We’ve just published our annual “State of the Industry” guide. It’s a massive data set, with metrics from over 13,400 gyms worldwide.
But it’s more than a book of numbers: It can be a roadmap.
To help your business reach its full potential, follow these steps:
1. Track your own metrics—average revenue per member (ARM), length of engagement (LEG), clients, effective hourly rate (EHR), net owner benefit (NOB) and return on investment (ROI). (If you don’t know what these metrics are, I break them down for you on Page 4 of the report: get it here.)
2. Improve the metrics that are below average. For example, if you have an ARM over $205 but only 100 clients, grow your client base to 150 next. If your client base is 160 but your expenses eat up more than 50 percent of revenue, fix that problem next.
3. Bring all your metrics up to average before you focus on just getting more clients. Getting more clients doesn’t solve all the other problems. A big client headcount with low ARM is like trying to build your bench press without training your lats: You won’t have a foundation for growth.
4. Next, shoot for these targets: 150 clients, $205 ARM, 13-month LEG, recurring expenses that total less than 30 percent of revenue, EHR over $70, and NOB over $100,000 per year.
5. Then think about scaling up to 200 clients or adding a second location.
6. Finally, look at Two-Brain’s monthly leaderboards, where we publish the Top 10 scores for selected metrics (we track all of them). Aim to get on those leaderboards after you’ve achieved consistency in steps 1-5 above.
To make it easy, we’ve put the numbers on a chart. Measure yourself on this scale:
Maximizing your gym doesn’t mean having the largest footprint or the most clients or even the most revenue. Those are all indicators of success but not guarantees.
However, if a gym can get—and keep—150 clients for over 13 months while earning more than $205 per client on average, keeping fixed expenses under 30 percent of revenue, and holding staff costs under 44 percent, I know that gym will be successful.
Keep it simple, count your metrics and improve one at a time. This is the way.
To speed up the process, work with a mentor.
