How to Screw up and Grow Anyway

20211230-screw-up-blog

Mike (00:02):

You messed up running your gym. You can beat yourself up or you can dust yourself off and learn. Chris Cooper is on Two-Brain Radio to give you the exact plan for using mistakes to improve your business as you move into 2022.

Chris (00:15):

Chris Cooper here to talk about Incite Tax. The people at Incite Tax know you’re working long hours to improve health for the world, but it can still be hard to turn a profit. You just can’t focus on your mission without money in your account. So Incite founder John Briggs wrote “Profit First for Microgyms” and created a system that increases your cashflow so you can be home for dinner with a thriving fitness business. Bookkeeping, profit first, cash flow consulting, taxes, whatever your financial needs, Incite can help. Join their free five-day challenge at profitfirstformicrogyms/five days to get a snapshot of the financial health of your gym. That’s profitfirstformicrogyms/five days.

Chris (00:55):

Hey, everybody it’s Coop. And today I’m gonna talk about making mistakes. My Amazon bio and the back cover of at least two of my books reads something like this.

Chris (01:06):

If Chris Cooper has a superpower, it’s the ability to make mistakes faster than anyone else. But that’s actually a misleading claim. If I’m good at anything, it’s not necessarily making mistakes though. Some would say that I am gifted at screwing up it. If anything, what I’ve learned over time is never to make the same mistake twice. Learning from mistakes and not repeating them. And today I’m gonna tell you exactly how to do that by building an audit mechanism for when you make decisions. Way too many of us get caught up in this trap of sunk costs. We make a decision when we open, then we’re like married to that decision forever. Even when evidence tells us that maybe that was a bad call. I’ll use setting your gym rates as an example. This is the most obvious one. So let’s say that you open up and it’s 2015 and you say, what should I charge for my CrossFit classes?

Chris (02:00):

And you look at the other five CrossFit gyms in town. And you’re like, OK, that one’s 150. That one’s about 145. That one’s about 140. Hmm. I guess I should be around 140. I’m gonna be 135. I’m gonna provide better service at a lower price. And everybody’s gonna know it. So I’m gonna charge 135. And three or four years down the road, you’re struggling a little bit, you know, you’ve got clients coming in, you’ve got clients going out. You’ve got coaches coming in. You’ve got coaches going out. But you’re never quite making a living. And you start to look at something like, our state of the industry or some other data source. Maybe you just call the other gyms in town. And now you find like, man, when I do the math, I really need to be charging 180 a month.

Chris (02:46):

And Two-Brain is saying I should be targeting 205 as the base average per month. Oh boy. How do I get there? If I raise all my rates, I’m gonna lose my current clients, man. I can’t do that. And if I raise my rates, my coaches might rebel. I can’t do that. And if I raise my rates, I’m gonna feel weird because like I’m not in this for the money. So I can’t do that. These are what’s called sunk costs. You know, we made that initial decision with no data, no knowledge, no experience in business. And I did this too, by the way. But now we don’t wanna change that because we’ve invested time and money and attention and focus and audience into that original cost, right? Instead of saying, well, Hey, objective data says, I should be at 205. I’m still charging that 135 a month.

Chris (03:34):

I didn’t pick 135 out of thin air, by the way, that was my original unlimited rate for CrossFit. So, you make that mistake. You’re tied to this like sunk cost of the original mistake, right? And we could apply this lesson to coaching, like the staffing that you hire, the location that you got, the equipment that you bought, we all make these sunk cost mistakes. The key is realizing they’re a mistake, auditing our decisions regularly and then forgiving ourselves for making that mistake, but not allowing ourselves to make the same mistake. Again, I’ll give you a broader example. Right now, we’re talking to a lot of gym owners who maybe struggled through the last year and a half, it was tough. And if you’re in some places in the world like Austria, you’re going back into lockdowns now. It’s not getting any easier.

Chris (04:28):

So you think like, OK, you know, I opened up this gym. I took 8,000 square feet. I built the gym of my dreams. We had 200 members and you know, now I’m down to like 60 or 80. I’m not making any money. I’ve failed. I’m done. Instead, what you should say is, is there another model that would work here instead of 8,000 square feet? What if I tried again? You know, what if I closed the gym and started from scratch and I just did small group training in 1500 square feet, or what if I talked to my landlord and said, I only need half this space. Can I cut my rent in half by taking up half this space? Or what if I said to my coaches, look, I wanna give you the opportunity to serve people to the best of your ability. We can’t do that in a group class with 30 people, we are going to raise our rates, focus on 150 people that we can serve really, really well.

Chris (05:24):

And you know, everybody will be more successful. You can make those decisions unless you’re tied to sunk costs. Sunk costs say all or nothing. I tried this once. It didn’t work. I’m out. I tried this once. I don’t have any better ideas. I’m done. I tried this in the way I thought was like the way and it didn’t work and I’m done. Instead, you have to say, how can I make this work, avoid the sunk cost and maybe start over. So let’s talk about setting up an audit mechanism. All right, there are four rules that I have that help me grow from mistakes. The first one is only make new mistakes. That means only make mistakes because I can’t find somebody else who’s already made the same decision and done it successfully. Whenever possible I wanna learn from somebody’s mistake. So I wanna read books about gym ownership.

Chris (06:19):

I want talk to successful gym owners who have been where I am and made the same mistakes and what they’ve learned. I want to have a mentor in the gym space. You know, I want to buy the answer. I don’t want to try and do trial and error to figure out stuff on my own anymore, because that is 10 times as expensive. And it takes 10 times as long as just buying the answer from somebody else. OK. However, when I can’t find the answer anywhere else, then I will try it myself. So I’m allowing myself to make new mistakes with the caveat that I am going to measure the effect of my decision after 90 days. And I’m gonna tell you how to do that in a moment. My second rule to help me grow from mistakes is never repeat mistakes. So I know I’m gonna screw up, right?

Chris (07:02):

I know I’m gonna make bad decisions. And I give myself permission to do that. What I don’t allow myself to do is repeat the same mistake twice. So if, you know, I get desperate for coaches and I just like hire the first person that comes to mind and it doesn’t work out, the next time I get desperate for coaches, I might be tempted to just do the same thing. Right. But I don’t allow myself to do that. And so whenever something comes up and I’m like, oh man, that was a mistake. Oh, that was a screw up. I sit down and I write out the entire experience. Here’s why I made this decision. Here’s what the decision was, here’s why it went badly. Here’s what I’m never going to do again. I started learning this process back in 2008 and in 2009, I actually started publishing this stuff online in public to hold myself accountable for not repeating mistakes.

Chris (07:55):

I made it public. I made it a blog called don’t buy ads.com. It’s still there. I kept this blog for four years. And it was just like this chronicle of mistakes that I was making, the lessons that I was learning from them and my promise to myself and everybody else to not repeat them. The next thing is I ignore sunk costs by adding trial timelines. So this is my third rule for trying new things and making mistakes. So what I don’t want to do is like, make a mistake and then just stick with that forever because it’s too hard to change. Right? So maybe I sign up with a new website provider and you know, it’s tough. It’s challenging to move everything to the new site. So I don’t wanna ever do that again. And even if the site isn’t working well, I’ve moved it now.

Chris (08:45):

Right. I got other things to worry about. It sucks. I’m mad, but I’m just gonna stick with that new site. Instead, what I do is I put a 90 day trial on everything. So for example, let’s say that I wanna try out a new 7:00 PM class. OK. We’re not just gonna throw that on the schedule and announce it as the new class. Instead, what we’re going to do is announce it as part of our winter 2021 schedule, this 7:00 PM class on Friday. And that way, if the class isn’t working out, or we have only got two or three people attending, then I just won’t put that on my schedule 90 days later, right? I give myself like a finite endpoint and whenever I’m making any kind of decision, I give myself that 90 day out basically so that I can get out of it.

Chris (09:30):

If it’s not working. The same thing with hiring a new staff person, give them a 90 day contract. And at the end of the contract, it’s just a natural exit if it’s not working out. The same with a new specialty program, a new supplement line, anything that you do in your business, you can add a 90 day deadline for an audit. Now my fourth rule is determine what a win means in advance by using a tool that we call the impact filter. The impact filter is like a one pager that I got from Dan Sullivan and we’ve edited it. And we give it to people in the Two-Brain growth program, it’s called a go worksheet. The impact filter is basically this. Like, what exactly are we trying to achieve here? What will a win be? What would make us stop doing this?

Chris (10:18):

And who’s in charge of it.

Chris (10:20):

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Chris (10:45):

So for example, let’s say that you want to try running ads on TikTok and you pull up your impact filter and you say, OK, what’s a win here. Well, we get 10 new clients from TikTok, or maybe, you know, a hundred leads from TikTok or whatever. You define it. How long are we gonna give ourselves to test this? Let’s try 90 days.

Chris (11:05):

So in 90 days, we’re gonna come back together. We’re gonna look at this sheet and we’re gonna say, did we get a hundred new leads from TikTok? Yes or no. OK. And who’s in charge of this. I’m gonna put Ashley in charge of this. All right. So she’s gonna run my TikTok. She’s gonna learn about TikTok. She’s gonna invest time in TikTok. And 90 days later, we’re gonna come back and we’re going to say, Ashley, was this successful? Yes or no. And we’re gonna decide one of three choices. Choice number one. Yes, it was successful. We got a hundred leads. We will continue. Choice two. No, it was not successful. We did not get a hundred leads. We will not continue. Third choice. It was not successful yet, but we have clear proof that it will be in a longer time frame. And this is actually rare.

Chris (11:52):

What you’re trying to do here is get off maybe and avoid sunk costs. What happens with a lot of gym owners is this new thing will come up, right? Like TikTok and they’ll run their first thing on TikTok, their first little video or whatever. And now they’ve got a TikTok channel that they have to maintain. And 90 days later we say, is it working? And they’re like, I guess so, I’ve published to it every week. People are liking it. People are following me on TikTok. Somebody even shared my thruster dance. But there’s no clear metric for success there. And we don’t know if it’s working or not. And because we don’t know, you can’t stop doing it. It becomes another cost or sunken time, sunken energy, where you just have to keep maintaining this thing. Even if you don’t even know if it’s working.

Chris (12:40):

And this is a trap that a lot of people fell into with like Clubhouse, TikTok too, you know, Snapchat. Social media is great for this. You start doing it. You don’t have an audit process. So there’s nothing telling you to stop doing it. And you just wind up doing it forever. And you don’t even know if it’s doing you any good. So you wanna set up this audit process, using a tool called the impact filter. You wanna explain to the staff person in charge, here is what a win means. You also wanna tell them in advance, like if this is not a win after 90 days, we will stop. If you don’t define that and you just say, Hey, Ashley, you’re in charge of our TikTok account. And then 90 days later you audit it. You’re like, geez, we got three leads and no conversions from this.

Chris (13:24):

We’re gonna stop. Ashley’s gonna feel like she has failed. And you are taking something away from her. Unless you define in advance here’s what a win looks like. And guess what? But you need to do this for yourself too. If you’re starting to run Facebook ads, for example, you have to define in advance, like I’m gonna do this for 90 days. Here’s my budget. A win will be getting 60 new leads. It will be getting 10 new appointments booked and getting six new clients from this in the next 90 days. If we fail at any of those in 90 days, we are going to say, this is not working. So you define your metrics. You run Facebook ads for 90 days after 90 days, you say, OK, how did we do? We got our 60 new leads. That’s great. We didn’t get 10 appointments booked.

Chris (14:14):

And so we only got three new clients. OK, do we continue to do this? Well, the Facebook ads got us the 60 leads. They did their job. OK. We didn’t get all those leads to book. So we need to work on our conversion. So for the next 90 days, our focus is really gonna be on lead nurture, getting people to book actual calls. So what can we learn that will help us with that? And you set up your next target, your next impact filter to improve your lead nurture. Then you say we only closed like 30% of the people who booked calls. What do we need to improve there? Well, we should learn the no sweat intro process or learn motivational interviewing. So for the next 90 days, that’s what we’re going to try. And we’re going to test it. And what we’re doing here is we’re defining a metric for success.

Chris (15:01):

There are two ways that people screw up Facebook groups, Facebook ads. First, they don’t define a metric for success. So they just keep running them forever. Because once you start, they think they just can’t stop. Second, same mistake, different outcome. They don’t define a metric for success. So they run a Facebook ad for five days, they spend $20. They panic and they say, Facebook ads don’t work and they never do it again. We see that actually more often. I invested a hundred dollars in Facebook and it didn’t work. As somebody who spends $15,000 a month on Facebook ads, I will say Facebook ads suck, but they’re still better than anything out there for getting people to sign up for your service. OK? So this is where the impact filter comes in. It gives you a very clear target. It gives you a lot of clarity on execution, but it also tells you when something has been a mistake and when to stop doing it, it gives you permission to stop an initiative that a staff person has begun by giving them clarity and giving them an offramp.

Chris (16:05):

And it also helps people come to you with new ideas. If a staff person has an idea to run a TikTok account, but they don’t know how to approach you with the idea, they probably just won’t do it. They might mention it to other staff, we should have a TikTok account, but unless they fill out this impact filter, that idea will probably never reach you. Filling out the impact filter also means that you and staff have to really think through the idea, right? Like you might have this vague notion that we should double the size of our gym. And then if you fill out this exercise, you’re gonna force yourself to answer the questions like, well, why do I need this much space? You know, will adding more space actually attract more clients or will adding more equipment actually increase the amount that I’m able to charge for my service?

Chris (16:50):

Like, how will this actually benefit at me? You force yourself to sit down and think through the rationale for your decisions, which actually helps you avoid mistakes. So you’re an entrepreneur. You’re gonna take chances. I get it. I love you for it. Here’s what I’m gonna recommend to you. These four rules. First, when you make decisions, you’re going to make mistakes. That’s OK. Forgive yourself for them. As long as you learn from those mistakes, because you evaluate the outcomes, that you never make the same mistake twice, that you learn from other people’s mistakes. Even if you have to pay for them, it’s still cheaper than making it yourself. And that you kill the potential for sunk costs by adding trial timelines when you make decisions. The next decision that you make should be audited after 90 days, you can use the impact filter if you want to, or you can just set up an appointment with the employee or with yourself and say, is this working? What metrics prove that it’s working? Or should I stop it now? I hope this helps give yourself permission to make mistakes, make ’em fast. Don’t let them kill you and learn from every one.

Mike (18:02):

Two-Brain Radio hits the air twice a week and features all the info you need to run a successful fitness business. Subscribe so you don’t miss a show. Now here’s Coop one more time.

Chris (18:10):

Thanks for listening to Two-Brain Radio. If you aren’t in the Gym Owners United group on Facebook, this is my personal invitation to join. It’s the only public Facebook group that I participate in. And I’m there all the time with tips, tactics, and free resources. I’d love to network with you and help you grow your business. Join Gym Owners United on Facebook.

 

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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