Chris Cooper (00:02):
Hey, I’m Chris Cooper. This is “Run a Profitable Gym.” And in early 2024, I’ve got a new book coming. It’s called “Millionaire Gym Owner.” And today I’m going to give you three of the top takeaways from that book as a little preview to get you into the holiday season. First, every gym owner should be able to make a hundred thousand dollars a year. Now, that figure is a lot greater than the median gym owner take-home of 47,604, as we reported in our “2023 State of the Industry” report. But at Two-Brain, we’ve seen many gym owners reach the hundred-thousand-dollar level, and we’ve seen it so many times that we know that it’s absolutely possible with a clear goal, a plan to reach that goal, and a mentor to provide accountability. So, what happens after you hit that goal? Well, your opportunity to serve grows.
Chris Cooper (00:50):
You can better serve your family, your team, and your clients. And for the first time, you’ll have enough money to serve your community better when you hit your income goal and then you start investing and begin to build wealth. There are really four areas of investment: First, you can invest in your family. You can begin to invest your money to create long-term wealth for your kids. You can invest in things that will let you retire. You can invest in properties your kids will inherit and in tax expertise to minimize their burden when they do. You can invest in experiences that will change their lives. The second place you can invest is in your team. Earning a hundred thousand dollars in your gym is a signal that your business is stable enough to pay other people a salary too. You have the systems and processes that can create careers, and your income is proof of that.
Chris Cooper (01:39):
So, only after you’re earning a decent salary should you be able to offer a salary to others and invest in them. Another place you can invest is in your gym itself. You now have a proven working model that you can duplicate in other locations, or you can buy the building in which your gym sits, securing its future—because you know that you’ve got a model that works, and you can prove that to a lender like a bank, or you can reinvest in different modalities to help your clients more. Right? You can bring in saunas, or you can just fix the broken stuff. The fourth place that you can invest is in your community. When you have some extra money and time, you can spend it volunteering. You can buy bikes for kids who need bikes. You can find places where $10,000 makes an immediate and profound difference and then just donate the money—like I do.
Chris Cooper (02:25):
You can hold fundraisers and charity events in your gym because you have the extra bandwidth to do so. A quick note on these investments: Many gym owners try to do these things too early. They try to buy a building before their gym can afford it. They promise salaries to their staff before they make a decent income themselves, or they open second locations before their first location has a proven working model, or they run charity events when their own business is unprofitable. Remember, income first and then investment. Keep the golden goose fed. Now, let’s talk about going from income to investment. My previous books talked about how to make a good income in a gym, and this is the next step. We built our Tinker program to teach gym owners how to invest, and this book, “Millionaire Gym Owner,” is all about that journey from income here to investment.
Chris Cooper (03:15):
There are four ways that Tinkers really invest: The first is scale. They put money back into the business that they know and love. They open a second location successfully because they have a proven model that they can duplicate. They expand their offerings to serve more people, or they might open an overlapping business, like a Ninja gym for kids. Second, they make external investments. So, they put money into cash flow assets like real estate or overfunded whole life insurance policies or bonds or crypto or stocks or boring businesses like self-storage and laundromats. Sometimes they might even offer private lending to others or even act as angel investors in startups. Third, they make internal investments. They invest in mentorship to become better leaders, and they remove the bottlenecks in the growth of their businesses. This has been massive for me. When I bought a self-storage business, the first call that I made was to a mentor in the self-storage business so that I could get that thing profitable fast, and we worked out an entire business model in about an hour instead of me taking three years of losing money and beating my head against the wall trying to figure it out.
Chris Cooper (04:20):
The fourth place that Tinkers invest is their lifestyle. So, they invest in work-life integration. They invest in experiences; they invest in buying back their time. Some invest in Two-Brain’s mentor certification to help other gym owners and local entrepreneurs succeed. Or they might also invest their time into service. Now, all this sounds great, right? But you can’t invest until you have a good income. You have to get your gym sorted first. The reason that I want to make gym owners wealthy is because there are no better people on earth. I want to put more money into the hands of generous, service-oriented people who are dedicated to improving the health of others. Basically, I want the good guys to win, and I want them to win big because that’s how they help others win.
Chris Cooper (05:03):
So, to create a balanced portfolio—and I’m going to get it more into the nuts and bolts here—I want to share a strategy with you called the Barbell Strategy. Now, some people like to invest as little as possible into a whole bunch of different buckets, and they think that’s diversification. But according to Nassim Taleb, who’s a mathematical statistician, a former options trader, and a risk analyst who is also good at deadlifting, there’s a better way than just dabbling in 50 pies at once. So, what Taleb recommends is having a couple of really conservative investments. So, if you think of a spectrum of risk, these conservative investments are very far on the right-hand side, right? And then he recommends having two high-risk investments, maybe on the left-hand side of that spectrum—and nothing in between. So, like a barbell, your investment portfolio is heavily weighted on both ends instead of spreading your investments across 10 different things. Look, it’s tempting to put a little bit of money here and a little bit of money there, but it’s best to invest where you have some expertise.
Chris Cooper (06:06):
So, the higher the risk, the more time and attention you’ll have to invest along with the money. Right? Your gym is a good investment. It’s a passion project. It’s on that left end of the spectrum, and you’re better off to get really good at one or two of these passion projects instead of dabbling in a dozen. If you’re not really interested in learning about stocks or real estate, you could just park your extra income in something boring on the other end of the spectrum and then stay focused on your gym. And I’m going to share more on that in a moment. But here’s why that’s important, and that is conserving your attention. I love that Barbell Strategy to guide my investments, and not just because it’s got an awesome name, and he’s a good dead lifter, but as a gym owner, my business is my high-risk investment.
Chris Cooper (06:48):
That’s my passion project. That’s what’s going to get me out of bed at 4 a.m. It pays me a good income because I’ve learned to be a good entrepreneur. So, I balance that higher-risk investment with conservative securities—the other end of the barbell—and I save my attention, which is actually the most valuable asset that I have. Where do I put the excess money from my gym over here? Into conservative investments over here. Now, those exact investments change over time, but as I’m reading this, I’m looking for bonds or other high security spots where time is on my side. Boring, right? But I can play the long game there because my short game is to be all in on the gym and all in on Two-Brain. So, I get the money out of the gym, and I put it in places where I don’t also have to invest my attention or think about it, and then I just let it grow quietly.
Chris Cooper (07:35):
Now, one attractive way to get started is through vehicles that you can invest in easily, like insurance funds or index funds or bonds. And the advantages of these options is that once you’ve made the investment, it requires really little involvement from you. You don’t have to keep paying attention to it. Most of these options offer relatively secure returns, and they’re typically a good home for your first external investments, while also being an important part of your ongoing investment strategy. Now, of course, you might be really attracted to overfunded life insurance or crypto or buying art or flipping houses, and those investments will take a lot more of your time and energy, but if they make you happy, then go after one of them. Just know that your business is going to suffer a little bit when you shift your attention to one of those other things.
Chris Cooper (08:20):
So, the simplest investment formula is the Barbell because your attention is finite. Don’t split it too many ways, or every other investment will suffer. I have a successful gym, right? I also run a large worldwide company, but I’m tempted, like you probably are, to open a coffee shop and a bike store and more self-storage spaces and about five other companies—because I can. I have the time and the energy and the money to do it. But just because I’m a good entrepreneur with a lot of interests doesn’t mean that I should own five different types of businesses. Instead, I should maximize one type of business, take the profits out, and put them in conservative investments that won’t take my attention away from my core business. That’s the Barbell Strategy that I just laid out. The last thing that I need is something else that will wake me up at 4 a.m., have me obsessing over it, and send me running around all day.
Chris Cooper (09:10):
Well, for example, I love coffee, but if I opened a coffee shop, I would lose money for at least a few months—probably a year—while I figured out how to staff it, and I bought inventory, and I lost sleep over food waste. I would definitely scratch an entrepreneurial itch, but my gym would suffer. Eventually, I’d probably decide that one business is enough and sell the other one. And when I told my friend Mike that I’d love to own a coffee shop, he said, “Why do you want to ruin your other favorite hobby?” And of course, he was joking, but he was right: Fitness was my hobby until my gym made it my job. So, now I own a gym, I make money, and I spend lots of time in other people’s coffee shops. Even boring businesses like self-storage and laundromats still take attention away from your core business.
Chris Cooper (09:53):
And attention, remember, is the most valuable asset that you have to invest. So, think about it: How often have you been on the floor coaching a class while you’re completely distracted by something that’s going on outside the gym? Maybe it was your drive to work, or maybe it was your kid’s bad report card, or maybe you had an argument with your partner. It doesn’t matter. You know the feeling, right? Like, you know that you’re a worse coach when you’re distracted. Well, nothing is more distracting than another business. So, imagine you’re coaching a one-on-one client, and you’re stressing about a broken dryer at the laundromat, or you’re stuck at the gym, so you can’t fix the dryer, and the dryer is stressful, so you can’t concentrate on that client that’s right in front of you. Right? Nobody wins when you split your attention. I’ve had this happen with people trying to steal ATMs out of my buildings, broken doors that didn’t close all the way because of ice.
Chris Cooper (10:43):
It’s not helpful to anybody if your attention is split. So, now imagine that you own a coffee shop, which is a thousand times more distracting than a laundromat. You’re going to have staff issues; you’re going to have supply issues; you’re going to have quality issues. You’ll have to go to the grocery store twice a day. You’re going to run out of cups, and all this for a lower profit margin than your gym offers just because you really like coffee, or you open the coffee shop because you can’t figure out how to make your gym more successful. So, you avoid the hard problem by creating a different hard problem. If you’re making a bit more money than you need from your gym, put the money in boring investments that you don’t have to think about, right? Just set it and forget it. Remember, the most valuable asset is your attention, and you lose when you split your attention too many ways.
Chris Cooper (11:27):
This is just one of the many lessons in my new book. I love this book more than the others because it’s not just my story anymore. Two-Brain has now produced 43 millionaires. These are real millionaires, and I’ve asked them to help me write this book. I went out to 18 of them, and I said, “Can you tell your story? Can you share the steps? Can you tell us exactly what you did and when?” And that’s what we put in the book. My job was to tie the stories together, frame the common lessons as things that you can take away and action, and then put them all together into a book that’s really, really wonderful to read. It’s a lot of fun. My favorite thing about this book, though, is that before Two-Brain existed, there was no roadmap to wealth. Nobody was even talking about income back then.
Chris Cooper (12:11):
And so, when I finally realized at my lowest point that not only could I not figure out how to make my gym profitable, but that I didn’t see a future. I didn’t know how I was ever going to pay for my kids to go to school or buy them the clothes they wanted or have a decent Christmas—let alone retire. That’s what almost drove me out of the industry. I want you to make a good income, but I also want you to have a future in fitness so that you can stay in the industry for 30 years, change 10,000 lives in your community, and leave a legacy for the coaches who work for you, for the clients who train with you, and for your family who are giving up time with you while you build this business. That’s what wealth is about. It’s not just being Scrooge McDuck and hoarding gold coins in a vault. Wealth is really about the freedom of time, attention, and money. And if we can improve the fitness industry, we can encourage more people to become trainers and gym owners and make a good living and thereby help save more lives. I’m Chris Cooper. This is “Run a Profitable Gym.” The new book, “Millionaire Gym Owner,” is coming out in early 2024. I can’t wait to share it with you. In the meantime, if you’d like to chat, go to gymownersunited.com, and we’ll talk there. Thank you for your service.