Huge revenue is one thing.
Combine it with tiny expenses and you have an amazing gym.
I’ll show you what the Top 10 gyms posted for revenue in June 2024, but first a question:
How good are these numbers if the owners are minimizing expenses and getting huge ROI on the money they do spend?
Revenue stats alone can be misleading.
I know gyms that grossed a million dollars a year and had almost no profit. That’s bad.
How about $60,000 in revenue with a 33 percent profit margin? That’s almost $20,000!
Whatever your gross revenue is, I want to help you improve your profit margin.
If you look at your expenses, you might find some places where you can work on your margin—and you don’t always have to make cuts. In fact, you might discover that some reasonable investments generate huge rewards for you and your staff members.
Example 1
This one is simple. Maybe you have two music subscriptions but only use one service. Cut the other and your profit margin goes up.
Example 2
What if you messaged your accountant and said, “How can I make better use of your service?”
Maybe the accountant responds with this: “If you get your monthly documents to me on the 15th every month instead of making me chase you until the 30th, you’ll only pay me for accounting, not hounding you.”
Here, you’re not cutting anything; you’re just improving a process so you spend less.
Use this approach with the other professionals you work with.
Example 3
What if you audited your facility and asked “where am I wasting space?”
Maybe that room full of broken bumper plates and unused fitness machines can be cleared to make space for a small PT studio. In this example, you’re getting better ROI on your space, and you’re creating a place where your coaches can earn more money personally and bring more cash into the business.
Example 4
What if—instead of turning off your ads completely—you evaluated them to discover which ones were connecting with viewers and which ones weren’t? By making adjustments, you could drive down cost per lead and give yourself more at bats in the sales office.
And then you might double down: What if you worked on sales techniques with a mentor? A small investment in time might drive up your close rate for the rest of your career and add hundreds of thousands of dollars to your revenue.
High-Revenue, Low-Expense Gyms
When I review our revenue leaders, I always ask questions like this:
- Who’s doing the most with the least?
- Who can stretch a small space or low headcount the furthest?
- Who’s crushing it in a tiny space or getting amazing ROI on expenses in a larger gym?
These are important questions, and our leaders always have good answers. It’s no coincidence that four of the Top 10 gyms for revenue also appeared in the Top 10 for net owner benefit back in March.
What’s the No. 1 thing you can you learn from the people with high revenue and low overhead?
That the combination is possible.
If you want to push your gym in that direction, here are my tips:
- Start small and upgrade space later—or if you’ve rented a larger space, sublease a portion to cut expenses until you can afford to use all the space.
- Select a good location but don’t pay retail-area rent.
- Ensure revenue diversity, with 10-20 percent of revenue coming from personal training, nutrition coaching or some kind of specialty program.
- Spend time coaching or mentoring staff.
- Give staff members opportunities to grow the pie for everyone (intrapreneurship).
- Work with a Two-Brain mentor so you can avoid wasting time on mistakes and just follow the right path to success.
I want to see you on our revenue leaderboard someday—but I also want to see you take home a lot of money from your gym.
The key: Drive up revenue but always monitor expenses so you can protect and even improve your profit margin.
