January
10
2016

Cash Flow and Metrics That Matter

By Chris 0

It’s hard to get excited about math. It’s much easier to coach the third pull of the clean, right?

But if you don’t know your numbers, you won’t be coaching for long. Gyms fail most often due to business ignorance, not bad coaching. But even the fear of closure won’t make you WANT to know your business metrics, so I’m giving you a new way to look at them.

This is The Two-Brain Business BIG SHEET: a simpler way to track the metrics that really matter.

You can download it free. RampUp and Mentoring clients are taught to use the tool optimally, and their results are tracked monthly for accountability.

The metrics I track:

  1. Gross Revenue: of course. But this is just necessary to calculate NET revenue. If a business owner is bragging only about their gross revenue, they’re hiding something (maybe ignorance.)
  2. Total Members: Like gross revenue, only used to calculate ARM (below.) A gym with one member that profits $10 per month is better than a gym with 100 members and no profit.
  3. ARM: Average Revenue per Member (per month.) This is a key metric that usually highlights an affiliate’s weakness right away. If you catch yourself saying, “I just need 10 more members!” you should stop and calculate your ARM.
  4. LEG: Length of Engagement. I want to keep clients for at least 10 years, because I’d rather be a coach than a marketer. If your clients stick around for an average of 9 months, you’ll always be scrambling to replace them instead of coaching them better.
  5. Net Gain this month: Your operating profit. If you’re “not in this for profit,” save yourself a lot of stress and get a job coaching. You’ll be happier.
  6. Net Gain since First Month: Because I want you to see how quickly the mentoring program pays for itself.
  7. Profit Ratio: Mentoring clients are trained to produce a 33% profit margin, which is good for a service-based business.
  8. Robustness Ratio: Where does your money come from? If you rely solely on one revenue stream (like group classes,) you’re riding a one-legged horse, friend. I want to know you can survive if one part of your business takes a hit.

Download The BIG SHEET here:

Two-Brain Metrics

Now that you know your metrics, it’s time to see how you compare to others. Do a self-checkup on your gym here.

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