Mike Warkentin (00:02):
Gym owners who earn between $15,000 and $25,000 a month from their businesses: They’re real, and they come on this show to share their secrets with you. You’re going to see behind the curtain today. This is “Run a Profitable Gym.” I’m your host, Mike Warkentin, and please hit “Subscribe” wherever you’re watching or listening, so you don’t miss any of the great stuff from these top gym owners. Now, Two-Brain’s most recent leaderboard tracked net owner benefit for three months. Now that’s salary, dividends and any other little extras that the business contributes, like pays for your cell phone or your car. As I said, the Top 10 ran from 15,000 to $25,000. This isn’t gross revenue; this is actually what the owners took out of their businesses. How do they do it? Well, my guest is going to tell you. His name is Ashley Reese, and he runs Defining Moment Fitness in Charleston, South Carolina with a partner. Ashley, welcome to the show. Thanks for taking time for us.
Ashley Reese (00:48):
Hey, thanks, Mike, for having me.
Mike Warkentin (00:50):
I can’t wait to dig into this, and there’s a thing, I know you said this before the show, so I’m going to dig right into it: You said simple stuff works when it’s done consistently well. Now a ton of gym owners don’t know what that simple stuff is. What are you referring to? Because you managed to do this simple stuff so well that you ended up on our Top 10 leaderboard.
Ashley Reese (01:07):
Yeah, I think I attribute it to just three main points, and there’s a saying that I’ve always kind of held true to: Everything rises and falls on leadership, right? And I think for me it’s number one: I’ve always had the vision for where I wanted to go long term, and I’ve always broken that down into steps, right? So, where I am now, and then ultimately, where do I want to go in the next three to six months? Then what is the strategy behind that? So always keeping the next step relevant and always on the forefront of my mind. And then it really just comes down to two focuses. Number one is the client, right? Like the client, how am I going to service the client in the most high-quality value way, right? Build that relationship, cultivate that relationship for not just the now-results in return, but the long-term sustainability to keep them in-house and let them share that with all their friends.
Ashley Reese (01:58):
Through doing that and building those relationships, it’s going to equate to more clients coming back in, right? So, I’ve always—we could label that client journey. Client journey’s always been the focus with my vision and goals in mind as well. The second part of that is the staffing journey, right? Aligning myself with the people who actually help me fulfill the services. You know, for me, I’ve always wanted the career-oriented trainer. Want the person that just wanted two and three hours a day. Maybe we’ll do this for a couple months. So, I’ve always hired with intention from the get go. And then as I move towards my goals, it’s what is the systems and the operations I need to put in place, but ultimately, like, how do I keep elevating my client journey and my staffing journey to level not just me up as an owner and keep moving, moving forward, but to get us elevated toward moving towards that goal? So, no matter if I add marketing to the equation, retail, or shirts or protein shakes, it always comes back to client journey, the staffing journey. Who’s helping me fulfill these day-to-day operations? And then ultimately, once we hit this next three-to-six-month goal, then what is that next goal after that? But it really just comes down to the simple consistent steps and those three pillars really for me and my success.
Mike Warkentin (03:19):
So, that’s great stuff. So, you’ve got this vision and then you’ve got your goals, and you’ve got steps that are laid out to get to those goals. And that’s a huge one because every gym owner—Chris Cooper has said this many times—needs a goal, a plan and someone to hold them accountable to that plan. So, that’s a really important one. Your focus—you frame all of that with focus on staffing and on the client journey. And those are two huge things because I can tell you this, listeners, you can’t get to a huge net owner benefit by yourself for the most part. There are very few people who run one person shows, and they can do that, but it’s rare. What’s much more common is for gym owners to ascend to a CEO role and build a business where staff members contribute. And that means it’s a different skillset.
Mike Warkentin (03:55):
You’re not coaching squats anymore; you’re building a team. And then the final thing that Ashley mentioned, which is super important, is that client journey. You need to know how clients come into your business, what they do there, why they stay, why they leave when they leave. How can you extend that? How can you serve them better? If you do that, you’re going to increase your average revenue per member. You’re going to increase your length of engagement, lifetime value goes up, and as a result of all of that, you earn more. Have I got that right, Ashley?
Ashley Reese (04:20):
Yeah. 100%. 100%.
Mike Warkentin (04:23):
Yeah. Because you can’t, you just like–but it’s not obvious. Like when I started out my gym, I didn’t see any of this stuff, right? So, it’s these simple things where it’s like goals, plan, steps, focuses, all that makes a lot of sense. But I didn’t see it when I was starting out as a new gym owner. So, if you don’t have those things lined up, start thinking about what are your actual goals, and then make clear steps to get there. And if you don’t know how to do that, a mentor can help. Try that. Book a call. The links are always in the show notes for that. I’ll ask you this: How has your net owner benefit changed over time? Like, where did you guys start, and how did that grow? Was it zero? Mine was zero.
Ashley Reese (04:57):
Yeah. You know, it started with me being a one-man show, and how can I trade what I was good at—training—with the money to pay for the overhead and actually take home some money. So, you know, I had this bare minimum that I had to pay the gym, and I had this bare minimum that I had to bring home, right? I think back in the day it was $3,000 because I live very minimally, right? And so, really for the next year, two years, as I was trying to put these pieces of the pie, really understand like, what do I need to do in order to get here? You know? You know, I really just paid myself the bare minimum. Everything else just went into a bank account. I didn’t know where to spend the extra money if I had any, right?
Ashley Reese (05:38):
And then ultimately build a staff. And then my perspective started changing, right? Like I needed to focus more on the client journey and more on the staffing journey, and then ultimately leading those two entities towards an ultimate goal, which we previously said. But as I did that, I found that there was actually more value in my time in focusing on growing the clientele through those relationships, and then helping my staff gain more revenue for themselves, get a career out of this and, and so on and so forth. And so as those two things rose the vision and the goals became bigger, but I found my paycheck actually increasing as well—not to my own understanding, but a CPA and a financial advisor was like, “Hey, you should really start considering paying yourself more, or the tax man’s going to come get you if you don’t start spending your …”
Ashley Reese (06:30):
So, enter the picture of me now trying to learn financial management. It wasn’t just growing a team, and it wasn’t just trying to get more clients. It was like, what do I do with this extra $2,000 a month? So, in working with a financial advisor, a mentor per se, in a financial sense, they started telling me to elevate my income. They started telling me to put money into a SEP fund for retirement. They started helping me build all these things out. I wasn’t raised financially. I’m financially literate is what I really am. But having that guidance and then ultimately giving myself a $6,000 a month salary, and then creating—instead of my company staying an LLC, we became an S-corp, right? For tax benefits and purposes. Then we had another rise in the amount of clients we were serving and revenue growth.
Ashley Reese (07:19):
And so, I gave myself a $10,000 pay raise, right? But at the end of the day, there’s still net profit that you’ve got to invest back into a SEP. You’ve got to do other investments with it. And then ultimately, as we’ve taken guidance and mentorship from a professional in that area, we’ve ended up being at 15 and 18,000 in net owner benefit per month, which ultimately is still—there’s still money left over at the end of the year to then either give back to staff, other investments, so on and so along the way. So, it’s been one of those gradual things that I’ve had to learn just as much as being a better manager, a better leader, business owner, finances is something that I’ve had to really dive into and wrap my head around differently than the way that I was raised, really.
Mike Warkentin (08:07):
Yeah. Do you remember any of the milestones, like the timelines? How long did it take you to get from, say, 3,000 to 6,000 or 10,000? Do you recall?
Ashley Reese (08:15):
I think 3,000 to 6,000 was about a year-and-a-half, two-year period.
Mike Warkentin (08:19):
So double up in a year and a half to two years?
Ashley Reese (08:22):
Correct. And what that came down to was the amount of clientele and the amount of staffing, and then ultimately being able to focus on those two things growing. Just so happened at the three-year mark, you know, the big term “COVID.” In May of 2020, our lease was coming due actually on our facility. And I was really contemplating not renewing it because of all the things in the world that were happening. But I had the opportunity to grow to an 8,000 square-foot facility while other gyms were shutting down. And I decided to take the jump. We jumped; we moved into an 8,000 square-foot facility. But again, along with that, systems, operations, staffing all increased. Revenue increased. And so there was a different conversation about, “Hey, you need to pay yourself more.” So, I took a jump from 6,000 to the 10,000, and then it’s just ever evolving to where we are today. So.
Mike Warkentin (09:15):
All the stuff you’re saying, Ashley, is not like “how I coach the squat” kind of stuff, which you probably started at as a one person show. You are now talking about CEO-level decisions about getting bigger space, hiring staff, managing people, developing your product and its delivery, and all the things that go into that—marketing, which I know you’re great at. Like, this is CEO-level stuff. So, listeners, if you’re thinking about “How do I get to a greater income?” you can start thinking like a CEO, not just a trainer, because when you open a business, you’re not a trainer anymore. You are the CEO of that business. Ashley, give me the quick rundown. 60 seconds. What are you selling, and what are you doing at your gym? What is the basic deal there?
Ashley Reese (09:49):
Yeah, we do all one-on-one, customized training. So, whether it’s athletic development, golfers, weight loss, weight gain, anything and everything involving the one-on-one aspect, we do a little bit of partner training, but we haven’t really branched into the semi-training market or the group training market. We do have some in-house physical therapy as well, but we’ve always kind of stuck to that one-on-one customized, individualized approach, and it continues to work, and we continue to grow. So, I’m just going to stay and keep it simple.
Mike Warkentin (10:20):
Okay. So basically, you classify it as like a personal training facility of sorts. Okay. So, there you go. That’s a really interesting model. It’s one of many models that works. Chris Cooper has laid out a ton of different ones, but that is one that will work if you do it properly with guidance from a mentor. Net owner benefit strategy. You mentioned a few things. Are there any other details that you have on that? So, some people will just take a straight salary, other people have salary dividends, other people do a whole bunch of different things to pay as much tax as they’re legally required to do so, but not a penny more. What do you do there?
Ashley Reese (10:50):
You know, I seek the advice of a professional. I mean, that is literally—I don’t have a nugget to give you guys. Like quarterly, I’ve got a meeting with my CPA and my financial advisor tomorrow. We are at the end of the year, right? But I always am staying relevant to them, whether it’s through just coffee or lunch once a month, and just kind of letting them know where I am. And we’re always assessing the income levels, the revenue levels, and what pivots do I need to make now in order to best benefit me in the long term and my team, and ultimately just keep things moving and growing, right?
Mike Warkentin (11:26):
If you don’t know, ask an expert. And what you’re buying there is speed because they’re going to tell you from an expert position what you need to know rather than you fumbling with it. I’ve made that mistake way too many times. If you don’t know, you don’t necessarily need to figure it out. You can ask an expert. So again, that’s CEO-level stuff. Hire a financial planner, hire an accountant, get those things done, and then you’re going to save time and speed. The one other thing I want to ask you then next is how does mentorship figure into this? We’re talking about experts. How does the expert guidance from another gym owner—a successful one—how does that help you build your net owner benefit? Have you avoided mistakes? Like what’s happened here?
Ashley Reese (11:59):
You know, I think the biggest thing right now is—what’s the best way for me to answer that question? I think it’s how I allocate my time.
Ashley Reese (12:09):
And this has been something that, you know—I have several mentors. One is for specifically the business. One is more of a personal development. I have another one in finance. But what all three of them are telling me right now is: Where are you spending your time? Because I am quick to make a decision, and then I want to go that way, and I end up just getting busy, right? And so even these three mentors have said, “Hey, slow down. You don’t have to do anything. I need you to do the right thing, right? What is going to bring the most value in, but also going to require the most value from you, right? Don’t just do something to get busy and to just do something, right?” And so, I think where am I spending my time in learning education? Who am I hanging out with?
Ashley Reese (12:58):
What are those networks that I’m involved in? What am I spending my time on, and where am I putting my energy? And again, a great example would be back in the day, it was training because I thought training equaled the result that I was really looking for. No, it was really business ownership and becoming a better leader and a manager. And so vice versa, it’s like now it’s not just doing the things. It’s: What are you doing, and are you doing it with intentionality? So, it’s really about time management, and how am I spending that time?
Mike Warkentin (13:29):
Listeners, this is CEO stuff. Again, time and attention. They’re finite resources. You do not have a lot of it, right? You have a certain amount of time, and you need to invest it in the things that will grow your business. That is not cleaning toilets anymore, as a gym owner; that is hiring someone to clean the toilet so that you can build a marketing strategy or whatever upper-level tasks are out there. Same thing with attention. As an upper-level entrepreneur, you have all these opportunities in front of you. You can’t follow everything. If you do, your business is going to crumble, and you’re going to get distracted. It’s really important that you figure out what to do. A mentor’s job is to tell you exactly what to do right now to grow your business and get the greatest result. Two-Brain specializes in that. You can book a call in the show notes if you want to talk about that. That’s the idea: Invest your time as wisely as you possibly can. Ashley, as we close this guy out, there are some gyms owners out there, they’re not earning much from their gym yet, and they’re looking at this, these numbers, and saying, you know, back maybe where I was, where they’re paying themselves $0—maybe where you were at $3, 000—and they don’t know how they get to the next level. What’s a piece of advice you would give them at their level to get just a little bit further ahead?
Ashley Reese (14:31):
You know, employ the right operations and things that are going to help you get the business to the next level. Spend time when you have time on those things. It’s easy to chase the next session. We can always get more clients to build this hour, but if that one hour that you spend on the business and focusing on growing your business, that one hour could equate to 10 new clients instead of you servicing one for one hour. That took me forever to really get my perspective because I was like, “No, this is what I need now. This is going to get me that solution the quickest possible way.” And then by the time I got around to spending time on my business, I was too exhausted. I didn’t feel like it. The creativity in my brain was gone from having so many conversations and training and motivating groups and so on and so forth.
Ashley Reese (15:25):
But put the systems in the operations and structures into place, even though it may not be staffing right this second, get the things in order that save you time, that allow you to have the time to focus on the growth, even if it’s just a 30-minute cup of coffee at your local Starbucks or a coffee shop—whatever you guys have around the world. Right? But make it a priority to sit down and focus on growth and giving you more time to focus on the business—getting to where you envision it to be in 90 to 120 days.
Mike Warkentin (15:57):
If I would summarize that in a catchy slogan, it would be: “Work on the business, not in the business.” You have to figure out how to grow it as a CEO again, not how to deliver the service that those days are done for all, you know, 99% of successful gym owners, there are those few one person shows, they’re very rare. For the rest of us, it’s staff building, trying to develop the product, all the things that come with it. Tell me again, and it might be the same answer, but talk to someone who’s maybe at that like $6,000 level and is looking to get to that 10 to 15: What’s the big jump there?
Ashley Reese (16:28):
Perspective and priorities. It’s—the gap between the six and the 10, the 10 and the 15, is really: What are you doing with your time? Six to 10? It was—I pulled myself almost completely out of training, and I was not doing any of the fulfillment. I focused on growing revenue, and I focused on developing my staff. When I got to 15 to 20, it wasn’t either one of those. It was just make sure that my top-tier leadership knew what they were doing so that they could develop the rest of the staff. And then ultimately, where am I spending my time on making sure that revenue streams are coming in? Because at that level, it’s about your connectivity to other people, not just the systems and the operations. So now, I am surrounding myself and spending time with other business owners, other people that are running corporate, and we’re doing corporate wellness type things for them. So, then I can sign that up, sign that deal, and then pass it down to my people. So, it’s really more about time allocation. I mean, it really, really seriously is.
Mike Warkentin (17:37):
And that’s visionary level stuff. Like that’s that C-suite kind of upper-level stuff. And again, in the gym world, we aren’t all that corporate necessarily, but that’s visionary stuff where you’re the connector, you’re doing these big level things and, and then you’re passing it off. It’s like, “I made this deal, make it happen.” Staff members, the whole structure, building things. And we have mentorship for this too; that is Tinker level entrepreneurship. That is what we call our upper-level entrepreneurs and gym owners who are expanding into anything they want because they have the time and the freedom. It could be crypto, it could be opening a distillery, it could be sports beverages, it could be another gym, it could be expanding a gym, buying real estate—any of those things. That mentorship does exist. Ashley, thank you so much for sharing your story with us. This is really great basic tactical stuff that can be used by low-level entrepreneurs like me or people who are at that elite level where you’re at. Thank you very much. I appreciate your time.
Ashley Reese (18:25):
Absolutely, Mike, thank you for having me.
Mike Warkentin (18:27):
My pleasure. That was Ashley Reese. This is “Run a Profitable Gym.” This is where the best gym owners in the world, they come on the show, and they tell you what they’re doing so that you can have the same success. Please subscribe for more episodes on your way out. And now, here’s the final message from Chris Cooper.
Chris Cooper (18:40):
Hey, it’s Two-Brain founder, Chris Cooper, with a quick note. We created the Gym Owners United Facebook group to help you run a profitable gym. Thousands of gym owners, just like you have already joined. In the group, we share sound advice about the business of fitness every day. I answer questions, I run free webinars and I give away all kinds of great resources to help you grow your gym. I’d love to have you in that group. It’s Gym Owners United on Facebook, or go to gymownersunited.com to join. Do it today.