Latest / Gym Business Coach Podcast / You Deserve Way More

Transcript

You Deserve Way More · Gym Business Coach Podcast

0:08
[SPEAKER_00]: You are listening to the built-to-grow podcast delivering the knowledge in all things, fitness, business We help jimrollers win, hear your hosts, ten lions, and Randy Axton
0:26
[SPEAKER_01]: All right, welcome to the Jim business coach podcast of your host him lines joined in studio in the new room with the brick wall in the wood wall Randy angst and what's up.
0:36
[SPEAKER_01]: Oh, we're doing doing a good man.
0:38
[SPEAKER_01]: I was doing some research for a presentation.
0:42
[SPEAKER_01]: I'm doing later on this year and I was pulling up industry data on micro gems training gems of what you know.
0:47
[SPEAKER_01]: What do you what's the monthly gross revenue what's the averages and I created kind of like a bell curve just like just like any.
0:56
[SPEAKER_01]: you know, a ray of numbers is always kind of falls into a bell curve, right?
1:00
[SPEAKER_01]: And everybody's seen a bell curve been in school or whatever.
1:02
[SPEAKER_01]: It's like, it looks like a bell in the middle.
1:05
[SPEAKER_01]: That's like the greatest numbers to average.
1:07
[SPEAKER_01]: And then you have the outliers on the outside on the low and the high side.
1:10
[SPEAKER_01]: And then it's kind of everybody falls into that kind of range.
1:13
[SPEAKER_01]: Um, and you know, looking at our industry as far as, you know, let's just say micro gym training gym style and that could be anything from like a crossfit or a class base to a one-on-one personal training studio, anybody that's listening to this podcast knows what I'm talking about.
1:30
[SPEAKER_01]: Um, you know, the average was just under the average grocery revenue per month was just under $19,000 a month.
1:37
[SPEAKER_01]: And what was more interesting was that 90% of the industry does less than $40,000 a month in gross revenue.
1:46
[SPEAKER_01]: Okay.
1:47
[SPEAKER_01]: So these are just real numbers.
1:49
[SPEAKER_01]: Not my numbers.
1:50
[SPEAKER_01]: These are from state of the industry reports, as well as through some of our own data from one of our billing partners that's given us.
2:00
[SPEAKER_01]: Bottom line is this.
2:02
[SPEAKER_01]: 90% are under 40,000.
2:05
[SPEAKER_01]: The average is 19.
2:07
[SPEAKER_01]: And you start looking at what the models are that drive those numbers, right?
2:13
[SPEAKER_01]: And just like anybody can say, hey, you know, I have a gym that is this model.
2:20
[SPEAKER_01]: And I do X.
2:21
[SPEAKER_01]: Well, you're an outlier.
2:23
[SPEAKER_01]: But the majority.
2:24
[SPEAKER_01]: Kind of live, you know, in these bell curve ranges and really what I'm trying to say is there's there's a large there's three kind of types of training models it's the it's a group class style large group You got semi private training and you got one on one training and it was really interesting to see that the kind of like the bottom 50%
2:43
[SPEAKER_01]: was 90% of those were large group training gyms.
2:47
[SPEAKER_01]: Okay, so like large group training gyms are obviously the lower half of those numbers and the higher half of those numbers were some of my private training gyms.
2:56
[SPEAKER_01]: And you start to think about why, like what's going on?
2:58
[SPEAKER_01]: Well, one of the obvious truth is that the price per member, right, like, you just charge more for some of my private training and one of one training personal training is always on the higher side,
3:11
[SPEAKER_01]: cost per month.
3:14
[SPEAKER_01]: But obviously, on the lower end, there's more volume.
3:18
[SPEAKER_01]: Yeah.
3:19
[SPEAKER_01]: So, you got large of training gyms that are, you know, the majority are under $200 a month.
3:25
[SPEAKER_01]: You know, let's just call it 179 is about where they all sit in the averages.
3:31
[SPEAKER_01]: You have to have a lot more members.
3:33
[SPEAKER_01]: I mean, if you just do the math, like you'd have to have 200 members at $200 a
3:42
[SPEAKER_01]: large of training gym to have 200 members of $200 a month, that's kind of, that's your outlier, right?
3:47
[SPEAKER_01]: And again, 90% live at that number in lower, okay?
3:51
[SPEAKER_01]: And so you start to think about like, okay, is this the best it gets?
3:56
[SPEAKER_01]: And it's really a question for the gym owners listening to this.
4:02
[SPEAKER_01]: Is this the best it gets for you in your model?
4:05
[SPEAKER_01]: And typically, I would say your model,
4:09
[SPEAKER_01]: The ceiling on your revenue is cat-by-your-model.
4:12
[SPEAKER_01]: That would be great.
4:12
[SPEAKER_01]: Period and of story.
4:14
[SPEAKER_01]: Large-up train gyms, yeah, there's some out there that do a million dollars.
4:17
[SPEAKER_01]: I know it, but again, 90% and actually the majority are going to be in that $19,000-20,000-a-last.
4:23
[SPEAKER_02]: Unless, yeah.
4:24
[SPEAKER_01]: And so I went to a seminar even two years ago at this point.
4:30
[SPEAKER_01]: I got in J.A.
4:31
[SPEAKER_01]: Abraham.
4:31
[SPEAKER_01]: Right?
4:32
[SPEAKER_01]: J. Abraham is a kind of a guru, a grandfather of the digital marketing, he's a business coach.
4:39
[SPEAKER_01]: And you put up a slide up there so the only economic reason to be in a particular business is to beat the next best use of that capital time and energy, what does that mean?
4:48
[SPEAKER_01]: It means if I'm going to spend the time in the business that I'm in, it needs to beat every other option out there because I will only have a finite amount of, there is no finite amount of time and energy that I can spend, so might as well make it the best I can.
5:01
[SPEAKER_01]: Correct.
5:02
[SPEAKER_01]: Or change something.
5:04
[SPEAKER_01]: Yep.
5:04
[SPEAKER_01]: And to me, that hit, that hit's home really, really hard because, you know, there's a lot of things I could do.
5:12
[SPEAKER_01]: There's a lot of things you could do.
5:13
[SPEAKER_01]: Is this the best use of your time?
5:14
[SPEAKER_01]: What business model you're in?
5:16
[SPEAKER_01]: Is this the best use of it?
5:18
[SPEAKER_01]: And if you're in a large group training gym right now, the answer is no.
5:23
[SPEAKER_01]: That is not the best use of your time capital energy in that model.
5:27
[SPEAKER_01]: If it's an economic reason, there you go.
5:30
[SPEAKER_01]: And that was the start of my quote, the only economic reason to be in a particular business is to beat the next best use of that time capital and energy.
5:40
[SPEAKER_01]: Well, the next best use is to change your model to another model that will drive higher revenue, right?
5:46
[SPEAKER_01]: And so, you know, the obvious question is, well, does higher revenue mean higher net profit?
5:50
[SPEAKER_01]: Does it mean higher net owner benefit?
5:52
[SPEAKER_01]: The answer is yes, as well, to that question,
5:55
[SPEAKER_01]: You know, I know a guy that does a million dollars doesn't make any money and a guy that does 200,000 makes a hundred grand.
6:03
[SPEAKER_01]: The answer to, yeah, obviously, you could have higher expenses in a higher model, but like you don't have to.
6:07
[SPEAKER_01]: And so my private training, which is so nice about us, the thing that we kind of like preach or flagging the ground for many, many moons, it's the best of every world.
6:17
[SPEAKER_01]: Yeah.
6:17
[SPEAKER_01]: It doesn't exponentially increase expenses while it exponentially increases gross revenue.
6:23
[SPEAKER_01]: The other side of that is, you know, I'm starting to see it now more and more across fits are starting to adopt some of my private.
6:29
[SPEAKER_01]: Yep.
6:30
[SPEAKER_01]: They have to, the ratings on the wall, that the large group training model is a complete red ocean of insane it for years.
6:39
[SPEAKER_01]: And just, you know, for those of you don't know what a red ocean terminology means.
6:44
[SPEAKER_01]: It means that there's a bloody water, a lot of competition.
6:47
[SPEAKER_01]: And you're going to fight tooth and nail.
6:50
[SPEAKER_01]: And usually you can compete on price in that red water because everybody's doing the same thing.
6:56
[SPEAKER_01]: Yep.
6:56
[SPEAKER_01]: And you look at a large, you're training gym.
6:58
[SPEAKER_01]: It's very easy to open up a large, you're training gym.
7:01
[SPEAKER_01]: This doesn't take a lot of capital.
7:02
[SPEAKER_01]: It's not a lot of equipment.
7:04
[SPEAKER_01]: You can go in a warehouse somewhere and get cheap rent.
7:10
[SPEAKER_01]: cheap charge a little bit and you know you're in business.
7:13
[SPEAKER_01]: Does that mean you're going to make it you're actually going to be in that bill curve in the on the south side of that 50% one.
7:18
[SPEAKER_02]: Well, and the one thing that that you hit, especially when it comes to the challenges for large group is it's a volume play.
7:23
[SPEAKER_02]: Yes, and if we're talking about the most difficult, if you're going to spend money in the marketplace to acquire a client.
7:30
[SPEAKER_02]: Right, right.
7:30
[SPEAKER_02]: We wouldn't you like to have a service that clients paying more for than less?
7:35
[SPEAKER_02]: Of course.
7:36
[SPEAKER_02]: When it comes to the volume, then what we see with large group is they're competing on something in an arena where there is no unique identifier, no unique mechanism, no unique anything to their delivery of that service and to your point, the marketplace sees it as the same.
7:54
[SPEAKER_02]: So your business.
7:55
[SPEAKER_02]: doing large group is competing with the gym down the street doing large group and the gym down the street doing large and we watched it in flux of gyms probably because it was a little cost of overhead.
8:05
[SPEAKER_02]: It's an enjoyable workout for a coach.
8:07
[SPEAKER_02]: I mean, I get it right.
8:09
[SPEAKER_02]: It's fun.
8:09
[SPEAKER_02]: It's motivated.
8:10
[SPEAKER_02]: You know, it's it's a rarer.
8:11
[SPEAKER_02]: The high the high fives and chest bumps.
8:13
[SPEAKER_02]: It can be fun.
8:15
[SPEAKER_02]: But to your point about economics, it's also the most challenging of all of those, probably, to see success.
8:21
[SPEAKER_02]: And I would say more than anything else is because of the volume.
8:27
[SPEAKER_02]: It's really difficult using
8:30
[SPEAKER_02]: almost any form of marketing right now to attract Jim clients who any Jim and if you're competing with the most competitive you're entering the arena with the most competitive deliverable going for as many of those bodies as you can at a time where the marketplace is extremely difficult to acquire clients
8:49
[SPEAKER_02]: how far are you going to get and that's where the data shows, right?
8:53
[SPEAKER_02]: Like this isn't an emotional conversation where we're just trying to rag on the model.
8:58
[SPEAKER_02]: It's data driven decision making and you as the owner, you are in a position to do you want to continue down that path and battle everybody else to try and earn that one next client.
9:13
[SPEAKER_02]: Can you get to three
9:20
[SPEAKER_02]: with all the competition that you have or do you want to bring something unique that's different than what everyone else is doing?
9:26
[SPEAKER_02]: Yes, it does carry a higher cost, but it's that old added, right?
9:31
[SPEAKER_02]: You can make a dollar with ten dimes or you can make a dollar with four quarters.
9:35
[SPEAKER_02]: I would rather serve four quarters, you know, four clients equate, go into that hundred that dollar than ten of them.
9:42
[SPEAKER_02]: Yeah.
9:43
[SPEAKER_02]: One thing that we don't we don't think about
9:46
[SPEAKER_02]: When we're doing that model is the delivery is managing all of those bodies is the done bar number of 150 relationships that somebody can personally manage in own.
9:59
[SPEAKER_02]: Can you do that to three, four, five, hundred members in order to be the outlier in a large group?
10:05
[SPEAKER_02]: scenario.
10:06
[SPEAKER_02]: Everybody believes that that they can be, right?
10:09
[SPEAKER_02]: But unfortunately, like the math is the math and what you find what we see consistently is that you do.
10:15
[SPEAKER_02]: You fall right there somewhere in the average.
10:19
[SPEAKER_02]: And unless you have something that's different and can differentiate yourself in the marketplace, you're going to fall right there somewhere in there.
10:26
[SPEAKER_02]: Yeah, no matter how hard you work.
10:28
[SPEAKER_01]: And I think in the other because the cost per acquisition is not going down.
10:31
[SPEAKER_01]: So it really understands what that is.
10:32
[SPEAKER_01]: It's like you're going to spend money on marketing.
10:34
[SPEAKER_01]: You're going to get some amount of clients.
10:36
[SPEAKER_01]: how much do you have to spend to acquire to client?
10:39
[SPEAKER_01]: And try to offset that hard cost with what you're making on the first month, right?
10:45
[SPEAKER_01]: Like if you're only collecting 150 bucks on the first month, you can only, what are you going to spend $600, $800 to acquire a client?
10:53
[SPEAKER_01]: No, you want to get somewhere as close to 150 or less.
10:56
[SPEAKER_01]: And so it doesn't give you as much ammunition to compete in the market.
11:01
[SPEAKER_01]: You nailed that too.
11:05
[SPEAKER_01]: You're an owner.
11:07
[SPEAKER_01]: You've decided to go down this path for a reason.
11:11
[SPEAKER_01]: Maybe you were a technician and you come from the training side and you would believe like, hey, I'm going to enjoy this.
11:17
[SPEAKER_01]: And while 100% of that could be
11:20
[SPEAKER_01]: the motivator to get into the business.
11:24
[SPEAKER_01]: What's going to keep you in the business is revenue.
11:27
[SPEAKER_01]: What a disaster.
11:28
[SPEAKER_01]: Yeah.
11:28
[SPEAKER_01]: So, unfortunately, I just see a two often, Jim owners not paying themselves.
11:34
[SPEAKER_01]: Jim owners barely scraping by.
11:36
[SPEAKER_01]: Jim owners, you know, training every session, not able to hire staff, not able to spend a ton of marketing.
11:43
[SPEAKER_01]: struggle, struggle, struggle because it's a financial thing.
11:46
[SPEAKER_01]: Even though you enjoy it, even though what you, the good work you're doing is helping clients.
11:52
[SPEAKER_01]: And unfortunately,
11:54
[SPEAKER_01]: unless you change the model typically you're in you will be in that struggle boss forever because there is a hard ceiling on a model.
12:06
[SPEAKER_01]: Now the other side of that fence is like the ceiling on large group versus there is a ceiling on semi-private.
12:12
[SPEAKER_01]: There's a ceiling on one and one.
12:14
[SPEAKER_01]: But the ceilings are much, much higher, much higher.
12:18
[SPEAKER_01]: And it's just, again, it's just math, right?
12:21
[SPEAKER_01]: And so you have a decision to make Jim owners.
12:26
[SPEAKER_01]: Like look, you've got a family, probably kids, wife, husbands, whatever, retirement, your lifestyle, like all these things going to this equation.
12:37
[SPEAKER_01]: If you know the data, and again, this is a motion aside.
12:41
[SPEAKER_01]: This is data.
12:42
[SPEAKER_01]: And the data says, you know, the bottom 50% the bottom 50% is 90% large group.
12:50
[SPEAKER_01]: The 90% of the entire industry average is under 40,000.
12:56
[SPEAKER_01]: The top 10% of gyms are typically with a semi-private training model.
13:03
[SPEAKER_01]: Doesn't it make sense?
13:05
[SPEAKER_01]: to change your model.
13:07
[SPEAKER_01]: Is hard as it may be?
13:08
[SPEAKER_01]: It's also hard not making money.
13:11
[SPEAKER_01]: Yeah, and on top of that, you can also be very, I believe, even more proud of the product that you put on the table to serve your clientele in a semi-private training, model versus large group.
13:23
[SPEAKER_01]: And just so everybody's clear because I had the conversation when a gym owner last week.
13:29
[SPEAKER_01]: Semi-private training is not large group training with less people.
13:35
[SPEAKER_01]: Good point.
13:35
[SPEAKER_01]: It is just not it.
13:37
[SPEAKER_01]: Semi-private training is customized programming.
13:40
[SPEAKER_01]: IE where the value is what they're paying for.
13:43
[SPEAKER_01]: It's not their paying for the more attention they're paying for customization.
13:47
[SPEAKER_01]: And if you cannot customize a down to the individual movement pattern and score it and do all the stuff that you can prove what it's worth.
13:55
[SPEAKER_01]: you're not going to be able to charge premium prices for call it small group personal training, which is just large group of less people.
14:04
[SPEAKER_01]: This is the most common mistake that's made when Jim owners are trying to bring in a premium service is they just believe that less people is the value.
14:13
[SPEAKER_01]: Yeah, they're just chasing that one on one in a way without it's people is not the value.
14:17
[SPEAKER_01]: In fact, I'd even argue
14:23
[SPEAKER_01]: Having more people, tribe mentality, you attract better.
14:27
[SPEAKER_01]: I like it better.
14:28
[SPEAKER_01]: I've got more energy.
14:30
[SPEAKER_01]: Some of that is more valuable than having less people think about all the way down to a one or one where you actually, I just have that little conversation with one person.
14:38
[SPEAKER_01]: That's not as valuable to some people.
14:40
[SPEAKER_01]: Correct.
14:41
[SPEAKER_01]: But where the value lives in a semi-private training model is customized, training at scale.
14:47
[SPEAKER_01]: We call it scalable semi-private train period and of story like that is the what the value is.
14:52
[SPEAKER_01]: That's what people will pay for.
14:54
[SPEAKER_01]: Oh, this is for me.
14:55
[SPEAKER_01]: Oh, that's my work at my workouts.
14:58
[SPEAKER_01]: Completely different than his workout and her workout.
15:00
[SPEAKER_01]: This is more valuable to me.
15:02
[SPEAKER_01]: That is what the client is saying.
15:05
[SPEAKER_01]: if you cannot deliver that product because you're just thinking, hey, we're just gonna scale down that amount of people, they're still gonna do a watt format and they're just gonna kind of like scale up and down a little bit, but everybody's doing kettlebell swings, maybe somebody's doing 35 and somebody's doing a 90 pounder and somebody, you know, whatever?
15:24
[SPEAKER_01]: That's not what I'm talking.
15:25
[SPEAKER_01]: That's not what people are paying for.
15:27
[SPEAKER_02]: And there's evidence to that too because of attendance in large group.
15:32
[SPEAKER_02]: average attendance across the board, same industry reports is saying that six people is still the average attendance in a large group format.
15:41
[SPEAKER_02]: If it was an exclusive thing and Jim said, oh, well, only six people are attending, only bump up my prices because you're getting that much more added time and attention, then you as a large group training model would be able to scale your rates.
15:55
[SPEAKER_02]: without the loss, but you're not, you can't, because again, it's not the limited number, it's the individualized component.
16:03
[SPEAKER_01]: Yeah, just think.
16:04
[SPEAKER_01]: If you, if you, this is funny, let's just say you're 200 bucks a month.
16:09
[SPEAKER_01]: And then the next morning, you decide you're going to change and raise your base rate to $400 a month.
16:14
[SPEAKER_01]: And the only thing you're giving them is less people.
16:17
[SPEAKER_01]: you're going to lose everybody.
16:19
[SPEAKER_01]: Yeah.
16:19
[SPEAKER_01]: That's what most gyms try to do.
16:21
[SPEAKER_01]: We're going to have this higher price point, but the physical workout, the programming, the deliverable of that product, doesn't change.
16:31
[SPEAKER_01]: It just has less human beings to compete with.
16:34
[SPEAKER_01]: So I eat more attention.
16:36
[SPEAKER_01]: In fact, the most clients want less attention.
16:37
[SPEAKER_01]: If you're being honest, don't look at me.
16:39
[SPEAKER_01]: I don't want to be seeing, right?
16:41
[SPEAKER_01]: Like, that's the opposite of what you need to be doing.
16:44
[SPEAKER_01]: They're going to leave.
16:45
[SPEAKER_01]: There's no value there.
16:47
[SPEAKER_01]: And so again, there's more steps to taking on a semi-private train, the way that we teach it and the semi-private where you're going to get up to a million dollars, $60,000, $70,000, $80,000 recurring revenue models.
17:01
[SPEAKER_01]: Guys, when we say...
17:03
[SPEAKER_01]: 60, 70,000, $80,000 a month, this is in one product, not total gym revenue.
17:09
[SPEAKER_01]: You can have also supplements and nutrition programs and things on top of that number, but we discuss and I don't think that we talk about it enough.
17:18
[SPEAKER_01]: We're talking about the recurring revenue in the deliverable of semi-private training.
17:24
[SPEAKER_01]: not total gym revenue, you can make more than that in a gym.
17:27
[SPEAKER_01]: It's just that what we're talking about is the product, the membership, some of my private.
17:31
[SPEAKER_02]: And one addition to that, too, because it goes hand in hand, is that's recurring revenue, not a single month where we hit 80 or so gym hits 70, 80 on the next month, you know, because they did a high ticket program or they did
17:45
[SPEAKER_02]: You know, some sort of front and front loaded offer where cool we, we made the money but now we were on the hook to service those clients for a while.
17:53
[SPEAKER_02]: That's 70,000 this month, that's 70,000 the next month, that's 70,000 the month after.
17:58
[SPEAKER_02]: Probably growing, yeah, exactly.
18:01
[SPEAKER_02]: But that's not money that's just in the business and then gone the next, right?
18:05
[SPEAKER_02]: And that's a big deal.
18:06
[SPEAKER_02]: And I think.
18:07
[SPEAKER_02]: we've we've we've always talked about recurring revenue and it being one of the biggest values of this industry that unfortunately jim wonder squander all of the time.
18:17
[SPEAKER_01]: Yeah because they're looking for the money grows.
18:19
[SPEAKER_02]: Yeah grasp it straws and then you know now you're on the hook to service that client but you've spent that money and now you got to go again resell remark it resell.
18:28
[SPEAKER_02]: It's cyclical.
18:30
[SPEAKER_02]: I think that the biggest thing is you hit it with the kind of choosing your heart, right?
18:35
[SPEAKER_02]: It's hard not making revenue, not bringing in enough revenue to pay your bills.
18:40
[SPEAKER_02]: Maybe you have a part-time job on the side of your gym or your spouse is carrying the weight and covering the gap.
18:46
[SPEAKER_02]: Things like that.
18:47
[SPEAKER_02]: That's the norm with a lot of the large group gyms that we work with and they may have seen.
18:53
[SPEAKER_02]: Would you rather make a hard decision and spend the next six months transitioning your gym to be out of that hole forever?
19:00
[SPEAKER_02]: Or are you banking on the fact that you truly believe large group has the ability to get you where you want to go by acquisition?
19:11
[SPEAKER_02]: One thing that you mentioned that I think needs to be, like we really need a highlight is the fact that
19:17
[SPEAKER_02]: Most of those gyms are also not in a position to where they have a consistent marketing budget, where they can afford to spend what they need to spend to get where they want to go.
19:28
[SPEAKER_02]: We had a conversation with, because the acquisition costs and the competition and all of those things.
19:33
[SPEAKER_02]: We had to come a second I would talk with one of our coaching clients and their large group model, their acquisition costs wasn't covered by their membership
19:47
[SPEAKER_02]: You're acquiring a client on an annual contract in reading one month's profitability out of that acquisition.
19:54
[SPEAKER_02]: that alone.
19:56
[SPEAKER_02]: That was a massive sinking ship, right?
20:01
[SPEAKER_02]: And it was, that was, again, kind of an anomaly.
20:04
[SPEAKER_02]: I mean, most are three, four months before they're breaking even.
20:08
[SPEAKER_02]: But again, we're looking at average attention in large group, 9.8 months.
20:12
[SPEAKER_02]: And that's, that was here when we got rid of it.
20:14
[SPEAKER_01]: I would argue.
20:15
[SPEAKER_01]: I think it's way less now.
20:17
[SPEAKER_02]: I mean, you know, orange theory said three months for
20:22
[SPEAKER_02]: that's something you guys have to have to consider, you know, we talk about lifetime value of a client.
20:27
[SPEAKER_02]: How long is somebody in your business?
20:29
[SPEAKER_02]: Not the anomalies, not the three people that have been with you since you opened the average.
20:35
[SPEAKER_02]: And I would be willing to bet if you know your numbers in a large group model, a lot of you are actually acquiring clients and never actually making the money back to cover the cost of the acquisition within about a time that they're staying in your business.
20:51
[SPEAKER_01]: It's scary.
20:51
[SPEAKER_01]: It's very possible.
20:53
[SPEAKER_01]: I mean, it's scary.
20:55
[SPEAKER_01]: You can't run that formula that long or else you'd be out of business.
20:58
[SPEAKER_02]: But again, then we look at the numbers of the business, right?
21:01
[SPEAKER_02]: They're not profitable, meaning that's exactly it, right?
21:05
[SPEAKER_02]: It's a sinking ship and you're having to funnel money from savings, from somewhere else, just to keep the doors open.
21:11
[SPEAKER_01]: Yeah.
21:12
[SPEAKER_02]: So back to the kind of choose your hard.
21:14
[SPEAKER_02]: You know, we obviously hope we coach gym owners to making the transition to scalable,
21:21
[SPEAKER_02]: If you do believe that you're in that seat where you're battling large group and you know that this is an available option for you.
21:32
[SPEAKER_02]: take a serious look right how what are the options you have in your large group gym to actually get out of the whole to actually get to the position you want to be.
21:39
[SPEAKER_02]: Yeah.
21:40
[SPEAKER_02]: If you were to sit back and say and let's just say not even considering the math of the business but like what is the revenue if you're going to get a traditional job what is the salary that you'd be okay with.
21:53
[SPEAKER_02]: for your lifestyle, for the life that you want, for the bills that you have, for your family, all of that type of stuff.
21:58
[SPEAKER_02]: Then go and look at your business.
21:59
[SPEAKER_02]: Does it even have the ability to pay you that with everything that you have available?
22:05
[SPEAKER_02]: And unfortunately,
22:07
[SPEAKER_02]: Large group is just, it's dismal.
22:10
[SPEAKER_02]: It's very, very few that get, yeah.
22:12
[SPEAKER_01]: So let's do some math.
22:14
[SPEAKER_01]: I mean, people are always wondering, like, what is owner benefit as a percentage of gross revenue?
22:20
[SPEAKER_01]: I don't know if anybody's actually going to ask that question.
22:24
[SPEAKER_01]: If you look at kind of like the profit first methodology, 10% net profit, 15% owner paid, that's 25%, and throw another 5% in for miscellaneous owner expenses that are run through the business.
22:35
[SPEAKER_01]: So you're at 30%.
22:37
[SPEAKER_01]: Okay, 30% of a average gem doing $20,000 a month times, so it's $240,000 a year, 30% of that is $60,72, $2,000.
22:53
[SPEAKER_01]: That's...
22:55
[SPEAKER_01]: You know, is that good enough?
22:57
[SPEAKER_01]: That's 30% net owner benefit.
23:01
[SPEAKER_01]: That's not what you pay yourself because you're gonna owe taxes on the pay you pay yourself and you're also gonna owe taxes on the business profit.
23:08
[SPEAKER_01]: And then the other portions of those expenses aren't, they're not income to you.
23:14
[SPEAKER_01]: They're just being paid by from the business.
23:16
[SPEAKER_01]: So like your self own.
23:17
[SPEAKER_01]: That's total net owner benefit.
23:19
[SPEAKER_01]: Like things that,
23:20
[SPEAKER_01]: You just took your card to Costco and ran it through the business on accident, you know, quote unquote on accident.
23:26
[SPEAKER_01]: That's the that's the global 75% 75,000 72,000 in that equation.
23:34
[SPEAKER_01]: I don't know.
23:34
[SPEAKER_01]: I don't know if that's good enough to be honest with you.
23:37
[SPEAKER_01]: You know, I would want to be as a, all the risks that I put into a business.
23:41
[SPEAKER_01]: I want to be north of 200,000 a year.
23:44
[SPEAKER_02]: And let's, the, the one thing that also has to be talked about there is like, that's perfection.
23:50
[SPEAKER_02]: That's having your numbers there.
23:52
[SPEAKER_02]: That's having profit.
23:53
[SPEAKER_02]: That's a, with, with, in, in, enforcing the owner benefit, your own pay, that type of thing.
23:59
[UNKNOWN]: Yeah.
24:00
[SPEAKER_02]: Are you paying yourself and that's exactly how many gyms do we know that?
24:08
[SPEAKER_02]: That's where their numbers are, that's also no, it's a few.
24:12
[SPEAKER_02]: So, you know, maybe it's 50K, and then all of those taxes and everything on top of that.
24:19
[SPEAKER_01]: So in a $20,000 gym, you take 30% out of that.
24:21
[SPEAKER_01]: So it's 6 grand, you're operating your entire business, not $14,000 a month.
24:26
[SPEAKER_01]: That includes rent and payroll and marketing and any utilities.
24:30
[SPEAKER_01]: Is that even possible?
24:32
[SPEAKER_01]: Maybe in some markets?
24:34
[SPEAKER_01]: very few that's just that's just not enough.
24:36
[SPEAKER_01]: Yeah.
24:37
[SPEAKER_01]: The point to the message is most of you want more.
24:39
[SPEAKER_01]: I would hope you want more.
24:42
[SPEAKER_01]: You're an at type A personality took the risk of owning a gem like you just signed your name on a line.
24:48
[SPEAKER_01]: Let's hope for the best.
24:49
[SPEAKER_01]: No, like let's let's earn this.
24:51
[SPEAKER_01]: Let's make sure this thing works for you.
24:53
[SPEAKER_01]: Let's make sure it pays you, pay your coaches, pay you know, you're not having to worry about money.
24:58
[SPEAKER_01]: Like that's that's the thing in business.
25:01
[SPEAKER_01]: You do it right, you should not have to worry about money because it's always there.
25:06
[SPEAKER_01]: If you do it right, and unfortunately, I just don't see that a whole lot in gyms.
25:12
[SPEAKER_01]: I just don't, you know, this, this is the industry we're in.
25:16
[SPEAKER_01]: We know the industry average numbers, take a look at your lifestyle, is this going to serve you in the long run?
25:23
[SPEAKER_01]: Because there's a lot of other industries that would do a lot if there are a lot easier to make more money in.
25:28
[SPEAKER_01]: You know, you just may not enjoy it if it's a money thing.
25:32
[SPEAKER_01]: So it's just like this.
25:34
[SPEAKER_01]: It's just, you know, teeter totter or yin and yang.
25:38
[SPEAKER_01]: I enjoy what I do doesn't pay me.
25:40
[SPEAKER_01]: I don't enjoy what I do.
25:42
[SPEAKER_01]: It does pay me.
25:43
[SPEAKER_01]: Which one do you want?
25:44
[SPEAKER_01]: And so I would think most Jim owners live in that altruistic Yin and Yang where it's like, hey, I do enjoy this.
25:51
[SPEAKER_01]: I just don't make a lot of money and I'm okay with it.
25:54
[SPEAKER_01]: You can make a lot of money in this industry and enjoy it, too.
25:59
[SPEAKER_02]: Yeah, we did a podcast, the second I did a podcast, a couple months of two ago.
26:02
[SPEAKER_02]: They're not mutually exclusive, right?
26:04
[SPEAKER_02]: You can serve the industry, you can get clients, great results.
26:07
[SPEAKER_02]: You can have a great community and you can pay yourself at the end of the day.
26:10
[SPEAKER_02]: Like, it's not a bad thing, you know, nothing.
26:13
[SPEAKER_02]: And I'd be willing to bet that you'll pay yourself, you know, their business will be around a lot longer.
26:17
[SPEAKER_02]: If that's the scenario versus you have
26:24
[SPEAKER_01]: the money's on the business or you know dip into savings another month you know those types of things so yeah it's it's and there's a lot of reasons we're in this position we'll do another show on this in another day but at the end of the day this is what I want you guys to understand there's a bell curve in this industry there's a middle of the road line ever the majority of the jams live around $20,000 a month
26:45
[SPEAKER_01]: There's an outlier of, you know, north of 40% of $40,000 is only 10% of the industry.
26:51
[SPEAKER_01]: That's a north of $40,000 per month, so 90% of gems are living in less than 40.
26:59
[SPEAKER_01]: Okay, and 50 at the 50% line, if you go $20,000 in under,
27:05
[SPEAKER_01]: 90 percent of those gyms are large group training gyms.
27:09
[SPEAKER_01]: Okay.
27:09
[SPEAKER_01]: So what are the other 10 percent that live on the north side of the 50?
27:13
[SPEAKER_01]: Right.
27:13
[SPEAKER_01]: That's your semi-private training gyms.
27:15
[SPEAKER_01]: They charge more.
27:15
[SPEAKER_01]: They have less clients.
27:16
[SPEAKER_01]: They have less headaches.
27:17
[SPEAKER_01]: They have more revenue, more recurring.
27:19
[SPEAKER_01]: They're not scrambling.
27:20
[SPEAKER_01]: It's just a better model, like period.
27:23
[SPEAKER_01]: So yes, you can be in this industry.
27:26
[SPEAKER_01]: have a semi-private training model.
27:28
[SPEAKER_01]: Enjoy what you do.
27:29
[SPEAKER_01]: Be proud of your product that you're serving because the one thing that we didn't really touch on is the product that you give to your client.
27:39
[SPEAKER_01]: You need to be proud of that.
27:40
[SPEAKER_01]: And if you look at your water the day type of style workouts with with no modifications and everybody's just fire breathers like, is that the best product?
27:50
[SPEAKER_01]: Is that how you even train yourself?
27:51
[SPEAKER_02]: Just gonna say it, right?
27:52
[SPEAKER_01]: And there's just so many like
27:54
[SPEAKER_01]: There's so many things that don't align in consistency, in consistency.
27:58
[SPEAKER_01]: So listen, guys, there is a better path.
28:01
[SPEAKER_01]: We have the way, we call it the way, this is the way we have books for you.
28:06
[SPEAKER_01]: We got this podcast for you, we got workshops for you, we got our gross summit for you, we got coaching programs for you, it's all here, we're teaching this to Jim owners every single day, constantly taking Jim owners from that, you know, 18, 15, 18, 20,000 up to
28:24
[SPEAKER_01]: You know, all within 12 months.
28:26
[SPEAKER_01]: If you've been in, you know, we've taken gyms that have been business 17 years, you know, and never made more than 20 grand a month to to 50,000 in one year, just by changing a few things.
28:38
[SPEAKER_01]: So guys, if that's what you want, this, you know, we've got three sources for you.
28:41
[SPEAKER_01]: I'd love to help you guys out.
28:42
[SPEAKER_01]: You book a call or whatever, there should link up in the show notes.
28:45
[SPEAKER_01]: But you've got to look inward.
28:47
[SPEAKER_01]: This is your choice.
28:49
[SPEAKER_01]: This is your chance.
28:50
[SPEAKER_01]: It's only going to get harder from here.
28:52
[SPEAKER_01]: It's going to be harder at Client.
28:53
[SPEAKER_01]: It's going to be harder to compete in all the markets.
28:56
[SPEAKER_01]: So why not set yourself up with a model that doesn't have such a low ceiling that you can break through it and make the revenue that you deserve and you, that you, you know, they could be proud of the product.
29:08
[SPEAKER_01]: That's it guys.
29:09
[SPEAKER_01]: Hopefully that helps you kick in the ass a little bit, get you moving.
29:13
[SPEAKER_01]: We want to see you win.
29:14
[SPEAKER_01]: That's it for this episode until next time.
29:16
[SPEAKER_01]: Keep changing laps and see you on the next show.
29:19
[SPEAKER_01]: All right.
29:19
[SPEAKER_01]: Thanks for listening to another episode of the built-grilled podcast.
29:22
[SPEAKER_01]: If you want more help growing your business, join our free Facebook group, profit accelerator, hoping training gyms grow to $30,000 a month and beyond.
29:31
[SPEAKER_01]: We'd love to see you there.
29:32
[SPEAKER_01]: Go check out the show notes for the link and keep building something great and we'll see you in the next episode.