It’s better to have more clients, right?
Maybe not.
When I started out as a gym owner, I thought “more” was the answer to every problem.
In fact, I rented an overly large space and believed I could grow to fill it.
I thought every new member would make that 6,000-square-foot space more affordable, and I figured it would be easy to fill classes with 12 people every hour on the hour.
More than a decade later, I only want about 60 clients.
Here’s why.
When I set my vague initial client target—”more”—I didn’t have a real plan or business model. I had a space and a love of fitness, and I thought lots of people would want to work out in my functional fitness playground. That was Plan A.
In the words of a character from the obscure Canadian cult film “FUBAR,” “Plan B is just to keep on given ‘er.”
Neither plan was solid.
People did want to train in my playground—one of only two similar spaces in a city of 700,000—and we grew. But that growth overwhelmed me and my systems, and we started bleeding members. That happened as other gyms like mine opened up, and our growth slowed.
I didn’t have a marketing plan of any kind. I thought I would attract clients by being a great coach. I know now that this is one of the greatest myths in the coaching business.
Suddenly my quest for “more clients” became a desperate play for “enough clients to break even”—and I wasn’t paying myself a dime at the time.
The situation sounds brutal, but the switch to a “breakeven mindset” was actually a positive: For the first time, I was thinking about the exact number of clients I needed to break even.
I was just a step away from determining exactly how many I needed to actually earn money from the gym.
And I was only two steps away from determining exactly how many I needed earn a good living from my business.
I should have done these calculations much, much sooner. The ideal time: well before I signed a lease and set my prices.
How Many Clients Do You Really Need?
Don’t make the same mistakes I did.
Get rid of the words “more” and “lots” when talking about your client count.
Instead, run your numbers, working backward from your ideal income as a gym owner.
Simple equation: If you want to earn about $100,000 and you have a profit margin of 33 percent, you need $300,000 in gross income. Divide that by 12, and you must gross $25,000 a month. If you have an average revenue per member of $167 (this is too low, by they way), you need 150 clients.
If your ARM is $205, you only need 122 clients to gross $300,000.
I’m skipping past staffing costs, rent expense and so on to keep it simple, but you can dig into full spreadsheets by requesting Chris Cooper’s guide “5 Ways to Make $100,000 From Your Gym” here.
Plug in your numbers and make adjustments to see what’s possible for your business. It is 100 percent possible to make $100,000 a year with just 150 clients.
My point: I didn’t need “more” clients. I needed a certain number with a certain ARM—and a plan to get there.
Then, while earning a reasonable living, I needed to stay there until I was certain my systems and staff could handle calculated growth. Or I could have stayed at that number and worked on delivering more value to clients to boost ARM.
During the COVID lockdowns of 2020, my wife and I had time to revise our business model. We used this exact process of reverse engineering to determine we needed about 60 high-value clients to earn what we wanted if we got rid of the cavernous warehouse space.
We talked to our mentor, changed our model and reduced our space to handle only the clients we needed to earn what we wanted. That last part alone dramatically improved our financials: We were no longer paying rent on a 6,000-square-foot warehouse that sat mostly empty for 22 hours a day.
Because our member target was below 100 high-value clients, we were able to create simple but effective systems that didn’t involve lots of staff people and moving pieces.
With a hard target, everything was easier.
Run Your Numbers, Set Your Targets
If you haven’y figured out exactly how many clients you need, do it today.
You don’t have to sandbag it, either. Dream up your perfect day and put a price tag on it. Then plug your income requirements into your spreadsheet.
Calculate what it will take to provide that income. Then create the revenue.
Here’s the key part: You might come up with numbers and question marks. If you can’t see clear a path to earning what you want, speak to an expert. You don’t have to figure it out on your own.
A mentor can look at your numbers and say, “Here’s exactly how we make it happen.”
To find out more about that, book a free call here.
