Thomas Plummer

The business of fitness


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The 17 Immutable Laws of Coaching

#1: Never fail to charge what you are worth

You cannot be the cheapest coach in town and then expect to be perceived as the best.

Successful coaches learn to charge what their talent, education and experience is worth to the client. Many new coaches believe charging less than their competitors gives them an edge in the market, thinking that if they charge less now than the other coaches, they will take everyone else’s clients, because they will be viewed as cheaper and; therefore, a better deal.

This strategy fails every single time. The client simply doesn’t believe the cheapest of anything can be the best of anything. Our clients make their decision to choose a coach on whether he or she believes the coach can get the results they desire. In this client’s world, price is secondary, behind the anticipated ability to get the results the client pays for over time, but price is also a perception of quality and if you are a money person, which our clients usually are, the more you charge the better you are valued.

Simply put, if one trainer is $50 per hour and the other trainer is $100, then which one is going to be the best trainer to choose in the eyes of most of our clients? These clients believe the expensive trainer is usually the best trainer. The higher priced coach must have the experience and education to charge this amount and he or she must also have had enough clients to validate that someone else pays this amount.

One of the biggest mistakes a coach makes is undercharging for what they do and who they are. Your price sets an expectation of quality and the cheapest is never the best.

#2: Never tie yourself to a single methodology

Single methodology coaches fail over time. Single methodology people are much like a carpenter that is really good using his special hammer and then he believes that his magic hammer is the only tool he would ever need to build a house. This would be a great theory until you need a drill or saw and then the one tool wonder falls apart.

Single methodology coaches suffer the same fate. We become married to a tool, such as a kettle bell, barbell, yoga mat, suspension trainer, or go so far as to build an entire gym around a single methodology system, and we then try and force every client into our single tool approach, or put another way, I am a hammer and you are going to be a nail rather you like it or not.

Master coaches move beyond tools and think more as an architect who is working with a master builder to create a beautiful house. The architect can design an expected outcome, and the master builder, with all his vast array of tools, can build it efficiently. The master coach has to play both of these roles to get the most out of any client. He must see what can be created, but he also must have all the tools in the bag to be able to get it done, because every client is different and every client might need his own unique application of tools to get it done over time.

Single methodology people limit their businesses to the one client who can benefit from that exact process. Master coaches spend careers mastering many different tools so he or she might always have the right tool for the right client at the right time.

#3: If it hurts you, why do you think it won’t hurt them?

If you are hurt and beat up from your own workouts, then what are you doing to your own clients? There is nothing more pathetic than a coach who is constantly in pain and beaten up from his own workouts applying this same brilliant approach to his clients.

Many young coaches believe that constantly being dinged, in that six Advil a day pain range and held together with tape is a status thing: “Yeah, been pushing it hard lately and going for another PR this week,” is nothing to brag about to any other human, but rather a negative statement on your IQ and mental stability.

If your approach to fitness is keeping you constantly fighting pain, then what do you think you are doing to your clients, who believe every word you utter, but who have so much less base conditioning, technique and experience?

Maybe you are the problem, not the solution you believe yourself to be? Maybe your technique, choice of exercises, willing to push through pain and overall willingness to destroy your body in the name of fitness is just a wrong approach that is killing you and hurting the very people who trusted you with their fitness?

#4: Never lose your integrity

It takes a lifetime to create an image of integrity, but only a few brief moments to kill it.

Integrity is who you believe yourself to be in life. You create your own code, based upon your personal values, and then live by that code. Coaches need to be honest to the extent of obsession; respectful of others, including yourself, your family and especially those who pay you for your help and guidance; are willing to help when others can’t or won’t, and especially willing to never do anything to a client for the mere sake of trying to make a little money off of him selling him something he doesn’t need and he only bought because you told him to buy it.

You can never be a master coach without integrity nor can you ever be a good human being without integrity. Integrity is nothing more than a bond of trust stating you will do what you promised and that the other person will not get hurt in the process. This applies to clients of course, but also to your life in general. Do what you say you will do, when you promise to do it, and make sure you do no harm in the process and you are on your way to discovering the integrity within your soul.

#5: Professionalism is the separator between the good and the great

Everything matters. How you dress, how you speak, what time you show up, how prepared you are for a client, how you follow up, how you do not ever talk about other clients, how you shake hands, how you charge, how you protect yourself by never making a deal with any client that you wouldn’t give every client and how you value your team are just a few small parts of what it takes to be a true professional.

There is usually an aura around those you respect over time, those of whom you want to learn from and emulate in life. The aura you sense is a shield of professionalism that is never compromised or let down. If you are a professional coach, then you live it every day.

Being the best dressed coach in the room, the best spoken, the most prepared and the one who is simply the most put together compared against every other coach is a huge edge as you build your career over time. You can be the most educated person in the room and neglected, or you can be the one who is educated wrapped in professionalism and be a guru to others in your field.

#6: I would rather go broke and die on the street than scam a client

There is always a time in every career of every coach when you will consider, even if it is only for a few seconds, taking advantage of a client. You could be broke, desperate for money or simply the guy who spends more than you make and then you consider looking for the easy money.

You tell yourself, “Hey, just once, and besides, this client has so much money who will care?” Then once you have talked yourself out of your integrity, you now are trying to do some outrageous cash deal with a client to pay your rent, or worse, you enter the world of multiple level marketing and you are now advocating products to the clients that they don’t need, and you may not even really believe in, because you can see yourself making some easy money.

When you cross that line, it is almost impossible to come back to the light. Once integrity is sold, there is almost no way to buy it back. If you want to make a living as a professional coach for the rest of your life, then swear to yourself that you would rather go broke and die on the street than ever scam a client.

#7: You are not a role model, you are a professional coach

Your physical perfection is not why the client comes, and is definitely not why the client might stay with you over time. The client trusted you, because he or she believed that you were the one, and the only one, that could get the results they were willing to pay for over time.

Wait, you say, the client trusted me in the beginning, because he thought all of my almost naked selfies and videos lifting heavy stuff with my exertion/sex face action proved that I am a stud/studette and the client just knew that if I can get myself into this kind of shape, just think what I can do for them?

If you ever said this to yourself, and you actually believe your own bullshit here, then you are too stupid to be a professional coach and should move back to your mother’s basement and go back to being the biggest stud that ever worked for Starbucks, because this is not why 99% of clients you will ever meet chose you.

Professional coaches are chosen because they have the skill set, reputation and experience to get results. Any drunken monkey with a one-day certification can take 20 people through a workout and only kill two or three, but it takes a professional coach with years of experience to be able to get the maximum results, from the maximum number of clients, over time.

Getting this done is not about how you look, but what you know. Despite the misguided belief that every coach has to be a specimen suited for framing at your local art gallery, coaches come in all shapes and sizes, and yes, many of these fine coaches are considered works in progress chasing their own fitness goals and wrestling with their own fitness demons.

Consider that all of your ego induced social media posts might actually be the very things that are keeping serious adult clients out of your gym. Also consider that your need to be in every ad without a shirt, every video in a workout bra and every group shot flexed up might be more of a personal issue you need to deal with rather than ways to help you create a financially successful training business.

And it won’t last. You will not be perfect for ever, but if you base your business on a perfect day on your 30th birthday, then what do you do for a living when you are 40 and not so perfect? Being a perfect specimen doesn’t last, but being a professional coach can feed you until you die.

Replace you in all of your social media with clients that have succeeded because of your caring and helpful guidance. Your potential clients care much more about how you can help them meet their goals than they would ever do about how you look without a shirt.

#8: It is never about you; it is always about them

We push clients too hard, and for too long, because we apply our own personal standard of fitness to them. Your goals and vision for the client maybe the exact thing that will drive him out of your gym, and maybe hurt him as well.

It is not about you and what you want, professional coaching is about them and what they need to be successful. Your client might just want to move and feel better and not give a damn about his weight, although you know that is what is hurting him. You can guide and suggest, but when you push you lose him forever. He is moving, he is happy dropping in once or twice a week and that is enough for him.

The side note here is that purists drive your clients, and probably your family too, crazy. Nothing worse in life than a Paleo freak at a holiday dinner yelling at poor Aunt Edna because she just stuffed a giant biscuit covered in butter in her mouth and washed it down with a beer.

Living pure is your choice. Expecting your clients to live up to your idea of a perfect fitness life is not going to work very well in the business world. Yes, there will always be a posse that will follow you because of your intensity and purism, especially for those coaches who own those single methodology businesses, but will 25 hardcore clients be enough to support your career over time?

Understand that your clients have different goals, lives, time commitments and that while you could create the perfect fitness life for them if they would only listen, most just want to venture down the fitness path of life slowly, maybe stop and drink a beer along the way, occasionally stop for a biscuit and just don’t have the same deep believe that you do… and all of that is okay because at least they are with you and moving forward and that is enough.

#9: One-dimensional coaches fail over time

Coaching isn’t enough. If you want to be successful over time you have to force yourself to be good at all aspects of professional coaching. For example:

  • Have you mastered marketing and branding?
  • Can you handle your own social media and then teach someone else how to do it for you?
  • Do you understand money? Do you save and invest? Can you run the financial side of a growing business?
  • Do you understand staffing and can you hire and create a team to grow your business?
  • Have you learned to speak and can present your ideas in public or speak in front of groups to grow your business?
  • Have you ever had anyone look at your professional image and help package you as a professional?
  • Have you learned about negotiating professional contracts that might affect the jobs you may have in the future?
  • Have you learned to network and surround yourself with a team that can help you and your career grow over time?

Being a professional coach isn’t just about learning to train someone. Being a professional coach is about becoming a well-rounded person able to create and manage a career that could span your entire life. Multi-dimensional is your plan if you want to hang around for more than a few years.

#10: You can help more people with a million dollars in the bank than a $12.92

It is never about the money, until it is. Easy to say I am not in it for the money and be that reverse snob as a coach where your poverty is a badge of honor; but then a kid gets sick, you get married and look for a house or your parents age and need some help, and then it is about the money and the so little you have ever earned or saved.

Money only has one purpose and that is freedom. Money lets you work where you want to work, leave when you don’t want to be there any longer, live where you are happy, help people who need your help and in other words, let’s you live your life on your own terms without being held hostage by anyone else who controls your cash flow.

Chasing money is not important, but the process of chasing money is in your life. The difference is you will build a more successful career, a more financially successful business and enjoy a sense of freedom and peace so many coaches never find who live check-to-check in life, if you make creating money part of your life’s work.

We create money to take care of our families. We create money to allow us to say no to stupidity that makes us unhappy. Most importantly, making money validates your talent in many ways, because making money proves you were right, you are a professional coach and people are willing to pay you for your help and guidance.

You can be happy and poor and you can be a simple monk and change the world, but for most of us who desire to live as a professional coach, you will find you can help a lot more people in life with a few dollars in the bank than you ever could being broke and barely surviving to each payday.

There will also be a day where you might not be able to do what you do any longer. You might become injured, burned out, or simply have had enough and want to move on in life. Money is your way out. Money is your way to turn 50 and say, “I have had enough of this and just want to go back to college and maybe teach for a few years.”

The hardest conversation in the consulting life is telling a guy who is 57 years old that the $2000 he has saved in life isn’t enough and that he will have to work every day until he dies to just stay alive and pay his bills. Remember, money isn’t made as a status and the biggest houses, newest cars, and most gadgets isn’t what you are chasing; you are pursuing the freedom that only comes from having enough money in life to live life on whatever terms you desire.

#11: You did not get to be you without a hand up from somebody

You are you because somewhere, at some time in your life, somebody gave you a hand up. There are no self-made people, only those who have forgotten where they came from and who helped them in life.

Remember who helped you and say thanks and make sure you help others who are further down the ladder than you are. You are who you are because someone cared… and now it is your turn.

#12: Hire a coach to coach you/break out of your comfort zone

You have been training for 20 years and think you know it all? Hire a coach you respect and have him or her train you for a week. You need to force yourself out of your own comfort zone, but most importantly, you need to be reminded there are other ways to get results and what you know is not what everyone else knows and maybe, just maybe, you are all right and you might learn something new.

Same thing is true for life. When you think you know it all is the day you should hire someone to ask the hard questions in life, from everything to money and family to personal goals and retirement. Often asking for help when we think we have it all figured out gets us to the point where we remember that we don’t even know all the questions anymore and fresh eyes can help us leap ahead years of just going our slow and self-dictated pace.

#13: Knowing when to say no is the sign of coaching maturity

One of the best days you will ever have as a professional coach is when you look at a client and say, “I don’t think I can help you, but I can refer you to someone who can.”

That is the day you have arrived as a professional coach, because that was the day you stopped faking it and finally stopped forcing a client into what you know and admitted there are clients that don’t fit your skill set and the best answer is, “No, I am not the guy for this job.”

Young coaches too often force every client into their box, even if the client doesn’t fit their training model, or worse, has medical concerns he shouldn’t even touch. Hey, this is what I know and if I throw you into the box I will force something to fit you somehow. This approach is sort of like a guy buying a shirt and the clerk says it looks fine, we can make it work, you look amazing, while the shirt is a 3XL and the guy wears a medium. I have the shirt for sale, and it is the only one I have, and you will buy it now.

Knowing when to walk is a sign of maturity. Knowing who to refer out to is a sign of a professional coach. You do not need to be right every time, or know how to train every client in the world, but a professional coach does need to know who can get it done if he can’t. Sometimes the best advice you can give a client is to go somewhere else.

#14: Why are you different than every other coach?

Generalists eat last; specialists own the future.

The future of coaching belongs to specialists who focus on narrower populations and then master that area. For example. You might focus on:

  • Fitness after 50
  • Women only after 40
  • Severely obese
  • Junior golfers
  • Stressed out female executives
  • Guys over 50 with fitness and hormonal issues
  • Movement analysis and correction for corporations
  • Male executives who are in the 40s and later

This is just a partial list of specializations a coach could make a living and a career mastering. There is truth in many of the old adages, such as: Find something you love and learn more about it than any other person and you will always make a lot of money.

The age of the generalist coach is fading and that one size fits all approach that worked so well 20 years ago is dead today. People want to work with coaches who understand them physically, but also mentally as well. Someone specializing in stressed out female executives would not only have to know how to train those women, but what they think, what are they going through in life at this age, their special nutritional issues, how they learn and what do they really want in life and from their fitness?

Generalists eat last for a reason these days; the specialists in coaching have driven them away from the table.

#15: You have to earn the right to be called a master coach over time

There is nothing funnier in life than a coach with two years of experience, an entry level certification, 12 clients, a one-day wonder certification that states, “You are now the man,” and who is still working for $10 an hour at a mainstream fitness chain where trainers have the status of a farting uncle in church, now declaring himself, because no one else will, a master coach.

You have to earn being a master coach. You have to pay your dues over time. You have to take the beating through the years that molds you into a coach who has seen it all and who has practiced his craft with discipline through those long years.

What does it take to be a true master coach?

  • You have to have done at least a thousand hours of sessions with every type of conceivable client per year for at least 10 years.
  • You have to have a strong entry level certification, a movement based certification and advanced nutritional certifications and training. Couple these along with a never-ending string of skill set certs, such as kettle bells, the Olympic lifts or sand bags that are added every year as new tools are introduced into the market.
  • At least 30 hours of education a year garnered through attendance at major coaching events, such as Perform Better Summits.
  • The willingness to at least once every two years admit that everything you learned up to this date might be out of date and you need to reinvent yourself one more time.

There is no certification for a master coach, but there is that moment when your peers come to you for help and guidance and then you know you have arrived at the point where what you know, and who you are, is respected by others in the industry. Until then, keep your head down and just keep working.

The driving force behind all of this of course, is the premise that if you do not grow each year, you will wither and die early in your career. Coaching is not only about making change, coaching is about accepting change and what we knew even a few years ago might be considered out of date and something the industry has moved past.

Grow or die should be your motto if you want a career as a coach that lasts and is respected by others, and if you put the years one by one, then one day you might just become the master coach the two-year wonder child already thinks he is.

#16: You will not be successful until you know what it means to be you

What do you want from your experience of being a professional coach? Ten years from now, if you are sitting in a bar and someone asks you, “So you have been a professional coach your entire life? What did mean to be you?”

You can’t ever reach the upper levels of success if you don’t know what you are trying to accomplish in your career. Ask yourself these questions:

What professional mileposts have you set for yourself?  Speak at a major conference? Own a training gym that does a million dollars a year? Get an advanced degree? Create an online training empire?

The problem isn’t that you don’t know what you are trying to accomplish, the problem is that you don’t dream big enough. Create a list of milestones that stretch out for years and dream big. Give yourself permission to chase your real dreams, not those watered-down things you share with your drunken friends over too many beers.

There are other questions that matter too when you come to the end of your career. Did you make a difference in the fitness world? Did you leave the industry a better place because you were in it? Did you help others and create a generation of young coaches on the right path because you gave a damn?

What will it have meant to have been you? No coach whoever amounted to anything couldn’t answer this question.

#17: We change lives

If you want to be a respected coach, then remember this: You exist to change lives!

Changing lives is your purpose in life. If you are a true professional, then this is why you were born; to make a difference and to change the lives around you.

If changing lives isn’t your thing, then you will have a difficult time ever reaching any upper level of coaching. All the great ones make the world around them a better place every single day they are alive. If you think everything written in these last few sentences is something found steaming in a pile under a bull, then you will not ever make it as a master level professional coach.

Changing lives is what you do. Changing lives is what professional coaching is all about in life. You are either in, or you are out, but if you aren’t driven to change the world, then it will be a very short and boring career before you leave to find work that might be important, but that will seldom have the impact on as many people as being a professional coach.


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Too busy being busy to make any money

Do we have enough leads?

How many trials did you get from those leads?

How many new clients did you convert from those leads?

What is the average return per new client sold (average client payment)?

This should be in huge letters on the wall of every single person who owns any type of fitness business. This is your business plan and is where you have to start every single day as an owner if you want to be successful in the gym business.

In this business, you get so busy being busy you forget there is a huge difference between being busy and being effective. Busy is where you fill your day scrambling from one project to the next putting out fires and burning up your time. You stumble home late, check and see if the kids remember you, open a beer and flop on the couch mumbling to yourself, “What the hell did I get done today? I was really busy but didn’t make any money at all.” You can be busy all day, but still not make any money.

Effective is a completely different game. Effective means you work about the same hours, but what you get done in those hours changes the outcome of your business. The difference between hopelessly busy and effective is the difference between failing or staying in business and ending up with a financially successful gym.

So what do these four statements really mean in your business, and most importantly, how do we go from busy to effective?

Do we have enough leads?

There are no profits unless you have accumulated enough clients. You will never get enough clients unless you have a lot of perspective clients. All perspective clients start as a lead, defined as someone who made a serious inquiry about your business, or more common today, tried one of your trial programs, such as a 15-day quick start.

Your business will never grow unless you have dedicated person who does nothing but bring in leads for the business. In today’s world, this is usually a dedicated social media person who spends 10-15 hours a week doing nothing but concentrating on generating enough leads. This person cannot be an outside person. He or she has to be inside and one who can pick up the voice of your gym, how it runs, how it feels, who the clients are as a community and what makes you unique.

Everyday, you ask yourself, “Do we have enough leads to make this business profitable?” If the answer is no, then that is your main focus for the day, because you can overcome almost any problem in business if you have enough new potential clients to keep what you own growing.

The order for lead generation in today’s training gym is:

  • Social media marketing including your website
  • Referrals and internal events and promotions
  • Long-term working of your acquired list of former clients and missed potential clients
  • Traditional old school retro marketing, such as ads in newspapers

How many leads turned into trial memberships?

There are people who will take a look at your gym and then go no further. The question to ask yourself is, “What could we have done better to get more people to at least try our gym?” Start with these:

  • Does the potential client perceive this as too hard to even try?
  • What does the lead see that stops him or her from even trying us?
  • Is our trial too expensive to even try?
  • Did we target our marketing toward the right potential client?
  • Are we just plain bad salespeople who can’t follow up properly or ask for the business?
  • Is it too hard, or too many steps, to get from inquiring to trying?
  • Can a potential client sign up and pay for a trial of their choice online without even having to come to the gym first (your answer here better be yes)?

How good do you have to be converting leads into trials? You have to convert at least 80 percent of all leads into trial memberships of some type. If you are not hitting that number every month, think of the money wasted on marketing to buy nothing but misses. If you can’t convert at least 80 percent, you have an issue and there is nothing more important to fix today than how to be more effective at getting more leads to trials.

How many new clients did you convert from those leads?

Leads are important, but only relative in relationship to how many new clients were derived from that number. Leads without sales are just very expensive misses.

We will define leads as a client who has engaged with the gym in any way. A phone call, for example, is an inquiry, but not a lead, since the potential client is merely asking about information and has not engaged in moving to the next step.

The old school players who read this will cringe at that notion that a phone inquiry is not a lead, but in today’s electronically driven market phone calls are fewer and trials and social media leads are far more common. Leads have to be classified as a butt in the door trying something in the gym.

You can of course track calls and the conversion rate from calls to firm appointments, but with trial memberships as our primary tool, it is just more efficient to get people from the phone or social media directly into some type of trial membership.

Each trial has a different expected conversion rate, because the various trials attract different potential clients who respond differently depending on the tool.

Short terms trials

These trials are sold as solutions to specific problems. If you sign-up for a 15-day quick start program, you are most likely looking for a short and intense chance to lose weight. The same psychology applies to anyone taking the 21-day shred type of trial as well. These potential clients aren’t necessarily in the gym to join a gym, but to use the gym as a tool to accomplish a personal goal.

Based upon all of this, the closing rates are lower for this class of trial membership. The expected rate for these trials should be in the 40-45 percent range; meaning you will convert about 40 percent of those who sign-up for a 15-day trial into regular memberships in your gym.

If you fall below 40 percent conversion rate, you might have a sales problem, or in other words, you can bring them into the gym, but you aren’t strong enough to convert enough to new business to make a difference.

Longer trial offers

The longer trials bring in a different client altogether. The 30-day trial and the six-week version bring in an often more serious membership potential client with different expectations. He or she is looking for a more long-term solution, is willing to explore options in the gym and statistically is usually a more qualified buyer.

Perhaps the biggest difference in clients is the difference in price charged for the trial. Shorter trials are sold for less money; therefore, these trials attract a younger and more price conscious client. The longer the trial, the more is usually charged, which attracts a client more likely to commit for a longer period of time.

In the case of the 30-day trial, some gyms position this as a higher priced option while others price it lower to attract more volume. The price for this trial should be in line with your shorter term versions and should be sold at a higher price than your 21-day.

Closing rates on longer trials are significantly different over time. You should expect to convert at least 60-70 percent of all longer trials into memberships. The client is just more serious and more prepared to become a member than those who pop in on the shorter term trials.

What is the average return per new client sold?  (average payment per client)

This is probably the most important number no one is tracking in their business.

Each client has a value. Your goal as an owner of a gym over time to is to drive up that average per client. In other words, you need to understand how to make more money from fewer clients as your business matures.

The volume era of the fitness business, defined as the time when selling memberships, letting a client fail and then replacing that client with the next warm body, is gone replaced by a new generation of owner seeking better clients who are willing to stay longer and pay longer if they get the results the paid for each month.

For example:

Club Volume

3500 members paying $27 per month average = $94,500 per month before losses

 

Gym Next Gen

300 clients paying $319 per month = $95,700 per month before losses

It should be noted that the losses on the volume club are significant.

$94,500 x 12 months = $1,134,00

$1,134,000 x .64 = $725,760

(Figured on losses of 3% per month compounded to 36% annual losses)

The losses on the gym are far less. Clients have more money, are more sophisticated, better educated and are there for results and are getting the help and results they paid for so most are happier.

$95,700 x 12 months = $1,148,400

$1,148,400 x .88 = $1,010,592

(Figured on losses of about 1% per month)

In this example, the volume club needs to add hundreds of new clients each month just to replace the losses from members who leave for a variety of reasons ranging from losing a job, moving, just plain quitting and other issues associated with a client paying a small amount of money each month to access equipment without help.

The gym only needs a small number of new clients each month to maintain that number since the population in that class of client is more stable over time. In this example, assuming 300 clients at maturity for that gym, which would be around 18 months into it, this gym would need about 15-18 new clients per month to maintain the 300 number assuming normal losses.

The gym only needs a small number of new clients each month to maintain that number since the population in that class of client is more stable over time. In this example, assuming 300 clients at maturity for that gym, which would be around 18 months into it, this gym would need about 15-18 new clients per month to maintain the 300 number assuming normal losses.

Summary

We often get so busy we make the gym business harder than it has to be, but your business plan can be reduced to just four questions:

Do I have enough leads?

Did I convert enough leads to trials?

Did I convert enough trials to new clients?

What is my average per client sold and is it rising slowly over time?

If your gym isn’t performing the way you hoped, start here. This is your business plan for any gym. Focus on what makes you money each month and be sure and do it in the order listed here.

Don’t be so busy you go out of business focusing on everything but the right things.

 

 


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Mainstream is dead… long live the training gym

You risk everything you have to create a new business.

You raise money, build your vision, take the risk of being in business and yet nowhere has anyone guaranteed you will make this dream a financial success this time. Yet, when the business struggles, we often get pissed at the universe, because there is always a sense of entitlement within us: since we took the risk, we should be entitled to succeed.

This sense of entitlement often masks the real issue, which is the business never had a chance to be successful in the first place. Often, our vision of this business, secretly honed each night during those last 20 minutes before we fall to sleep, just doesn’t match what the consumer wants to buy, and while this seems so irritatingly obvious, this is why so many fitness businesses, along with thousands of other small businesses in this country, continue to fail year-after-year. You simply built something that no one wants to buy. You simply built what you wanted instead of giving the potential client something he wanted to buy.

What one person represents your target market?

Where does your potential client live, what does he make financially,                                                        how does he live and what would he buy from the right gym owner?

Most owners force one methodology into a market instead of                                                     understanding that different clients, at different ages, might want different products.

The majority of these failures are actually very much alike, although each one may be from a different industry. These failures often represent someone trying to copy someone else’s successful business too late in that business’ timeline/lifecycle for success.

In other words, being the 50th startup company to try and copy  the Curves franchise model back in the 90s probably didn’t turn out too well; as is copying the $10 model twenty years after its inception is copying a dying plan. Copying an overexposed, out of date, worn out idea is not good business, yet in this industry we are doomed to repeat the past… or are we?

Every business concept has a life cycle. There is a long slow growth period that can last for a decade or even two; there is a rapid growth phase as the new business concept reaches tilting point and takes off; followed by a long, and sometimes, but not always, static period of slow growth. Finally, there is the eventual failing of the concept illustrated by the steady decline and final demise of the concept. This is called, “S Curve Theory” and it can be applied to most business concepts, but works particularly well for the fitness industry.

Used wisely, the S Curve is the modern equivalent of having someone read your tea leafs back in the day to predict your future. The numbers in business simply never lie, but our emotional connection, maybe this sense of, “I built the damn thing, and of course my idea/business concept is what the consumer wants” entitlement blocks our ability to see the future that is so clearly in front of us.

Take a look at the computer industry as an example. Up until 1984, it was estimated that only about 1-3% of the population in this country had computers or access to computers. In 1984, the famous Apple ad, the rage against “Big Brother” was shown and changed the course of computer marketing forever. From 1984-89, the number of people with computers rose to 15%. It wasn’t until 1997 that at least 30% of the people in the US had computers.

But from 1997 on the computer industry took off and more than doubled in just 10 years. Since about 2007, when it was estimated about 85% of the people in this country had access to a computer; traditional computer sales have flat lined and now have started to decline. The old school, box computer that lived under your desk is fading rapidly and even laptops, the desk computer killer, are starting to fade replaced by tablets and the new generation phones.

In summary, there was a long slow growth from the 50s through the mid 90s, a rapid growth phase that more than doubled in less than 10 years, and now we have that long slow decline as this product/concept of a box computer fades away replaced by a better and more efficient idea.

What has this to do with our industry? S Curve Theory is why the mainstream, big box gym is on the going extinct list and why the training gym, or training-centric mainstream hybrid, is replacing this failing concept.

The mainstream, all-purpose, be everything to everybody, fitness facility started slow in this country in the 1930 and 40s, built through the 60s, had its Apple commercial minute in the early 1970s with the arrival of Nautilus, went through a fast and furious growth phase in the 1990s and during the first decade of the 2000s, and then flat lined followed by the present decay phase.

In other words, the mainstream box fitness facility has run its course as a concept and is dying and there isn’t a damn thing anyone can do about it unless the concept is reinvented, and a few pioneers are letting their chains evolve (change is possible, but hard to get leadership locked into the vision of what they built and own to admit their baby is ugly and no one wants to babysit it) or if nothing changes, then this concept simply goes the way of the pager and Palm Pilot, brilliant ideas back in the day, but now replaced by the “next big thing” that will destroy the older technology.

What we don’t understand is that the training gym, and its close sibling the hybrid mainstream training facility (think $19 base membership,but with over 40% of the gym’s membership paying more for some type of coaching/training/group experience), are on a separate S Curve altogether and are not affected by the mainstream curve evolution.

The modern training gym did not begin until 1996. Its long, slow growth period lasted until just a few years ago and now we are just starting that decade long growth period. This category of gym is to mainstream fitness as to the smart phone was to the pager…. a killer with no defense.

So what does this mean to us for the future? What will the industry look like during the next 10 years? Here are a few basic ideas as to where we are headed in the future, not just domestically, but worldwide as well:

  • The low priced guys will just keep going lower. You cannot, no matter what you believe, defend a business on price alone, because no matter how low you go someone will be crazy enough to go lower. This was a fallacy in the first $10 model as everyone bragged that they owned the bottom. Now look for $5 per person, or cheaper, memberships in the next few years. This will be a tough category to compete in since everyone knows that when the cannibals run out of tourists to eat, they then start eating other cannibals. Look for a price war within a price war as they attempt to kill each other.
  • The hybrid, mainstream training-centric facility has life. This is where you can show low in price, but average high in average return per client served. There are chains and franchises already looking at this and during the next few years you will see a few brave leadership teams take the lead and own this segment before everyone else catches on.
  • The first very poor attempts at trying to franchise the training concept have appeared, and they will fail. It is not about the workout, stupid, it is about the coaching experience. If programming were the solution, all the chains that attempted to do functional programming in a back room would have been wildly successful rather than stumbling. Those chains, along with the new franchise companies emulating training gyms, don’t understand that a good training gym is a coaching delivery system and not a magical routine any aerobics diva from the 90s can learn in 15 minutes.
  • The third generation training gyms are going to set the industry on fire. Small gyms in the 6000-10,000 square foot range are already changing the way you have to compete today. When you see gyms this size doing between a $1.2-2 million a year with fewer than 500 clients you have to understand that ding dong the witch is dead and good luck trying to generate that revenue with 4,000 clients with 12 other competitors in your market chasing the exact same client during the coming years.
  • Nutrition is the next big thing. We have done nutrition so poorly in the market for so many years it has been forgotten as a serious revenue component, yet this is changing too. Companies such as Precision Nutrition and DotFit offer solutions that can be used to generate enormous revenue in the gyms, but we are just now as an industry ready to listen and learn.
  • The restoration of natural movement will also change our world. We have created an entire generation of clients who look good in a tee shirt, but can’t tie their shoes without a struggle. Looking good is cool; moving well into your 60s and beyond is everything in life and we can sell this to the consumer soon. Companies such as Functional Movement Systems are already leading that charge and it is becoming a hot issue worldwide.
  • The death of the $39 guy in the middle. No one lasts in the middle. S Curve Theory demonstrates that you are on the edge or you die and anyone trying to cruise down the middle of the pack is going to lose. Look for that category of gym to complete fade away within five years.

What is the future of everything?

Maybe there future is returning to what made us important to people in the beginning, where the industry existed to help the maximum number of people get into the best shapes of their life in the shortest period of time. It was all about the coach at the dawn of the fitness industry and it is rapidly becoming about the power of delivering coaching again…. and that spells the end of the membership era.


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The 5 hard lessons of the gym business

Hard lessons in life and business are usually the end result of someone denying the truth until the truth kicks their ass. We call these lessons, “hard,” because not grasping these ideas earlier in our careers or life cost us so much time and money doing everything, “the hard way.”

Small business owners are often forced to learn these lessons quickly when things go bad. You wake up someday with about $10 left in your account and a letter from the landlord that you are going to get booted and all of a sudden you now are now open to a few new ideas. Waiting until the shoe of doom is heading for your ass is just too late. These lessons are the core of so many business books and are always there for anyone to learn before the need to survives inspires you to now learn.

The importance of one single sale

We get so busy being busy we become too busy to make any money. Then, suddenly, we become really scared because the business isn’t performing. We show up everyday. We coach everyday. We look at the lack of new clients being added to the gym each month and blame the weather, the time of year, the competition, our dog and the staff for that, “almost, but not quite enough” new client number being added each month.

If you want to change a struggling business, go sell just one new client; just one and feel the power you have to change the course of things in your business reality. Selling a new client a membership to your gym is the physical act of recapturing the power you willingly gave up to control the business you own.

There is power in creating revenue where none existed before you made it happen. We forget that we can sell our way out of any bad situation if we focus on the process of selling new clients and the need to keep the business fed.

Your gym business is a lot like a new baby. The new baby needs to be fed or it is miserable. Feed it regularly and the baby sleeps like a small child was meant to do. This does not mean that the new baby might not poop all over you, as all small businesses do to all owners at some time or another, but a constant stream of new clients keeps the gym fed and happy over time.

Selling one new membership is a statement: I can control the outcome of this business and I, as owner, have the power to fix this business and all I have to do is sell one membership and set my business free to grow.

There is no such thing as momentum

Momentum is the Easter Bunny of the gym business. Momentum is totally untrue and does not exist in the business, but believing in the Easter Bunny and magic eggs just makes us feel better.

We tell ourselves we have momentum in January and we hope it lasts until the end of May. We then tell ourselves that in most markets summers are slow so we let ourselves believe that we shouldn’t expect to do much business in those lagging summer months; therefore, we don’t ever do much business.

Momentum is a self-fulfilling prophecy. We believe it is true and it works. We believe it has faded and it goes away. In fact, even the term, “momentum” is used incorrectly in most cases and is often confused with the word, “flow.” Flow represents the natural ebbs and surges any small business has if that business is left alone to suffer the wild disparities in any business climate.

The problem is we give away our power to control our business to a concept that does not exist. There is always business, at any time of the year, in any gym anywhere, if we create that business and plan to create it in advance. In other words, we can control the flow of the business through planning and investment.

Creating business where none existed before is the holy grail of any small business, but is also why so few small businesses last over time. Most owners, who don’t accept that you control your own fate in the small business world, are held hostage by the vagaries of the local business climate until the business is taken away from them. These owners believe external forces magically control their revenue stream and that if the stars align, or that old gym down the street closes, then life can be good again.

But you do not have to live this way. You can create your own future by planning your income stream at least three months in advance. You can plan now to create your own momentum/flow every month, as long as you understand what you are chasing and how you are going to get it done.

For example, you might average 30 new trial clients a month during the early months of the year at an expense of $2000 a month spent on social media advertising. Knowing this, you can plan to change the promotion starting in May for the summer and increase your spend to $3000 for the months we assume to be slower. We could also change our programming for the summer adding some type of race training camp, special events, summer client guest privileges, etc., to increase cash flow and traffic.

You get what you create in this business. You can create flow that lasts year round if you learn how to manipulate your leads and cash flow by planning for the creation of flow so many months in advance. If you wait to see what happens and hope the months will be good, then you will live by the flow and you will die by the flow.

Cash flow can be a problem for even a healthy business

             Even the healthiest of businesses can have cash flow problems. Shortage of present cash is usually not always an indication that the business is not healthy. You can run a great business for years, but all of a sudden find yourself grasping for money to cover the payroll. In other words, cash flow problems happen to good people who run good businesses.

Most new gym businesses always have a cash flow problem during the first year, because no owner on earth has ever had the discipline to keep enough reserve capital to cover expenses until the business gets healthy. Most training gyms will not cover their operating expenses until between the 6-9 month of operation; therefore, those owners will need about three months of reserves capital to cover all bills each month until the business can generate the income to cover its own monthly expense.

For example, if it takes about $50,000 a month to pay all of your bills and cover all operating expenses, then you should have had about $150,000 in reserve to cover operating losses until the gym reaches its breakeven point, which for a decent training gym is at about the 6-9 month period.

This owner who runs short of reserve can either panic and start lowering the price and running specials to make up the cash shortfall, or he can go back to the bank and investors and admit he overspent on build out or never did have enough cash to really open (remember the theme of hard lessons). One way or the other, it is the very rare new gym that won’t burn three months of reserve one way or the other.

Mature businesses will also suffer from the occasional cash flow glitch. You reinvest in the gym and then a new competitor sets you back for a few months. You have a bad hire that injures your business for a few months before you can remove him. You get sick, you get divorced, you just plan badly and spend the cash or just simply screwed it up and got caught without the reserves you needed that month. Bad cash flow happens to good businesses for a 100 reasons.

This takes us back to reserve capital. Even mature businesses need at least three months reserve at all times. The gym business is an intense business and no owner can hold it together year-after-year without blinking at least once. Death, divorce, distress or drugs wreck havoc on us all at one time or another and we take our eyes away from the business for even a few weeks and we then find ourselves with a good business that is short of cash.

Growth versus protecting what we already have 

It is human nature to protect what we own. We find the right cave, by the right stream, with some food nearby and then we become willing to die to protect what we now own…. and human nature hasn’t changed much since then, especially in small business.

Over time, we create infrastructure that protects what we have built in our business. We hire enough sales people to make sure we can get the same sales we have done in the past. We hire just enough coaches to make sure we can cover all the current client needs. We buy just enough equipment this year to replace what we had that wore out and to give the clients one or two more toys.

And all of this kills your business. If you own a small business, if it isn’t growing by five percent per year then it is dying. The cost of everything in business goes up every year and if you are not growing by at least that five percent rate, then you are dying because you are losing ground.

If you want to survive, you have to build an infrastructure designed for growth; something most owners avoid because building for growth means you have to incur a slight risk in the business. The mistake so many make is that they wait for the business to generate enough revenue to pay for growth, instead of taking some financial risk and creating a structure that will allow that growth to take place.

Do you have the staff you need to grow your business by five percent or more this year? Do you have the right physical plant, positioned for today’s client and today’s market, which allows you to attract the new clients your business needs to be sustainable into the future? Do you have the right credit lines, reserve capital and lease and bank needs that position your business to stay out front instead of constantly chasing everyone else in the market?

Programming your business for growth goes against most of the basic human instincts. We get to the point where we are fat and happy then we shift into protection mode and concentrate everything we have to make sure what we have doesn’t disappear. The lesson is learning to build for growth and to live with the small risk this strategy entails over time.

What got you here is what stops you from being any better (concept dies)

             What made you good is what is keeping you from being better.

Over time, we create threads in our business. We learn how to make money; hire staff that often stays with us over time and we create a business that is right for the time and market.

But through the years, the threads that tie us to our past are what are preventing us from growing to another level. We learned to make money 20 years ago and think the same price specials and sales techniques still work. The staff we praise for their longevity now fights every new idea, because we have always done it this way and we sure as hell aren’t going to change now. We created the perfect business for 1995, but now it is 2017 and what made us so good over the years simply no longer works.

The hard lesson to learn is to blow your business completely off its foundation every 3-5 years and challenge everything you think you know about making money. What got you there is not what will get you there and you need to question the roadblocks that exist that stifle your growth and sustainability into the future.

At the core of this challenge to your own business is questioning your concept, which means has the product you offer gone out of style and is no longer what the consumer wants to buy?

The mainstream fitness world is in shambles, but there are still new gyms opening up that are nothing more than replicas of a 25,000 foot box from the 90s built around a sea of cardio, a giant floor with too much single plane equipment, a small functional room in the back and old school aerobics rooms in the corners. Everything is new and fresh, but everything is textbook out of date from the last century.

We continue to open brand new museums to the history of the fitness industry. Most mainstream owners aren’t certified trainers, have never worked out a single client, or at least in the last 20 years, view trainers as just another expendable front line employee and who still believe that the right combination of “the way we did it when it worked” will work once again. And this is wrong thinking.

Every service business has to evolve. You have to let go of how we made money and embrace how we will make money in the future and as of today. The future belongs to training-centric businesses where it is all about results with lesser emphasis on merely renting equipment for a monthly fee.

The consumer has evolved. The culture has evolved. How we train people to get results, and the tools we use, has evolved. Everything has evolved except the mainstream gym business who still believe in circuits and 120 group classes on a schedule.

We learn the hard lessons too late in life

             Experience is the best teacher, but we shouldn’t have to get our collective asses whooped to learn the lessons of life and business, yet we seem to accept this year-after-year.

The difference comes down to mindset. Are you reactive, which is about 90 percent of you, meaning you let the competitors dictate your business plan and you live by reacting to the negatives in life that force you to change, such as a major loss of business or divorce, or are you proactive meaning you drive the market from the front anticipating change, living for success and learning the hard lessons now before they combine to take down your business?

 

The lessons are only as hard as you let them be. You can choose your own path in business everyday and you can embrace change that creates growth in every business.


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Sometimes the only way to save a business is to destroy it…. one thread at a time

The threads of our past may be killing our future

(Four minute read)

Sometimes the only way to save a business is to destroy it.

A single, flimsy thread can’t do much harm to you. Threads are usually just little cotton strands that a child can snap with her little fingers. Thousands of threads, especially those that keep us tied to a failed past can, however, combine into a force that chokes the life out of any business trying to stay alive or evolve.

Every business with any age to it has threads that bind that business to its history. Threads are the history of that business, but seldom its future. Employees from the old days, aged physical plants, old procedure manuals, a glorified past where the business was known and successful, and an ownership trapped trying to restore a fading concept rather than letting the business evolve to its current potential, are all threads binding you to something that may no longer exist and may no longer be viable into today’s business environment.

Businesses fail because they don’t evolve, forcing it to lose the ability to react to a changing market. Keep doing what you are doing and the world offers up someone doing it faster, better, cheaper, nicer or just different. Doing what you have always done, especially when it is proven not to work, guarantees failure, since you have already validated there simply isn’t enough clients out there who want to buy your old method of business. Sure, there are fans of desktop computers, K-Mart, film cameras, CD music, circuit training and old school aerobic classes; but not enough of those fans to keep any of these concepts viable going forward in time.

Sometimes, the only way to save or grow a stagnant business is to destroy it. Sometimes the only way to save a business is to cut all those threads that bind you to your history and let the business evolve. Sometimes you have to sit down and reinvent the concept for the market that exists today, not try to maintain it for the ever fading pack of fans that still believe in what you are selling, but isn’t big enough as group to support your efforts any longer.

The problem of course is that we never recognize the threads that bind us to the past. These threads are insidious in nature, much like the proverbial frog sitting in slowly heating water that gets boiled rather than leaps. In our case, the very things we are so proud of in our businesses are often the very things that are causing the most damage.

For example, the employee left over from the old days who fights to restore the way it was when everything was perfect and only he knew how to get it done: “It is our employees that are killing us today,” he says, “If we just go back and train them as we did when were making money we can fix it all.” Usually this is the old sales guy who believes we just need more closers, rather than questioning if what we are selling is what people want to buy today. This isn’t a sales problem, it is a concept problem.

When the business environment all around you changes, using techniques that made you successful 20 years ago will have little bearing on fixing a struggling business today. For example, you might have been the world’s greatest pager salesman, ran the greatest team, and were the company star, but no matter how good you were then has no value on competing in a world of smart phone fanatics. The market changed, the business changed, the needed techniques have changed; everything has changed except for this employee who can’t let go of the company’s past, or his own. The solution? Cut his thread.

Forgetting that what made you famous will not keep your famous is the real problem here. Businesses will plateau at some point, meaning that if we keep using the techniques and people we currently have, we cannot grow the revenue of this company any higher. We peaked with what we had, but what we have is usually not enough to drive through to the next level.

The thread here is that we refuse to change because we are so afraid of pissing off current clients. “If we change, we will lose all (your employees always go for worst case to validate their points) of our clients that love the way we do things.” The big question, especially if the business is stalled or in decline is, “If we don’t change, we might lose the whole business instead of a few old customers.” Old customers, who fight change to their service, product or even something as simple as a change in their gym equipment who then threaten us with their willingness to go elsewhere, hold us hostage to doing what is the best for the business, which is cutting that thread to the past.

Our staffs tell us that if we get rid of that old equipment, we will lose too many members and hurt the business, but the reality is that the current equipment array isn’t attracting enough new members to sustain the business. If you are held hostage by the old staff, yet again, and some of the old members threaten to quit if anything changes, then you won’t even paint the walls in fear of making some old client mad enough to go somewhere else. Put more simply, the very equipment or dated programming that is keeping that old guy from leaving you is what may be keeping a lot of new clients from joining you.

The answer here is to do what is necessary to give the business a chance to attract a new generation of clients, in big enough numbers, to replace the old client who might leave, but are preventing the business from growing.

There is no way you could ever survey this in a business. Ask any old client what happens if you change anything they know, replacing the known with an unknown, and no one will ever let go of what they have, but remember, for every client who clings to the past there is another old client who hates the fact that you haven’t reinvested in that business in 20 years. Having equipment, or programming, or a service that hasn’t changed in a decade is not a badge of honor to many clients; it simply means you are cheap and won’t reinvest in your business.

As a side note here, are we sure it is the old clients who refuse to change? Many times it is the employee who fights so hard to keep the same old, same old. Employees demand leadership and if you want change you have to replace the vision of, “We have always done it this way and this is all I know” with a tighter vision of what can happen if we let go of the past and embrace your clearly described vision of the future.

Your history is just that, something that happened in the past, and has no bearing whatsoever on what you can be tomorrow. A big question to ask here that frames this issue more clearly for most employees is, “If we just started the business today, would we be doing the same things we are doing now?”

The answer to this is seldom yes. If we started the business today, you wouldn’t have the old physical plants; the old, already ruined employees, and you would be able to start today fresh correcting all of your past mistakes by focusing on a vision of what the business has to be today to compete.

And this is how you should learn to run your business. If you want to go forward, you often need to cut the threads to the past. What are we going to do today to compete is for more sustainable over time than clinging to a past identity that is not sustainable going forward.

If your business is flat, getting surrounded by competition and you are fading, or it is simply not performing, ask yourself these questions:

  • Are the employees that have been with me so long part of the solution, or are they really part of the problem that keeps this business from growing? Long-term employees seldom change when times get tough. Yes, there are a few who have been around for a long time and who can change, but not many. Often the very people you are counting on for help to evolve are the same ones who secretly fight every new idea by hanging on to the way you have always done it. Long term employees often nest and build empires and even the ones who have been with you just a few years will often cling to what they know, not embrace what you want them to do. Big change requires big change; often the only way to do that is to start fresh with people not afraid of your new vision.
  • Is this concept even competitive today? What made you successful will not keep you that way. Markets evolve; competitors steal best practices and the expectations of the consumer changes too. Sometimes you have to admit you were brilliant in 1995, but not even in the game today. Change is often harder than death, as almost any smoker will tell you. Sometimes letting go of a concept and replacing it with, “What is next” is enough to save a flat lined business that is fading year after year.
  • If I look back the last 18 months, can I predict success or failure during the next 18 months? If what you are doing, such as a string of negative numbers, has lasted more than three quarters, you don’t have a trend, you have a new reality, and that reality is that you are denying the inevitable. The numbers will not change if you do not change them, but if what you are doing isn’t working, defined by shrinking numbers, failing physical plants, dated processes and a staff that won’t let go of who you used to be, then you have to break it if you want to save it.
  • Do I know the difference between a patch and a fresh concept? Putting little turf areas into the back room of a mainstream gym doesn’t make it a training gym. Signing up for a new group exercise license won’t save a business from three decades ago. Adding a few pieces of the newest, latest and greatest equipment doesn’t change the situation enough to attract a huge number of new clients. Patching means you are using programming and other gimmicks to prop up your failing concept. Most of you do not have a programming problem; you have a concept problem. Old, tired streetwalkers with fresh makeup and new clothes are still old, tired streetwalkers. Old, tired gyms with a little paint, 200 feet of turf and a few treads are still old tired gyms three decades past their prime.

Sometimes the only way to save a business is to destroy it. Sometimes the only way to go forward is to cut all the threads from the past. Sometimes the right thing to do to save a business is just to start over.


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What if your pricing system is as old as this picture?

(10 minute read and study)

The technique was right in 1999, but that doesn’t mean it is right in 2016.

Solving problems is situational and in the late 90s the problem that needed to be solved in the fitness world was what to do with the collapse of the mainstream fitness market? The chains were strong in the late 90s, the independent owner was small and not changing much of the world yet and the “real” gyms, such as Gold’s, World’s and Powerhouse, were at their prime. But there was a niche in the market that no one noticed, which is why the modern training gym is here today.

The 90s was the decade where the new generation training guru emerged. Sports performance had been out there for years, of course, but no one had taken the team dynamic and the already functional approach to training and applied it to the mainstream consumer and that was where the hole was in the market: small training gyms, or maybe mainstream guys who were willing to adapt, focused on a client that was tired of six-day a week bodybuilding dogma and wanted to be better at sports and life rather than just entering a show and standing as a pile of muscle on stage.

But there was no map, no model and no plan to build one of these. So we adapted. Bill Parisi in New Jersey would have been the first gym in the country to mix sports performance with the mainstream Average Joe client. In 1996 he did $950,000 in 3900 square feet, something that even today would be impressive in any market. Following right behind this breakthrough in the late 90s were Alwyn and Rachel Cosgrove in California, who were the first owners in the country to switch completely to small group coaching only doing away completely with the one-on-one concept in their first gym.

We also didn’t have the strategy to make this small group idea work so again, we adapted. Everyone prior to this time period who received any type of training in any gym in the country did it one-on-one. There was no small group training. There was no team concept. CrossFit was still 10 years away from being a team factor in the world at this time.

The first price strategy for small group training was based upon simply modifying the one-on-one idea:

  • Instead of one-on-one, we train the clients in groups
  • Everyone bought sessions in the past, so we break away and just charge the clients for coming either 1/2/3 times per week
  • All the one-on-one guys had their own workouts, so just put together a small group and each guy still does his own thing increasing our profit, although we stupidly started paying the trainer for more people in his group. In those days he did sell, but we gave away a lot to the coaches that later proved not to be necessary.
  • In essence, the client just bought an extended version of sessions. Instead of sessions based upon a package, he just bought them by the week over time. Sessions were still sessions and the client still wanted to make the individual missed sessions up next month
  • About three guys were all a coach could handle since everyone was doing their own workout at their own speed (except Parisi, who was already coaching mainstream clients as if they were on a sports team).

There was no kind of group dynamic at all. Everyone did his own thing, at his own speed, and the coach just runs around trying to keep everyone safe and moving. This type of workout was nothing more than three guys doing one-on-one workouts together, which made sense then but is fairly funny now.

The price strategy looked like this:

  • One time per week you paid $189 per month
  • Two times per week you paid $289 per week
  • Three times per week you paid $389 per week

All the memberships were on a 12-month basis, or at least the early gyms were heading in that direction and the first adapters were already doing away with sessions and packages or even doing away with one-on-one coaching altogether.

This price strategy was brilliant in the late 90s and early 2000s, but while I was right then, I would be horribly wrong now using this system. The weakness is that we created a training methodology based upon just modifying a one-on-one concept and basing it on a newer price model.

Nowhere in here did we look at the scalability of the system (could we use this with bigger groups and a lot more members?) or the time and effectiveness it takes to design three workouts for three guys and then keeping them all moving at the same time with one coach. In other words, this was a prefect system to solve a problem of transition from the mainstream gym to the first training gyms, but it is not an effective way to make money or train clients today.

How the training business model has evolved

Small group coaching has evolved into the primary category for a financially successful training gym. This is where the best results occur and this is where the highest consistent revenue per client is generated, with the biggest profit margin. Team training is still important, but the real profit comes from small groups paying a higher-return-per-client-served.

Here is what has to happen for you to be able to train a large number of clients successfully over time at the highest revenue possible:

#1…. You have to shift the responsibility of showing up to the client: In the old system, the client believed he bought sessions, such as the ability to come twice per week. The problem was that if he missed a session he wanted to make it up next month. We sold times per week instead of access to the training, which is what has to happen. Access means you can come up to so many times per month, but you do not have to use all of those times if your schedule doesn’t permit that week.

#2…. By selling access you kill the failure mode that was written into the old system. In the old days, trainers sold their own books and every trainer of course wanted to fill his time so he told the client that he or she has to be there at least three times per week or you are a failure. If the soccer mom got busy and couldn’t show up for a perfect week of working out, she felt she failed simply because her coach planted that seed in her head by telling her if you don’t get here three times per week you will never reach your goals. She failed, and then often quit, because why keep going in a system where failure was going to happen almost every week?

Here is what a modern pricing strategy would look like along with the strategy behind it, but first we have to start with the terms needed to set up the concept:

  • Unlimited means you can come up to 12 times a month with a coach. This is not a contradiction since unlimited means you always have something to do on your off day designed by the coaching team. You don’t have unlimited coaching, you have unlimited access to coaching guidance at this gym.
  • Limited means you can come up to five times per month
  • You get everything below the level you sign up for at this gym, although few people ever take advantage of this benefit
  • The average person who takes unlimited will train somewhere between 9.2-10 times per month depending on the region of this country or where you live internationally. If you live in London or New York, the average client will train more than someone who lives in a more rural part of the country. If you look at just one client, you would think the client is killing the gym, but if you average 20 clients using a number in this range, the gym will usually net about 40% on coaching.
  • The average person who takes limited will only train about 4.5 times per month. Even this group does not show up for all five workouts every month.
  • The key is that we are selling access. This means you can come up to 12 times if your schedule permits, but if you only make it in nine times this month you didn’t fail. You have to build success into every system by eliminating a false sense of how many times equates to success. If you haven’t been working out for years, but get into a gym once per week for a year, is that a success for the client or a failure?
  • The annual coaching program means the person has complete support for the year including all supplements, nutritional support, and even medical referrals if that is relevant for your business.
  • Four people in a small group is perfect. This allows you to have two sets of equipment and then train your clients as a group rather than as individuals. Most experienced coaches modify the client using progressions and regressions rather than modifying or creating separate workouts for each client. If the client has severe pain or dysfunction, he should be in 1/1 anyway and not part of this type of group until he can function. All prehab work should be done on their own prior to the workout, such as foam rolling or specific stretching needs.

Four people is where the intensive coaching lives in your gym compared to team training, which might have up to 20 people in it. In small group you can go after the complex movement patterns safely as opposed as trying to coach 20 people when they are tired doing something that no coach can truly supervise. IN team we use simple movement patterns and use the same workout for the week so the clients can chase progressions.

In small group, you could have two people doing low box jumps and two people doing heavy carries at the same time. The box jumps are where you coach and the carries are where the clients just take off since there is little coaching required at this level. By having two sets of all needed equipment, and by using the mix of a skilled movement with kettle head movements (movements that require steel, but not much brain power) you can keep four people together as a team and still get great results.

The technical movements, such as a power clean, can be done with two doing and two watching form and then alternating. This system allows you to move four, the optimal number of clients, around in a smaller space with less equipment needs.

And obviously, training four at a time is so much more cost effective than training just three or two.

The price structure:

$1499 a month for 12 months annual coaching program

$899 a month for 12 months unlimited 1/1                                                                                        $499 a month for 12 months limited 1/1                                                                                              (This 1/1 training is based upon a $100 per workout)

$289 a month for 12 months unlimited small group coaching                                                    $189 a month for 12 months limited small group training

$129 a month for 12 months unlimited team training

$89 per month for 12 months access with a template workout provided monthly

Special: $249 a month for 12 months individualized workout including full screening (FMS) and full body comp and a workout designed based upon the results of this testing and your goals. Not all gyms will offer this or have open access space. If you are 4,000 square feet or bigger (400 meters), you should have a dedicated open access space so clients can come into your gym on their off days and do their own thing, meaning doing something relevant for them individually designed by your coaches but not needing the cost of direct supervision.

This system solves all the problems of the old 1/2/3 times per week and creates a more stable business platform that is sustainable over time. This is also scalable for even the biggest training gyms, some of which are now over 16,000 square feet.

Everything evolves and this old system is no exception. People using versions of this basic structure, such as Rick Mayo, Justin Grinnell, Colin McGarty and Frank Nash, are doing numbers never before possible in a training gym business. If you aren’t making the money you want from your gym, take a look at your pricing structure. How you charge and collect from the clients may be the reason you are forever locked at a lower revenue.