With five clients, you have a side income.
With 15 clients, you can have a job.
With 50 clients, you have a business.
With 150 clients, you can have a great life.
The key to every step? You must have the right clients.
The “More-Clients” Mistake
When I started a CrossFit gym, the only business advice I could find came from the affiliate message boards. At the time, many affiliate owners were trying to copy a martial-arts business model:
Get 300 clients. Pack them into classes. Pay one coach to lead them and have another volunteer “assistant” coach correcting technique. Get a big space to scale up faster. Lock coaches into their roles by giving them a tiny share of the business.
This works for karate classes because they’re mostly choreographed and students don’t require much space. But it’s never worked for CrossFit gyms. CrossFit requires a lot of coaching. CrossFit is more like personal training than choreography.
Why 150 members?
First and foremost: 150 is more than enough.
Second, you can only maintain about 150 relationships yourself. Around 150 clients, you have to add another layer of staff to your business, which adds complexity and shrinks your margins.
Robin Dunbar’s research on interpersonal relationships explains why 150 is a great target, and our data supports it. The most profitable gyms aren’t the gyms with the most members all the time. Most of the time, they were profitable with 50 clients, then they scaled to 150 while maintaining their profitability. While “Dunbar’s number” isn’t always exactly 150 in the microgym business, it’s a great starting point when you’re pricing your service, scheduling your day and trying to market to the right people.
For example, if you start with the goal of 150 clients, you can work backward from your ideal income to calculate your rates. For step-by-step instructions on how to do that, read this article.
Then you can think about how many classes you’ll need. According to an Arbox/Deloitte study published in 2020, the average adherence rate in microgyms is 0.6. That means around 60 percent of your clients will show up on a normal day.
Then you can hire based on need:
- At five clients, you don’t need help.
- At 15, you get a software platform.
- At 50, you get a part-time coach to take your early or late classes, and you get a cleaner. This is the start of Farmer Phase.
- At 100, you hire an administrative helper and take your coach full-time or add a second part-time coach.
- At 150, you hire a general manager and a client success manager or media person. This is the start of Tinker Phase.
Then you consider: Do you want to scale by adding more clients to your location, adding a second location or doing something different but related?
Meanwhile, you’re maintaining your profit margin, adding space and equipment only as needed, and reaching your targets in three years instead of 10 (or 11, in my case!).
Now compare this to what most gyms try to do:
- Base rates on what everyone else is charging or what the owner thinks “the market will bear.”
- Base space choices and equipment purchases on a “dream gym setup.”
- Open the owner’s schedule to eight classes every day, even if they’re poorly attended.
- Base hiring on duplicating the owner instead of replacing him or her in less expensive roles first.
- Pay for marketing lessons.
- Churn through staff every year and clients every three months.
Sorry, but it’s true. I know because that was me.
In 2020, we completed a four-year journey to collect and analyze data. We now have the biggest data set in the fitness business. We reported that data in our 84-page 2020 State of the Industry Report. You can download it for free and draw your own conclusions: Click here to get it.
The emerging model of success doesn’t look like 300 clients “gettin’ after it” and posting on Instagram. To build a successful career, start with 150 and work backward.