Owner of Unprofitable Million-Dollar Gym Finds Success Through Mentorship

Owner of Unprofitable Million-Dollar Gym Finds Success Through Mentorship

Mike Warkentin: (00:02)

Well, look at these revenue stats. Chris, are you gonna keep your secrets or are you gonna tell us how you generated so much revenue at your gym?

Chris Thacker: (00:09)

I’ve gotta let my secrets out, Mike. Two-Brain has been too good to me to not do this. They’ve really helped me along the way. And really, when it comes down to it, do the program. Two-Brain has been very integral to these numbers. And so I’m happy this year.

Mike Warkentin: (00:30)

Okay. I can’t wait. We’re gonna get right into that. Listeners, this is Two-Brain Radio, please hit like or subscribe, or subscribe wherever you’re watching or listening. My name is Mike Warkentin. I’m here with Christopher Thacker of the L.A.B. Gym in St. Louis, Missouri. At Two-Brain, we track all the numbers, all of ’em. And I’m thrilled to tell you that Chris landed on our June leaderboard, which ran from $48,000 to almost 80K. Wow. Right. I know a little bit about Chris’s business and I want him to share his secrets with you. He said he’s gonna do it. So we’re gonna dig right in now, so you can generate big revenue too. Here we go, Chris. Now I understand you’ve always been a PT facility and groups are the other thing. Now that’s different than many, many gyms, including mine. Many of us focus on group training. PT is an afterthought. So how did you come to focus on this and generate so much revenue from it?

Chris Thacker: (01:16)

That’s a good question, Mike. We have always been a PT facility, as you mentioned. My brother, Justin Thacker, RD, CSCS, health fitness specialist. He’s got several letters behind his name, but he founded the L.A.B for human performance and preventative health.

Mike Warkentin: (01:38)

Oooh, like that one.

Chris Thacker: (01:39)

Back in June of 2007, Justin being an international level weightlifter with aspirations of making it to the big show. He needed to maintain his training, a paycheck, school and pursue a career in our industry. So he said, let’s roll the dice and open my own place. He was an undergrad at the time. He called his big brother up and said, Hey, this is what I’m doing. And I said, you go sink your own ship, buddy. . 

Mike Warkentin: (02:13)

As any big brother would say.

Chris Thacker: (02:14)

Absolutely. And so really the first year was a one man show. He started hiring in, we grew to quite a few trainers. That gym was 2000 square feet. The training floor was a thousand square feet. The front end of it was some, you know, there was a cardio room, there was a small lobby, an office, a one-seater toilet, pretty sure only women or only men used it. The women stayed away from it. but the gym floor itself, we had five platforms and by the second year we were running, we were booked out on all five platforms with several trainers and clients before and after work, during our peak times.

Mike Warkentin: (03:07)
And this is all PT.

Chris Thacker: (03:09)

Yeah. All PT. We ran- Justin being an RD, we, nutrition counseling was obviously very much integrated into everybody’s plan. And then we ran some massage therapy as a perk, you know, enough hours for a part-time gig. I think it was mostly used by staff. We dabbled in supplements and this and that, but really at the end of the day, it was all about training.

Mike Warkentin: (03:37)

Now you recall your, I gotta jump in on this. Yeah. Like, do you recall your rates from back in the day, then? When- in that era where you were doing PT and a little bit of supplements and some other stuff in there? Like what do you, maybe you didn’t track ARM, but do you have an idea of what you were charging a client on average per month?

Chris Thacker: (03:54)

Yeah. I wanna say that we were probably in the ballpark of $50 a session. And everything at that point in time was we had two programs. It was six days a week or three days a week.

Mike Warkentin: (04:06)

Okay. So simple offering, but effective.

Chris Thacker: (04:08)

Yes. And so do the math on that. It runs up pretty quick. When I was in preparation for this meeting, I looked at some old numbers and we were hovering around 17, $18,000 a month.

Mike Warkentin: (04:23)

Okay.

Chris Thacker: (04:24)

And to look back on that today, that, it’s good to see the growth. I’ve seen every aspect of this industry. We peaked out back in around 2015 with a 28,000 square foot facility running $100,000 a month revenue. But we were also running $110,000 a month in expenses, you know? Yeah. So the ever-growing cash-eating monster was nipping at our heels daily.

Mike Warkentin: (04:56)

Did you go from 2000 to 28,000 square feet?

Chris Thacker: (04:59)

So we scaled up, we moved from 2000 into 7,500.

Mike Warkentin: (05:05)

Still big. Yep.

Chris Thacker: (05:06)

Yeah. And that step was kind of scary. We looked at each other and said, okay, we’ve got this big room. Now we have to fill it. So yeah, we had some very good clients that Justin actually trained prior to the LAB being more than an idea, you know? And so they’ve been with us throughout, but when going into that 7,500 square foot space, we had started, we picked up a boot camp from a local guy. He was a military guy, moved to Colorado and had a pretty good following. So we had maximized our one-on-one PT space. So picking up this bootcamp was beneficial. It was a new animal for us. You know, we grew up in sports. Strength sports have been a big part of our lives since we were kids.

Chris Thacker: (06:08)

But then, you know, more organized team sports stuff too. So group training kind of came naturally to us. When we’re running group programs, it reminds me of being in the weight room in high school and college, you know? So picking up the bootcamp, it was their quintessential bootcamp. You know, Tom being a military guy. It was a lot of body weight stuff, a lot of “carry your buddy” and a lot of long enduring steady-state cardio runs. So when we brought them in, us knowing how beneficial strength training is, and that being our go to, we won that crew over pretty quickly. They were a pretty tight-knit group. They would hold, oh God they would hold a holiday party every year. It was a bootcamp Christmas party.

Chris Thacker: (07:07)

It was a great deal. They would be involved in each other’s weddings and, you know, they’re a big part of our community still today. But bringing them on board into a space of 2000 square feet in an already maxed out space. No go. Yeah, we were actually, we bought a couple of big tarp canopies from Sam’s that were 10 by 60 and created an outdoor space. And those die hards would do that. I mean, they didn’t miss a day. We would only take it inside if it got below 20 degrees. , it was-

Mike Warkentin: (07:51)

You signed up for a boot camp, you’re gonna get a boot camp.

Chris Thacker: (07:51)

That’s right. But, you know, by interjecting some dumbbells, some compound movements in a linear progression, they thought that we had just given them the golden egg basically.

Chris Thacker: (08:09)

They were really, really turned on by it. And so that gave us enough traction to say, okay, let’s roll the dice, let’s get into a bigger space. And that first year there was a little rough, as any growth move is. And so to compensate for that, we tried everything from, you know, membership sales to bringing on group fitness, to free PT, free memberships for Christ’s sake. And then Groupon kicked in. Groupon was a, we cycled a lot of people through our facility. And our deal was a month membership with free training sessions. And, you know, at one point my front desk was not so thrilled with all the tire kickers that were coming through mm-hmm but I ran some numbers at that point to kind of prove how valuable it was at the end of the day which it, you know, Groupon turned us over a lot of PT clients.

Chris Thacker: (09:25)

And so while personal training was very strong and running really well, all of the other noise that we created for ourselves was very distracting and caused more problems than we needed. And so, it wasn’t too long after that word started getting around town that we were weightlifting coaches. And this was probably, so we moved into the second space around 2009, 10. We started a small weightlifting group in 2008 before we left our first building, that comprised of about five or six people, but it didn’t take long, CrossFit being a growing element and how important weightlifting is to the workouts, the sport itself. You know, the area coaches and other CrossFit athletes were, or CrossFit health minded individuals found out what we were doing.

Chris Thacker: (10:37)

And they started coming to us for more weightlifting coaching, things like that, which then turned into coaching seminars. And we have a pretty wide net in our area, our community from gym to gym, we’re pretty in touch with one another. But a lot of that goes back to those days when we were all training together in the same room, you know. But then that kinda opened up the door to affiliating. CrossFit was prime for the picking. And so we moved into that space of 7,500. A year into that, we took on another 7,000 square feet or so of that space, which was essentially a big open room. No AC, no heat, just a concrete room that we can weightlift in, you know?

Chris Thacker: (11:37)

And so my boot camp crew who are most lovingly known as our grass kickers, they were our test dummies for our CrossFit programming. And when we introduced that to them, it was a whole new thing for them. I mean, essentially another golden egg. You know, they loved it, took to it very well. There were a couple naysayers at first, but, you know, they’re tried and true CrossFitters today. So the group fitness element or the, and I shouldn’t say group fitness. Group coaching element came on in a time where we were unsure of it, but needed it. And since then, I’ve dumped all the other nonsense and have really rooted back into what we’re good in. And that’s our one-on-one training.

Chris Thacker: (12:37)

We’ve expanded on that with our group training model which is, essentially it’s personal training. It’s just done in a group of 10 to 12. Okay. Right. And so very early on with being a CrossFit affiliate, we said we should be doing this with our own format, with our own program, you know? Going back to the first offerings of six days a week of training, that’s exactly what we needed to be doing. And so, you know, a classic training approach, barbell centric, squat, bench, deadlift, overhead press, accessory work, and then cardio conditioning. HIIT style. You know.

Mike Warkentin: (13:17)

You had me until you said cardio, but other than that, it sounded great

Chris Thacker: (13:21)

Yeah. Right. Exactly. And so that format has been our principal or first offering since 2007 and still to this day is my recommendation to anybody walking in the door.

Mike Warkentin: (13:37)

Okay. So let me summarize this and see if I got this right. So you start out PT and then you start adding in a little bit of boot camp style stuff, and you start expanding, then you start getting into, like, how do I pay for this space? Adding in Groupon, starting to lose your focus a little bit, as you said. When you got that big space, like, what was the profitability of the business throughout this? Like when did you get to the point where you had like a hundred grand of revenue, but expenses that matched or were bigger than that?

Chris Thacker: (14:05)

We scaled pretty fast. In that era, you know, Coop talks about it a lot. The 2008 hit that we had. You know, I remember many times being able to say, you know, we’re growing in a recession, and you know, there are a lot of factors in this, you know, CrossFit becoming a thing. We’re seeing some of the baby boomers are wanting to, you know, live forever. And so they’re coming in and wanting to get into training, but to a hundred thousand dollars a month, I’d say by 2011, 12. We were getting pretty close. Yeah. And definitely, you know, from 12 to 17, we were north of that.

Mike Warkentin: (15:03)

OK. And was the big expense rent and salary? Was that what caused you to- so that’s what caused you to get in a bit of a trouble there?

Chris Thacker: (15:11)

Yeah. Yeah. And so I’m in an area in St. Louis that’s considered Midtown. Okay. And it encompasses several neighborhoods but it’s the heart of St. Louis. The interstates are running right through these neighborhoods. It is where high end housing is, or, you know, housing, apartments, leases, ownership, et cetera. The hospitals are right next to us. So I’m in a high rent district. Even with a warehouse space for that matter, you know, it only gets more expensive, the bigger you get, right?

Mike Warkentin: (15:52)

Yeah. So six, I mean, six figure revenue. And you’re talking like, early on. Like when I opened my gym, it was in like 2010, 11, something like that. And we were like, I was trying to get to five figures. So you’re cranking out six, your expenses skyrocket up. And Chris has talked about this where expansion often comes with a dip in profitability. And because everything adds up fast, you gotta figure things out, you gotta be a better business owner. So how did you unscrew everything? How did you get to a point where then, you know, you get revenue above expenses, how do you do it?

Chris Thacker: (16:22)

We had to make some hard decisions and started to scale back.

Mike Warkentin: (16:30)

And what’d you scale back on?

Chris Thacker: (16:31)

Everything. So we were in an, the building we were in was an Albatross by our third move. It was, you know, 28,000 square feet. You know, it was great space, had a lot of character, but there was like, you know, for example, there was an atrium that ran through the middle of the building. Great meeting place. You know, lots of natural light in there. There was fricking palm trees for Christ’s sake. . Yeah. In St. Louis. Oh my God. But he glass in that atrium was a sheet of plexi glass. So when the summer hit, my electric bill was 8,000 a month. When winter hit my gas, bill was 5, 6,000 a month. So it would take me until October, November to catch up with my summer months of bills, but then turn around to get the utility bills, you know? And so we had to learn the hard way that we just did not have big corporate to support the stuff we were trying to do. And again, lots of ways is a way to put it. We were distracted from what we were really good at, and that goes back to our training and coaching, you know.

Mike Warkentin: (17:59)

Okay. Did you have a long term lease or did you have to break it or did you wait it out or what’d you do?

Chris Thacker: (18:03)

So the landlord was interested in moving, or in selling and we were not. And we were looking at trying to get out of there anyway. And so we came to an agreement to break the lease. And before we had ability to plan an appropriate move, you know, he’s got a buyer on the hook. And so that kind of expedited our exit a little bit. And then my world imploded, my brother passed away that year. And that was 2019. And then,

Mike Warkentin: (18:41)

That’s when you were exiting this facility?

Chris Thacker: (18:43)

Yes.

Mike Warkentin: (18:44)

So at the same time when your brother passes?

Chris Thacker: (18:46)

Yes. So we had, he and I had been working on the facility I’m in now. We started speaking with the landlord over here, had lots of discussions, lots of meetings, started working on floor plan and our move to exit. He passed away. And in the end of August of 19, I didn’t talk to anybody for a couple weeks. When I resurfaced, landlords trying to get ahold of me, Hey, we’re closing October 10th. I need things to be moving. So I said, man, it’s September 15th. I’ve got, you know, 30,000 dollars of equipment. Well, 27, but either way not gonna happen. Well, he worked with me, we got out of there, had a lot of support from clients and staff and family.

Chris Thacker: (19:45)

And, you know, it’s, our community, you know? What’s really unique about small business and gym community, et cetera. I mean, when, when there’s a crisis, everybody’s there, you know? And so I got out of there quickly, did a short term deal with a friend of mine who owns a gym locally. We trained our clients there for about six weeks. Tight space, but they were in, and they had a full book of clientele as well. But they’re amazing guys, and wouldn’t be here without them today. They really, you know, I sat down with them and they said, Chris, whatever it’s gonna take to help you get to the next step.

Mike Warkentin: (20:32)

Wow. So, so at one point, did your gym crack a million dollars of revenue?

Chris Thacker: (20:37)

Oh yeah.

Mike Warkentin: (20:38)

Okay. So that’s incredible, but profitability was not there.

Chris Thacker: (20:42)

No, no. I mean, we were feeding ourselves. We were, you know, the last ones on the list, you know how that goes.

Mike Warkentin: (20:47)

Yeah. So this is fascinating because we often talk about gym owners. We say, gross revenue is not all it’s cracked up. It’s great, but it can’t, if your expenses match it or exceed it, gross revenue means nothing. And there have been stories. And Chris has talked about this, there have been stories of gym owners who are, you know, million dollar gyms, things like that. The revenue is exceeded by the expenses, and there’s some suffering going on for their families and staff and so forth. And so you were that guy?

Chris Thacker: (21:10)

Absolutely. And the other part of that pie was payroll, you know. We are a W2, and so that compounds pretty quick. And when we’re running a place, that’s got 10 trainers on the floor at one time, strength coaches, and then group fitness, and then support staff. I had 30 people on staff at one point.

Mike Warkentin: (21:42)

Wow. And I can see how that would, that pressure to feed those people, feed yourself, cover your expenses. I can see how that would cause you to lose focus, because all of a sudden you start thinking, I need to do all the things, I need to find some revenue, I need to group on this. I need to find more clients, marketing, hamster wheel, the whole thing. And it’s just that spiral, right? Yeah. Let’s get into the good stuff now. So like, I’m curious to see about this. So 2019, you have a tough deal. Everything’s kind of crappy. What happens then you move into, I’m guessing a smaller space. And what do you start doing? Like, take me through that period.

Chris Thacker: (22:14)

So, we landed in a warehouse space. It was not very far from where we were, the neighborhood that I’m in. Really turning around, lots of new restaurants and nightlife moving in, lots of residential stuff. So moved into this neighborhood, the building I’m in is a monster, it’s 130,000 square foot warehouse space. The landlord said, Hey, I’ve got temporary space if you need it. We moved into there, was only supposed to be 30, 60 days and try to iron out details for the space I’m in. Well, then by day 90, well, I’m pretty comfortable in this space. I can make it work, but you know, it needs a coat of paint and a lot of work. It was straight up just a warehouse. Then we started negotiating to get me back in the space we originally talked about, which is where I’m at now, which is in hindsight much rather be where we’re at. There’s, you know, lots of natural light. It’s a great room. This was around about January, February of 2020. 

Mike Warkentin: (23:32)

I know what’s coming there. I know what you’re gonna talk about right away.

Chris Thacker: (23:35)

Yeah. And so stay at home orders started going into place, mid-March.

Mike Warkentin: (23:40)
How big is the space? Before you go further? How big is the space that you were in at that point?

Chris Thacker: (23:44)

Okay. So I went from, like I said, 27, I’m in 12, almost 13,000 square feet now.

Mike Warkentin: (23:52)

It’s still big, but less than half. So you’re cutting your cost there, which is nice.

Chris Thacker: (23:55)

Oh, absolutely. And so, the square foot rate didn’t help me out much, but just the gross run up of the area or the space itself is a big, big help. So with trying to move, being transplanted in a couple places, not having an ideal space, you know, in my previous space everybody’s used to having air conditioning, locker room showers, you know, some niceties, so to speak. 

Mike Warkentin: (24:33)
They got soft. Oh, they got soft.

Chris Thacker: (24:34)
Yeah. Yeah. We took some hardcore people and made ’em soft. But our core group’s still with us. The pandemic hit and stay at home orders went into place. We were limited down to something like 10 people in the room on an hour or something crazy,

Mike Warkentin: (24:58)

Which makes no sense when you’ve got a giant space. Right?

Chris Thacker: (25:01)

Oh, absolutely. And one of my staff said, if they shut us down, how long you think we’ll make it? I said, two weeks, you know, we’re on a bimonthly draw. Yep. I said, you know, if there’s no revenue coming in, and we can’t provide services, we’re dead in the water. Fortunately, incredible staff, incredible community. My clients, they huddled around us again. We pivoted. Did a lot of virtual stuff and there was quite a few members that were, you know, and at the time I was still doing open gym access. A lot of those people said, keep my membership running. I wanna make sure you make it to the other side. I even had a few people charge me double.

Mike Warkentin: (25:52)

Wow, that’s some good clients.

Chris Thacker: (25:54)
Yeah, yeah. And fast forward three months, I had already signed the contract to move into this new space and the city was releasing us back into the wild and allowing people to start going to public places. I was able to get us moved, do some renovation, paint, you know, make it a nice space inside of that three month break. It was tooth and nail to get opened up inside of three months though, too. And then that, 2020 was just kinda everybody’s deal. It was rough. But then from there, Two-Brain has been very, very much a part of my growth in that process. So I signed up in 2020 October and it really helped me focus on where I needed to be putting my attention and time.

Mike Warkentin: (27:03)
So why’d you sign up?

Chris Thacker: (27:05)
Well, I stumbled across Cooper through “Profit First” by Mike Michalowicz.

Mike Warkentin: (27:11)
Oh, cool. Right on.

Chris Thacker: (27:13)
Yeah, that ecosystem just made a lot of sense to me

Mike Warkentin: (27:16)
Especially given your history. You said you guys were eating last.

Chris Thacker: (27:19)
Oh, absolutely. And truth told, I found “Profit First”, first part of 2019, and I was reading the book and I said to my brother, Justin, you gotta read this book, man. This guy’s incredible. The stuff that he’s putting out there is,it’s gonna change our lives and I didn’t get halfway through the book. And I had to put it down because of life and then everything else that blew up on me. I picked it back up first part of 2020. John Briggs sent out his rendition of it.

Mike Warkentin: (27:54)
“Profit First for Microgyms.” Yep.

Chris Thacker: (27:56)
Yep. And that anchored me in, signed up with them as my accountants. And been running that program since.

Mike Warkentin: (28:05)

Okay. So that’s interesting. And then through all that you get hooked into Chris and Two-Brain Business.

Chris Thacker: (28:10)
Correct. All of the content that Cooper’s sending out, like who is this guy? This guy’s crazy. He’s giving it all away for free. Coming from a mindset of “everything we do is proprietary” and, you know, yeah. We’re strength training, but nobody else is gonna do it as good as we can. Uh, and we’re not reinventing the wheel of course, but we have a refined method and nobody’s gonna copy that, you know? And so when Cooper’s sending out all these things, I was just blown away. And you know, he follows the mindset of follow up till they’re dead , which is, that’s a marketing tactic that we’ve always tried to employ. But tapping into that resource, it was just checking off a lot of the right boxes at a time when I was, my sounding board was smaller. Uh, you know, my partner in crime had been silenced so to speak, you know? And so it came at the right time where I was needing to kind of quiet the noise and focus a little more. And I was first assigned to, uh, Dan Visentin, who’s no longer with Two-Brain, but Dan was an incredible guy to work with. He’s since left, but now I’m with Russell Francis.

Mike Warkentin: (29:40)

Russell is good. He’s a good guy.

Chris Thacker: (29:42)

Yeah. It could not have been a better match. Mm-hmm , he and I, I mean, I look forward to our conversations just for the dopamine I get from the meeting. I mean, it’s just always good, progressive conversation. There’s a lot of things that I need to be covering, a lot of things I need to be working on. And he helps me kind of silence the noise and get directed into what’s gonna make the biggest impact.

Mike Warkentin: (30:10)
Let’s talk about the Two-Brain stuff. And so you had this longstanding well-established business that got to a million dollars in revenue, had some profitability issues. You had a gigantic beautiful space. You had some moves, you had a tragedy in the family, you have all this stuff. You start working with Two-Brain, what happens then? ‘Cause you’re a long standing gym, how does Two-Brain help you make things work better?

Chris Thacker: (30:30)
So good, good question. It helped me put our process into a structured format that really, you know, the client journey is kind of the root to that answer.

Mike Warkentin: (30:48)
OK. I’m fired up about this already. Did you have one before that?

Chris Thacker: (30:53)

Yes. Yeah. Loosely.

Mike Warkentin: (30:55)

Okay. Loosely. I gotcha.

Chris Thacker: (30:57)

Yeah. So I mean, the process has always been, from day one, get them on a consultation. However they make it in the door. That consultation is, you know, we go through health history, we talk about our programming, their goals, how this all comes together. Of course the next step is get them on the training floor and the training experience hooks them in. Like, if I can get them onto the floor, it’s a close. And so there’s always the budget conversation, things like that, always had the mindset of an offer A and an offer B. I wanna see them working in our six day a week program. If that’s not in their budget, I have something that’s going to wow.

Chris Thacker: (31:51)
Them just the same, you know. And something that my brother and I always said to each other is, you know, you get what you pay for. Everybody wants the Ferrari, but not everybody can afford that. So just making sure our services were ironclad. But there there’s drop points in that. And so by incorporating a longer onboarding period that’s really helped me, it’s really helped with traction and that client sticking. Prior to, you know, it was three free training sessions with a membership, you know, it was basically giving this all away for free, come in, try it out. It was an expense we were willing to take on because we were so confident in our services. However, there was a lot of time spent on the 60% or so that didn’t stick. We burned a lot of leads over time. And so we tried to prequalify as much as we could. The reality of it is though, is we were running, I mean, everybody in the door had a deal. There was no standard in margin. Well, I established a margin for us that was good. It was definitely not the four nights model. But it was good. It helped us through our growth patterns, but at the end of the day, we were still there. There was really not much room for profit.

Mike Warkentin: (33:34)
So you’ve got some structures, obviously you have some stuff, but it’s not like it’s not super solid in the sense that you’re kind of, you’ve got some discounts, you’ve got some deals, you have an idea of the client journey, but you’re not quite have it dialed in. So what does the Two-Brain team do to that client journey and to your systems and procedures to take you into like significant profitability?

Chris Thacker: (33:55)

So first step was no more deals.

Mike Warkentin: (33:59)

That’s a big one, right? Yeah. You probably saw a huge bump of profitability right there. I’m guessing.

Chris Thacker: (34:02)

Yeah. You know, get what you’re worth mm-hmm, , it was the real take home message and reverse engineering everything, which, listen, I’ve got a finance degree, accounting degree. Yeah. And that area of my life has always been key in business of course. Right. But when you are passionate about your business, that’s your baby, it’s gonna live regardless. You’re gonna die on your own sword, right? Yeah. 

Mike Warkentin: (34:38)

Tough to put a budget on your daughter’s birthday party, you know?

Chris Thacker: (34:41)

Correct. Exactly. And so restructuring the price points, doing a rate increased campaign was pretty early on the, you know, and again, we’re in a higher rent district. Our price points are probably a little higher than some, but when you get into the prescriptive model, coaching centric, client centric method or model, you can’t be ashamed to ask for what you’re worth. Because at the end of the day, if you’re not feeding yourself, you’re not gonna last. And your clients don’t want you to see, they don’t wanna see you go by the wayside. So that was a big pill to swallow for me at first. The one thing that Dan would always say to me, quit casting your budget on your clients.

Mike Warkentin: (35:39)

That’s a big one I do too.

Chris Thacker: (35:41)

Yeah. And I still struggle with that, honestly. But then the next step in that is my onboarding process, you know, the going into a longer term, really helping ensure their attraction, their success, and so longer onboarding. We went from, you know, the three free sessions. And actually we would extend that to two weeks. We turned that into a six week program with the onset of group being a big focus or a bigger focus of the operation when trying to determine price points, setting your average revenue per member, and then working backwards. And so essentially selling on the front end, okay. This is where you need this person to be at. Okay. So that’s what your offerings are. Don’t go below it. And so I still have a lot of people that go back to 2007 that are with me, that we’re working on getting them there, you know, but between the rate change and that longer onboarding has really correlated to greater retention. And then with that onboarding, the goal review process has been a game changer.

Mike Warkentin: (37:08)

Okay, I’m gonna stop you there for a second, because we’re gonna hit this one hard. And I’m just gonna recap for our listeners. You get rid of discounts. That is a huge deal right off the top. So all of a sudden, cuz we have that same issue. You’ve got people at different rates. Everything’s a little bit weird and you’re still moving some people up from those old school rates. That’s totally cool because there’s a plan to do that. And you might not just bring them all the way up, but you eliminate discounts. You do a rate increase, which- the rate increase formula Two-Brain has is designed to help gym owners make what they need to make. And there is a stepwise progression. If something needs to go up significantly, then you’ve got this onboarding process.

Mike Warkentin: (37:45)

And every single time I talk to a successful gym owner, the onboarding process, the longer it is and more intense that it is, the better things are for the gym. And better for the client because the client stays, they stay in the business, they get acclimated, they learn things, they get everything they need for long term success. So those three huge things are just a monster deal right off the bat that are gonna increase average revenue per member, length of engagement, revenue, all the key metrics that you need to drive up. And now we’ve got goal reviews. So tell me about this because this is once a client’s in the door. We have a tendency as gym owners to be like, oh God, I sold the client. I got the commitment. Everything’s great. And we’re just gonna assume that client will stay forever and it doesn’t happen. Goal reviews change things. So Chris, tell me about goal reviews and what they did for your business.

Chris Thacker: (38:30)

Gonna give you what that looked like prior to mm-hmm it would basically, we did a lot of packages. Okay. We did not- we adapted to monthly draws, probably around 2017 ish or so, but God, I could say 45% of revenue was still coming from large packages. So moving that forward.

Mike Warkentin: (38:56)

So that’d be unpredictable, right. That could be unpredictable.

Chris Thacker: (38:57)

Unpredictable, number one. But I would only have a touch with that client when it was renewal time

Mike Warkentin: (39:05)

And then you gotta sell again.

Chris Thacker: (39:06)

Yeah, exactly. Yeah. And there was never, you know, body composition assessments were part of our program. Mm-hmm that would go from caliber readings and circumference measurements to Inbody periodically. It was never a consistent or static routine with that. And so when it came time to renew somebody, it was, you gonna make it at this time, you know, you’re gonna come in on time, you’re gonna pay us, I’ll cut you this amazing deal on this really long term program, you know, and a lot of paid in fulls and silly stuff like that.

Mike Warkentin: (39:44)

OK.

Chris Thacker: (39:45)

By incorporating the goal review process, I was instructed and this is through RampUp, to start with seed clients, and doing the due diligence through those interviews immediately struck a fire with my seed clients. You know, they’re posting on social media, “you wanna go to a gym that really cares about your progress? This is where you need to go.”

Mike Warkentin: (40:15)

And seed clients, listeners, seed clients are your very best clients that pay the most money, bring you the most joy, and you wanna listen to what they have to say. Keep going Chris.

Chris Thacker: (40:23)

And so at first I was a little uncomfortable with it. You know, anything new, right? But had clicked off a few meetings with my innermost circle and they went really, really well. And so that just fanned the flame, and really stoked that fire to where I was starting to get progress into all of the new client onboarding. And so through my six week onboarding, I do a, at two weeks in, we do a quick touch point. At the end of that, we do a post assessment, another prescription or goal review essentially. And then maintaining that at the very least quarterly. I mean, I’m in touch with the clients more so than I ever have.

Mike Warkentin: (41:14)

There’s a secret there.

Chris Thacker: (41:16)

Yeah. And also, we have our avatars for client types. Right. But it goes deeper than that when you start factoring in personality type, and you know, there’s of course the physical progress everybody makes, but then there’s the mental side of it too. And kinda getting to understand that client a little better kind of helps me pull the right levers, so to speak, and I’m not trying to play anybody, but it helps me understand them greater. So find the motivating factor to help them get to their goal. I’ve got an incredible staff, these guys, I wouldn’t be here without ’em. They they’ve really helped me cultivate our culture, but the client interaction and getting to know our clientele through the goal review process has increased our length of engagement.

Chris Thacker: (42:18)

It’s helped increase our community aspect or the, I mean, everybody’s tied together. People are, there are so many relationships built in our community, but that’s a whole other tangent. The point being though with the goal review process, it helps me to trouble spot, or troubleshoot if there’s drop off points. That regular routine of getting with somebody. If I’m gonna go to a professional for something, if I give them my money and I have no other interaction beyond that, they’re not gonna get my money much longer.

Mike Warkentin: (43:01)

And that’s a paid in full, right? That’s like the equivalent of a paid in full contract at a gym.

Chris Thacker: (43:06)

That’s correct. Mm-hmm . And so when somebody is truly vested in my progress, or when we clearly show that we’re vested in their progress, that has solidified length of engagement, it helps us increase our ARM. It’s a win-win and it’s so simple, but everybody should be doing it. It’s just, we have to get over some hurdles, you know, and it’s all our own really , but the value that I have found in it, again, goes back to keeping me connected with clientele and you know, it’s, yeah. I can’t say enough positive things about it.

Mike Warkentin: (43:56)

So what you basically listed for me is you followed the playbook that we give you in the Ramp Up program, which is the introductory program that Two-Brain has. After that people go to the growth stage where it’s more targeted, but the Ramp Up program is designed to bring gym owners up to speed. And there are a lot of elements that you mentioned there. A lot of the stuff that’s in there is like, fundamental stuff that people haven’t done, either new gym owners, or old school guys like us, haven’t done. And so we’re talking, like, getting the rates correct, getting a clear avatar, who are we selling to:? Getting a clear client journey in place, figuring out in that client journey, where are we screwing up? Where are people leaving and why are they leaving? Then plugging those holes, which means retention is better, using a prescriptive model, which is then asking clients about their goals and telling them: this is what you need.

Mike Warkentin: (44:40)

Here’s what it costs. Okay. Here’s what the other program costs, whatever. And you’re selling that way. So you’re telling ’em what they need. Then in that, you have built in a long-term onboarding process. And then onto that you have regular touchpoints with the peak of those being the goal review sessions, every quarter at least where you talk to your clients, find out if they’re having progress. If they’re having great progress, you celebrate them. If they’re not, you adjust the prescription so they make better progress, which is a huge retention tool. And all of a sudden, a lot of the major holes in the business are plugged. So I’ll ask you this, when you got through this stuff, what happened to your financial stuff? Cause you made our revenue leaderboard. Did your profitability go up? Like, what happened at this point?

Chris Thacker: (45:20)

Oh, absolutely. And as I relayed to Eden, who first reached out to me about making the leaderboard, she asked, do you expect this to continue? Or is this a blip on the radar, basically? And I told her, I said, I’m not much for counting my money at the poker table. I get a little superstitious about that, but things are trending. Last month was actually, you know, our revenue was higher.

Mike Warkentin: (45:56)

So the month before you made the leaderboard, your revenue was actually higher.

Chris Thacker: (45:59)

Yeah. A couple paid in fulls in there with some old clients that I just could not. Yeah. But exactly. And so, but as this month’s tracking, as I’m looking at future monthly draws, we’re anchored into a pretty sustainable pace. Nice. And so that’s got me to, you know, I have a paycheck, I can take time away from work. I mentioned my son earlier, my wife, we try to not be at the gym as much as we always are. And so when I once thought the potential of a hundred thousand dollars a year take home was a laughable point, it’s a foreseeable future for me and beyond honestly.

Mike Warkentin: (46:57)

And that’s super cool because, you know, sorry to interrupt, I gotta point it out. It’s like you had this million dollar revenue and now you are looking, I’m guessing that you’re gonna make more money personally with a gym that maybe is smaller quote-unquote, but is much tighter and much better run. Is that accurate?

Chris Thacker: (47:13)

That’s a hundred percent accurate.

Mike Warkentin: (47:15)

Yeah. How cool is that? Right. Like, it’s amazing.

Chris Thacker: (47:17)

It’s so eye opening, the old school frame of mind or mindset of, you know, bigger is better and grow, grow, grow. We will eventually make what we need to, if our revenue is, you know, 2 million or whatever the hell it is. 

Mike Warkentin: (47:41)

That’s a lot of revenue.

Chris Thacker: (47:42)

Yeah. Right, right. I mean, we were chasing that. We were chasing that. But just like Cooper talks about it very early on, you’re not gonna have too much bandwidth for too many people outside 150. So that requires for every additional person there’s, you can break it down and how much more cost that’s gonna generate for you, you know?

Mike Warkentin: (48:08)

And you’ve been there with the giant 7,000 square foot place. Those costs, they eat you alive, if you’re not running a tight operation.

Chris Thacker: (48:15)

Yeah. Yeah. And I did some changes with our program too. So gym memberships forever, I don’t offer an open gym access anymore, unless it’s a training client.

Mike Warkentin: (48:29)

Oh, high fives.

Chris Thacker: (48:30)

It’s been a hard pill to swallow because yeah. You know, we’ve always had our toe on the water when it comes to strength sports. So we are a, you know, there’s a barbell gym aspect of what we’re doing. And there are still some that come in on the open gym that have been grandfathered in, but they’re still part of our programming. You know, they’re not necessarily getting coached, but they’re still on our service list. Sure. But quieting the noise, refocusing attention and getting the right mindset of average revenue per member, length of engagement and also not getting too, as my grandmother would put it, not getting too high in the head, over expenses. That, you know, really understanding what’s my return on investment with different services that we have, things like that.

Mike Warkentin: (49:34)

So was it eye opening? I mean, I’m going back. Old school gym owner, you hit the million dollar revenue mark, was it really eye opening to see some of these simple systems and how they could transform your business just by going through the fundamental stuff in Ramp Up? Was that eye opening for you?

Chris Thacker: (49:48)

Oh my God. I would trade it for my college degree any day.

Mike Warkentin: (49:52)

Oh, seriously.

Chris Thacker: (49:53)

Yeah. Hundred percent. I mean, the value in what I’ve taken from the Two-Brain program. My mentorship. These guys have been paramount in basically the rest of my life. Honestly, I’m 45 this year. When I turned 40, I told myself the next 10 years is kind of the rest of your life, because that’s gonna set you up for what is next for, you know, do I get to retire early, et cetera, et cetera. Well, you know, I hit a huge reset button a couple years back. I’m breathing. My head’s above water and there is definitely a horizon that I’m working towards, you know. Seeing that money turn through the accounts is great, but when you can’t partake in it or, or even worse, you’re constantly chasing your tail.

Chris Thacker: (50:56)

Trying to fill that void is, I mean, you wanna talk about stress. My mother is always giving me a lot of props for handling stress the way I do. I said, mom, today, this, ain’t nothing , operating the way I used to. That’s a little bit different, you know? And again, everybody that is listening to this podcast, anybody that’s involved in the Two-Brain network have been down the path of wearing every hat in the gym, or every hat in the business, trying to make a mark in their life. And really, ultimately I think all of us want retirement. And so if I were to find a guy that’s new on the street or wants to open a gym and I’ve done it, I’ve got a buddy who’s in Wisconsin. You know, he’s asking me questions about it. Tell you what: go do everything that Two-Brain tells you and you will be profitable by the end of the year, on year one. And you know, there’s lots of testimonial to that, but you know, it’s, I dunno, I can’t say enough good things, Mike.

Mike Warkentin: (52:12)

Well, I appreciate that. I’m super happy that you found success because it was a thing where it was like gymnastics. No one retired from gymnastics, you got injured and you were done. Whereas with gym owners, it’s like, no one retired as a gym owner. You just got sick of it and burned out and you left. And that’s a tragedy for healthcare. It’s a tragedy for clients and everything. The thing that I really wanna bring forward is here, you made the revenue leader board, but I’m gonna guess that all your other metrics went up at the same time. We’re talking ARM, length of engagement, average revenue per memner, all the profitability, all the other stuff. And I’m thrilled to see that because I never liked to ask people revenue, because if I had asked you about revenue in 2012, you’d have been like, yeah, I got a million dollar gym. I’m like, holy crap. But it was a struggle for you. And you’re much happier and much more chilled out, less stressed now. So I love that you’ve got revenue tied to all the systems and structures that make sure that you get home to hang out with your kid.

Chris Thacker: (53:08)

Everybody’s read all of the quotes and all the self-help. And, you know, the list is very long, but you know your family comes first. Your health comes first. One of the first things that caught my attention from Michalowicz was eat the sandwich. You know, the pilot must survive. That hooked me in, I mean, within the first paragraph of that book, and so that’s kind of been my mindset ever since. I work, I’m here at the gym more than I should be. As business owners, you know, this is our baby. But there’s other things in life, you know, and until you implement systems, and here. I’ve been- we’re here because of Two-Brain.

Chris Thacker: (54:08)

Yeah. They have been integral to our success. At the same time, and I say success, quote-unquote, but I still have a lot to work on. But instilling programs or putting systems in place. Two-Brain’s a great option for people, but until somebody can systemize their approach and put things in place, they’re gonna be chasing their tail like I was. The greatest educations in life don’t pay forward until you actually put ’em into practice. 

Mike Warkentin: (54:44)

Chris has talked about this: knowledge doesn’t mean anything it’s action that does it, because with all the knowledge in the world, it doesn’t matter unless you actually take action. I’m gonna let you eat the sandwich, Chris. I know we’re creeping up on just after noon here. I wanna thank you so much for sharing your time. I hope this inspires some other gym owners, so thank you so much, Chris, for being so upfront about your journey.

Chris Thacker: (55:05)

Oh, no problem, Mike. And you know, when I got the notification on this, I was of course honored, but my second thought was, I am by far done. You’ll see me on the leaderboard again. That’s for sure.

Mike Warkentin: (55:21)

I can’t wait. That was top 10 revenue leader, Christopher Thacker, on Two-Brain Radio. Thanks for listening to the show. Please hit subscribe on the way out, wherever you’re watching or listening. Now here’s Chris Cooper with a final message.

Chris Cooper: (55:35)

Hey, it’s Two-Brain founder, Chris Cooper, with a quick note. The Gym Owners United Facebook group has more than 5,600 members and it’s growing daily. If you aren’t benefiting from the free tips and tactics and resources that I post daily in that group, what are you waiting for? Get in there and grow your business. That’s Gym Owners United on Facebook or www.GymOwnersUnited.com. Join today.

Thanks for listening!

Thanks for listening! Two-Brain Radio airs twice a week, on Mondays and Thursdays. Be sure to subscribe for tips, tactics and insight from Chris Coooper, as well as interviews with the world’s top gym owners.

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