John Franklin (00:02):
Hello and welcome to this very special episode of “Run a Profitable Gym.” I am John Franklin, the CMO at Two-Brain Business, and with me today is a very special guest, Brandon Sundwall of Virtuo Personal Training straight from Los Angeles. How you doing today, man?
Brandon Sundwall (00:19):
Good. Thanks for talking with me.
John Franklin (00:21):
Yeah, I’m constantly digging around the Two-Brain Growth group looking for interesting gym owners and interesting gym owner stories that I think will benefit some of our listeners. And a post you made earlier this month really caught my eye. Sounds like you have one of the more epic turnaround stories that we’ve heard here. But first let’s get into the nitty gritty. What is Virtuo, and how did you become a gym owner?
Brandon Sundwall (00:49):
That’s a—it’s a great question. So, we’re a small group and one-on-one PT training studio in Los Angeles, like the West Hollywood area. I opened the gym in July of 2020, which is like obviously the absolute best freaking time to open a gym. But the story basically goes like this: I was a high school teacher out here in LA, and I had always been involved in the gym kind of community and training people on the side, and I got to a point where like I was looking forward to waking up at 4 a.m. and training people before work more than I was going to work. So, 2018 I made the full-time switch into fitness. I went from a handful of clients up to a really busy book, like training personally, like 40 hours a week, which with LA prices is a pretty good living.
Brandon Sundwall (01:29):
Then, fast forward to 2019, I’m like really riding high, opened up sort of like online coaching as well, and then in March of 2020, the whole world shut down, and I just like, I was training out of somebody else’s studio that I had learned a lot from in the process of being there, and we were still able to train underground, but I think just the experience of watching our industry be so affected made me feel very like powerless and helpless. And so, I thought that—it’s just completely illogical—that somehow hanging my own shingle and doing something, like having my own studio would be the way to do that. So, I went out, I leased a space, kind of just took my shot, and from the experience that I’d learned from the person that I’d been working under and with my handful of clients I still had left, and I opened the gym. We had paper on the windows, masks on for like the first year basically because LA had pretty strict lockdowns, and then eventually I got busy enough where I called one friend and then another, and then we’ve kind of just grown from there and expanded into our current home, which is a larger space than the original last, a year and a half ago now, and gone from there.
John Franklin (02:38):
So you actually signed your release after COVID, so you saw what was happening, you were in LA which had some of the most strict COVID policies, and you’re like, “Let me in. Let me, let me, let me make a huge life-changing obligation and sign a lease.”
Brandon Sundwall (02:52):
Yeah. Here’s why: I’d say like 50% of it was front of brain and 50% was back of brain, meaning that, you know, we had a lot—the city was on lockdown. Like we had the National Guard here in June when the protests were going on, and the neighborhoods where the gym I had been training at, like the windows got smashed out and stuff. And so, my clients were still willing to go pay like 150 bucks an hour to go train in a park with some bands with me. And so, I was like, personal training is not going anywhere. Like these people need this more than ever. These are not a segment of the population that’s financially affected by what’s going on. Like they have more time now than ever, and they still have the same amount of money. So, I know at least I can cover rent and make a profit with just me training. And I felt safe doing that. And I also felt safe that like, this is the core of the fitness industry is personal training, and so this isn’t going to go anywhere. It might just take a little while to come back.
John Franklin (03:46):
And it was an existing gym space already? Or did you have to do any build out, or how did you work that out?
Brandon Sundwall (03:51):
It was a skate brand clothing shop with 70s porn as wallpaper.
John Franklin (03:56):
OK, so you left it exactly the way it is.
Brandon Sundwall (03:58):
Yeah, and I needed some attitude and character. Yeah, I called one of my friends who knew some contractors and was like, “I have $0, but I need this to be a gym in like two months.”
John Franklin (04:09):
And they got it done for you?
Brandon Sundwall (04:11):
Yeah, I basically just like—I’d come from a CrossFit background, so I just went super minimal with the equipment, a couple of folding racks, bikes and rowers and dumbbells and things like that. And kind of based it off of the studio that I’ve been training at to a large extent, we had 650 square feet, and that’s what we went with.
John Franklin (04:30):
And LA is definitely not known for its cheap rent. So, you know, what was your outlay in terms of your monthly rent once you committed to opening up your own space?
Brandon Sundwall (04:41):
Yeah, for that 650, we were paying 4,000 a month plus another like 600 or 700 for the triple net. We did have one thing that really worked in our favor. There happened to be a garage behind the building that was 300 square feet, came with the lease. When it was given to us, it was gutted, like the roof had fallen in and stuff like that, but because it was during COVID, people didn’t feel comfortable being in the space together. So, over the weekends, once I started to get a little busier, like got some friends, we repaired the roof, I got my friend’s contractor people to come put the drywall up, and we turned that into basically like a glorified garage gym. So, we turned it into basically a 1,000-square-foot space with two rooms.
John Franklin (05:19):
So you could run two sessions simultaneously, basically.
Brandon Sundwall (05:22):
Totally. And eventually, at peak, we had like three sessions going on in the 650-square-foot space and then like two in that little garage. And that’s when we were like, “OK, we have a problem here.”
John Franklin (05:32):
Well, you said you had a book of business. I’m sure you lost some at COVID. So, going into that space, how much were you making as a personal trainer?
Brandon Sundwall (05:41):
Probably in actual, in-person still, probably just around that, like just enough to cover overhead. And then I had still—I had sort of transitioned some people to online and stuff, so I knew that I could basically have personal income and the time and keep myself afloat personally while building up the gym itself.
John Franklin (05:59):
So you basically burnt the bridges, it was do this or you were back at square one?
Brandon Sundwall (06:05):
Yeah, my wife—my now wife and I, at the time, we were dating, but we were living together—and it was kind of like, “Should we go to Mexico for a year and just see what happens? Or do I want to do this and double down?” So, this was the decision that I made professionally just to like double down on my career.
John Franklin (06:24):
And so how did it end up going? You know, you mentioned now that you are in a larger space, but it doesn’t sound like you had a clear trajectory. It wasn’t like, “Oh, just steady growth and then, yeah, we’ll just move into another one, and that’s the end of the story.”
Brandon Sundwall (06:37):
No, I mean, I have the classic sort of entrepreneurial experience where you’re just like, “Hey, I could do this.” And no business, like I was a teacher, and then I was a trainer. Like no business acumen, no sense about anything. And so, I feel like the only thing that I had going for me is I just—like the shame factor in failing at this was like way too great. So, I wasn’t going to let that happen. And I’m like, you know, I always worked super hard. I was training at 4 a.m. before I would go work all day and then train at night. And so, I knew I had those two things, and that and just picking a really great street location by accident really saved us in the beginning.
Brandon Sundwall (07:18):
Because I knew nothing about marketing, and once we could actually open the window after the first like year, then we got a lot of walking traffic. And we also found ourselves in a niche that was really needed at the time because a lot of people like had gotten out of shape, their mental health was in jeopardy because of being so stagnant, but they didn’t feel comfortable going back to Equinox or a large space. And so, we filled this sort of like transitory period in fitness that people were looking for in ‘21 and ‘22.
John Franklin (07:46):
When you said close the window, you were essentially just operating illegally basically?
Brandon Sundwall (07:50):
Yeah, totally. I mean, we just had a conversation. We bought air filters, masks. We just had an open conversation with anyone. We’re like, “Hey, here’s the deal. Like all our coaches are agreeing to be vaccinated when that becomes available. But this is like kind of train your own risk. If you’re sick at all, don’t come in. No cancellation policy problem on it.” And you know, we had a couple of COVID waves that came through, but we were just very transparent with the people who were training about the policy, and so they were comfortable with it. And then some people like opted to just train over Zoom with us, and then eventually they came back when they felt comfortable.
John Franklin (08:22):
So did you—I’m assuming you filled up quickly, and then what did you do? Did you hire other trainers? Did you sublease to trainers? Like how did you build up—you mentioned you were doing multiple spaces at the time. How did that all work out?
Brandon Sundwall (08:35):
Yeah, so before I even built out the second space, I really, I was back again, I was running the studio, and I was training like 40 hours a week myself, and I was managing online clients, so I was just kind of overwhelmed. And so, I called a friend who had been a coach at a CrossFit gym and just had him start, come in, and train some of the clients that I was signing up. And then it just kind of grew from there in spurts where like I would kind of get to a tipping point where I felt that the growth is kind of needing hiring somebody. So, I think we hired him, he was there for like maybe four months, and then I brought in somebody else. Another six months and somebody—like that as we grew. And again, not really having any experience. It was just like, “Hey, it seems like we need another person because there’s some gaps in the schedule right now.”
John Franklin (09:20):
Were you just kind of figuring it out as you go? You know, you mentioned that you came from the CrossFit background. Did you have a good mentor or something along the way that made you feel comfortable? Or was it just kind of the blind leading the blind at this point?
Brandon Sundwall (09:32):
Yeah, not in a business sense. So like, I had a—like the guy who ran the CrossFit gym that I had been a coach at this CrossFit gym, and he had like really taken running CrossFit gym seriously. And so like, I had seen someone that took the gym space very seriously and treated it like a full-time business. And he had also been the person who—he owned also the personal training studio I’d been in in COVID. So, I had this like official-unofficial mentorship from him. Like, “Here’s how you be professional in the fitness space. Here’s how you be successful. Here’s how valuable personal training is.” So like, implicitly and explicitly from him, I picked up sort of a template, but once I got into the gym myself, I had a business coach that I was working with, but I had no formal training or anything like that.
John Franklin (10:18):
And you mentioned that you expanded. At what point did you actually move into your new location? What was the cause of that? Was it like you were training people at the wall, or you thought you were going to grow into it? What was the idea there?
Brandon Sundwall (10:30):
Yeah, I mean I think it was a combination of one side, very optimistic: Build it, and they will come. Because that’s kind of what happened in the first place. And then also we had a dispute with our landlord. They were moving a restaurant in next door, and they were going to use our back parking lot for a food truck before the restaurant could open, which put the food truck directly between our two spaces. And I felt it impeded our ability to do business. So, I just said like, “Hey, you know, we could have not paid you rent for all of COVID and been completely legally within bounds, but we never missed a payment. And now you’re affecting our business negatively. We feel like you’re not creating a conducive business environment.” And basically, we used that as leverage to then move into the larger space and just be like, “Hey, we know you’re really trying to get the restaurant to take both of the units in our space, so why don’t you just take your money, and we’ll walk, no hard feelings,” with like four months left on our lease.
John Franklin (11:20):
And what did that do to your expenses with the new space?
Brandon Sundwall (11:24):
Oh man, massively increased them. Yeah, we went from 600 square feet to 1,500, and also remember we locked that lease in during COVID pricing, so it was like relatively cheap, like we’re retail on a major street in LA so yeah, I mean our rent went from that foreground to almost triple.
John Franklin (11:41):
Basically for double the space too, right?
Brandon Sundwall (11:43):
Yeah, yeah, essentially. I mean, we have like maybe I’d say like 1,100 to 1,150 of usable floor space. We put in an office that I’m sitting in right now. We have a restroom in there, and we found out interestingly that the square footage of the space is a negotiable amount. It’s not actually what’s on the blueprints, which is an interesting part of the leasing process. So, the blueprints showed that the space was 1400, the landlord said it was 16, so we agreed on 15.
John Franklin (12:11):
Anything New York, LA, San Fran, anything’s negotiable on those leases. And usually the landlord’s at a huge advantage. Alright. And so, when you moved into the space, you incurred a lot more expense, obviously. Were you profitable?
Brandon Sundwall (12:27):
Barely, yeah. Just from, like—I was still training; I still am training, but I was still training probably like 25, 20 hours a week myself on staff. So, from a business like negating my training costs as if I had hired somebody in there for my role. Like we were probably just above breaking even. We were doing about—I think January of that year, like November, December, January are probably tipping around like 39,000 in top line, 40—maybe just breaking 40.
John Franklin (12:57):
A lot of people in the CrossFit world especially will hear that and think that’s a huge number. But as someone who ran a gym in New York City with similar economics, it goes quickly.
Brandon Sundwall (13:09):
Well, yeah, and you have to remember comparatively for a personal trainer in LA, I can charge—for me, I can charge $150 to $200 an hour, and then I don’t have all the burdens of running a gym and managing a staff and all those things. So that’s also a point of comparison where I think in other places in the country, like $35 an hour is what a personal trainer can get. And so, there’s always the burden of that for me as the owner to be like, “Hey, if I’m going to put all this effort in, I have to like significantly outshine what I would do just training 20 hours in the gym.”
John Franklin (13:41):
And so you said your approach going in was, “If you build it, they will come.” Did they come?
Brandon Sundwall (13:47):
No, it was worse. So, we moved literally down the same block, but we didn’t anticipate that the previous corner we were on was like the nexus of foot traffic. And so, that really saved us a lot during that time versus like where we are now, we don’t get nearly as much. So, all happy accidents like that, it forced me as the owner to get like a lot more strategic about how I was going to attract business and to learn basically, like it forced me to get better.
John Franklin (14:13):
And so what did you do to get bodies in the door?
Brandon Sundwall (14:16):
Well, at the beginning of the year, not much. I mean, we were just kind of relying on sort of like a very positive web presence that exists around us on Google and Yelp especially, asking for internal referrals, but not in a very strategic way, just kind of like dabbling our hand in different things. Like we were doing the right things, but not—the scope of them was not significant enough to have impact, which was a big learning experience. Like, “Oh, I tried this; it didn’t work” versus like, “I tried it for six months all out,” are two very different things that I had to learn.
John Franklin (14:46):
Yeah, exactly. There’s a lot of people who will hear a strategy or get a nugget and try it for a few weeks and then get upset that they’re not a millionaire gym owner in that time, when in reality, you’ve got to put your head down and grind. So, it sounds around this time, you also had some life changes as well, right? You had a kid.
Brandon Sundwall (15:05):
Yeah, so a couple things happened. Like obviously I knew the kid was coming. They don’t just pop out of nowhere.
John Franklin (15:10):
Didn’t surprise you?
Brandon Sundwall (15:11):
Yeah, I got a heads up. So, I was burned out just to be honest. Like I had been training and going through this whole process of running the gym and managing staff, and I was working really long hours to do that. And I was starting to just get disillusioned because now I felt like I’d taken a step up, but things weren’t going in the direction. At that time, a client approached me with an opportunity to help him start up a franchise in the fitness space. And I thought this would be an opportunity to train the hours that I was still training for that and manage the two businesses at the same time. So, that decision happened in January, February; that process was taking place. My daughter was born in March of last year, and so my attention was kind of divided. Like I just figured that the gym was going to be OK, it just needed a lot of time to kind of grow. And then I would work on this other business for, for personal income, let the gym kind of grow organically until it was making more money, and life was going to be awesome, but that’s definitely not what happened.
John Franklin (16:11):
Yeah, so just grow into the space. We hear that a lot. Yeah, just going to take the extra space and grow into it. And it’s something funny that you mentioned, like you just got lucky. You picked a magical location that just sometimes happens. Like my first gym was like that; it was literally on this epic corner that I had no clue. Like I’d been to the city once before I signed the lease and just got absolutely lucky and something like that has the potential to have so much more pull than you think it would until you move and then realize, “Oh shit, I’m not a marketing genius. I just happened to win the lottery.” Alright. And just to get clarity, you said the franchise—he was going to be a franchisee, or he’s like, “I’m going to start this franchise idea.” Like, what did he tap you to do here?
Brandon Sundwall (17:02):
Franchisee. He needed me to be the operator because he wasn’t going to operate it, so he needed me to be the franchise operator. It was, like, I won’t say the name of the company, but it was basically a franchise where you do remote personal training, and so they’ll send people to your house. So basically they would—like, our role as a franchisee was to establish in Los Angeles this franchise where we would hire on the trainers as contractors, connect them with the customers and manage the in between like that through a little bit of a tech portal in between. It expanded to other services like in-home services and things like that. But we realized pretty quickly in the process that the business model didn’t really have legs so to speak.
John Franklin (17:51):
And you mentioned before you took that on, you were working pretty long hours, like what—pretty long means different things in the—it’s different shades of bad when I talk to gym owners who say they were working pretty long hours. Like, what were you putting in?
Brandon Sundwall (18:04):
Yeah, I mean I think I was like—I wasn’t working on weekends on a super consistent basis or anything, but it’s just like the hours of the gym, like I’m up early, I’m at the gym late, I’m still training a good amount, and now I have to manage these employees. So, hours per week could vary. A lot of it’s voluntary sort of like self-development, like learning and trying things and stuff like that, as I’m sure you know. But yeah, I mean, not incredible, like not more than 60 throughout the week considering the stuff I would do at home, the training and stuff like that. But a lot of it was like I didn’t know what I was doing, so you have to try a lot of things kind of stuff versus now where I’m more efficient, I’m like, “Oh, that task really only needs 30 minutes, but you used to spend three hours because you thought it had to be done like this.” Like there was a lot of that going on at the time too. So, part of my own efficiency.
John Franklin (18:51):
And you’re trying to squeak in time with your daughter and then you’re like, “You know what I need? I need a franchise right now. I need to operate another gym.” And so, what ended up coming from that?
Brandon Sundwall (19:02):
Yeah, so I mean I guess like—so my daughter comes in March, and then I took two weeks off from the gym. I was going to take as much as I could, kind of get feedback. The clients I was working with I had other trainers with. I was touching base with everyone, and then about two weeks in, I started getting messages from the staff and even from some of the clients that there was like some dysfunction taking place. So meanwhile, the whole two weeks that I was off from the gym, I was working on this other business. We were launching. We were trying to get launched in June. So that process of doing that, like I’d had to come back into the gym early. I come back in, and apparently you would think that like “Game of Thrones” had taken place with the elevated sort of level of dysfunction between people.
Brandon Sundwall (19:50):
I misread the situation and felt that like I could just come back in, and things would kind of ease out, but the tensions only got worse and exploded in part because, just to be honest, like I was exhausted. I mean, anybody that has kids knows, like I’m three weeks into having our first kid. Nobody’s sleeping like divided attention, and all the things I went into like that. So, I didn’t come in with a strong hand to resolve the situation, maybe the way it could have, or maybe it was unresolvable. And the end result was that one of the trainers left, but it appears had been plotting to leave even before this because of what I found out from outreach he was making to clients to try to solicit their business. And then he took a bunch of clients with him, and then he convinced—or the disruption convinced two other coaches to leave as well. And a lot of business walked out the door with them, and then I came. At first, I felt very like I bore a lot of responsibility, and of course I did, but I came to find out from clients that I’ve known for years that he had reached out to them and tried to solicit their business behind my back, and they came to me. So, it was kind of like everybody wears a little bit of fault in a situation like that.
John Franklin (21:00):
So you’re not point—you’re not saying you hired the—like, was it you hired the wrong people, or you’re not leading the people correctly? Was it a little bit of everything? Like if you had to say—if you had a mulligan, what would you have done differently?
Brandon Sundwall (21:15):
Yeah, I think that’s a great question. I think it’s a combination, like you said. Like I can only wear what’s my responsibility. I’d say like be a little bit more, like in the hiring process, be a little bit more stringent in the first 90 days and make sure someone’s a good fit. And then just from a leadership standpoint, rather than hoping something gets better, like if you’re training a dog, you correct behavior immediately in the moment. And so, I let something slide due to my own leadership style or lack of willingness to step in. That ultimately grew and grew into this sort of breakdown in there. So, those are my personal faults. And I think also just from a structural standpoint, like some people are toxic to culture, and it’s much easier to get rid of them early on, than let them really embed themselves and pose a danger to the business as a whole.
John Franklin (22:06):
And you said you lost two coaches, you lost a member, he took some—or you lost three coaches, right? Because it was the guy who took some clients, and then two other people left because of the drama. How much of your revenue did you lose during this exodus?
Brandon Sundwall (22:20):
Yeah, we basically went in March from like a revenue PR to we had almost like a 45% drop the next month.
John Franklin (22:31):
So almost 50% of your revenue like gone overnight.
Brandon Sundwall (22:35):
Yeah. And then I ended up basically stepping back into the gym training again. And I was working for negative dollars for a few months and not just at the gym, but also my training.
John Franklin (22:45):
What happened to the franchise?
Brandon Sundwall (22:47):
The franchise, we were—so basically, I split my time between the two things, and now I was working like 80 hours a week, like seven days a week between the two things. So, we were running the franchise during that time as well and kind of working on that and keeping that, like growing that and establishing the business as we were going through it like that.
John Franklin (23:08):
So you went from ramen-profitable in the gym to losing money in the franchise to having a little bit of time for your daughter to losing money in the gym, losing money in the franchise and not being home at all?
Brandon Sundwall (23:19):
Yeah, I mean, losing money in the franchise because you’re starting a business from scratch, and so there’s not going to be profitability from the beginning. But yeah. So, the main thing, speaking just about the gym part, yeah, we went from making some money to making less than money.
John Franklin (23:33):
Less than money. Not ideal.
Brandon Sundwall (23:35):
Not ideal.
John Franklin (23:37):
And where on this journey did you find Two-Brain?
Brandon Sundwall (23:40):
So, I had started working with Two-Brain at the beginning of the year because I felt like the gym’s growth had stagnated. And so yeah, I think it was in like January of ‘23 that I had been introduced to Two-Brain, and I kind of like have always sought out sort of like mentorship and higher education for business stuff. So, it appealed to me just because of the systems building and the structure, and that’s when I started working with Two-Brain.
John Franklin (24:04):
So the house is on fire. You’ve got problems in every direction you look. You’re working 80 hours a week. What are your conversations with your mentor like? How are—what was the plan you built? Right? Like if it was me, I would’ve been like, I’m going to lie to all that. I would’ve went to Mexico then, and then Tulum. Like what was it? What was going on there?
Brandon Sundwall (24:23):
Yeah, so Anastasia and I had like some really some tough conversations. She’s my mentor. Because I was kind of like, “Look, I don’t love this at this point. This shit really sucks. And you know, I have a lot going on, and my quality of life is terrible. Like I could walk away and start over on something else or whatever.” And so, it was just kind of like a soul searching, like what do I want to do here? And I really just don’t like—you know, the thing I shared in the beginning is I really just don’t like to lose. And I think that’s what really was the thing. So, I work well with finite goals as opposed to open-ended outcomes. And so, she was like, “Alright, what’s your deadline on this? Like, if you’re going to turn this around, give yourself a timeline, and that way you’re not stuck with it.” And so, I was like, “Alright, if we’re not decently profitable by Christmas, let’s shut this shit down.”
John Franklin (25:14):
So, what happened? This was March, right? This was the—you kind of hit the bottom around March, April here?
Brandon Sundwall (25:20):
Yeah, April, May is when things really like—it didn’t all happen in like one day. So like March was, beginning of April is when things kind of, the shit went down. And then by April, May, June—June was really like ugly times because now it’s the summer too, so it’s like you’re not getting a lot of inquiries and things like that. Yeah. So, we said Christmas. So, then the question went from like, “Will I save the gym?” to “If I have six months to work as hard as I can on this, what will I do to save the gym?” So, it was a much more constructive framing of the problem. And I think that worked really well for me. So, what had worked well in the past was like, “I’m just going to do everything that I know how to. I’m going to be present every day.”
Brandon Sundwall (25:59):
“I’m going to train; I’m going to do—I’m going to like really evaluate what’s working and focus on the things that I’m good at.” And I also only have x amount of time to work on this because I have this other franchise that I’m working. So now I have to be hyper efficient with my time. I can’t just have all the hours in the day. And so now, it allowed me to remove the emotion and the fear from the process of like, “Am I a failure for losing this business?” to like, “OK, more as a consultant in my own business, like what would I do to save this business?” And that helped a lot.
John Franklin (26:28):
So it was six months, do or die, and you basically were looking at it from an outside view, like giving yourself a finite deadline, and you’re like, “I just have to maximize every hour I put into this business.” And it sounds like just “act like an owner,” right? And get the most out of every single unit of time you were putting into the gym to turn it around.
Brandon Sundwall (26:48):
Yeah, like the first thing I did, I had two staff left in the gym and a VA that was doing our lead nurture. And I literally sat—we had our—like our team meeting every week got worse because there’d be like one less person. Felt like death. And like, these were the two original staff. And I was just like, “Dudes, do you still want to do this? Like, honestly, because if you guys don’t want to do this anymore, like we don’t have to—like that’s, that’s where we’re at.” And they were like, “We got you. Like whatever it is, like we’re in for this. Like we’re in.” And I was like, “Alright, like I feel like a sense of responsibility to them now because they’re committed to me.” And so, it also gave me some confidence to be like, “We had some backbone there.” And so, that was kind of like the turning point too. Like that showed loyalty, and sort of feeling like I had the support internally mattered.
John Franklin (27:33):
And so we’re obviously talking today, so you know, the spoiler alert, you turn it around. What did you do during that six-month period differently than you were doing as an owner before that allowed you to save yourself here?
Brandon Sundwall (27:45):
Yeah, I think the first thing is I stopped—I started doing all the stuff that I didn’t like. Before, I had this idea that I could run the business in a way that was more palatable to my personality, which was like less day-to-day involved. But I realized that’s not necessarily how this industry works specific to our model and stuff. And so, I had to change sort of my expectations for myself, and before, I would kind of shy away from things I had to do. So, I coached myself to like, if I felt resistance to a task or something, it meant that it was something that really needed to be done, and that was something that I would follow through on whether that was calling leads, especially having a lot of checkpoints with staff now to make sure that we were on the same page.
Brandon Sundwall (28:25):
More interaction with clients, leading to more referrals and things like that. And then systematizing things so that I didn’t like work on what felt good or I was interested in. So, like not spending 20 minutes on an Instagram post that two people are going to see versus calling some people or actually training people or whatever it was that was more valuable. So, I think I got a better sense of like: What’s most worth my time and effort? Not: What do I most want to do? And focusing on the former.
John Franklin (28:54):
I think a lot of Two-Brain mentors listening to this now are nodding their heads. You just did it in the accelerated program. You managed to do all those things relatively quickly. Let’s walk through each one because they were all awesome. Those are all the answers I wanted to hear. You gave me what I needed there. So, the first one was calling the lead. So, what did that mean you were getting—how were you getting leads, and were you just not calling them before?
Brandon Sundwall (29:20):
Yeah, I mean we were. We were pretty good at it. Like, I would say our lead nurture was good. We just didn’t have a lot of people going in the top of the funnel. The other thing that had happened was at the beginning of the year, I’d given up the sales consultation role, and I was letting the coaches do it, but I wasn’t managing it. I had like abdicated, not delegated, and so I wasn’t doing quality control. And so that was a big problem. So, I’m the best salesperson at the gym by the numbers. So, I was like, I’m going to do that because that’s the most important thing. The other thing I forgot to mention is we had only been offering one-on-one training. And so, we had all the space, and now we had no one in it. So, I was like, “Let’s start adding semi-private/small group.” And we completely opened our market, basically doubled the size of it because we went from like, “You must pay 1,000 or more dollars a month to come here” to “Now you can pay 600.” And so, it entered an entirely different client avatar that we hadn’t been able to close before because they just didn’t have 12 grand a year to spend on personal training. So that was a big part of it too.
John Franklin (30:14):
I like that you said you abdicated and instead of delegated, and you kind of didn’t really monitor. And that’s really easy to do. A lot of people think that they—once their gym becomes successful, they can just hand over sales or marketing or social media, and it will just continue to work the way it did. But the reality is nobody is going to do a better job at that role than you because nobody cares more. And a lot of people don’t realize how—like most don’t track set show close by rep. But let’s kind of paint a picture here of what that could cost for a gym owner who—it’s like I have my other guy doing it, and he only closes 5% less than I do. But for example, what is someone at—like the average person at your gym, what’s that worth to you? Like what’s the lifetime value of a client?
Brandon Sundwall (31:00):
Yeah, the lifetime value is anywhere between $6,000 and $8,000. Our average revenue per member per month is about 750.
John Franklin (31:08):
So, let’s call it seven grand, right? And so, for every 100 consultations—which you know, so probably the amount a gym does in a year, maybe more for you because you’re in a high traffic area—a 5% difference in close, that’s five members. So, five times 7,000, that’s 35,000 in lost revenue if you just have somebody who only closes 5% worse than you, right? And so, a lot of gym owners, if you’re listening to this now and you do delegate your sales, like that’s a true cost of something like that. And so, if you have areas in your business where you can generate that 35,000 elsewhere, power to you. But I always love to paint it out by numbers and extrapolate across like a longer period, like a year to see what that truly costs. Now the second thing you said that was great is you just talked to members and somehow when you talked to more members, that led to more referrals. What were you doing before, and what are you doing after?
Brandon Sundwall (32:16):
Yeah, I mean, just to share about me, I’m a pretty introverted person, and so like the last thing I want to be is seen in a big space and be the center of attention. And so, I think I shy—I let other coaches be that in the space. And so, when they walked, that role and sort of like a lot of clients walked because of that. And so, like I had to bite the bullet and just be more interactive. And so, like I believe this is your line actually specifically, like conversations equal conversions. And so, I just like—I like sales, and I like feeling like I’m successful at winning and acquiring clients. So, I started looking at those conversations, one, as feedback so that I can improve retention and then, two, as potentially lead generating conversations. And so that reframe made it, again, more palatable to me so that I was seeking them out as opposed to like shying away from that process.
John Franklin (33:01):
And then you mentioned systems and processes. What was different in your approach during your six-month, do-or-die period versus before?
Brandon Sundwall (33:09):
In regard to like the sales system specifically?
John Franklin (33:11):
It sounded—I think earlier you mentioned it was just systems in general, but it doesn’t have to be sales specific. If there was one area that had more impact than others in terms of system systematizing your business, we’d love to hear it.
Brandon Sundwall (33:25):
Yeah, I think something that I did because of the time efficiency I needed to do, I created something called the “Monday routine,” which is like a checklist for me as the owner that covers all the areas of the business from finance to operations, et cetera. And I just distilled down like, “What are the three or four operations on a weekly basis that if I look at these or make sure these are done, we’re going to be successful?” So that was one thing that I make sure happens every week, even if I’m not present in the gym. The other thing is I started tracking leading KPIs. So, like revenue, session service, those are all lags. And so, I noticed that we were tracking sessions per week, but that’s still a lagging KPI because I would find with coaches, like all of a sudden, they would have a week with like a 30% or 40% reduction in attendance. And so, we started tracking leading KPIs. So, I would say like, “Hey, the sessions for your clients need to be on the schedule for the next month. They need to be booked out because they’re much more likely to happen.” And so, I would go through, and I would look at the calendars, and I would track weeks ahead, and then I would intervene ahead of time. And so, our attendance started to increase pretty significantly, like 20 to 25%. And so that was a big factor.
John Franklin (34:34):
So listener, dear listener, if you’re unfamiliar, leading KPI is just like looking out into the future where a lagging one is more like a rear-view mirror. So, you gave the example of sessions. So, a lot of people track in their gym management software, like “How many sessions did I have last week?” Something like that would be like great. Like, “OK, we had 100 two weeks ago. We did 120 this week. We’re improving. That’s awesome.” But if you’re not looking out into the future to see how many are on the calendars, you just wake up, it’s one Friday, you’re looking at your metrics—or you said you do it on Monday—and it was like, “Oh shit, we did 60 the week before,” and you had no clue because you’re looking the rear view. And so, by making that small shift, I’m assuming it allowed you to talk to your trainers and say, “Hey, this looks low. Call your clients.” “Hey, it doesn’t look like we’re booking people out enough,” which allowed you to kind of preserve revenue going forward. And I’m assuming that matters a lot more in a personal training-based business than something that’s 100% group.
Brandon Sundwall (35:32):
Totally. Yeah. And I think the other thing is, like a lot of new business owners, I was obsessed with like new clients, leads, leads, leads, but like what’s easier? Getting the people who already like you to come in more frequently, or go find a whole new person and establishing a relationship? So, I think it was accepting like, “Hey, if I just like push the trainers a little bit to get the person in one, two more times a month, that’s another—” Right? Like each time they’re coming in, they’re training at $125, it pushes that up like that.
John Franklin (36:00):
Getting a new client is so hard. And so yeah, that is something that, talk to more grizzled gym owners, that you hear over and over and over again. You just get better at doing the most with the clients you have. So glad to hear that you had that mindset shift. So, let’s flash forward to—actually before we do that, you mentioned the Monday thing. That’s interesting. That’s something that I haven’t heard before. So, what is on your Monday checklist? Like what are you looking for?
Brandon Sundwall (36:30):
Yeah, so by section, like the first section has to do with marketing. So, we also use leading KPIs there. So, we’re tracking pieces of content posted, dollars predicted to spend on ads for marketing. As other leading KPIs, we’re tracking the amount of conversations, from a sales perspective, the amount of new conversations we had and the amount of total conversations per week. And then, I look at those numbers, I reach out to the VA who’s doing the lead nurture to make sure to audit those conversations. That’s one thing. I check on ad results, so I’ll look at what our cost per lead is, cost per click, things like that to make sure that they’re where they’re supposed to be. We’ve been working with Gym Member Machine in terms of … team, like doing an ad agency basically.
Brandon Sundwall (37:16):
And so we touch points with them if we need any changes. And then from an operation standpoint, I send out like a weekly bullet point message to all the coaches. Like, “Here’s the things that we need to focus on this week.” And then I send individual check-in messages to the coaches. So, I audit their sessions from the previous week. I ask for updates on clients who we’re a little worried about. If a client’s been missing for two weeks in a row, our client success manager is tasked with calling them and then collecting any other things like that. Those are some of the main things. So, looking at those KPI numbers, it’s just a decision tree, right? So, if I go in there and I see that the KPI is where you want it, awesome, that’s good. I probably don’t have to audit it at that moment. If I see that the number’s a little low, then I’ll move down to the next: Is it because of this or this? Then if I get there: Is it because of this or this? And then I can get an answer, and we can start fixing the problem back up the tree.
John Franklin (38:04):
What gets measured gets managed. And so how much time do you carve out for this each week?
Brandon Sundwall (38:09):
I mean, it probably takes an hour if there’s not a lot of issues. If there’s a bigger issue, then I just set like a follow up time to either meet with the staff member or to address the issue at a longer time. But actually, just going through the list takes like an hour at most. It’s just like, I literally set a timer and so I have this ticking time bomb in front of me, so it makes me work really fast, and I’ll just hammer that out.
John Franklin (38:31):
That’s awesome. That’s a cool little hack. And so flash forward to today. What happened? What was the result of this effort?
Brandon Sundwall (38:43):
Yeah, so we are—since we’re talking, I didn’t close at Christmas. We ended, going from just like—we hit the bottom at like 20, 28,000 in revenue. And then by like November, I think, we got up to like 56. So, we’d climb back up and then, the holidays are a little bit, there’s a lot of—we live in a very transitory area, so like people live in apartments, not houses, so there’s a lot of flow around the holidays usually. So, then we kind of entered the year down people, but we’ve kind of climbed back up since. In the past three months, I think our average revenue is just about 60,000.
John Franklin (39:19):
So you’ve basically more than doubled your gym in the last six months?
Brandon Sundwall (39:23):
Yeah, yeah. And our goal, like I think our—with our model currently the way it sits at a 50/50 split between small group and one-on-one, I think if we hit 100 to 110 members, we’re going to be like pretty damn at capacity because of the—people train. People don’t train here in the evening for us, like it’s mostly from morning until like noon, one o’clock is very packed. So yeah, we’re sitting at like 82 people trained with us last month. So, we’re really looking to push hard to get to what I think is going to be a magic number of like 100 or 110.
John Franklin (39:54):
And are you still working 80 hours a week?
Brandon Sundwall (39:58):
No, no, I’m not working 80 hours a week anymore. Like, I still—I feel like it’s good for me to be on the floor, so I still train some clients. You know, in terms of staff management, I probably spend like three hours per week meeting with, overseeing them. I handle all the sales consults. On average, we’re signing up about two people a week. I’m closing about 75% to 80% of those. So maybe like two to three hours on that, one hour of overseeing lead nurture. So yeah, I mean total, like actually running the gym versus me physically training people in person is probably less than 15 hours a week.
John Franklin (40:30):
That’s awesome. So it sounds like a pretty substantial cut.
Brandon Sundwall (40:31):
Yeah, maybe even last, to be honest. Yeah, maybe 10 hours, honestly, because I’m in here training the clients, and I gather feedback from that, but I could have somebody else do that if I wanted to.
John Franklin (40:42):
So how many hours are you hanging out on the floor?
Brandon Sundwall (40:45):
Like training or just like hanging around watching?
John Franklin (40:48):
Training people? Like how many training hours are you doing a week?
Brandon Sundwall (40:50):
Between 10 and 15 a week right now.
John Franklin (40:54):
So it sounds like you’re in the neighborhood of 20, 30 hours in the gym?
Brandon Sundwall (40:58):
Yeah, yeah.
John Franklin (40:58):
So you’ve doubled your revenue and halved the time you’re working. Does that sound about right?
Brandon Sundwall (41:05):
Yeah, that sounds accurate. Yeah. And any additional time that I would say I work on the business is completely voluntary, like learning, right? Like, “Hey, I want to learn more about how to be better at marketing, et cetera,” but it’s not operationally important to keeping the gym running.
John Franklin (41:19):
Alright. So, you doubled your revenue; you’ve halved the hours worked. What’s next for you? Where do we go from here? What’s the next six-month sprint?
Brandon Sundwall (41:27):
Yeah, I think like my big goal is like, I want to get to these 100 members. This is sort of like this goal that I set. It’s a nice even number. And I think over time, our shift is going to be towards more of a small group facility because it allows me to pay the staff more. It allows us to have a little bit bigger pool of people, which through referrals, begats more people. And I think it’s also just a more sustainable system. And I think honestly like people buy into the gym more when it’s a group thing. So that’s important.
John Franklin (41:55):
What’s happened to your profit over this period? Obviously, you were losing money, so it was negative profit, I’m assuming it’s positive profit now. Are you in healthy margin territory?
Brandon Sundwall (42:06):
Yeah, I think in terms of margin—let me see. I’d say yeah, like I think if you consider like total net owner benefit, right? Including like if I was to pay myself as a coach at the same rate, we’re looking at probably just under 30%, maybe like 28%.
John Franklin (42:21):
Which is tough to do in an expensive city with the type of overhead you have. So.
Brandon Sundwall (42:28):
Yeah, our contribution margin is high too. Like it’s probably about 50% just because I think that one of the learning experiences, like investing in good staff is really important, and because of the cost of living here, people have to be able to make a living if they’re going to stick around and grow.
John Franklin (42:43):
Yep. Always something I struggled with operating gyms in New York. It was very difficult to stay within the salary cap but pay people a career-long type of wage. So definitely a struggle of owning a gym in a tier one city. So, it sounds like you’re a little higher than maybe the average that we would recommend, but that’s kind of what you need to do to live in sunny LA.
Brandon Sundwall (43:08):
That’s true.
John Franklin (43:10):
Alright, so we’re charging to 100 members and anything else that we’re working on? Anything else we got on the horizon that we’re looking forward to?
Brandon Sundwall (43:16):
I think pretty much just that. Yeah, I think that that will allow me to step into more of a sort of like ownership and running the gym role, and I’m interested to see if like that is all I focus my attention on, where we can go kind of from there. I think that’s the next big stop. Pretty sure that I don’t want to own another gym, like a second location. I think I don’t have to touch the hot stove on that one. I’ve read and listened to enough content on that. And so probably, what I see for us is like our demographic we work with is like the cliche busy professional, but we’re a little bit more honed on who that is and where we’re helping them. So, I think moving into more of like a corporate referral kind of element as, especially in LA, there’s a big understanding of like the importance of mental health for productivity and physical health. So, partnering with some companies to be a provider for them would probably be my jumping off point after the gym’s in a really good place for the next six months to a year.
John Franklin (44:11):
Well, I’m looking forward to the follow-up interview one year from now to see how it has gone. I’m certainly rooting for you, and I appreciate you sharing and being vulnerable with us. I know it’s easy to talk about success, but I think it’s important to hear that it usually comes with a heavy helping of failure before that turnaround comes. So, thanks for opening up the kimono and sharing with the community.
Brandon Sundwall (44:37):
Yeah, absolutely. My pleasure. Thanks for having me.
John Franklin (44:40):
And that’s all I got for you this week, gym owners, on “Run a Profitable Gym.” If you could do us a favor, subscribe and like. And if you want to talk about getting a mentor for your gym, go to twobrainbusiness.com and slam that “Book a Call” button. And if you want to hang out with other gym owners who are shooting ideas, we got a Facebook group that is free, just go to gymownersunited.com, join, ask your burning questions and maybe Brandon will answer you. Until next week, love you, miss you, gym owners.
