How to Find Clarity and Build Wealth as a Fitness Entrepreneur

Podcast-1 (22)

Chris Cooper (00:01):
How do you actually grow your business? How do you literally make more money? How do you beat overwhelm and paralysis by analysis and just the general busy-ness that comes with owning a gym? You do it by focusing on one thing at a time, by taking one small step today, right now. By finding clarity and then doing one thing at a time until you gain momentum. So today I’m gonna tell you how to filter out the noise of bad ideas and badly timed ideas and stress, how to identify what you need to do in your business and in what order you need to do it, how to beat overwhelm and take action, and why it’s critical to be clear with your staff—and how to do it without being a jerk. So this is one of the most important podcasts that I’m going to give you.

Chris Cooper (00:51):
All the free ideas, all the inspirational books, all the education that we share on Twobrainbusiness.com every single day for free, it could be literally worth millions of dollars to your business, but if you don’t use it, it’s literally worth zero. I’m Chris Cooper, I’m the founder of Two-Brain Business, and if you have questions about this episode, please go to Gymownersunited.com, which will redirect you to our free Facebook group just for gym owners, where we answer questions and talk about stuff like this every single day. Again, it’s free. The difference between gym owners who succeed and gym owners who don’t is not stronger work ethic. It’s not their location. It’s their ability to focus on the right work at the right time, and then do it.

Chris Cooper (01:39):
So today, before we get into what exactly you should be focusing on depending on where you are in your entrepreneurial journey, I’m gonna give you some filters. I’m gonna start off right away with five amazing tools to help you filter out your ideas and all the overwhelm that comes from being a gym owner. So the five filters that you need to grow your business. First off, the reason that you need filters is that you have too many ideas, right? Not all these ideas are bad; most are good. The problem is that you can’t do all of them, and you get more ideas every day. The further you progress in your entrepreneurial journey, the more ideas you’re going to have. You’re never gonna run out of ideas. And as our social presence increases online, you’re getting exposed to more and more thoughts. And so for now, you’re getting exposed to so many things that you’re probably treading water, but if you’re not careful, you can actually drown in things that you could do unless you have really powerful filters. And, hey, look, I’m giving you free stuff every day. Eleven times a week, we publish tips and tactics and you need to filter “which one do I do first? Which one can I not do? Which one can I save until later?” That’s what mentorship is really all about. Here are the five filters that I teach that you can do yourself, though. First off, the BS filter: Is this thing that I’m learning about an idea or is it a proven strategy? In other words, has the person sharing the idea actually implemented it, tracked data and compared it to something else? For example, they might say in a Facebook group, “The panther floor scrubber is the best. We love it. And so do our members.” And I might answer with “what else have you tried?” And usually the response would be “nothing.” So this isn’t really a problem in Gymownersunited.com, but it really is a huge problem in other groups. As a mentor once told me, don’t trust people who are willing to make bets with your money.

Chris Cooper (03:42):
If they’re pulling ideas outta the air and feeding them to other people, then don’t listen to anything that they say. Now, this is the “easy-hard filter” because it’s easy to be skeptical about people, but it’s hard to filter ideas. So if you see a good idea from a sketchy source, you might wanna still try it if it passes the other filters, but if you see something that seems like a great idea and it comes from somebody you don’t know, you might wanna pass it through the BS filter. Another great example: “Adding 24-hour access was the greatest thing that we’ve ever done for our gym.” First follow-up question: “What else have you done for your gym?” Okay, so even when an idea is great, it might not be your top priority right now. It might be something that you think about again, in six months, a year, three years, when you’ve done the big things, the more important things that will actually move the needle for you.

Chris Cooper (04:34):
So the BS filter is my first one. The second filter is the math filter. And in this filter, you’re asking yourself, “Which metric in my business will change by how much and what will happen if I do nothing?” So if you’re tracking your average revenue per member—ARM—or your length of engagement–LEG—and you’re tracking your profit, then the math filter is pretty simple. You simply write down all the ideas you’re thinking about, and then you hold them up to the lens of your metrics and say, “Will this one improve my ARM? Will it improve my LEG? Will it improve my profit? And by how much?” Now, if you’re not sure or you’re not tracking your metrics, then just put that idea aside until you are. Being sure means having data. So, for example, “Clients who start with one-on-one training for at least five sessions have an increased LEG of four months.”

Chris Cooper (05:27):
That is great data. “Our clients love having couches to crash on after class.” That’s not data. Maybe having couches means nothing. Maybe it means something. Maybe it improves your LEG by one month, maybe by 10 months, but you don’t know. And there are knowable things that improve your LEG. So focus on those first. You have more than enough ideas, so let’s just stick to the ones that will show a measurable benefit first because you just can’t do everything. My third filter is the time filter. And the key question is “do I need to do this right now or when is best?” So we’re all drawn to urgency over importance, right? Like it’s why some people smoke cigarettes instead of exercising. Now, personally, I have this tremendous fear that if I don’t act on a great idea now, somebody else will and the opportunity will disappear for me.

Chris Cooper (06:21):
Derek Sivers’ book “Anything You Want” has helped me a lot with this, and my business mentors often help by telling me, “Let’s put that on the list for next quarter. And if it’s still a really exciting opportunity, we’ll do it then.” I can literally hear the voice of Marcy Swenson, one of my business mentors, saying that as I’m saying it to you. Remember, you’re not gonna run out of great ideas. This new thing that you see, TikTok ads, it might be a great option for you in six months, but if you don’t have a staff playbook right now or you haven’t refined your lead-nurture process or your sales process, don’t worry about TikTok ads at this point. My fourth filter is the variables filter. And the question I ask here is “what is the next best step?” George Dantzig wasn’t the lead singer of the Misfits, right?

Chris Cooper (07:10):
You have to like punk to understand that joke. This Dantzig was a mathematician. He invented the simplex method. So the simplex method goes like this: There are too many things that you could do right now to change your future, and we can’t measure the outcome on any of them precisely because there’s just too many variables. So the best thing that you can do right now is to determine your first best step. So that’s harder than it sounds. You need an objective eye on your business. If you don’t have a mentor yet, then you should get a mentor. And this is all about taking action, right? It’s not like thinking about what happens after this or all the possible outcomes, all the possible variables, which are impossible to predict. A lot of the times we stop ourselves from taking action because we forecast into the future.

Chris Cooper (07:59):
You know, “I’m gonna raise my rates, which will increase my ARM, but man, what if this client really gets mad? And what if she posts something on social media? And what if that social media post means five other people quit? And what if Lisa quits and starts her own gym? Like she’s got the money to do it, right?” We extrapolate multiple steps into the future, and those are impossible to predict, but we’re just really good at telling our stories to ourselves. So you have to ask yourself, “What is the next right step?” And my fifth filter is called the context filter. And this is “is this thing right for my specific case right now?” Why can no entrepreneur remain objective about his or her business? We’re subjective creatures. We all need a mentor who knows our history and can see our future.

Chris Cooper (08:46):
The blessing of being a smart entrepreneurial person is also a curse. You’ll always have more ideas than you can possibly act on. Just yesterday, a friend offered to sell me his company, which is built on a great idea, right? It’s already profitable. It’s already working from the help-first ethos that I love. So I got really excited, and that idea passed through my BS filter, right? I know his history and I trust him. It passed the math filter. I know his numbers. But it didn’t pass my time filter because I have other investments that will yield a greater return for me. So I passed the idea along to a different friend. Being successful doesn’t mean doing more things. It means doing the right things. My mentors filter my great ideas and opportunities. Who filters yours? Now I’m gonna give you a good way to determine what you should be doing right now.

Chris Cooper (09:40):
I don’t wanna just give you ways to say no to things. This podcast and all of our materials have been about “what exactly should you do?” And so that’s what I’m gonna share with you now: how to build a model for determining what different people should do. To do it, I had to think through the different stages of entrepreneurship, and I wrote this book about it called “Founder, Farmer, Tinker, Thief.” And that book goes into great depth—some would say too much depth—on what you should be doing at each phase, when each phase starts, when it ends, how your focus should shift, what you should be doing differently at each phase as you travel through your entrepreneurial journey. So I’m gonna start by giving you some clarity on what you should be doing in the Founder Phase of your business. The Founder Phase of gym ownership is the startup phase, right?

Chris Cooper (10:28):
You’re doing everything yourself. You’re working long hours, you’re sweeping the floors, you’re coaching the clients. There are a million things that you could do. So what should your focus be? Your focus should be cash flow. You need more revenue coming in than expenses going out. You need to set up the foundation of sustainability long term so that you can grow without sliding backward. You need to build your gym on a house of rock. And rock is your cash flow. Every action that you take in the Founder Phase should provide the answer to one question: “Will this improve my cash flow?” So, for example, in Founder Phase, doing a personal-training session will increase your cash flow for now because you can sell that hour of time for high value. Mopping the floors might improve your cash flow for now because you don’t have to pay anybody else to do it.

Chris Cooper (11:20):
Setting up a Facebook marketing campaign will improve your cash flow by speeding up your lead generation. But earning an advanced coaching credential won’t improve your cash flow. Arguing with other gym owners online won’t improve your cash flow. Simply delivering a great service won’t improve your cash flow. It’s necessary but not sufficient—one of the hardest lessons I’ve ever learned. Until your gym is profitable and paying you at least a thousand dollars a month after expenses, you have to finish every day with this question: “Did I take one action to improve my gym’s cash flow today or not?” Now, when you’ve reached that point where the gym is consistently paying you at least a thousand dollars a month, you start to enter what we call the Farmer Phase. And the goal of Farmer Phase is to earn a hundred thousand dollars per year from your microgym.

Chris Cooper (12:12):
It’s to improve your income. This is mostly done by growing your gym. So by growing your gym, you’re also growing the number of people that you manage. You’re growing your audience, you’re serving more people than you could by yourself. And now you’re probably serving many people at once. You have larger costs. You have more risk and hopefully higher revenues. There are a million things that you could do in this phase, which we call a Farmer Phase. So what should your focus be? It should be improving net owner benefit—NOB. NOB is what your business pays you. That includes a wage. It includes your profit distributions and all the little extras that your business covers for you, like your cell phone or maybe your car payment. Your net owner benefit target in Farmer Phase should be a hundred thousand per year. Or you can adjust that up and down if you live outside North America.

Chris Cooper (13:06):

But the bottom line is that your business should pay you a little bit more than you need so that you can translate that income into wealth later in Tinker Phase. It should take a little less time than you have and pay you a little bit more than you need so that you can reinvest your time and money. So every action that you take in the Farmer Phase should provide an answer to this question: “Will this action improve my net owner benefit?” For example, raising your rates improves your net owner benefit. Selling nutrition coaching or personal training improves your net owner benefit—as long as you have a good ratio of reward for your staff instead of just giving it all to them. Getting more clients improves your net owner benefit unless you’re adding more facilities and space and equipment. That increases your expenses, too.

Chris Cooper (14:00):
And adopting a pay-yourself-first strategy like Profit First improves your net owner benefit because more of the revenue converts to income in your business. There are some things that don’t improve net owner benefit, like buying more equipment. Most of the reinvestment—quote-unquote, air quotes—in your business does not improve your net owner benefit. You’re making the business bigger, you’re paying the landlord more, you’re paying the government more, you’re paying your staff more, but you’re not increasing your net owner benefit. Hiring a general manager probably won’t increase your net owner benefit. The only time it does is if it that buys you time to scale your business up. Now, of course, there’s a balance to consider here, right? Buying more equipment might someday improve your net owner benefit by allowing you to train more clients. Hiring a cleaner will improve your net owner benefit, but only if you reinvest that time into higher-value roles like marketing and improving your sales process.

Chris Cooper (14:55):
But in Farmer Phase, you don’t need to hire a general manager. You don’t need to set up staff health-care benefits. You don’t need to expand your facility until you’re earning more than a hundred thousand per year yourself. That is the test of your systems. Can you make yourself your first well-paid, full-time staff person? Now, of course, there are exceptions to all of this. That’s why we’re a one-on-one mentorship practice instead of just pushing a system on you. And if you wanna determine your largest roadblock to earning $100,000 a year, you can book a call with my team through the show notes below. Once you’re earning $80,000 to about a hundred thousand, when you’ve got a little bit of free time, the next best thing that you can do is start to think about the next level. And that’s scaling, investing, growing as leader or improving your lifestyle.

Chris Cooper (15:43):
Because if you don’t think about the next level, what will happen is what happens to most entrepreneurs: They become a micromanager of their fairly successful business. They stay in the business, they look for problems to solve, they look for things to break. They’re constantly changing a working machine, and they like stick their fingers in, or they think “let’s change our programming. Or maybe now that we’re successful, I should go open a second location.” While you should have those goals, it’s really important that you establish this solid base first. And when you have that solid base, we say that you’re moving into the Tinker Phase. The goal of the Tinker Phase is to transfer your income into wealth. Wealth because that creates impact for multiple generations of your family. Wealth because that expands your platform for impact in your community. And wealth because that allows you to grow the opportunities for your staff.

Chris Cooper (16:40):
So this platform that you’re building of a million dollars net worth can include your gym, but it might also include things like a second or third gym, cash-flow assets like real estate, owning a building or compounding investments like index funds, or maybe another service for your primary audience. Maybe you’re gonna start a supplement company, right? Or lots more entrepreneurs in our Tinker program are opening more locations. They’re sometimes starting churches. They’re franchising, they’re writing books, building their personal brand. They’re doing all sorts of amazing things. And I’ve got a link to a video in the show notes about impact and how to turn the income from your first gym into a multi-generational, multi-platform impact. But the bottom line here is that when you’re in the Tinker Phase, every idea, every action that you take, has to pass this question: “Does this get me closer to a net worth of $1 million?”

Chris Cooper (17:35):
So, for example, buying a building gets you closer to a net worth of a million. Opening a second location should get you closer to a net worth of a million if you do it right. Paying off your personal debt gets you closer to a net worth of a million, but rebuilding your website doesn’t get you closer to that goal. Most DIY projects don’t get you closer to that goal. Designing your own T-shirts does not get you closer to that goal. Coaching more classes at your gym won’t get you closer to that goal. Of course, some of these big moves like real estate and investing come with higher risk. As the rewards of entrepreneurship grow, the risks usually grow with them. To minimize risk, you must grow as a leader and become more self-disciplined. And that’s what our Tinker program is set up to do: to develop entrepreneurs to build their million-dollar platforms.

Chris Cooper (18:25):
So if you’re not sure where you fall and these hints weren’t enough, you can take our test. There’s a link in the show notes. You can go on the Twobrainbusiness.com site and take the Founder, Farmer, Tinker, Thief test, determine where you are, and then that’ll tell you what you should be focused on right now. These filters are incredibly powerful because the biggest hurdle now to growing as an entrepreneur is not knowledge. Knowledge is free. There’s enough stuff on the Twobrainbusiness.com website to grow your business to infinite levels. The real power comes from focus, and focus comes from filters: filtering out the things that you don’t need to do ever from the things that you don’t need to do right now to the things that you should be doing right now. And then finally acting on them with the accountability of a mentor. If you have more questions about the Founder, Farmer, Tinker, Thief process or the entrepreneurial journey or how to get more focus, join Gymownersunited.com. It’s free. There’s 6,000 gym owners in there to help you. I’m in there about once a day. My mentors are in there. We can share resources and tips and tactics to help you get there. Gymownersunited.com will take you directly to that free Facebook group. We are there to help you.

Thanks for listening!

Thanks for listening! Two-Brain Radio airs twice a week, on Mondays and Thursdays. Be sure to subscribe for tips, tactics and insight from Chris Coooper, as well as interviews with the world’s top gym owners.

To share your thoughts:

To help out the show:

  • Leave an honest review on iTunes. Your ratings and reviews really help, and we read each one.
  • Subscribe on iTunes.
Like
Tweet