Mike (00:02):
Jeff Jucha paid bills for his gym personally and didn’t see a paycheck for three years. Then he got sick and had to make huge changes. Here’s what he did and how you can make your gym an asset, not an expense.
Chris (00:13):
Hey, it’s Chris Cooper here. Programming is the service that you deliver to your clients. So I partnered with Brooks DiFiore, who had one of the highest adherence rates for his group classes in the world to build TwoBrainprogramming.com. Now we built this for Two-Brain gyms and we give them free access in our mentorship program, but I’m now making this available to the public. Programming that’s proven to improve retention and cash flow in your gym. Visit TwoBrainprogramming.com to get it. Your gym’s programming won’t attract new clients, but it can help you keep your clients longer. Good programming includes the stuff you know, like your benchmarks, novelty, skills, progressions, leaderboards, but great programming contains something more. It’s a link between each client’s fitness goals and the workout of the day. Your coaches need to tell the clients more than what they’re going to do every day. They need to explain why they’re doing it and how it will help them achieve their specific goals. Gyms whose coaches could explain the why connection had a 25% better retention rate during lockdowns. Imagine how that translates into better retention when things get back to normal and a better bottom line at the end of every month. That’s TwoBrainprogramming.com. Take a look.
Mike (01:28):
This is Two-Brain Radio. I’m Mike Warkentin here with Jeff Jucha of West Little Rock CrossFit. Arkansas is the natural state, but cutting himself a check did not come naturally to Jeff. After he hit the wall, he made some changes and now he’s a certified Two-Brain fitness business mentor. So Jeff, thank you for being here. Here’s the big question right off the bat. Why couldn’t you afford to pay yourself for so many years? Like where was the money you should have received as an owner? Where was that going?
Jeff (01:52):
OK, so let’s start with why it didn’t have any. I should preface this, I was born and then after that, now I was 22 when I started my business. And so I was one, I did not have a lot of experience in money, but even before that, I had probably zero formal education on finances. So, we take that into account here, but because of that, you know, I didn’t have any long-term goals. So, you know, for money or for profit or keeping my business running, I was really just, I loved working out. I loved hanging out with people and having human interactions. So I was like, I can get paid to do this. I’ll start a gym.
Mike (02:33):
That’s a such a common story. Mine isn’t that different.
Jeff (02:36):
Yeah. So I was just all about like totally in the present, which is like got its perks, but it’s got its negatives.
Mike (02:42):
Yolo!
Jeff (02:42):
So I had no long-term goals. So I didn’t have anything to reach for. So number one, that was an issue. And because I didn’t have anything to really reach for, I didn’t have anything to track, so I didn’t have a reason to track. And even if I did those long-term goals, I wasn’t tracking metrics anyway. So there was no way for me to really tell where money was going. And especially to tell that it wasn’t going to me.
Mike (03:09):
And what year was this?
Jeff (03:11):
This started in 2012. And that continued into, that was about almost halfway through 2012. And that continued closer towards the end of 2014 into 2015. It was just how I ran it. We’ll say that’s how I was able to get away with running it. You know, I was lucky. But yeah, I was paying things—I was paying for personal things out of the business account, but I was also maxing out my personal credit cards to pay for big purchases in the gym. There was no plan or structure or tracking. So we’ll say there was no structure to my finances and there was no tracking and there were no goals. And so that’s pretty much how you get to, you know, it’s kind of like, you know how to lose a guy in 10 days. It’s like how to lose a business in 10 months.
Mike (04:02):
You would actually, so you would let the business pay for some of your personal stuff. So you were getting some benefit out of that in some ways, but you kind of were doing it haphazardly and then you’d have to like, you know, use your personal credit card to pay off gym stuff. And, you know, it was just kind of a back and forth shell game, I guess.
Jeff (04:18):
Yeah. And it wasn’t even a shell game. It was just, I just really did not know what I was doing. So I was, you know, I would get a net owner benefit from, or not even a net benefit. Right. So net is you keep something. I was getting owner benefit, but then it would all go right back on like my credit cards and I have to pay interest on those. And like, I was just spiraling down the whole time.
Mike (04:37):
It’s like the cash advance from Visa to pay off MasterCard, and so forth. And all of a sudden, there’s zero plus zero is zero.
Jeff (04:44):
Yeah. I don’t think a payday advance place would have touched me.
Mike (04:47):
- You know, what’s interesting. It’s so common. Like, my story was like, I had a full-time job, so I had a gym and I didn’t feel pressure to make that gym profitable. I just wanted to break even. So we didn’t profit. Right. And I’ve heard other people say the same thing. Like they opened a gym living in their parents’ house or something like that. Didn’t feel a ton of pressure to make that business a business. It was just there. But then eventually they realized it was kind of a disaster that was swallowing their souls and they had to make some changes. So your story is, you know, is not super uncommon. Let me ask you this, how bad did things get? Like, can you tell us like the lowest of the low thing and like, what hardships did you endure to keep this thing going?
Jeff (05:20):
Oh man. I’ll keep it pointed to just like a few things I think would encompass it. So, take whatever I’m about to say and like triple it, but this is like, that’s just the amounts. So it was not enough room. Well, you know, the first thing is like, you know, I was maxing out on my personal credit cards cause I had no savings to use cause I was so young. And so there was no real safety net. There’s no real buffer and, you know, live with that stress long enough and it’s going to affect you. And I also will, keep in mind that like I kind of thrive in the high chaos environments and enjoy it to an extent, but after a long enough time it will wear down on you.
Jeff (06:06):
So keeping that in mind that there’s no real safety blanket here. You know, early on, while I had started the gym, I went through a divorce pretty young and did not have the money to go buy a place of my own or rent a place on my own. So I slept in the gym in a hammock for a solid month before I could even get a place on my own. And well, number one, hammock sleep is not really bad. It’s pretty good. But number two, you know, I had too much pride to go with my family and like stay with family, but they obviously, you know, I was so prideful, I’d sleep in a hammock at my gym and like try and get up and get ready for the morning, go to my office and work and do stuff before all the classes would start rolling in.
Mike (06:50):
I have to jump in and ask you two important questions here that I have to know the answer to. What did you attach the hammock to, first?
Jeff (06:57):
Yeah. So I put two eyebolts from home Depot into the walls of the offices that were in my gym. And you should not do that. I didn’t use the squat racks actually. It was pretty cold or pretty hot out there depending on the weather. So I had air conditioning in the offices. So that was it. There’s still holes in the wall from where I did that, by the way.
Mike (07:18):
So this is my second question is did you hide the hammock when it was time for business or did you leave it up and just like, ah, you know, take afternoon power naps or did you like obscure this from people?
Jeff (07:29):
At first I was like hiding it and then after a while, since I was taking power naps through the day and it was really, really good, I got great sleep, you know, quality wise, great sleep. I would just shut the door. So like nobody could really go in there or anything.
Mike (07:48):
You got the hammock in the gym, you got credit cards maxed out, which, you know, you’re paying interest on. You’re getting stressed. Take me further.
Jeff (07:54):
So, you know, through the divorce, you know, it’s super hard, you know, what are the things that can kill a business, well, divorce is right up there. Definitely came close. My mindset got super negative at that time and you know, the members and the staff and the whole culture just started really reflecting me. So that was tough. We lost members because of that. We had struggles because of that. And, you know, I placed that on me back then. I had this just piece of crap truck, which also was crap brown by the way. So it’s really, I love that truck still got it, but broke down like all the time, like twice in the Walmart parking lot. And I had to walk back to the gym, but, I couldn’t afford cheap house that I actually ended up being able to rent.
Jeff (08:38):
So I had to call them and say, look, I can’t pay rent. I need to get out of this lease. So I moved in with my brother for a few months till I got back on my feet. And in the time that right around that time, I got kind of sick and had this sore throat and a cough and I couldn’t afford insurance, so couldn’t afford to pay for my own insurance. And so I didn’t go to the doctor. Well, you keep a sore throat and a cough for two months. And I was coaching and stressed and had all these other stresses and going through divorce and was like, man, I was just a beat down organism. And so I got even sicker. And finally, someone back then who really, really cared about me, made sure that they looked up insurance that I could qualify for.
Jeff (09:23):
And they’re like, what do you make? And I was like, here’s the last tax return. Right? It was something like that to find out like how much I made. And it was like, Jeff, you are so broke. You get the best insurance in the country for free. And I got the best insurance for free and I immediately went to the emergency room and they’re like, yes. So there’s a problem with your lungs. And we’re really glad you’re here now because if you waited longer, maybe you wouldn’t be. I got loaded up, man. I had all kinds of drugs. I was high for a week, I think, on the medicine I had to be on. They were like, this isn’t life-threatening today, but if you had waited much longer, this would be very life-threatening. So that was a turning point. Not even by choice, it was like, well, if I’m going to survive, I’ve got to figure out how to adult through things and start putting some money aside and be able to actually take care of myself financially.
Mike (10:20):
I’m going to ask you about that. But I want to know, like when you were in the hospital here at this low point who was running the gym, was someone taking care of it for you? Or had you gotten to that point where someone could do that for you?
Jeff (10:28):
I had one staff member left who coached the classes that I think I missed like two classes because I went to the ER place on a weekend. So I had a couple of days to just kind of start recovering again. And he coached the Monday mornings. And I think the noon and I only had to show up Monday in the evenings, but really, I just had one staff member helping at that time. So I still had to go coach.
Mike (10:53):
Wow. So you just soldiered up on that one and like put on the chin strap and went back to work, even though you were just hurting.
Jeff (10:59):
Yeah, there was no relief, no cure.
Mike (11:05):
Yeah. So this is a tough situation. So you decided there, you got to make a change. Now tell me how did you do it? And then specifically, how did you find the money to actually start paying yourself? Because there’s this whole thing with profit first where people say, where does the money come from? So tell me about your changes and where the money came from.
Jeff (11:21):
Yeah. So I started on a personal basis. I sold everything that I had personally that I was not using. And you know, maybe you start there, maybe you don’t, but you can definitely look in your gym and if you have more than a couple of GhDs, like you have stuff that you probably don’t use you can sell. So looking in the gym, there was plenty of things that I had bought because you know, we were going to send like five teams to the games or whatever.
Mike (11:46):
At least five.
Jeff (11:46):
So we had to have equipment that really didn’t need.
Mike (11:51):
What was the weirdest piece equipment that you unloaded? Do you remember? Like it was it one of the Rogue Pigs or something like that?
Jeff (11:58):
It wasn’t one of the Rogue Pigs, I’d have to think about that. We had this powerlifting group for a while and I think not the weirdest thing, but probably like the most out of place thing, my gym is very much run like a, if it occupies square footage of the gym, it has to pay for itself and more, or else it does not stay here. So like every square foot is accounted for, for making money. So what doesn’t fit there is a deadlift jack.
Mike (12:27):
Whoa, there you going, I bet another one, if people are listening out there, take a look at your reverse hyper and tell me if there is a computer, a clipboard or a collection of protein cups on top of it, and if there is, it’s not making any money for you.
Jeff (12:39):
Yeah. Jerk blocks, jerk blocks were another one. We actually held onto those way too long. But yeah, we should have gotten rid of those sooner.
Mike (12:45):
I couldn’t part with mine, but I finally did too. Cause we went into a garage and we got rid of our big space, went into a garage and like jerk blocks, take up a huge amount of space. GHD too. All right, take me further. So you sold all your stuff and you sold stuff from the gym that wasn’t making money. What else?
Jeff (13:00):
Yeah. You know, I tightened the chin strap and I worked almost every class that I could to save money. You know, not totally by choice, but like had the staff had come down to I had one person helping me and he was solid and reliable. So I coached as many classes as I could and I stopped giving out as many and this person at the time, wasn’t super reliant on that income. So it worked out all right. The other thing too is to, you can look at it like the money that you have now, and you can start making headway, but you still have to make sure that you’re moving somewhere that’s growing solutions for you and not just growing your problems too. So I affinity marketed with my PT clients. And I went from too, the other part of this too, is to stop recommending group to everybody that walked in the door.
Jeff (13:50):
If I felt like that I could help them with PT at the time, this is different now, but at the time it was like, I need money. And if I can help you with PT and you can afford it, I’m going to offer it. And now it’s more, of course, of a, like, what’s the thing that will help this person the most. And I can not project my budget and it’s relieved lot of stress of sales that way. But at the time it was like, if I can help you and you got the money, let’s do this. And so I went to 12 PT clients for myself, two to three times per week, I think it was 50 bucks a session back then for an hour. And so that was very helpful for me. And I was able to make myself enough money to not be so concerned with bringing on staff to help with classes.
Jeff (14:35):
And I made sure that I at least took a percentage of our gross income and I paid myself something because if the business took a loss, Hey, that’s better than me taking a loss because the business, even if it died, you can make it reborn. But like, I can’t come back from the dead. I can’t pull a walking dead episode here. So like I have to take something and I made sure that I paid myself just enough to cover my expenses and break even and have zero savings was where I started. And the business did like the business bank account started draining a bit for a while and the business bank account was a loan too, of course, but it was money. But it turned out all right. And I had taken a loan out to buy a partner out because we have a great relationship.
Jeff (15:24):
It was just decided on price. And I didn’t have that money. So I was somewhere in there a stroke of brilliance, borrowed more than I needed to pay him. So I had something. And I think that buffer helped a ton, but yeah, sold stuff I owned, sold stuff at the gym. I saved money where I could, reduced the expenses and then make sure that I grow my revenue as much as I can in the shortest time, PT’s the way to go for a lot of us. Not just sticking to group.
Mike (15:55):
So to recap. So we’re clear, the mentorship plan. You wouldn’t just say to someone, you know, sell all your stuff, right. You’re saying, I found in my gym, I evaluated what was useful and what was making me money and what was not. And you got rid of the extra stuff that was like, you probably shouldn’t have bought in the first place. Right. And Chris Cooper’s talked to this many times and said, how many barbells do you really need? You don’t need the Eleiko, you know, spinning barbell bearing bar for $2,000. You just need, you know, this, these small amounts of stuff. So you did that. You checked out on some of the expensive gear and whatever gear you just didn’t need. The second one, you would probably never tell someone. I know like our mentors are constantly telling people, you know, to not coach every class, unless they want to replace themselves. But in an emergency situation like this, you need to buy yourself some time and some income just to get your feet underneath you. Correct?
Jeff (16:40):
Because the cost of the proprietor or the entrepreneurial, like it falls on no one else’s shoulders and you got work to do. You got work to do so buckle up and get it done, but work to a place where you don’t have to do it forever.
Mike (16:52):
Right. Because it’s not sustainable. Like, that’s the point I guess I’m making is that like you couldn’t coach every class at your gym forever and not burn out and you certainly couldn’t grow the thing. So the thing that was really important here, I think was that you managed to do all that stuff, but also find time to grow your PT business. Like just start getting high value clients through affinity marketing, which means guys, he was doing it with no ad spend affinity marketing is just using your current clients to acquire more clients like them through their relationships and so forth rather than spending money on ads. Which you probably didn’t have to spend at that time. So you found a way to at least try to grow and get higher value clients at a time when you were working, do you remember how many hours you were working?
Jeff (17:30):
I don’t even want to think about that. If we don’t count the time that I was just sitting there stressing about things, we’ll say definitely full time.
Mike (17:42):
- And so the other thing you said, your business set up was like an LLC or a corporation or something like that.
Jeff (17:48):
Don’t I don’t remember where I said that, but it is, yes.
Mike (17:50):
Yeah. So the reason I was asking was you said that it’s better for the business to take the loss than for you to take the personal loss. And so that’s what I was kind of getting out the other thing too, where I did this a lot of times where I propped up our business because I wanted it to look profitable, but that wasn’t the right thing. Like you should run the expenses through the business. The business can go first, your house and your mortgage and your car and all that stuff, feeding your kids that can’t go first. The business would go first.
Mike (18:17):
So, you know, there is a kind of an order of operations here and you definitely discovered that. Tell me, do you remember like what you started to pay yourself and did it fluctuate down or up or did it always just go up from that point?
Jeff (18:27):
It started with, I would make sure I wrote myself a check in which I was just, I was so mentally fogged up that I didn’t just make a transfer, but I’d write myself a physical check I was paying for, I would make sure I wrote a check to myself for rent. I wrote a check to myself for my month’s worth of groceries that I had budgeted, gas, a couple other things like my life had become super, super minimal. Especially while I was, you know, kind of staying with another person and just had a bedroom and a car. I didn’t own a lot of stuff anymore. So I think in total, I was probably paying myself like 12, maybe 1500 bucks a month tops.
Mike (19:11):
And did that, uh, did that ever waver down, like, did you ever get to a point where like I got to cut myself $800 or did you hold firm on that line and then keep improving?
Jeff (19:20):
This is, so it wasn’t really so much that I wrote myself 1200 bucks every month. It was, I couldn’t afford to do it all at once. And so when I needed to pay rent, I’d write myself a check. And gas was pretty much like I just cut myself that money. And I think every week I did groceries. And so I went through a lot of checks, but I had a lot of checks because, you know, you buy a thousand checks when you start your business. But I was doing them when the expenses would come up. And I think, honestly, that was, if I had done it the other way, it might’ve just put us in too bad of a position. You know, keep the lights on, but I did it that way. I never went down. I don’t think I ever went back down to that low again.
Mike (20:05):
The reason I ask is because during COVID times, people are forced to make some hard decisions. And I’ve talked to some owners who have thought about this and said like, Oh, the temptation is there to pay myself less this month because you know, we’re locked down. And, you know, it’s been some hard decisions, but most of the ones I’ve spoken to have just decided to pay themselves anyway, and then find a way to get the money that the business needs, which I think is the right plan. Because again, you need the money as a person, your business can, you know, you’ll figure that one out and it’s more important that you and your family have food than the business.
Chris (20:35):
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Mike (21:12):
So do you remember when you started, you’re going down this path, do you remember when you started to pay yourself like more than just living expenses when you got to that point where you started to cut yourself, maybe a check that had some quote unquote profit or surplus in it?
Jeff (21:24):
Yeah, I think I stayed around, let’s see here. This would have been around the end of 2016, maybe. I had finally gotten to where I was comfortable to write myself a salary check, and I think that was like two grand per month. And the business was still retaining profit as well. So like there was cash in the account. And that’s really another thing too, I think for listeners is even if you do take a pay cut and pay yourself less, remember that if you are staying profitable with the business and if it’s in the aims of doing that, like, yeah, not just like, how can I get by with less, but like, how can I afford the things we need is a better mindset, but you remember the profit still sits there.
Jeff (22:12):
And so if I needed anything, I would write myself a check from profit, is what I told myself. We didn’t really have as much profit in there as I would like, but yeah. So I think towards the end of that year, I was able to get myself to where I was making, you know, 24 grand a year, you know, for, I don’t even know what all, what all I was really doing to earn that. But well, more than that much, I did way more work than most of us probably should do for 24 grand a year.
Mike (22:44):
Your hourly rate is probably not good if you actually broke it down there, I’m sure you were doing, probably working for like two bucks an hour or something like that.
Jeff (22:51):
That’s that’s really gratuitous of you. I don’t think I made that much.
Mike (22:56):
- So where does Two-Brain come into this and how did you learn about like actually establishing the profit first and pay yourself first systems where you know, you establish this and you do it based on like actual calculations and percentages and the math, where did that kind of all come in?
Jeff (23:10):
So I had been following Chris since the don’t buy ads.com days.
Mike (23:16):
You’re one of those guys. Nice.
Jeff (23:18):
Not definitely not like a hardcore follower. And like, you got to do all the things. And obviously, I don’t think I would’ve been in the position I was if I had just done half of them.
Jeff (23:31):
But I had known Chris’s stuff. I had been a fan of it. I had seen some of the things work. I would just get super distracted, but after I saw that he, that Two-Brain was forming and there was a program and I had done some other programs before, you pay some money and then like go through the course and then like you’re done with the course and like, that’s it. And I was like, well, it was cool. So I was looking at that again. I was actually talking to another group that said mentorship. I did a call with them. I didn’t really, like, I didn’t think it was a good fit, but, when I saw Two-Brain was opening, I actually booked a help call with Chris. Yeah. I think Chris was my first guy to talk to, but you know, I’ve slept since then, so I’m not sure, a lot of sleep since then, but I think Chris was the first guy I talked to and I just knew it was the right way to go.
Jeff (24:29):
And I had kind of said like where I was, and from there, like once I had gotten started in the incubator, what’s ramp up now with us, but once I’d gotten started in the incubator program, the most important thing was someone telling me this week, you’re doing this. Do not talk to me until you have this done. And not so much like literally that, but like that was the vibe. And it was always at the end of the call, you know, we’d have a great call. It was like, OK, here’s the deal. And it was like, it was kind of like making, it was making a deal. And I didn’t want to let someone else down and I think a lot of us can identify with this. We treat our dogs better than we treat ourselves and we will show up for someone else long before we will show up for ourselves.
Jeff (25:14):
And so I got a lot of work done, I think actually finished incubator in like three weeks instead of six or seven, because I could go through all the modules. And so I did all of it early. It was just like super, I wanted to be like the A plus student for once in my life and not a D student. So yeah, so Two-Brain was where I started there and had made a lot of progress through the incubator. And at some point after that, and I’m not sure on the date here, got turned on to profit first. I think it was Mike Michalowicz was originally like, yeah, does it and licenses it. And I been kind of doing some of that stuff with like, well, pay myself. And then I gotta like really hustle to make these expenses and make the staff pay, like, make sure that there’s something left, like, but like I have to take care of me.
Jeff (26:02):
And I think that was the first things I identified with. And then there was like the profit accounts there too, and was like, well, I have a separate, it’s just my personal savings account, but that’s the profit account. And then it was like, save money for taxes. I was like, I’m so dumb. Why did I not think of this? I like, I get, cause you get your tax bill every year. And you’re like, well there, went all the money I made and or all the money I don’t have. So, made such good sense to just do it ahead of time. And don’t wait for your, the idea was like, don’t wait for your business to tell you whether or not it’s going to be successful, write down what you want and make it successful on paper first and now fill in the holes and make it there. And make it what you need to see. It was just from there. I never went back.
Mike (26:50):
If you want to know exactly how the profit first systems and the bank accounts that Jeff was talking about work, John Briggs, he wrote the book profit first for micro gyms. We’ll put the link in the show notes here, and he’ll tell you exactly what those accounts are and why you should have them. There’s I believe six or seven. And it tells you why and when you should transfer the money in there, and exactly one of them is the tax accounts got to have money at the end of the year so you can pay that bill and don’t lose everything you have, your money’s already set aside. So that’s a huge one, but there are other accounts that John will tell you about. Check that link in the show notes. So Jeff, you started going down this path, you recovered from the worst part, you know, the sickness, the debt and all that. Now you’re at a stage where you’re on the Two-Brain mentorship staff. So in your work helping other gym owners, how important is it for them to start paying themselves first? Like where does that rank them on all the hundreds of priorities that gym owners have?
Jeff (27:40):
When I get a new mentee or I take someone through the on-ramp program, it’s one of the first things that I find a way to slide into the conversation. You know, how much do you pay yourself? And if it’s nothing I’m like, OK, well, let’s talk about doing this. And I’m sure half my clients who are listening right now are like, yep, Jeff’s annoying about that. And now you all understand why. So, it is not supremely important, but it is among the things that are supremely important. Like, cause there’s a group of things that are super important, right? Like you deliver great service, you know, make sure that you are like doing affinity marketing before going to paid, there’s these things that are just like hallmarks of what makes a solid foundation. And one of the things that helps build that solid foundation is that you do pay yourself because it sets an intention.
Mike (28:33):
Makes it a business too, right? Like the business has to pay the owner something, otherwise it’s not a business at that point. Like it really, if you’re just, if you’re not paying yourself, like what are you, it’s a hobby, right. It’s just, it’s not a business. It’s not by the definition, it is not doing anything other than eating your time for nothing.
Jeff (28:49):
And the way that I look at it is similar, you know, tomato, tomato, is that like, it is a business. Whether you treat it that way or not. If you don’t set an intention and you don’t set set expectations early on in a relationship or teach this new puppy that like, it will not bite you and you know, positive reinforcement when you don’t tug on the leash, like it’s either it’s the business will serve you because you set that intention early and you’ve decided I am going to make sure that this is sustainable because it will pay for me to take care of myself so that I can show up because the worst gym is the one that closes and leaves everyone homeless. And so set your intention strong like that. Because if you don’t, it will be the opposite.
Jeff (29:36):
And instead of the business serving you and the people you care about, you and all the people you care about will be serving it instead. And it doesn’t give anything back. Unless you set that up early and decide that you’re going to pay yourself something. And it’s more of just an exercise of practicing to stop martyring yourself. Because like you’re only martyring yourself for yourself for most of us. But yeah, it sets the intention that like and sets the track for like, here’s where we’re going to go. Because if you don’t like, you’re just going to be wherever the winds take you.
Mike (30:12):
Guys, if you’re out there listening how to make a hundred thousand dollars per year with 150 clients, it is a new guide by Chris Cooper and Two-Brain Business, you can download it. We’ll get that link in the show notes. And in that guide, you can go through a short diagnostic. Chris is going to show you three different scenarios that tell you exactly how you can put this a hundred thousand dollar net owner benefit together. But you can also use this diagnostic. And it’s just a short little tool. Take two to three minutes. It’s six different questions. You have to fill out the answers and it’s just circling answers. It’s not like a deep thought thing. You just have to circle different things. Like how much do you pay yourself? And that is number one. The first thing Chris is asking you in this diagnostic is how much money do you earn from your business per month?
Mike (30:51):
That is net owner benefit. And it means like, what is your salary? What other benefits does the business pay? Does it pay for your car or your coffee or whatever. We’ve got recurring memberships, average revenue per month and so forth. In six lines, two to three minutes, you’ll be able to go through here and find where the major holes are in your business. And what’s preventing you from making a hundred grand. So I’ll encourage you take this thing, use it, and then take some action. It’s exactly what Jeff is talking about. Taking action and moving on these things. So I’ll ask you this, Jeff, for listeners who are not paying themselves first at all, or they’re not paying them first, or they’re not even paying themselves at all, how would you coach them to make a couple of changes right off the bat? Like how can they find this money? Imagine again, we’re talking to like, you’re talking to a brand new client, a mentee, and this person is not paying himself or herself. What do you tell that person? How do they start? Especially when they feel like there’s no money.
Jeff (31:39):
Everyone’s gym is different, but my process stays pretty much the same. Cause you can work within it based on your comfort level. So, you know, imagine you’re in a boat like, we’ll say like a pretty big rowboat in the ocean it’s wood, right? If your boat has holes in it, then you’ve got to plug those holes first, before you start thinking about bringing on more business, right? So start with auditing. What are the things in your gym that you could remove that could bring you some of this income to give you or not so much income, but some money back so that you can have some initiation energy in this and to kind of kickstart the fires, right? So getting some quick money is super helpful. This is Dave Ramsey teaches this, like save up a thousand dollars as fast as you can.
Jeff (32:25):
Which was part of the stuff that I was practicing in getting myself out of those, that position back when I was sick, but save up a quick $1,000. And like you could turn this into a gym version of it with offload something worth a dollars or things worth a thousand dollars and put that away real quick. Right now, like take a percentage of that and pay yourself. And then after you’ve removed that, look at where your money is going each month, if it’s not going to you, or if it’s not going to where you can really connect it to providing service to the clients who are bringing you income, you’re not maximizing that thing. You should probably remove it. Or maybe you could reduce the plan if it’s a subscription plan. So, you know, get rid of what’s weighing you down and like throw the stuff overboard and then your expenses where your money is going.
Jeff (33:13):
Even if it’s not expenses, but like things maybe you just haven’t been paying attention to. If you’ve got money going out every month, those are the holes you’ve got to like put some cork in and plug the boat really quick. And then now you’ve got to where, OK, I can scoop some of the water out of this boat. Now I feel comfortable bringing more people into the boat. And that’s where you can start bringing the income back in again and asking more people to show up. You know, I did it with PT clients, different micro gyms, all over the place have different models, or not so much models, but different services they offer. It might be nutrition for you because maybe you can’t work anymore. It could be other things, but you know, start with, can I scoop some water? Can I throw the things overboard I don’t need, make some money, plug the holes with the money that’s leaving your business right now. And now the boat’s actually safe to bring people on and you’re not just going to sink even faster. Now you can start bringing people on board. So, yeah. Look around you. What can you get rid of, audit where your money’s going, plug those holes, start bringing more people on board because now they’re not going to be sinking your boat with every person that you put on there.
Mike (34:19):
Yeah. And you’ve, I mean, you hit on exactly what John brings said. You’ve got two ways here you can find the money. It’s like you cut your expenses or you increase your profit or your revenue. And the expenses, if you audit your expenses at a gym, it’s likely that you’re going to find some stuff that you’re not getting return on. And it might be like the old music subscription that you stopped using three years ago, or, you know, just all sorts of stuff that you will find that you maybe just don’t need. Right? Can you get a better deal, for example, if you’re buying programming, can you get a better deal and get better stuff? Check out Two-Brain coaching for some options there. And if you’re a Two-Brain client, you’re going to find some really cool stuff there.
Mike (34:56):
But just audit your expenses. At some point, you are going to get to a point where you can’t cut any more stuff like you can’t cut your hydro, unless you wire, the rowers into the lights, which I don’t know if anyone’s done yet, but it is a brilliant idea, but you will not be able to cut anymore. After that, you’ve got to grow. And that’s exactly what you talked about. You do some affinity marketing with PT. There are other ways, you could add in a nutrition program. You could add in some retail supplements. The idea here is like a mentor will tell you how to grow and pick the low hanging fruit so you’re not doing everything. You’re just doing the things that will move the needle. And at that point, then you focus on these things. And Chris has these scenarios laid out there’s many of them, but he’s got three that involve different aspects of business that will help you find some revenue.
Mike (35:37):
So if you’re struggling with that, book a call with our mentors, cause they can tell you, first of all, what to look at, how to figure out if you’re getting ROI on your expenses, then how to grow the other way. So Jeff, now, when you talk to like a gym owner and help someone do this, what happens to that person when he or she starts paying themselves first? What is the general like, is it like a life-changing aha moment that changes the trajectory of everything? Or how does things go when people start paying themselves, giving themselves that first check from their business?
Jeff (36:03):
They get happier.
Mike (36:04):
Right, it makes it easier.
Jeff (36:08):
Yeah. It’s tough to enjoy things when you’re drowning. Like you can be really fulfilling your purpose and finding meaning in what you do. And but if you’re, you know, just in a room and water keeps coming up to the shoulder height, like you’re stressing and you’re worried, but if you can stabilize that and stop that, people can take a breath and actually appreciate what they’ve built so far and what they’re doing. And like, you can accept a compliment and like actually enjoy it and believe it. And you can actually like, OK, you can start believing that you’re actually worth paying yourself. You’re worth being successful because your clients all want you to be successful. They do not want you to not go on vacation. They don’t want you to struggle. They want you to be happy. They want you to be successful.
Jeff (36:56):
Just like you want that for them. So when you, you know, whether it’s add business or you just restructure an on-ramp program, I do a lot of restructuring as well, too. As part of that equation, generating revenue, doesn’t always mean generating new business, affinity marketing’s huge, but you know, you may alter, you may change your rates and we’ve got a way to do that. Yeah. We’ve got all this stuff down. It’s tested, we’ve got the numbers, we know exactly how to go about it. But once someone sees like, wow, I didn’t have to go make this a multi-million dollar operation for me to actually just be able to pay for my kids to go to the school that I want them to. And like, you see it’s possible. And it’s a lot closer than you thought it was. And so owners like on the call where we make some changes and they start paying themselves and they start making the income to pay themselves, or they get rid of the things that were holding them down. They’re happier on that, you see it on someone, you know? But you also, you get to hear about it in your reviews. So people are happier.
Mike (37:57):
Well, it’s refreshing to look at the numbers that Chris lays out and see that you don’t need 300 or 500 clients to make a hundred thousand dollars. Right. You could certainly do it, but that’s a lot of clients to find, to be able to do it in 150, or there are models where you could do it even in 50 clients, if you have the right service, that’s refreshing because 150 is not that hard, a number, right? Like if I told you Jeff, you know, 2016, Jeff or 2014, Jeff, I need you to find 400 clients. You’d be like, whew, I can barely, I’m sleeping in a hammock dude. But like, if I told you 150, you could kind of think of like, I can find 150 people I can help. Right.
Jeff (38:32):
I have more than that and I’m still losing money.
Mike (38:35):
See, there you go. And that’s the perfect thing. So guys do check out this guide, take a look at it. It’ll give you some real ideas on how you can make positive changes. The action step that I will give you. Whether you are a well, I’ll give you this action step right now. This is the one you do. Pay yourself something today. Write yourself a check. Even if it’s for a dollar. If you’re not paying yourself at your gym, write yourself a check. Even for a dollar. Take out Jeff’s checkbook that he’s was still probably using to this day because he bought a thousand of them and pay your self. Yeah, you still do. I love it. A dollar. And you know what? Write even a sequence of post-dated checks and keep them because the second you start taking something from your business, you will be happier. Just like Jeff said. After that, talk to one of our mentors who can tell you the entire path to more bigger checks and eventually that a hundred thousand dollars or more. If you desired. Jeff, I’m glad you survived that horrible sickness. I’m glad you dug your business out and you’re helping people. Thank you so much for sharing your wisdom with us and thanks for helping mentees on your calls.
Jeff (39:27):
Thanks for having me.
Mike (39:28):
My pleasure. Talk to you again soon. That was Jeff Jucha on Two-Brain Radio. I’m your host, Mike Warkentin. FOMO alert. You are missing out on Gym Owners United. That is Facebook group for gym owners only. Join it right now. Two-Brain founder Chris Cooper and our mentors help gym owners solve problems every day in that group. If you have a question about the gym biz, ask it and get answers in that group. That’s Gym Owners United on Facebook. See you in there.
