How much does your business pay you to be the CEO?
When you open a business, you stop being a coach and start being an owner. You acquire different skills, you wear different hats, and you’re paid differently.
The success of your gym isn’t measured by how many members you have. It’s determined by what your gym pays you as CEO.
Watch my webinar here: “How to Make $100,000 With 150 Members.”
And the kicker? You can make $100,000 with 50 members if you want to. But if you have 500 members and you’re not earning anything from your gym, you’ll close.
Some of us take salaries from gyms. Some take profit distributions. Some charge their gym rent as a landlord. To avoid overtaxation, some have their businesses pay their bills (like their cell phone or their car loan). Some do all of the above. Net owner benefit (NOB) is the total of salary, profit and the “extras” your gym provides for you.
For example, a gym owner might make $100,000 in NOB this way:
- $66,000 salary ($5,500 per month)
- $20,000 profit ($5,000 quarterly distributions)
- $6,000 health insurance
- $6,000 vehicle
- $2,000 cell phone/extras
Total: $100,000 NOB (or $8,500 per month)
Here are the top gym owners worldwide for NOB in March 2021:
(We publish the actual gym names for our clients but not publicly).
How did they do it?
- They paid themselves first. Using strategies like Profit First, they wrote their paychecks before they did anything else. (Listen: “Why Your Gym Must Pay You First (and How to Make It Happen.”)
- They increased gross revenue by increasing their client count, keeping clients longer and earning more per client.
- They maximized ROI on their expenses (instead of cutting expenses).
- They maximized their value to the business by focusing on high-value roles.
That means they measured what the business paid them and figured out where their money was coming from, where their money was going and how they were spending their time. Then they relentlessly strove to improve each element. These are four of the “Six Strategies” we lay out in our free guide to making $100,000, which includes a self-assessment diagnostic. Get the guide here.
In the previous post in this series, I showed you the Two-Brain Leaderboard for lifetime value of clients. Some of the same gyms on that leaderboard show up on the one above. That’s not a coincidence.
Tomorrow, I’ll tell you how a high LTV translates into more income for you!