Hard Work Doesn't Always Mean Big Money

Most gym owners work hard, long weeks, but still never make the money they deserve

By Anna Stills on iStock (image licensed by author).

Gym owners don’t fail because of work ethic. Most gym owners would say being in the business only fifty hours a week is a light load, almost like a vacation, compared to the often seven day a week, dawn to falling asleep in a chair at nine at night, kid in your lap, adventure these small businesses can be. Many gym owners have the same lament, I am working my muscular ass off yet I am still not making much money, what am I doing wrong?

What does kill so many of these gym businesses, and destroys the dreams of so many owners, is the inability to separate what is important for the growth of the business from what is just necessary to keep it going. In other words, most owners are so busy being busy that they are too busy to understand the difference between the things that make them money, and keep them in business, and the daily activities that blow up in your face and feel so important in the moment.

And there is a name for this. Owners who flatline in the fitness business, meaning they reach a peak where they merely survive instead of thrive, use what is called a Horizontal Management Style. This owner prides himself in getting everything done needing to be done each week. Yes, I did marketing. Yes, I managed staff. Yes, I trained clients for thirty hours a week. Yes, I did community things, managed pissed off clients, ordered supplies and finished the hundred other things that will keep this business going for another week. He did everything but make money.

Turn a sheet of paper from vertical to horizontal, then draw a line in the middle from left to right, or if you are a compass person, from east to west. In this management model, every task you have to do to run a business is on that line. Owners using this method work down the line, reacting to situations or doing a heavy load of training, and also doing all the other tasks the business needs to survive. Simply put, everything gets done, but the failure is every action on the line is of equal importance.

Most of us tend to gravitate towards what we are good at, meaning most gym owners get into the gym business because they love to train people, are usually competent at it, and swear I would lose all of my clients unless I train them personally.

So he or she does 30-50 hours a week as a trainer in their own gyms, then, using the Horizontal Management Style, does everything else needing to get done between training hours. Yes, it gets done, but is it effective and growing the business? I train, then I do marketing, I train then I handle a member complaint, I train, then I do staff training and I train, I train and I train some more. You got it all done, but you didn’t make any money this month.

Financial success in a gym has to be defined regionally. There are few numbers of comparison that work for a training gym in Iowa, one in New York, one in Southern Illinois and one in Orange County. A gym owner taking $75,000 a year out of a gym in Alabama is doing well. A gym owner in downtown Stamford, CT, taking out $75,000, is living in his momma’s basement.

That said, here are a few numbers you should consider to see how you are doing and if your management system is working? First of all, did you grow your business by a minimum of five percent over the same month last year? If you aren’t growing by five percent a year then you are dying. Secondly, and this is general in nature, but the big boy, big girl number to chase for most training gyms is $40,000 per month. This is usually enough to show profitability and to keep the business in business for another year.

The big number you are chasing these days is a million a year, or $83,000 a month. When I presented this number as the goal about ten years ago it was almost laughable, but even then there were training gyms hitting this goal, and now more are getting there each year.

This is based upon about 250-300 clients paying an average of $300 or more per month for either small group training or one-on-one, which brings up the average... numbers most any training gym can hit in most any market if you target the upper thirty percent of the population in your town by age and affluence.

So if the Horizontal Management Style doesn’t work, then what does? If we take that same piece of paper you drew the line on, turn it vertical, meaning you now have a line going north to south or from the top of the page to the bottom, you have what is called a Priority Based Management Style, where your day is governed by only focusing on what is important to grow the business and eliminating everything else, meaning you focus on what grows the business and let a minion do the rest.

How will I ever do this and still train people every day you moan? Well, you can’t. Perhaps the most important line in this articles is this one: You can train thirty hours a week and have a mediocre business, or you can train ten hours a week or less and have a financially successful business, but you can’t train full time and still have time to run a profitable business. Choose!

There is an exception to this statement and that is an owner who grows a successful business while not training daily, then goes back and trains again after he has created systems now run by staff members. In other works, this owner trains because she wants to, not because she has to.

Priority Based management means you assign a priority to all the tasks in the gym needing to be done, ranking them from most important for growth to less important, then you, the owner, focuses only on what is going to grow your business. Getting enough new leads, converting the leads to visits, converting the leads to trials, then converting the trials to new clients with an average payment of over $300 is the single most important thing you have to do in a gym and this should be ranked number one and at the top of that vertical line on your page.

Another way to say this is you can sell yourself out of most any financial nightmare you have in a gym, but few owners spend the majority of their time chasing new leads and working to add new clients. They are just too busy putting out fires every day to plant the new forest. Add new sales each month, usually about 8-10 needed for most every training gym, and average over $300 per client, and in about eighteen months you pass the magic threshold of $60,000 per month, and if you can get there you should arrive at $83,000 a month by the end of year two or so.

Most of you work hard, but few gym owners are able to prioritize well what has value to grow a business against the simple, yet never ending, daily work it takes to keep one going. Focus on growth, then develop a team to train the clients and handle the daily operations. The gym you save just might be your own.