How This Gym Owner Makes $867 an Hour

How This Gym Owner Makes $867 an Hour

Mike Warkentin (00:03):
My worst-paying job was $5 an hour at a fast-food joint—until I opened a gym. If I had calculated what I was paid per hour at that gym back in the day, it would’ve been pennies per hour. That’s not an exaggeration. Two-Brain helped me change that, thankfully. Keith, what’s the lowest hourly rate you’ve ever worked for?

Keith Yungel (00:22):
I believe it was $6.50 collecting golf balls at golf range.

Mike Warkentin (00:27):
Ah, kind of fun, but not a great rate. You beat that this month with an hourly rate—an effective hourly rate—of $867 as a gym owner, correct?

Keith Yungel (00:37):
I believe so, yes. Yep.

Mike Warkentin (00:39):
Yeah, that’s the number. Yeah. So we’re gonna dig into that. I’m Mike Warkentin. This is Two-Brain Radio. I’m here with Keith Yungel. Keith owns CrossFit Pawling in Pawling, New York. He was our August leader for effective hourly rate or EHR. Now, what is that? Divide your total pay, including all benefits from the business by the number of hours you worked on or in the business. That’s a big one because sometimes when you’re working on the business at home on your cell phone, you don’t count that. But that is work, and that does count. The shortcut here: you can divide your income by 2,000 hours. But that might not tell the whole tale if you’re working more than 40 hours per week or if your gym pays for your car or your cell phone or any of the other stuff. The point: you can drive up your EHR by working fewer hours or by making more money. We’re gonna dig into Keith’s big number—$867 per hour—find out how we did it, and we’re gonna help you increase your EHR as a gym owner. Keith, you ready to roll?

Keith Yungel (01:33):
I am.

Mike Warkentin (01:34):
All righty. Here we go. Now, I understand that your EHR is tied to something that’s kind of unsexy, but it’s really, really important: standard operating procedures. Tell me a little bit about how you operated before you had SOPs, roles and tasks and all that stuff. How were things back in the day when you first started?

Keith Yungel (01:52):
Yeah, so I was just in the trap of doing everything on my own, right? So I had some, some group-class coaches, but outside of that I was cleaning the gym. I was, you know, doing client success manager work even though I didn’t really know what a CSM was at the time. I was doing kids program, foundations, nutrition. I was basically doing everything.

Mike Warkentin (02:14):
Every hat.

Keith Yungel (02:15):
Every hat. Yeah. So at the time I just thought it was because I didn’t trust other people to take on those roles, but really it was because I just didn’t know a system or have a system to teach other people how to do it.

Mike Warkentin (02:33):
Yeah. I was kinda the same way, and I held onto a lot of roles. Part of it was like, “Oh, I can do it better than anyone else.” That’s common. But my real problem was I was scared to hire people and put the wrong people in the wrong spots and go through that whole hiring process. It felt like dating to me, and that scared me. I had trouble with it. A lot of gym owners have that, but we had the exact same history doing all the stuff. Your hourly rate back then, your effective hourly rate, probably would’ve been pretty low, I’m guessing, given that you were cleaning and doing all the other stuff.

Keith Yungel (03:02):
Yeah, absolutely. And I mean I couldn’t even tell you what it was because at the time I wasn’t even really tracking my effective hourly rate, but I’ll tell you it was probably pretty low.

Mike Warkentin (03:12):
Because I’m sure you weren’t working 20 hours a week. You were probably working like 60, 70 or something just ridiculous.

Keith Yungel (03:18):
More. Yeah, I was putting in a ton of weekends. I didn’t see my wife much.

Mike Warkentin (03:26):
Yeah, but change is possible, right? So you’re here to tell us about that. So I wanna know how did you get out of the habit of getting sucked into those low-value roles—because it’s so easy for us as gym owners and driven people to just grab everything and do it all. How did you stop doing that?

Keith Yungel (03:43):
I mean basically it was the conversation with my mentor to start, right? It was a conversation with Shawn. I had just joined Two-Brain. I believe I was still in, I was either still in or just started Growth.

Mike Warkentin (03:59):
When was this?

Keith Yungel (04:01):
This was in 2020, so the beginning of 2020.

Mike Warkentin (04:05):
And we’re talking Shawn Rider as well?

Keith Yungel (04:07):
Shawn Rider. And this is right in the middle or beginning of lockdown. So it was a tough time. That’s why I decided to join up with Two-Brain. And so I’ll never forget, I had this conversation with him, and we were working on developing my nutrition program. And so he said, “Ask yourself how much earnings you’re gonna take from this, and how much time you’re gonna spend on this, and how much you’re really going to enjoy it versus hiring somebody else to do it. How much would you pay them? How much time would it them, and how would you spend your time otherwise?” I did some math. Now, throwing around numbers, I think I probably would’ve put a thousand bucks in my pocket if I ran a nutrition program. But it probably would’ve taken me about 20 hours that month to run the nutrition program. So what is that, $50 bucks an hour? I hired a coach to do it for four-ninths, but let’s round to 50% just for easy math. So I paid them 500 bucks. I paid myself 500 bucks, but I really only spent two hours mentoring that individual. So now my effective hourly rate was $250. So I had 18 extra hours to play with, and I just started duplicating that process. So I just started writing more SOPs and passing jobs along and hiring other coaches. So instead of coaching the kids class, I hired a kids coach. Instead of doing a bootcamp, I hired a coach to run the bootcamp. So I just kept duplicating this process with all that extra time that I had.

Mike Warkentin (06:24):
So, dare I say it, you started acting like an entrepreneur instead of an employee of a business, right? And that’s what we forget as gym owners because we have all these skills, we do all these things. We don’t act like entrepreneurs a lot of the time. We just start doing all the stuff rather than hiring people to do this stuff—but that’s what entrepreneurs should do. Like, Bill Gates does not build computers. Get someone to do this stuff. I’m gonna ask you about your SOPs, but just for listeners, I’m just gonna unpack a couple of things. There is an exact process to identifying the roles that need to get off your plate. Two-Brain has laid it out. It’s called “climbing the value ladder.” It involves math and there is an exact process. Your mentor will take you through it and you will look at all the roles you do, and you will look at how much you have to pay someone to take those rules off your plate. Then you would look at “how can I invest that time?”—exactly what Keith said—and you’re gonna pay for the cost of that role. Keith started with nutrition. Another easy example is cleaning. Cleaning costs 12, 15 bucks an hour or something like that. Takes most of us five or six hours a week or something like that. Do the math. If you can get rid of those hours for let’s say $150 a week, could you take six hours to make more money? Yes, you could do that as a gym owner. And you keep doing this all the way up the chain until you are the CEO of a gym business where you are doing minimal work on certain things. Other people are doing the service delivery and so forth, and you’re making some money off it at every step. And the four-ninths Model that Keith talked about is tied to the entrepreneurial concept. And what that is is you get someone to work in your business and you pay them 44% of the revenue. That person drives and grows and is responsible for the program. But you get a cut as the business owner for providing the space, the equipment, the market, the internet—everything that goes along with that program. Again, all this is systemized in the Two-Brain program, and we can teach you exactly how to do it. The key though, Keith, is SOPs. Because what I did was when I tried to offload stuff, I just chucked it at staff members washed my hands of it, walked out the door and it collapsed. And I was right back to vacuuming the floors. Tell me about SOPs. Cause it’s boring and it sucks, but it works and it’s the foundation of a business. How did you do it?

Keith Yungel (08:38):
So I took templates from Two-Brain. I can’t say I recreated the wheel at all. But I wrote out every single detail to a T like I was programming a robot.

Mike Warkentin:
Was that fun?

Keith Yungel:
No, not at all.

Mike Warkentin (08:55):
Was it worth it?

Keith Yungel (08:56):
It was. It’s well worth it—just writing every little detail. And what I would do is I would write it out and then go do it, go do the job, go perform the role, and then fill in the gaps. I’d come back and find out what I missed in the details. So it took me a while to figure out what to actually write in the SOPs. I would take things out, put things back in. So the first one that I really did was my nutrition SOP, and that was for my nutrition coach that I had hired. I actually started writing SOPs for positions I didn’t even have yet. I didn’t have a CSM, but I started writing an SOP for a CSM. You hand that SOP to somebody and go over it with that staff member and revisit until they have it down. And then they actually start to come back with their own ideas and fill in the gaps that maybe you missed that are gonna make that role even more advantageous to your gym.

Mike Warkentin (10:50):
So tedious, boring. But we give you the speed: Two-Brain will provide you with a lot of templates that’ll get a lot of it done for you. You just have to fill in the details, where the music volume goes to seven at your gym and at mine it’s nine or something like that. You can customize these templates. Still, I’m not gonna lie: it’s not fun. But the payoff is huge because you only have to do it that one time. You took it a step further and even got your future planned, right? Where you looked at all these roles that could possibly exist. And I bet when you thought, “Okay, I need to offload something or hire,” you just pulled out that thing from your pile and ran with it. Am I right?

Keith Yungel (11:24):
Absolutely. The toughest part was writing them, and then after that it was simple. It was easy, and it just fell into place after that.

Mike Warkentin (11:36):
Okay. So now tell me: how long does it take you to do this stuff when you’re meeting with staff members to maintain your systems and optimize things? How many hours a month or a week does that take?

Keith Yungel (11:47):
Depends on how many staff members you have and what roles you have, right? But I’d say, and again, depending on the role, you might meet with your cleaner once a once a month for 30 minutes. And the first time it could take an hour. You know, you’re just walking the gym with them and showing them everything that they have to clean and how everything works from, you know, from where the mop is to how to clean up when you’re done. And then the SOP is gonna run itself, and you’re just gonna audit that process and then meet with your cleaner again anytime that you feel that anything is not going the way that you would like it to go. You know, on the other hand, with your CSM, you’re gonna meet with a CSM much more often. So I’d say with a CSM it’s probably a couple of 30-minute meetings a month. So 30-minute biweekly meetings with your CSM. But again, it could be 15 minutes depending on the weeks. If everything’s going smooth and everything’s going great, it could just be a chat about life. So it’s not gonna end up being much about what’s going on in the gym sometimes.

Mike Warkentin (13:00):
So the maintenance of this system, if I’m getting you here, is not that difficult. It can be more at the beginning. There’s a little bit of extra work where you have to dial in a couple things, answer some extra questions, and maybe change a few things. But really at the end of it, you are probably taking a few hours a month to maintain the whole system, depending on your staff size. Would that be accurate?

Keith Yungel (13:19):
Yeah, I’d say, let’s just say an hour per staff member on average.

Mike Warkentin (13:26):
And so that’s a huge investment because that allows you to step out of service delivery. You essentially replicated yourself, and now you’re able to move on to higher-value rules. So what do you do with your time now?

Keith Yungel (13:38):
I mainly work on Affinity Marketing, and then all those meetings. So I have seven staff members, so six staff members that I spend, you know, on average, probably about 45 minutes per staff member on average. So, you know, it’s probably about five hours a month meeting with my staff and then a couple hours doing Affinity Marketing. Sometimes I’ll step into an NSI if my CSM can’t make it or my GM can’t make an appointment. And you know, I still do like to coach, right? So you know, I’ll coach generally one class a week. Sometimes it’s more like one class every 10 days. So I’m usually hitting about 10 hours a month when it’s all said and done.

Mike Warkentin (14:40):
In total work?

Keith Yungel (14:42):
In total work.

Mike Warkentin (14:44):
You get to see your wife again?

Keith Yungel (14:46):
Yeah. Funny, I have two kids now, so I get to see them, you know, a decent amount—as much as I really want to.

Mike Warkentin (14:54):
So that’s a bit different from the early days, I’m guessing.

Keith Yungel (14:57):
Oh yeah. It was late nights. You know, I’d come home after coaching at 9 o’clock at night, and then I would still have calls to make for lead nurturing, and I’d wake up early the next day and just do it all over again.

Mike Warkentin (15:14):
And because you’re a fitness guy, you know how to grind. We all do, and we make that mistake, and we get stuck in it. Listeners, I’m gonna give you a couple of acronyms. I’m gonna tell you what they were and define a few things for you. What Keith just said—CSM—is client success manager. We’ve talked about that a few times. That is the person to make sure your clients are staying in the business and they’re happy. They’re responsible for client happiness. We’ll call it a “low-value role,” but that’s just in terms of the payment. It’s not a $30-an-hour role. It’s something less than that, but it has huge rewards and it’s highly important. So when we say “low value,” it doesn’t mean it’s not an important role. It just means that it doesn’t generate as much revenue as, say, sales. Okay? So that’s what that is. Client success manager, essential to your business. Affinity Marketing, that is sales of a different sort. You’re talking to people that are close to your business. You’re talking to your clients inside your business: “Hey, do you have any friends and family that I can help?” It’s talking, outreaching, that kind of thing, as opposed to cold-calling people or putting ads on Facebook. NSI is a No Sweat Intro, a consultative process where people book an appointment to see you, you ask them what problems are they having, and you solve ’em with your services. It is essentially a sales meeting, but we call it a free consultation or No Sweat Intro. What Keith is working on, he’s the CEO and manager, right? Do you have a GM, Keith?

Keith Yungel (16:30):
I do, yep.

Mike Warkentin (16:31):
So you’re the CEO working more closely with your GM, who manages a ton of stuff that you don’t have to deal with. So you’ve got CEO time and you are doing marketing and sales, which are very high-value roles because they bring in money for the business. All of that is huge. You went from cleaning to the highest level as a CEO in the gym, and you did that in two years and a little bit, is that correct?

Keith Yungel (16:54):
Yeah, about two and a half years.

Mike Warkentin (16:57):
So it’s possible. And you went from making a lower rate to $867 per hour because you’re making a good wage and you’re not working 75 hours a week. Correct?

Keith Yungel (17:08):
Correct. Absolutely.

Mike Warkentin (17:09):
So here’s where we help somebody. Gym owners out there right now are listening and they are drowning in work. Someone out there asks you, “How the hell do I start this process?” What do you tell them? They wanna be you now and they’re you from two years ago? How do they get here?

Keith Yungel (17:24):
Yeah, like you said, there’s nothing sexy about it. It’s just starting to find the right people’s probably the toughest part, right? I think that’s a whole other podcast. Find the right people, right? But really being prepared before you even find those people with the SOPs. Write out everything that you do in detail. Find the right person, delegate it, and don’t just hand it off and then just expect them to just follow all the bullet points, right? Take a month to teach them, do the work with them. Take a month, give it to them, completely mentor them through the process. And I say a month, but depending on the role, it could be a month to two months to three months, right? And then let them take that role, and then just begin checking in with them once or twice a week or month for 15, 30 minutes, and just continue to audit that role or audit the SOP. Start out with something that you really do not enjoy. So it’s something that is sucking the energy from you. Maybe you don’t like coaching your kids program. Maybe you don’t like working on nutrition with people. Maybe you don’t like cleaning your gym. Whatever it is that’s sucking the energy out, start with those roles because those hours that you get back are gonna be “energy hours.”

Mike Warkentin (19:11):
We have a thing called the “love and loathe list,” and that’s another exercise our mentors will help people do. It’s “what do you like doing and what do you loathe?” And for me, accounting stuff, I hate it. That would be something to offload because not only is it going to save me time because I’m not good at it, but it’s going to save me energy, as you just explained. So listeners, what I’ll get you to do, I’ll challenge you to put down the mop and take some time to do the dirty work of writing out your roles and tasks. Do that. You only have to do that one time. From there, you’re gonna have to hire. Like Keith said, that’s a whole different show. And we do have hiring shows in our archives that you can check out. Then the final step of that is not to just push the cart down the mountain and assume it will go all the way to the bottom without tipping over. You have to monitor the thing, but it doesn’t take a ton of time. Once you start to systemize things and get the process down, it’s going to go very smoothly. The final step there, one of your greatest hires is gonna be a general manager who’s gonna take care of most of that work for you, and you are just gonna be the CEO who checks in on certain high-level things. You can do whatever you want, as much or as little as you wanna do, and you get time to spend with your family. Keith, thank you so much for sharing this with everyone. It’s a great story. I love hearing from someone who did what I did back in the day and then fixed it in less than two years. So thank you so much for sharing your story with us.

Keith Yungel (20:30):
Absolutely. Thanks for having me here.

Mike Warkentin (20:34):
That was EHR leader Keith Yungel on Two-Brain Radio. Thanks for listening. Please hit subscribe on the way, wherever you’re watching or listening to the show. And now here’s Chris Cooper with a final message.

Chris Cooper (20:46):
Hey, it’s Two-Brain founder Chris Cooper with a quick note. The Gym Owner’s United Facebook group has more than 6,100 members, and it’s growing daily. If you aren’t benefiting from the free tips and tactics and resources that I post daily in that group, what are you waiting for? Get in there and grow your business. That’s Gym Owners United on Facebook or www.gymownersunited.com. Join today.

Thanks for listening!

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