I met a unicorn the other day.
Her name is Saara Snellman, and she runs CrossFit Kreis 9 in Zurich Switzerland.
Here’s why she’s so special:
- CrossFit Kreis 9 has 340 members.
- Membership is capped, and the gym has a healthy waiting list.
- The gym derives most of its revenue from group classes.
- The gym only loses 10 clients a month.
- Five of the 10 departing members are replaced by returning clients.
- The other five are replaced with people on the waiting list.
- The gym has no marketing costs.
This was the ideal when entrepreneurs started opening functional fitness microgyms in 2007 or so.
But almost none of us accomplished the goal.
And few people can accomplish it today.
Don’t worry: You can still build a very profitable gym without 340 group-class members.
Let’s be clear: CrossFit Kreis 9 is rare.
I wanted to talk to Saara for about three days straight to find out how she did what I and so many others couldn’t. Her gym is a shining example of what a great business owner can accomplish—but I’d stop short of holding it up as a target. It’s just too rare.
To suggest every microgym owner can do what Saara’s done is like showing the 100-m final at the Olympics and suggesting you can run that fast one day.
I’m not saying this to be insulting; I’m saying it so we can have a realistic conversation about your first goals as a gym owner in 2024.
Data doesn’t lie: It shows that gyms like Kreis 9 are few and far between, and after mentoring thousands of gym owners, we know that it takes elite skill to build a gym that serves more than 300 members through group classes.
According to our “2023 State of the Industry Report,” the average gym has about 159 members (PushPress stat) and grosses about $10,000 to $12,000 USD per month (Wodify stat). Only 71.9 percent of gyms in our survey were profitable.
Here’s what Chris Cooper had to say about that:
“The (group) model has flaws. The average group has three to seven clients, not 12. Yet the average gym owner has invested in space and equipment for 12, so six-person groups barely cover the bills.
“Worse, most gyms are undercharging for coaching: They’re selling small-group coaching at large-group prices. That puts gym owners in a real pinch: They’re not making enough with six people in a group because their prices are too low, and they’re paying too much in expenses.”
All this happened to me and many, many others. The situation is very common because—as Chris said—the group-only model contains a few deadly traps.
Coop laid out three ways to keep a group-class gym afloat:
1. Coach every class yourself all day every day. (I did this; it sucks, and I hit burnout.)
2. Pay coaches a low wage and make very little yourself. (I sorta did this: I paid coaches industry-standard wages but never paid myself a dime. This was increasingly hard on my family.)
3. Supplement the model by selling personal training, semi-private training, nutrition coaching and other higher-value services. (We started doing this with a mentor’s help, then completely changed our model to small groups and nutrition only after COVID.)
No. 1 and No. 2 are not viable long term. Only No. 3 will solve the problem.
Here’s the cool part: You can choose No. 3, still run the group classes you love and make about $100,000 a year with 150 clients.
And that’s the data-driven target I’d set for you: Figure out how to make $100,000 with 150 clients.
Build a great gym and hit those numbers. Then decide what to do next.
With a very profitable 150-member gym, you have options. Could you pursue 300 clients? Absolutely. Saara did it. But you might not want to. Acquiring and holding 300 clients is very hard, and it requires a major level-up in your entrepreneurial skills.
You might be able to make more with less work by improving your model and serving fewer high-value clients with hybrid programs (PT plus group classes or nutrition coaching), semi-private training, super-premium life coaching, etc.
The point here: The group-only model is very challenging. It can be downright dangerous at times, especially as large chains with big marketing budgets attempt to fill fitness classes with people who pay very low rates.
Huge, very profitable gyms like CrossFit Kreis 9 are fantastic, but these few businesses exist in spite of the flaws in the group model, not because the model will work for everyone.
I’ll help you research a model that will work for you, your market and your perfect client. If you dig in and work the numbers, you might find that group classes are just the thing, but you might discover better ways to earn a great living through your gym.
To see five gym business models, complete with spreadsheets and analysis, read “Five Ways to Make $100,000 a Year From Your Gym” by Chris Cooper. You can get it by following the instructions here.
