Gym owner makes $900k/yr from semi-private training

ABOUT THIS ARTICLE

Gym World comes from Kilo co-founder John Franklin, who shares lessons about making money in the fitness industry.

& how you can save $30,000+ every year…

What’s up Gym World?

Like many gym owners, Mike Baker from BOLT Fitness & Performance Training started with large group training.

Then he added programs, business got complex, and COVID hit. So, he simplified things and switched to a smaller group model, which skyrocketed his profit.

💡 Matt Wilbur and Dan Purington have similar stories.

Now, his gym makes $900k/yr, with most of his revenue coming from semi-private training.

Here’s how he did it:

Evolving the gym

BOLT Fitness & Performance Training opened in 2016 in Chester, NJ. The gym started in a 1,500 sq ft garage bay, offering semi-private training for adults.

Members had customized programs, and classes were capped at six people.

💡 Mike also did sports performance training on the side to fill extra hours and boost revenue.

Business went well, and a year later, Mike took over the neighboring garage bay. This added:

  • 2,000 sq ft of training space
  • Office areas
  • A physical therapy tenant

With the new space, he started running large group training for up to 32 people per class.

space for large group training classes up to 32 people per class
💡 Both spaces are separated by a cinder block wall with an opening. Semi-private training sessions were held in the original space, while large group classes ran concurrently in the larger area.

Transitioning to small group

By 2019, the gym had 215 members, most of whom did large group training.

💡 Many of these group training clients transitioned into the semi-private program, with the average client spending $236/mo.

The gym was making money, but Mike noticed:

  1. People weren’t getting the results he wanted from large group.
  2. Member retention was lower than expected.

💡 At the time, the average client stuck around for 13 months, which is impressive considering last year’s industry average was 7.8-months.

He added a strength training program, hoping it would fix these problems. In reality, the program created too much complexity, so he scrapped it.

💡 Steve Jobs once said, “Simplicity scales, complexity fails.” Many of the most profitable gym owners on here simplify their business.

Still, Mike didn’t like where the business was going. The plan was to eliminate the large group program over time, but COVID hit and did that for him.

So, when gyms reopened, he introduced a small group training program:

  • Capped classes at 12 people
  • Structured them as generalized fitness classes
  • Raised the prices

This boosted the average client’s monthly spend to $350, adding $24,510 in revenue each month.

💡 Here’s the math: 👇

Previous spend per client: $236/mo

Current spend per client: $350/mo

Increase per client: $114 ($350 - $236)

Total additional monthly revenue: $114 x 215 clients = $24,510

Not too shabby.

The gym today

Mike offers two adult programs:

  • Semi-private training: Capped at 6 people per session with everyone getting customized programs. It costs $399 a month to train twice a week or $499 to train three times a week.
  • Small group training: Capped at 12 people per class with general fitness. It’s similar to large group training but with fewer people, and costs $249/mo to train twice a week or $299/mo to train three times a week.
💡 In 2022, Mike grew the sports performance training program. These businesses are often seasonal and lose revenue during the in-season, but Mike mitigates this problem by marketing the program as year-round training for athletes.

Here’s his revenue breakdown:

  • 50% comes from semi-private training
  • 30% from sports performance training
  • 10% from small group
  • 10% from 1-on-1 training

The gym has a 2-step sales process:

  1. pre-qualifying phone call with a coach to ensure the gym is a good fit for the prospect and to outline goals.
  2. An in-person visit to ask more questions and build a fitness plan.

They have three full-time coaches who receive health & dental benefits, and a 401k, plus one part-time coach.

💡 The gym still has 215 members, and Mike is now focused on getting leads through referrals and lowering churn.

Mike focused on reducing churn. That’s smart because a tiny reduction can lead to a huge increase in profitability.

Let me show you. 👇

The average Two-Brain Business gym has the following numbers:

💡 Churn: 5%
Customers: 130
LTV (Lifetime Value): $4,000

We can figure out what churn costs at the average gym by plugging these numbers into the following formula:

💡 (Churn x # of Members) x LTV = Monthly Cost of Churn

In this case, it works out to $26,000 monthly & $312,000 annually.

💡 Monthly Cost of Churn: (5% x 130) x $4,000 = $26,000
Annual Cost of Churn: $26,000 x 12 = $312,000

Here’s how a 10% reduction in churn can boost your bottom line:

💡 Churn: 4.5% (5% x 0.90)
Customers: 130
LTV: $4,000
Monthly Cost of Churn: (4.5% x 130) x $4,000 = $23,400
Annual Cost of Churn: $23,400 x 12 = $280,800

The result:

💡 Annual Savings: $312,000 - $280,800 = $31,200

Imagine what you could do with those extra funds in your gym…


I asked Mike what’s next, and he said he’s not looking to scale. Instead, he’s focusing on making the gym better, with the goal of generating $1M in revenue next year.

TL;DR

When business became too complex, Mike simplified by adding a smaller group program and increased his revenue.

Now, he’s making $900k/yr.

For a deeper dive into Mike’s strategy, watch or listen to his full interview on Gym World.

cheers,

j

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