Chris Cooper: Your Route Through the Entrepreneur’s Valley of Death

Chris Cooper

Andrew (00:02):

Chris Cooper is on Two-Brain Radio to talk about the dreaded valley of death in business. Coop will tell you what it is and how to ensure your business makes it through to the other side. Here’s how right after this.

Chris (00:13):

We know that getting clients results isn’t enough to make a great business or a great career, but it is the foundation. If you’re not getting your clients results, none of the other stuff matters. Your marketing plan, your operations plan, your retention plan, your systems, how much you care about the clients. You need to get them results. What does it take to get a client results? Long-term behavior change, short-term habit change. It means learning skills like motivational interviewing, peer-to-peer programming. It means focusing on things like adherence and retention instead of novelty. And I built twobraincoaching.com with my partner, Josh Martin, to teach coaches how to do this. More than ever before it is critical to get results for your clients. You need to charge a premium fee. You need to provide high value to warrant that fee. And what is most valuable to the client? What do they care about the most? The results on the goal that they choose. Twobraincoaching.com has programs set up to help your clients achieve those goals. We will train you and your coaches to deliver personal training, group training, online training, nutrition coaching, and coming soon, mindset coaching, in a way that’s simple for you to adopt, it’s legal everywhere. And it’s super effective. These courses were built by experts with years of experience getting clients results. Twobraincoaching.com is a labor of love for me, and I know you’re going to love it too.

Chris (01:30):

Hey everybody, Chris Cooper here, and today, we’re going to be talking about the valley of death. And this is a concept that I learned when my business was trying to scale from 250 to a million. And then I kind of had to learn it all over again as the business went from one to 5 million, and now that I’m emerging on the other side, I’ve got a ton of things to share about the valley of death. First off, this name valley of death came from, I think Greg Crabtree in his book, “Simple Numbers.” And what he’s talking about in most businesses is going from one location that’s operating well and running at about a 30 to 33% profit margin to multiple locations, or going from one location, one owner/operator-style business to one giant business within the same location.

Chris (02:30):

So either going from like one location to multiple locations, or from around 350K gross to around a million in gross. If that’s you, you’re about to go through the valley of death. And the only thing that we can do, we can’t avoid it, but we can get you through it faster. And so that’s my goal today. Going from a stable business to a broader platform requires risk. And even if you know the terrain, like you’re copying one working model, this gym is going well and you’re copying it over and over and over again, you still have to take a leap. You have to make bigger bets and you have to spend money before you start making it again. You have to invest time and money and tools into bridging this gap between your first business or the business as it is today and the other blocks in your platform.

Chris (03:19):

But for many gym owners, this gap can become the valley of death. It can actually kill them. And instead of going from this, you know, the golden goose, they wind up homeless and with nothing, they risk it all and they lose it all. So if you’re trying to start something new, the leap that you have to take is threefold. First, you’ve got a knowledge leap, right? You’ve got a knowledge gap that you have to leap over. Second is you’ve got a money gap. This is the biggest one. And the most obvious one for most people. Third is you’ve got a tools gap. You don’t have all the tools that you need to scale yet. So for example, knowledge gap, you own a gym and you want to start a bar or some completely different business, but you have no idea how to open one.

Chris (04:03):

You just think it might be cool. The money gap. You want to start a second location for your gym, but you don’t have an investment cushion. So how are you going to bridge that money gap? And tools? You know, that you need higher level staff than the ones that you’ve got right now, you cannot scale to a million dollar business letting the coach that you know, runs your Saturday morning group, also manage your books. OK? You have to have experienced, skilled staff who are highly educated and more qualified than you are. So here’s what typically happens. A gym owner tries to go from one thing to the next thing or the next level. And they spend so much time trying to build that next level that the first thing suffers, this is super, super common. So let’s say, like, for example, you’ve got a gym and you’re doing 250,000 a year and you see, or you hear a podcast from us or somebody else.

Chris (04:54):

And it’s like how to add a high-ticket coaching offer. And so you add this high-ticket coaching offer, but to do that, you’ve got to change your entire delivery. So you rip apart your playbook, you change all of your operations, you change your pricing, you change your sales process. Some of your original clients don’t really fit the model anymore. So they leave and you just kind of gut your original business to build the next business. And so what happens is your first idea suffers and maybe it survives, but maybe it doesn’t. The second thing that typically happens is you move your best staff away from your working business to build this new idea. So you’ve got an amazing coach at your first gym. You’re going to open up another gym at the next town over. Let’s take that amazing coach and move them great, except that you’re undermining your original business, this amazing coach that was such an integral part of your success in the first place is now gone.

Chris (05:50):

You know, it’s the exact same thing as if you would fire that coach, or if they had left to go do something somewhere else, like they’re just not in that gym anymore. And so your original members are suffering. And the third thing that typically happens is that they invest all their free capital into the new idea and their first business suffers from malnourishment. And this was totally me. In fact, I think I’m guilty in all three. So I’ll give you examples here. They spend so much time trying to build the next thing that their first thing suffers. For me, if I’m not entirely focused on making gym owners more money, if I’m focused on writing another unrelated book or starting an unrelated project or whatever, then I’m not helping gym owners make money faster. And so my first business suffers. Here’s an example of moving my best staff away.

Chris (06:40):

So at Catalyst, I had this amazing coach named Tyler and we had an opportunity to open up a second location inside a private school. And we would train the competitive basketball players from the private school. And we’d really focus on athletic training if we opened the second location. And the second location started off pretty well. I won’t get into that whole story, but it collapsed. Meanwhile, my best coach was no longer at my primary gym. And so his fans were like, where’s Tyler, you know? And I was gone too. So where’s Chris. And so now, you know, they’re dealing with coaches who have different personalities who appeal to different clients and they’re going like, where are these two best coaches? My experience is suffering. And third, they invest all their capital into the new idea and the first business suffers. I mean, when I opened up my first CrossFit gym, I had a personal training studio.

Chris (07:32):

The personal training studio was keeping me afloat. It was paying me, but I took all of the money from that business and just kept pumping it into my CrossFit box to keep it on life support. When really I could have upgraded a lot at my personal training facility,if I understood a different model. So I’ve done all these before. Don’t worry if you’re guilty too. If you’re trying to duplicate your gym and open more locations, or even to scale your gym from 350,000 a year to a million, here’s what typically happens. Like here are the most common problems. First off, your customer base is growing, but your team is struggling to keep up. So do you hire coaches in advance of the demand? Probably not. Right? Like, cause how are you going to pay them? The next problem is that the systems that you built for 150 clients, they don’t scale to a thousand clients.

Chris (08:23):

And I’d say that the same is true for a brand. Second or third. The owner has operational skills, not management skills. I think I’ve said, this is probably my thousandth time saying being a coach and being a gym owner are completely different jobs requiring different skill sets. But when you are the owner of one microgym and you’ve got 150 clients, you’re still involved in the coaching, or at least you’re like the mayor of the box, right? You’re engaged. You see people regularly enough, you maintain a personal relationship. When you go to a 1000 clients or even 500, your personal relationships are with your staff. And then they have relationships with your clients. And this is what’s called management, but most box owners don’t have management skills or management training. They could acquire them, but you know, who wants to? So they don’t. The fourth problem is that these higher value roles are expensive.

Chris (09:18):

So for example, let’s say that, you know, you’re going to go to a million, you’re going to have to hire somebody else to handle the marketing for you. Not because you can’t figure it out, but because you don’t have time to do all the things that you want to do. So you hire somebody to do your marketing. Well, that person is going to be very expensive because if they’re successful either they’re just going to market for themselves or, you know, maybe they’re making the lifestyle choice to work for you and get paid the sure thing. So let’s say that you have to hire like a chief marketing officer or a really qualified salesperson. And that person is going to cost you a hundred thousand dollars per year. Well, you have to make that commitment to hire them before the revenue is coming back, before you’re getting a return on that investment, right?

Chris (10:04):

And making like a high ticket salary offer to a coach, it won’t return that investment. So you have to really be careful. Higher value roles are really expensive. And at this stage you should only be investing in the ones that will show you a direct return. The next problem is that you can’t predict future growth. I mean, I talked to so many gym owners who had plans to open their second location, even their first location. And then COVID shut them down. What happens then? Can you keep paying the rent with zero revenue coming in? The next problem is that the staff that got you here might not be good enough to get you there. So, you know, most of the skills in a micro gym, you can train to your friends. You can take a coach who’s caring and empathetic and you can make them your client success manager.

Chris (10:53):

You can take a 16-year-old kid who helps out in your kids program and you can train them to do your social media for you. Absolutely. In an owner-operator model, this is just amazing. But to get to the next level, you’re probably going to need to make some people full time. You’re probably going to have to have a general manager who’s like qualified in running operations and just promoting the people that got you here into these higher paying jobs might feel great to you at first because you’re giving them a raise and you’re giving them more responsibility. And we’re doing this together as a team. But the reality is they’re not qualified to run things at a higher level and they might not want to either. Next, the company that you are right now might not be the same company that you are when you get to 500 clients or a million dollars, your services will probably change.

Chris (11:47):

Your customers will almost definitely change. And even your values might change. Not like suddenly you become dishonest. But what I’m saying is you might have different priorities. So for example, if my values are take 150 people at a time so that we can provide one-on-one touch points every single day, if you want to get to a million dollars in revenue, you probably can’t do that same thing. So you have to ask yourself, is the trade off of the impact that I’m going to have in my community worth less one-on-one time with my clients? And maybe it is, maybe you find a way to do that. All I’m saying is that a shift in values isn’t necessarily a bad thing. It’s just a shift in the current value set that you have, but not be the same value set that you have later and values evolve.

Chris (12:36):

It’s natural. Another problem when people are trying to scale is that, you know, as the gym owner, you are able to teach coaching skills to your friends, but you can’t teach tax planning strategies to your friends, right? Higher level knowledge has to be purchased from an expert. And this is not a cost thing because I already spoke about that. This is a trust and a fear thing. You are going to be hiring people who know more about their specialization than you do, and that’s why you’re hiring them. But also it’s tough to check their work, right? Like, OK, I’m going to hire this accountant. They’ve got this tax strategy. I’ve never heard of it before. I’ve really got to trust them because I won’t know if they’re making a mistake. All right. So scaling from a hundred thousand dollars in net owner benefit, what you take from the business, to 350K, you know, in revenue is simple, right?

Chris (13:32):

We go through this in ramp up. We go through this in growth. Scaling to a million in revenue requires a different infrastructure because you don’t just want to scale your revenue up. You want to make more money for doing that. It doesn’t do anybody any good to have a bigger business that makes you the same amount of money. So to do that, you need a few things. First, you need a clear guiding vision that inspires your team. We call this a vivid vision and we teach this in our tinker program. It’s more of a teaching. It’s a whole process that you have to go through. Second, instead of one generalist, that’s you, at the helm, you need like a team of specialists. Gino Wickman writes a lot about this in “Traction” and “Get a Grip.” And so we talk about it a lot in our tinker program too, but you know, you are pretty good, right?

Chris (14:17):

At a lot of different things. You can look at a P and L and you can spot glaring problems, but you can’t make a tax strategy. You can look at your website and say like, OK, yeah, we need to move this around. Or we need less text-based or get rid of those sliders. But you can’t optimize for conversions. You can look at a Facebook campaign and say, OK, this picture is working well. But what you can’t do is like optimize your retargeting. You’re going to have to hire some specialists. And that means you have to make investments in staff, but also in space and equipment ahead of revenue. And you have to make those just in the hope that it’s going to pay off. When you launched your business, you leaped out into space. That was scary. And it held unforeseen pain that you really

Chris (15:01):

don’t want to go through again, right? If I asked you five years ago, if you had known that you’d be at this point, having gone through this much pain today, would you still have opened a gym? A lot of people would say no. And so you don’t want to face that again, and I get it, but to make it to the next level, you have to make another leap. Only this time it’s across the valley of death. There’s more at stake, right? It’s easy to take risks when you’re at the plate. It’s really hard to take risks when you’re already on first base, because you’ve already got something. You have something to lose now. But you can’t avoid it. And you have to make it across this valley of death as quickly as possible. So here’s how to do it. First off, start with a buffer.

Chris (15:39):

I don’t mean start with $5,000 in your bank account. I mean, start with enough money that your second location can go three months without a drop of revenue. Now I know that sounds like a lot, but hear me out. If you have to save up $30,000 in cash before you open your second location, you’re going to look very, very hard at your current model and say, how can I generate cash? If I’m only profiting by a thousand dollars a month, and I don’t want to wait 30 months to have 30 in cash waiting and ready, then I need to change my current model. And now is the time to do that. Optimize your current model before you try to duplicate it, right? So we teach systemize optimize automate. But if we were looking at opening a second location, we’d add a fourth step to that.

Chris (16:25):

Systemize optimize, automate, duplicate would come after that. So start with a buffer. Second, don’t sacrifice your golden goose. If you are the primary coach at your first gym, do not buy a second gym because you will have to be there all the time. And your first business will suffer. And it’s the same with the primary coach. Third, get access to credit. A lot of us started our gyms with this notion that we had to like bootstrap everything that we should never go into debt, but credit is your parachute. You don’t have to use it, but I promise you, it will cost you more than you think to open up a second location or to expand. And while you’re waiting for that new revenue to be generated so that you can level up, you got to bridge that gap. You got to, if you’re going to leap off the cliff and over the valley of death, like having a parachute is a smart idea.

Chris (17:15):

You don’t want to run out of money before you run out of steam. Next, you can also have people pay in advance. So people in our tinker program who opened up a second location, they do something that’s called a founder’s club. And basically what you’re doing is you’re getting a commitment in advance from people that they’re going to be joining your gym. Now this isn’t so far in advance that it eliminates the risk. You still have to sign a lease, and I’m going to talk about that in a moment, but having this kind of security in advance, it buys you some time.

Chris (17:46):

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 (18:26):

So let’s say that you commit to a lease and you start paying on the lease September the first and you have to build out. So you’ve got a month’s worth of rental expenses set aside because you know, like no money is coming in while that build-out is happening, but then the build-out takes another month. Well, now things are running really short and you’re starting to panic. And then the builder says, actually, I can’t get you open until December 15th. And now you’re really worried because you’re entering the Christmas season when people stop buying gym memberships. So now you’re going to be three months without revenue, but what can help with that is a founder’s club where people are signed up in advance and they’ve reserved their spot so that you know there’s money coming. And you can even have them pay in advance if you want to.

Chris (19:10):

I really don’t recommend this, especially do not discount. You need cash at startup. You don’t want to give out discounts and like slit your own throat, um, grants. There are a number of grants post COVID to help people buy other businesses, expand their current businesses and just do whatever they can to keep people employed. So definitely check that out. Like, there are some great grants that I’ve heard about recently, especially for women who are expanding their business and other grants that I’ve heard about recently, for people who are buying existing businesses that are closing. I mean, the government, this is a good play for the US state that’s doing this. If a business is closing, they want to make sure that that business stays open if they can, so they want to encourage somebody else to come in, buy it up, keep people working, keep clients, paying, keep collecting taxes.

Chris (20:01):

Next is to trade where you can. So, I mean, when you’re trying to open up a second location or scale or whatever, don’t negate the value of sweat equity, OK? Now I’m in a stage where drywalling something is not worth my time because I can pay a drywaller 30 or $35 an hour. And plus I hate dry walling and I’m going to do a really crappy job. However, if you’re trying to make it across and preserve cashflow, do not be scared to trade in kind services, just put it in writing. OK? Like you don’t want to trade the sign guy a brand new sign for your location against membership without a firm end date. What you need to do is write a contract saying, OK, the sign is worth $2,500. Our membership is 250 a month. I will trade you 10 months of membership.

Chris (20:47):

It will commence on the day that the sign goes up. There are no transfers, no holds, it’s up in 10 months. OK. The next is getting a mastermind. I mean, every dollar that you can save every minute of time, potentially wasted that you can save has a resounding effect because instead of doing something that isn’t going to work or that wastes your time, you’re going to spend your time doing stuff that does work. You’re going to learn this from other people, but you’re really going to have support from them. I mean, I’ll tell you one of my favorite entrepreneurs in our tinker program, he owns a franchise in Texas and it’s not a gym franchise. It’s a tire franchise. And when all of his buddies who also own franchises in nearby towns open a new location, Nick flies out to offer to help.

Chris (21:36):

So he’ll show up and for four days he’ll work the sales floor for them. Like he’ll just volunteer. And then when it’s time for him to open up his own location, they all show up and they change tires, or they volunteer on the sales floor and it’s kind of fun for them, but it also helps them bridge that gap of like revenue to cash expenditure shortfall. So, you know, getting in a mastermind, it pays off and the dividends are sometimes obvious, like, oh, you’re opening up and you’re short a coach? I can send my coach down for the weekend. And sometimes it’s less obvious, but just as potent, Hey, here’s a mistake that I made. Don’t make that same mistake. I mean, I’ve heard just in the last week in our tinker group, oh my God, dude, you just saved me $30,000 for something that I would have done wrong, or, oh man, I took your advice on that

Chris (22:23):

lease negotiation. I saved $8,000 over the next two years. Like that is the value of being in a mastermind. Next, the next tip is to partner. I mean, you can defray some of the potential costs if you partner in the next location, you just have to be careful. A lot of us are tempted to give like one of our employees equity in the second location. And you know, the reason that we do it is we want to reward them. We want to motivate them. The problem is that everybody thinks they want to be an entrepreneur until it’s time to do what entrepreneurs do. And then they realize, oh my goodness, I would rather be an employee. This is not for me. A lot of them also think that you’re like handing them the golden ticket. So, wow. Chris has given me a share.

Chris (23:10):

He must make millions of dollars off this gym. I’m going to also make millions of dollars. I’m going to do the same amount of work, right? They don’t understand that their responsibility, their skillset, all of that has to upgrade just like yours did because they didn’t see you go through that process. And the last thing is equity. So if you’re giving up equity in your company, the partner has to bring equity into the company. So let’s say that I’m going to open up my second location. And I’m going to put $50,000 into this location and I’m going to give a coach 20%. Well that coach had better be bringing $10,000 in cash into the equation to get that 20% or else. What I’m actually doing is hiding the risk from them by paying all of that money upfront. You owe it to them to ask them to invest if they want to own a share.

Chris (24:03):

Because if not, they’re going to have a false sense of what’s actually required here. What’s actually at risk. OK. Let me give you a great example. About two years ago, I was talking to the GM of my gym about what would motivate him. And so we were actually talking about selling a share of Catalyst, you know, 20%. And then I explained what would happen in the case of a cash call. So let’s say that Catalyst lost money for a month. Now, Catalyst had not lost money in well over a decade. It was profitable month over month for over 10 years, but we couldn’t have foreseen COVID coming. And what would have happened is let’s say that for some reason, we couldn’t make payroll and we had to make payroll of $5,000. Well, if Catalyst didn’t have the money, I would have had to put in 4,000 and the other shareholder would have had to put in a thousand, right, along shareholder lines, to make up the shortfall. Like you share profit, but you also share costs if the business is ever losing money.

Chris (25:03):

And so when I explained that the GM said, whoa, whoa, where would I get the thousand dollars? Like I couldn’t afford to do that. And I said, well, you know, that’s part of the risk of being a shareholder. And he said, forget it. I don’t want to take that risk. And so if you’re not telling your staff this upfront, and you’re just giving them a share of equity, you’re not actually giving them a share of equity. Right. And you’re disguising the truth from them. When I opened up my second location, I gave a share to my best coach at the time. But I didn’t say upfront, like, look, you are the owner operator of this location. You will be delivering the service while I work on these other things. I have other businesses, you know, I will not be here daily coaching classes for you.

Chris (25:44):

I thought that went without saying. It didn’t. And he assumed that I would be there in the trenches with him every day coaching classes, doing personal training clients. And so when it went south, it was over a big misunderstanding that I should have cleared up in the beginning. It was over a lack of understanding of finance. You know, I made a personal loan to the company. And so when we decided to close that location, the company owed me $20,000 personally. And so I just basically waived it, took all the shares back and said, OK, now I own this, but because he didn’t have a financial education, it looked like, you know, the money wins again. You know, like I got screwed out of something here. So you have to really be careful because, and of course that ended the friendship too, which was a real shame.

Chris (26:29):

So be very careful. The next tip that you can use to scale through the valley of death faster is set up commercial agreements before you get there. Now I said like, you can pre-sell your memberships, don’t take people’s money until you’re open and don’t discount. But what you can do is talk to local businesses near your second location and set up training contracts in advance, and you can actually ask them for a deposit too, and you can do that with teams. You can do that with groups, but you don’t want to do that with individuals because in a lot of states and in Canada, you’re going to be bonded, to do that, right? Like you have to be insured that if you take somebody’s money, you’ll be able to give it back. And a lot of owner operators in all industries run into this trap where it’s like, OK, I’ve pre-sold these memberships, oh, there’s a delay.

Chris (27:18):

And I’m paying my bills out of this cash that I have. And now the cash is gone. And now I have to deliver my service for free for a month or two, or I have to like close up shop in the dead of night and escape town. That actually happened to a personal trainer in Sault Ste. Marie, I think back in 2006, he pre-sold memberships at this big discount. He got open, suddenly realized he didn’t have the cash to pay his bills anymore. And he skipped out, ran away with people’s money. Founders’ club, I mentioned, and then finally get commitments before you make commitments. So before you sign a lease, you want to be talking to the neighbors in this location. You want to be talking to local corporations. You want to be talking to schools and getting a sense of like, who will commit to something.

Chris (28:00):

And you want to get as close to like a written commitment as you possibly can. So, you know, if you’re talking to a school and they’re like, yeah, I would bring a gym class in to do some training at your gym. You want to get specific, like, what’s your budget for this? How many times a year do you think this would be possible? You know, how will you pay for it? That kind of thing. Instead of just kind of like a promise between buddies that never really pays out. All right, now, I’ve got a few kind of bigger gross rules too, if you’re trying to jump over the valley of death. This for most people will be a long process. I really recommend you get into a high level mastermind group, like our tinker program, but here’s some other best practices. First, simplicity scales faster. The simpler your brand and your method is to understand, the faster word will spread.

Chris (28:50):

Because if I understand it, I can talk about it more simply. If I don’t really understand it, I won’t talk about it because I never want to look dumb. And the same is true for your opps for your rules. OK? If you have 50 different pricing packages, that’s going to be really hard to scale. If you have, you know, 30 different programs, that’s going to be really hard to duplicate over and over. OK? So, another one adding a management layer, you still need to maintain your guidelines for where your money goes, your expenses, right? So in the founder phase and the farmer phase, we say your total salary, your total staff pay should be 44% or less. We used to call it the 4/9ths model. That’s like your salary cap. When you get into second location and stuff, that rule still applies, right?

Chris (29:39):

It should still be 44% or less of your gross, but now you have to track it differently. You have to look at contribution margin because when you’re adding a management layer, you need to know that everybody that’s in that business is contributing somehow, either they’re generating revenue or they’re creating time for you to go out and generate revenue. OK? Then you want to look at your team. You want to like, take a look at your org structure. You want to say, how much of a management layer do I need? Where can I duplicate services across gyms, you know, for a tiny little bit more. So, for example, maybe you pay your bookkeeper 150 bucks a month, but to do the books for two gyms at the same time, it’s 250. So you can scale without scaling costs proportionally. OK. You can share services across both businesses.

Chris (30:27):

The next thing is you have to mentor your team. Your team does not see how you know you got here. They haven’t gone through the stress. They don’t know the backstory. They don’t know what’s going on behind the curtain. It’s not just that you have to teach them that stuff or show them behind the curtain, but you have to mentor them. The way that your pie will grow is not on your personal brand. Not when you’ve got two locations. You have to grow the business. And that means growing your staff, as people, as leaders, and as practitioners. Next, you have to add different layers of marketing. So from $0 up to $350,000 a year, like one marketing pipeline is enough. You just run Facebook ads, or you just do Instagram, or you just do affinity marketing like I do. OK. One is enough.

Chris (31:15):

But to get to 1 million, you have to eliminate single points of failure so that your business can’t fail fast while it’s trying to grow. So how do you choose? You measure and you optimize one pathway knowing that each marketing strategy lasts between one and three years, then you add a second pathway that you can sustain, right? And they should leapfrog one another. So for example, if a year ago you added Facebook advertising. You know how to do that? Now you’re good at it. It’s getting you some results. So now you’re going to go to something else, right? Email marketing or referrals. And you’re going to focus on that for two to three years. Meanwhile, a year from now, referral marketing is really kind of catching on. You’ve got some good momentum, but Facebook ads stop working. OK, well now you can find the second one again.

Chris (32:03):

What you don’t want to do is like start from zero on marketing because marketing takes a little bit time to ramp up, gain momentum and snowball. So you always have to have at least one marketing system that’s working really well to scale. And you have to always be looking for a second one and building that second one. Now notice I only said two. I didn’t say five. If you’re trying to figure out Instagram, Facebook referrals, corporate, Tik Tok, LinkedIn, Clubhouse. If you try to do all these at once, you’re not doing any of them very well. I promise you. You know, Google Adwords, just the more you add the less well you’ll do at each one, you’re better to stick with two, but it has to be more than one. And the next, this is the biggest one. Think about your impact, right? Chasing money is not enough.

Chris (32:51):

It’s not enough of a reason to go to a bigger gym. You can make more than enough money with 150 people in one location. But none of us got into this to make money or get rich. So while the metrics and the money are exciting early on, cause you can see your success. It’s really impact that will pull you forward. And so before you make this scaling move, you want to think about what kind of impact am I trying to have. And finally, I need you to know that this will take years. Going from a startup to a multi-generational legacy is going to take 10 years, best case. So if like me, your first five years were really spent trying to figure it out, you know, you didn’t really spend five years figuring it out. You did like one year of work duplicated over and over and over again, and didn’t really get anywhere for five years.

Chris (33:40):

Then it’s going to take you 15 to get to that legacy stage, right? The first phase of entrepreneurship, which we call the founder phase, should take you about 18 months. The second phase, which is to get to a hundred thousand dollars net owner benefit, should take you around three years. And then you start building that wealth platform and we call that the tinker phase. So, and that should take you another three, four years probably. But for me it took a lot longer. And for a lot of people listening to that, they’re still in founder phase. Maybe, you know, they’re still trying to get their first dollar out of their business, or they’ve been in farmer phase for a decade. For me, I took seven years in founder phase. We can get people through that in about 18 months now at Two-Brain. I spent, four years in farmer phase, you know, and I had a mentor that whole time.

Chris (34:25):

And it still took me four years. We can get people through that now. I mean, we’re doing it in less than a year in some cases, it’s amazing. And then I’ve been five years in tinker phase going from 250,000 a year to a $5 million business. Right. But I’m slow. I try everything. I have a lot of ideas. I try them all and I screw it up instead of saying focused. So this is going to take you years, but even if it takes 10 years, even if it takes 20 years to go from a startup business to a multi-generational impact, you’re still creating a multi-generational impact. You’re still getting there twice as fast as your parents did. You know, your parents probably never had the opportunity to create a wealth platform that they can hand on to their kids and create recurring cashflow and have a lifestyle business. They never had that chance. Instead, they got a job. They worked for 40 years and they had just enough money to eke out a living until they died. You can finish when you want. You can get there faster. If you can do that in 10 years and get further than they got in 40, that’s incredible. And that is a gift that is saved just for entrepreneurs, the risk takers, who will make the leap. Thank you for taking the leap. And thank you for listening to this.

Chris (35:44):

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 in 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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