentality, I think you said, or what was the shop vibe that you had? Correct me if I’m wrong on how you said that, but tell me what that is and describe how it goes over there.

Lisa Palmer (28:01):

Well, we are lucky because we’ve got a really well rounded team. So we’ve got a team of 12 of us. We’ve got coaches who have more of a passion for mobility, nutrition, sports, massage therapy. And what we were able to do is draw on all those different areas of expertise and then make a service out of it. Now we haven’t just done it for the sake of it, that service would’ve been developed on the back of one of these athlete check-ins. Where more and more clients, we sort of almost developed themes that two or three clients are saying the same thing. Then there may be a need within our gym that we need to develop something.

Mike Warkentin (28:36):

I’m gonna interrupt before you finish that off. This is a key concept Chris has written about. It is creating products for your clients, not the other way. Not finding clients for your products, right? You are listening to what they want and need, and then giving them a solution. That is so different than saying, I am offering an Olympic weightlifting program. Come to me. That’s not the same thing. Sorry to interrupt. Key concept, continue with the shop feel.

Lisa Palmer (28:58):

Yeah. And that goes back to why these client check-ins are so important because it allows you the opportunity to really get to know your membership base and what they need and what they want. And that changes. So, you know, seven years ago, when we opened the current site, our membership needs were very different to what they are now. So by constantly checking with our membership base in the diary every three months, we really understand whether our members are getting what they need from us. And more importantly, are they getting what they came in for in the first place? Has that changed at all? And I can’t put a figure on how valuable those check-ins are in terms of getting to know our membership base. And it’s only been from those check-ins and the regular check-ins that we have mapped out exactly this virtual shop.

Lisa Palmer (29:43):

More people were saying, you know on the back of lockdown where people suddenly went on holiday loads, but they still had a little bit of weight to shift. And they’d been a member for three months with us, and then they decided they wanted to go on a month’s holiday and they were almost gutted to be going on holiday. So we had to quickly think of something that we could offer them that was still gonna keep them on track and keep them accountable in their training. So we then developed things like online programming and virtual accountability checkups, and we had loads of people on holiday shift onto those kind of programs. And then they came back into the gym again. So all of these services that we have on offer are all on the back of what members have been telling us.

Lisa Palmer (30:24):

Another example is, we had a member about a year and a half ago who said, “Listen, I’m gonna have to cancel my membership, I love it here, but I just can’t do it anymore because of my shoulders.” So what we did was we just transferred her class membership onto regular sports massage therapy for a couple of months. So no extra cost to her in theory, same sort of outgoings. But we worked out how many sports massage treatments she could have every month. And then after the two months, then she’d come back into classes again. And the great thing about having our head coach as a sports massage therapist is as he’s doing his treatment, he can be talking to her about recovery, good nutrition for tissue healing, good hydration levels. What we can expect when she goes back into the gym, do we need to support her on a graded program back in again? So it’s a bit like an orchestra. We kind of have lots of different things, kind of playing at the same time, trying to achieve the same thing. And it’s only because we have all these different offerings that we’re able to do that and give our clients the best service in our opinion.

Mike Warkentin (31:24):

Well, let’s not kid ourselves, either. We’re talking about ARM today, but everything that you just described is part of a retention strategy. If you did not have those things, and I’ll use the example of the person with the shoulder, that person would’ve just left the gym and said, it hurts. I’m not coming back. You would’ve lost the revenue. That person would not have improved health and fitness. Probably would’ve quit. That’s a loss for the client. It’s a loss for the coach. It’s a loss for the business. It’s bad for everyone. Because you spotted it and have a service in place, that person now works with another one of your coaches. There is a salary for the coach, stays in your business. That’s revenue for you. Improves health and fitness to the point where that person can keep working out. Okay. So all that is, is solving problems, huge retention, right? Like, that is a key.

Lisa Palmer (32:06):

Absolutely. And this wasn’t the intention, the sports massage, but on the back of that, that member then upgraded to a PT package because she acknowledged that maybe classes weren’t the best thing for her shoulder. And she wanted a little bit more one-to-one attention. So you’re absolutely right. You know? Yes, it’s for retention, but out of genuinely caring for your clients and giving them some solutions because you’ve built up that level of trust. They upgrade their services, or they add on. We kinda call it addons. Bit like the hybrid concept. We do offer hybrids, but it is like a shop. It’s like, I’ve got this base product of my classes, and what can I add on top of that? I’m gonna add on some PT, I’m gonna add on a specialty course this weekend, and I’m gonna add on some nutrition as well. And it’s a really nice way because they know we offer these services, they can do these addons. And that I would say with the transformation packages has been the biggest source of our ARM, and, you know, I think I was asked by someone else in Two-Brain, whether we could see that happening and carrying on. And yeah, absolutely. The more we offer, the more satisfied our clients are, the more they add on. Of course, the ARM is going to maintain the same sort of- in the same sort of range.

Mike Warkentin (33:16):

Think about it in the car sales world. So when I was- in 2008, I was looking for my first vehicle and I decided I was gonna get a Honda Civic. I didn’t have a lot of money, so I was gonna buy the cheapest version available. I looked on the website, it was this base model, no air conditioning, no features, nothing. Called the dealership. I said, I want this. They said it doesn’t exist. No one gets that car. That is just there for the base model we’re gonna build. And you have to get air conditioning and all these other things, the base model is almost not in existence. Okay? Because every car is customized with, like, seat warmers and leather, this trim or that trim or this button, or this feature. Gyms never took that approach. I essentially, at my gym, sold that base model Honda Civic and said, the only thing we have is group classes. And if you want anything else, that’s too bad. And my revenue, my ARM reflected that

Lisa Palmer (34:02):

Yeah, right. Yeah. We did that.

Mike Warkentin (34:03):

Yeah. But when you go to a car dealer, they’re going to give you all these different options so that you can buy the exact thing that you want, that does the thing that you want it to do and solves your problems. And that can be anything from large upgrades, like the things that cost two or three extra thousand dollars, or it can be simple stuff like, do you want some extra floor mats on the way out? And every extra dollar added to that transaction is a benefit for the dealer and for the client who wants the stuff. So if you’re thinking about this and you just offer group classes, I am telling you, you can make your ARM number higher simply by finding out what your clients want and offering it. It’s not a hard concept.

Mike Warkentin (34:44):

It just gets lost because you’re stuck in the day to day of your business. So, Lisa, I’m gonna ask you this, as we get towards the end of this, I wanna know if there’s a gym owner out there- and you’re on our mentorship team now. So you’ve got a gym owner out there who’s like only offering group classes. Their ARM, let’s say, is in the $80 range, something like that, which- obviously their pricing is too low, but we will skip over that for now. What are like three simple steps you would give this person to take, to start getting that ARM off of $80 and moving north of $100?

Lisa Palmer (35:13):

Three steps. So athlete checkins. So absolutely sit down regularly with your members to discuss how they’re getting on and whether they need anything more from you as a gym. Two: Transformation packages. If it’s not in there, then they don’t know you offer it.

Mike Warkentin (35:29):

So something high ticket?

Lisa Palmer (35:31):

Something high ticket. Yep. And then the third thing is choice. So even when we talk about our Onramp, so a lot of CrossFit gyms, they do kind of fundamentals, but they only offer one package. And actually sometimes people need a little bit more attention. So for example, you know, with our sort of fundamental, we call it start package. We have three different choices, so they can either start with 12 PT sessions, eight PT sessions, or six PT sessions. Now, if you are a real kind of gym bunny, and you are really fit and healthy, you probably actually only need six sessions to start with, just to kind of get familiar with our style of training and to make sure you’re safe with the bar, etcetera. But if you are someone who hasn’t exercised in 20 years and you are kind of holding a bit of an injury somewhere and you just need a little bit more tuition, then they will go for the 12 sessions.

Lisa Palmer (36:23):

But if you don’t offer those three different arms, I wouldn’t probably go more than three in my personal opinion. Cause then it gets really confusing. But if you don’t offer those three different arms, then you’re never gonna know whether people will go for that higher offering or not. And that’s exactly what they need in order to start their fitness journey with you. You are once again, going back to doing a disservice, you’re doing that person a disservice if you’re expecting them to be engaged and fully embraced within the class environment, after only six sessions of PT. ‘Cause they will feel overwhelmed and we’ve all probably seen it before, they get re-injured quite quickly. And then guess what, it’s on you as a brand. It’s on you as a company as to whether it was anything which you guys could have obviously helped them better with. So I say offer choice within your front end processes, high tech offering and athlete check-ins have been incredibly useful for us.

Mike Warkentin (37:18):

You have three action steps right there that are guaranteed to increase your ARM. I would encourage you to take them, but I know many of you aren’t going do it and it’s going to be difficult for you to do that. It’s just, it’s one of those things where you get overwhelmed and I’m sure the phone’s gonna ring and you’re like, ah, forget about it. If you need something, some help, you can work with someone just like Lisa. All you have to do is go to TwoBrainBusiness.com and book a free call. If you do that, you will talk to one of our people who will give you an exact prescription to make your gym better. And it’s exactly what we’re talking about here. Prescriptive model, you will learn how to improve your gym super fast and you’ll work with a mentor to do that. And that mentor will provide everything a fitness coach would provide to a client to get the results that they want. So I would encourage you to go over there and book that. You would be able to work with potentially you Lisa?

Lisa Palmer (38:06):

Yes please! Yeah, I’m here to help.

Mike Warkentin (38:07):

That would be awesome. So Lisa’s in the UK. She’ll work with people anywhere, but if you are in the UK and you want someone on home turf, you could absolutely talk to a person who would put you in touch with Lisa. Our goal is to help you guys improve stuff. One final question. Lisa, do you tackle on things like the floor mats and cupholders in terms of supplements and things like that, T-shirts. Do you do retail in this package as well?

Lisa Palmer (38:30):

We do. Yeah. We don’t do packages, but we do have retail, yep, for sure.

Mike Warkentin (38:33):

Yeah. Every dollar counts, right? And it’s again, solving client problems.

Lisa Palmer (38:37):

We even do our own coffee, and it’s really good. So if you’re ever in our area, make sure you get yourself down and buy a bag of beans.

Mike Warkentin (38:44):

I will 100% do that. I’m a coffee fanatic. So I will be by your gym if I’m ever so lucky as to be in the UK. That was Lisa Palmer on Two-Brain Radio. She is an ARM leader, average revenue per member per month for May. And she just opened her book and shared her secrets. Take action! But if you need more help, go to TwoBrainBusiness.com and book a free call. Thank you so much for listening to Two-Brain Radio. Please hit subscribe on the way out, wherever you’re watching or listening. Now here’s Two-Brain founder Chris Cooper with a final message.

Chris Cooper (39:16):

Hey, it’s Two-Brain founder Chris Cooper with a quick note. The Gym Owners United Facebook group has more than 5,600 members and it’s growing daily. If you aren’t benefiting from the free tips and tactics and resources that I post daily in that group, what are you waiting for? Get in there and grow your business. That’s Gym Owners United on Facebook or www.GymOwnersUnited.com. Join today.

The post “The Shop Feel”: Keys to $340 Average Revenue Per Member appeared first on Two-Brain Business.

Beating the Recession

When I was a personal trainer, I worked with a lot of financial planners and wealth managers.
 
Our first “gym” was in the financial district in town—three banks and a couple of financial offices. I didn’t get much free advice, but I heard a lot of gloom and doom.
 
In 2007, as the stock market was on the brink of disaster, we were all still blissfully unaware. But I remember one of my clients telling me this:
 
“You’re selling a luxury, buddy. If the steel mill goes down in this town, you’re done.”
 
Another said:
 
“You should be paying close attention to the market because when people start losing money, you’ll be the first thing they cut.”
 
Obviously, they were wrong: My stock portfolio—basically, my shares in other people’s companies—took a vicious beating in 2008. But Catalyst started to grow. I’ll share the reason why in one moment.

Antifragility

First, though, a quick definition of antifragility from Wikipedia: “A property of systems in which they increase in capability to thrive as a result of stressors, shocks, volatility, noise, mistakes, faults, attacks, or failures. The concept was developed by Nassim Nicholas Taleb in his book ‘Antifragile: Things That Gain From Disorder’ and in technical papers.”

Taleb’s book is a fantastic lesson on building a resilient business. The key takeaway for the service industry: Hold tightly to your values but loosely to their delivery. In other words, be plastic: Change the service, not the price, and recruit clients who are also immune to market forces.
 
In a stock market crisis, who is least affected?

Government workers, like teachers (in Canada, at least, they can’t be downsized).Entrepreneurs with the same antifragile policies.Financial planners (ironically, with fixed fees, they’re among the safest; they make their 3 percent even if you lose money).Doctors, lawyers and professionals.Kids.Cab drivers.

In other words, generalists are least affected by a stock-market crisis.

Who is most affected? 

Middle managers.Salaried workers in collapsable positions (including steelworkers, unfortunately).

In other words, skilled specialists are most affected by market crises.

Recessions and Premium Services

The market did collapse in 2008, of course. And our city’s major industries—pulp, paper and steel—took a massive beating. One of the top three employers went bankrupt; another is now only a third of its size a decade ago.
 
When the steelworkers and paper workers had to leave town, it was depressing. But the doctors, lawyers and financial planners are still here.
 
This is why I write that the average per capita income in your area doesn’t really matter—because we sell a premium service. High-volume, access-based fitness centers suffer in times of financial crisis because people cancel unnecessary (unused) expenses. But that’s not our model.
 
Chain gyms suffer in a recession because they sell on volume and try to appeal to budget seekers (who are most affected by a financial crisis). Their clients lose their jobs, they cancel their memberships, and the gyms suffer. But that’s not our model.
 
Coaching is a premium service.
 
The population of our city has dropped by over 25 percent since I opened my gym. Average household income is lower now than it was. But we’re thriving because the doctors, lawyers and entrepreneurs are still here.
 
Do we have waitresses who pick up extra shifts to pay for their memberships? Of course.
 
Are there people at Catalyst who will suffer in a recession? Sadly, yes—but at least their gym family will be there for them.
 
Recessions happen. And they’re bad news for commodities, like beef and cars and globo gyms. But they’re not bad news for agile entrepreneurs.

In the next post in this series, I’ll tell you what to cut in a crisis. And after that I’ll tell you how to prepare your clients for a recession so they don’t cut the wrong thing if it comes.

The post Beating the Recession appeared first on Two-Brain Business.

Scared of the Recession? Seek out Solid Tactics and Hard Data

Are people at your gym for physical or emotional reasons?

According to recently released statistics, the answer is at least partially influenced by financial status.

Weird, I know. Really weird.

On July 4, FitBizWeekly presented “Are Gyms Recession-Proof? They Can Be” by Mo Dezyanian, a marketing professor and entrepreneur.

The bad news: We’re dealing with inflation and a recession.

The good news from Dezyanian, who is reporting on research conducted by Empathy Inc. (his company) and Vividata: “The majority of respondents (53%) say the pandemic has increased their desire to spend money/time on physical fitness. Notably, it is more true for those who have identified themselves as being financially precarious (66% vs. 47% of those who say they are comfortable in their finances).”

It’s not surprising that the pandemic forced people to think about fitness and health. But it is surprising that people in tough financial spots seem more inclined to invest money or time on fitness.

I think the key to that odd stat is the “slash”: money/time.

Money and time are not the same thing at all, and that fact makes me question the value of the data for gym owners. So does the term “desire.” I desire lots of stuff, but that doesn’t mean I’m taking any action to acquire those things.

The stats just feel weird. I’d be thrilled if I saw data like this instead: “Research reveals 60 percent of survey respondents are actively planning to spend money on fitness in the next 30 days despite current economic conditions.”

“Desire” and “money/time”? They’re vague and imprecise terms.

Good Advice or Guesswork?

The phrasing in the article makes me question subsequent stats and recommendations:

“Our research shows that people who feel unsecure about their finances—especially as the economy turns around—indicate fulfilling their emotional needs as the top priority to be fit (31% vs. 17%). Conversely folks who feel secure about their finances prioritize physical reasons to get to the gym (64% vs. 48%).”

Again, I have to question the wording: “being fit” is not the same thing as actually “getting to the gym” or spending money on fitness. And what’s an “emotional need”? What if I derive self-confidence from looking jacked? Is that an emotional or physical need?

Finally, I don’t buy this advice, which is based on the stats quoted above: “Gyms targeting a wealthier clientele would do better to empathize how fitness improves your physique. Conversely, gyms looking to be financially accessible can empathize with stress and sleep management benefits of fitness.”

Personally, I think that’s a mistake. I wouldn’t focus my marketing like that. Despite the data presented in the article, I just don’t think it’s wise to assume wealthy people want to look good and people of modest means want stress relief. I don’t have any stats to back that up—but I do have common sense and 13 years of experience running a fitness business.

My experience suggests just about everyone who thinks about fitness has one of three goals—or a combination of these three:

Look better (fat loss, weight loss, muscle gain).Feel better (general fitness, including more energy, greater strength, improved flexibility, increased vitality and improved metrics in the doctor’s office).Perform better (in life or sports, including functional fitness competitions).

If I were going to market a fitness coaching business, I’d focus on telling everyone how I can help them look better, feel better and perform better. If I were to boil that down further, I’d simply tell people that I can help them accomplish any personal goal related to fitness. If I cast that net into the ocean, I’d get a lot of fish.

I wouldn’t assume the high-value clients I desire only want to look better. Some of my most affluent clients were much more interested in feeling better. And others really wanted to crush the competition on the field of play.

And I wouldn’t assume less-rich clients want to sleep better or de-stress. That one doesn’t even pass the common-sense test. No client has ever told me sleep management is the No. 1 reason they come to the gym. And it certainly wasn’t a clearly stated priority for people who were concerned about finances when considering joining my gym.

If anything, it was the affluent CEOs who were more likely to want to blow off some steam with me in the gym. And the college kids with two jobs were more likely to want rippling abs or a spot on top of the podium at the WODafit Gauntlet Ultra-Throwdown Comp.

Overall, it’s really not a great plan to guess what prospective clients want.

So solve the big problems—look better, feel better, perform better—for everyone and don’t project budgets onto your audience. Then, when people come to your gym, actually ask them what their goals are. Don’t assume anything. Ask. Then give them the best plan to accomplish those goals.

That’s a solid course of action in times of financial stress and in times of plenty.

Real Recession-Beating Tactics

I’m not trying to dim the light of hope Dezyanian and FitBizWeekly are shining for stressed gym owners. I’m just pointing out a few oddities that suggest you might want to seek additional advice if you want your gym business to weather current economic conditions and even thrive in spite of them.

Here’s a starting point. Everything in this video is actionable and based on the best practices of hundreds of the best gyms in the world. If you’re a gym owner who’s worried about inflation and the recession, start here:

The post Scared of the Recession? Seek out Solid Tactics and Hard Data appeared first on Two-Brain Business.

Two-Brain Awards: Stars of the Fitness Industry

Tiffy Thompson (00:01):

Welcome to Two-Brain Radio. I’m Tiffy Thompson. And today I’ll be chatting with the recipients of this year’s TBB Awards, stars of the fitness industry, Ashley Haun, Nyree Segui and Scott Romijn have demonstrated excellence in the fields of coach education and opportunity, long-term planning and owner lifestyle. They’ll share what they’ve learned, how they’ve grown and explain how you can get there too. Hello, Ashley, welcome to the show. Ashley was this year’s recipient of Two brain’s Coach Education and Opportunity award. And this was given to the client who is investing the most into growing their team. And her mentor wrote, Ashley has completely overhauled her roles and the people in those roles while focusing on leadership and connections. So how did overhauling your staff roles open up more opportunities for your team?

Ashley Haun (01:01):

Yeah, overhauling everything allowed the team to get better at what they were good at. Instead of putting people in what I always say, seats on the bus that they’re not great at and making them stay there, it allowed them to move into positions that they really only loved doing. And what we saw was that the gym just got better and better because they were happier. And then the happiness flows downhill to our clients from there.

Tiffy Thompson (01:32):

Awesome. Did you learn anything new about entrepreneurialism and how it can function in your gym?

Ashley Haun (01:38):

So entrepreneurialism in the gym is we look at it in two ways. So we have two different numbers when we do career roadmaps with our full-time staff and we have our ramen noodle numbers. So that’s folks that are, they’re like paying rent, eating ramen and peanut butter and jelly. But a lot of times that’s their jumping off point to being full time. And as an owner, we’re sometimes surprised at what those numbers are. We think that they have to start off at what we call at the gym, “the filet numbers”. That’s what I say to my staff is them living abundantly, right? They’re eating filet mignon, they’re going on vacation. That’s what I want for them. And so the entrepreneurial opportunity we really look at, like what is your jumping off point? What are your ramen numbers? And then how do we get you to the filet numbers after that? And that helps them take ownership of the different opportunities that they can have inside the gym.

Tiffy Thompson (02:44):

I think having that sense of ownership is really key, too, probably. Right?

Ashley Haun (02:47):

Yeah, absolutely. I track their numbers all the time, ’cause it’ll keep me up at night. I’m like, oh shoot, is Zach making enough money? and so I can go in and see, okay, this is where he’s at. You know, he’s passed his ramen noodle numbers and he is super close. So let’s have a conversation with him on what is the next thing we need to do? Or maybe there’s something we need to get better at, like social media posts, or content, or maybe we need to offer a particular program to push him over to the filet numbers.

Tiffy Thompson (03:23):

Awesome. So is there one piece of advice you could give to other gym owners who want to increase opportunities for their staff?

Ashley Haun (03:32):

I would say doing the two different numbers of ramen and filet because the staff can then very clearly see, okay, I could survive, but nobody wants to just survive. The owner can see, well actually, I could probably make this happen today. And then moving all the way up to their filet numbers. I think everyone should do two career roadmaps to see what those numbers are for each person. Cause if we ask staff, you know, it’s like saying to a gym owner, I wanna make a hundred thousand dollars a year, but why? If you ask staff, they’ll say I wanna make $52,000 a year, but why? And so I think it helps everybody get on the same page with that.

Tiffy Thompson (04:16):

Awesome. Thanks Ashley.

Ashley Haun (04:17):

Yeah, absolutely.

Tiffy Thompson (04:23):

Welcome to Two-Brain Radio, Nyree!

Nyree Segui (04:28):

Hi.

Tiffy Thompson (04:29):

So today I’m speaking with Nyree Segui. She is the recipient of the Future Star award for long-term planning. And this was given to the client who has a solid place in plan- or solid plan in place to grow. This client should be in Farmer phase and demonstrate they know the steps to take to be successful. And her mentor wrote, these guys were under $1500 a month when I started working with them mid-2021. I don’t believe they were ever over 4-5K in revenue in the last 10 years. We’ve made so many great strides, implementing new systems, doing incremental rate increases and moving to biweekly payments. All in all, rates have gone up 50% and they have nearly three times the clients they did when we started, they hit 8,300 in March 2022, which is completely uncharted territory for them. We’re making plans of what a 15K a month-gym looks like for them and working back from it. And I understand that you want to travel to Norway and by God, I’m getting them there.

Nyree Segui (05:42):

We’ve got Costa Rica booked. So,

Tiffy Thompson (05:44):

Oh, awesome.

Nyree Segui (05:45):

We’re getting closer! Like, you know, we’ll get there.

Tiffy Thompson (05:47):

Yeah. so since working with Two-Brain, what adjustment do you feel has moved the needle the most when it comes to boosting your revenue?

Nyree Segui (05:59):

Well, you know what, honestly, there’s just so many. We had zero systems in place for anything really. So I mean, laying the foundation and having systems in place to generate new revenue, to get leads and that kind of thing, like even our whole membership process was a mess. So, then we switched it biweekly, which made such a huge difference. And then, yeah. We increased our membership rates a good 50% and didn’t lose anybody along the way. So having the systems in place made such a difference. And then trusting the process, I think for us, that’s been the biggest thing. Like, you know, Jay’s been there. All these people in Two-Brain have been where we’ve been. And to know that they can come out on the other side, you know, it really just gives you the confidence to say, all right, you know what? If this is what worked for them, this is gonna work for us. And so we just trust the process and we took some hard looks at our business. It was kind of gut wrenching in so many ways because we had to be brutally honest with ourselves and Jay didn’t let us slide on that. So that made a huge difference.

Tiffy Thompson (07:10):

Right. What would you say, looking back over the last couple of years, what has emerged as your sort of entrepreneurial superpower?

Nyree Segui (07:21):

To be a little bit more fearless, you know? To try things. And I mean, we would always try things, but I don’t think we would always give them the full effort. And so, you know, to just like- with the rate change and changing to biweekly and that kind of thing, say, what was the worst that’s gonna happen? I feel like COVID really taught us the worst of the worst. We navigated that and, you know, if we lost a few members, then so what? In the grand scheme of things, it wasn’t gonna hurt us the way we used to feel like things like that would. So to be a lot more fearless. And to plan, like to have a plan in place and to have the processes in place, but to know that those processes are in place and that you can be a lot more fearless about making decisions and sticking to them.

Tiffy Thompson (08:08):

It sounds like you’ve gotten a confidence boost.

Nyree Segui (08:10):

We’re together all the time and he had to get another job. And so, when that changed it was like a one-woman show and I just couldn’t do all this myself. And so it really made such a difference to be able to not only know that we’re going to have a plan in place, but to have that resource to say, Hey, this is happening. Where do I go now? And to really just to have the confidence. Oh, huge. Yeah. Because you kind of see things through your lens, and maybe something that’s not as big of a mountain to me, or if it is a big mountain to me, you know, Jay or your mentors can say, Hey, you know what? We just need to tweak this one little thing and then everything will start to fall into place.

Tiffy Thompson (08:54):

Right. When it comes to long term planning, what is one major takeaway that you think might help other gym owners who are trying to get traction?

Nyree Segui (09:05):

You just gotta build. Don’t be afraid if it’s slow at the start. Right. Cause I mean, in the beginning, things were kind of slow and, you know, it wasn’t these massive increment, huge jumps that you see maybe other businesses take. But just trust the process and then just put those little systems in place and then work those systems. And then just know that once you have those systems in place and then you can kind of teach other people in your business to run those systems, it really does start to come into place. You really kind of need to keep your head down, do the work. But you know, also kind of have that goal of like, okay, we’re gonna reach this milestone. We’re gonna reach this milestone. It may take three months. It may take six months. But just to trust the process, I mean, I think that’s kind of, that’s been the huge message for me is to just, they’ve been there, trust the process.

Tiffy Thompson (09:53):

Mm-hmm . And it sounds like it’s working because you’re able to book a trip to Costa Rica and step away from your gym.

Nyree Segui (09:59):

Yeah. This would’ve never happened five years ago. It would’ve never happened 10 years ago. And not only are we going on vacation, but I’ve got coverage for my gym. ‘Cause people said, oh, are you guys gonna be closed? And I said no. And I’m almost more excited about that part than actually going on vacation.

Tiffy Thompson (10:19):

Nyree, I appreciate you chatting with me today.

Nyree Segui (10:21):

Thank you so much. This was such a cool honor.

Tiffy Thompson (10:27):

Hello Scott. Welcome to the show.

Scott Romijn (10:30):

Hey Tiffy. Thanks for having me.

Tiffy Thompson (10:32):

So Scott Romijn is the recipient of this year’s Owner Lifestyle award. And this was given to the client who has hit functional retirement. So the client can prioritize their lifestyle and the business exists to serve them. So Scott’s mentor wrote, Scott has created a business that allows him to travel extensively with his wife and freedom of time to leave when he wants for as long as he wants. Scott also has focused significantly on a great relationship with his wife and has a great family life outside the gym. He’s genuinely happy with the life he has built. So Scott, was functional retirement at a young age always in your plan?

Scott Romijn (11:19):

No, never. I never thought of that before or even when I opened the gym, that was never a thought because I worked all day every day, like most people do when they start this. But as the years went on, it finally became a reality in this last year of taking more time off and doing new things I enjoy, and spending it with my wife.

Tiffy Thompson (11:44):

So what did you do to create the situation? Like does it boil down to staffing and systems, or how did you get to this point?

Scott Romijn (11:55):

It boils down to having a great team. I owe everything to my team. They can function and do everything and grow the gym and run it without me. And that’s taken years to develop and we’re just doing interviews today to add more to the team because it needs to keep growing and you need to focus on that.

Tiffy Thompson (12:19):

So it’s a matter of passing the “hit by the bus” test, basically.

Scott Romijn (12:26):

Yes, absolutely.

Tiffy Thompson (12:27):

What did that feel like the first time you were able to kind of step away from your gym and you knew that it was running without you looming and worrying about it?

Scott Romijn (12:37):

It’s a scary feeling. You’re like, you put so much and everyone says they pour their heart and soul into it, but you do. But to leave it alone and think it’s gonna be okay is hard the first time. I mean, it is hard the first time you let someone else coach a class and it’s not you, nevermind be gone for, I think in the last year we took two trips over two weeks long. To not have any contact other than like, Hey, are you okay? Like, yep. We’re good. Don’t need you. So yeah, it’s frightening at first, but then you kind of get used to it. Even now, I usually don’t work Friday, Saturday, Sundays, those three days are off completely and I’m used to not worrying about it. Like everything’s gonna be fine.

Tiffy Thompson (13:23):

Wow. So for gym owners who are listening to you with envy and longing for this freedom of time for themselves, what would you recommend if you had one or two tips that they do to get there sooner?

Scott Romijn (13:38):

Two-Brain teaches us really well. It’s like build your systems first, do what you do really well and then teach the next person and then take a couple days off, find out what your problems are. You might need your next hire to fill that next role, but just keep replacing yourself over and over until you don’t need to be there anymore.

Tiffy Thompson (14:02):

So you’ve canceled yourself out.

Scott Romijn (14:04):

yeah, absolutely. Then you get to work on the projects you want to work on. If it’s still working some hours then great. But I work on some different projects now that support, help with the gym, but aren’t directly involved with the gym. So you get to do more freedom to do what you want, not just vacation, but you know, passion projects.

Tiffy Thompson (14:25):

For sure. So do you have your next trip planned or?

Scott Romijn (14:29):

Yes, I’m leaving in two days. We’re going off the grid, a little tiny house for like four days. No cell phones, no wifi, no internet. Yeah.

Tiffy Thompson (14:40):

That’s wicked. Well, thanks a lot. Thanks a lot for your time today, Scott. I appreciate it.

Scott Romijn (14:45):

Awesome. Thank you.

Tiffy Thompson (14:47):

Thanks for listening to Two-Brain Radio. If you wanna get in on this great community of gym owners, head over to GymOwnersUnited.com right now to join. That’s GymOwnersUnited.com.

The post Two-Brain Awards: Stars of the Fitness Industry appeared first on Two-Brain Business.

What Would a CEO Do?

Imagine you get fired as CEO of your gym. The board of directors hires a new CEO to run it.

What’s the first thing the new CEO would do?

This story comes from the book “Good to Great”: a CEO and COO found their company in trouble. So each fired the other. Both walked out of the boardroom, and they re-hired each other in the hallway. They re-entered the room as if they were brought in to fix an ailing company from scratch.

The value of the exercise is in removing the emotional filters that stop us from taking hard actions. Deep down, we might know that we should cut back on staff or reduce our gym size—but our ego and our relationships stop us from taking the necessary steps.

Even the knowledge that the tree will die if we don’t cut off some imperfect limbs might not be enough to take action. So we need to act from a place of objectivity.

Advice Backed by Experience

In “Thinking Like an Investor”—one episode in my private podcast just for those in our Tinker group—I laid out the value of removing yourself from your business and looking at it as a stranger would. This eliminates all the pet projects, subjective reasoning and untouchable conversations.

Every month, I take the CEO of another local company to lunch. His name is Mike. Each of us orders a sandwich and then lays out the largest challenge he’s facing.

The listener first shares his experience with a similar problem.

If he doesn’t have experience, he might share advice—but he makes it clear that he doesn’t have specific experience with that issue. This is actually pretty rare; most issues of leadership transcend niches.

The talker might accept the listener’s advice without experience but almost always accepts the advice when it comes with experience.

Many Tinkers in our program find themselves asked for advice by other local entrepreneurs. We actually encourage them to get out there and coach others because solving others’ problems makes them better at seeing their own objectively. It’s also great creative practice, and it feels amazing when you have experience that can help (trust me).

The value of finding another CEO and asking them for advice is priceless.

But if you can’t do it, ask yourself this:

“What would a new CEO of this company do?”

Or ask this:

“If I were preparing to sell this company, what would I want to change to maximize its value?”

The post What Would a CEO Do? appeared first on Two-Brain Business.

How Two-Brain Prevents Gym Death

In the previous post in this series, I told you that there are six reasons gyms go out of business:

Low net owner benefit (NOB).Few members.Low average revenue per member (ARM).Short length of engagement (LEG).Poor return on expenses (ROI).Owner burnout (EHR).

I also identified some red herrings that usually take the blame. You can read the post here.

At Two-Brain, our mentorship practice grows gyms by improving each of the six key metrics listed above. We do this in stages.

RampUp Phase

First, in our RampUp stage, we measure the gym’s strength with regard to each of the metrics.

You can take our self-assessment here and then book a call to talk with my team about growing.

Then we work to improve each metric over the course of 12 weeks. This is our first “sprint,” and it’s very intensive, with hours spent one on one with a Two-Brain mentor.

Growth Phase

The next stage in our mentorship practice is Growth.

In this stage, the gym owner has built a solid foundation and is ready to learn the methods of growth. These include hiring and mentoring a team, marketing, sales, optimizing operations, adding new revenue streams, correcting rates, and even giving themselves raises.

Different gyms have different priorities at different times. Gym owners track their metrics over time, and each month work with mentors to determine the largest opportunities. Mentors help them achieve their next goals as quickly as possible.

The goal of Growth Phase is to help a gym owner earn $100,000 per year in Net Owner Benefit (NOB).

Tinker Phase

When an owner has achieved $100,000 NOB, they ascend to Tinker Phase.

Tinker Phase is about scaling: reinvesting the little bits of extra time and money to create compounding effects. Some Tinkers open second or third gyms, others launch larger programs, and some reinvest in real estate or crypto.

At this stage, there are no experts who have explored every possible option. So the Tinker program is a mastermind with some one-on-one coaching to speed up the process.

The first goal of Tinker Phase is to reach $1 million in net worth. In the first six months of 2022, we certified 18 new millionaires. And most of them still love to coach in their gyms!

These are huge levels of achievement that haven’t been achieved consistently in the fitness industry. But the path to real success requires many of the same steps that saving a failing gym does. While we don’t teach struggling gyms to spend $100 per day in Facebook ads, we do teach them how to market effectively. Eventually, through the process of systemizing-optimizing-automating, they might go all-in on the marketing funnel that works best.

Feeding a starving gym owner is great. But eventually that gym owner needs to fish and provide a catch large enough to support her family, her team and her community.

The post How Two-Brain Prevents Gym Death appeared first on Two-Brain Business.

The Six Reasons Gyms Die: Tough Love Alert

Gyms go out of business all the time.

When a gym goes under, the reasons can seem complex. Microgym owners especially hate to admit failure. You might not even know a gym is closed until you see its founder’s ads for real estate on LinkedIn.

Unfortunately, that leaves the rest of us without the valuable lessons we could be learning from the yoga studios, CrossFit affiliates, personal training practices and nutrition businesses that close their doors forever.

Gyms fail for six reasons:

1. Low Net Owner Benefit (NOB)

The gym owner just isn’t making enough money. This can happen with 10 clients or 100 clients or 300 clients. If the owner is starving and constantly justifying her hard work to her family at home, it’s not going to last long.

2. Too Few Clients

You know this one. This isn’t the most important reason gyms fail, but it’s definitely in the mix. Even if your system is revolutionary and your location is perfect and your staff is incredible, everyone starves without clients.

3. Too Little Revenue per Member (ARM)

If the gym has 1,000 clients and they’re only paying $10 per month, it will go out of business. This is really common in both CrossFit and yoga, where the owners deliver high-value service for prices that are unsustainable.

4. Poor Length of Engagement (LEG)

The gym is constantly onboarding and losing clients, making cash flow unpredictable. High churn means more marketing, which means less time spent on retention, which means more churn. It’s a downward spiral.

5. High Expenses (ROI)

The gym owner bites off more than they can chew. They take a big space, make big bets on equipment or hire full-time staff with titles like “head trainer” without thinking about how these spends will create a good return.

6. A Low Effective Hourly Rate (EHR)

The owner is working hard but the gym isn’t growing. Eventually, the owner just burns out, fights until the end of their lease term and gives up. Because most gym owners are capable of very hard work, this is actually one of the biggest killers out there.

The Blame Game

Of course, we all love to blame other things or people for our failures.

Statements like this are common: “My market is oversaturated!” or “That gym down the street gave my method a bad name!” But these are red herrings:

The method you choose to deliver fitness (yoga, CrossFit, heart-rate training, etc.) won’t make you or break you. Being first to market is sometimes an advantage but also sometimes a high risk. Some gyms benefit from having “Bikram” or “CrossFit” over their doors; some don’t. Other gyms can’t “steal” your clients. If your clients jump on the next bus that passes by, it’s because they were already standing on the curb waiting for it.
Governments, health orders and pandemics don’t kill gyms that aren’t already fragile. COVID lockdowns sped up the process in many cases, but, just as with humans, the gyms most affected by COVID were the ones with “pre-existing comorbidities.”

This post is a bit of tough love. Telling you this stuff actually makes me uncomfortable because I know some readers will get defensive.

But it’s important that you think about your business objectively. If you’re weak in one of these six areas, you’re vulnerable—no matter how great you are at coaching CrossFit.

In the next post in this series, I’ll tell you how Two-Brain grows gyms by first making them resilient to these six threats and then turning each of the six to the gym’s advantage.

The post The Six Reasons Gyms Die: Tough Love Alert appeared first on Two-Brain Business.

Two-Brain Awards: Gyms of the Year and Epic Comebacks

Tiffy Thompson (00:02):

Hello, and welcome to Two-Brain Radio. I’m Tiffy Thompson. And today we’re featuring the winners of this year’s Two-Brain Awards: gyms of the year and epic comebacks. I’ll be chatting with Kyle Cato, David Allen, Charlie Banfield, and Rich Borgatti about what they’ve been through and where they’re heading next. They’ll share their top tips for excellence in gym ownership, as well as a personal message for other gym owners who may be going through a rough patch. Now, I have with me Kyle Cato. He is the Gym of the Year—Culture award winner, and he’s speaking with me from his gym, CrossFit 806 in Amarillo, Texas. This award was given to clients who have the most success on the “right side of the brain.” So key metrics to demonstrate success here would include length of engagement or online engagement from their clients.

Tiffy Thompson (01:10):

Kyle’s mentor wrote, “There are a lot of gyms that I mentor that I would personally love to be a part of, but the energy that Kyle brings to his community is just second to none. His enthusiasm is infectious, and it’s not just for his members and staff, but also his greater mission to bring clean water to places in Africa. Everything he does is done with a singular focus to make a difference in that part of the world. So it’s no surprise that he and his wife adopted his son from Uganda. He’s a busy man that takes action and isn’t shy about staying true to why he’s doing what he’s doing.” Kyle, welcome to the show.

Kyle Cato (01:48):

Thank you.

Tiffy Thompson (01:50):

So what is gym culture? How would you define it and how did you develop it in your own gym?

Kyle Cato (01:58):

When we opened the gym just short of 12 years ago, at the time it was me and a buddy, and we wanted to have the gym with the strongest people and do the hardest workouts. And both me and my business partner at the time had jobs. We knew that a gym could operate if we paid the bills, you know, so we didn’t really have an idea of what we wanted. We just knew that working out was fun. And we knew that it also helped people our age to stay fit. When I realized that I wanted to grow this place, at the time, I was a teacher I had a P.E. job, which, for a guy like me who loves fitness, that’s the ideal dream job, right? Well, I had a gym where we’re at now and I also had a gym an hour north of here and a family—with a pretty new family, with us adopting Jeremiah. I was at home the least of all the things I was doing, and knowing that teachers had summer off had an easy, easy hourly schedule. But my gym is where I wanted to be. I decided to, to quit my day job and to make this thing my full job. When you have a family and you have two gyms in different towns, you’re now focused on how to make this thing grow. So when I burned the ships and I quit my my teaching job, I knew that if I didn’t make this thing produce money, I was gonna regret my decision.

Kyle Cato (03:41):

So once we knew I was gonna do this this full time, I really just dialed in what I like most about my gym, and I wanted to grow it that way. So I I’ve focused on three things. It was fun, family, fitness. I had an opportunity to kind of just grow the gym—and doing it with kids as one of the tiers that we were gonna go after. My son was getting older. Knowing that my dad was 67, that’s a market we were looking for. I decided to take what Two-Brain offered when it comes to Affinity Marketing. And I literally went to all of our members. I went to businesses around town, and if there was a member that I enjoyed being around, I asked them who their friends were. And so getting started that way really got us where we we’re at now. And so getting a gym full of people that I like to hang out with—and their friends are now coming to the gym. And the cool part is I’ve now got most of their kids coming to the gym, too.

Tiffy Thompson (04:52):

How would you describe that culture? Is it like a family atmosphere? Like what’s the vibe?

Kyle Cato (04:58):

A funny part that I like to compare us to: I’m a Christian. Jesus is, is a big part of my life. And knowing that not everybody in my gym goes to a church, I want my gym to be known as a safe place, whether you follow Jesus or not. But you coming to my gym for an hour a day four or five days a week, you’re going to basically be doing what I do on Sunday when I go to church. And I want it to be, I wanna be known for that.

Tiffy Thompson (05:30):

So like a worship atmosphere almost?

Kyle Cato (05:32):

You know, we play Tupac. We play Guns N’ Roses on the radio. We’re not just listening to, you know, Christian music. But you come to my gym, the music censored. There’s kids in the background doing CrossFit Kids. It’s just, it’s a safe environment. And a lot of people these days don’t have a getaway to where they can be themselves. But when you come to my gym, you’re gonna see the culture that we provide, and you’ve got two options. You can stay and be a part of that, or there’s other gyms in town. And that’s something that I realize: that we’re not the only gym in town. But when people come in into my doors, they know it doesn’t take long to see for what we offer.

Tiffy Thompson (06:14):

Culture might not be really measurable, but retention and marketing are. So how has having a strong culture helped you keep your members longer?

Kyle Cato (06:26):

I mentioned my son, Jeremiah. We have a coach that has a nonprofit here in town. My son was born in Africa, where there’s the need for water. My coach that has a nonprofit here in town, we crossed paths with Rich Froning a long time ago—nine years, when he was still in the, he was Rich Froning the CrossFit god, right? The man. We crossed paths with him. My wife and his wife talked about the adoptions. They happened later. So we got to meet them before the adoptions actually happened. But Rich Froning came and he kind of just told his story one time to Amarillo Texans, to our gym, to a church here in town.

Kyle Cato (07:16):

The next year, he came back again and did a little competition that we put on. And that was—we’re nine years deep now. So we’ve been doing this for a while. So all the money that we make through this competition with the guys from Mayhem goes towards a nonprofit Christian program here in town. We also do what we call Clean Water. It’s an event we’ve been doing for three years. The money that my gym, only my gym members, raise goes to building water wells in Uganda, Africa. So we’re three years into this, and we have raised $100,000, and that’s 10 water wells that have the name CrossFit 806 on them. And we go back every year to kind of get footage and get videos and testimonies from the Ugandans that are using the water that we provided. So showing Jesus to people around my town, but also where my son was born out of our gym. You know, our four walls are way bigger than what my building is.

Tiffy Thompson (08:21):

If you could share one tip you think would help other gym owners in building their culture and keeping it positive and energetic, what would that be?

Kyle Cato (08:32):

I like to say, “Where I would go pay to work out, that’s where I wanna be. So I would pay to come to my gym, and I would pay a lot of money to come to my gym because it’s something that I consider fun. But I provide a service, and that’s really valuable. So if you want to grow your gym, your business, and you wouldn’t go to it, you’re wasting your time. So what’s important to you? What’s important to me? That’s what I wanna be known for. My gym will be open for a long time, but, you know, whenever I’m not in the office–I’m not on the floor as much, you know—I want people to know that this started with what was important Kyle.

Tiffy Thompson (09:19):

It’s great advice. Thanks for coming on the show.

Kyle Cato (09:22):

Hey, thanks for having me.

Tiffy Thompson (09:33):

Hey, David, welcome to the show.

David Allen (09:35):

Hey, thanks for having me.

Tiffy Thompson (09:36):

So David Allen was this year’s recipient of the Gym of the Year—Metrics award. And this is given to clients who have the most success with the left side of the brain. So nominations should focus on the overall change in gross profit. And his mentor wrote David totally crushed metrics this year and surpassed the $1 million revenue mark while also working on a plan to open a second location and ninja warrior gym. So, David, what were the main strategies that brought you over that million-dollar revenue line?

David Allen (10:14):

Yeah, so a couple years ago, I did a Vivid vision—kinda a three-year vision exercise. Like, where did I wanna take my business? And the target I set was three locations serving a thousand clients. And in order to reach that vision, I knew we were gonna have to really focus on what I call “scaling awesome.” A lot of what we’ve learned in Two-brain is how to deliver a truly exceptional experience, but that’s kinda what makes a Two-Brain gym unique from your typical gym, right? But we had to figure out, well, “How can we do that at scale?” Because at the hundred-member mark, the 150 member mark, you can kind of somewhat do it on a personal-relationship basis. And beyond that, we had to figure out how we can really leverage software to make it so that you can still deliver a relationship to a broader group of clients.

David Allen (11:26):

And so that’s kind of a lot of what we worked on: how do we scale software and also scale software to handle a lot of the things that I don’t want my major players, my main employees doing. Easy example was like inventory for retail. It’s a piece of our business. It’s important. It’s a revenue stream, but it’s not, what’s gonna take us to a million dollars. It’s not gonna take us to a million or a thousand clients, right? So it was things like that that we just kinda said, “Hey, what is the low-ROI task and how can we make this automated or pass it off to like virtual assistants?” And so a lot of what we worked on was kind of finding ways to scale all that. And then the other piece was really developing staff.

David Allen (12:25):

It was from where I’m at with having multiple locations and multiple businesses, I just wasn’t gonna be able to be a day-to-day operations kind of person. And so it was teaching staff, giving them a playbook, giving them a vision, guiding them, letting them make mistakes and being like, “Hey, that’s OK,” you know, and developing them into key players who feel comfortable running their particular operation within our bigger framework. So that was kind two big pieces with staff development and scaling what I call awesome.

Tiffy Thompson (13:10):

What aspect did you focus most on improving when it came to the business?

David Allen (13:15):

Like between the two?

Tiffy Thompson (13:16):

Yeah.

David Allen (13:17):

It was kind of like one and then the other. So what happened was I had a GM who went on maternity leave. And she passed off a lot of her tasks to the rest of us. And in that I kinda had a trigger moment of going like, “Wait a minute. Like, if this is all the stuff you’re doing, I’m mis-utilizing you because you are an exceptional person and I don’t need you doing task stuff.” So it was kinda like, “Oh, OK. Let’s figure out how to scale all this stuff and take it off your plate. And now I can develop you into your full potential.” It’s kinda like scaling some of that stuff first, taking it off, so that everyone has the capacity for bigger roles.

Tiffy Thompson (14:11):

Gotcha. And it sounds like you had the right people in the right seats. It was just a matter of taking stuff off their plate that wasn’t serving them or your gym.

David Allen (14:23):

Yeah. I mean, some of it was some of it was moving people around. So I kinda took one manager and put her into a new business. I took someone who was head coach and moved them into a manager. I took someone who had just kind come on part time because they liked the gym but had everything we needed to run another location, and I just approached them and was like, “Hey, you’re the person for this job. You ready to take it?” And they were like, “Yes. Cool.” So it was a little bit of both. Everyone was within the organization, but it was like just putting them in the right spots in the organization.

Tiffy Thompson (14:58):

So if you have one tip that you’d like to give to other gym owners who are looking to improve their metrics, what would that be?

David Allen (15:09):

Well, I think the very basic one is pay attention to your metrics. I see our progress as a gym very much. Like I see the progress that you would see in training. And part of that is you have to know where you are first, and if you’re not paying attention to your metrics, you have no idea where you are. And if you have no standard of metrics, you have no idea where you fit in in the bigger scheme. You may be thinking you’re killing it and not even coming close. The beautiful part about Two-Brain is they said like, “Hey, here’s how to look at metrics. And here are standards to kinda go by.” And then in doing so now you have kind of a roadmap to follow. Part of, I think, of our successes, you know, we’ve been a gym for—well, I like to make the joke that I’ve owned a gym for five years and I’ve owned a business for six. But we’re in our 11th year. And I started my gym at 25. I just think there’s a reality that you’re probably not gonna be good at many things, and you’re probably not gonna be really good at anything you haven’t done for a decade. And so I would say right now, it just took 10 years. Just like it would take 10 years in the gym of knowing where you stand, knowing where you wanna go and just kinda chipping away at that. So, you know, we are very big on metrics. We have KPIs that we look at, where we go through these metrics on a weekly basis, whether that be sales, LEG, gross revenue—these are all things we’re constantly looking at. And just being aware of it, and then having targets that we’re reaching towards.

David Allen (16:49):

So when you have that goal, now you can start turning levers to kind of get there. Now, sometimes those levers don’t result in us moving forward, but now we know. So I think my biggest advice would be to know your metrics and where you are and where you’re trying to go. And then just be patient, like watch your trend lines over time. It’s not gonna be this constant, just linear progression up. It’s gonna be a trend line, but if you’re going the right direction, you’re going to get there. And as you do that, you’ll be able to learn, “Hey, when I do this, this happens. When I do this, this happens.” And you’ll be able to just slowly over time develop that skill as a business owner who has experience.

Tiffy Thompson (17:35):

And when it comes to getting the rest of your team on board, in improving those metrics, how did you go about doing that?

David Allen (17:43):

It’s a couple of pieces. One, I think as a leader, you need to be a bit of a good storyteller. I can’t just walk into a meeting and say, “Our goal: make a million dollars, guys. This is cool. Let’s go do it.” Right? You know, like we have a bigger vision that’s just beyond revenue. So revenue is an easy way to track the impact that we’re making. And so our vision is to impact people’s lives. And we truly believe that, you know, fitness can save the world. So we have a passion project behind this thing. Revenue goes up and we impact more people. So this is a good way for us to kinda track that impact. So getting them on board—I’ve already got people who are passionate about helping people—telling them that story, getting them fired up, giving them a game plan and saying, “Hey, here, here’s where we are. Here’s where we’re wanting to go. This is why it’s important. Here’s how we’re gonna get there.” I get them involved in the planning. I get them involved in part of the process. And then I reward them along the way. So, you know, our goal is not to just make a million dollars cause a million dollars would be cool. It’s “we wanna make a million so we can impact people’s lives so they are getting healthy and fit so we can impact your lives, and you can have a career doing something that you love and are passionate about and make a good living, and you can do it for the rest of your life. And you don’t feel like you have to go do some job you hate just to pay your bills.” And so let’s say it’s part of this bigger collective piece. So I think that’s where that vision comes in being the storyteller. And I think that’s, you know, part of my process the last several years has been leveraging myself up. Like I can’t do the day-to-day tasks. I don’t really need to be delivering service. I can’t really be doing sales. I can’t really be doing the day-to-day management of staff. My job is to drive that ship. And part of driving that ship is being a good storyteller casting a vision and driving the business in that way.

Tiffy Thompson (19:46):

David, that’s really helpful. Thank you for coming on the show with me today.

David Allen (19:51):

Absolutely. Thank you for having me.

Tiffy Thompson (20:09):

Hey Charlie, welcome to the show.

Charlie Banfield (20:12):

Hi, Tiffy.

Tiffy Thompson (20:14):

So Charlie is the recipient of this year’s Comeback of the Year resilience award. And this was given to the client who had hard times but turned it around, and the client should have come through the challenge and now be stable and profitable as a result of actions they’ve taken. And his mentor wrote, “Charlie inherited a small, struggling globo type gym from his parents. And through RampUp, he’s made some big, tough decisions to revamp the whole business model towards a more CrossFit style coaching program and raised prices significantly, which it created a lot of backlash. He came in for a lot of criticism, but he stuck to his guns and has reached his interim goal of 10,000 pounds monthly revenue. So for you personally, over these past couple years, what’s been the toughest part of gym ownership?

Charlie Banfield (21:12):

Well, changing the business model was huge. So I think we actually did, we probably did about four months of Two-Brain Business mentorship before we actually made any changes. And that was huge. So we actually removed all open access to the gym. And yeah, we ran like group fundamentals and changed to incorporate like the group and the PT. And that was a huge, huge change. That was like starting a new business basically. And we had a little bit of recovery after the COVID, our COVID shutdowns, and then we sort of changed our model, and then we had to rebuild again. So that was quite challenging.

Tiffy Thompson (22:05):

Yeah. A lot of adjustments. Did you ever struggle with impostor syndrome?

Charlie Banfield (22:11):

Yeah, so we basically changed everything we did. We we’ve been like following the content you guys gave up for quite a while. And like we sort of knew we were capable of changing, and we knew we could be good coaches, but the globo style of gym that we had before was we were basically receptionists, right? So actually figuring out that we could help people more than just sitting behind reception. The imposter syndrome that comes with that was huge.

Tiffy Thompson (22:48):

What boosted your confidence during that time?

Charlie Banfield (22:53):

Well, making the changes, it was a huge headache. But just from taking people through a structured fundamentals of, like, how we were gonna work with them, we did get a little bit of backlash. But just after a few months of this new method, we were getting some amazing feedback. Like, “Oh, I was bending over to clean my car wheels the other day, and I didn’t get a backache.” Or, “Oh my God, I managed to walk upstairs and I felt good doing it.” Or just the feedback that it was actually helping people in their day-to-day life. That was a huge win that sort of lifted those clouds.

Tiffy Thompson (23:50):

Yeah. So you went through that process of revamping your whole business model. Do you have any advice you would give to others who are looking at doing something similar with their gyms?

Charlie Banfield (24:02):

Well, if they haven’t got a mentor, then listen to a mentor. Like we had Russell Francis. He was in our corner the whole time. And I don’t think we could have made the changes about him, to be fair, and the support he gave. Yeah, it was a really, really big change. So I think also we were coming off the back of COVID, so it’s quite a, well, I suppose lots of people were coming off the back of COVID, but it was quite unique for us anyway. We’d already lost quite a few members through that. So it was a good opportunity to change for us. But really just, you we’ve just gotta do it.

Tiffy Thompson (24:45):

Yeah, yeah.

Charlie Banfield (24:47):

It’s been quite a, well, it’s felt like quite a long recovery, but it’s been far more enjoyable. And it’s like, it almost, it’s like as soon as we did it, like that fire reignited, that fire to come into the gym on the day to day. And yeah, you’ve just gotta like bite the bullet, as such.

Tiffy Thompson (25:09):

Get it done.

Charlie Banfield (25:10):

Yeah. Get it done. Yeah.

Tiffy Thompson (25:11):

Charlie, thanks for coming on here with me today.

Charlie Banfield (25:15):

Amazing. Thank you.

Tiffy Thompson (25:28):

And today I have with me Rich Borgatti. Welcome to the show, Rich. So Rich was the recipient of the Comeback of the Year resilience award. And this was given to the client who had hard times but turned it around, and the client should have come through the challenge and be stable and profitable as a result of the actions that they took. And his mentor wrote about him that “he’s a longtime Two-Brain client. He’s been through it all during this time. But this year he saw some of his lowest numbers in a decade. He had coaches quit. He had to fire someone on the spot, and they were stuck in this small bubble where mask mandates lasted longer than the surrounding areas, but he faced adversity dead in the face. And he is prevailing. He is turning his finances around. He’s hiring new staff. He has reset his time, and he’s also near publishing his first book. Rich is a true leader and one whose story resonates with so many others.” So, Rich, was there a point during this last crazy period that you just wanted to give it up, and what made you persevere?

Rich Borgatti (26:46):

Yeah, actually there was probably about three times that I can remember that I succinctly went, “OK, why am I doing this anymore? Like, I should move on.” Cause during COVID my wife got pancreatitis and we were worried about pancreatitis cancer. Like we went through a battery of tests while the gym was shut down. So, like, at that point I was like, “What’s more important, like the health of my family or this business, like where do I need to put my time and energy?” So that was like the first time. And, luckily, she came through just fine, and she had to have a surgery, but things worked out well. But, you know, going through major surgery where, you know, she was in the hospital for a week and the gym was shut down, and we didn’t know where our next paycheck was coming from. That that’s very stressful.

Tiffy Thompson (27:36):

Yeah.

Rich Borgatti (27:36):

You know, and we were homeschooling the kids at the time, and everything seemed wrong or against us at every point at that time.

Tiffy Thompson (27:47):

Wow.

Rich Borgatti (27:47):

Yeah.

Tiffy Thompson (27:48):

What kind of kept you going? Like what was the driving force?

Rich Borgatti (27:55):

Well, the driving force at that point was survival. Like, you know, keeping food on the table, keeping a house, our house, our mortgage paid. You know, keeping my staff employed. Like there were more people than just me that were counting on whether this gym survives or not. And so we had a, you know, I had to dig down and really look at our mission statement and our values, and they seem corny when you write them. But when you have a situation like that and you read the reason why you’re doing it, it becomes very important and very apparent that you need to keep moving forward, you know, cause it’s more than a business. It was, we always called it, you know, like, our second child or like, it was part of the family. My wife likes to call it, you know, our children’s college fund, you know, like this is how we are making our living. And so I didn’t have anything else to really fall back on at the time. And so we just kept pushing forward through all the challenges.

Tiffy Thompson (29:06):

What was the biggest lesson you took away during this period?

Rich Borgatti (29:11):

Well, one of them was we were very thankful that early on we went through like our Profit First, you know, for the business. We had turned the business around where we had money in the bank by the time this happened. And we had a good support system and good resources at the time. And so the biggest thing was like, “Oh, thank God we did all this work foundational work in the beginning.” Cause if we didn’t have the strong foundation that we learned through Two-Brain Business, it would’ve all just crumbled like a deck of cards, you know? Right. A house of cards, just bam—gone. But it didn’t. So the community that we had spent building over the years, we had a good solid base of 50 to 60 clients that didn’t go anywhere.

Rich Borgatti (30:01):

And that kept us at least open. Maybe not profitable, but at least it paid the bills. And those were very strong relationships that we spent years building. And so all the things that we learned through Two-Brain from financial to community building to leadership really came to the forefront. When things are going well, you’re like, “Oh, I’ve got this.” Like you think that everything’s running smoothly. It’s not until you hit these failure points that you really see how resilient your business is or isn’t. And that’s what we saw: We built a resilient business that was able to survive. We did have to get outside funding from our PPP loans to stay open when we were not allowed to keep our doors open. And, luckily, a few years before this, I had started working on online training. So we had a good system to move the whole gym to an online virtual system. But that again, that’s the foundational stuff that we were building a year or two before this happened that thankfully we had in place.

Tiffy Thompson (31:18):

So I guess the takeaway is get your house in order before the shit hits the fan.

Rich Borgatti (31:25):

Yeah. You don’t wanna do it when it hits. That’s when you pressure-test it. But you’ve gotta have it in place to see if it’s actually gonna work.

Tiffy Thompson (31:35):

Yeah. What would you say to other gym owners who are currently struggling? Like we’re probably heading into a recession now. Gym owners are wondering what they’re gonna do. What would be your advice to them?

Rich Borgatti (31:48):

Sure. So I started the gym in the recession of 2008. So that was my starting point. And I got told a lot of times like, “Hey, we’re in a recession, you shouldn’t start a business. You shouldn’t quit your job. You shouldn’t do … .” But what I learned from then really helped us now and is going to help us going into a bit of possibly a downturn: Figure out exactly what you need and don’t get more. Right? So a lot of times gym owners see shiny toys and it’s like, “Oh, I want another bike.” Or “I want, you know, a new GHD machine.” Or “I want the newest thing.” We built everything off of used gear. Like we go used. Save your money. put your money in the bank, you know. Used gear as just as good as new gear. Really understand how much you need to spend. And that was one of the things in the beginning, I didn’t understand budgeting—I do now. So I know what kind of equipment we need. For gym owners that are going into this, it’s like, just figure out your model. Like if you’re just used to cramming people into a gym, guess what? Those people might not be there in a year if we hit a recession. So, you know, really understand your bottom line. Like where is your cutoff point and are you too top heavy? That was one of the things that we did have: a bit of hubris going into the pandemic cause we were the biggest we’ve ever been, you know, 230 members. I had 13 coaches on staff. I didn’t even have to go to the gym anymore at this point.

And I unfortunately thought that I had made it at that point. But unfortunately when you get that much overhead, all of a sudden things are very fragile when something like the pandemic or recession hits. So you really need to make sure that your foundation is stronger than the top end, you know? Don’t get too far away from your community. The big lesson I learned was like, oh, thankfully I could step back into a head-coach role. I could take care of the community cause they did not wanna look to my other coaches. As soon as things started happening, they looked directly to me as the owner, as the head coach, for what to do. And so did my staff. So a lot of times I would say “don’t lead by delegation,” right. Or deferring to people and just abdicating responsibility. Really know your members. Don’t get too far away from the basics and show up every day. Like that was a big lesson that I learned.

Tiffy Thompson (34:47):

And is your book out now?

Rich Borgatti (34:49):

Yes. So the book is out on Amazon.

Tiffy Thompson (34:55):

And what’s it called?

Rich Borgatti (34:56):

It’s called “Epic Training: A Comprehensive Guide to Obstacle Course Racing.”

Tiffy Thompson (35:00):

Awesome. So you can check that out on Amazon. And thanks a lot for your time today, Rich. I appreciate it.

Rich Borgatti (35:09):

Yeah. Excellent.

Tiffy Thompson (35:14):

That’s it for Two-Brain Radio, gyms of the year and epic comebacks. Thanks for tuning in. And if you want more, subscribe to Two-Brain Radio wherever you get your podcasts.

The post Two-Brain Awards: Gyms of the Year and Epic Comebacks appeared first on Two-Brain Business.

The Pre-Mortem: A Critical Annual Exercise for Gym Owners

It’s really hard to look at your gym objectively.

I know: Your gym is your passion project, and your clients are like your kids.

I use a mentor to help me look at each of my businesses objectively and see the stuff that has to improve without the veil of passion in the way.

One of the really valuable exercises I do every year with each of my businesses is the “pre-mortem.”

Imagine your gym died yesterday and you’re at the funeral. Then answer these questions:

1. What was your business? Describe it. Pretend you’re giving a eulogy to 100 people who have never heard of your business before.

2. What killed it? In the end, what was the final cause of death? I’ll help you with this one tomorrow if you have trouble getting clarity here.

3. What survived? What will you keep? Every business does a lot of things right. If you were starting from scratch with a new business, what parts of your current business would you keep?

Work through the exercise when you have a clear headspace and a half hour to think without distractions.

Resource: Two-Brain Radio: The Business Pre-Mortem

In the next post in this series, I’ll tell you the six causes of death in gyms, and after that I’ll tell you how we prevent them at Two-Brain.

The post The Pre-Mortem: A Critical Annual Exercise for Gym Owners appeared first on Two-Brain Business.