How much should you earn from your gym?
Back in 2011, when I opened a bricks-and-mortar facility, my answer was “$0.”
I considered the business a hobby, and my casual approach ensured the business barely broke even. And it only did that because I didn’t earn anything personally even though I devoted a huge amount of time to the gym every month.
A few years later, when the gym was losing money, I still wasn’t earning anything.
We were bleeding out $5,000 a month, so I couldn’t even consider paying myself.
As an entrepreneur, I was literally lost for years when it came to owner income.
I had a lot of questions:
- What’s reasonable?
- What are others doing?
- What can a solid business provide?
- Do I deserve to earn anything?
- Who comes first: me or my staff?
- Should I raise rates so I can earn something?
- Am I being greedy?
All those questions rolled through my head, and I bet you have similar thoughts.
Here, I’m going to give you a table that would have helped me a lot 10 years ago.
➡️ First, you deserve to get paid.
It doesn’t matter if you consider your business a noble endeavor that helps people improve their health.
It also doesn’t matter if you want to create careers for staff people.
You must be paid first or you will eventually burn out and quit for a “real job” that pays the bills. Your noble venture will die and your staff will be out of work if you have to sell condos to pay for groceries.
As an entrepreneur, you are:
- Taking a risk.
- Creating jobs.
- Helping people solve problems.
- Building something.
- Working very hard.
👉 Pay yourself.
This is not negotiable.
How much?
Here’s are some starting targets:
| Gross Monthly Revenue | NOB |
|---|---|
| $0-5,000 | $500 |
| $5,000-$10,000 | $750 |
| $10,000-$15,000 | $1,500 |
| $15,000-$20,000 | $3,000 |
| $20,000-$25,000 | $4,000 |
| $25,000-$30,000 | $5,500 |
| $30,000-$35,000 | $7,500 |
| $35,000-$40,000 | $9,000 |
| $40,000-$45,000 | $11,000 |
| $45,000-$50,000 | $15,000 |
These numbers are general, and you have wiggle room. But consider this scale a tool to keep yourself honest.
If your gym is grossing $25,000 and you’re only paying yourself $2,000—or $0, as I was—something is broken.
If your business makes more, you should make more personally.
You’ll also note that your NOB should increase as a percentage of gross revenue as revenue totals increase:
- $500 NOB is 10 percent of $5,000 gross monthly revenue.
- $5,500 NOB is 18.3 percent of $30,000.
- $15,000 NOB is 30 percent of $50,000.
That isn’t to say you can’t pay yourself 30 percent of $20,000 gross. Some gym owners do this.
Two-Brain gyms target a profit margin of 30-33 percent of gross revenue, with about 22 percent allocated to fixed costs and no more than 44 percent allocated to staff costs. But at certain stages, you will have to invest some of your profit to grow the business, so it might not all flow into your bank account right away.
As the business becomes stronger, more antifragile and increasingly predictable, you can and should pay yourself a larger percentage of its profit.
Here’s what the Top 10 Two-Brain gym owners pay themselves every month:
Use the table above as a guideline, commit to increasing your NOB over time, and work with a mentor to ensure your business grows to support your income goals.
If you do that, you could be among our NOB leaders one day.
And you’ll have a strong business that supports you, your staff and your clients.
To get a personalized plan to grow your revenue and your income, book a call here.
