I paid the dumb tax through the nose as a new gym owner.
In fact, I paid it in regular installments over a period of years.
The dumb tax is the penalty for making bad decisions.
It’s not the cost of bad luck or bad results.
It’s the price you pay when you do something dumb—something that could have been avoided if you simply did some math.
In the gym business, the dumb tax is almost always paid after an entrepreneur ignores numbers and data.
Sometimes, the tax bill comes due after a “business expert” offers horrible advice—but, again, the owner could have avoided the tax by asking more questions and evaluating numbers more carefully.
Never take recommendations from “experts” at face value; demand numbers.
Here are five times I messed up badly and paid the dumb tax:
1. Renting too Much Space and Wasting It
“CrossFit gyms should be in big warehouses,” I thought. So I rented 6,000 square feet even though I had 10 members, and I used 1,000 square feet as an athlete lounge and office area that was vacant most of the day.
Dumb Error: I rented space based on the idea that I would have—and need—hundreds of members. The is like a bachelor’s renting a huge house because he “might have kids down the line.”
What I Should Have Done: Created a business model that ensured profitability with just 150 members and rented a smaller space to serve those members.
2. Absorbing Staff Costs
My business plan literally said staff costs would be zero because the owner would coach all classes. This decision ensured I didn’t generate any personal income and couldn’t take a day off for a decade.
Dumb Error: Hiding expenses to create false profitability.
What I Should Have Done: Built staff costs into my business plan so I could set my rates to cover expenses, generate profit and take time off.
3. Basing Rates on Other Gyms
“What is that other gym charging for a similar service?” I asked in 2011.
What a horrible question. Asking it cost me hundreds of thousands of dollars over the years.
Dumb Error: Assuming another gym’s rates would create profitability for my gym.
What I Should Have Done: Calculated rates based on expenses, value and desired profit margin.
4. Not Raising Rates
About two years after I set my rates based on what other gyms were charging, I knew the numbers were flawed.
Dumb Error: Running the numbers and then failing to take action because I was scared.
What I Should Have Done: Raised rates immediately with the help of a mentor.
5. Not Selling High-Value Services
My focus on big groups blinded me to an obvious revenue source: I had more than enough space to offer high-value services and group classes. Instead of offering PT—high value—I offered more open gym slots to group clients—low value.
Dumb Error: Continually trying to find “more members” instead of high-value clients who wanted more attention and personalized programming.
What I Should Have Done: Turned underused space into a studio and sold one-on-one, small-group or semi-private services.
Numbers Over Feelings, Hunches and Anecdotes
All these mistakes are obvious on a spreadsheet.
They are hidden when you make decisions based on emotion, “should,” and unsupported advice from business gurus or well-meaning but misguided gym owners.
In my defence, solid microgym data was scarce in 2011. That’s no longer the case.
In 2025, Two-Brain has mountains of numbers, and a mentor can tell you exactly what to do to improve each key metric in your gym.
“This tactic will improve average revenue per member by $20 in 30 days. We’ve used it in 300 gyms, and it works.”
Don’t pay the dumb tax.
Run your gym with numbers.
To get access to an expert who can help you analyze your data and make the very best decisions for your business, book a call here.
