The reason its common is because owning your own gym means you do all the jobs. You’re not only the head coach and trainer on the floor (the easy part), but you’re the CEO, CFO, COO, Head of Sales and Marketing, Director of Programming, Special Event coordinator, Executive Mop handler … the list goes on and on. Here’s an example of my initial organization when I first opened my gym.
Your day is more than full. You’ve lost the vantage point of the forest (your business) because of all the trees (daily tasks) that have to be accomplished to simply keep the place running!
You’ve become tactical in your doing, not strategic in your thinking.
The result is often burnout, loss of joy for your vision, and a feeling of worthlessness as you’re not enjoying the life you initially set out to have. It can be devastating. I know. I’ve been there. I’ve looked over the precipice of sanity on several occasions, asking myself why would I throw away what most could only dream about and roll the dice simply to try and transform others. Lost a lot of sleep, I did (Yoda voice).
But, you are of value. To the members you’re transforming. To your family. To the Community in which you live.
You, the service-oriented, caring badass life-changer that you are. If/when you make it, you’ll know deep down that’s it all been worth it. Do you know how few people ever feel that?
The rest of this article is simply going to give you an example to help change your mindset back to being strategic, rather than tactical, in nature.
The mindset in which you laid your business plan out, determined your cashflow expectations, the mindset you had just before you open the doors and chaos ensued.
And to do that, we need to put a value on your time and effort! Let us begin.
Your gym will only survive if the amount of revenue coming in is greater than the amount of expense it takes to run it (and to cover your personal/family expenses) AND the workload on you is sustainable over a long period of time (think years, not months) after you’ve burned through all the cash you set aside to get it up and running proper. So, every hour you spend on your business can be assigned a value, it simply changes based on which role you’re playing, normally by outside influences, as they are ALL important to the well-being of your enterprise. Sales and Marketing that gets new faces in the door affects your gross revenue number, but having a dirty, unmaintained gym can lower retention rates as people leave due to the grime factor and affect revenue as well! The marketer, however, charges more than the cleaner on a per job or hourly basis. So, the key is understanding how much value each of your hours really means and then outsourcing the roles that fall below that value WHILE you concentrate on the roles that drive more! First, we need to define a simple economic unit to allow for comparison. For simplicity sake, we’ll use your gym’s average monthly membership cost. If you’re super savvy, you might like to use your Average Monthly Revenue per (unique) member, or ARM. For the sake of this article, we’ll use a very round $150 USD.
Now, let’s take a look at the primary roles of your gym that drive revenue: Sales & Marketing and Retention activities. At this point, we are going to have to make some estimations because most of us don’t track exactly how much time we spend on doing them. That’s OK.
SALES & MARKETING ACTIVITIES INCLUDE THESE TASKS:
DEVELOPING OFFERS AND GRAPHICS TO SUPPORT CAMPAIGNS, ADVERTISING ON FACEBOOK AND INSTAGRAM, MEETING PROSPECTS AND SPENDING TIME WITH THEM, TAKING PHONE INQUIRIES, SHOOTING VIDEOS, LOOKING AT NEW VIDEO EQUIPMENT, EDITING TOOLS, AND/OR LIGHTING SOLUTIONS, CREATING TAKEAWAYS FOR PROSPECTS THAT COME IN, CREATING BRANDING AND/OR COHERENT MESSAGING, ATTENDING/PRESENTING AT EXPOSITIONS, CREATING REFERRALS PROGRAMS, NEWSPAPER / BILLBOARD ADS, CREATING EMAIL MARKETING CAMPAIGNS, CREATING, OFFERING, AND DELIVERING LUNCH & LEARNS AT NEARBY COMPANIES, DEVELOPING NUTRITIONAL GUIDANCE PROGRAMS, CREATING AND DISTRIBUTING NEIGHBORHOOD FLIERS, DEVELOPING POSTAL MAIL CAMPAIGNS, AND MANY, MANY MORE WAYS OF GETTING YOUR PRODUCTS AND SERVICES IN FRONT OF POTENTIAL CLIENTS.
If you’re not doing at least some of these activities, I hope you’ve updated your resume’ recently.
THE OTHER HALF OF THE REVENUE QUESTION REVOLVES AROUND RETENTION ACTIVITIES, WHICH INCLUDE:
BULLET-PROOF ONBOARDING PROCESSES, DETERMINING AND FOCUSING ON “HIGH RISK TO LEAVE” MEMBERS (LOW ATTENDANCE, MISSED PAYMENTS, CONTINUED ARGUMENTATIVENESS IN CLASS BEHAVIORS), CREATING A FUN/SAFE ENVIRONMENT IN WHICH TO EXERCISE, PROGRAMMING CHALLENGING BUT SCALABLE WORKOUTS SO THAT EFFECTIVE DOSES CAN BE GIVEN TO ALL ABILITIES, FACE TO FACE FEEDBACK FROM MEMBERS OVER FOOD OR COFFEE, CREATING IN-HOUSE EVENTS/COMPS, DEVELOPING NEW SERVICES, CREATING/ANALYZING SURVEYS, REACHING OUT TO GROUPS OF MEMBERS BY PHONE/EMAIL/CHAT, OFFERING FREE (BUT SHORT) APPOINTMENTS TO THOSE WANTING UNDIVIDED FACE TIME WITH OWNERS/COACHES, ACCOUNTABILITY COACHING, CREATION OF NEWSLETTERS / MEMBER OF THE MONTH PROGRAMS, AND ANYTHING AND EVERYTHING THAT SHOWS YOU CARE ABOUT YOUR CLIENT’S GOALS AND WELL-BEING. PERIOD.
On a tangent, this is what drives my entire retention strategy: “People may not remember exactly what you did, or what you said, but they will always remember how you made them feel.” ~ H. Jackson Brown Jr. Remembering that every day just before you walk out onto the floor or answer the phone can make a world of difference to your gym’s culture and revenue stream.
Determining Value: Sales & Marketing
So, now, the fun part: Take the average monthly net new faces that have joined your gym in the past 3-6 months (where their membership is somewhere around the average monthly membership number you decided upon earlier) and divide that by the number of monthly hours you spent on Sales & Marketing. That’s pretty easy to do. Just fill in this sentence:
“For every _____ hour(s) a month of Sales and Marketing tasks I do, I can reliably convert ______ net new members.”
As an example, let’s say that on average you gain 5 net new full memberships a month and you normally put 4 hours of work in a week into your Sales and Marketing. Knowing that there are (52/12), or 4.3 weeks in a month times 4 hours per week = 17.2 hours of Sales & Marketing hours that reliably convert 5 members * 150 per membership, or $750 of net new revenue. Therefore, $750/17.2 = $43.60 that is reliably made for every hour of Sales & Marketing that is given.
Determining Value: Retention
Over the same period, determine how many people stayed due to your retention strategies and divide that by the average monthly hours you spent on retention …. Pretty hard, isn’t it? Because, you don’t really know unless they outright tell you, and very, very few will ever do that. I’ve had one do it in five years. So, I want you to look at your attrition number over the time period and figure out how many people you normally lose a month. Take a close look at the names of the people that have left. If you do exit interviews, analyze those, although again, very few will tell you why they truly left. Are their some that left because they had a bad taste in their mouth about something that happened? Did you know about it? Could you have intervened? How long would it have taken to have focused on “high risk” members and had a word with them that might have changed their minds? If you had invited someone to sit down over coffee just to shoot the breeze or better, asked them if the goals currently on file are still their focus, could that have kept them around longer?
You will need to use your instinct to some degree, but determine a number of hours/minutes that you feel it would take to save one member from leaving. Fill in the blanks to this sentence:
“If I spent ____ hours a month on more/better retention tasks, I would decrease my attrition by _____ clients.”
As an example, let’s say that on average you lose 5% of your membership of 100 clients. That’s five clients a month you lose for one reason or another. Since I’m a goal oriented person, let’s say I wanted to touch every member once a month to see how they were tracking towards their stated goals or simply offer them 15 minutes of my time for free. (I actually did this last month. For my membership, it took me nearly 3 hours to either chat or leave a message with each of them! From that, I immediately made 5 15-minute appointments that resulted in sales of nearly $500!) So, an example might be:
4.3 weeks in a month times 3 hours per week = 12.9 hours of Retention work a month resulting in 2 people staying on that had a high probability of leaving, or 2 * $150 = $300 of recurring revenue. Therefore, $300/12.9 = $23.26 that is reliably made for every hour of Retention that is given.
In these examples, every hour of Sales & Marketing results in $43.60 net new revenue. Every hour of Retention results in $23.26 in recurring revenue. You want to focus on both, but in this example, you would want to spend more time in Sales.
OK, now that we have some understanding of the value of your hours, let’s look at a task that many of us do for our clients: programming functional fitness for your gym.
I’ve personally programmed over 2,000 workouts for my CrossFit Gym, over the past 5.5 years we’ve been open. I’ve always bled over my programming, b/c I like to think it’s a differentiator. (We all do, right?) When I program, I take into consideration:
Constantly varying the combinations/permutations of monostructural, gymnastics, and weightlifting movements,
Rep Schemes (EMOMs, ARMAPs, Rounds for Time, Chippers, etc…)
Systems of the body (posterior, anterior, shoulders, pecs, core, etc…)
Loads (light, medium, heavy)
Durations (short, medium, long)
Interweaving my Strength cycle
Distributing Benchmarks “fairly” (mixing days of the week, Heroes and Nasty Girls)
Throwing in Accessory work, as necessary, and oh yeah,
Keeping everything “fun” and making sense to initiate adaptation while lessening the risk injury.
And that’s all with trying to stay away from my inherent biases that I might not even be aware of! I normally get it done before my son wakes up early Sunday mornings. It normally takes me 3 hours (sometimes 4, if I don’t have caffeine). Yes, I’m that analytical. So, that’s:
4.3 weeks in a month times 3 hours a week = 12.9 hours of Programming a month for me!
What? I’m too slow? You can do it in an hour a week? OK, tough guy, let’s run those numbers:
4.3 weeks in a month time 1 hour a week = 4.3 hours of Programming a month.
But, as we’ve come to find out, 4.3 hours of Sales nets me (4.3 * $43.60), or $187.50. 4.3 hours of Retention nets me (4.3 * $23.26), or $100.00. In my personal case of 12.9 hours, that’s $562.44, and $300.05, respectively!
So, the answer to whether you should do the programming role yourself or outsource it is simple. Is the amount of revenue from sales and/or retention greater than the cost of the programming? So, using the lowest example of programming (1 hour), can you outsource your programming for less than $187.50, but hopefully for less than $100.00? If so, you should buy the programming solution and use the time savings on Sales, Marketing, and/or Retention!
ALTR has created a simple calculator for you to input your specific operation finds:
Summation: The amount of time in a month is finite. The amount of time you can productively put into your business is even less so and the more you overwork yourself, the quality of your products and services will degrade over time. There is an opportunity quotient for every hour you spend on your gym. You need to decide what that value is and outsource all roles that can be done for less so that you can use that time on more high-value activities, or on quality of life: family time, training, travel, or rest. This will in turn make your more productive, generate more revenues and put you on an upward spiral, rather than a downward one.
About the author: John Manser owns the affiliate CrossFit Dynamo, a gym located in Cumming, Georgia, USA, just north of Atlanta. Throughout his varied career as a business owner, he has traveled the world, and created several successful businesses. However, nothing has been more fulfilling than throwing his last lucrative practice away and rolling the dice on running/growing his gym. He has been operating profitably since opening the doors in June of 2012. Charitable, John helped raise over $48,000 in 2017 by hosting the “24 in 24” to benefit a local Children’s Cancer Treatment Organization. As an abundant thinker, he has also founded the massively successful CrossFit Affiliates Owners Group on Facebook, where over 12,000 owners and prospective owners can post and solve challenges to owning CrossFit gyms, making every owner just a little bit better on a daily basis. Further, feel free to reach out to John personally, if he can be of service.