I started doing personal training in 1998. For the next decade, I coached people 1:1, selling my attention for an hour at a time.
When I found CrossFit in 2008, it felt like a massive relief. After we coached our very first CrossFit group at Catalyst (for free—facepalm!), I remember turning to Mike and saying, “This is all I want to do for the rest of my life.”
A year later, I had two locations. I was showing up at 5 a.m. to mop one, then coaching a tiny “class” of two people at 6 a.m. and a group of four or five at 7 a.m. Then I’d rush back downtown to train my personal-training clients until 4 p.m. and wonder why I was losing money.
It all comes down to simple math. Here’s how to figure out what your groups are paying you:
1. Add up the total revenue you receive from group training each month (your CrossFit groups, your bootcamps, etc.).
2. Divide that by the number of classes you run at your gym per month. That’s the average value of each class. Write that number down.
3. Now go back to your total group-training revenue. Divide that by the number of people paying for group training in your gym. That’s your average revenue per group-training client.
4. Next, divide the number above by average attendance. How many times does the average client attend a group in a month? This will tell you the value of one person attending one group.
5. Finally, pull up your attendance-tracking sheet and look at each group you run. Multiply the average attendance for each group by the average value of a group-training client. That will give you a specific value for each group you run.
6. Compare the average value for each class (from Step 2) against that of each class on your schedule. Which classes are pulling you up and which are pulling you down?
7. Compare the average value for each class against your personal-training rate. Are there any spots where you’d make more money taking a 1:1 client instead of running a small class?
8. ***Danger*** Compare the average value for each class against what you’d be paid to work at McDonald’s. Maybe skip this step if the answer scares you.
Sam has 150 clients and grosses $15,000 per month in group revenue.
He runs 28 classes per week, or 120 classes per month.
His average revenue per class is $125. Not bad.
Sam’s average client pays $100 per month. His average client attends 15 times.
The average value of a class attendee at Sam’s gym is $6.67.
That means his average group size is around 18 people. (You can calculate this two ways. First, you can use the attendance multiple of 0.6—data shows that a maximum of 60 percent of your clients will show up for class on a given weekday. Second, you can simply divide Sam’s revenue per group class by the average value of an attendee.)
If Sam runs a class for fewer than 18 people, he’s making less than $125 per hour.
Sam charges $65 per hour for personal training.
If fewer than 10 people show up for his class, he’d make more doing a 1:1 session in that time.
If more than 18 people show up for a class, Sam’s making more than $125—but, of course, if he adds a second coach, he’s making less.
Questions to Answer
What do these numbers tell us? On their own, they’re just a measuring stick. But as a mentor, I’d ask myself these questions:
1. What’s the sweet spot for Sam’s group coaching based on profit? Where does he begin to lose money by adding a second coach?
2. What’s the best use of Sam’s time in that hour?
3. What’s the retention at Sam’s gym? With 18 people in a class, retention is probably lower than it could be. (Read more about that here.)
4. How much can Sam afford to pay a coach? Does that match the skill set needed to coach 18 people at once?
In case you’ve determined that you need to move or cancel some classes, I’ll tell you how to do that in the next post in this series.