Building the Next Level When Your Gym is Finally Successful

Building the Next Level When Your Gym is Finally Successful

Chris Cooper: (00:02)

You are making some money. Good. Finally. You’re not scared of shutdowns and lockdowns anymore. Good. You have decent retention or a solid client headcount. Good. In fact, if you’ve read “Founder, Farmer, Tinker, Thief,” you recognize that you’re leaving Farmer Phase and entering Tinker Phase. That’s awesome. So what’s next for you? Well, that’s what we’re gonna talk about today. My name is Chris Cooper. I’m the founder of Two-Brain Business and the author of “Founder, Farmer, Tinker, Thief” as well as several books on growing your gym. And today I’m gonna talk about what happens when you have a successful gym business and what you want to do next. If you find this is helpful to you, please hit subscribe on your favorite podcast platform and give us a five star review so that I know there are people out there listening who are at this level.

Chris Cooper: (00:50)

So let’s get going here. When you have a successful gym business, it’s easy to look around and feel alone because very few micro gym owners actually make it to this point. And though that number is growing, thanks to things like our growth mentorship practice, very few models exist to help gym owners to scale beyond their current gyms. So what do you wanna do? Do you wanna open a second location? Do you wanna buy out your competitor? Do you wanna double the size of your gym? Do you wanna sell a new service to your existing audience? Do you wanna buy your building or another building? Do you wanna just buy Bitcoin or a rental property? There are dozens of options available to you. And in this podcast episode today, I’m gonna talk to you about the next steps in your entrepreneurial journey. Because if I know you, and I think I do, I know you’re not done yet because you are an entrepreneur now and entrepreneurs build.

Chris Cooper: (01:47)

So let’s get started. The biggest mistake that gym owners make when they’re reaching this point and their first gym is fairly successful, and they’re thinking about maybe buying another gym or opening a second location, is they don’t actually test how resilient their first location is. They’re not absolutely certain that their first gym can run without them. Because whatever your next project is, it’s going to require a lot of your time and attention. And if you don’t test whether your existing gym can run without you, you’ll probably take a few steps to get started on your next project, and then get sucked back into your gym. So before you start building any of these options, I want you to do me a favor, and that is take a five-day vacation. I want you to go away from your gym. I want you to have no contact whatsoever.

Chris Cooper: (02:35)

And then when you come back, you’re gonna audit how things went. Did new clients walking in the door get sold on your service? Did your marketing work? Did anything break? Did the toilet paper get refilled? Audit everything. And Two-Brain clients, you have something that are called the six audits available to you in the growth toolkit so that you can see which cracks you have to patch before you’re actually ready to move on to the next strategy. The biggest mistake that gym owners can make is they think that their current strategy is gonna be a winner forever, right? Like I’ve had a couple of wins. I did this Facebook ad campaign with this 90-day challenge and I signed up 30 people. I’m a success. I know what to do. Check. Let’s go. But the key to long term success as an entrepreneur isn’t just constant forward motion, because that’s just never the case.

Chris Cooper: (03:27)

The key is actually stopping backward motion. You wanna go forward and then not slip backward. All business is cyclical to an extent. Sometimes you’ll grow. Sometimes you’ll shrink. The key is to grow as much as possible when you’re in a growth phase and minimize shrinkage when you aren’t. Two steps forward, one step back. That’s how you feel when you’re starting out. But eventually we wanna feel like you’re having three steps forward and then one step back, and then five steps forward and one step back, and then 10 steps forward and a tiny step back. And over time you wanna feel like you’re making more and more momentum in between those little setbacks and maybe the setbacks get smaller too. For example, it was pretty hard to grow during COVID shutdowns. So we had gym owners focus on minimizing shrinkage. They cut costs. They renegotiated their rent.

Chris Cooper: (04:21)

They kept as many clients as possible by adjusting their services and focusing on retention. And when their gyms reopened, they were ready for growth. And the average gym saw an immediate surge of 8% revenue or more. Most entrepreneurs, especially in the fitness industry, can find a bit of success pretty easily every few years or so. Some great idea emerges that can get you some new clients fast. And we’ve reported on a lot of them on our blog. Like if I go way back, the New You challenge, and then there was Check-ins for Charity. And then there were six-week challenges, like whole lifestyle changes and stuff like that. And new ones are always appearing. Last year, it was high-ticket coaching. And most of these ideas work for a while. The key is to take the progress you make and keep it instead of slipping backward.

Chris Cooper: (05:10)

But many gym owners start running one of these promotions, they see a quick win and they become over confident in the long term viability of that strategy. And some gyms, unfortunately, they go all in on that strategy. And then when it stops working, it kills their gym. So here’s how to stop sliding backward. Number one is to reinvest your wins. Why do the most successful entrepreneurs in the world have mentors? Because they’re always looking for the next level. They wanna talk with people who have been there already. Number two, watch your data. The first time you use a new marketing strategy, record everything that you can. Your set rate, your show rate, your close rate, your conversion rate, and your length of engagement for the new members that you’re gaining. Now, the second time you use the strategy, you compare your numbers. Are you getting fewer leads?

Chris Cooper: (06:05)

Are the leads getting colder? Are you paying more to acquire a client? Is the quality of the client going down? Is your retention dropping? If any of these numbers are decreasing, then you are using a short-term strategy. Use it while it works, but be ready to replace it when it stops. Third, press the “save game” button. Anybody brought up in the video-game era knows what I’m talking about here. Capture this moment of success in time, record all of your SOPs, all of your prices, get it all on paper. Replace yourself with an operations manual, make your business turnkey. In times of crisis, we fall to the level of our preparation. Get your business out of your head. And it’s like pressing save game on your gym because you’re recording a snapshot of exactly how things were done when you were at your best.

Chris Cooper: (06:59)

Number four: if you’re ready, hire a manager. You need somebody else to oversee your daily gym operations so that you are free to build the next phase. You can’t open a second location if you’re still coaching classes or scheduling appointments at your first location. Number five: don’t let yourself repeat mistakes. Your manager is going to make a few mistakes and that’s okay, as long as the manager doesn’t repeat them. Audit your processes and your plans at least every six months. Record what’s worked since the last time you wrote your playbook and what didn’t work. When somebody screws up, including you, document the error, just so it’s not repeated. You’re allowed to make mistakes, but you’re not allowed to repeat them. Number six, if you’re ready to move up, you need to start mentoring your staff. It took you years of mistakes and books, and probably mentorship to grow to this stage.

Chris Cooper: (07:55)

All of that experience and knowledge doesn’t automatically pass to the next person in line. If you don’t mentor people, you will be pulled back into gym problems over and over again. Number seven, you need to make yourself antifragile. You need to adopt systems that will allow you to pivot in the event of another business closure or a recession. Keep your online programs ready, move to a prescriptive model, and make sure nutrition coaching is a big part of your service. Number eight. Finally, you’ll need to keep your hands outta the machine. I’m a product guy. So I get it. It’s very tempting and easy to keep tweaking your training product, micromanaging your staff, finding yourself, you need to upgrade your coaches, finding mistakes in your SOPs and fixing them. This is the triage trap of business, and it stops you from growing. You can’t drive the car with the hood open.

Chris Cooper: (08:50)

Now, if you follow these steps, you will stop the “two steps forward, two steps back” dance that prevents most entrepreneurs from succeeding at a higher level. And instead you’ll create a ratchet effect of forward progress long-term. So now let’s talk about building the next step using the leverage that you have. You actually have three points of leverage. These are what I would call assets. They are your audience, your cash, and your time. First, you want to look for activities that generate cash with the least possible effort. You don’t really wanna start from scratch with a brand new idea. Leverage the assets that you have by leveraging your audience or your cash currently at your disposal. And I want you to start with these two instead of trying to leverage your time, because many entrepreneurs are tempted to start from scratch with this brand new idea.

Chris Cooper: (09:48)

And they pull themselves all the way back into Founder phase and their time becomes worth four bucks an hour again. And you’ll see what I mean as I go through this, but start with your audience. So to leverage your existing audience, which is your greatest asset: number one, you can help people solve a larger problem or a different problem. If everybody at your gym also needs nutrition help, then you should launch a nutrition business. This is a tiny example. A larger one might be childcare or health insurance or coffee. Solve the problem that the greatest number of people in your gym already have. Number two, look for the option that requires the least amount of your time. So for example, adding a rentable asset, like a float tank or an infrared sauna, requires investment, but no time. You just set it up and charge for its use.

Chris Cooper: (10:40)

Conversely, a coffee bar or a smoothie bar requires a lot of your time for a very, very, very small return and a lot of risk. Number three, you could help somebody from your team open a second location. Think how easy it would be for you to go out and open a second gym, knowing what you know now. Well, if you have somebody on your team who legitimately wants to be an entrepreneur, then you can be their investor. You can license your brand and you can mentor the person. You can share your SOPs, your intellectual property, maybe even your brand, if they don’t want to create their own. But all the stuff that you’ve learned and implemented and tested and trialed and is successful is tremendously valuable. The fourth option is to invest in a client who wants to open a business. You have to be very careful with this one because the client probably doesn’t see the hard parts of entrepreneurship.

Chris Cooper: (11:33)

And if the venture fails, you’re going to lose a client and a friend. I’ve had to learn this lesson many times, and it’s been very painful every single time, but it is an option. And sometimes this does come up in your audience. For example, I know several gyms who have started booking and billing software with a member of their gym who was an app developer, and they’ve made a bit of money on it. Or I know other gym owners who have started supplement companies because they have somebody in their gym who is in fact good at figuring out beverages and canning and supply chains. I know one gym owner who recently bought out a local sign shop from a member, or he bought a share of it. And he is just coaching them to help grow their sign business.

Chris Cooper: (12:19)

Right? There are opportunities out there, they’re just rare and they’re risky. Your second asset is cash. Now, to leverage your cash, which is your second best asset. First: you can invest in long term cash flow, like buying buildings and renting them to other people instead of flipping them. Now, these could be commercial buildings for your business or for other businesses, or it could be rental properties like Airbnbs or self-storage units. And your other option is to invest in other people’s businesses, through the stock market or other mutual funds or angel investing or whatever. Obviously that’s a little bit riskier, but you can do it. And a lot of people in our Tinker program do. Now your third greatest asset is time. To maximally leverage it, start by calculating your effective hourly rate. So divide the hours that you work in a month into your net owner benefit, which is what you paid by all of your businesses.

Chris Cooper: (13:17)

So for Two-Brain clients, you can work through this exercise step-by-step in the Value Ladder workbook on the growth toolkit. Then step two is to buy yourself time. Hire someone to replace you in the lowest value role that you’re currently filling. Third, you can set up a 90-day sprint to work solely on the higher value role. So for example, how many new clients could you gain in 90 days if that was your only job? Fourth, stay focused on that new project until it can run without you. And then fifth: leave deep tracks so a staff person can trail. Now I wanna talk about our Tinker program. Our Tinker program is for entrepreneurs who’ve made their first business successful, or successful enough that they have a little bit of spare time and a little bit of spare money. And they’re thinking about the next phase of their ascension as an entrepreneur. They want to go from incremental gain one client at a time, $200 a month at a time to exponential gain by investing their time, their money or their audience slightly differently.

Chris Cooper: (14:19)

And so in our Tinker program, we bring in speakers to help you optimize your time, teach you how to lead better, help you mentor your team, build cashflow assets, duplicate your first business and serve more people. We work in groups with other high-level entrepreneurs who are at the same stage. And some of these people are at the multi-million-dollar mark already. We meet in person, we meet online and we travel together to do interesting stuff. You have levers that can produce growth. They are your audience, your money and your time. But the fulcrum on which all of these levers pivot is people. You have to be around the right people. You have to follow the right people. I mean, receiving mentorship, not just reading your books, and you have to become the right person. In Tinker phase, knowledge is not enough. You must immerse yourself in success, be around successful people

Chris Cooper: (15:13)
if you’re going to grow further. On that note, I want to close with how to level up your staff and fire them up instead of firing them. Because if you want to climb higher, you have to assemble a better team. You’ve done the hard work, the labor of leadership, right? You’ve taken your big risks. You’ve missed paychecks. You’ve read a book every two weeks for the last five years. You’ve been at work before the sun rose and after the sun set too many times to count. But your staff haven’t. You have fired clients. You have fired your friends. You’ve interviewed people and you’ve said no to really good ideas and opportunities. You have set your rates and you stuck by them, even when people got angry about them. You wrote a staff playbook and you made rules for a reason, and then you enforce them. But your staff haven’t.

Chris Cooper: (16:03)

When you hire people to replace you in any role in your business, you have to remember that they’re beginners. They will learn faster than you did because you’ll teach them, but they still have to learn those lessons. This is a very hard lesson to remember, but if you fail to leave deep tracks for your staff to follow, you will always be their micromanaging supervisor. They won’t like it. And neither will you. So here’s how to mentor your staff to grow your business without you being there. Number one, give them a paint by numbers picture, not a blank canvas. It’s not their job to reinvent everything. It is not their job to figure out how to get new clients. You have already figured that out. And so you give them a staff playbook, you set their operating procedures, “do it like this,” you give them a sales binder with your pricing, you give them a dress code. In other words, you give them guidelines. Second, you give them a north star. You write out your mission for the gym. When your staff encounter a new challenge for which there is no map, no SOP, they can look at this north star and say, here’s what the owner would do. Now, you’ve got a point A: your standard operating procedures, and a point B: your mission, where you wanna go. And your job is to mentor them to get from point A to point B. So here are the steps. Number one: teach. Here is why we do it this way. Number two: isolate problems. Dig deep and get to the root of each barrier to your growth. Number three: ask your staff how they would solve the problem. Ask them to give you three alternatives. If all three are different from your way, then gently steer them toward the right answer, but make sure you’re encouraging them enough to make suggestions next time.

Chris Cooper: (17:50)

Number four: role-play the solution if it’s a people problem, and it’s almost always a people problem. Number five: give them a deadline and ask for a report. Number six: run through an after action report. So if they solve the problem, record the solution in your playbook for next time. If they didn’t solve the problem, then teach them how it could have been approached better. Now, mentorship isn’t all about solving problems. It’s really about creating personal growth and helping them level up too. But it almost always starts with solving some current problems. Eventually every good mentor moves clients from fighting fires to feeling like they’re on fire. So here’s how to light the match. First to your staff, if they’re high level, issue one growth challenge. For example, say, “I want you to get five clients in August.” Second, give them solutions. Ask your staff for three ways they think they could get five clients in August. Then third: role-play the solution if it’s a people solution, right? So well, here’s exactly what we would say. Here’s what we would do if we’re asking for referrals. And then fourth, give them the tools they need to be successful and a deadline as well as a clear metric. So five clients is a great metric. “Grow my gym” is a bad metric. And five, create an after action report. If the strategy worked, celebrate, then record the solution in your playbook and plan to repeat it monthly, quarterly, or annually. Put it on your calendar to start slowly building a plan for growth. Now, mentoring your staff is a lot like mentoring gym owners. You have to start with triaging problems and putting out fires before you can get them to feel like they’re on fire. But as they gain confidence, you should quickly move to growth strategies.

Chris Cooper: (19:34)

You should gather little wins together. You should set clear targets. You should hold them accountable and you should celebrate wins every time you meet as well as recording their lessons. And then you just watch your metrics improve. Reaching the Tinker Phase, the level where your first business is running well and you’ve got a little bit of time and a little bit of money, it requires delegation, but it doesn’t require abdication. Your gym still exists. Someone else can run it pretty autonomously, but only with mentorship. The GM of my gym has a Two-Brain mentor that’s not me. My staff is in the Two-Brain team training program. They all have mentors because when they grow, so does my gym. If you want to serve as the mentor for your GM, that’s great, but you can’t just abdicate responsibility to them and hope that your gym will continue to grow without you.

Chris Cooper: (20:25)

I hope this helps. You really can reach the next level. There are examples, about 60 of them, of people in the Two-Brain Tinker program who are doing amazing things in a variety of different ways. We’ve certified over 25 millionaires so far this year. And as these people continue to push the envelope, they set amazing examples for the rest of us. And this is really what’s helping Two-Brain have such a massive impact right now is this tip of the spear. The people who are already successful, collaborating, sharing, wins and growing faster together than they could on their own.

Mike Warkentin: (21:03)

That was Chris Cooper. And this is Two-Brain Radio. Please subscribe for more episodes. Now here’s Chris with a special message.

Chris Cooper: (21:10)

We created the Gym Owners United Facebook group in 2020 to help entrepreneurs just like you. Now, it has more than 5,600 members and it’s growing daily as gym owners join us for tips, tactics, and community support. If you aren’t in that group, what are you waiting for? Get in there today so we can network and grow your business. That’s Gym Owners United on Facebook or GymOwnersUnited.com. Join today.

Thanks for listening!

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