Chris Cooper's Blog, page 92

Why Venice Doesn’t Want Your Gym’s Worst Clients, Either

The city of Venice doesn’t want cheap tourists.

And if you sell coaching, you don’t want cheap clients.

How are the two related?

Read on.

A recent Bloomberg article revealed that Venice is working hard to prevent day-tripping spendthrifts from jamming up the city and using its infrastructure without leaving a single Euro behind.

According to Bloomberg, Venice city councillor Simone Venturini is “leading an initiative to shift the city’s tourism industry to quality over quantity.”

The solution: a fee of 3 to 10 Euros (US$3.20-$10.60) to be charged to day trippers starting in January.

Let’s pass on the debate about whether this is good policy and focus only on how it relates to gym owners. Here’s the link:

Your coaching business doesn’t need cheap people, either. You know who I’m talking about. They’re the equivalent of the Venice day trippers who pack their lunches, use the city’s bridges and roads, use historic architecture as picnic tables and then vanish without contributing to the local economy.

In a gym, clients like this:

Grind you on price and continually question your value.Ask for discounts (and refunds when they don’t “use all their classes”).Demand vacation or illness holds—even for two days.Ask for tailored services, open gym, schedule changes, new equipment, etc.Don’t buy your T-shirts or retail items.Don’t attend your special events.Regularly hint that they’ll go to the gym down the street instead.Complain about literally everything, including the music and programming.Argue with your trainers and refuse to be coached.Bolt when you increase rates to adjust for inflation and preserve profit margins; i.e., ensure your business stays viable.
Make Room for Perfect Clients

Some in the fitness world will say it’s wrong to screen out these clients: “They deserve fitness, too.” I agree. They should train somewhere—just not at your coaching gym. The 24-hour-access globo gym in the strip mall will be just fine.

Trust me: You don’t want bad clients. And Venice doesn’t want “bad tourists.”

Venice is actually waist deep in three Two-Brain exercises:

Client Avatars—Whom do you want to serve and how can you do it best?Seeds and Weeds—How to identify and attract your ideal clients.Raising Rates—How to charge fees that reflect your true value and attract the people you want to attract.

Venice’s leaders have identified the exact kind of tourist they want to visit their historic city. The right people will visit, appreciate and contribute to the local economy by supporting hotels, shops, restaurants, vendors, artisans, gondoliers and so on.

With those ideal tourists in mind, the wrong people can be screened out. Doing so will leave more room for the good tourists. Or, if the “bad tourists” still want to come, they’ll need to pay for their visit.

Again, I’m sure someone will want to joust on the morality of charging for access to “public spaces.” But if you’ve ever paid a toll on a road or bridge, you’ll dismiss the argument that Venice’s policy is unfair.

And if you don’t like it, go to Florence instead.

Besides, we’re just using Venice as an example. The great city represents your coaching business. You can fill that “city” with cheap people who make your life miserable or wonderful people who truly appreciate your business and want to engage with every part of it.

It’s your call.

Do you want coupon clippers who climb famous statues for selfies and leave behind a trail of gum wrappers, water bottles and cigarette butts?

Or do you want educated, appreciative visitors who want to stay the night, eat at local restaurants, buy handmade crafts from local artisans and experience every part of your rich culture?

Easy choice, right?

The post Why Venice Doesn’t Want Your Gym’s Worst Clients, Either appeared first on Two-Brain Business.

Developing Coaches Won’t Grow Your Business

Chris Cooper: 0:01

Developing your coaches won’t grow your business. Hey, I’m Chris Cooper. And today I’m going to give you an exercise and some examples, and some reasons why simply investing a ton in coach education might be doing them a disservice and is probably harming your business instead of growing it.

If this episode is valuable to you, please leave a five-star review wherever you listen to your podcast so that we know to make more on this topic.

Before we get going, I want to ask you to rank your coaches and rank your business for me. Now I’ve got two tools for this. The first is a downloadable evaluation form from our website and I’ll post links in the show notes, download the evaluation form, rank your coaches in each category on a scale of one to 10, deliver the evaluations to them. And then look at the averages on average, where are your coaches? Are they a three out of 10, a seven out of 10 or a 10 out of 10? Or, or where do they fall?

 Then I want you to evaluate your business in the six areas that we say matter the most, how many clients you have, the average revenue per member that you have, the length of engagement, how much you pay yourself, the ROI that you get on your expenses and how you spend your time in the business. I want you to look at these numbers and say, how does your business rank? Is it a three out of 10? Is it a five out of 10? Is it a 10 out of 10?

Early on in my career, I made the mistake that many gym owners make. And this is actually so common, even in the service business, outside fitness, that it has a name. This is called the technician’s curse. And the technician’s curse is that we believe that simply by being the best, we will grow our business and put everybody else out of business and eventually win the game. If we have the best coaches in town, we will win. If we have the best donuts at our donut shop, all the other donut shops will go out of business because people will see the value of coming to our donut shop. The truth is that you, if you wanna help your coaches have meaningful careers, then you have to build a sustainable foundation to your business, and you have to guide them to do the things that will build value for your clients, which will grow the pie, which will allow you to pay them more.

Today I’m gonna tell you how to do that. Years ago, 2013, 2014, I built a product called Two-Brain Coaching. I had already been working with a lot of gyms around the world, a few hundred. I already had the bestselling book in the fitness industry. And I thought, okay, I’ve got these business problems solved. Now it’s time to move on to the coaching problem. But what I quickly found while trying to grow twobraincoaching.com is that most people already have coaches who are a seven or an eight out of 10, but their business platform was maybe a two or a three out of 10, really? And so they couldn’t support the coaches. The coaches moved on, they had all this staff turn and they wind up with worse coaches because now they’re constantly recruiting.

Even worse was sometimes their great coaches would quit the industry and just stop helping people. Or they would open up their own shop down the street. That’s what happened to me. I was working at a personal training studio. I was making, I think $22, $23 for a personal training session. And the studio owner didn’t know how to grow the business. He didn’t know how to pay me more without taking it out of his own income. And so eventually I capped out I was working 45 hours a week with personal training clients. The gym owner didn’t know how to help me make more money. And I thought the only way that I could make enough money to pay my mortgage and buy my groceries was to go open my own gym.

And then I almost repeated that mistake when I hired staff because they wanted to get certified. They wanted to learn, take more courses, right? They wanted to get coached on coaching, and I wanted to reward them for that. I wanted to build in a pay system that gave them a raise every year or whatever, but I didn’t know how to do that without choking out my business. And so we’re gonna talk a little bit about that in a moment here.

The answer to getting great career coaches is not to send them away to get more training or upgrade their certification. It’s to build a business with a large enough platform that will support coaches long enough that they can stick around for 10 years, make it a career and take the time to get really good.

Because even in the case of making coaches better, more knowledge is not usually the problem. They don’t need to learn a new coaching cue. They don’t need to see how to, you know, do squat triage better. What they actually need, are reps, they need experience. And if they’re churning out after two to three years, they’re just never going to get there. A nine out of 10 coach will starve in a three out of 10 business. If you haven’t downloaded those assessments for your business and for your coaching staff, from our site, please go to twobrainbusiness.com and do that. Now I’ll have the direct URL in the show notes, but if you go to twobrainbusiness.com and you hit the search bar, you will find a coach evaluation. And also our Six Strategies audit. Now at Two-Brain Business, we spend our entire focus. Our one-on-one mentorship practice is geared around building a better gym. Part of that, of course, is selecting, hiring, and training great coaches. And here’s the process that we teach. Number one, start with a great personality that takes you 50% out of the way that is five out of 10, right there before they’ve acquired any skills. They need to have an amazing personality. Having a great personality is something that you can’t teach.

You can always train a happy person on the skills, but you can’t train an expert to be happy, positive, and engaging to your staff. If you look over time at the most successful coaches in the fitness industry, who’ve built massive audience. They are not PhDs. They don’t hold master’s degrees. Most of them aren’t even certified. They have amazing engaging personalities that make people want to be around them. The polar opposite is the burned out underpaid, exhausted coach who has amazing amounts of textbook knowledge. A ton of experience they’re overqualified, but they no longer want to be there early in my career, I guess, probably around 2013.

So not that early, I was visiting this other gym in Ontario, and this the home of one of the best weightlifting coaches in Ontario at the time. And I was really excited to get to his gym and get some coaching while my family was on vacation in this neck of the woods. And so I showed up at about 10 to six before the gym opened. And I waited in the parking lot with all of his clients. And at 5:59, he rolled in wearing a hoodie pulled up over his head, coffee in his hand, clear body language saying like, he didn’t wanna be there. and he wasn’t ready to be approached.

He opened the door and went inside, closed the door behind him, like pushed it closed. Did not turn the lights on for a few minutes. Slowly. The other people in the car park started wandering in, you know, they went inside, the lights came on, he had some music on, you know, and he wrote the workout on the board and people just started doing their own warmup. I really didn’t know what to expect. And so I approached the desk and said, Hey, I’m new. Do I need to sign a waiver or what? And he’s like, yeah, I’ll go print you on. And you know, he went in the back room somewhere, found a waiver for me to sign. Now it’s 10 past. Some people are warmed up. Some people aren’t, he’s like, all right everybody, over to the whiteboard, you’ve all done this stuff before. Don’t let me see this, this, this, that 3, 2, 1 go starts the clock and goes and sits down.

Now, obviously this is an extreme example of a coach with amazing technical knowledge and some great gifts to share who was just completely burned out and who just could not deliver those gifts. And he was probably looking for ways out of the fitness industry. And he has since exited the problem is that a nine out of 10 coach will starve in a three out of 10 business. So start your search for coaches based on personality. That takes you 50% of the way. As I said, then you run something that teaches your coaches the model. So we run something called an Advanced Theory Course, it’s free. We do it once a year, usually about six or seven people apply for it.

And we say, this is your view of the other side of the coaches’ clipboard. Like here’s what coaches need to know. And we teach them a little of the science and we teach them some cuing, and we teach them why we do things the way that we do. And most of these people don’t wanna be coaches. They will never be hired as a coach. If there’s somebody in that group who would make an amazing coach, will a approach them on the side and say, have you thought about coaching? But the members who go through this process understand the reason behind what we’re doing and they become better members.

All right, after you’ve taken somebody through your coaching model and identified who can show up on time, who is really engaged and excited about this stuff who can speak in front of a crowd, then you get them certified in whatever your method is. So you have to go with personality and then your coaching model and then your method. So if your method is CrossFit, that’s when they go to the Level-1, if your method is yoga, that’s when they go to the Bikram initiation course. If your process is like, you’re in a franchise like F45, that’s when they go to the first coaching course in F45, you get them certified.

After you already know they have a great personality and they understand your model, okay? Then from there over time, yes, you’ll do some professional development, but you’re going to do this on two fronts.

The first front is you are going to mentor them on their career path. We have tools for this in our mentorship program, like the Career Roadmap. And so you can work with them to identify how they make more money, how they progress as a coach, and I’ll come back to how they make more money.

In one moment, you have to mentor them on their career. Now, of course, of course you want to get them coaching on how to improve as a coach, but you can do a lot of that yourself because you’re probably already a great coach. And if you want some novelty or some outside perspective, you can bring experts to you.

So from a cost benefit analysis, it’s actually a lot easier to find an expert in one topic, bring them into your gym for a day and have all of your coaches acquire that knowledge. And that way, the knowledge and the skillset stays in your gym forever. Instead of staying in the head of the one coach who traveled two towns over and paid a thousand dollars for a weekend certification. So if you’re doing coach development and you want an external source, I just need you to understand that it’s not hard to find people to develop your coaches. It’s far cheaper to hire them three to $500 for a day to come into your gym and teach than it is to send somebody away for maybe a week to learn something that’s gonna cost you far more.

And your gym retains that knowledge. You could film them if you want to, and then train future coaches for the next 30 years. If it’s something that all of your clients would love, you could even sell access to this specialist course and like basically pay for your coach’s development. So that’s really key to understand here is like, you don’t have to follow the path that the certifying body has set out. You can follow your own path.

I mean, we brought in chiropractors, we brought in yoga instructors, swim instructors, rowing coaches to Catalyst, weightlifting coaches, powerlifting , strong man coaches, and they’ve run workshops for our coaches that the coaches loved. If I didn’t have any money and didn’t want to pay for this, I would just sell tickets and let clients attend too , to make it like, you know, to cut out the cost. But if I do wanna make this investment, I want that investment to be in my gym instead of just inside the head of one coach.

All right, so next, what do I invest in? And we’re talking coach development. What do you buy that helps your coaches earn more money? Well, if you wanna earn more money, then you have to increase the value that your clients receive. And the same goes for your coaches. You increase the value to the client by getting the clients better results, faster period.

So if you want to earn more money as a coach, then you need to take courses or you need to learn how to get clients better results faster. So going back to the example of me in the fitness studio at the time, uh , a lot of my clients were like only slowly getting results and a lot of them wanted weight loss. So I just made up this diet and I called it the Catalyst diet. And I did it in Microsoft, works a long time. Uh, old person might remember that program. And I, I drew like this old green arrow using Word Art in Microsoft works and I printed it off and I gave them this diet for free, just so that they would get better results.

What should have happened there was the studio owner should have said, hang on. This is tremendous value. We need to charge more for this diet. And I will give you a percentage when you sell it. So the, the client would’ve had the extra value, the client, um, would’ve paid for the extra value because it was really good. The studio would’ve made more money and I would’ve made more money too. If the gym owner had the foresight to understand how to grow the business platform, to benefit their coaches. Okay. When you’re thinking about investing in coach development or education, the first question you should ask yourself is does this actually increase value to the clients or does it just increase the knowledge of the coach?

Because they’re not the same thing. If knowledge was the answer, then all of your clients would already have the knowledge or they’d get it for free online. And they wouldn’t need you. The real value of a coach is getting a client, their results and getting their client their result faster. So if a coach wants to earn more money, they increase the value to the client, which earns the business. More money grows the pie, and everyone wins.

Now the old way of making more money or providing incentives for coaches. That’s the industrial model. We used to give people a raise based on the time that they spent working, but that weakens the gym by giving the coaches a bigger slice of a small pie. So the owner makes less money. There’s no growing revenue stream coming in. And the gym closes. Everyone loses. If you pay people more, just because they’re certified or quote unquote experienced, but you don’t increase your rates or you don’t sell a new program. Then you’re building a coach centric business.

That means that the clients might get a little bit more education, but they’re not getting more results. So they lose out. It means the owner gives away a larger share of a small pie. So they lose out. Building a coach-centric business is not why we’re here. We’re here to build a client-centric business and you add value to the client by getting them results faster, with less pain. Charging, what your service is worth, and then paying your coaches to deliver that service. That’s what coach development means.

Developing your coaches means increasing their value to the clients. Their value is increased by the results gained by the clients, not by the knowledge or the time spent working as a coach value does not come with more certifications, you know, a master’s degree or a doctorate value comes from outcomes. If you’re able to get clients outcomes faster, with less pain, more definitively, and you create social proof around that, then your value as a gym increases and that rising tide lifts all boats.

But going in the other direction and paying for coach development without a business plan to support it, or any way to increase the perception of value from your clients or earn more money. That’s a downward spiral. That’s building a coach-centric business instead of a client centric business. I hope this helps. I do want you to invest in making your coaches great careers, keeping them in the industry longer, letting them build on your platform and creating an impact in your town. The way you do that is by building a solid platform by becoming a better business owner.

But if you really want objective proof on where you should be focusing your attention, download our coach evaluation tool, evaluate your coaches and see what their average is. Then download our gym evaluation tool, evaluate yourself in each of the six categories, take the average and see where your gym is and whatever is weaker, your gym or your coaching. That is where you should be investing time and money in growing because that will improve life for everyone.

Hope it helps. We created the Gym Owners United Facebook group in 2020 to help entrepreneurs just like you. Now, it has more than 5,600 members and it’s growing daily. As gym owners join us for tips, tactics, and community support. If you aren’t in that group, what are you waiting for? Get in there today so we can network and grow your business as gym owners United on Facebook or gymownersunited.com. Join today.

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Building a Client-Centric Business: Evolution

In the first post of this series, I mentioned the evolution of my gym, Catalyst.

Our mission at Catalyst is to extend and enhance the lives of 7,000 people in Sault Ste. Marie.

Our model is coaching: We do not sell access or one-off programs or courses. Around 20 percent of our clients prefer 1:1 coaching, and the rest attend group classes.

Our method has evolved over time. We started with powerlifting/HIIT and some cycling classes. Then we evolved to CrossFit in 2008. We evolved again to the Level Method in 2020. And now we’re evolving again, to a program we call “meta” (but it’s actually in beta).

Each of these evolutions in our method was gradual. Each overlapped with the one before it. We didn’t toss Joe Defranco’s stuff when we found CrossFit, and we didn’t deaffiliate from CrossFit when we started using Level Method.

We’re able to evolve our method for a couple of reasons:

1. The client-centric approach. We’re constantly on the lookout for anything that will help our clients achieve their goals.

2. Our method-agnostic approach. When something stops working, we stop using it.

3. Most importantly, we use the Prescriptive Model. When we tell a client to change what they’re doing, they just see it as a step in their path instead of “we were wrong and now we know better.”

The Catalyst Method

So what are we doing?

We’re now tailoring our metabolic prescriptions to each client.

We start each client with one of three general prescriptions, depending on their primary goal (Fat Loss, Get Fit or Perform).

These prescriptions are given in “blocks” of 30 minutes, and each contains a mix of strength training and metabolic training.

Metabolic-training blocks are prescribed in heart-rate zones. So, for example, a starting prescription for someone in the Fat Loss avatar might be:

4 blocks of Zone 2 exercise.1 block of Zone 3 exercise.1 block of Zone 5 exercise.And as much Zone 1 work as possible per week.

After their first 90 days, clients are reassessed and their prescriptions are customized a little to optimize progress.

Over time, the prescription becomes more individualized (and therefore more valuable). But clients still exercise in a group if they choose.

Heart-rate training at Catalyst Fitness in Sault Ste. Marie.
Testing and Analysis

Some early data:

25 percent of our clients upgraded their memberships in the first 20 days because they “felt great.”Two of our coaches lost over 6 lb. of body fat without changing their diets.25 people signed up for the second testing cohort (with a waiting list).Three clients brought friends—former clients—back to the gym.Another gym running the test actually had negative churn (this means they lost one client out of 110 but actually gained six clients who quit when they were doing a previous method).

We’ve shared this evolution and its specific details in our new YouTube channel and podcast (available on Google Podcasts, Apple and other platforms).

I’m sharing this as an example: “meta” might not be the answer for every gym. It’s not built to replace CrossFit or anything else. It’s simply providing better results for clients at Catalyst and is therefore what we use—because that’s how we choose our method.

Our model rarely changes, but we do change it based on the data from the thousands of Two-Brain gyms who share their models with us every month. When the data says “do this” in a business, we do it.

And our mission won’t change until we hit it: 7,000 people through our doors, staying for at least three years and changing their lives in a measurable way.

Clients first.

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Building a Client-Centric Business: The Happy Path

In the first post in this series, I published a breakdown of the three levels of building a client-centric business that truly helps people: mission, model and method.

You can visualize them as a vertical, with the mission informing the model and the model influencing the method.

We can add a horizontal line that bisects your model: the client journey. In our RampUp program, we teach gym owners how to build a client journey that includes every interaction with the business, from the time the client first hears about the gym to the time the client leaves the gym. (We provide templates for Two-Brain clients to customize and use.)

A simpler version: the Happy Path.

Draw a horizontal line on a piece of paper. This line is the timeline from when a client joins your gym to the point where they quit.

Above the line, you’re going to write the actions that the client takes at each point in time.

Below the line, you’re going to write the actions that your team takes at each point in time.

For example:

Day 1

Client shows up for their No Sweat Intro. Client decides on the package they want to start their journey. Client pays. Client books their first coaching session.

Team performs an assessment. Team performs a motivational interview. Team prescribes a starting plan. Team receives payment. Team books the client’s first session and welcomes them aboard.

Day 2

Client is waiting for their first session.

Team sends a welcome video from the client’s coach. Team orders a welcome kit to be delivered to the client’s house.

Day 3

Client arrives for their first session.

Team delivers first on-ramp session and assigns stretching homework.

And so on.

Map It Out!

You should map out the Happy Path for at least the first 90 days, ending with the client’s first reassessment (or Goal Review). At that point, the path will probably take a slight turn.

If you really want to do this well, walk backward through the Happy Path and make sure that every step is built to get the client to the 90-day mark with some progress to show for it.

That is putting the client in the center of your business: You build your processes around their journey.

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Building a Client-Centric Business: Mission, Model, Method

What do the truly great gyms have in common?

I mean the gyms that really change their clients’ lives, create wealth for the owners’ families and really impact their towns. What’s the common characteristic?

They’re built around the needs of the client first.

In this series, I’m going to talk about building a client-centric business. This means solving the clients’ problems and being paid for it.

This doesn’t mean you give away your service for free or even deliver it for a low price.

It also doesn’t mean you adhere rigidly to one philosophy of fitness.

It really doesn’t mean that you seek the approval of other gym owners.

It means that you build your service to provide whatever clients need to reach their goals.

Building a client-centric gym is done on three levels: your mission, your model and your method.

Your Mission

My mission is to extend and improve the lifespan of 7,000 people in Sault Ste. Marie (my hometown; 7,000 is 10 percent of the population).

You can state your mission as “deliver X result to Y people.”

Your Model

Your model is determined by what your clients want to buy. We teach the Prescriptive Model because it’s a good balance of telling people what they need and letting them choose what they want.

For example, many Two-Brain gyms have a business model that looks like this:

Your model is how you deliver your method. It changes, but rarely. For example, I went from PT-only to group to the model above because that’s how our clients want to buy our service.

Your Method

Your method covers all the tools in your toolkit. What will you use to deliver X result to Y people?

Your method could be CrossFit or Tae Bo or kettlebells. It could be swim lessons or the Zone Diet. It could be a mix.

Your method will evolve over time. And it will probably evolve to include more methods. That’s fine. The businesses that fail are usually the ones that don’t evolve (or can’t evolve, like franchises).

Businesses whose methods don’t evolve are fragile. They fail when the market finds something newer or better. I mentioned Tae Bo above, but the fitness industry is littered with examples.

Our method at Catalyst evolved from cycling to a powerlifting/HIIT mix to CrossFit to Level Method to meta over the last 18 years.

One tip: If you’re using a Prescriptive Model, shifting the method is really simple.

Avoid This Mistake

Where people screw this up: They confuse the mission with the method.

When we found CrossFit in 2007, I said to a coach, “I wanna teach this for the rest of my life!” I thought I meant CrossFit, but really I just meant fitness in a group with happy people hitting PRs.

Unless you work for CrossFit, your mission is not CrossFit. CrossFit is your method. It’s also not your model: While there are still some who say “CrossFit is group training,” they’re wrong.

Another example: the myth that if you’re just better at coaching the method, the business will take care of itself. Also incorrect. Owners of thousands of failed CrossFit affiliates, yoga studios, Pilates businesses and martial-arts dojos would agree with me—except they’re all selling real estate now. It’s sad.

The bottom line: Owning a client-centric business is rewarding but challenging. You must be willing to do whatever it takes—even changing your method or your model—if that’s what gets your clients the results they want.

If you don’t change, they’ll find someone else.

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Building a Client-Centric Business: The Key to Success in Service

Chris Cooper: 0:01

If you wanna have a successful service business, you have to build the business around the needs of your clients. We call this “building a client-centric business.” And this week I’m gonna talk about building a client-centric business on this podcast. I’ve got some blog posts coming for you and even a video or two. I’m Chris Cooper. And if this helps you really prioritize what’s important in your business, set up your business systems and run it day to day , please hit subscribe on your favorite podcast platform and maybe leave us a five-star review if you don’t mind. Thank you!

So let’s get into building a client-centric business. A lot of us get into business because we want to make a living doing the thing that we love. And so, as an example, I’m gonna tell you a story. When I opened up my first gym , it was because somebody had given me the gift of introducing me to fitness and it changed my life. And so all I wanted to do was change the lives of other people in the same way. And so that business did really well. When I opened my second gym, it was a little bit different. I was powerlifting at the time, and my staff was just finding CrossFit and we wanted to open up a powerlifting gym so that we could spend time powerlifting or doing CrossFit, which is what the staff was into a that point. The problem was that there was a massive disparity between the success of the two gyms. In the gym that was client-centric, we were solving clients’ problems and doing one-on-one training.

We were successful and we were making money. The other gym, which was built around our passion and what we wanted to accomplish doing CrossFit and powerlifting, was not successful. And over time it started to leech the money from the successful gym and almost pull both of them under. Now it took me years to kind of sort out what the difference was and why one was successful and one was not. But today I’m gonna give you the formula and the framework for building a client-centric business. We’re gonna follow the path of mission, model and then method. So first let’s start with what your mission is: What exactly are you trying to accomplish?

And if it helps you, you can do this as kind of like a postmortem 30 years from now. When the business is over, people are not going to say, “Jimmy opened a business and made $20 million .” They’re going to say, “Jimmy opened a business and accomplished blank.” If it helps, sometimes it’s easiest to frame what your mission is by saying, “our goal is to change blank for X many people.” So our mission at Catalyst is to meaningfully enhance and extend the lifespan of 7,000 people in Sault Ste. Marie. We want to improve their lives and we want to keep ’em around longer 7,000 because that’s 10% of our local population. And if I can influence and extend the life of 10% of my population, they, in turn, will affect and influence the next 10%, et cetera . So that is our mission. So the next question to ask is “how do we achieve this mission? What’s our strategy going to be ?” And that’s your model.

So I would say that our model is coaching. We want to be coaches because we’ve seen what the alternatives are. So knowledge is one alternative, right? We could just write books about fitness, but I’ve seen the effect that has. Very few people read books about fitness and nutrition and health. And they take no action. Another model is we could run an access gym, right? So we could charge 19 bucks a month like Planet Fitness, and we could sell access to equipment. But I’ve seen that in action, too. And I know that most people don’t even use those memberships, let alone get meaningful life-changing results from them . In my experience, what gets people these results that we’re trying to achieve is coaching. And so we want to have a coaching business that coaches fitness and coaches nutrition but also mindfulness, self-management and even sleep–all of the pieces required to deliver somebody to a longer, better life. So our model is going to be coaching.

And now our method. Our method is going to evolve over time. So our method is going to be science backed, data proven , but it’s always going to be evolving. And that means that our method will change every so often. So when we find a method that will get us to our mission faster and fits within our model, then we will adopt that. So let’s say that you started out as a Beachbody coach and you’re coaching people. But over time you find that people just kind of stop using the Beachbody system. I think it was like supplements and shakes and workouts and stuff. And so you have to find something else, but luckily you found obstacle-course racing, and that helped people better. And you said, “Oh great. I need to be training people to do obstacle-course races.”

So you got the certification, you changed your equipment, you changed your program a little bit, and your method evolved. And then after that, maybe you found a different method entirely: aquatics. And you said, “This is getting my clients better results. And I’m achieving my mission faster than ever. I’m getting more people fitter and healthier and extending their lifespan and their healthspan by doing aquatics. I’m gonna evolve to that.” And then later you discovered, “Well, maybe I need to be doing yoga instead.” Or maybe you combined things. The point is that the method evolves to whatever is best for achieving your mission. That should be your method.

Now, a lot of people screw this up. So what can happen is you discover fitness through one method—Pilates, for example. And you wanna stay true to the method. So you open up a Pilates studio and you say that your mission is to, I don’t know , improve core strength and flexibility in women aged 30 to 50 in your town. And that’s great. And you’re doing pretty well with Pilates. And then you discover that “wow, mat Pilates is not really doing it. I need to add a reformer or two .” So you buy the machines and you start doing like a different type of Pilates. And then over time, maybe you realize “holy crap, these people also need some aerobic capacity, and they need to be able to squat and have some power.” And so you evolve again to kettlebell training. Obviously that’s a dramatic evolution, but sometimes that’s what’s required, right? Evolution. Isn’t always gentle.

In my gym, we started off doing mostly like aerobics combined with some bodybuilding stuff and some powerlifting stuff, depending on the client. And then over time, we evolved to do CrossFit and spent 14 years as a CrossFit affiliate. And now we’re evolving again. But the key is that our mission hasn’t changed. What we’re doing is following the science, following the data. What we’re doing is looking at our model and saying, “Is our model getting people what we’re trying to get? Are we achieving our mission with our model?” And then we say, “Are we achieving the mission with our method? Is there a better method? Is there a newer method that has the proof to back up the change?”

So at Catalyst, what we’re doing, and I’ll share this in detail in a blog post, is evolving to a more metabolic, tailored style of training. So while some of our workouts will be constantly varied functional movement performed at high intensity, others will be single modality. Others will be longer period. And we’re basing this all off testing our clients’ progress. So we use the Prescriptive Model. The beautiful part of all of this is that if you’ve been using a Prescriptive Model, it is not hard to change your method. So a Prescriptive Model means that a client comes in, they have a one-on-one consultation, you measure their starting point, you talk about their goals, you give them a prescription, and three months later you measure their progress and you update their prescription. And three months after that, you measure their progress and you update their prescription.

Now, if you’re already doing this, then changing your method is a piece of cake because you just prescribe the next method: “So you’ve been coming to CrossFit classes three times a week, and that’s great. Your weight loss has slowed. And I would like you to add some Zone 2 cardio for another hour a week. You can come into my classes, you can wear a heart-rate wearable. You can just slow down and make sure that you stay in Zone 2. Alternately, I can give you some homework to do on your own. Which is best for you? Or you can make a PT appointment—whatever you want.” That’s how the Prescriptive Model works. Alternately. What you could say to each client is “you fit this avatar. Here is our starting prescription for you. Four blocks of Zone 2, one block of Zone 3, one block of Zone 5. Would you like to do those: one on one or in a group?” And then you basically tailor the workouts to them, but those workouts might be CrossFit or they might be yoga, or they might be something else. You can pivot the method.

Now, in my latest book, “Start a Gym,” I said that the model is more important than the method. And this is because the business model that you set up will ultimately determine your success, the method much less. But I’m bringing this up because there is this ongoing and pervasive myth, especially in the CrossFit space, that you are doing a CrossFit business, that your mission is to promote CrossFit. And that’s not necessarily the case. If that were the case, then getting better at CrossFit, winning the CrossFit Games would ensure that you had a more successful business. Or achieving higher levels of CrossFit certification would guarantee financial success for you and your family. And there are thousands of affiliates who are out of the business, out of the career track, out of fitness, who would tell you otherwise if we knew where they were. They’re all gone, selling real estate or working at tech companies or they’re back to being investment bankers now, unfortunately. And it’s because they put the method first instead of asking themselves, “What is the mission that I’m trying to accomplish here? What is the best model for accomplishing that?” And then being flexible with the method.

So my advice here is to be very clear in your mission. Be rigid in that mission. Stay on that mission until it’s accomplished. Ask yourself, “Who am I trying to help? And what am I trying to help them accomplish?” Be less flexible with your model than with your method. So if you have just been doing a model of running group classes and selling membership subscriptions or whatever, then it might be time to evolve your model to a Prescriptive Model. Be really flexible with your method. And I don’t mean flip-flop between Pilates and CrossFit and bootcamp every month. What I do mean is be willing to change when new evidence suggests that it’s time for a change. And when your method isn’t keeping up with times, don’t stick to it dogmatically. But think about “what do I need to help my clients more here?”

Add the things that you need to add. Subtract the things that aren’t getting your clients the results, and do the right thing for them. And that is what a client-centric business means: “Whatever it takes to get these clients to that goal is what I am willing to do.” I hope that helps. And I’m just trying to set the table for the specifics. And so if you want the details of how you set this stuff up, how you pivot from one model to another, how you change your method and how we’re doing it at Catalyst, take a look at the Two-Brain Business blog and I will have all the specifics there over the course of the week.

The Gym Owner’s 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 Building a Client-Centric Business: The Key to Success in Service appeared first on Two-Brain Business.

Profit First for Gym Owners

If you mention a Profit First gym accounting strategy to many fitness entrepreneurs, you might get the question, “What profit?”

Because many gym owners run hand-to-mouth operations, it’s hard for them to even think of implementing a Profit First gym bookkeeping strategy when they aren’t generating a gym profit.

The solution is simple: Gym owners should “create” profit immediately by setting aside a portion of monthly gym revenue before addressing anything else.

This revolutionary gym accounting strategy is simple, but making it work for your fitness business takes diligence and innovative thinking. When properly implemented, the Profit First approach can completely change the way you think about gym bookkeeping and ensure your business becomes strong and stable.

Below, you’ll learn:

How Profit First is defined.Why you need to optimize your gym accounting for success.What Profit First can deliver.How Profit First works—i.e., “where the money comes from.”How to maximize the benefits of Profit First at your gym.Using checks and controls in your first year of Profit First.                                        
What Is Profit First?

Profit is the most important element in running a gym business. However, gym owners often put it last.

Many gym owners get into the business to help people, and their “business” is actually a labor of love that’s more of a self-created job than a true enterprise. The roadmap is typically to work very long hours, break even at some point and maybe hit profitability—or not. Because profit isn’t a priority, small surpluses are often eaten by equipment purchases, renovations and other expenses.

In the worst cases, the gym has no profit at all, and many owners don’t even take a reasonable salary. Instead, they focus solely on supporting their clients and their team. This approach might seem noble, but it’s not a sound way to run a gym. Inevitably, these dedicated gym owners burn out and quit or have to leave the business to find other ways to support their families.

In fact, stats show less than half of new gyms will make it to the five-year mark.

If you’ve owned your business for a while, you’ll understand why half the gyms in the industry fail within five years. You operate in a highly competitive environment. Most of your time is not your own, and you solve the bulk of the problems in the business. You wear every hat, from cleaner to CEO, and it’s very hard to find, develop and retain staff. You are the heart and soul of your gym, and everyone looks to you for motivation and leadership, but you’re tired and underpaid. Without proper compensation, you will eventually burn out and your business will suffer.

Profit First gym accounting is designed to solve these problems. By taking a slice of the revenue for profit first, you will ensure that you’ll get paid.

The traditional approach is that profit is what’s left over.

Sales – expenses = profit

But in the microgym industry, you seldom have left-overs. So the owner goes without.

Here’s the basic principle of Profit First, as laid out by accountant John Briggs in the book “Profit First for Microgyms”:

Sales – profit = expenses

This alteration to the formula represents a dramatic and powerful mindset shift for a gym owner. By automatically placing your profit in the no-touch zone, Profit First eliminates the temptation to look at the balance in your business bank account and assume you have the entire amount to work with.

The biggest difference between the traditional and Profit First approaches is that the traditional gym accounting mindset doesn’t require you to install money management systems. Profit First demands strict money management (see below).

For the original, general Profit First plan, read “Profit First” by Mike Michalowicz.

What Does Profit First Accomplish?

Prioritizing gym profit puts you, the owner, first. That’s essential because if you aren’t there, the business disappears, too—at least until you hire staff to run it.

With a portion of revenue marked “sacred” and allocated to you, you have less money to operate your gym (unless you generate more revenue—which is a good thing). But by allocating profit first, you’ll be forced to examine your business model, your operational procedures and all the elements that cause profit erosion in your gym businesses. Here’s a big one: Parkinson’s law.

The formal definition of Parkinson’s law: “Work expands to fill the time available for its completion.”

Applied to a gym business, Parkinson’s law suggests spending will always increase to the level of the money supply.

Spending Whatever Is There

Here’s a simple example: The parents of a first-year college student want to make their son financially comfortable while he’s in school so they give him a credit card with a $2,000 limit. Each month, the parents pay off the balance in full, but they notice that the card’s available balance is zero by the end of each month. So they raise the card’s limit to $3,000. But the card is still always maxed at the end of the month.

When the parents ask their son about his increased spending, he shrugs and says that he just spends whatever funds are available each month.

The same thing happens in businesses that don’t set aside profit. Profit becomes an afterthought, and the gym owner starts spending money on coffee bars, staff raises, new equipment and so on. You can always find something to spend money on—and you will. With profit set aside, you ensure that you’re taken care of first.

No matter what you spend later, the gym owner still gets to eat. Suddenly some expenses don’t seem essential. Questions like this are common with Profit First gym bookkeeping in place.

“Do I really need four new airbikes?”

“Will a new couch in the lobby generate ROI?”

“Am I using all these subscriptions? Are some redundant?”

The Profit First gym accounting approach fundamentally changes your businesss. By immediately taking out the profit share from your monthly revenue, you limit the money available to run your business. It’s like putting your business on a diet.

The Impact of Profit First

When you purposely impose restraint on your business spending, it prompts you to put a laser focus on your business operations and accounting practices. As a result, your gym business will operate more efficiently while you work to improve your financial circumstances. You must dig in and eliminate all wasteful spending and evaluate your available resources to maximize their potential. A dollar spent should actually be a dollar invested.

By creating a limited operations budget, the Profit First approach helps you abandon the old habit of throwing money at problems. In some cases—but not all—you should invest your way out of a problem. The word “invest”—not “spend” is key.

Here’s a simple and low-cost example: You can spend hours trying to solve common gym problems. Or you can spend $8 on Chris Cooper’s book “Gym Owners Handbook.” If the book saves you even a single hour of time, your ROI is on that $8 is already huge.

Apply the same principle to other spending and ask this question: “Am I getting a return on this investment?”

Here’s another way to state that question from a Profit First perspective: “Will this expense allow to me generate more revenue and profit?”

Don’t underestimate the effects of owning a profitable business. They’re immense, and they can be tangible and intangible. Profit will ensure you can feed your family, take a vacation or buy that thing. But it will also boost your morale because you know your work is being rewarded. Slaving away in silence as a martyr gets old very quickly.

The Active Managerial Accounting Behind Profit First

You can put Profit First in motion by setting up multiple accounts at your bank. Here’s the structure of accounts Briggs outlines in “Profit First for Microgyms.”

Income.Profit.Owner’s Pay.Team Members.Tax.Equipment.Operations.

These accounts serve as the partitions for your gym budget.

Income goes into the Income account and is then moved to the other accounts according to your exact financial strategy. You don’t spend money in the income account.

Let’s explore the others:

Profit Account

For most entrepreneurs, their business is their ultimate investment. And as with any investment, the goal is to see a return on investment (ROI). Profit is the owner’s or owners’ reward for owning the business. So the Profit account is funded by the Income account and provides quarterly distributions to the owner or owners. No more than 50 percent of the funds in the account should be distributed in any quarter.

Please don’t confuse the gym’s Profit account with the Owner’s Pay account. They serve different purposes. The Owner’s Pay account is for owners who work in the gym regularly. If you—or your partners—don’t work in the gym, you don’t need an Owner’s Pay account. But in most gyms, one or several owners perform work, and they will be paid from the Owner’s Pay account.

A single bank account can muddy the waters. By allocating funds to different accounts, you’ll avoid overspending.
Owner’s Pay Account

The money in the owner’s pay account compensates you or other owners for all the work you do for your gym, except coaching classes (see Team Members, below). You must remember that you are the most valuable worker in the gym. Nothing rolls without you. So the most vital worker must reap the benefits.

And here’s the biggest issue: If you don’t pay yourself a fair wage for the work you do, you can never offload that work without throwing your budget out of whack.

For example, most gym owners perform the work of a general manager but don’t pay themselves for this work. If you pay yourself $200 for general-manager work every week and build that cost into your business model, you can eventually use that $800 a month to hire a GM, freeing you up to work on other tasks. If you haven’t been paying yourself for the work, you’ll have to find $800 to hire someone. That causes some gym owners to get stuck in “low-value roles” forever.

Resource: “The Value Ladder”

Team Members Account

This account is for your staff people, with one important caveat: If you, as owner, are coaching classes, you must pay yourself for that service from this account. This is critical. If you “volunteer” your time coaching, you’ll find yourself stuck in that role and will never be able to move into other roles because hiring will mess up your cash flow.

Pay team members from this account, and pay yourself from this fund when you are working as a team member. Then, when you want to stop coaching to, say, grow your gym by setting up partnerships with other local businesses, you’ll have the cash to replace yourself.

Tax Account

Nobody likes coming up short during tax season. So the tax account helps you meet your tax burden without doing any last-minute shuffling. Commingling your income tax reserves with your expense funds could mean you’re short when the tax collector supplies a bill.

It’s worth noting that sales tax and payroll tax come out of the Operations account (see below). This account is for income tax.

Unless you are filing as a C Corp, your tax account holds funds for your income taxes based on your owner’s pay. The IRS generally considers your gym business a “flow-through” entity, which essentially means you pay a personal tax on the gym’s income. So the gym should cover that tax in the Profit First plan.

Equipment Account

This account is for equipment purchases and maintenance. If you don’t have it, it’s likely you’ll buy “just one more bike” for no good reason. Gym owners love new toys. So set aside money for new equipment and repairs to old equipment and you’ll spend only what you’ve budgeted and not a penny more.

Operations Account

The operations account holds funds to cover all the expenses of running your gym. Pay bills from this account. You might want to get checks attached to this account.

When your get the Profit First system in place, you’ll finally have financial clarity.
How to Maximize the Benefits of Profit First

Once you determine your actual operational budget, you can begin to discover ways to run the gym better with less money.

Of course, money doesn’t just appear because you prioritize profit. But here’s the key: By allocating funds to all accounts and ensuring both profit and owner’s pay, you now have a firm target for gross revenue.

Without that target, you’re likely to be more passive and look at revenue as a stream that comes in—you’ll get paid if the flow is great enough. If you actually know what the business needs, you have clarity and you can take action. That means you’ll work to generate revenue, not wait for it to appear. You’ll review your numbers and think, “I need five more clients at $205 per month to hit my numbers. I’ll take exactly these steps to find those clients over the next 21 days.”

If you aren’t sure about the exact steps to grow your business, a Two-Brain mentor can lay them out for you, give you a plan and supply a host of supporting resources. (Book a call to find out more.)

To be successful with Profit First, you will need to be at your best creatively and intellectually, and you’ll need to work to get to your goals. But no gym owner is afraid of a little hard work. The following methods and practices will help you optimize the benefits of your Profit First strategy.

Recognize and Avoid Lazy Business Habits

Change can be unsettling, so you might be nervous in the early stages of Profit First. You’ll have to take a hard look at your business and optimize it.

To start, try to avoid or eliminate the unproductive business practices many owners employ. These practices often cost you earning opportunities or waste your money and time. The most damaging ones are:

1. Mimicking–Many small business owners tend to make crucial managerial decisions by copying what their competitors do. This tendency is prevalent in pricing. For example, some gym owners charge the same membership price as their competitors—or less—without considering their gym’s unique revenue requirements and target market. Mimickry can indicate laziness in some cases, but it’s more commonly an indication that the owner doesn’t understand their gym’s value, clientele and revenue needs. Take the time and effort to make well-thought-out and evidence-based decisions, especially when it comes to pricing.

2. Buying Trendy Equipment—You’ve probably seen the digital boxing machine, the mountain-climbing wall, the weird balancing cushions, the coordination gadgets and all kinds of therapeutic devices. Some of these gimmicky apparatuses look like they should be romper-room accessories. It’s best to resist the urge to buy extraneous equipment because gear will never attract new clients. Ask yourself “exactly what do I need to get results for clients?” If you answer honestly, you’ll find the list of essentials is actually very small.

Do your clients need battle ropes to be fit or do you just want them because they look cool?

3. Neglecting Gym Accounting: There is a tendency for gym owners and other small-business owners to only focus on accounting at tax time or the end of the month. However, active accounting and regular reviews of key metrics will protect your cash flow and your profit. Don’t avoid the balance sheet. Dig into it regularly.

Resource: “Cash Flow and Metrics That Matter.”

4. Being too Casual With Business Associates: The fitness environment fosters deep personal bonds among owners, clients and staff, so it’s tempting to take the path of least resistance in dealing with money matters. Unfortunately, this bad business practice can eat into your gym profits and cause awkward moments down the line. Treat everyone the exact same way, and make a list of clear policies and standard operating procedures before you need them. That way you can lean on well-considered policies rather than react emotionally in a stressful situation.

You should:

Avoid casual handshake deals and “pay you later” plans.Avoid discounts and deals.Treat everyone the same way every time.Establish, maintain and clearly articulate gym policies regularly.Reward achievement by and positive contributions from team members.Quickly, kindly and firmly correct counterproductive actions by clients or staff members.Install systems of documentation and record keeping—this can include contracts, staff playbooks, new-member welcome packages and so on.Be as transparent as you can with your business practices.Be OK with saying “no” if doing so protects your gym’s values and mission.

5. Relying on One-Shot Marketing—There is no magic marketing event or viral video that will boost your gym business to great success. Promotions might give you a brief uptick in leads, visits or even new members, but throwing money at marketing isn’t wise without a strong onboarding system and a robust retention program. Focus on your gym’s systems first, implement Affinity Marketing and a referral system next (see below), and then when you get into paid marketing, track your metrics to ensure you’re getting ROI.

The Pumpkin Plan   

When improving your actual operations budget with a Profit First plan, it’s worth referring to another Michalowicz book: “The Pumpkin Plan.”  As we said earlier, you can’t just expect money to appear. But you can use a very effective strategy to get your best clients to help you recruit other clients of their caliber. This is a key strategy for reaching your revenue goals.

The premise of the Pumpkin Plan is simple: A healthy, thriving pumpkin patch requires good seeds to grow. So to help your gym business prosper, you need to identify your “seed clients,” cultivate them and try to find more. Seed clients tend to have the following qualities:

They pay more.You and your staff like them.They tend to be problem solvers as opposed to problem causers.Seed clients supply referrals more often.

With these criteria, you will be able to make a quick list of seed clients without going to your records. But, while you are at it, you need to identify your worst clients. These people are the price-sensitive ones who complain about any rate increase and make excuses for not making timely payments. They are frequent complainers who are difficult to please. In addition, they are usually the most vocal and needy.

It is crucial to understand how much your worst clients drain you and your staff. In fact, it is better not to have them around than to keep accommodating them. Without wasting time and energy appeasing them, you could focus on recruiting more seed clients. In most cases, you can encourage bad clients to move on by using a private consultation or a small rate increase that sends them running for the door.

With your remaining seed clients, you’ll want to set up a clear plan to make it easy for them to help you grow your business. Here’s a resource for that: Seeds and Weeds exercise.

Remember, this is an active process. You don’t wait for referrals. You generate them through your very best clients as you work toward the revenue goal your Profit First accounting plan has supplied.

Final Thoughts on Profit First for Gym Owners

It’s normal to fear change and bold steps in life, especially when they involve your livelihood and financial future. But Jim Rohn once said, “Your life does not get better by chance; it gets better with change.” Of course, as with regular gym operations, problems and unforeseen obstacles will appear as you adjust past accounting and money-management practices. But your hyper-focused attention to the details of the Profit First plan will help you deal with them.

If you need even more help, it’s available through Two-Brain mentorship. A mentor can help you implement the plan described above and generate the revenue needed to make it a complete success. Here’s what other gym owners have to say about the program: Results.

When you think about it, Profit First is really a form of reverse-engineering a profitable business.

Instead of hoping to end up with a profit at the end of the month, you take the profit first, carefully allocate revenue to cover other costs, avoid overspending, improve efficiency and ROI, and work hard to generate the revenue the business requires. This is a perfect plan for hard-charging, goal-oriented, Type A entrepreneurs who aren’t afraid of a challenge—people just like you.

About the Author: John Burson successful ran a personal training business for over 20 years, and he has written volumes of published articles on business entrepreneurship, finance and the fitness industry.

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“I Told You So” – Gym Owners to Government on Declining Health

“It’s always good to quote from experts.”

The sarcasm dripped from Sun Media columnist Anthony Furey’s statement.

He’s talking about the post-pandemic “revelations” from the Ontario COVID-19 Science Advisory Table.

Apparently “movement behaviours and mental health status worsened among Canadians during the COVID-19 pandemic.”

I know that certainly isn’t news to gym owners who had to close their businesses for lengthy periods over the last years.

We’re clearly in the stage of 20-20 hindsight as we review pandemic measures. And of course hindsight is rarely fair to people who make decisions.

That said, the report is a johnny-come-lately echo of all the common-sense things gym owners said when they were being told to close their doors and turn clients away in 2020 and 2021.

“Patterns of declining rates of physical activity worsened during the COVID-19 pandemic, as Ontarians and other Canadians were significantly less active and even more sedentary. Studies have associated these rapid declines with pandemic-related measures, including closures of schools and recreation,” the Science Table report reads.

Furey’s reaction is likely a profanity-free reflection of each gym owner’s thoughts: “Reading this report, you’re kind of at your wit’s end. You’re like, guys, really. Like, please. Just ghost away. Just go away.’ … Big lockdown boosters: ‘Shut it all down.’ (And then): ‘Oh maybe it wasn’t so good that we shut this down,’” Furey comments in this video.

With the pipes clear of I-told-you-so bitterness, it’s worth looking for a silver lining. It exists: Reports like this remind people that they should probably start working out and eating better.

It’s never easy to get a sedentary person moving, but gym owners have been doing that for many years. So every government report about inactivity, weight gain and poor nutrition represents, in a backhanded way, a little assistance for gym owners.

Let’s not forget government restrictions caused a lot of the problems the reports are highlighting now. That fact shouldn’t be ignored—especially when the next election rolls around. But don’t dwell on that. Get moving.

Whenever you see government reports on declining health conditions, be sure to remind your audience that you can help.

My advice:

Create some media: blog, video, podcast, social post.Refer to the government report or news article on the report.Highlight the problems the report lists.Present your solutions.Reassure people that health and fitness can be improved quickest with the help of an expert coach.Link to your free consultation booking page.

With that productive act complete, feel free to stomp your feet and remind your close confidantes that the government caused the problems it’s now documenting. Sharpen a pencil in anticipation of the next election and make a commitment to toss those responsible out of office. Scream “I told you so.”

Then straighten your hair, put on your smile and get back to helping people become healthier and fitter.

The post “I Told You So” – Gym Owners to Government on Declining Health appeared first on Two-Brain Business.

Four Steps to Grow Any Business (Including Yours)

Chris Cooper: 0:01

Every business scales through four distinct stages. And today I’m gonna tell you exactly what they are.

My name’s Chris Cooper. I’m the founder of Two-Brain Business. This is Two-Brain Radio. And if this episode is useful to you, please hit subscribe on your favorite podcast platform. So there are four stages that every business goes through. And if you’ve read my book, Founder, Farmer, Tinker, Thief, these will sound familiar to you, but I wanna portray them in a slightly different way to help you think about exactly what you need to do to get from the first stage all the way to the fourth. And this is true. If you run a micro gym, if you run a yoga studio, it’s true. If you run any service business of any kind.

So the first stage that you go through when you’re starting up, your business is systemizing. Most of us start a business to buy ourselves a job. And so we become these kind of solo entrepreneurs and we become really self-employed, it’s not really even a business yet. So we’re the ones who show up at 4:00 AM and bake the donuts. And we’re the ones who show up at 5:00 AM and open the gym.

Sometimes those are the same person and sometimes we’re there past midnight, closing down our bar, the first stage of business before we can really grow it is we have to get the entire business off our shoulders out of our head, out of our hands and make it possible for somebody else to do it exactly the way that we would do it. And this is called systemization.

And this means writing a playbook, writing in great detail here is exactly how you open up the gym in the morning. Here is where you park your car. Here is how you turn on the radio. Here is how you load up the workout and you get deeper and deeper and deeper leaving nothing to chance and ending with a document that has to pass what we call a hit by the bus test. And that means if you were hit by a bus today, could a stranger walk into your gym, open up this document and run your gym the same way you would. So the first age is systemization. Now here’s why this is important. If you don’t get these things out of your head and onto paper, number one, you will never be replaceable. But that really means is not like, oh, somebody can copy you and compete with you.

What it means is that you will never be able to take time off. That’s the first thing. Number two, no staff person will ever be able to make a decision without you. Number three, you will spend all of your time, micromanaging your staff, looking over your shoulder, checking the gym cameras, to make sure that the floor is cleaned properly. You will never have any piece and you will never have a real business until it is systemized. Now, of course, writing the playbook is step one.

And step two is giving your staff contracts and giving them checklists and templates to follow and evaluating their progress. But really in this phase, all you’re trying to do is make sure that the business doesn’t depend on your constant presence. The second phase is called optimization. So after you’ve systemized everything and written it down, now you can try different ways of doing things. So for example, you write down your marketing process and you draw maybe what your marketing funnel is. And if you don’t know what your marketing funnel is, if your marketing funnel has just opened the doors and hope for the best, then going through the systemization process makes you think about what is my plan for marketing.

There are really four marketing funnels that every gym needs. We talked about that at Summit this year, and it’s in our Growth Toolkit too, but basically no matter what you come up with for your marketing plan, you wanna make sure that it’s systemized so that in the next stage you can optimize it. So for example, maybe your marketing plan is we’re gonna do affinity marketing. And we are going to ask our clients for referrals in a tactful and helpful way at regularly occurring intervals. And once you’ve got that set up, you’re doing these yourself. And then in the optimization phase, you are going to try other marketing.

So maybe you’re gonna run some Facebook ads, or maybe you’re going to do more of a social media type funnel, or maybe you’re going to do something completely different. But in the optimization phase, this is where you play with the variables. The reason that you systemize one way of doing the marketing first is so that you’ve got a solid foundation that you can always fall back on just as if you are climbing a rock face, a rock climber.

When they’re climbing only moves one limb at a time, they, they do this thing. That’s called three points of contact. So as you’re going up scaling a rock face, you’ve got both of your feet set and your left arm is set before you move your right arm. You make sure that everything else is secure and then you change one thing. And then after your right arm has a good hold, then you move your left arm up like that. So optimization is really about slowly adopting the processes, finding the things that are going to help you grow marketing is part of that.

Optimizing your sales process is another. So let’s say that you make a system and your system is you’re going to do a free class trial and people come in for your class trial. And sometimes they sign up and sometimes they don’t, that’s a system. It’s not a great system, but it works maybe, you know, to get two to three new members a month. So you write that down. Here’s exactly how we do it. And then you get to the optimization phase and you say, oh, I’ve been reading about this, no sweat intro. And my mentor has just presented me with the script and the process and some role play to do for homework.

So now I’m upgrading my existing system to a No Sweat Intro. And I’m gonna try that. And oh boy, look at this, I’m closing higher value clients at a much higher rate. And then you learn about lead nurture and you learn what to do with people who are paying attention, but not paying you money yet. And so you upgrade your lead nurture process. Maybe you start using a CRM like kilo.

And so the optimization phase is really about improving the systems that you documented and built in the systemization phase. The third phase of business growth is what we call grow. And at this point you’re growing your primary business. So you’ve got your systems down, you’ve optimized. It, you’ve basically figured out what works and now you’re going all in on those strategies that you know, work.

So for example, if you tested out running ads on TikTok and you found that you’re getting a little bit of results and for every dollar that you put in, you wind up getting $2 back. Now it’s time to go all in on that strategy and just keep pumping into what works. If for example, you find that during the optimization phase, you found that the best group size for retention is seven to 12 people. Okay? Now we know that. And in the growth phase, we are going to build as many groups of seven to 12 people as we possibly can. And so the growth phase is really about growing your primary business on the systems that you’ve already built.

And that means , uh , more investment in these systems. It means more investment in marketing and sales. And really in this phase, we talk about marketing and sales a lot because operations should be settled, should be sided . They should be locked in. You should have a great , uh , staff. You should have good training processes. You should have a good operational handbook. You should have evaluations in place and now it’s time to grow. And so all of your attention as the CEO is basically into the growth of your company, which is marketing and sales. And the fourth phase of business is scale. So systemized optimized growth scale scale is when you’ve got one successful business, that’s paying you at least a hundred thousand dollars per year.

And you decide now what, what is the next level? And so you might duplicate that business, or you might say, okay, what’s it gonna take to get this business to pay me $250,000 a year. I need to add a management layer, for example, or , um , maybe I need to add a different business, a separate business beside this business. I need to add an ninja warrior gym. I need to build a separate kids program.

Maybe I need to add a franchise. Maybe I’m gonna take what I’ve earned. And I’m gonna reinvest that somewhere else entirely. I’m gonna buy a self storage business or I’m gonna invest in the stock market or real estate. But scaling is really about having one golden egg or one goose laying golden eggs so that you’re nice and stable. You’ve got a little bit more money, a little bit more time than you need. And you’re going to reinvest that to compound what you learned through the first three stages.

Why is it important to follow this process? It is super important because if you do these things out of order, you can break your business and you can even bankrupt yourself. For example, several years ago, maybe three or four, there was a big marketing company that ran a ton of Facebook ads for you. And they would come into your gym and they would set up a whole lead nurture sequence and they would get leads into your door. And then they would teach you how to sell those leads. Great. Right? But you’re jumping straight to the growth phase of gym ownership. And if you haven’t gone through systemization, you haven’t gone through optimization, you can break your gym. And here’s what happened.

So this Facebook marketing company was getting a ton of leads in the door. People were growing their gyms by like 50, 60 members even, and those 50 or 60 members were coming in and they would even pay more than the current clients, three or 400 bucks a month. And then after the first month, those people started washing out, they started disappearing and they started canceling their credit cards .

And they started becoming hard to collect from. And the retention rate was like 30% after one month because the gym did not have the systems required to scale. And so they’d bring these new people in the new people would join the classes. The older clients would be like, whoa, who are these 10 new people in the 6:00 AM class, getting all the attention who don’t know what they’re doing? You know what?

I’m gonna go find another coach somewhere else. And so the problem became that not just the low retention of these new clients, but also the existing clients, the good people were washing out with them. And so this created a massive churn problem in the gym. Now, if the gym had systemized, their processes had systemized, how to coach a class consistently well had systems for doing a better on-ramp process.

They would’ve kept a lot of these clients and they would’ve kept their existing clients too. If they had optimized their progress, maybe by hiring like a client success manager to oversee retention, maybe by mapping out the client journey, maybe by using an Ascension system like level method, they would’ve kept their existing clients too, but because they were not ready for the growth, it broke their business. I’ve done this too. And I’m guilty of this.

So sometimes when we partner with people, Two-Brain Business has so much trust and affinity that we’ve worked so hard to build that when we recommend a product, they quickly become overloaded. And overwhelmed years ago, we were working with a company and it was a solo operator. She was an amazing person. And when she had 20 or 30 clients, she ran an amazing business. But then when we stood up and recommended her at our summit, she suddenly went from 20 clients to a hundred. And she was a sole operator. She was doing all the work by herself.

And so she quickly tried to hire staff to accommodate all this growth, but it was kind of too late and she didn’t wanna leave any of these new clients hanging. And so she was wind up sometimes working literally around the clock, 24 hours straight, and her husband was ready to divorce her and her life just went to hell in a hand basket. This is really, really common. Before the last 10 years, businesses went through a few systems, right? A few stages. And so a lot of business owners would open up. They’d buy themselves a job.

They’d work that job for 30 or 40 years, they’d sell it to their kid and retire. That doesn’t happen anymore. So then what happened was people would open up, they would run their business and they’d reach, you know , the year 2010. And they’d look around for somebody to buy their business. And they’d realize that their kid went off and got a liberal arts degree at college. And there was nobody to buy it. And so they just eventually shut down or they worked until they were 80 and couldn’t stop working now, enlightened entrepreneurs understand that they need to build roles and tasks so that they can someday sell their business or pass it off to somebody or train their kids to run it or whatever. They must build a business that runs without them.

And so they get into the early stages. They systemize things, check, they optimize things, check, but then they don’t grow because they don’t, you know, find the one thing that’s going to grow them and stay focused on that. Instead what they do is they build one thing, they get a hundred customers and then it gets hard to grow. So they try 50 different advertising strategies. And each one works a little tiny bit, but they never go all in on one because they never measure which one is working. And so then what happens is they, they get two clients and they lose two clients.

And they’re never actually growing because they’re never finding the one thing they skip the optimization step. And so , um , they’re , they can’t break through the ceiling of like a hundred clients. And this is, this is super duper common. And really what has to happen is not the next marketing strategy. It’s not early adoption of TikTok . What needs to happen is they need to go back and say, which system is broke, which system is not optimized. When two brain was growing and we were hitting like the million dollar mark and just kind of sitting there for a few months.

What we realized we had to do was not just have the systems, but test which growth strategy was going to work best. So bullets before cannonballs, we went out and did Facebook ads. We did Instagram, we did YouTube. We did Google ads. We found the one that was working the best. And we went all in on that. We went from a $500 a month. Facebook ad spend to a $15,000 a month Facebook ad spend, because that was the thing that was working the best. And guess what? The return on that ad spend was something like seven to one in the early days. And then it went down, but it’s still like 3.5 to one. You put a dollar in, you get 3.5, three 50 back.

And we learned that in the optimization phase. And then we went into the growth phase. So what happens when you’ve grown your gym and you’ve got, you know, 150 clients or two 50 or 500, you’re making at least a hundred thousand dollars per year take home.

What next well, that’s really what scale is all about? And at that level you have to decide, do I want to duplicate this business? Do I want to add a management layer or do I want to go out and invest the profits in something more passive and keep running my gym myself. Any of those are viable. Now this maps to our client journey. So in the systemized portion of growth, we call you a Founder and your job at that role is to stop doing everything yourself. The next phase, which is optimized, we call Farmer. That’s where you’re growing your team. You’re finding the optimal systems and you’re doubling down on them. And then the next stage is Growth, which is also kind of Farmer phase. You’ve discovered the systems, and now you’re really reinvesting and growing your gym as much as you can using the systems that are optimized.

And then finally scale, which is Tinker, which is you have a little bit of free time. You have a little bit of extra money and you’re reinvesting that or adding a management layer or being a better leader. But anyway, the four systems that you need to grow any business are systemized optimize growth and scale. If you skip any one of these, you will collapse.

It’s like a house of cards, but if you build these in order, you can build a really solid foundation that really removes all limits above you. So I hope this helps you. If you need to figure out like where you are in the process, you can read Founder, Farmer, Tinker, Thief, I’ll post a link. In short, We created the gym owners , United Facebook group in 2020 to help entrepreneurs just like you. Now, it has more than 5,600 members and it’s growing daily. As gym owners, join us with tips, tactics, and community support. If you aren’t in that group, what are you waiting for? Get in there today so we can network and grow your business. That’s Gym Owners United on Facebook or gymownersunited.com – join today.

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Your First Goal: $205 Per Member Per Month

What if every member at your gym paid you $205 per month?

How would that average revenue per member (ARM) affect your profitability?

Would that solidify your business?

Would it allow you to focus more on the clients you have instead of spending time trolling for more?

Would it allow you to keep your business open longer?

The data says yes.

Target No. 1: $205

The top 10 percent percent of gyms in our 2021 State of the Industry data set earned at least $205 per member per month. And the top gyms earn double that much per member per month. But most microgyms are a long way away (less than $100 per member per month).

That means most microgyms need twice as many members to make the same revenue as the top gyms. But with twice as many members, they also need a lot more space and staff, and other expenses increase as well.

In other words, it takes most microgym owners 250 clients to make the same income as a Two-Brain gym with 100 clients.

Worse, gyms with over 150 clients are almost always the gyms with the worst retention rates. It’s an extremely fragile model.

Today, I’m going to let the leaderboard champs tell you how to increase your ARM. The leaderboard above shows you what the top gyms in Two-Brain scored in ARM in last month, and here are the ways the gym owners got there:

“Two main things: sales and quality of packages. I spent a lot of time on sales training, learning how to ask the real questions and get to people’s real issues of why they want to join our gym. Then we grouped our services (PT, nutrition and mindset) into one package and as a result were able to sell it at a higher rate.”

“I’ve focused on prescribing higher-value services to prospective clients—PT packages and hybrid options. I start from the top of our sales binder with most folks and work my way down.”

“We work really hard to identify who belongs in group programs and who should do 1:1 programs.”

“I started sharing some of our goals with our staff. I decided it was time to share where I thought the gym could be with the team, where the opportunities are—I communicated ‘this is what you can do to make this happen.’ I gave them more focused goals based on achieving results—specific to their skill and focus—which was different than the past.”

$205 ARM isn’t the right target for everyone. But it’s probably the first target for most gyms.

And you need to know this: All of the gyms on the leaderboard started where you are right now. All of them had underpriced services, and all of them doubted their clients would pay more if they created more value.

All of them, happily, have now seen the reality: If you create more value, you’ll make a greater impact for everyone.

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