You can earn more from your gym—in fact, you can earn more than you need.
Paying yourself more requires more revenue and more profit, of course. But it also requires discipline. I know hundreds of gym owners whose gyms are growing, but they never give themselves raises.
I’ve seen many graphs of gyms that have doubled in revenue, but the owners aren’t taking more money home. They’re just sitting on thousands of dollars in their bank accounts for no reason!
At Two-Brain, we track net owner benefit (NOB) to make sure gym owners upgrade their incomes when their gyms grow. Here are some of our tactics:
1. Use a “pay-yourself-first” strategy, like Profit First. Maybe you don’t need five or seven separate bank accounts, but you can still use the fundamental principle to earn more. Simply write yourself checks for every second Friday for the next three months. Postdate them. Take them to the bank and deposit them in advance. Now you know the money is coming out of the business, and it’s up to you to make sure the money is in your account. (Hint: you can do it.)
2. Every quarter, give yourself a raise. Write a larger amount on the postdated checks. How much? 10 percent is a great start. But $50 per check is still good because you’re still going up. Just don’t wait until the business is “ready” to pay you more because you’ll always just spend the money on something else.
3. Pull money out of your business instead of leaving a big lump sum in your bank account. All you need is access to cash and credit to cover two months’ expenses. Anything else is just a security blanket—your business will never go to zero revenue overnight (COVID proved it!). You don’t have to take the money as personal income. You can reinvest it somewhere else if you like. But your business doesn’t need the money sitting around, and money in your account is more exposed to lawsuits. Might as well get it out of there and get it working for you!
4. Move some of your personal expenses to the gym if you can. If your gym can cover the cost of your phone, for example, then that increases your net owner benefit. And because you’re paying that bill with pre-tax income, you’re probably saving money on it—bonus!
5. Invest in mentorship. Your business pays for mentorship, but you reap the reward. So while the investment is purchased with pre-tax income, you’ll make more money to take home. That’s because good mentors don’t focus on client headcount or gross revenue but net owner benefit—how much you make. Trust me, there are a dozen ways to increase net owner benefit without getting another single client.
The key? Remember to give yourself a raise.
Behave Like a CEO
As your business grows, it makes more money. But often the business just eats up all the new revenue—it doesn’t flow through to the owner. I’ve seen gyms with $1 million in revenue and broke owners, and I’ve seen gyms with $100,000 in revenue pay their owners over 60 percent of it.
If your gym is growing, you’re a good CEO. Do what a good CEO would do: Ask for a raise.
