Greg: 00:02 – Hey everyone. It’s Greg Strauch of Two-Brain Media. On this week’s episode, we talk to Bo Buser. Now, Bo didn’t start off the typical route of going through a gym, becoming a member, and then opening his own gym at one point and feeling like you could do better. But Bo bought into a business and bought the business and took over. But he has a story that may not be so typical when buying a business and realizing that it was marketed to him in a much better light than what was really going on under the hood. So we jump into buying into a business like this that is dying and the steps he took to get out of it and get the business into the right place so that it can move forward and do better and still remain OK.
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Greg: 02:12 – All right. I’m another episode of Two-Brain Radio with Bo Buser. How are you sir.
Bo: 02:18 – I’m doing very well today. How about you?
Greg: 02:20 – I’m doing well. So you have an interesting story, but it’s really the story of a lot of gym owners that I’ve talked to that decide, hey, I want to buy into a gym. I’m thinking of buying into this gym or buying, taking it over. And things don’t always go as planned. So before we do that, let’s kind of talk about your background. What kind of started you into the fitness realm, and then eventually leading up to you wanting to buy a business?
Bo: 02:51 – Yeah. So I’d say like a lot of people, I’ve always had some sort of fitness in my background as something that I loved. I played soccer all the way through college, and then needed a new outlet once I was done playing competitive soccer and tried a handful of things. And the one that stuck best was CrossFit just cause it still had that competitive aspect to it. And so I dabbled with CrossFit just casually a little bit, and then after I, stopped working with my last job, I had more time and I was not traveling for work anymore and I got much more into it and realized that if I could do this professionally. I’d love to do that, be paid to do CrossFit every day. Whether that’s coaching or just working out with my own members. So it was meant to be a long-term goal to make CrossFit my job somehow. So I was going to grad school, getting my masters in business with a long-term plan of either starting or taking over a gym, figured that would take three or so years to find the right spot. And then an opportunity happened within three months of graduating. So I was kind of thrust into it, but I was really excited cause it was what I wanted to do and it was fairly good timing with school ending and just being ready to start a new chapter. And so I took the plunge.
Greg: 04:38 – So three months, I mean, you plan for three years, but three months into it, which is a much faster accelerated rate to going into either buying a business or starting a business. What was that like? I mean your mind shift had to change very quickly from, I mean, a three-year plan, 36 months, compared to three months. I mean, I could only imagine. How did you deal with that?
Bo: 05:04 – So I consulted with my best advisor, which is my dad and he was on board. He knew I could do it. And he was there to support me and help me make smart decisions as far as like financing the purchase would go. He’s got a financial background. So he was able to tell me what kind of price range I should be looking at, what makes sense. But as far as getting in the right mindset to be going from just a member and part-time coach to owner, I think I was just ready to get back into a routine and have a lot of projects to do, because grad school was not as tough as I was expecting, so I had a little more free time and I think I just needed a little bit more on my plate and I was excited. I had the energy to get back to doing something full time. And yeah, I think I was just ready to go. I don’t think there was too big of a preparation phase for me, I was just going to be looking or planning for a couple of years and the opportunity found me, so I was ready to go.
Greg: 06:36 – Excellent. So you were part time coaching and were you part time coaching at the gym that you purchased?
Bo: 06:42 – I actually was not.
Greg: 06:44 – OK. So you were coaching already at another gym, and doing that part-time coaching and taking on additional duties and stuff like that. And then how did you actually find this other gym then that was interested in possibly selling?
Bo: 07:01 – Yeah, so right when I finished grad school in December, this past December, I reached out to a handful of gyms in the area to see if they needed coaching or wanted extra coaching just with the goal of making some more connections, getting more experience and kind of learning as much about CrossFit business as I could. So I started coaching at two more gyms and within a month or so of coaching at one of the new gyms, their owner was contacted about my current gym being for sale. And they knew that my long-term goal was to do CrossFit on my own, have my own gym, and so they told me about the phone call or email, whatever they received, about the opportunity. And then I started looking into it.
Greg: 08:06 – Wow. That that usually doesn’t happen either, especially if you’re going into a gym and you’re coaching for a gym, usually, which is really great, that they were able to do that. But usually it doesn’t always go that route. It usually goes the route of they get a call and they’re not going to tell their coaches even if they know that they have long-term plans, cause they feel like, well, that will be direct competition with me. And all the other scenarios where it’s more of that fixed mindset compared to growth mindset. So it’s awesome that you had people that were willing to say, hey, here’s an opportunity. Even though you just basically started with us, here’s the opportunity to grow into what you really are passionate about. So that’s good. Now that you have this opportunity at hand, what were the steps that you guys took to actually, purchasing the business?
Bo: 08:55 – So, it started with, they kinda did a interview of me. Cause I think the previous owner who I purchased from was a long-time member and coached for a few years also. So they’re very attached to the community and wanting to make sure that the gym was going into good hands. So they actually interviewed me and I had a chance to ask them questions as well. But we got to know each other a little bit before any business-type talks happened. And then after that I spent a couple of weeks kind of undercover as a fake new member cause they weren’t advertising that they were selling the gym for private reasons. So I was a pretend new member just dropping in to classes, seeing if I liked the gym. And also doing a little bit of research on the community and just what type of feel the gym had. And then after that, there’s I guess the usual price negotiations, I guess I can’t say usual, this is my first time doing it, but what I assume would be the normal business negotiations of how much and what’s included. and that took a couple of weeks, I think, having lawyers on both sides look over the purchase agreement, and then after that signed some papers and the check and made the switch.
Greg: 10:49 – Wow. And that whole scenario took about, you said a couple weeks, so would you say like maybe six weeks from start to finish?
Bo: 10:57 – Yeah, that sounds close to right. I’m trying to think back exactly. I’d say there’s definitely two weeks where I was just pretending to be a member and then at least two weeks of getting all the legal stuff in place. And so there had to be a couple more weeks where we’re actually negotiating price and what’s included and all that kind of stuff. So I’d say at least six weeks from start to finish, maybe a couple of weeks longer.
Greg: 11:38 – OK. So, and I mean that is very quick. I mean we’ve had one of the mentors on Tammy Friedt who talked about her process and it was a much, much longer process. So it’s great that you were able to negotiate and everything and get through it so fast. Cause that is really quick, I mean, to buying any business, anybody out there listening, that is a very fast rate, which is great when you can do that. But doesn’t always happen that way. So those results aren’t always as typical as what I’ve seen. Now, did you decide, hey, I’m gonna buy this business outright and just pay cash. Did you decide to finance it and kind of have your dad help you with that? What was your decisions on actually, with the financial side of purchasing the business?
Bo: 12:26 – It was purchased all in cash. I’d done a good job saving up from previous job just cause I got to travel for work and all those expenses were paid. So I went straight up and purchased with cash. Just make it easy.
Greg: 12:46 – And now while you were a member, I mean you decided to pay with cash to buy the business, which means I’m guessing you were like, hey, everything is exactly the way I want it to be. And as a member, did you notice the gym, did it feel like it was a good atmosphere? Did everything seem like everything was firing all cylinders and everything was going great?
Bo: 13:10 – I would say yes. It seemed like a fairly put-together gym from what I saw. The atmosphere I got was that a lot of people were coming in to the gym because they like to see the people that they also knew would be there. Whereas some gyms are just a bunch of firebreathers there to work out I’d say this gym has a very good casual community, lots of different goals, but I’d say very few people on the competitive side of CrossFit. So a lot of people are there just to move each day or each day that they’re there. So everyone gets along well. There’s not a lot of, wouldn’t say any cliques that I’ve seen it at other gyms I’ve coached down or been at. As far as like the operations, I thought they were fairly smooth. Again, I’d never owned or managed a gym, so I didn’t know all the stuff that goes into running a gym, so I couldn’t say for sure that all that stuff was taken care of. But from what I’d seen coaching at other places, it looked like it was ready to go.
Greg: 14:41 – All right. So now that you’ve purchased the business, it is completely yours. Did they, I’m guessing they just did an announcement of that you were now going to be the new owner of the gym?
Bo: 14:52 – Yes. So it actually timed up with the, I can’t remember if it was in the last week of the Open or their like week after the Open closing party, but at a Friday Night Lights event, I came to be introduced as the new owner by the previous owner, which was a surprise to pretty much everybody and especially people that I had met and worked out alongside and thought I was just a new member. But yeah, it was a semi-emotional announcement from the previous owner to the Friday Night Lights, barbecue picnic group.
Greg: 15:47 – Gotcha. And overall, did it seem like people had an issue with it or do you feel like overall people were like, OK, like this is the next step?
Bo: 15:57 – So actually I guess there’s a little more background. The owner I purchased from actually purchased the gym from the original owner in early December, and then turned right around and sold to me for personal reasons in March. So I think it was a big shock to the members that it was changing hands again. But not in the sense that they thought the gym was going to go in a big different direction, they understood her reasons to need to get out of it just cause it was kind of a surprise of a situation for her. Yeah, the members handled it pretty well. It’s a good community. Everybody gets along and I’m sure it took a little bit for them to warm up to me and trust me. But no backlash at the very beginning.
Greg: 17:10 – All right. And that’s always good to hear that, I mean, especially if somebody bought it in December and then was willing to sell it, I mean four months in, but, knowing that, did you have any kind of reservations on whether or not the business was doing well or is it just because of the situation with that previous owner knowing that she had some unexpected things that happened personally in her life that caused her to want to sell?
Bo: 17:34 – So I’d say I’m a pretty trusting person, so I kind of thought or believed fully everything that she was telling me. So I didn’t see it as a red flag that it was up for sale so soon. Maybe I should have in hindsight. But it just seemed like life happens and it was an opportunity for me, so I didn’t make too much of that.
Greg: 18:09 – OK. And now, now leading up to that, you were able to buy this business, take it over, open up the book, see what was going on. And what was really going on within the business?
Bo: 18:26 – So I’d say they did a good job of marketing the business to me for the sale. I’m not sure if they intended to or meant to, but the numbers look better on papers that I was looking at than I think what I was actually going to end up working with just due to some, just the use of the front-end revenue to make monthly revenue look like it was a little better than it might’ve been as far as like some yearly memberships were built into the monthly revenues, which made it look like the recurring revenues would have been a little bit better. So I had more work to do than I thought. I think the numbers, once I took over and was doing it all myself, worried me a lot more than I thought they were going to when I was in the process of figuring out if I wanted to buy the business. So right off the bat I’d say I was fairly stressed out. Wasn’t too worried about too much of the day-to-day operations just cause I’m sure I’d helped with most of those types of things at all the gyms I’ve coached at. But I was very, very concerned with making the numbers work, which I don’t think they were exactly when I took over.
Greg: 20:20 – Wow. That is never a good thing to see, make it feel like they marketed the business for you or making it sound better than it was. So, we’re going to get back with Bo right after this.
Chris: 20:39 – Hey guys, it’s Chris Cooper. If you’ve ever run out of money, you know that it affects every single corner of your life, all of your relationships, your business, even your self-worth. And so when I found a mentor in 2009, I said, I want to share this gift with everyone. Since then, I’ve been building and refining and improving a mentorship practice that we now call Two-Brain Business. We break our mentorship into several stages. The first stage is the Incubator, which is a 12-week sprint to get your foundation built, to get you started on retention and employee programs and finding the best staff, putting them in the best roles, training them up to be successful, and then recruiting more clients. It’s an amazing program. It is the culmination of over a decade of work. It’s also the sum of best practices from over 800 gyms around the world. These aren’t just my ideas anymore. What we do is track with data what’s working for whom and when, and we test new ideas against that data to say, is this actually better? Then when ideas have proven themselves conclusively, then we put it in our Incubator or Growth or Tinker programs. I just wrote “Founder, Farmer, Tinker, Thief” to define who should be doing what in what stage of entrepreneurship. But no matter where you are, the Incubator is your first 12-week sprint to get as far as possible in your business. We’re a mentorship practice for one reason: Mentorship is what works. We work with gym owners for one reason: Because you have the potential to change the world with us, and I hope you do.
Greg: 22:09 – All right, we’re back. Bo, so you’ve set the scene, things are not as well as they were marketed and shown to you. And you had to do something quickly, and make changes to get the business in the right direction. So, going about those changes, what did you do to actually create change? And I think this is the biggest thing for any gym owner out there that has done the same thing where they bought into a gym or bought a gym, took it over and then realize that, hey, I’ve been bamboozled. I’ve been told that, hey, everything’s going great. And then I realized that it’s really not. So what were the big changes that you made in the beginning to kind of put you at a point where things were at least looking better? Just a little bit.
Bo: 23:01 – Yeah. So it took me one month before I made my biggest, biggest change, like I said, that time, and that was to get a hold on the payroll expenses. So Centennial CrossFit, at the time when I took over, had nine coaches, which is a lot, especially considering, the size of the gym. It’s not an enormous community, mega gym or anything like that, but there’s nine coaches on the schedule. And all being paid for all the classes they were coaching, all receiving a free membership, all having a free membership for their boo, their significant other. And so the payroll was, I knew when I took over and I’d seen all the numbers that, I could get that down fairly quickly just by coaching more classes. But still it was, in my opinion, out of control.
Bo: 24:12 – So at the first coaches meeting, I informed them that they would be coaching their first four classes a month to earn their membership for themselves and their spouses, and that immediately almost cut payroll in half as well. Since so many coaches and then so many coaches contributing a few membership classes. So that helped a lot. I still needed to get a few more coaches, I guess I needed to get more hours for me to coach. And so I had to adjust people off the schedule, and I knew some people wouldn’t like it. Some people would understand. And the people that understand and want the best for the community is the ones I wanted to keep around, and only had one coach push back and who was hard to deal with.
Bo: 25:25 – But I was lucky enough that they were caught doing personal-training sessions without anybody knowing. So I was able to let them go pretty easily without any reservations. So that was a big change. Number one was adjusting how the coaches were paid and then, cutting some of their hours by coaching more or in one case, letting one go. And so I was a little worried to do that just cause I was not only the new owner but a new face in the gym. But all but the one who was let go are still around and they’re still working well with me.
Greg: 26:11 – Wow. So you had to turn around and tell all the coaches, not only is your spouse no longer going to get a free membership, but you also had to turn around and say, OK, you’re going to have to coach your first four classes free, basically to pay for your membership, then pay your for your spouse’s membership on top of that. And then also finding this one coach that decided to go against what the business was doing and kind of do personal training on the side and you were able to let them go, that helped with payroll, cutting that down.
Bo: 26:48 – Yeah. Yeah. So they, I think at that coaches meeting were, somewhat, I don’t know if shocked is the right word, but surprised. But I was very transparent with the idea that this was for financial reasons for the gym, not to finance myself a yacht. And so they understood for the most part, a lot of them told me that, yeah, it makes sense that we should have to have to earn a membership and not be theoretically earning a $160 bonus for the membership just for coaching a few times a week. So a lot of them understood, a lot of them were hesitant, but in the end, it made sense to them. And I’m glad I told them face to face and was honest with them.
Greg: 27:55 – So being honest with them, I mean, I think that’s a huge turning point for a lot of gym owners, too. They don’t want to tell them, hey, the gym’s not doing well, the gym’s not going in the right direction. And it’s not going to be here long term if we keep going the way we’re doing it because they’re afraid that that’s going to cause their staff to leave. But you were willing to open up and tell them this stuff, which caused them to have what kind of reaction with you, then?
Bo: 28:24 – I’d say they all, including some members who’ve witnessed some changes, for the most part have been very supportive of the idea of keeping the gym open rather than saving some money for themselves, a lot of them. So the gym has been around for over 10 years now. I was actually invited to the 10-year affiliate owner meeting or summit, wherever that was, even though I’ve only owned the gym for a couple months. So it’s been around a while and there’s a lot of people who have not only invested a lot of money over the years, but a lot of time forming a lot of relationships throughout the years. So they want the gym to stay around. And I think they’re for the most part, all willing to sacrifice a little bit in some way to keep it around so they can keep coming and keep hanging out and working out with the people that they’ve grown to be good friends with.
Greg: 29:43 – And that’s awesome to hear. So they kind of all joined hands and said hey, yeah, this makes sense. We need to do this. And, so what were the next changes that you made to get the ship heading in the right direction?
Bo: 29:58 – Yeah, so, when I took over there were a couple of classes running at the same time and I don’t think were even close to having the amount of members that it would ever make sense to have concurrent classes. So those aren’t happening anymore. And then also one of the bigger changes was so we have a CrossFit class and then we have a Burn class that when I took over was an intro-type class. It was kind of a pseudo-on-ramp class where you don’t need any experience at all to come in and do the Burn class. From what I remember, it was maybe 10 or so, 20 minutes of instruction, maybe learning a new movement that you could take into the CrossFit class. And then a very not-intense workout at the end, maybe 10 or 15 minutes.
Bo: 31:08 – So it was not seen as an option for long-time athletes because they wouldn’t get a good workout out of it. And there’s also not a structure to like how many Burn classes you need to do before you were ready to jump into a CrossFit class. How long or which movements you had to learn before you jumped into the CrossFit class from Burn. So it was just not really a good prep course for doing normal CrossFit classes. So I’ve changed that. We still have a Burn class, it’s more of a HIIT sweat class, not a lot of heavy weights, but longer cardio-type workouts. Good if you’re feeling sore or you don’t want to lift anything heavy that day. CrossFit classes are the same, but now we also have an on-ramp program, which has been great doing the one-on-one sessions just cause it’s been good to meet the new members one-on-one and form a relationship.
Bo: 32:17 – And I think that keeps them around longer and at least gives them a little bit of comfort to reach out to me if they have any questions or concerns since they’ve actually met me and worked with me. So it’s been good for that. It’s also of course been good to have front-end revenue from on-ramp courses. I think people are much better prepared for whether they jump into Burn or CrossFit classes. So that’s been a good switch. It’s helped the coaches not have to do so much one-on-one time when they should be, when they’re technically in a group class. So on-ramp’s been a blessing I think in a lot of ways, both for the members, coaches and then also the books, I guess you can say.
Greg: 33:18 – So making the shifts with the staff first with payroll, turning around and creating more of a on-ramp or foundations or whatever people want to call it, that intro classes that are one-on-one, has definitely helped. Now, is there anything else that you did that you feel like were huge changes to the sale to move the business ship in the right direction?
Bo: 33:44 – Yes. There sure is. I think like a lot of members who I’ve seen in the Facebook group have to go through some price raises or changes. And I definitely had to do that as well. And I knew that I was going to have to do that when I took over, cause I had seen the monthly membership payments and rates and all that good stuff, and I knew at some point that I’d have to address it. Of course I was not excited to. But yeah, so we had, I think our unlimited rate going into September, we had seven different rates for an unlimited membership. And some people were paying half, or sorry, less than half of what other people were paying for the same membership, which is crazy, in my opinion, and I hope most people would agree with that.
Bo: 34:55 – Yeah, so I had a lot of people with rates that needed to change. And I devised a plan with my mentor Kaleda to make that happen. And what it looked like was first getting everything in the back end of Wodify set up to handle all the rate changes when they would come around. Two would be, step two would be letting the coaches know that it was about to happen when it was about to happen. And then three was meeting with all of the members who had a substantial rate change, which there was a lot. There was about 20, 25 people that had rates that were going to change. Maybe more than that, maybe around 30 and 20 of them needed a face-to-face conversation just cause they were enjoying the rate from 2010 or something that had to go up a lot.
Bo: 36:10 – So then I met with all of them in person one week. I came to every class, even if I wasn’t coaching, just to try to catch everybody, told them what was happening. And that I wanted to tell them in person just cause I value their time at the gym. And I like having them as a member, but that I wanted to be equitable and fair to everyone and that meant everyone paying the same rate. And I gave them a hard copy of the letter that would go out that following week to the rest of the members saying that these are the current rates, everyone’s going to be brought to them gradually over the next four months. Do you have any questions? Let me know. And then a couple of days later sent the letter to the people who had smaller changes to let them know that it was happening.
Bo: 37:05 – Most of them were just a few dollars, I think 10 at most for the people who received the letter. But there was a lot of people who had almost 50% increases, which was scary to approach some of them just cause a handful were seed clients, but it went much better, I would say from what I’ve read in all the Two-Brain group as well as the CrossFit Affiliate owners Facebook group, I think I may have had the best rate increase of any CrossFit gym that’s ever existed as far as retention went. So yeah, it was scary, but it went very well.
Greg: 37:54 – All right. So I mean, changes to payroll and your staff, changes to your on-boarding processes and then changes to your current members. It seems like those three steps now have kind of corrected the ship. Where are you now with the business? Do you feel like, hey, it’s in a good place? And we’re not having to worry about, hey, are we going to make rent every single month? Where are you guys at now with the business?
Bo: 38:22 – So we’re doing much, much better. I wouldn’t say we’re bringing in any sort of stacks to be blown on all kinds of fancy stuff, but the gym is doing much better as far as what’s coming in, what’s going out. Another big expense that was unnecessary was the rent, the space we’re at is very large for our average class size. And luckily the lease is coming up soon. We’ll be relocating to a space that one is better on the budget and two is much more efficient as far as the amount of people we have in the building at one time. So that’s good to have. I think right now at the current space, still struggling a little bit, but not nearly as much. I’m not nearly as freaking out as I was when I first took over or maybe two weeks after I took over when I saw what was actually happening.
Bo: 39:27 – So we’re going in the right direction for sure. Revenue’s going up. Expenses are much more under control. And then when we move we’ll be in a great spot. So I think a lot of the changes have been great to get things moving in the right direction. The lease, of course, is not something I could go in and change overnight. But it’s good that it’s coming up. So right now we’re doing OK, when we move we’ll be doing much better, much, much better and in a much better spot for our gym.
Greg: 40:12 – Excellent to hear. Well, anyone out there that’s listening, definitely make sure that you guys are taking note here of, I mean, if you’re going to do this, it’s definitely a step-by-step process and definitely something that a Two-Brain mentor can definitely help you with. But make sure that you guys aren’t doing this on your own because this is something that is not always done—unless you’ve done it before, it is not an easy process to not only implement, but really for you to mentally navigate through. So Bo, I commend you on being able to make all these changes and basically save a dying gym. I mean, that’s what you did. You turned around and saved it and you’re moving it even further in the right direction than it already has been. So I commend you on being able to take those actions cause I know they’re not easy, especially even owning a gym, doing rate increases or, I mean, even the small things or the big things like the rate increases, it’s never easy to make those changes. So great work on that, man. If somebody decided, hey, you know what, I want to know about Bo’s experience with going through this process, what’s the best way for someone to reach out to you if they just want to talk about your ability to do this and kind of how you started within Two-Brain or where to go and kind of get some feedback from you?
Bo: 41:30 – Yeah, so probably the best way is email, my email is bo@centennialCrossFit.com. And I’m pretty good at checking that. I’m happy to chat with anybody who’s got any questions about big changes, turning things around. I’ve enjoyed it. It’s been hard work and stressful, but I’m excited to see where things are going now. I’d say the biggest piece of advice that I could tell people would be is just be invested as much as you can. I’ve gotten some of the—seems like a very mild compliment or comment from members is that they’ve said they’re just happy to see me in the gym. And so they can tell that I’m working on the gym and I want the gym to be better. And if members don’t get that feeling that you want the gym to be better than, I think it’d be hard to keep them around or keep them on your side. So I’d just say work hard and people notice, and have someone help you make the right decisions.
Greg: 42:41 – Awesome. I couldn’t say it any better myself. Bo, thank you so much for your time and being able to share your story with us.
Bo: 42:49 – Yes, sir. I enjoyed it. Thank you.
Greg: 42:53 – Thank you for listening to Two-Brain Radio. Make sure to subscribe to receive the most up-to-date episodes wherever you get your podcasts from. To find out how we can help create your Perfect Day, book a free call with a mentor at twobrainbusiness.com.