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Why Semi-Private Training Makes 2.5x More Than Large Group Gyms · Gym Business Coach Podcast

• 0:00
  [SPEAKER_00]: All right, welcome back to the Jim business coach podcast.
• 0:03
  [SPEAKER_00]: I'm your host Tim Lyons, join in studio by Randy Aksu with something.
• 0:06
  [SPEAKER_00]: Are we doing?
• 0:07
  [SPEAKER_00]: We're ready to leave with Gennath Town again.
• 0:10
  [SPEAKER_00]: Shoot, that's right.
• 0:10
  [SPEAKER_00]: We're heading out to perform better Rhode Island for a private speaker school with Mr. Thomas Plummer and the Iron Circle.
• 0:18
  [SPEAKER_00]: Yeah.
• 0:19
  [SPEAKER_00]: It's going to be great.
• 0:20
  [SPEAKER_00]: You've done it before.
• 0:21
  [SPEAKER_01]: Yeah, this will be my second time through this this class Work shop, I should say a love it man.
• 0:27
  [SPEAKER_01]: I mean anyone I mean I know we're taking our iron circle We really Recommend they do it because of the the things that they're working on.
• 0:33
  [SPEAKER_01]: I mean anyone who who speaks whether it's on the coaching floor to a stage Yeah, it'll help refine those skill sets and yeah, highly recommend it, but
• 0:43
  [SPEAKER_00]: Yeah, first one.
• 0:44
  [SPEAKER_00]: The first one I did was in Baltimore with Tom back.
• 0:49
  [SPEAKER_00]: God.
• 0:50
  [SPEAKER_00]: And then I did another one and then I've done two more.
• 0:54
  [SPEAKER_00]: So this would be my fourth or fifth.
• 0:57
  [SPEAKER_00]: Fourth of fifth time with this and I learned some every single time whether it's whether or not it's how to stand or put on the slides or Or whatever it's just it's just good right it's just a great Work shop and so we're excited.
• 1:11
  [SPEAKER_00]: Yeah, we're the 6 a.m. Yep, we're out right nearly.
• 1:13
  [SPEAKER_00]: I'll get some I'll get some espresso and we'll get going on the road But yeah, that's something we do for our iron circle.
• 1:21
  [SPEAKER_00]: This is a little extra little special
• 1:24
  [SPEAKER_00]: deal.
• 1:24
  [SPEAKER_00]: We do for them because we've got our events.
• 1:26
  [SPEAKER_00]: We've got a virtual stop at like here.
• 1:28
  [SPEAKER_00]: Here's an opportunity.
• 1:30
  [SPEAKER_00]: A metascale set that everybody can benefit from.
• 1:33
  [SPEAKER_00]: And so we just pay for them.
• 1:34
  [SPEAKER_00]: We'd pick up the tab and just just meet out there.
• 1:36
  [SPEAKER_00]: And that's what's part of being an iron trick was all about.
• 1:39
  [SPEAKER_00]: Yeah.
• 1:39
  [SPEAKER_00]: Opportunities.
• 1:40
  [SPEAKER_00]: Yeah.
• 1:41
  [SPEAKER_01]: And you know it's the number one fear most people have speaking in public speaking front of others.
• 1:46
  [SPEAKER_01]: No.
• 1:47
  [SPEAKER_00]: it's nerve wracking and as much as I speak I still don't like it if I'm being honest I don't enjoy it.
• 1:53
  [SPEAKER_00]: I don't like the preparation for it.
• 1:54
  [SPEAKER_00]: So like I over try to find more resources to help me um as much as I speak on here you think like yeah no big deal.
• 2:02
  [SPEAKER_00]: No I I don't like it.
• 2:04
  [SPEAKER_00]: Yeah it's an uncomfortable thing for most.
• 2:07
  [SPEAKER_00]: Yeah.
• 2:08
  [SPEAKER_00]: But anyways, uh, here we are.
• 2:10
  [SPEAKER_00]: We got, uh, we got an episode about the, the financials, the economics of your training model.
• 2:16
  [SPEAKER_00]: And we're just going to break down some of my private versus large group training.
• 2:20
  [SPEAKER_00]: Um, and it's pretty eye-opening.
• 2:21
  [SPEAKER_00]: Honestly, when you start looking at the math, um, at the end of the day, you've got X amount of hours in the day to make money.
• 2:28
  [SPEAKER_00]: Yep.
• 2:28
  [SPEAKER_00]: And we want to maximize two things.
• 2:30
  [SPEAKER_00]: We want to maximize the square foot, like your revenue
• 2:36
  [SPEAKER_00]: And the revenue per hour really comes down to, you know, how much are people paying?
• 2:42
  [SPEAKER_00]: How many people are coming?
• 2:43
  [SPEAKER_00]: And what am I making in that said, you know, let's call it training session hour, right?
• 2:47
  [SPEAKER_00]: Whether or not it's a class or it's a session.
• 2:49
  [SPEAKER_00]: It's an hour of time.
• 2:51
  [SPEAKER_00]: You've got expenses that go into that hour of time.
• 2:54
  [SPEAKER_00]: We need to maximize.
• 2:55
  [SPEAKER_00]: And so like if you break down and again, we are using data that was, you know, kind of
• 3:05
  [SPEAKER_00]: And the numbers are pretty clear.
• 3:08
  [SPEAKER_00]: This was done.
• 3:09
  [SPEAKER_00]: Some studies done with over 10,000 data points and 10,000 gems and bringing it in from payment processing.
• 3:17
  [SPEAKER_00]: And so it's like it's real data.
• 3:20
  [SPEAKER_00]: And here's kind of like,
• 3:22
  [SPEAKER_00]: Here's what the math says, like in a large, you class-based model, you know, we're going to, just for simple math, we're actually going to estimate a little bit higher than what's real.
• 3:33
  [SPEAKER_00]: But like the average, I think, price per month and in a large group is like 179.
• 3:38
  [SPEAKER_00]: We're going to just bump it to $200 a month.
• 3:42
  [SPEAKER_00]: If you were to take on average globally, you know, gyms that are doing larger training, they're charging about $200 a month for unlimited classes, right?
• 3:53
  [SPEAKER_00]: Now, now you have to like say, okay, what's the frequency of my clients coming into those said classes in a given month?
• 4:02
  [SPEAKER_00]: And it's less than this number, but we're going to, you know, it's about 12 times, right?
• 4:06
  [SPEAKER_00]: It's like right, it hovers between 11 and 12.
• 4:08
  [SPEAKER_00]: So we're just going to say 12 for the sake of math.
• 4:11
  [SPEAKER_00]: So if I'm charging $200 and I have a client coming in 12 times, what is that client paying per class?
• 4:17
  [SPEAKER_00]: It comes out if you just divide the two numbers as $16 to $67, okay, $16 to $67.
• 4:22
  [SPEAKER_00]: Now, another number that was given in the same industry report said on average.
• 4:29
  [SPEAKER_00]: the amount of people attending a class in all large group studios was six.
• 4:35
  [SPEAKER_00]: Okay.
• 4:36
  [SPEAKER_00]: So six people are coming to that class.
• 4:39
  [SPEAKER_00]: On average, you're paying $16.67.
• 4:41
  [SPEAKER_00]: So if you just multiply six times 16.67, you get a round number, beautiful number, $100.
• 4:48
  [SPEAKER_00]: Okay.
• 4:49
  [SPEAKER_00]: That's the average and probably a little high.
• 4:53
  [SPEAKER_00]: what a large group training gym on average is making per hour now within that one hour of time you've got a hundred dollar bill
• 5:01
  [SPEAKER_00]: I've got to take my coaches salary or pay out of that, maybe you're paying per class, maybe you're paying 30 bucks, okay, 30% going.
• 5:10
  [SPEAKER_00]: I've got to pay my utilities rent overhead, music subscriptions, electricity, you know, marketing cost, okay, cool, yeah, pay myself as the owner, cool, let's take 15% of that, 15 bucks, and then, oh, profit, what is that, what's left, right?
• 5:30
  [SPEAKER_00]: And so out of that $100 bill that you just charged or you actually collected, you know, what is what is the real profit out of that, right?
• 5:41
  [SPEAKER_00]: And so you get $100 per hour.
• 5:43
  [SPEAKER_00]: That's the average over here in large group.
• 5:46
  [SPEAKER_00]: So, okay, cool.
• 5:47
  [SPEAKER_00]: Got it.
• 5:47
  [SPEAKER_00]: $100 in our.
• 5:49
  [SPEAKER_00]: Now, if you didn't have any overhead and you were training everybody yourself out of a park, that's a pretty good, you know, it's a pretty good pay for a single operator guy, but you have coaches and overhead in families and rent and all this stuff.
• 6:03
  [SPEAKER_00]: So looking at that number, like, uh oh, there's not a lot of hours in the day that I have people coming in, maybe I got five hours in the morning and four hours in the afternoon.
• 6:12
  [SPEAKER_00]: The max I make is 900 bucks a day unless I'm selling answer Larry T. Shirt's water bottles and supplements you know what it becomes a requirement to you know what I mean.
• 6:23
  [SPEAKER_00]: Okay.
• 6:23
  [SPEAKER_00]: Yeah.
• 6:23
  [SPEAKER_00]: All right.
• 6:25
  [SPEAKER_00]: That's kind of like box number one box number two is called some of my private okay we're just gonna take our numbers here.
• 6:32
  [SPEAKER_00]: Um, shoot I don't have any for me but like the math I'll show you the math.
• 6:36
  [SPEAKER_00]: So we just recently raised our rates to let's call it one ten a month one oh nine ninety nine a month or week.
• 6:44
  [SPEAKER_00]: I'm sorry I'm asking it now get a figure out here.
• 6:48
  [SPEAKER_00]: Which is open my phone
• 6:51
  [SPEAKER_00]: Come on.
• 6:51
  [SPEAKER_00]: All right, I don't even know my own code.
• 6:53
  [SPEAKER_00]: Got it.
• 6:55
  [SPEAKER_00]: All right, if you were to take 109.99, and you multiply it with times 4.33, that's the give it, okay, 476, $476 a month is our lowest number.
• 7:06
  [SPEAKER_00]: No, yeah.
• 7:07
  [SPEAKER_00]: Okay, so just take the lowest one.
• 7:09
  [SPEAKER_00]: If people pay more, this aren't annual ones, so this is our lowest one.
• 7:13
  [SPEAKER_00]: If you divide that by,
• 7:15
  [SPEAKER_00]: have a attendance average attendance of 12 same number.
• 7:19
  [SPEAKER_00]: You have about 39.
• 7:20
  [SPEAKER_00]: It's called 40 bucks a session.
• 7:23
  [SPEAKER_00]: You multiply that by six and you're about $238.
• 7:25
  [SPEAKER_00]: It's called $240 revenue generated in that same hour of the day.
• 7:32
  [SPEAKER_00]: So there's an hour you know over here in in box A they're making a hundred bucks and in the box B they're making $240 for the same nine o'clock to 10 o'clock hours.
• 7:42
  [SPEAKER_00]: So two different gyms, two
• 7:46
  [SPEAKER_00]: What is that?
• 7:46
  [SPEAKER_00]: Two and a half, almost two and a half times the revenue in the second box.
• 7:52
  [SPEAKER_00]: Now, yes, you still have overhead.
• 7:54
  [SPEAKER_00]: You still have all those same things, but you're taking this pretty much the same piece of pie size wise out of a bigger pie.
• 8:02
  [SPEAKER_00]: Yeah.
• 8:02
  [SPEAKER_00]: you know what I mean this pie over here is real small the hundred dollar pie but you're taking almost like three quarters of that is the one piece and you take that same piece over to this bigger pie is like only a fraction of it so well let's be able to break that down a little bit right like from left to right or it box 8 box B
• 8:19
  [SPEAKER_01]: You're paying the same for your opx, right?
• 8:22
  [SPEAKER_01]: You're paying a coach, fixed salary or fixed, uh, literally.
• 8:27
  [SPEAKER_01]: So all of that remaining goes right to profit benefit of the business benefit of the owner, uh, to the tune of almost two and a half times.
• 8:39
  [UNKNOWN]: Yeah.
• 8:39
  [SPEAKER_00]: when it comes to math there let's have a make decisions but I don't understand why somebody wouldn't at that point right I mean what didn't you guys like really like what's the what's the what's I think holding you back from saying you know what actually the retention says this is some of my private's better the revenue says this is better let's continue to do the old thing
• 9:04
  [SPEAKER_00]: Like, what, why would you do that?
• 9:06
  [SPEAKER_00]: I'm just trying to figure it out.
• 9:07
  [SPEAKER_00]: Like, for me, it was a really easy decision.
• 9:09
  [SPEAKER_00]: When I realized it, I didn't realize it.
• 9:11
  [SPEAKER_00]: I had both things going on and I started like, just going on with my day and it's like, you know, we didn't really pay too close attention.
• 9:17
  [SPEAKER_00]: We're just looking at the lump sum monthly, like, what we made.
• 9:21
  [SPEAKER_00]: Yeah, not exactly what clients paid the most and stayed the longest and stuff.
• 9:25
  [SPEAKER_00]: And then when we really did find it, it was like, okay, well, I need to stop doing that and can start over here and do some of my private,
• 9:33
  [SPEAKER_00]: duh, like why, so like we did it.
• 9:37
  [SPEAKER_00]: So I don't understand why a gym wouldn't, you know, because we did do it.
• 9:40
  [SPEAKER_01]: I think there's I think we're just working with taking a lot of calls with gym owners and then obviously coaching clients through this, this transition.
• 9:48
  [SPEAKER_01]: I think there's a lot of that assume that it's like you cut off the business.
• 9:52
  [SPEAKER_01]: on one day and then, you know, maybe it's Friday and the Monday, you're running into a lot of literature.
• 9:58
  [SPEAKER_01]: Um, but that's not the reality of it.
• 10:00
  [SPEAKER_01]: It is a phased approach, right?
• 10:02
  [SPEAKER_01]: I mean, the game is money into revenue.
• 10:04
  [SPEAKER_01]: We're not trying to cut the head off the snake and hope that it lives.
• 10:09
  [SPEAKER_01]: Um, it's a transition, right?
• 10:10
  [SPEAKER_01]: You're bringing in a new model, your transitioning.
• 10:13
  [SPEAKER_01]: Some of your current clientele to semi-private, because there's new will be some that it's a better
• 10:21
  [SPEAKER_01]: You start marketing for it to the people who've never been in your gym and go back to past clients and bring them back for something new that you have so there is a strategy around the transition and I think that's another big reason why jams find themselves either trying it or have heard of somebody who's tried it and didn't get off the ground is because they they
• 10:41
  [SPEAKER_01]: They didn't have a system around the transition.
• 10:43
  [SPEAKER_01]: They didn't have the process around the transition.
• 10:45
  [SPEAKER_01]: And depending on the gym and the square footage and things like that, there are gyms that still keep a large group option if it makes sense for the business.
• 10:57
  [SPEAKER_01]: But most gyms, I mean, call it anywhere between 1500 square feet and probably five, six thousand.
• 11:04
  [SPEAKER_01]: I think most of them, once they transition is underway, the writings on the wall and they realize,
• 11:10
  [SPEAKER_01]: now I'm going to pour all of my time and attention into some of my private and phase this one out because at some point if you have a limited amount of force space and team you have to come to the realization that I'm either going to make a hundred dollars for this hour I'm going to make two hundred and forty dollars for this hour which one do I want for a business right?
• 11:32
  [SPEAKER_01]: And so we just, over time, you start to, you'll watch, you know, the tenants start to slip for your large group.
• 11:40
  [SPEAKER_01]: And he was then just start replacing those sessions with some of my private and it's again, it's a phased approach.
• 11:47
  [SPEAKER_01]: Yeah.
• 11:48
  [SPEAKER_01]: But, you know, I don't think we've ever had a gym that's, that's gone backwards and revenue, making the transition.
• 11:54
  [SPEAKER_00]: Unless there was a one that pulled it off a little early.
• 11:58
  [SPEAKER_00]: Yeah, and they've been playing from behind because they did they did there's like, you know what, screw this.
• 12:05
  [SPEAKER_00]: It didn't really fall the plan, but they they just want to make the change and get done and they're kind of just sick of it or whatever.
• 12:11
  [SPEAKER_00]: Most of the gems that we do phase transitions kind of which they wouldn't faster.
• 12:17
  [SPEAKER_00]: For because of nervousness, they kind of like hang on and not do everything right away.
• 12:23
  [SPEAKER_00]: But yeah, I think a healthy way to transitions over 3 to 6 months.
• 12:28
  [SPEAKER_00]: And if you get into, you know, month 3 and 4, and you feel good, then just end it there.
• 12:33
  [SPEAKER_00]: But if you need to take it to 6 by all means, but don't drag it out for a year.
• 12:38
  [SPEAKER_00]: Yeah.
• 12:38
  [SPEAKER_00]: Don't try to get out for a year, make it a six month plan, three to six month plan.
• 12:42
  [SPEAKER_00]: Because there's definitely some things you don't want to do in the first month.
• 12:46
  [SPEAKER_00]: And you definitely got to wait on some things and you got to let things shake out after a while.
• 12:50
  [SPEAKER_00]: And the whole time we're building up new clients coming in, we're not selling the old.
• 12:56
  [SPEAKER_00]: Guys, if you need help, but this is exactly what we do.
• 12:58
  [SPEAKER_00]: This is our springboard program.
• 13:01
  [SPEAKER_00]: It's what we do in there every single day with gems that realize that you know what?
• 13:06
  [SPEAKER_00]: This is just a better model, right?
• 13:07
  [SPEAKER_00]: Somebody, probably, is a better model.
• 13:09
  [SPEAKER_00]: Do you have to cut it all off and never do large group again?
• 13:12
  [SPEAKER_00]: No, you might want to after you start looking at it in the weeds, but like at the beginning, no, you don't have to.
• 13:19
  [SPEAKER_00]: you need help with this guy's go reach out like this is what we do there's a link today being the show notes if you want more information on our youtube channel we just release an episode yesterday that breaks this down in even more detail go check us out it's a different youtube channel then the one that you're watching this on
• 13:36
  [SPEAKER_00]: So another channel will link it in there somewhere, but we'd love to help you guys if this is what you decide you want to do Because really I don't know what a better way.
• 13:46
  [SPEAKER_00]: I don't know a better model that's gonna take your gym to greater profits
• 13:53
  [SPEAKER_00]: You know, for the coaching staff, for the ownership, for the profit, you know, the bottom line, it's a better product for the clients in general.
• 14:01
  [SPEAKER_00]: And they're willing to pay for it.
• 14:03
  [SPEAKER_00]: They want to pay for it.
• 14:04
  [SPEAKER_00]: Yep.
• 14:04
  [SPEAKER_00]: This is the thing you're looking for.
• 14:05
  [SPEAKER_00]: So guys, if this is what you want to do, jump on a call, you'll jump on a call with Randy.
• 14:11
  [SPEAKER_00]: Tell me any what Randy will talk to you.
• 14:13
  [SPEAKER_00]: you happy to help you guys.
• 14:15
  [SPEAKER_00]: That's it for this episode guys.
• 14:16
  [SPEAKER_00]: We're out.
• 14:17
  [SPEAKER_00]: We're heading out to Rhode Island tomorrow until we get back.
• 14:22
  [SPEAKER_00]: Keep changing allows.
• 14:22
  [SPEAKER_00]: We'll see you on the next show.
• 14:23
  [SPEAKER_00]: Bye.