Author Archive for LRob65

The Message I (Almost) Didn’t Hear!

by LRob65
March 5th, 2012

Recently I was thinking about the current financial success of my gym, and I was reflecting on exactly how I got to this point.  This particular gym recently turned 5 years old, and I learned so much in that 5 years that applies not only to the gym business, but also to business in general.  So I decided I’d take some time to discuss one of the major points I learned that I hope will help you achieve success in your business.  And if nothing else, putting them down in writing will help to remind myself what I learned – in the hopes of being able to apply my knowledge to future business endeavors.

So here it is – LISTEN!  By far the biggest lesson I learned is to listen to your customers (or in my case – my prospective customers).  Back when I opened the gym 5 years ago, while we were under construction, I was encouraged by how many people stopped by to see what was going on.  We had put signs around town saying “24/7 Gym Coming Soon!”, and it got people’s attention.  But there were 2 things that I began to see that I should have paid closer attention to.  Number 1 – I couldn’t believe how many big guys were stopping by and asking about our free weight area – how big was it going to be, would it include this or that type of equipment, what weight would the dumbbells go up to, and so on.  Number 2 – Nearly everyone that stopped by, emailed, and called asked “How does it cost to join?”.  So these were 2 very clear bits of information that were being delivered up on a silver platter … that I needed to have a great free weight area, and that I needed to be priced competitively.  So here’s the problem … I wasn’t listening!

You see, I had already started and run a successful fitness center in a nearby town.  It had struggled in the beginning, but ultimately, by the time I opened the new gym, my other gym was 10 years old and profitable.  And I figured to myself “I know how to do this now!”.  So when I opened gym #2, I had a plan right from the start to make it a carbon copy of my first gym.  And what that meant was that we were going after the higher end of the market – people who were not so price conscious (in fact our gym was at least double the price of most of the gyms in the nearby city of Syracuse).  To generalize, the members of gym #1 were working professionals – average age was 40+.  They were willing to pay a higher price to belong to a bit more exclusive gym, and they weren’t so concerned with free weights – to them it was all about cardio, circuit equipment, and personal training / nutrition.

So when I opened gym #2, in my head, I knew what people wanted in a gym.  After all – we are told we need to create a business plan before we open a business, and that means we have had to sit down and visualize what our business is going to look like.  So I already had it all figured out!  I heard an interesting quote from a business person “Business plans are absolutely essential and absolutely worthless”.  But that’s a subject for another post!  The point here is that I thought I knew what people wanted, but I was wrong – and worse yet, I wasn’t listening!

Fast forward 5 years – I now have a gym that really is what the people in that market want!  Yes it took me 5 years to get here!  Yes, I had to expand my free weight area and drop my price in half to get the membership base I now have.  In fact, in order to undo the wrong message that we had sent when we first opened, I even changed the name of the gym to differentiate it from our other gym (which by the way is still doing well).

So after 5 years I now have the gym that my customers (members) were asking for.  It only took me 5 years to hear them!  What have your customers, members, or clients been trying to tell you?  Have you been listening – or do you think you have it all figured out?  Not listening is a mistake that could be fatal to your business!

Categories General Business, Low Cost Competitors
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Making more money

by LRob65
February 3rd, 2012

I told you some time ago that while personal trainers are capped at how much money they can make, there are some ways to get around the inherent flaw in the concept of trading time for money.  And here they are:

First, borrow a page out of the playbook of a professionally run hair salon … sell your client a product.  Here’s the scenario – you’re getting your hair cut (or styled, colored, etc.) and the stylist uses a product in your hair – for example, styling gel.  Assuming the stylist does a great job on your hair, you look in the mirror and you love what you see.  So of course it makes sense that when they recommend this product, you’re going to buy it – right?  I mean, how else are you get that great look after you get home?

As a personal trainer, you form an even deeper relationship with your clients than the stylist does with theirs.  After all, a stylist sees their client once or twice a month, where you see your client once or twice a week!  But what product do you sell?  I am going to recommend you stick to your chosen industry and sell them health and nutrition products.  Examples would be vitamins, weight loss supplements, protein products, and so on.  Yes, you are going to need to find a product line that you feel good about, and you are going to have to get some education on the products – after all, there is a big difference between a product you put on your body (hair gel) and a product you put in your body (supplements).

My wife Carin is a personal trainer, so I’ve seen first hand how providing her clients with supplements has provided her with supplemental income.  In fact, one year while she was personal training full time, she sold an additional $26,000 of nutritional products to her clients!  Even with a modest 30% profit margin, that resulted in an additional $7800 in Carin’s pocket!  But beyond the extra money Carin made, something else happened – her clients also achieved results the likes of which they would not have gotten without the supplements.  In fact so much so, that the 2 other trainers at the gym started asking Carin what she was doing to get these kinds of results from her clients.  And before long, Carin taught both of them how to do the same thing.  In effect, our 2 trainers became Carin’s newest distributors.  And that brings me to an important business concept that I have mentioned before – leverage!

Leverage has to do with creating a system where revenue is being generated on your behalf, but without your direct involvement.  In this case, the 2 trainers that Carin taught how to provide supplements to their clients (and who were now her distributors) were generating revenue for not only themselves, but for Carin!  This powerful concept of “leverage” was displaying its power right before our eyes.  In fact, so much so that Carin began showing other personal trainers (outside of our gym) how to do the same thing – creating revenue sources from trainers in other gyms.  Wow!  This was powerful!  We learned business concepts that were relatively new to us – for example “duplication”, “residual income”, and of course “leverage”.

Now keep in mind, selling products is a great start to boosting your revenue as a personal trainer, but in order to really reach a level of an unlimited income, you need to better understand how to develop a distribution network.  And the only way I know of to do this is to join a network marketing organization – specifically, it needs to be one that focuses on health and nutrition products.  In other words, we aren’t talking about a company that sells electricity or phone services, we’re talking about a company that sell high quality health and nutrition products.  In a future post, I’ll explain more about the company that we have partnered with (Market America).  Now don’t be scared off by the fact that this is basically network marketing – I will show you how this concept actually fits perfectly into what you do as a personal trainer.  And as a side note – there are many other professions that this can work well for – such as massage therapists, health professionals such as chiropractors, physical therapists, etc. and many more!  After all – what we are really talking about here is a basic business principle of building market share – that is selling more products and services to your existing customer (or client) base.  Plain and simple, we are talking about “leveraging” your existing customer base to achieve a greater share of their their spending habits.

Stay tuned for future posts about the power of network marketing – especially as it relates to personal trainers and gym owners.

Categories Personal Training, Revenue
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Q: Should I lower my prices?

by LRob65
January 18th, 2012

Ronnie from Tampa, Florida asks, ”We have seen a surge in low cost gyms ($9 a month) in the Tampa area.  I’ve owned my gym for almost 10 years, and I am definitely losing members to them.  My question is, should I try to compete with them on price, or just wait it out?  I can’t imagine that they’ll stay in business with prices like that!”

Well Ronnie, I hate to be the one to tell you this, but these types of gyms are here to stay (at least for the next decade I would say), so if you don’t want to wait 10 years or more for them to go away, you better believe you need to do something about it!  Remember back when all the airlines were losing money except for Jet Blue and Southwest?  Well the same thing is happening in the fitness industry today … while Bally’s goes bankrupt (again) and Gold’s struggles to reinvent themselves, Planet Fitness and many others like them are kicking ass and taking names!

So now that I’ve sufficiently scared you in to realizing that if you don’t do something, you may end up going down with the ship, the real question is what do you do about it?   The fitness business, like all other businesses, operates on basic principles of supply and demand – which I like to break down as:

  1. Is your club at 100% member capacity? (supply)
  2. Are you giving your members what they want? (demand)

Look around your club at the busiest time of the week (typically Monday night after work).  At its peak time, your club needs to be busting at the seams.  Think about a really good restaurant on a Saturday night at 7pm.  If you go there and get seated immediately, wouldn’t you agree that there is a problem?  It is no different in our business – we need a packed house at peak times.  So let’s assume that you have established that you are only at 70% capacity – how do you fill the place up?

I would submit that lowering your price is the easiest way to get more members.  Many people in the industry are against this concept, saying that you need to differentiate yourself against competition, and keep your prices high.  I would suggest that if your club was truly different than the competition, and even more importantly that you were delivering members what they really wanted, they would in fact pay a higher price – and you probably wouldn’t have asked your original question.  But consumers are fairly savvy – they are looking for value.  And if all you have is a gym that when you break it down is not that different from the gym down the street that costs less, where do you think the member is going to go?

So in summary, if you are feeling the heat from a low cost operator, here are a few things you may want to consider.  First, take a tour of their gym to see what you’re up against.  If they have newer equipment, cleaner facilities, and a strong marketing program all at a lower price than your gym, you need to get to work!  First by renegotiating all of your expenses (especially rent) – and then by putting a huge marketing effort in yourself.  And yes, in more cases than not, I do advocate lowering your prices.

If you are a gym owner or personal trainer and you would like to see one of your questions answered here, please complete this form.  If I use your question on my site, I’ll provide you with a free 20 minute phone consultation so we can go into the answer in more detail!

Categories Low Cost Competitors
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Could your gym run without you?

by LRob65
January 4th, 2012

If you’re like a lot of the gym owners I talk to, you do almost everything in your gym.  Ask yourself a question – do you spend the majority of your time working on your business, or working in your business?  On vs. in – it’s just one little word, but it can mean so much!

The problem with many independent gym owners is that they are consumed by the day to day tasks involved with running their business.  This means that they are so engrossed in the 4 walls of the gym, that they seldom get out there to learn what’s going on with the rest of the world, or even more importantly, what’s going on in the fitness industry.  How many business turnaround shows have you watched?  I will admit it – I’m addicted to them!  I’ve watched them all – Robert Irvine’s Restaurant Impossible, Tabitha’s Salon Takeover, Ali Velshi’s “The Turnaround”, Ramsay’s Kitchen Nightmares, and the list goes on!  In many cases, just the fresh and non-biased perspective of someone coming in from the outside and getting the owner to think a different way, turns the entire business around!

I’ve owned many small businesses in my entrepreneurial career.  Some have been hits and others have been duds.  But one thing that I always know going into a new business venture is that (in my mind) it is only truly a business if it can exist profitably without me being directly involved in the day to day running of it.  Now I’m not saying that when the business is a baby, it doesn’t need my constant coddling, but eventually when it reaches maturity, I should be freed up to move towards bigger picture items, such as overall business strategy, starting another business, or even planning the exit strategy for this one.  And the only way to get there is to establish systems.

Systems, as well as their counterparts (policies and procedures) are fascinating to me!  Many people think systems are boring or mundane, but I’ve always admired systems, and when I visit other succesful businesses out there, I am always looking at the systems that they have in place, and trying to figure out what I can learn from them.  So when i am in the processs of building a new business, one of the first things that I consider once it opens is “what systems can I put in place to make this business run like a well oiled machine?”.  I create a policy and procedure manual, and I write out every single task I can think of in excruciating detail – hoping that the task becomes easily taught, and easily followed.  If a task is too hard to be taught effectively, I will seriously consider if there is anything I can do structurally to make it so the task doesn’t have to be done at all.

Think about your gym.  If you were forced to leave it for an extended period of time (say one month), what would it look like when you returned?  Would the business just click along, churning out the day to day functions needed to continue making a profit?  Or would it crash and burn without your direct involvement.  If your answer is the latter, then I’m going to go out on a limb and say that you don’t own a business after all, you own a job.  Or even more to the point, the business owns you!

 

Categories Systems
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Personal training and capped income

by LRob65
December 14th, 2011

Earlier this month, Curtis, a personal trainer in California asked for some advice about making more money.  His question was specifically related to whether or not he should continue to pay a percentage of his revenue to the gym owner, or strike out on his own.  If you want to read my recommendations, visit the post here.  But in this post, I want to speak more to the inherent drawback to being a personal trainer – capped income.

Capped income means, you can only make a certain amount of money and that’s it.  It is an inherent flaw in personal training as a profession, and I think it is one that you hear very little about – mainly because there are very large industries that make their living educating and certifying personal trainers.  These industry players spend significant money on marketing, encouraging people that are passionate about fitness, that they can make huge sums of money by becoming a certified personal trainer.  We all hear the stories about trainers charging $50-100 an hour training wealthy clients.  And yet, I have never met a personal trainer that is making a 6 figure income in their profession.  In fact, most make less than $50k a year, and the only reason many of them stay in the profession as long as they do is because of their passion for fitness.

But why don’t trainers make a 6 figure income?  What do I mean that their income is capped?  It is very simple really.  The fact is, the only thing a personal trainer sells is their time.  So when you multiply the number of hours a trainer generates revenue, byt the hourly rate he or she charges, you can easily come up with a weekly, monthly, or annual projected revenue.  Keep in mind that a typical trainer generally only bills out for about 50-60% of their available time.  This is because most clients want the same time slots, which is usually before and after work.  Often times you will find that in the middle of the day, trainers don’t have clients – and this usually when they will get their own workout in, have their meals, catch up on paperwork, or plan their next clients training sessions 9none of these tasks are billable).

So, there almost always comes a time in a trainer’s career when he or she realizes that they will probably never make much more money than they are making right now.  The trainer realizes that they have absolutely no leverage, and that their income level is capped, and that this is the way it was predetermined all along.  This can be a bit depressing for a personal trainer, realizing at this point that even though they considered themselves to be a business owner, they realize that in effect, they are really not that much different than an employee.  Oh sure, they may have a bit more control over their schedule than an employee, and they may make more money per hour too – but in reality, they are just “trading time for money”, which is no different than what a typical employee does.

I wouldn’t ever want to paint such a bleak picture about what I feel is a very necessary profession without providing some ideas about what a trainer can do to “give themselves a raise”.  So stay tuned for upcoming posts where I offer up some real practical tips about how to generate more income by leveraging your existing client relationships.  I think some of my tips will surprise you.  I’ll give you a hint, it has to do with generating more revenue in the same number of hours per week!

Categories Personal Training
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Q: How do I make more money?

by LRob65
December 1st, 2011

Curtis from Sacramento, California asks, “I’m a fairly successful personal training in the area.  I train out of a local gym and also out of my client’s homes.  I work 6 days a week and put in about 10 hours a day.  Even with what I feel like is a heavy client load (which has taken me 5 years to get to), I’m not making the kind of money I would like to.  Don’t get me wrong, I love what I do, but I thought by now I would be making really good money – and in reality, I can’t even afford to buy a house.  What can I do about my problem?  At this rate I’m just going to be working forever and not getting any further ahead.”

Curtis, I can’t tell you how many times I’ve heard personal trainers say they aren’t making the kind of money they thought they would be.  In fact, when I talk with personal trainers around the country, and they express this sentiment, I first try to find out how much they are making annually.  I just figured one person’s idea of “enough money” may be different than another’s.  Can you believe out of the dozens of personal trainers that I’ve asked this question – I have yet to find one that is making a 6 figure income?

I use the “6 figure income” reference because when I dig deeper and I ask them, how much money they would like to earn, it seems that more often than not, they feel like someone that works as hard as they do should be making $100k a year.  In fact, only once did a I meet a trainer that even comes close, making $78k last year.  Keep in mind though that he lives in the very expensive Upper East Side of Manhattan (which is where all of his clients live).  In fact, he has some clients on his list that are names you would know – so he is sort of an East Coast “trainer to the stars”!

So Curtis – if you are like most trainers that work out of a gym, you are paying the gym something for this priveledge.  Usually it is a % of revenue – I’ve heard figures as high as 50% and as low as 10%.  I’m going to assume you’re right in the middle at 30%.  So in effect, the client is willing to pay 30% more than what you are making to receive your services, and the gym owner pockets that 30%.  So one question to ask yourself is – what do I get from the gym owner for his 30% cut?  Well clearly, you are using his or her facility and equipment – and that has value.  Also, is the gym owner actively promoting you and finding you your new clients?  You are responsible 100% for client retention, but where are your new clients coming from?  If you’ve been in business 5 years, my guess is that your existing clients are referring most of your new ones.  Is that’s the case, then you really need to take a serious look at the 30% cut – what does it translate to in dollars?  For example, if the gym is billing out $50k on your services an then paying you 35k, then the cut translates to $15k per year.

The real question is, could you replace what the gym owner is providing you with for less than $15 a year if you were to open your own personal training studio?  It’s doubtful.  So what options do you have?  I am curious about the clients you say you train out of their homes.  It isn’t uncommon for wealthier individuals to have high quality fitness equipment in their homes and hire a trainer to come in and work with them there.  And since the relationship with them is direct, my guess is that you aren’t paying anyone a percentage or cut.  So do you maintain the same prices that the gym is charging?  I hope so!  I wonder, could you slowly start replacing your gym clients with “in home” clients?  If you were able to start to do this now, and once you reached a tipping point, maybe you could move to this arrangement exclusively.  Then the extra 30% could go in your pocket instead of the gym owner’s.  This would be something I would seriously look at in your case – it could be the answer to giving yourself a 30% raise!

In summary – look very closely at the numbers.  Compare and contrast the money you make from the gym clients against the money you make from the “at home” clients.  One or the other should emerge as the clear cut winner – my guess is it will be the home clients.  Remember, the only thing you have to sell is time – so the dollars per hour is what we’re looking at here (not total revenue).  If I am correct and the in home clients make you more dollars per hour, focus your business efforts fully in that direction – eventually to the exclusion of gym clients.

If you are a gym owner or personal trainer and you would like to see one of your questions answered here, please complete this form.  If I use your question on my site, I’ll provide you with a free 20 minute phone consultation so we can go into the answer in more detail!

Categories Personal Training, Revenue
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