Chris Cooper (00:00):
Hey, guys, Coop here. This is “Run a Profitable Gym,” and are you ready to grow your empire? That’s what we’re talking about today: the stages of business that will get you ready to scale. So whether you’re thinking about opening up a second location, third, 10th, even franchising your company, I wanna make sure that you’re set up for success. This week, on all of our content, we’re talking about expanding your empire. We have multiple dozens of gym owners in Two-Brain Business who own multiple locations, and their lessons can be very helpful to you—especially the ones that will save you from starting a second gym and then destroying both of your gyms. If this is helpful to you, just go to gymownersunited.com. That’s our free public Facebook group. We put helpful content in there every single day. All the mentors on the Two-Brain team are in there, just chipping in, helping gym owners out for free with all kinds of advice and materials and tools and templates. You can just join for free. It’s gymownersunited.com.
Chris Cooper (00:59):
Today we’re gonna talk about being ready to scale, to expand your empire to multiple locations, and the steps that are required to get there. So if you’re listening to this on the podcast, you might wanna tune into YouTube to see the diagram. I’ve got this really pretty graphic that the media team made for me to break down the four stages of the gym business. The first stage is called “systemization,” the second is “optimization,” the third is “growth,” and the fourth is “scale.” And if you’re listening to this instead of watching, you can just picture four ascending mountaintops. Okay, so here we go. The first thing that has to happen in a business to get ready to scale is you have to be able to systemize everything. That means replacing you, the owner, and what’s in your head with systems that your staff follow and run even without you there.
Chris Cooper (01:49):
This is what excellence means. It’s not “when are you at your best?” It’s “how does your gym perform when you’re not there? When your worst employee is running your worst class ever, how good is it?” And when you’re building a business, especially a gym business, you don’t grow to the level of your marketing and stay there. You fall to the level of your systems, and you keep coming back there. Ask anybody that’s done a marketing agency or a six-week marketing plan, and they’ve gotten all these leads in, and maybe they even got a bunch of signups, and maybe they even made revenue from it, and then two months later they’re right back where they started because you fall to the level of your systems. So what systems do you need? What do you need to get out of your head? Well, there’s a few.
Chris Cooper (02:32):
First, you need your ops systemized completely, including “how do you turn on the lights in the morning? How do you clean the place up? How do you run a class? How do you nurture your leads? How do you call people? Okay, what do you say at a No Sweat Intro?” So you need your sales process systemized and you need your marketing systemized, okay? This means that you should be asking for referrals as part of your goal reviews every single time. A system is like a machine. And when you build a system, it’s like adding a gear in the machine. And the more you use that system, the smoother the gear turns, and it becomes more powerful when you just keep doing it. So once you’ve got these systems built, your gym can actually grow, but if you don’t have these systems, then you’ve got nothing to optimize and you won’t grow.
Chris Cooper (03:22):
And I’ll come back to that in a moment. So you need a system for staff training and ascension. You need a pay system. Absolutely. I already mentioned ops, and that’s like cleaning. You need a delivery system. How do you deliver the perfect class? How do you do it at a 10 outta 10 every time? You know, you need all that stuff. You need pay systems for yourself and your and your staff. You need a metrics system for tracking how you’re doing it so that you can improve that over time. Now we build all these things with you in a program at Two-Brain that’s called RampUp. And the goal here is to build you a system for sales, a system for retention. I don’t wanna forget that—that’s my favorite one. You need a retention system, a system for marketing and the different types of marketing, right?
Chris Cooper (04:08):
You need a system for organic marketing. You need a system for referrals. You need a system for paid marketing, and you need a system for content. You need to get those all down on paper before you can grow. Because when it’s time to grow, if you’re worried about still doing all those things yourself or looking over somebody else’s shoulder and micromanaging them or hoping that they just do it, you’re not gonna be able to grow. Remember, you don’t rise to the level of your marketing. You sink to the level of your systems. The next stage is optimization. Now, this is where you decide like, “OK, this is the system for me, and we’re just gonna get better at that.” This is what I might even call like “virtuosity.” And a lot of gyms never get past this stage because they don’t systemize and test things.
Chris Cooper (04:53):
So what they’ll do is they’ll say, “I’m gonna try Instagram ads, and I’m gonna spend a hundred bucks on Instagram ads this month, and if I don’t get any new leads, I’m gonna stop doing Instagram ads.” Instead, what they should be doing is learning a good marketing system for Instagram ads, setting that up and then running three variations of those ads, deciding which one converts best, and then just putting all the money into that. And that’ll come in the growth stage. So you double down, OK? But you have to test. So the best gyms in the world, and you’re gonna hear this on our podcast later in the week, too, the best gyms in the world pick the methods and the models that work for them. And they just work really, really, really hard at getting better at those methods and models.
Chris Cooper (05:41):
Now, at Two-Brain, we teach you models for all of these, and we do that in RampUp. I’ll give you an example. The sales system that we teach is called the No Sweat Intro. And you can learn the No Sweat Intro. You can follow the script. You can read the questions right off your hand or off your computer screen while the client’s sitting right there in front of you, and you’ll have the system. But then you have to practice the system. You have to get reps with the system. You have to get comfortable with the system to get good at it. And that is where you optimize the system because simply knowing the system is not enough to help you grow. And you’ll see why in a moment. But the reality here is that you have to optimize and test every single thing that you’re doing.
Chris Cooper (06:21):
I’ll give you another one: your delivery system. Let’s say that you’ve made up a workout program that you’re sure is gonna get your clients results. Well, if you’re not tracking their results and testing their results, you don’t know if it’s actually getting them results. And so then they don’t get results, and then they quit. You have to be tracking your delivery. Are you actually getting people results or not? So maybe that’s why you set up your goal review process. You measure their results, you update their prescription based on what’s best for them, and you help them double down too. Retention, I mean, you want to be auditing your retention process and measuring that metric. And of course, metrics are all about optimization. So you wanna have this period where you’re not just scrambling around trying every single thing, a hundred bucks to Instagram, 50 bucks on Facebook, 300 to TikTok, 200 to LinkedIn.
Chris Cooper (07:13):
What you wanna do is find the system that’s working for you, test variations on that system over and over, get reps, get really, really good at it, and then move on to growth. Now, the growth stage, you know what’s working, and it’s time to double down on it. So when your business enters this phase, growth, you already know like, “Hey, I get really good lead gen from Instagram,” for example. So you wanna double down. So this is where you ramp up your ad spend. This is where you might add capacity. So for your delivery, you might add coaches. For your sales process, you might add a salesperson. Probably not, but maybe if you need to add more capacity. Or maybe you might hire somebody to do lead nurture for you or whatever. One, one quick note on that.
Chris Cooper (08:04):
Usually when you’re in the optimize phase and you’re testing things, that might be when you add humans or robots. So when you’re optimizing things, either you are doing something yourself and measuring it or you’re giving it to humans and measuring their output, or you’re automating it by doing like an automated lead-nurture sequence, for example. But it’s a mistake to just jump straight to automation before you’ve got the system absolutely dialed and before you’ve done it yourself. Because what you’re doing then is instead of delegating the work to a human or a robot, what you’re actually doing is just abdicating the work. “I don’t wanna do lead nurture. I don’t know how to do it. I don’t wanna be texting people. I’m just going to pay for a CRM and hope that their texting works.” You have to do it yourself.
Chris Cooper (08:52):
You have to deliver the system yourself. That’s how you optimize. And then you can automate if you want to. So in growth, you might move to automation again once you’ve got the system down. So you’re adding coaches and you’re adding ad spend and you are onboarding clients. And basically in the growth phase, you should know “hey, Facebook ads are working in my market.” Or “three out of every five people who we ask for a referral give us a referral.” You should know that so that you can decide where to go all in. It’s not the time to be experimenting with stuff usually at this phase. After you go through that growth phase, and let’s say that you can get up to, you know, maybe about 150 clients, you’re earning $100,000 in net owner benefit per year, maybe you’ve got one full-time staff, one part-time staff, that’s when you decide “now it’s time to scale.” Here’s what happens to most gyms, though. They will have these brief periods of growth. And so something will happen and they’ll get like five new clients, and they’ll try and onboard these clients, but they have no systems to do it. So if the owner doesn’t onboard the client themself, the client probably doesn’t convert to a long-term membership, right? So again, you sink to the level of your systems. Or somebody will bring their entire family in and their family will sign up. But because you don’t have great operations, some people in the family have to come to the Tuesday class and some have to come to the Wednesday class, and it’s not the same experience. And so the people with the Wednesday class are like, “Well, this sucks. We’re out.” And they quit.
Chris Cooper (10:28):
You fall to the level of your systems again. Or the other thing that can happen after a while is people start a new marketing program. “OK, here’s what I’m gonna do. I’m gonna advertise on LinkedIn.” Awesome—advertise on LinkedIn. You get five new clients. “Oh, so good. Let’s keep advertising on LinkedIn.” Well, now it doesn’t work anymore, and after six months it’s not working at all because you don’t know how to optimize what you’re doing or you don’t have a base of content, right? You don’t have a media system. So we’re gonna add that in. Here’s another system that you need that we teach in our RampUp program. Then you’ve got optimize. So another mistake that gym owners make at this stage is they systemize things. “Facebook ads are working for me.” Great, perfect. “They worked for the last three months in a row. They’re gonna work forever, right? I can add five more gyms. Let’s go sign the lease on five more locations.” Suddenly the algorithm changes. Your ads aren’t working as well anymore. You don’t know how to optimize them and oh—you’ve got six locations now and nobody’s getting any new clients because you don’t know how to optimize and continually measure things to improve them. So this is, it’s really important, this optimize phase, and I’m trying to get that through to you. When are you actually ready to scale? Well, there’s a few metrics that you should be looking at. Number 1, you should be able to make $100,000 net owner benefit. That’s profit. That’s you taking money out of the business. That’s not the business’s total top-line revenue. You should be able to make that from one location before you add a second.
Chris Cooper (11:58):
Here’s why adding a second will quadruple your workload. You’re not just gonna split yourself in half. What you’re actually going to do is create all kinds of task-switching problems in your head. So you’ll have to drive back and forth across town from one location to the other. That eats up time. You’ll have to think twice as much and go from thinking about one location to the other, and that eats up brain space, and you get tired, right? The other thing that you have to be able to do is take one week completely away from the business. If you can’t even do that, there’s no way you should be opening up a second location. You also wanna be looking at a couple of client-facing metrics like ARM and LEG. Look, if your business isn’t doing average revenue per member of around $200 and keeping them over 13 plus months, optimize that first.
Chris Cooper (12:46):
Your bigger opportunity is not to open a second location; it’s to optimize the location that you have. And so you go back to this growth. So there are a few traps here that I want to talk to you about. In between the systemize and the optimize phase, we have what we call “the swamp of perfection.” And this might show up in your brain as “nobody can do it as well as I can.” What you have to get over here is this premise that people have to be as good as you to be a coach or as good as you at cleaning to be a good cleaner. What you’re actually doing is hiring people to buy back your time. And in doing that, you might have to accept that they’re gonna perform at a B+ level. And that’s OK. If you are constantly micromanaging them, you are not gonna be able to ascend your business through these stages.
Chris Cooper (13:37):
You are not looking for a coach who’s as good as you are. You’ll never find one. And so you want a coach who can smile, be happy and energetic at 6 a.m. even if their base of knowledge is like a C+. You want that pump-up cheerleader because that’s the first person your clients will see in the morning, right? They might not be up to your standard, and that’s OK. That’s the skill set they need. So that’s the swamp of perfection. You have to get over it. The way that you get over it is you constantly get everything out of your head and onto paper. Then in the optimize phase is what we call the “valley of death.” So you set up these systems, maybe you go away for a week, you come back, and the whole place is on fire. Instead of saying “how can we fix this?” you say “nobody can do it as well as me. I’m gonna jump back in, and I’m gonna fix it all myself, and I’m gonna fire everybody.” This is like the valley of death for a lot of gym owners. And they get in this circle where they just can’t grow because they’re so stuck trying to make everything so perfect that they can’t see outta their own head. The other valley of death trick here that our brains play on us is “well, this is as big as I know how to make this gym. I better start something new.” So you think that you’ve run out of runway at your gym and you’re gonna start a t-shirt company. Or “this gym is as big as it’s ever gonna get. I’m not making enough money. I need to go out and I need to start an online programming business or something completely different.”
Chris Cooper (15:06):
Another one is “the reason the gym isn’t growing is because I’m not certified enough. If I go get my master’s degree or a CrossFit Level 12 black belt, people will find me.” That’s not true. Like there’s a lot of traps in here that will actually stop you from growing because you’re pursuing the wrong things. A mentor will help you here almost more than anywhere else. And, for me, only mentorship gets me through that trap. Finally, in growth phase, you have to be able to focus on “does this grow my gym? “So there’s a great book called “Will It Make the Boat Go Faster?” You don’t need to read it. The answer is in the title. If this does not get your gym to 150 clients or $100,000 net owner benefit faster, don’t do it. At this point, we’ve tried all the stuff, we’ve done our little experiments, right?
Chris Cooper (15:55):
We’ve dabbled and we’re done with that. We’re gonna go all in on what’s working for your gym, and your mentor can help you figure out what that is. So you’re just going to sprint basically, and in the growth phase, you’re gonna go as fast as you can to 150 clients or more and $100,000 net owner benefit or more. And at that point, when you can take a week off and still make a hundred thousand dollars a year, that’s when you think about scale. Now scaling means duplicating what you have into multiple locations. And because you’ve got everything systemized, you’ve got basically a franchise playbook. Because you’ve done the optimization, you have to make minimal tweaks depending on the next location that you have. And because you know how to grow a business already, and you’ve proven it, you’re not gonna impoverish yourself. You can take little risks. Later this week, you’re going to hear an interview with me and three gym owners who are scaling in different ways.
Chris Cooper (16:47):
Some are renting spaces and growing their gyms from scratch over and over. They’ve got everything systemized. They’ve got things pretty much optimized. They’re gonna do maybe a little bit of tweaking with each of the new locations, depending on where it is, but they already know how to grow. If they are buying other gyms up, well, then they have to start with putting their systems into the gym, but they don’t necessarily have to start from scratch with getting clients. So, you know, the growth is gonna be faster for them, but they still have to go through systemization and optimization. The biggest mistake that gym owners make is they get a gym, and it’s fairly successful. Maybe they’re making $50,000, $80,000 a year, so they’re good, right? That puts them in like the top, let’s call it, 30 percent of gym owners worldwide.
Chris Cooper (17:32):
Good for them. Then another gym opens up down the block, they’re not doing as well, and the gym owner says, “I know how to do this. I’m just gonna buy that gym and I’m gonna do it again, and that will double my income. So I’ll have $50,000 from this gym, $50,000 from that gym. That’s a hundred. Boom.” What they, they don’t realize is they’re buying is other people’s mistakes. You’re buying a gym that hasn’t run on systems. You’re buying a gym that doesn’t have any of the challenges solved at all yet. And you’re buying a client list of people who are married to the lack of systems and the lack of optimization and the coaches who are already there. So you have to fix other people’s problems before you can do anything else. And that almost puts a step before systemization, which is like breaking down what’s currently there.
Chris Cooper (18:18):
For that reason, I think it’s better to just start from scratch, duplicate your model over and over, replicate your systems, create your own miniature franchise. But there’s a good argument for doing it the other way, too, because then you’re already starting with some clients. So to recap, every gym business goes through four distinct phases to grow. They have to systemize everything. They have to make it a real business or they’ll constantly be falling back to some ceiling effect. For some gyms it’s 50. For some it’s a hundred clients. After they systemize everything, they have to optimize things. They have to get the trial period out of their heads. They have to stop experimenting, figure out what actually works by measuring things with metrics, and then just double down on that. And once they’ve got that going, they should be able to prove it by making a hundred thousand dollars a year in net owner benefit with about 150 clients or less.
Chris Cooper (19:13):
If they have more than that in net owner benefit, more than that in clients, that’s great, but if they have 300 clients and they’re not even making a hundred thousand a year, they should go back to optimizing their gym before they think about scaling. Finally, when they have that, that’s when they can scale. And there are certain options to do that. We help gym owners with this stuff all the time. In our Tinker Program, there are dozens of gyms with multiple locations who can talk about this. And even at our September meetup, we have a panel of multi-gym owners who are gonna answer questions for the other people in our Tinker Program. That’ll be in San Diego–Tinker in September. But if you’re thinking “I’m just gonna do this on my own. I’ve figured out my first gym. It’s doing OK. You know, it’s profitable. I’m making $50,000 a year. I’m gonna open a second or buy a second location,” I really urge you to go backward through this: systemize everything. Take a week off and make sure nothing breaks. Optimize everything so that you know where to go all in and you’re not just shooting from the hip with your marketing, sales, retention, staff, ascension. Pay yourself. And that’s when you can scale, when you can make a carbon copy over and over and over again. And that’s when you can scale quickly. Remember, systems scale faster, and you always sink to the level of your systems. So it always helps to start this way. I’m Chris Cooper, and this is “Run a Profitable Gym.” Whether you’re ready to expand your empire or just dig yourself outta your hole, book a call with my team below. If you just want free help, go to gymownersunited.com and we’ll give you all kinds of free stuff that will help you get more clients, keep them longer, and make more money until it’s time for mentorship.