What’s it like to be the owner of a CrossFit gym? Interview with an Affiliate Part 4

Posted on August 17, 2011 by Nicki | 4 Comments

Here is the 4th intstallment in a series of 5 anonymous interviews with current CrossFit Affiliate owners.  If you missed the earlier installments you can find each of them here: inteview 1, interview 2, interview 3.

How long have you been “open for business?”

2003 unofficial garage gym, 2006 official CF affiliate. What a glorious Mesozoic-like time it was in CF History.

How many hours do you typically work per week in/on your business?

Physical hours? 50-60 easy, but we have put in a few 24+ days for certain things. I always work or am present at the gym seven days a week. This is mainly because we are continually growing and pushing limits. Mental hours? I am constantly thinking about making improvements and tinkering with things. It’s really an issue sometimes.

I do have a wonderful team and flexibility in my schedule if I need it. If I wanted to go on a vision quest for like a month I have complete confidence everything would run 90% perfect.  It wasn’t always like this, but something that I have worked to achieve.

Did you leave another job to open your gym?  Are you making more or less money now?

I was in the military and got out because I wanted to, but not for CF.  While in the military I was “coaching” if we can call it that, but I didn’t really have a master plan when I got out.

I make less, but I have waaaay more flexibility, and the ability to proactively shape my life with my skills, which is something I value over stability.  I am optimistic that in a year or two I will make way more than I could have ever made in the military, but that really isn’t my #1 goal in life.

Is owning and running a gym different than you imagined? How so?

Honestly, and this may sound dumb considering how big we have grown,  but I really didn’t think about what running a gym would be like. I just kinda jumped into it.  That being said, owning a gym is very agreeable to most of my natural tendencies, but each new level of growth requires new skills and knowledge.

If I had thought about it perhaps I wouldn’t have guessed at:

  • The sacrifice of your fitness, heath, and training that generally happens because you are worrying about dumb stuff.
  • How a job is different then a hobby
  • How MBO slowly works to make me insane

Knowing what you know now, would you choose to do it again? Why or why not?

I would do it again. For sure. I have learned a ton about Coaching and due to the challenges that we have faced I have had to learn a ton about business. Compared to most CFs I am told that we are killing it. Additionally I have met and helped some of the coolest people I could have ever hoped to meet, and I have a couch to crash on probably on any continent in the world.

Why?

When you step back and think about it, helping people improve their lives is a pretty awesome job. If I am feeling like crap and then have to teach a class, all of that stress (bills, emails, etc) goes away because nobody wants a crabby coach! This is a huge perk.

Why Not perhaps?

It’s probably no different than most small businesses, but everything about running a great facility takes 2x more effort and 2x longer then you think.

If so what would you do differently?

I would have read this page as the partner thing didn’t quite work out for me.

I would get every last thing in writing if you have a partner, set and explain expectations, and don’t wait to have difficult talks.

I wouldn’t get loans (at least not way more then you need)!! Somebody is going to have to pay this back, even if you buy dumb stuff.

Don’t feel like you have to grow to larger and larger spots.

I would have moved to Columbus and started an equipment company in 2003.

What about your business frustrates you the most?

Many things have frustrated me, but currently it is my quest to pay down debt. This results in my taking a really low “salary,” especially when compared with other owners whose facilities are as large and profitable as we are.

By most measures of success that are evaluated: top coaches with excellent coaching skills, fun vibe, number and size of facilities, membership, etc etc we are way up there. But due to some dodgy business decisions a few years back and me deciding to work it out and not quit, we have had to work to become great just to barely get by.  We probably have a year or two to go at this then things will be golden.

I never got into this to make a ton of money, but financial stability is really the next thing for us, and it will take a lot off my plate.

What about your business brings you the most joy?

We have created an environment and culture that people will remember for the rest of their lives. Something that stands out and is memorable and legit. Most stuff in life is blah.

Reflecting back to when you opened would you consider yourself well-prepared for owning a business? What were your strengths and weaknesses?

Well prepared for business? No. Wired for business? Perhaps. I am a glutton for punishment and will spend all my time/energy/resources if need be to make something happen.  This trait is a double-edged sword for sure.

I doubt most people would take the risks, and put themselves in the positions of stress that I have. We have made some big moves that could have failed miserably. I also think I have a great attention to detail and am reasonably creative.

I am great at doing work and I would rather do something myself then watch it be done like shit by someone else. This leads to overload. Now that we have grown so big my boss skills have been put to the test and this is hard because I don’t really view myself as the “Boss.” But sometimes that is needed.

Did you have experience coaching prior to opening?

Not really, but I did grow up playing/completing in the sports that would make up most CF exercises.  Kind of weird really.

Aside from that I love the internet and books almost to a fault. Before this was my job I read Coaching articles on the internet everyday and read gems like this.

Do you feel you are sufficiently financially rewarded for the amount of time you’ve invested in your business?

No, but honestly the amount of money isn’t the problem for me.  I guess recently I have thought about getting a house or whatever and you need money for that.  My main problem is that I have well-surpassed every metric I can think of (size, membership, community awesomeness, monthly revenue) except my personal pay.  It is kinda like being really fast at every WOD, but when double unders come up you suck ass.

Do you see yourself doing this (owning/operating a microgym) 10 years from now?

Yes. Not knowing when enough is a enough we have opened up several more facilities. I really think that if I have the business skills down why should a coach have to take time away from learning about the Olympic lifts to learn about local tax laws? I would have loved to have had that.

As a current CrossFit affiliate, what are the benefits of affiliation as you see them?

The name. Which I feel some ownership of as we built the “CF” brand in our area big time, but I know I am not really an owner of the CF Brand.

In your estimation and in your particular circumstance are they worth the price?

Like the other interviews I pay $500 so that really isn’t that much. For our other place it is more, but even that really isn’t a lot.

How close is the nearest affiliate to your place of business.  How has this affected your business? 

2 blocks. Hasn’t affected us at all. If you can’t get enough members to pay the bills you should take a good hard look in the mirror instead of blaming someone else. I do know other places have price wars/member theft/general dumbassness, but I don’t have experience with that here.

What if any trends do you see among new affiliates?

It seems that it is way more stream lined now and people are opening that have less passion. Back in the day it seems you really had to look to find CF and that brought out some really bright and intelligent people. Those people still show up, but you just have to meet a lot more people looking at the business side now too. Sadly the people that know the least think they know the most.

And they are in no way stopped from starting a facility. I understand that I was given a big chance by getting a facility with little experience, but I think times have changed and a mentorship with more experienced owners would lead to better quality across the board and open peoples eyes to real word.

Would you consider yourself an introvert (you gain energy from having time alone) or extrovert (you gain energy from being around others)?

Introvert in my free time, but I have no problem public speaking, running 100 person classes/events, lecturing at a cert or chatting all day with members.  I gain energy at work, but love to have my own time. So maybe I have multiple personalities?

What advice or words of wisdom would you give to someone considering opening a microgym or similar fitness studio?

Coaching has to be the key. The better coach you are (Knowledge, communication skills, truly wanting people to get better) the longer runway you will have to figure out all the other stuff.  You probably don’t know how to teach something right now. Research it tonight and teach that this week for the warm up. Do that again and again.

Anything you do to get good at coaching needs to be applied also to business skills and research.  You don’t let people change out overhead squat because they don’t like them, so why don’t you just sack up and learn about taxes.

What is the hardest lesson you’ve had to learn?

Job =/= hobby. It’s slow, but at some point when you aren’t looking something changes. Its not necessarily less fun or enjoyable, but something changes.

 

Posted in Business, Clients, CrossFit Affiliates, fitness business
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On Ramp Revisited!

Posted on August 15, 2011 by Nicki | 2 Comments

It’s been 3 years since we held our first On Ramp workshop at NorCal and 2 years since I published the two-part series in The Performance Menu, detailing my case for entry points, specifically a beginner class or “On Ramp” to introduce new clients to CrossFit-style mixed modal training. During the past few weeks I’ve received several questions regarding the On Ramp so figured a little revisiting would be helpful for folks.

First, the concept for the On Ramp came about after a rocky initial start with our business.  In 2004 when we opened, the group training model was held up in CF land as THE way to run a business and we adopted it without hesitation.

The challenge in 2004 was that no one had ever heard the word CrossFit.  In fact the brand equity that CrossFit now has is due in large part to the growth of the affiliates.  Small affiliate gyms with passionate owners, opening up all over the country and ultimately the world, spreading the brand.

However, in rural Chico circa 2004 there was no brand.  And there certainly was no box in people’s heads for the type of training we were providing.  Folks were comparing our rates with globo gym rates despite the fact that we clearly were not a globo gym, we were providing quality coaching and instruction.  But still the distinction was not obvious and we were too new in town and didn’t have a network to pull from yet.  And when folks heard our prices and learned we did not have a swimming pool or showers…well, needless to say it was challenging.

First you stumble, then you find your way

We stumbled quite a bit early on.  We undervalued our services, we didn’t provide entry points or a client path, we lacked of a solid pricing structure and we lacked a way to run our back end (like MBO). By the end of 2005 we had grown our client base to around 70 clients but had only an average client billing of $65 per person.  We were easily covering overhead, but as coaches weren’t paying ourselves anything. And it wasn’t obvious how we were going to make this model work and pay our three owners anything that resembled a fair wage based on the number of hours that were being put in (Greg Everett of Catalyst Athletics was an early partner).

With some quick math it became obvious that by moving to a private training only model we could quickly be grossing what we were then grossing, and there was an easy path to actually paying ourselves! So beginning in January 2006 we moved to a private training only model. Quickly we were making more money than we had in the previous two years!

I am a big advocate for microgyms with group class based models to also offer private training.  I’ve talked about this before.  It can make a huge difference in a new gym’s profitability and it is a great way to develop trainers (you’ve got to be able to successfully coach 1 person at a time before you can coach 15 people at a time). That said a PT only model has its drawbacks, namely huge fluctuation and variability in revenue.  During the summer of 2007 we had several of our PT clients go on vacation, and one injured himself when he crashed his golf cart.  When your PT clients don’t show, you don’t get paid.  This is where the stability of the group class revenue is such a beautiful compliment in a microgym setting.

We decided to bring back group classes in October of 2007, but we did it very differently this time.  The first thing we did was sign up with MindBodyOnline.  I wanted an easy way to track member payments as well as track frequency of training/client visits. I think we were one of the first CF style gyms to use MBO.  I contacted them in September 2007 and we were up and running by the time we re-opened group classes in October.

Instead of opening up 5 classes per day I converted a group of 3 guys that I was training 1-on-3 into our first “class”.  It ran MWF at 6am.    These guys were stoked to be paying a group rate of $150 instead of their 1-on-3 rate of $360/each.  We slowly grew small groups like this and only added classes as made sense.

We also created an entry point to help ensure a base level of movement proficiency.  At that point our singular entry point was a requirement of 12 sessions of PT prior to entering a group.  This worked quite well, but with a requirement of 12 pt sessions we had a very slow entry into our groups and because of the higher pricing for 12 sessions of PT we had a high barrier to entry.  It was a consultation with Beverly Murphy at MBU in March of 2008 that made all the difference.  She said our PT requirement posed too high a barrier to entry…and had we thought about a beginner class as an alternate option? Can you say light bulb moment!

We took that feedback to heart and went back to NorCal and created the On Ramp program!  We now have 2 entry points: On Ramp or Private training.  Both are critical to our client path.  Many clients are seeking PT, and many are not appropriate for On Ramp without some PT first…both are revenue streams and both ensure our clients are well prepared prior to entering the group class environment.

Ok.  Enough of the history.  As many of you have asked “how do you set it up?”

Determine the days and times you will be holding the workshop (I like 3 days per week for 4 weeks) and start spreading the word in your gym.  Tell your existing members that you are starting a beginner workshop that will help prepare new members and encourage them to tell any friends, coworkers, family, etc who are interested in training.  You may even get some inexpensive postcards printed and hand those out to clients and ask them to pass out as well.

Decide on the max number of new clients you feel comfortable with, as well as the number of coaches that will be coaching.  At NorCal we cap our On Ramp classes at 10 clients and have 2 trainers coaching.  If your typical client is relatively young and healthy you might get a way with a single coach on 10 clients.  We tend to get a wide mix of both ages and aptitudes (mobility issues, etc) and find having two coaches makes for a more seamless running of the class.

Also, the On Ramp is a new client’s first exposure to our gym.  We look at the 12 sessions of the On Ramp as “our time to shine”. Whether or not a client chooses to sign up for ongoing classes beyond this first month rests largely on their experience in the On Ramp.  We feel that having two trainers coaching allows us to really put our best foot forward.  Here are a few key points:

1)   One coach can describe and explain what we are looking for with the movement while the other demos the movement.

2)   Getting equipment setup is easier with 2 coaches.  For example, one coach can be warming people up while the other is setting up racks and bars for the press or other skill introduction/review.

3)   2 coaches mean clients get more attention.  This is especially important when you have a few folks in the class with movement limitations.

4)   At the end of the workout one coach can run stopwatch and call out times while the other records times on the board

5)   Great dynamicism between coaches.  New clients get exposed to more than one of your coaches and are then more comfortable trying different class times.

6)   A second coach helps streamline the closing process at the end of the 12 sessions helping to get these 10 new folks signed up for ongoing classes.

4 sessions, 8 sessions or 12 sessions?

Many folks have modified the On Ramp and have either a 4 or 8 session intro class.  If you feel folks are adequately prepared to join your regular classes after 4 sessions then by all means.  For us 12 sessions allows us to accomplish several things:

1)   Introductory exposure to movements with multiple opportunities to review, especially the three key lifts: deadlift, press, and squat.  In my opinion one exposure to each of these lifts is not enough to have a new individual safely migrate into a larger group class.

2)   12 sessions spans a full month and with nutrition compliance folks will see body composition changes in addition to improving their baseline workout times.  These results are what sells your program and increases your conversion rate.

3)   12 sessions in a beginners group allows folks to bond with one another.  By the end they are asking each other what times they are planning on training in the Elements classes…they want to continue the relationship.

Success rate

Success rate is measured two ways.

First: How prepared are individuals exiting the On Ramp upon entering ongoing classes?  Do they feel well prepared and confident?

We constantly get feedback from new clients about how professional our coaches are and how pleased they were to not be thrown in the deep end.   Clients feel well taken care of and well prepared.  Their initial feelings of intimidation about starting a strength and conditioning program completely dissipate when they are in a safe environment of beginners with quality coaches.  If you can make a great impression and demonstrate the success of your program in 1 month you are far more likely to have folks who want to sign up for more!

Second: conversion rate.  How many folks sign up for ongoing classes at the conclusion of the On Ramp?

Occasionally you will get a 100% conversion rate, but if you average across 12 months of On Ramps most folks end up with somewhere around a 75% average conversion rate.  You should be tracking this.  After every On Ramp you run you should calculate your conversion rate.  Track this over time and always work to improve it.  This conversion rate, along with your attrition rate are the two largest factors (mathematically speaking) that control the growth of your gym and ultimately your profitability.

I know many of you are using the initial version of the NorCal On Ramp as a template in your business.  Please feel free to share your experiences and findings!

 

Posted in Business, Clients, CrossFit Affiliates, fitness business, MindBody Online, Trainers
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What’s it like to be the owner of a CrossFit gym? Interview with an Affiliate part 3

Posted on July 25, 2011 by Nicki | 27 Comments

 

Here is the third installment in a 5 part series of interviews with current CrossFit Affiliate owners.  If you missed the first two be sure to check out my introduction and Part 1 as well as Part 2.  Enjoy!

How long have you been “open for business?”

3 years.

How many hours do you typically work per week in/on your business?

I work about 80 hours a week.  About 30 of this is training time, and about 50 is “business time”.  To get everything done I need to get done would take about 100 hours a week.

Did you leave another job to open your gym?  Are you making more or less money now?

I had a pretty cushy but frustrating day job.  I was making a little over $100k per year, but wasn’t challenged (except with bureaucracy) and wasn’t very happy.

I kept my day job for the first year we were in business, working five days a week at my day job and 6 days a week at the gym.

I’m not making nearly as much now.

Is owning and running a gym different than you imagined? How so?

Training is the easy part.  Getting to interact with folks that want to work hard is great.

It’s dealing with what Mr. Al Swearengen collectively would call: The Cocksuckers from Yankton that causes one to wonder why they started a business (Crossfit or no).  These include but are not limited to those that would collect sales and income tax, mandate recycling plans, institute health codes, create idiotic accounting standards, idiotic bankers, worthless city officials, 99% of commercial realtors, people that want to sell you stuff, and people that generally want to take advantage of you.

Knowing what you know now, would you choose to do it again? Why or why not?

Probably not.  I think back to the simplicity that was my early days training at a Crossfit affiliate, having a comfy day job, being able to spend time with friends and family.

For the past three years I’ve barely seen or talked to my family, I see my pre-Crossfit friends maybe once every two months, and it’s been all I can do to keep my relationships together.

I work day in and day out constantly and while many of my clients know this, I still get the occasional “What do you do all day?” that frustrates the fuck out of me. Have you looked at the schedule asshole?  When’s the last time you didn’t see me at the gym?  Is that water bottle you left on the ground going to magically float itself into the garbage can?  No, I’m going to pick up after you.

No matter how much you love training, you will burn out if you don’t rest and find some work/life balance (which doesn’t mean work/drink balance).  The only issue is that most folks can’t survive or thrive without tossing most of their life out for the business.

I don’t really think this is Crossfit-business specific.  Talking to restaurant owners, architects, lawyers, software techs, etc, if you go out on your own you are going to work your ass off and stress out WAY more than you did when you got a paycheck.

If so what would you do differently?

I have no clue what I would do differently as I am dug deep into this lifestyle and profession.

What about your business frustrates you the most?

Assholes.  This would include anyone that thinks they are entitled to your time, money or property, which is mainly people in government and sometimes schmucks who just feel entitled.

Not to be confused with Asshole Clients – those self select out quickly.  Those that stay we push out quickly.

What about your business brings you the most joy?

Being a part of the excitement that comes with getting stronger and fitter.  Make no mistake, that feeling loses it’s potency over the years.  The first time you help a woman deadlift her bodyweight you’re on cloud nine.  However, the 1000th time you do it, she’s really super excited, and you’re just like “Meh….”.

Crossfit still attracts (mostly) people that want to work hard though.  That’s a great filter to have for your business.  While douchebags will creep into the mix every now and then, most are really salt of the earth type folks.  This goes for coaches and athletes alike.

Reflecting back to when you opened would you consider yourself well-prepared for owning a business? What were your strengths and weaknesses?

No, and I’ve never met a gym owner that was.  Every single Crossfit gym owner I’ve talked to is fatter, stressed out, and more tired then they were before they opened.  Most still love it, but they are beat to shit.

Now there’s something to be said for being beat to shit and still doing it.  I certainly look at my life before opening a gym and say “If I could have been this productive at my old job, the shit that I could have accomplished would have been amazing!”

And that’s the rub: you put out this much when you have to put out this much.  In my comfy day job which included poking on facebook and sending funny YouTube videos, I didn’t have a big downside.  Once you take away the lifeline that is the paycheck, shit gets real.  So you will do whatever you have to to survive.

But that’s more or less an aside.  The biggest things that you can do as a gym owner, and what I did passably well, was:

Keep the main thing the main thing: Training athletes.  Go ahead and fuck up the other stuff, because nothing is more important.

Never let them see you sweat.  This goes for athletes, coaches, realtors, bankers, etc.  For athletes, they pay you to train them and to have a good time doing it.  Nobody wants to train with a Jewish Mother, “Ohhhh, my job is so hard.”  You wear board shorts all day, stop complaining.

The plan never survives first enemy contact.  Everything you plan on doing will not work as planned.  Figure out when to push through and figure out when to change the plan.

Keep your place extremely clean and extremely organized.  This will make everything run smoother, attract clientele who will appreciate and pay for that, and dissuade slobs who can’t follow directions from training with you.

Delegate.  Everything that you don’t want to do, pay somebody else to do it.  Ideally this is a professional who does it for a living (Accounting, Bookkeeping, Real Estate, Legal, etc).  You will probably get fucked half the time you barter with clients.

Get a lawyer, do everything in writing, avoid partners if at all possible.  If you don’t, you will get fucked.

Don’t think that just because you’re successful you’re good or you have a clue what you’re talking about.  You might just be lucky.

Don’t use Mindbody Online (sorry Nicki….).

Did you have experience coaching prior to opening?

Very little.  I had a background in teaching, which helped a little, and I’m a giant extrovert, which helps a lot.  Introverts will get eaten alive in this job.

Do you feel you are sufficiently financially rewarded for the amount of time you’ve invested in your business?

No chance.  If you calculated my hourly wage (which I’ve done) I make less than minimum wage.

Do you see yourself doing this (owning/operating a microgym) 10 years from now?

Maybe, but if so it’ll be as someone that manages coaches and a facility, not athletes. Coaching athletes is great, but at some point you’ve got to shift focus if you want to continue to grow.

On the other hand, I have a “Grass is Always Greener” fantasy where I sell my big gym and open a garage gym.  I just train a few athletes a couple times a week and work out when I feel like it.

I call this my “Crossfit Avalon” business plan, because the same shit will happen as my big gym, but in my the fantasy land I created, everybody gets fitter, they pay on time, nobody gets tendonitis in their elbow, and nobody that wants to sell tshirts or protein powder knows my email address.

As a current CrossFit affiliate, what are the benefits of affiliation as you see them? In your estimation and in your particular circumstance are they worth the price?

Yes, absolutely.  Regardless of your opinion of which direction Crossfit is going, the info out there that was available when I started Crossfitting was unparallelled for the synergy (If you haven’t broken out your “Business Buzzword Bingo” sheet, now’s the time) of sophistication and digestibilty to a layman.

I could wrap my head around simple concepts like “Word-Class Fitness in 100 Words.” The early Crossfit Journal articles and early input on business practices from guys like Skip Chase blew my mind.

While I don’t program anything like Crossfit mainsite WODs, there’s still value in being affiliated.  I do a combination of Olympic lifting and gymnastics (very similar to what Robb talks about all the time) and have found my injury level and overall health have increased dramatically.  We do the same thing for our clients, but still give them the conditioning piece because that’s what attracts them at the outset.

I don’t know many people at the three, four, or five year mark in Crossfit that are still hitting it hard 3 on – 1 off and doing Hero WODs every few days.  I don’t know anybody that can do that.

Now maybe I’ll turn out to be wrong, maybe that’s what we need to do to get fitter.  But I look and feel pretty fit and still have some respectable benchmark WOD times, but I don’t need or want a 30 round Cindy.  The level of pain, suffering, and agony to get that isn’t worth it to me.

Maybe that means I’m a pussy, but I can live with that.

How close is the nearest affiliate to your place of business.  How has this affected your business?  

Pass.

What if any trends do you see among new affiliates?

Around here, it’s pretty much the same hit or miss type stuff. Folks make the same mistakes that we made (and I don’t know how to not make many of them).  There’s a mixture of technicians, yellers, doctrine thumpers, anti-doctrine thumpers, Slipknot fans, Ke$ha fans, etc.

The biggest trend I see is that inputs and outputs are very linear. The big things that will help/hinder you are:

Have your shit together.  Are you organized, punctual, and a hard worker?

Know your shit.  Do you have a steeping in both Crossfit and Strength & Conditioning?

Your shit does stink.  Do you think you know it all or do you think there’s probably another better way to do things?

Don’t be a shithead.  Be nice, be professional, charge what you’re worth.

Would you consider yourself an introvert (you gain energy from having time alone) or extrovert (you gain energy from being around others)?

See above.  Extrovert.  I will coach all day every day.  The only reason I don’t is because my wife would kill me.

What advice or words of wisdom would you give to someone considering opening a microgym or similar fitness studio?

Look at the area you are thinking about opening in.  In the military, this is called terrain analysis and this will affect everything.  You don’t fight a tank battle in the Hindu Kush – you also don’t open a large/expensive retail Crossfit in Bumfuck.

Figure out if there’s some small shred of demand and income – otherwise you’re going to spend a lot of time working out by yourself in a really nice facility.  You can’t change the terrain, so you have to change the plan.

What is the hardest lesson you’ve had to learn?

Get everything in writing via a lawyer.  90% of rules are made for 10% of the people. Most folks know what’s right and what’s wrong and have a basic level of etiquette.  Those 10% suck.

Posted in Business, Clients, CrossFit Affiliates, fitness business, Trainers
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The Economics of Performance, Health and Longevity

Posted on July 22, 2011 by Nicki | 11 Comments

Guest Post by my hubby:  Robb Wolf

Most folks that know me will not be surprised if I say “Hi, My name is Robb, I’m a geek.” My name is in fact Robb, and yes, I am a geek. Most folks (other than my wife) might be surprised if I say “Hi, I’m Robb, I’m super lazy.” Now, people might be surprised by this because I do a fair amount of blogging, podcasting, traveling, tweeting and facebooking. So, I am in fact doing a lot of stuff, but I’m lazy in that I’m always looking for the easier way. In economic or business terms I’m looking for ROI (return on investment). If you put $100K into investments, do you want 10% return or 15% return? 15% return seems pretty obvious, right? What if the ROI options are 10% and 15% but to get the 10% you can live a happy, healthy fulfilled life, but in order to get that 15% ROI you have to work so hard you are miserable, depressed, immune compromised and will likely shorten your life? How much shorter might that life be? Average lifespan in North America is about 75 years, so let’s say for you to get that 15% ROI your average lifespan will likely drop to 55-60 years. Does that give you pause? For most people it should, but the (possibly) interesting thing about this is that what I’m describing here is the difference between recreational athletics/ “fitness” (10% “easy” ROI) and ELITE performance (15% costly ROI).

There are a number of concepts that describe this process, perhaps the most popular is the “law of diminishing returns.” In athletic or fitness terms what this means is we can typically get reasonably “fit” or competent at a given activity with relatively low time and effort investment, but if we want to climb to the top and be “elite” it’s going to cost us. I’ve been thinking about these concepts for quite some time and wrote about it in the Performance Menu back in 2005   and did some blogging on the topic in 2007 . The basic idea is this: We can make decisions in life that will accentuate one of these 3 variables: Performance, Health & Longevity.

Performance is the ability to “do stuff”. This is NOT exclusively work capacity, as the Performance of many tasks requires a high degree of technicality, and virtually no work capacity. Olympic archery is a good example.

Health is the moment to moment likelihood that you will continue to live. Do you have cancer, low immunity or are so weak and compromised that if you trip and fall you will break a hip and die from the complications?

Longevity is simply Health, extrapolated over time.

Now it’s important to recognize that we can tweak how we live to alter probabilities of how Performance, Health and Longevity will manifest in our lives. If we practice severe calorie restriction with adequate nutrition (CRAN) we will increase our likelihood of living a long time (we have great data on this in animal studies ranging from fruit flies to primates) but our Performance will be terrible and interestingly, our Health may be impacted. Organisms undergoing CRAN cannot be exposed to significant temperature variations, injury or infection or they are actually MORE likely to die. Individuals practicing CRAN must severely limit potential stressors or they may actually die early, all while having terrible overall Performance due to low muscle mass and compromised fitness due to low calorie intake. Perhaps at the other end of the spectrum is the hard training, elite athlete that shortens lifespan and compromises health due to a blistering training volume, wear and tear and a large food intake. The net effect is a large oxidative load which damages DNA, and negatively alters both hormonal and immunological function. If we consider the Performance, Health and Longevity of our hunter-gatherer ancestors  we observe good levels of fitness (strength, muscle mass, endocrine & immune function) but certainly not ELITE performance levels as compared to modern top-tier athletes. Modern athletics literally pushes the envelope of human performance with the difference between 1st and 10th place often being fractions of seconds, kilograms or centimeters.

Ok, What the Hell does this have to do with me?

Running a gym for over 8 years I’ve observed many folks are not aware of the Law of Diminishing Returns nor the costs involved with going from “good” to “elite.” Let me qualify this a bit before I go on: If I’m approached by an athlete who WANTS to compete at a high level (I’m coaching folks at the Olympic Training Center, elite levels of MMA and world caliber level in their respective sports)  I keep in mind these ideas of Performance, Health and Longevity and I make recommendations to minimize the negative impacts of training load, stress and all that goes into elite performance, but at the end of the day the name of the game for these folks is WINNING. We run with training volumes and intensities, food amounts and types (maltodextrin shakes?) that I know are not great for the health and longevity of my athlete but are integral to optimizing Performance. 99% of my clients (and I’d guess most coaches and trainers clients) do not fall into this competitive athletics bracket.

Folks want to look good, have community and be challenged. What I see happening however is a tendency for coaches to prescribe “more” instead of Quality. Coaches lose site that folks can be just as excited by the acquisition of new skills (front levers, hand-stands etc.) as improvements in mixed modal metabolic work IF we create a culture that VALUES skill based work, periodization and planning.  Even if people want to compete in something like the CrossFit Games (which is certainly pushing the limits of human performance…with all the potential downsides we see in other sports) we can tackle programming in such as way that minimizes burnout and actually optimizes performance. Strength and technical work should make up the lions share of training for most of the year with capacity being maintained/expanded by alterations in Accumulation phases and Intensification phases followed by Competition and Recovery phases.

See work by Siff, Zastiorski and  Verkoshanski for concepts of block periodization and athletic peaking. I’d also recommend reading what OPT has written on the differences between Training and Testing.

The role of the coach or trainer is always to support the client in his or her chosen endeavor, but it’s helpful (Ethical? Moral?) to also remind clients of the inherent costs of climbing the ladder of Elite performance. This may seem like a stifling, kill-joy type attitude and if you are an Uber-elite coach who only deals with folks endeavoring to be world champions then ignore this whole post, but when you see clients who have made remarkable progress in your program begin to burn out because the only metric of progress is another 5 seconds taken off their “Rosanne” WOD, you as a coach are likely going to lose that client and all the hard work, transformation and history they bring to the table. Not all businesses can be run as a Ponzi Scheme and at some point, if you want to be successful AND do right by your clients, you need to create a culture that allows for progress to be measured (and celebrated) in different ways.

This idea of balancing Performance, Health and Longevity is actually much of the driver behind the curriculum we offer at NorCal Strength & Conditioning. We offer:

1-The OnRamp! This is initial iteration of the beginner’s class developed by my wife, which was published originally in the Performance Menu and given away for FREE to help the community of gyms that we used to be a part of.  May a thousand desert fleas inhabit the nether regions of the folks who have published a plagiarized version of this curiculum. Fracking Wankers.

2-Elements- The class most folks graduate into after completion of the OnRamp! or personal training. Strength work is combined with metabolic conditioning, but only a limited skill set is introduced to ensure safety and proper athletic progression. “Scaling” is a limp-weenied approach to coaching vs PROGRESSION.

3-Level 1- Similar to the Elements class but requires completion of various skills and achievement of performance benchmarks.

4-Level 2- This is a highly technical class with an emphasis on strength work and gymnastics. Some Metabolic work occurs, but it is of a short and highly technical nature (this is a fun recent WO: 3 muscle ups with full turn out at top & bottom, NO KIP, 5 OHS with body weight, handstand walk 30 feet, rounds in 12 min.)

5-Strength Class- This is a block-periodized class that runs in 8 week increments. Volume and intensity are varied over the course of the training, appropriate de-laoding is prescribed to optimize peaking. After the testing week the class does not meet for 1-2 weeks to allow for recovery, then a new block of programming is introduced. PR’s abound.

6-LIFT (a terrible name, Low Intensity Functional Training) This class offers a mix of strength work and metabolic work but no names go on the board, no specific time is prescribed for the WO. A coach takes folks through a typical warm-up, then describes the elements to be trained that day. Perhaps it is DL’s, rope climbs and 50M sprints. After a form review folks begin working their way through the WO, perhaps they perform 3 reps of DL at 75-80% of 1RM. They then work a rope climb (with or without feet based on strength & skill level) then they will walk to the end of a 50M course, and sprint to the other end. That’s one round…but no one cares because we are not keeping track. The class is about fun, community and getting some work done. When you remove the competitive element form errors magically resolve because people are not worried about being “beat”, they are concerned about doing it right. This is our fastest growing class and everyone from beginners to seasoned veterans love it. Men will indeed “Die for points” and not surprisingly they will also ignore coaching and safety at the same time. LIFT addresses this issue while allowing folks to get an outstanding workout.

7-Personal training. Many gyms do not offer this service…you are leaving money on the table if you do not, but what do I know?

This is the current incarnation of our gym, it will likely grow and modify over time but it is again an outgrowth of wanting to be both financially successful AND to do good by our clients. The Performance, Health & Longevity orientation combined with Dave Werner’s Athletic Skill Standards has driven our development and I’d say it’s been pretty damn successful thus far. A wisely constructed program really does offer amazing ROI and I believe optimizes not only Performance, Health and Longevity but also profitability. Perhaps this will be the 5th component of fitness “being profitable so you can remain in business and continue to help people…”

 

 

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What’s it like to be the owner of a CrossFit gym? Interview with an Affiliate part 2

Posted on July 18, 2011 by Nicki | 5 Comments

Here is the second installment in a 5 part series of interviews with current CrossFit affiliate owners.  If you missed my preable to the series and Interview number 1 you can find that here.

Interview with an Affiliate part 2

How long have you been “open for business?” 

We began Coaching in 2002 after departing the Military and Affiliated early on in late 2005 early 2006 as one of the first few CrossFit Affiliates.

How many hours do you typically work per week in/on your business?  

I just added these up the other day at dinner and found that I still am averaging 60-hour weeks.  That’s a toss between ALL aspects of the Affiliate from actually coaching the classes, working with one-on-ones, or running day-to-day operations.

Did you leave another job to open your gym?  Are you making more or less money now? 

I left a job as a personal trainer at another local fitness chain, but I am definitely making more money now than the hour-to-hour client-to-client.  The “house” took a big chunk of the hourly rate and 1099ed us.  In the end, the “house” won.

Is owning and running a gym different than you imagined? How so?

Owning/running the Affiliate is exactly what I had imagined.  I knew in advance that there would be more required on the back end; moreover, the recruitment of new clients, training of staff, maintenance/cleaning the facility, repairing/ordering new equipment, city meetings, neighbor relations, PR Campaigns, website/blog/facebook/newsletter design, media kits, apparel design and sales, extracurricular events and of course retention of clients is a business all to itself.

Knowing what you know now, would you choose to do it again? Why or why not? 

Absolutely…I would just go about it a completely different way.

We spent the first two years piecing together equipment as we grew.  Finding gear here, finding gear there.  Now you have companies like Rogue where $100,000 worth of gear can be spent in 15 minutes.  Upon the arrival of all the gear you are set in one purchase.  It seems just much easier today to stand-up an Affiliate than it was even 4 years ago.

If so what would you do differently? 

I would NOT hire from within.  Whether or not that model has worked for your readers it has not proven sufficient for me.  I don’t care what Glassman has said about it…it simply does not translate into immediate professionals.  Clients take easily a year if not more to respect properly another client turned Intern turned Assistant turned Coach.  It just makes much more sense to properly hire a dedicated staff that includes Coaches and Office Assistants.

What about your business frustrates you the most?

The part that frustrates me the most is simply the small percentage of our clients that are just on auto-pilot.  They take zero responsibility for their existence and decisions, and no matter what the Staff does to help motivate them they seem to just “get by.”  Luckily we’ve just gotten to the point where we’d rather see negative clients just leave before they drag the others down.

What about your business brings you the most joy? 

It would indeed be the complete opposite of the previous question.  Our clients that excel almost of their own accord.  They “get it” almost right away and are seen as leaders even among normal group classes.  It’s wonderfully refreshing to see that type of charismatic energy to help balance out the others.

Reflecting back to when you opened would you consider yourself well-prepared for owning a business? What were your strengths and weaknesses?

Reflecting back to Day 1, I can say that I was well prepared to asses my clients, help them develop a set of goals, help to develop a training program to drive them towards success, and of course monitor and adjust the training as we progressed.  BUT…I was not well-prepared for all the “other” stuff that came along with it.  I was very happy to have a business partner that I could rely on.

Did you have experience coaching prior to opening? 

Yes, I had completed multiple schools in the Military that stressed both small unit leadership in stressful environments as well as technical and tactical proficiency that led to numerous leadership positions.  As well, I completed multiple academic courses in both medical and physical fitness curriculum that led to my ability to coach and train clients and small group classes as a civilian for a few years prior.  As well, I had coached at the interscholastic level in four different sports.

Do you feel you are sufficiently financially rewarded for the amount of time you’ve invested in your business? 

Depending on how one defines “sufficiently rewarded” I would say that yes I am…but I may not be in comparison to other Affiliate owners.  I don’t own my building.  I rent a nice home, but don’t own.  The bills are paid, and I’m helping put my fiance through school.  We eat well, train hard, but don’t take extravagant vacations.  My career still “owns me” as I know I can’t take more than a week off at a time…but that is changing.  I am in no hurry to retire, but know that it won’t be any time soon.

Do you see yourself doing this (owning/operating a microgym) 10 years from now? 

Yes, although the capacity with which I operate it may not be the same.

As a current CrossFit affiliate, what are the benefits of affiliation as you see them? In your estimation and in your particular circumstance are they worth the price?

For the last few years the benefits have simply been the name.  We pay $500 a year and have easily made the ROI worth it.  As CF has become more and more popular the overall quality of the brand has indeed been diluted.  I was the first of 3 in our entire County, of which now we’re closing in on 50.  That’s correct…50!  And as you all well know, no one Affiliate is the same.  That means that there are at least 50 different flavors of a similar thing.  Good you think?  I think not.  The consumer today is a heck of a lot more confused as to “what” CrossFit is from box-to-box.  I have had numerous clients come from other boxes expecting “HERO” WODS and other 45 min. plus WODS every day…when they get here they do not understand why our training is both not mainsite and/or why it has a different approach.

How close is the nearest affiliate to your place of business.  How has this affected your business?  

Straight-line distance there is an Affiliate 160m away.  If you “run” around the blocks we exist on each other’s warm-up loops.  These were Level 1 Instructors that either quit our box or I fired from our box.  Little did I know that prior to the quitting and firing that they had plans to Affiliate together with another couple from my box.  Its not only affected my business, but I really made the clients feel as though they needed to “pick sides” as if this was a childish game of dodgeball.  In the end, their extra-low entry level prices, deep discounts to our existing members, and low-ball business strategies have made them look even more unprofessional than the original back-alley deals to jump ship.

What if any trends do you see among new affiliates?  

I see an alarmingly scary trend to “Crossfit” their clients into the ground.  In a recent observance of the two newest Affiliates, I’ve seen both program multiple week long sessions of 45 min+. “chipper” sessions back-to-back…how in the world can anyone even recover from this nonsense training.  I added up the volume per week and its seriously in the 1000+rep range…every week for no less than 3 weeks.  Really?

Would you consider yourself an introvert (you gain energy from having time alone) or extrovert (you gain energy from being around others)? 

Serious extrovert…I lead from the front.  I do what I say, and say what I do.  I can’t imagine being a lead Coach/owner of an Affiliate that is anything but.

What advice or words of wisdom would you give to someone considering opening a microgym or similar fitness studio? 

Simply put…Find a successful mentor and ask questions.  Then shut-up and listen.  If they are successful it’s because they have made all the mistakes that you will make, and they have learned from them already.

What is the hardest lesson you’ve had to learn? 

The hardest lesson has been the ability to pick and build my team that I surround myself with daily.  I was WAY too naive in the first round of my business and got burned by those I thought were friends and colleagues.  Who I am today though has been a consistent development and those lessons learned have created a better Coach in me.

 

Posted in Clients, CrossFit Affiliates, fitness business, Trainers
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What’s it like to be the owner of a CrossFit gym? Interview with an Affiliate Part 1

Posted on July 12, 2011 by Nicki | 16 Comments

As CrossFit has grown, so has the number of folks securing “CrossFit Anytown” domain names and rushing to open their doors.  I have had a few frustrating consultations with folks who have been training CF (as in themselves doing the main page workouts) for less than 6 months, yet they were ready to open an affiliate…NOW!

I get the sense of urgency…let’s face it, the microgym trend is burgeoning.  And I get that folks want on the bandwagon sooner than later.  But I’m not convinced folks are doing their due diligence and as a consequence many are suffering more than they should.  A friend of mine in a small Oregon community commented to me on the phone that there have been 2 or 3 well funded (in his estimation to the tune of $100K each) CF affiliates open in his town that have survived less than a year.

There are also numerous examples of urban areas with upwards of 15 affiliates within a 15 mile radius with new gyms opening sometimes 800 yards from an existing gym. Inevitably the new folks (usually with very little experience working with clients) get the “brilliant” idea to offer unlimited group training for $80/month (or something significantly less expensive than the current market to try to snake clients from existing gyms.  These “brilliant” folks are brand spanking new to the industry and have done back of the envelope calculations at best…which by the way are NEVER sufficient, and don’t realize the true margins (skinny margins) involved with running a service based business.

A year later they have a gym full of folks, but are barely covering their overhead let alone are they able to have a reasonable standard of living…this is when the light bulb goes off and they realize their brilliant pricing plan wasn’t so fab afterall. Not only did their pricing plan affect their own bottom line, but the bottom line of those around them.

Now it is not my intention to dissuade ambitious would-be entrepreneurs from opening their dream gym. Instead I am wanting to shed some light on what is really involved in running a successful microgym and encourage you to take your time, gain the necessary experience and do it right.

I have asked 5 microgym owners, all current CrossFit affiliates, to respond to a series of questions about being in the microgym business. I am purposely not revealing the identities of these folks for a number of reasons.  First, I want you all to benefit from honest, tell-it-like-it-is, unfiltered responses.  And second, I wanted to provide these folks the opportunity to be as thorough and candid as they liked without having to answer to any questions that may arise from clients, staff, or HQ members that may read this.  We all know that the internet can be a crazy place.  So with the spirit of anonymity 5 prominent CF gym owners are allowing you into their minds, hearts, and their businesses.

This first interview is an affiliate owned and operated by a husband and wife team.  I would surmise that somewhere between 30-50% of all microgyms are comprised of husband/wife or boyfriend/girlfriend teams, which from personal experience I can say can be both rewarding and frustrating at times  :)

As they each have different roles in the business and different viewpoints, both have generously offered their responses. Read on.

How long have you been “open for business?”

Wife:

4.5 years

Hubby:

We affiliated in 2007. Doors officially opened to the public a few months later once we had worked out a few bugs and continued to get the space ready. We had a lot of personal stress unrelated to the business at the time as well, so it was a bit more hectic than normal.

How many hours do you typically work per week in/on your business?

Wife:

For the first 3 years about 60-80, now about 40-50.

Hubby:

When aren’t we working in some capacity we are either sitting in front of the TV in the evening, doing back end computer work, working in the office at one of the gyms or running classes on the floor. If you were to add up actual work, I’d say between 60-80 hours a week, just depending on what is going on.  The good part is that it is not a set 9-5 job. We work when we need to work, and play when we want to play. IMO, the hard work is worth the freedom that comes with owning your own business.

Did you leave another job to open your gym?  Are you making more or less money now?

Wife:

No, was already in the fitness business, finally making the same amount – took about 4 years.

Hubby:

I had always dreamed of “dropping out” of my corporate gig, but didn’t see it as realistic as it was a steady stream of great income and the gym just wouldn’t support us. My perspective on things changed after a serious illness, so it really became a goal of mine to drop out. Finally, in June of 09 it was time. So, I walked away from the money and the perks to help the gym grow. Definitely making less money now.

Is owning and running a gym different than you imagined? How so?

Wife:

No, I already had a pretty good idea of what I was getting into as I was already in the business.  Only thing I didn’t expect was the stress from the growth of CrossFit.  I decided to go with CF because the program exuded honor, integrity and always doing the right thing.  It was also something different.  The business I was in was turning into step-aerobics with one on every corner.  I never imagined CF would become similar.

Hubby:

I don’t think it is much different than what we thought. Maybe the amount of work it takes to keep it well oiled was a bit more than expected.

Knowing what you know now, would you choose to do it again? Why or why not?

Wife:

Probably not.  The stress of worrying another CF could and does open down the street from you is really tough.  I am all for the open market, but not having some territory restrictions is really tough when you sink your life savings into something.  Please keep in mind I am a little jaded as I answer these questions because a 4th CF gym just opened within 1/2 mile of our location.  It just makes your stomach sink.

Hubby:

Yes, I would consider doing it again. The pros have outweighed the cons.

If so what would you do differently?

Wife:

To do it again I would have more training in backend system operations so our backend was set up right from the beginning.  We started out using a basic excel sheet to track clients.  Nightmare.

Hubby:

Different knowing what we know now? I think we’d definitely have started things out on our own with no partners- or at least spent the $ and gotten lawyers involved to set up the operating agreement and exit plan. I think we would have also started things out with a tight structure like we have now. In the early days, we had no real sign in system, class times were just a “suggestion”, etc. When you are small, it is easy to get away with that stuff. But, as you grow and need to make changes those changes are much harder to make later. I enjoy sitting back and watching all the new CF affiliates that are opening on every corner in our town make the same mistakes. It amuses me.

What about your business frustrates you the most?

Wife:

When clients cancel over a $10 savings from the new CF down the street.

Hubby:

What frustrates me the most is probably the disloyalty and entitled nature of so many people. Finding things like broken equipment hidden in the corner, folks not paying the honor box for their tape and the constant stream of folks trying to beat us up on our price and not respecting our time.  That is a constant battle. Especially now that CF is so well known now and there are probably 10 affiliates within a 3 mile radius.  I find that a good number of our new clients are folks that are shopping CF gyms and trying to leverage one against the other. We don’t budge. The new guys do.

What about your business brings you the most joy?

Wife:

I love business, so I really enjoy watching our business grow and become a success.  I love simplifying and improving systems so our clients have a better experience.  Happy clients = happy business.

Hubby:

Getting that low maintenance client that actually complies with the advice they are given and watching them succeed. I really like working with the new folks and those who have never done anything athletic in their life. It makes me happy when folks are doing things they never thought they could do.

Reflecting back to when you opened would you consider yourself well-prepared for owning a business? What were your strengths and weaknesses?

Wife:

Strengths: Good & motivating trainer, got great results with clients.  Clients liked me and came back for more.  Good at thinking of all the details necessary to open and run a gym.Good project manager.  Eventually good at delegating! Weaknesses: no clue on how to run backend systems, poor accounting skills.

Hubby:

I think we were well prepared. Before starting, we worked with a group (former partners) that had been in the business for some time learning the ropes. They turned out to be very poor friends & partners, but still a good learning experience. I studied business in college and had been running kind of a business inside of a business for years- so I already knew the basics of business, which I think has been a huge advantage for us. Most folks I see opening gyms these days are 24 year old dummies who just want to be able to hang around a gym all day.

Did you have experience coaching prior to opening?

Wife:

Yes.

Hubby:

Yes, we both had a couple years of training before starting our gym. We also had a year of CrossFitting under another affiliate. At that time, that existing affiliate was a tiny hole in the wall and the owner there really groomed us to be CF trainers. So, yes, we had good experience coming into it.

Do you feel you are sufficiently financially rewarded for the amount of time you’ve invested in your business?

Wife:

Now, yes, but not initially.

Hubby:

Sometimes. I’m always honored when someone is willing to use their disposable income using our services- but at the end of a super long week or month I always wonder if it is worth it. Sometimes it seems like it would be easier to go back to my old job. But, that thought quickly fades. :o )

Do you see yourself doing this (owning/operating a microgym) 10 years from now?

Wife:

Perhaps a minority owner, reaping the rewards of what we have built.  But not involved in day to day operations – definitely not.

Hubby:

In 10 years I’ll be 51 years old. I certainly don’t see myself working in this capacity then. I won’t be surprised if I am associated with this type of thing in some capacity- but doubt I’ll have the energy and drive to deal with all the individuals like I do now. I’ll be bitter if I do.

As a current CrossFit affiliate, what are the benefits of affiliation as you see them? In your estimation and in your particular circumstance are they worth the price?

Wife:

Price-wise I don’t mind the affiliation fee.  The CrossFit name is certainly helpful for bringing in clients, but we have never benefited from our listing on the CrossFit main page.  All of our clients come from our local marketing efforts or word of mouth, especially initially.  No one knew what CF was around here until a couple of years ago. They came because our clients were walking billboards.

Hubby:

Hmmm- this is an interesting one. For us, yes, I think it is worth the $. We only pay $500/year for our affiliation. With the word “Crossfit” becoming so popular, it is worth it for us being able to use that term. That being said, not very many folks find us from the main page. The vast majority of our business is word of mouth and those in the local area who Google search for “Crossfit in our city”. For new folks, I think it would be a tough decision. I believe it is $3000/year now to affiliate?  I’m a true believer in what Glassman has put together as a program and I have no problem being affiliated with it. But, I don’t really care for where “the scene” has gone. We are one of the quiet affiliates and do our own thing.

How close is the nearest affiliate to your place of business.  How has this affected your business?  

Wife:

We have 4 that have opened after us within 1/4-1/2 mile.  We initially lose people because every new affiliate thinks it is a good idea to undercut our price. It is hilarious to look at their websites.  Not only do they copy our pricing structures, they copy the language and sometimes even the look of our site. Eventually the affiliate learns they cannot survive on their pricing structure, flip out and charge more than we do.  We get all our folks back then.  Sometimes we don’t let them back depending on how they left.  We put a lot into our clients, we like loyalty.

Hubby:

We have MULTIPLE affiliates within a very small area in our city. At last count there are 11 other affiliates within a 3 mile radius from our location. I wouldn’t say it has affected our business too terribly much- just extremely frustrating. Usually, when a new affiliate opens up nearby, we’ll see a slowdown in new clients for a bit because of the new kid’s pricing. We will sometimes lose just a handful of current clients. After a few months, some of those clients will be back. Being one of the original affiliates in this city helps us out. Also, we have a good reputation in the community. I’d say there is a benefit of nearby competition though. It keeps everyone on their toes.

What if any trends do you see among new affiliates?

Wife:

Undercutting the going rate.  They are almost always young guys with no clue on how to run a business.  They don’t make $$ initially and make every mistake in the book.  It is almost comical to watch anymore.  They either reach out to us by coming in unannounced and ask us every question in the book on our gym (usually about equipment) while we are trying to work, or they open unannounced and aren’t friendly the way the early affiliates used to be.  Folks wanting to open an affiliate: if you want to ask a current owner questions, do something for them.  Don’t just drain them dry with your questions and waste their time.  They are BUSY.  Take them out to eat, get them a gift certificate, clean their gym.  You are more likely to learn something if you are respectful of their time and are courteous.  Make an appt!!

Hubby:

The trends I see with new affiliates are the same trends I am seeing with CF big picture. For every new affiliate I’ve seen open up, it is all about The Games, constant CF competitions in the area, Loads of vanity. Another trend I’m seeing is with the seemingly under the radar way these new affiliates are popping up. We have had 2 within 3/4 of a mile open up from our location and we have absolutely no clue who the owners are. They have never been in our gym. Which is fine by me. We are just seeing more and more of this and it leads to mistrust and some funky biz practices.  The other trend I see in the not too distant future with CrossFit is its further commoditization. Right now, it is all micro gyms who for the most part have true owner involvement and take pride in their clients and their training. At some point, at least in large metropolitan areas like where we are, someone will come in who is SUPER well funded and lease out a closed down grocery store or something and just run a CF mill at a rock bottom price.  There are already two big box type gyms with CF programs within them now here. It’s just a matter of time.  

Would you consider yourself an introvert (you gain energy from having time alone) or extrovert (you gain energy from being around others)?

Wife:

Both.  I need both.  In the beginning, I leaned more towards extrovert.  As I have gotten into this, clients do wear on me and I need my alone time.  As an owner you wear many hats, one of the heaviest is therapist.

Hubby:

Both. I thrive on being around folks with good energy and love getting in the mix. However, I have become more and more a private person so I really like my alone time and when I want to be there- I don’t really enjoy people- especially semi strangers. I’m over the small talk thing.  I’d say when we first started out, I was a full on extrovert.

What advice or words of wisdom would you give to someone considering opening a microgym or similar fitness studio?

Wife:

Make sure you fully understand what it will cost to run your gym.  Believe it or not, chalk is expensive.  So is water, electricity, equipment, janitorial services, build-out, gas, water, rent, city licenses, city, county and federal taxes, ADA compliance, water fountain or water bottles, toilet paper, paper towels, cleaning supplies, training your instructors – very expensive from a financial and time standpoint, bringing in new clients – from marketing, training and retaining them – incredibly expensive.

Hubby:

Buckle up. It ain’t all roses. Be prepared to spend double the time on the back end that you do training. No matter the temptation, stick to your guns. Don’t let yourself get slim shady.

What is the hardest lesson you’ve had to learn?

Wife:

Get all contracts in writing with a lawyer’s help.  Even with friends….especially with friends.

Hubby:

We had partners without lawyer written operating and exit plans. Many times these relationships end badly and it is best to figure out how you are going to walk away from it while everyone is friendly and civil.

 

 

 

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Are You Tracking Client Visits?

Posted on July 6, 2011 by Nicki | 2 Comments

I recently decided to explore the world of yoga and signed up for a month of unlimited classes at a local studio.  With numerous software programs tailored to small fitness businesses, including yoga studios, I was surprised when after paying I was instructed how to “sign in” to each class I attended…with pen and paper!

Sure enough there was a printed sign in sheet with room for about 40 names.  I was told to print my name and then told I could use the box next to my name to help me keep track of what class number I was on.  As I had purchased a month of unlimited classes this wouldn’t apply to me, but had I instead purchased a 10 class package this section was where I was to designate 3 of 10, etc…just to help me keep track. (I am hoping they have some other system on their back end to officially track this and that they aren’t solely relying on the accuracy of their members’ memory!)

This studio and the classes I have taken so far have been great.  It’s supremely clean, the instructors are knowledgeable, but I have to admit to thinking their operations are somewhat archaic.  With readily available and affordable software like Mindbody Online, Zenplanner and others, checking your clients into classes and tracking client visit histories is so easy it seems silly to not use them to simplify your operations.  Not to mention utilizing client visit history reports can mean the difference between keeping and losing several members each month!

Frequently I’ll have someone say to me, “I don’t need keytags or worry about checking clients in because all of my clients are unlimited and can come however often they want.  So I don’t need to track how many days a week they are coming.”

To this I say BOLLOCKS! You STILL need to track visit history.  Here are two simple reasons why check in data is imperative!

1)   If you aren’t tracking client visits you likely have no systematic way to run a last visit report to see who hasn’t been into your gym or studio in over a week.  If you’re a small operation you might just “know” this…you haven’t seen Bill in a week so you give him a call.  But as soon as you grow beyond yourself as the coach/trainer/instructor you will need a more foolproof way to check in with missing clients.  It’s much easier to keep an existing client than to gain a new one.  Reaching out to folks who’ve fallen off the wagon for whatever reason will keep your clients progressing, help minimize attrition and show them you actually care whether they are in your gym or not.

2)   Tracking client visits gives you important information that you can use to make decisions on pricing and program offerings.  Let’s say you are a gym that only offers Unlimited pricing.  And then let’s say you are mulling over your 5% attrition rate and notice that several of the folks who are leaving this month where only coming 2 days per week.  You could utilize this information to create a limited membership (2 days per week in this case) that might more closely match these individuals’ schedules and pocketbooks, with the end result being you RETAIN these clients. If you aren’t tracking check ins you have no way of accessing this information and adjusting to members needs.

Oh, and if you are tracking check ins, but not using them to generate last visit reports it’s time to start!  Make it a weekly task…you’ll notice an immediate effect on your attrition rate and your clients will thank you…literally thank you, for keeping them accountable and encouraging them to get their fanny back in the gym.

 

 

Posted in Business, Clients, CrossFit Affiliates, fitness business, MindBody Online
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Are you offering too many classes?

Posted on May 11, 2011 by Nicki | Leave a comment

I talk to a lot of CrossFit affiliates in their first year of business who are offering upwards of 20 classes per week, yet don’t have the enrollment to merit that number of classes, many of them with only 1 or 2 people in attendance.

It’s a common desire in the beginning to have enough classes on the schedule to accommodate every time slot that a person might want.  You might think that the more classes you offer the more folks are likely to sign up. There are definitely plusses to having a large class offering, but there are also opportunity costs (and labor costs) that should be considered.

As a start up microgym your first priority is to cover overhead.  That typically means as the owner/trainer you are not paying yourself for the classes that you coach.  Every dollar of each client’s membership is going straight to rent, utilities, equipment, insurance, etc, etc.  You aren’t able to pay yourself yet, but you know that will come with time.  But here’s the thing: The fact that you aren’t yet paying labor on your classes makes it seem like a no brainer to offer several per day…. but you should look at your business as if you actually HAD to pay labor. You should know each month what it really costs to operate.

Let’s take a peek at some opportunity costs

What else could you be doing with some of those hours?

You as the owner/trainer are likely doing most or all of the coaching at this point.  You might have somewhere between 20-50 clients and you are spending between 20-25 hours coaching classes.  That leaves the remaining hours of your 40 hour workweek (although let’s face it as a new business owner you are working FAR MORE than 40 hours) to do things like clean the bathrooms, mop the floors, return client inquiry phone calls and emails, pay bills, update your blog, write programming, run to Costco for supplies, etc.

It quickly becomes important to be very protective of your time.  You have a lot of hats to wear in the beginning.  And depending on the amount of operating capital you have saved prior to opening your doors you have a very finite amount of time to get the business up and running and paying you.

This is where being smart about group class offerings can open up time slots for you to offer small group training.  A private training session with 1 or 2-3 folks will provide a greater dollar per hour for you as the coach as well as the gym for return on space, compared to a class with only 1 or 2 people in attendance. For many gyms offering private training in addition to group classes provides the income cushion to get them through the sticky financial points of building and growing a business.  You simply can’t afford to leave the PT money on the table.

A group class with only 1 or 2 people attending is essentially a private session where the gym will gross anywhere from $8-$20 (or less or more depending on what you are charging, how frequently the client is training and therefore the average per class rate for the client) whereas a private session, either 1-on-1 or 1-on-2 will gross the gym anywhere from $50-$120, again depending on your rates, with the trainer earning somewhere between 45-70% of that and the gym netting far more than it would gross with the 1 or 2 folks showing up for that class hour.

When you are starting out you want to offer a couple of key classes at the prime times.  For example, MWF at 6pm and maybe Tues/Thurs at 6am to start.  Have your On Ramps or beginner’s classes either precede or follow these times.  As you grow you can open up classes individually.  This is key!  You don’t need to open a MWF 5pm all at once.  You could open a Wednesday 5pm and run with that for awhile….then consider opening a Monday as well.  Each class opened has a labor cost associated with it (whether you are actually paying labor on it or not you should look at it as though you were!)

It’s also important to consistently review your class attendance history.  MBO makes this super easy. Look at non-performing classes (low attendance) and evaluate if it makes sense to keep it in the mix.  Maybe you remove it temporarily from the schedule until demand is sufficient to bring it back. Building your class schedule as your clientele grows will allow you to spend more time on the business as well as allow you to service the private clients who are instrumental in keeping a new business afloat until group class membership grows to a sufficient level to sustain itself.

 

Posted in Business, Clients, CrossFit Affiliates, fitness business, MindBody Online
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Spring cleaning: A walk down memory lane

Posted on April 18, 2011 by Nicki | 4 Comments

Or the alternate title: How did we ever run our business without Mindbody Online?

Robb and I have been sorting through our closets, taking items to the Salvation Army and generally tackling all of the standard spring cleaning duties.   One of the items on my list of To Do’s was to go through several boxes of old business items to separate out items we still need to keep and determine what could be tossed, shredded or burned in our chiminea :)

Oh my goodness the things that I found! The thing that really struck me was the thought that there is no way we could operate the business we have today if we operated as we did back then, if we didn’t use MBO or some similar business management software.

Here are some of the items I unearthed from NorCal memory lane:

Sign in sheet for clients to manually sign into classes. I found stacks and stacks of these sign in sheets.  We had folks sign in, but there was no analysis of visit history without a laborious manual accounting process.  We use the visit history function of MBO constantly.  We can easily run a report to see who hasn’t been in the gym in the last week and then send out emails to check on folks.  This would be nearly impossible if we were still using paper and pen and a standard manual sign in list.

I found handwritten lists from our trainers that listed their clients and associated private training payments.  The trainers would submit this along with the dates of their sessions so that I could manually calculate payroll.  Fortunately at that point we only had 2 trainers.  There is NO way with 7 trainers we could operate with this system.  It makes my head hurt just thinking about it.  MBO makes calculating payroll as simple as running a report. I wouldn’t think about running a fitness business today without this ability.

I also found stacks of photocopies of client checks with associated bank deposit slips stapled to the top.  In the early days we had no real billing system…no method to handle recurring payments and no simple method to accurately track when clients had paid or were due to pay.  Everything was done manually and was therefore quite clunky and inefficient. Clients would pay by check or cash, I would check off the list that they paid for the month and then I kept these copies as a way to account for each bank deposit (probably completely unnecessary, but it seemed like the thing to do at the time).  With MBO all client payments are tracked in their account history and payment history.  I can see how many visits a client has remaining from their package of private training sessions, and I can see when their next monthly membership payment is scheduled.  I can see when the client came in for their very first visit, and I can see what classes and what days the client typically trains.  And I don’t need to save any paper to track any of this!

And I also dug up quite a few examples of our horrible attempts at guerilla marketing…some embarrassing flyers that amazingly actually did attract a client or two.  I highly recommend finding someone with some graphic design expertise to help you with your guerilla marketing efforts!

Post spring cleaning….Robb and I have spent the last two nights burning all of this old stuff in our chiminea!

Posted in Business, fitness business, MindBody Online
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Would you rush into marrying someone because you like his or her name?

Posted on November 5, 2010 by Nicki | 7 Comments

Did you ever have anyone tell you not to rush to finish university? “Don’t be in a hurry to get out in the working world”, “Keep studying as long as you can.”

Well, in a similar sentiment I can offer: Don’t rush into a business. Think. Plan. Save. Gather the appropriate funds. Think some more. Take time. Do it right.

Most businesses require significant amounts of capital expenditure and market research before you can open your doors.  And significant infrastructure. Computers, software, equipment, office equipment, capital for inventory or machinery, education, etc. Not necessarily so with a microgym or fitness studio. Most fitness-based businesses can be opened with minimal equipment and depending on your location, minimal overhead.

The fact that it is in fact so easy, and requires so little overhead, leaves folks who otherwise should be perfecting their craft and taking a year or two to prepare their business model, prepare their financial position and get a solid picture of the system they are wanting to create, jumping in with zero preparation for what lies ahead. It’s a bit like climbing a mountain in the winter with inadequate gear. Can it be done? Possibly. Is it going to be fun? Not at all. Just because it can be done that way doesn’t mean that it should be done that way.  In the case of our mountain climbing analogy, it most certainly will take longer to reach the top and there will be much more suffering in the process…all this providing you don’t die along the way.

As soon as you sign your lease you are on the hook.

There are indeed folks who do great under pressure and the pressure of the lease and the overhead properly motivates them to get out and hustle.  They have dynamic personalities and a decent to great coaching backgrounds and can keep and retain clients.  Great! But they end up putting in 8 hour coaching days with an additional 4-5 hours trying to figure out the backend of the business, trying to set up a business management system like MBO or trying to teach themselves Quickbooks or some other accounting software. They make it work, but they are exhausted and all-consumed by the business. They don’t have time for relationships.  They don’t have time for any other activities outside of the business. The get up the next day and do it all over again.  This is the successful picture.  But it could have been MUCH easier had there been more planning upfront.

Now I don’t want to say this can’t be done.  This was the route that we actually took.  But it was MUCH MUCH harder than it needed to be.  And fortunately there were two of us to share the load.  (3 actually, if you count our early partner Greg Everett).

Some observations

In general most new folks I talk to who are planning on opening a microgym are being FAR too optimistic about the number of clients they expect to attract in the first few months. And folks also seem to simultaneously UNDERESTIMATE the expenses they will have.  Good on y’all as it shows you’re of the optimistic ilk. However, in my opinion it is always best to be conservative when projecting these numbers.  I would rather plan for 10 new clients and be STOKED with 30 in my first month, than plan for 30 (and really be dependent on getting those 30 for my financial position) and only get 10 or 5. It’s the same with expenses. I would rather project on the high side and have resources to support that…for if they are in fact much lower it only makes my position stronger. Each time we’ve moved to a larger facility our expenses have been FAR more than I projected. There are always costs you don’t expect.  Build those into your expenses from the beginning and you’ll have a cushion for them.

Make a list of names

Make a list of everyone you plan on contacting to try to get them to come down the first month you open. Now circle the names of those who you KNOW without a doubt will absolutely come down.  How many do you have?  How many are in the “probably” category? What are you going to do to get those folks in the door.  And then how are you going to keep them?  Clients want a path to follow.  Where do they start? Where do they go next? And after that?  If you haven’t thought this through yet then take your time and think and plan. Again, creating and building a business is an involved project (much like a marriage:).  There is no need to rush.

Back to the title

Ok, now let’s talk a bit about my title…marrying someone for their name. I’ve been doing a fair amount of consulting with folks eager to open up CrossFit affiliates.  They want to “stake their claim” on a name or a territory…be the first to open in a given area.

Let’s face it, CrossFit is a sexy name.  And now, with thousands of affiliates who’ve forged the path and established the brand in cities all over the country, it lends significant brand recognition.

But here’s the deal.  If you are an inexperienced coach with no sense of the profession of coaching John Q Public other than following the main page WOD you may not have the background, knowledge and professionalism to retain the people that come through your door. Folks may initially seek you out because you have CF in your name, but if you fail to deliver the results they are seeking (not everyone cares about a fast FRAN time, not everyone will be wooed with increased work capacity, some folks do have significant orthopedic issues that need addressing, and not everyone likes a competitive environment) they will take their disposable income elsewhere.

And back to staking a claim or being the first in a given territory: If someone else can come in a drive a stake into the ground and claim the territory 2 doors down from you at any time it doesn’t much matter if you are the first or the second. What matters is that you are the BEST. If you take your time you will not only provide the better product, you will enjoy the process a whole lot more.

Posted in Business, CrossFit Affiliates, fitness business, MindBody Online
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