Chris Cooper: (00:01)
Let’s talk money. Today on the show, I’m gonna give you four reasons to charge more at your gym. I’m gonna give you five ways that you can give yourself a raise. And then I’m gonna tell you what to do with the extra money that you make, how to invest it. If this episode is helpful to you, join Gym Owners United, by going to GymOwnersUnited.com. And you can ask me questions in a free public Facebook group about this episode or anything to do with your gym business. Gym Owners United is a free group because we want to help gym owners succeed so that we can make their clients healthier and maybe save the world. So first, before we get into how to pay yourself more, I know you’re like me and you need a good reason to pay yourself more, right? Because we kind of carry this martyrdom complex of like, to really serve people.
Chris Cooper: (00:50)
I need to starve, or to really feel like I’m being of service I can’t make money. And it’s because of these conflicting perceptions of wealth that we get from our media and our parents and our schools, et cetera. So today I’m just gonna give you four really good reasons to charge more for your service. Now, if you’re already making enough money in revenue, but you’re not paying yourself more, you can skip to the second part and I’ll get there in about five minutes. So first: four reasons for you to charge more. Number one, so that you can afford to be generous. This means that you can pay for scholarships to your gym out of your own pocket, instead of undermining your gym’s revenue by giving out discounts and freebies and junk like that. If a client needs help, you can pay out of your own pocket for their gym membership.
Chris Cooper: (01:36)
So instead of, for example, oh, you’re in trouble, you get a free month, which is not a scalable practice. It means that you have to make a determination on your own value every single month to every single client, you have to guess what’s in their wallet. You have to make judgment calls on who’s making enough, which totally undermines your business. Instead, what you can do is when a client gets into trouble, you can chip in out of your own personal funds. And this is how I like to contribute when the need arises. So I’ll give you a great example here. If you charge enough for your service, you can afford to do whatever it takes to keep a client moving and making progress. So for example, I work with a few very high level companies, and sometimes when they get stuck, I can afford to just fly them up to Sault Ste.
Chris Cooper: (02:24)
Marie, put them up in a great hotel, take them out for breakfast, lunch, and dinner, spend an entire day. Sometimes even two days with them, give them a great experience and then send them home re-energized and full of action. If I wasn’t charging what my service is worth, I could not afford to do that. And it would actually harm them. Here’s another great example. When a local kid graduated from college, he wanted to be a fitness trainer. I didn’t really have a job for him because I’ve got a great bench already, but I could afford to sponsor him to go get his CrossFit level one. He’s a passionate CrossFitter. I could have done the same for somebody else with yoga or Pilates or whatever, right? So if you’re making more money, you can afford to do good things. I’ve got some newspaper articles written about us.
Chris Cooper: (03:11)
My wife and I are in a position where we can afford to just go out and buy 50 bicycles and give them away to local kids and stuff like that. And that’s what I’m talking about here is like, I want you to be able to be generous. And before you can be generous personally, you have to make revenue through a successful business. Don’t just raise money to give away to governments or bureaucratic charities or, you know, giant fundraisers. The reality is that you can maybe have more of an impact if you make more money yourself and then just give it away. So the number one reason you need to charge more is so that you can afford to be generous. Second, the second reason you need to charge more is so that you can support your family. Look, your family wants to support you, but they cannot endorse poverty for long.
Chris Cooper: (03:57)
It’s very hard to say, yeah, mom, go out and work a 12 hour day. We’ll just be here with empty tummies, right? You need to be able to support your family or the whole thing goes under. If you wanna make a meaningful impact in your community, your gym has to survive 30 years. And your gym can’t survive 30 years if your wife is ready to leave you because you’re working too much, never seeing your kids and not making any money. The third reason that you need to charge more is so that your coaches can do their best work. They can’t do their best work if they’re distracted by poverty or their other two jobs, or all the people who come in for a quick challenge. And then six weeks later, they’re gone and you’ve got brand new people come in, you need them to be invested in your people.
Chris Cooper: (04:42)
And that means you need to keep your people around longer. And that means you need to work with the best people, which brings me to number four, higher prices attract stability. They attract better clients who are less influenced by things like recessions. And so I think that we should be making money from the highest earn in our community and then donating to the people in our community who need help. That’s my personal perspective. That’s four reasons you need to charge more. I’m sure you can find your own, but now I want to talk about why you should give yourself a raise. So it’s not just enough to bring more revenue into the gym, but a successful business owner also pays themself from that revenue, right? They don’t grow just for the sake of growing. They don’t grow so that they can pay the landlord more because they’re getting more space.
Chris Cooper: (05:30)
They don’t grow so that they can pay the government more in taxes. They don’t grow just to give more people more jobs. They grow so that they can grow themselves as an entrepreneur. And that’s how they create more opportunities for people through jobs. That’s how they create more impact in their communities, by what they give away. So every month we track and we create this leaderboard of what people in Two-Brain are paying themselves. So we get data from about 850 gyms around the world every single month. And a lot of the times what happens is the gym starts doing better. And the owner says, awesome. I’m gonna reinvest in more equipment, more space, more staff. And they just keep forgetting to pay themselves more. So three years down the track, the gym has doubled in size, doubled in revenue and the owner’s making the same amount of money.
Chris Cooper: (06:14)
That’s not the goal here. 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 a raise. In fact, this month, I’ve seen a lot of 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. And they tell themselves things like I’m reinvesting, but they’re really not. Or they tell themselves things like, I need to keep three months worth of all my bills in my chequing account. And that’s not true. So at Two-Brain, we wanna make sure that gym owners upgrade their incomes as their gyms grow. So here are some of the tactics that we teach. First. We use a “pay yourself first” strategy like Profit
Chris Cooper: (07:02)
First. Now maybe you don’t need five or seven different bank accounts, but you can still use the fundamental principle of the book to earn more. All you have to do is write yourself cheques for every second Friday for the next three months, just postdate them, take them to the bank and deposit them in advance. Now, you know that the money is coming out of the business and it’s up to you to make sure the money is in your account. In this way, the business pulls the entrepreneur forward. If you know that there’s a thousand bucks coming out of your account on Friday, you’ll scramble a little bit harder to make sure that that thousand is in your account. If you’re paying yourself just what’s left over, you just won’t be as creative. You won’t take that step. You won’t hustle. If you owed the money to the landlord, you would hustle.
Chris Cooper: (07:48)
If you owed the money to the IRS or Canada Revenue or whoever your tax people are, you would hustle. If you owed that money to the power company, you would hustle. But the reality is that when we owe that money to ourselves, we don’t work as hard, right? We martyr ourselves. That’s the entire point of the “Profit First” book and John Briggs book, “Profit First for Micro Gyms” is an amazing read. This is a great strategy called pay yourself first to increase your income. The second strategy that we teach is that every quarter, we tell gym owners to give themself a raise. All you’ve gotta do is write new post-dated checks. How much? 10% raise is a great start, but even 50 bucks per check is still good because you’re still going up. And you’ve created this habit of increasing your income. Just don’t wait until you think the business is ready to pay you more because you’ll always just spend the money on something else.
Chris Cooper: (08:41)
Trust me on that. The third strategy is to pull money out of your business, instead of just leaving a big lump sum in your bank account. All you need is access to cash and credit to cover two months expenses. You do not have to save two months expenses in your chequing account. You just have to be able to access it if you need it. Anything else that you keep in your chequing account is just a security blanket. Your business will never go all the way to zero revenue overnight. I mean, COVID proved it. Didn’t it? That means you don’t need to take the money as a personal income. You can reinvest it somewhere else if you like, but your business doesn’t need that money sitting around and money in your account is more exposed to lawsuits. It’s also more exposed to your whims like, oh wow, I just saw this new thing at the CrossFit games.
Chris Cooper: (09:31)
I need to buy that. So you might as well get it outta there and reinvest it. Get it working for you, lock it away somewhere if you have temptation problems. The fourth strategy is to move some of your personal expenses to the gym if you can. So for example, if the gym can pay for your cell phone, then that increases your net owner benefit because it’s one less thing that you’re paying for with after tax income. And because you’re paying for that phone with pre-tax income, you’re probably saving money on it, depending on where you live. That could be 20% or 40%, depending on whether personal income taxes or corporate taxes are higher where you live, right? Talk to your attorney and figure out who should be paying for your expenses. In my case in Canada, you want the business to pay for as many things as you possibly can, because up to the $500,000 a year mark, the business taxes are lower than personal income taxes.
Chris Cooper: (10:26)
And even after the $500K a year mark, the corporate taxes are still lower than the personal income taxes. They’re just not as good. In a lot of states in the US, it’s actually the inverse. You wanna get the money out of the corporation as quickly as you can, but again, you should talk to an accountant here. The fifth way to pay yourself more is to invest in mentorship. So this is cool because your business pays for the mentorship, but you personally reap the reward. So while the investment is purchased with pre-tax income, you’ll make more money to take home. And that’s because good mentors don’t focus on just getting you more clients or your gross revenue, but they focus on net owner benefit, which is how much you make. So your business is actually paying for you to learn how to make more money. Now, trust me, there are a dozen ways to increase net owner benefit without getting another single client.
Chris Cooper: (11:22)
But the key is to remember to give yourself a raise. As your business grows, it makes more money, but often the business just eats up all that new revenue. It doesn’t flow through to the owner. I’ve seen gyms with a million dollars in revenue and broke owners, and I’ve seen gyms with a hundred thousand dollars in revenue pay their owners over 60,000 a year. If your gym is growing, you’re a good CEO and do what a good CEO would do. Ask for a raise. All right. So what do you you do with that money? Well, I want you to think of this, the money that comes from your business as income, your business makes you an income, but your investments make you wealthy. So the goal of our Growth Phase program at Two-Brain is to increase a gym owner’s income, their net owner benefit, to a hundred thousand dollars a year. In most countries, a hundred thousand dollars a year at 40 hours worked per week is a little bit more than they absolutely need.
Chris Cooper: (12:20)
That means they have a little more money and a little bit more time to reinvest in building their platform for wealth and long term impact. Now, if you’re listening in a country where a hundred thousand dollars is not enough or a country where a hundred thousand dollars would put you in the top 1%, we can adjust that goal for you. And that’s why you have one on one mentors at Two-Brain. But the point is that you have a goal that creates a little bit of extra margin. So what can you invest that margin of money and time into? Well, you can invest it into scaling your fitness business, right? Growing your brand at multiple locations or a bigger location. You can invest that money in real estate. You can invest that money in other businesses or in stocks or cryptocurrency, and you can invest that money in yourself, but before you invest in any of those things, you need to learn a little bit about all of them.
Chris Cooper: (13:12)
That way you can eliminate the options that you don’t love. And you can go all in on the options that you do. I’ll give you an example. In our Tinker program, we bring in speakers around once a month and they talk about a wide variety of subjects. And these are subject matter experts in things like real estate, crypto, et cetera. Okay. We even brought in experts on writing your own book. And the point of having these experts is not so that we get every high-level gym owner in our Tinker program to invest in crypto. That’s not it at all. The point is so that they can go through a process called addition by subtraction. They can learn about the things that they might love and eliminate the things that they don’t. So before our crypto expert took the stage, I thought, Hey, this is interesting.
Chris Cooper: (13:59)
I’m gonna buy some Bitcoin. And my son was interested. And so we attended the speaker and the speaker spent about an hour and a half teaching us all about cryptocurrency, everything that we needed to know to make a decision. He gave us a really easy path to invest. He gave us a more secure way to invest, but after 20 minutes, I realized like, this is not for me. I’m not getting fired up. There are so many other options that I have to invest that I’m gonna pick one of those, ’cause those excite me more. Okay. So part of the value of a program like this is like learning all the options and what you wanna say no to. Our Tinker program has four areas of focus. So each person in our Tinker program, they choose to focus on one of these four areas for 90 days at a time.
Chris Cooper: (14:46)
And then they might change their area of focus. But the four areas are scaling their current fitness business, right? Building their empire. Second is their investments. Third is their leadership. And fourth is their lifestyle. All four of those compound on each other. And all four of those compound on themselves. If you become a better leader, you will make more revenue and more income. You will scale your fitness business. If you improve your lifestyle, you’ll have a clearer head to make better investments, et cetera. So this stuff is super exciting. And I want every gym owner to create a bigger platform for their mission and wealth for their family. Here’s the dichotomy of working on these things. First, you have to build a sustainable income first. So follow the directions that I started this podcast with. You shouldn’t worry about buying your building or promoting your staff to full time or investing in stocks or crypto until you’re close to a hundred thousand dollars in net owner benefit yourself, right?
Chris Cooper: (15:45)
You have an owner operator business. That means get yourself to a good, sustainable income, and then hire somebody else and worry about getting them to a good, sustainable income. But as soon as you are close to a hundred thousand in income or whatever sustainable income means in your country, you have to look hard at the next level or you’ll stagnate. Many people tell me that our Tinker program pulls them up from earning 80,000 to a hundred thousand a year, simply because they didn’t have a reason to earn more before, right. They didn’t know what they would do with the extra money. They didn’t need it. So why earn it? And if they don’t improve as a leader, they will continue to face the same leadership crises they face now. So when somebody reaches 100K in net owner benefit from their gym, our mentors tell them to think about the next step because we want them to keep pulling forward instead of just treading water.
Chris Cooper: (16:38)
And our Tinker program is priced far lower than most programs at this platform because we want it to be a transitional platform from income to wealth. If we create more wealth in gyms, that means we attract better entrepreneurs to the field of fitness. That means that fitness has more influence, reaches more people and changes more lives. Creating better entrepreneurs is done through mentorship. And that’s why Two-Brain Business is a one-on-one mentorship platform. We want you to make more money so that you can have more influence and ultimately change more lives. If you want to talk more about wealth, money or any other thing related to owning a gym, go to GymOwnersUnited.com. That’ll redirect you to our Facebook group. And you can ask any question that you want in there. I pop in about once a day, try to answer as many questions as I can, but there are a ton of other people, over 6,000 in this free group with experience to help you.
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