Two-Brain RampUp: 10x ROI for Gym Owner

20210514-gorham

Mike (00:02):

Ever wondered what Two-Brain’s ramp-up program could do for your gym business? Florida gym owner Billy Gorham will tell you right after this on Two-Brain Radio.

Chris (00:09):

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Mike (00:45):

We’re back on Two-Brain Radio. It’s Mike Warkentin here broadcasting through an antenna mounted to a squat rack. We bring you the best of the fitness biz every week. And we always max out on biz tips. So please subscribe for more episodes of Two-Brain Radio. Today we’re talking RampUp. Here’s an incredible stat. 93% of gym owners recoup their investment in this mentorship program in less than 12 weeks. RampUp is Two-Brain’s 12- weeks sprint that will help you master the fundamentals of the gym business one-on-one with a mentor who runs or has run a successful gym. It’s designed for owners who want to improve their gyms or entrepreneurs who are less than three months from opening. I did this program about four or five years ago and it turned my fitness business around. The program has only improved since then as Two-Brain’s acquired more data and constantly upgraded the content. Today, a gym owner who recently completed RampUp will give you his thoughts on the program. Billy Gorham of CrossFit North Jax is on the line from Jacksonville, FLA, the sunshine state. All right, Billy. Welcome to the show. The first question is super important. Are you a Gators or Seminoles fan?

Billy (01:43):

Neither.

Mike (01:43):

Really? You’re the only guy in Florida.

Billy (01:45):

I’m a Boston college fan.

Mike (01:48):

Are you from Boston originally?

Billy (01:50):

Yes, sir.

Mike (01:51):

  1. So then it doesn’t really matter that much. So Boston college is your team so no Gators, no Seminoles.

Billy (01:58):

Yeah. I don’t care one way or the other.

Mike (02:00):

I didn’t know that was possible in Florida, but you are the guy. So we’re going to get to business here. Talk to me broad strokes right off the top. How dramatically did your business change over the course of the Two-Brain RampUp?

Billy (02:12):

Pretty dramatically. I mean, we went from, you might as well say we were like a garage style gym to actually being a premium health and fitness center. I mean, it was that type of a leap.

Mike (02:23):

Wow. That that’s, you know, that’s dramatic and like, my gym, we made that transition over a period of years, but certainly not over, you know, the RampUp period. How long did it take you to get through?

Billy (02:34):

I didn’t go through terribly fast. I really focused on the systems. So I’ll be honest with you. I don’t know off the top of my head. I’d say a couple months.

Mike (02:50):

Some people do it in 12 weeks. Some people just go through it, kind of depends on the pace that works for the owner. But in general, it’s not like a year-long thing where people grind through it. Some people of course take a lot longer, but it’s a pretty dramatic, fast sprint. It’s set up to be a sprint. Right. And you did it in a couple of months and saw a dramatic change. So tell me a little bit about, you know, what your business was when it started. I understand it wasn’t something that you, you set up as an income generator, but then you wanted to change it into a business. So tell me a little bit about what your original conception for the gym was and what it turned into.

Billy (03:22):

Well, my original conception for the gym, I didn’t start this gym. I actually became a partner of this gym. So when I became a partner with the gym, I wanted to, you know, improve the processes and it just, I didn’t feel right. As far as what we were doing, as far as a business, again, it felt like a hobby. It was like, you know, friends over. We just happen to charge them for using our facility. It’s really, that’s what it felt like. It didn’t feel like we had a direction. We didn’t have a plan. We didn’t have a vision. I mean, basically we just existed and it didn’t feel like a business. When I bought my partner out last year, right before COVID went down, you know, I really wanted, the whole reason I bought my partner out is cause I wanted direction for the business. I felt like we were in a pretty good place to be able to help a lot of people. And I didn’t think we were going to do that with our current dynamic. So, yeah, Two-Brain’s been a big part and is going to be a big part in the future of us being able to provide those types of services to people in our area.

Mike (04:17):

You know, you buy a gym right before COVID and then COVID hits. Did you feel like that was like a mistake all of a sudden, or how did that kind of wash over you as that happened?

Billy (04:27):

I’m pretty good with finance. So I did the numbers really quick and I was like, all right. Even if I don’t have any members for the next nine months, we can keep the doors open as it were. I could pay the rent, I could pay all the minimum things. We didn’t have a huge overhead. So, I didn’t have a lot of coaches or anything else like that. So it kind of sucked, to be honest with you. But sitting down and looking at it, I was like, all right, what can I do with this time? And that’s actually when I got involved with Two-Brain, we were all shut down and I was like, I don’t have any systems in place and I don’t even know where to start. So let’s start looking around and I’ll be honest with you, I have no idea how I even ended up with Two-Brain. I’m very thankful that I did. Because just as soon as I saw the roadmap, I was like, yep, this is it. This is what I want right here,

Mike (05:14):

I’ll take credit then. And I’ll just say you must’ve listened to an episode of Two-Brain Radio and couldn’t resist and signed up. So let’s just go with that. Is that cool?

Billy (05:20):

That sounds good.

Mike (05:21):

And the reason I asked you that question is that I’ve talked to a lot of different gym owners or former gym owners, some who had purchased gyms be right before COVID and were like, Whoa, you know, this is a crazy time to buy a gym. And then I talked to other ones who had sold right before COVID and saw it like as a stroke of luck in some ways. But it’s just interesting because it’s kind of what you make of it. And we’ve also seen gyms over the COVID period do really incredible things despite the fact that there’s a lot of government restrictions in a lot of places. If you don’t mind, tell me a little bit about what’s what’s your background. Like you said, you had a good financial situation going on. How did you get into business in the first place and how did you have things set up to some degree so that you’d be sustainable even during COVID?

Billy (06:01):

Well, that’s gonna be a long question. So I retired from the Navy in 2012. My background is actually electrical engineering. So I worked as an engineer for about four years. Got involved with CrossFit because I was too fat. I really fell in love with the science behind movement and kinematics. So I got my level one. I actually quit my job as an engineer. Went back to school for physical therapy and through all this time, I’ve always been a big believer in finance. So I’ve always been smart, relatively conservative with my money. I invest a lot, in the stock market mostly. And it’s just, you know, periodic things that I did over time that allowed me to have opportunities when they presented themselves, and that’s what I preach to a lot of people. So when the opportunity presented itself to be able to be part owner with the gym, I jumped on it. And then when the opportunity came to buy my partner out, I didn’t hesitate because I didn’t feel like we were going to move forward, but that’s kind of like the abbreviated version of how we got to where we’re at.

Mike (07:03):

  1. So we’ll have you back for a second show. We’re going to talk about Ethereum and Bitcoin and you can give us all your tips, right? So tell me about this. You’re doing the RampUp program. You say, you’re not sure why you signed up, or you don’t recall the exact thing that made you do it, but what was the first moment when you were in the program and you knew that it was working and you hadn’t wasted your money.

Billy (07:24):

To be honest with you, I knew as soon as I saw the roadmap, I mean, I had no doubt. We hadn’t even made an extra sale or anything else like that. But as soon as I saw the roadmap, I was like, yeah, this is exactly. And then just going through all the processes and actually have a lead nurture and what that actually meant and having metrics, within the first month of actually having metrics and being able to grade myself, I knew it was well worth the money. It was well worth the time, well worth the money, even in the first month, even though I really hadn’t in that first month, hadn’t made, we were still in the lockdown. So I hadn’t made any big changes or anything. The biggest change came in June when we hit our third highest grossing revenue ever, just coming out of COVID. And I’ll be honest with you. If I had my system set up now, them set up last June, we would have doubled our revenue just because our front end was really low. So, we’ve improved systems since then, but definitely the first month coming out of COVID, it was like just, you know, big aha moment, like, yep, this is it.

Mike (08:23):

I’m gonna ask you this. And I often jump in and I give our listeners the explanation of what the roadmap is. I’d love to hear you describe it because you came into it and took a look at it and saw this new system. Could you describe what the roadmap is to listeners?

Billy (08:35):

Just like it sounds if you’re going to have a map to get from point A to point B, and I’m going to outline specifically every thing that is going to take you to get from this destination to another, it’s that way of looking at it. And I like that because here you have this metric, all right, meet this metric. These are the things you have to do to meet it. That’s another cool thing. When you click on certain aspects and it brings up the education aspect of it, you can work with your mentor about the specifics for your particular situation, but you have metrics. And when you meet that metric, all right, cool. I’ve met this line. Now I move up to the next. So it gives you these constant goals to shoot for, very similar to what we do in a the gym when we’re working with clients, we give them achievable goals, the small little nuggets that you can hit each time. And I really, really fell in love with that because it’s just, it was really easy to see progress.

Mike (09:24):

And so the roadmap is divided into six broad categories, but within them, they’re all sorts of different highways, we call them and it can be something like, you know, membership retention is one of the big ones or getting more members, but then within that, there’s all different ways that we’ll teach people to do stuff. Tell me, what was your biggest area of focus on the roadmap? Was there one section, like you maybe mentioned that it was like kind of your, your systems and operations? Was that the main area of focus when you started RampUp? Or was it something else?

Billy (09:50):

My main area of focus was one, just making sure I wasn’t wasting my time doing things that I don’t need to be doing. Two, really developing a member experience that is truly unique in the industry. And then three, which led into the client journey, the initial client journey, writing that out. And then our client journey for our two, three, four, five, plus-year members and really focused. That still is my focus. I’m still refining that, but those are the two things that I had big gaping holes. And I had no way to know if what we were doing was working. The sales part of it. I guess a lot of people struggle with that. I was actually pretty good with it. I just didn’t have a good system in place. So once we put a good system in place, Oh, wow. I got this follow-up, I got this, I got this. And you know, next thing I know my set show and close rates go through the roof.

Mike (10:42):

Yeah. And the reason I kind of asked about that is the roadmap is gigantic, like it’s something like 480 or 600 squares. And each square that you click on has specific instructions to grow an aspect, like a very specific aspect of your business. And that can be overwhelming. But the idea is that you’re not supposed to go through just every single thing. You’re supposed to work with a mentor to target the things that are holding your business back the greatest, you know, like it’s the worst parts of your squat, so to speak, and then we’re gonna push the knees out. And after that, we’re going to get the chest up. And after that, we’re going to get weight in the heels and it’s going to give you very specific stuff. And Chris Cooper, Two-Brain founder, referred to it as a toolbox in a lot of cases.

Mike (11:19):

And it is that where you might not have to go through every single part of the roadmap, but you can definitely pick and choose with your mentor, the ones that are going to make the biggest difference. You mentioned client journey, and that is such a huge one. We’ve done so many shows about this on Two-Brain Radio, gym owners finding that the more they focus on their client journey, that’s from like, from the very first day that a client signs up to the day that that client leaves. And hopefully it’s like a 10 year window or more. They find that when they focus on that, the client stay around longer and they get better results. Had you heard of a client journey before this? Or was it something brand new?

Billy (11:51):

I kind of had a vague concept of it, but nothing definitive like it is laid out for us with the roadmap.

Mike (11:59):

Yeah. And I didn’t either. You know, like for me it was like, well, you sign up because you want to do Fran and hard workouts and then you just stay forever. And that was my fairly brutal client journey. And it worked for a few people like for a few early adopters, you know, maybe some of your Navy SEAL buddies in the service, that probably was the concept. But for some of us, or some other people, it’s not the same thing by any means because they have different goals. They’re not necessarily there for CrossFit and Fran. They’re there for, you know, weight loss, things that we never even thought about. So give me a little snapshot of your client journey, like who is your avatar that you’re speaking to for the most part.

Billy (12:38):

For the most part, our avatar is female, married between 30 and 50 years old, looking to lose weight, stay healthy. Most of them are looking to lose weight. But most of them are just trying to add a little bit something to their lives because they can’t keep up with their kids or they can’t keep up with their grandkids is typically so that kind of fits the niche. 70% of our members are female. So we really had to change our onboarding process to account for the fact that these were our typical members in our particular area.

Chris (13:12):

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Mike (13:45):

I love that you know that right off the top of your head, and you can just rattle off who your exact client is. And again, that doesn’t mean that every single person is exactly the same, but in general, if you’re speaking in marketing or whatever, that’s kind of who you’re looking for. And it’s really cool that you can do that because a lot of people don’t have a clue and still to this day, can’t figure out who they’re speaking to, which means you’re not speaking to anyone. You’re just kind of yelling in the parking lot. So you know exactly who you’re talking to. Talk to me a little bit about growth metrics, and you shared some of those already, but do you have any that you wouldn’t mind sharing about how your business is doing from before RampUp to now?

Billy (14:20):

Sure. We can do this a couple of different ways. I have a few different numbers written down. I think the biggest things to show people is just gross revenue. So my 2019 prior to COVID and everything else like that, it took me nine months to reach 84,000 in gross revenue. In 2020, it took me nine months again, mind you, we were shut down for two months. So it took us nine months, but four months of those was with Two-Brain and we probably wouldn’t have hit, it probably would have taken us all year. We wouldn’t have hit 80,000. This year we’re already surpassed 85,000, four months in. So that’s probably the biggest as far as gross revenue goes. I sat down with Russell and I asked him, I seriously was asking this question. I was like, I really think we can hit 200, but I feel like I’m being greedy.

Billy (15:05):

We’ve never hit more than 122. Is that even reasonable? You know, is that something we can really shoot for? And he, you know, told me to do it and set it up and we made a plan for it. So that’s the biggest thing. Went from 55 members. Now this was last year, right around COVID time to about 130 members now. The biggest change is our ARM was 94, roughly 94.50, our ARM last month was 190. So those are some numbers to just kinda throw by you and everything that the live shows that Chris does or the mentors do and stuff like that, I got a lot of good information. The roadmap is great and it’s well worth the time and effort put into it, but equally as great is those live shows I’ve learned. So I got to stop watching them cause I come up with new ideas every time I watch it, I’m like, I can’t do everything at once. I gotta prioritize.

Mike (16:00):

Yeah. And these are our office hours that we have for Two-Brain clients in our private Facebook group. And then sometimes Chris also does public webinars that help everyone and our clients usually have that info already. But they’re certainly welcome to join in. I want to point out a couple of things in your metrics that I thought were really cool. First of all, you mentioned a huge member increase, which is awesome, but it’s not awesome if you know, you’re just focused on increasing members and they’re all paying you too little. And I mean, you could get to 300 members or 500 members, and we’ve seen the data that supports this. You have these huge member totals, but you’re not making any money because their membership rates are too low. There’s too many discounts and things like that. So you had an increase in members and an increase in average revenue per member, which means that everything is going well at that point. So that’s a really cool one because if you have one and not the other, it doesn’t always work. I mean, I think if I was, if I was going to do it again, I would target increased ARM firs, average revenue per member, and then more members. And if you do both, it’s like a force multiplier, right? Like you probably saw your revenue, like you said, just skyrocket because you were increasing members at a higher rate. Is that right?

Billy (17:05):

Yeah. Yes. To answer your question is yes, that is very correct. It just, it ballooned, it went from, Hey, we’re trying to hit 15K, we were close. We were close. Next thing I know we hit 24, like, OK. Wow. And that was really kind of going on one of the live event or the live things, the office hours where they talked about doing the hybrid and really kind of got a good idea of what that actually meant. So I started during my consults, I’m the only one that does the NSIs right now, unfortunately, but during that, I give people three options for whatever it is. Two of those oftens options offer personal training, almost always, 75% of the time, I should say, people are taking the middle option, which always has at least one personal training session. And that was probably the big caveat to really jump us forward.

Mike (17:53):

And I’ve heard this from so many members or sorry, from so many gym owners, now that the thing that’s helping them drive up their average revenue is a hybrid program that has some personal training and some group fitness, because it’s the best of both worlds. You get the camaraderie of working in a group with your peers and cranking the music and sweating. But you also get that personal connection and personal attention that’s going to tailor things exactly to what you need in your goals. And then of course you can tack on as many personal training sessions as you want. Some people just prefer personal training, but that is a higher value service. So the concept, I mean, let me ask you this. Before you worked with Two-Brain, did you only run or predominantly run group classes?

Billy (18:28):

Oh yeah. We had no personal training. I had one personal training client in the last five years up until the last 12 months.

Mike (18:37):

Isn’t that incredible? What percentage do you think your business is in personal training now?

Billy (18:41):

Right now it’s 10.8%.

Mike (18:43):

So that’s like a whole new revenue stream and the best part is it’s a high end revenue stream.

Billy (18:48):

Our goal is to get to 20% that’s our next goal and really, I need another coach to be able to do it because my head coach, his schedule is so filled up and it’s interesting. It’s a snowballing type of thing. People see his schedule is booked up. So they’re like, Oh, let me get in when I can. And so it just, it’s blown up. I really need to create another person just like him so I can accommodate. And we just finished an internship with another coach and hopefully I can fill her schedule up too.

Mike (19:13):

And that’s another square on the roadmap. We’ll teach you how to hire and fire people if needed, or promote them to other roles. I’m going to ask you one other question related to your metrics that you talked about. You talked about gross revenue. How did profit margin change, or did it stay the same as you added gross revenue?

Billy (19:29):

My profit margin here recently has gone up too. I had the numbers in my head. I don’t have them specifically. They’re well over 33% right now.

Mike (19:38):

That’s the big one. That’s what I was curious about.

Billy (19:41):

My monthly expenses had gone up too obviously, but the biggest change is the amount I’m able to pay my coaches so that I needed to get closer to 40. And I’m still trying to get closer to 44% on that. Believe it or not. My goal for this year were to provide the best membership experience possible to my members and provide a place and opportunity for people, for coaches to actually make a real wage. That didn’t exist in our gym prior to meeting with Two-Brain. So I have a head coach now that’s making, you know, on average about $4,000 a month. So now I want to duplicate him and do another one and have somebody making about that, which in Florida 48 grand a year is pretty decent. Unless you live in Miami.

Mike (20:25):

Next to LeBron, right? The reason I ask is we never throw gross revenue numbers at people without putting them in context, because it’s very easy to say our business grosses a million, but if your expenses are a million too, you’re losing money. And that means nothing. So I love to ask gym owners, you know, what’s your profit like in there? Because a lot of us, I was guilty of this back in the day of running a business that, you know, broke even, and driving up your gross, but it’s not actually paying you any more money and it’s not creating careers for people because there is no extra money. So I love that you’ve got those numbers in your head and guys, if you’re listening out there and you find that, you know, your revenue is growing, but you’re not making any more money, there is an issue and we can help you figure out what that issue is so that you can pay yourself more. What’s the plan for the business going forward? Now you mentioned a few things specifically increasing PT to 20, about 20%, and creating careers. So would I be right to say that, you know, your main focus right now is to find some more staff members, maybe replace yourself in a few roles, or is it something else that you’re focusing on?

Billy (21:27):

It’s exactly that, it’s looking for pulling myself away from the daily operations. I coach very little, I coach probably about five to seven hours a week right now, to get that down to even probably three coaching. I do enjoy coaching still, so I probably won’t remove myself totally. I want to hire a GM to take over all the other little tasks that I’ve been accumulating and that I know needs to be done by a GM now. And then I want to actually help other business, you know, if people want to open up other gyms elsewhere to get other gyms open, to have a possibility of opening one up in Panama City, which is quite a distance away, but I think it might work out really well. If the person I’m gonna have a meeting with wants to do the work. So it’s going to be fun.

Mike (22:13):

So you work with Russell Francis, he’s your mentor, correct?

Billy (22:15):

Yes, sir.

Mike (22:15):

So talk to me about how mentorship has changed for you after—like when you were in RampUp versus now, when you’ve graduated from that program, what’s the difference or is there any difference between them?

Billy (22:26):

The biggest difference now is like, I probably didn’t use my mentor as much as possible. I’m very hard-headed and I like to figure out things on my own. And it took me a while, probably about six months before I actually started emailing Russell with problems, instead of trying to figure it all out by myself, you know, here I have this mentor who gives me great advice, but I’m going to try to figure, you know, waste time, figuring out myself that was something that I had to get better at doing. But once I got better at doing that, I would put really specific questions. Hey, I’m having this issue. You know, what have you seen this before? What are some other options, do you think? I mean, even looking at it, even having somebody just look at it with a different set of eyes, you know, he might say, yeah, you’re on the right track or no, you’re totally off track. I would suggest going this route for the goals that you have. So that’s the biggest thing is having somebody that can look at it from a different set of standpoints, a different set of eyes and give you the direction that you need to go, or at least work with you on a direction that is correct.

Mike (23:23):

You mentioned a little bit of this earlier, but do you find that your mentor helps you focus on certain ideas as opposed to every great idea you come up with? Is that part of it?

Billy (23:34):

Exactly. I mean, part of a mentor should be to throttle you back a little bit too. Hey man, I know you’re really excited about this, but we still got these other issues that we need to be able to take care of and focus.

Mike (23:42):

And that’s so important because as entrepreneurs, we up with lots of great ideas, but not every one’s a home run and you need someone who can give you that perspective. Let me ask you this. How about accountability? What does a mentor do for someone, you know, who like some of our clients don’t necessarily need accountability in the sense that like they’re very motivated, they’ll crush things. Other clients really appreciate it, but a mentor is there to provide the level of accountability you need. What did you need and how does that keep you moving forward?

Billy (24:08):

What I needed is to have somebody I can throw stuff against and like have that response, like, Hey, I have these ideas because I wasn’t the type of person that I needed to check in with. It definitely helps. But I was always, like you said, I’d go 10 different directions and I’m like, I’m not accomplishing anything. Where do I need my focus to be? So mentor for me is really narrowing the focus on these are the areas that I should be working on. Not that the other things aren’t important. They’re just not as important right now. That was the most value for me, since I didn’t really need that, OK, did you do this last week? I didn’t need that to the degree that I think some people need it. So I think really laser focus is what I needed and that’s what Russell provided for me.

Mike (24:58):

Nice. Cause I know that there are other people out there who, like, they need someone to check in and say, did you do this? And you know, we’re not going further until you do this thing. And that works for them, right. Because some people really that’s kind of the coach equivalent of like, did you show up to class today? There is that level of accountability, but then there’s also, you know, I almost use the baseball diamond analogy with kind of the way Russell’s working with you, where you can hit the ball anywhere in here, but we’re going to put these foul lines up and we’re going to say that stuff is out of bounds because we’re not focusing on it right now. But if you want to swing anywhere in here, we’ve decided that’s the right plan. You know? So it’s a really cool tailoring system. So it’s so much like fitness coaching, right? Where you’re tailoring your programs so your clients get results. Two-Brain’s doing the same thing. Last thing I’ll ask you, someone’s out there listening right now and is just kind of on the fence about Two-Brain RampUp. What would you say to that person?

Billy (25:42):

Don’t hesitate. Just do it. You won’t regret it. It’s by and far the best thing that you can do for your business. I know there’s other systems out there and people, you know, I get inundated with them. I seriously doubt that there’s anything better to help your business than what Two-Brain has to offer. The amount of information, the amount of mentorship, the amount of just accumulated knowledge is just beyond what you’re going to find anywhere else. So just, make the commitment just like you did when you first stepped into the gym that first time, and I guarantee you’ll have the results. If you put in the work.

Mike (26:16):

What do you think ROI? Will they make their money back?

Billy (26:20):

Let me put it this way. My ROI, if you actually went straight up ROI, my ROI is well over. I’m gonna make a hundred thousand dollars extra this year, so yeah. Figure out the total cost. So I’m gonna make 10 times what I invested. So I’d say that’s a pretty good ROI in one year.

Mike (26:40):

Again, tell me if you find a stock, that’s going to get me 10 times ROI, you send me an email after the show. I’d appreciate that. Billy, thank you so much for sharing. I hope to talk to you in about a year and see where you’re at because it kind of looks like you’re on a pretty cool trajectory and will you come back and talk to us again?

Billy (26:57):

Definitely, love to anytime.

Mike (26:57):

Thank you so much and all the best and go Boston College.

Billy (27:02):

Thanks sir.

Mike (27:04):

I’m Mike Warkentin, that was Billy Gorham on Two-Brain Radio. If you want to learn more about how our RampUp program can help you, book a call with a certified mentor via link in the show notes. Do it today. And now open the Facebook app and join the Gym Owners United. You can literally ask your gym business questions in there and get answers from other gym owners, certified Two-Brain mentors and Two-Brain founder Chris Cooper himself. It’s the only public forum where Coop offers his insight. That’s Gym Owners United on Facebook. Join it today.

 

Thanks for listening!

On Monday, Two-Brain Radio presents marketing tips and success stories. Chris Cooper delivers the best of the business world on Two-Brain Radio every Thursday. 

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