“It seemed like the right idea at the time.”
Many, many experienced gym owners say this when looking back at decisions they made as new entrepreneurs.
Some mistakes are easy to brush off—like a few comically small “adult” T-shirts that don’t fit anyone.
Others cost hundreds of thousands of dollars and take years to correct. No one laughs about those ones.
I recently laid out 12 decisions that feel great in the moment but go rotten over time. Check them out here. Below, we’ll dig into one awful, costly mistake that’s all too common: offering discounts.
I asked a gym owner I know to tell his story to make it real for you.
Real Gym Story: Founding-Member Rates
We started our gym as a bootcamp. I charged $10 per class and built a sizable following operating inside an access gym.
When I decided to lease a space of my own, I ignored all rules of business and made several bad decisions:
- I figured my founding members might come nine or 12 times a month (this was a guess).
- I came up with a nice, round founding-member rate of $100 (half the standard unlimited rate, which was based on another gym’s rate and was also too low).
- I told them they could come as often as they wanted for $100 a month.
- I said I would never change this rate.
I felt like a man of honor: I was rewarding people who believed in me and joined my gym despite my limited experience as a trainer.
But reality was harsh: I suddenly had a lease, heating costs, staff costs, insurance costs and more. I needed cash.
I remain grateful to those members to this day, but within a few months I knew their rate was far too low. Some came 16 times per month, effectively paying $6.25 per class—far less than I had charged for bootcamp sessions in someone else’s space.
None of the founding members would have been broken by the full price. I could have explained my mistake, given them a “founding member” T-shirt and adjusted rates. I doubt any would have left.
Instead of recognizing the economics and making the right move, I made an awful decision: I reduced my own wages so the gym broke even on paper.
After a few years, I started to feel stressed and burned out because our P&L was still a disaster, and I started to look wistfully at the members with legacy rates. “If they all just paid $100 more … .”
But I refused to change the rates because “a promise is a promise.”
In reality, I had promised to help them get fit, and I couldn’t do that if I lost the business.
Here’s some rough math:
- I had 15 founding members.
- About 10 of them stayed for five years or more—that’s at least 600 months of membership among all 10.
- Their rates were at least $100 too low.
- That’s $60,000 over five years.
- With a 33% profit margin, I could have paid myself an extra $4,000 a year had I corrected these rates. This cash would have dramatically improved life for my family.
Years later, I heard about Two-Brain’s founders club plan: You reward founding members with value-added stuff that doesn’t gut long-term revenue.
I could have printed “founding member” T-shirts and given my early supporters a free nutrition consultation and a VIP card for a two-on-one PT session with a friend. I could have packaged that as a $225 value and made them feel very special.
With 15 people, it would have cost me $3,375—and I bet I could have reduced that number or even recouped all costs by selling ongoing nutrition services or selling memberships to buddies who loved the two-on-one PT sessions.
If you’re reading this, don’t make the same mistakes I did. Don’t guess, don’t YOLO, don’t make up numbers, and don’t make forever promises that will sink your business.
Talk to a mentor who can save you time, money and stress.
You Can Avoid Huge Mistakes
That story is real, and it’s far too common.
As I said above, early mistakes often take years to correct and come with a monstrous price tag.
The decision you make tomorrow could cost you $100,000. That’s scary.
Or you could ask an expert how to handle the situation and receive a data-backed action plan that will ensure you get the best possible result.
Instead of losing $100,000, you could make a decision that produces $100,000 in profit. That’s inspiring.
If you’re “feeling it out” or guessing as an entrepreneur right now, let’s talk. No pressure. Just a conversation about how an expert can help you make the right decisions.
To avoid costly mistakes and set yourself up for long-term success, book a call here.
