Minor changes can skyrocket your take-home pay… 👀
It’s that time of year, Gym World.
Two-Brain Business dropped their annual State of the Industry report.
This year, they’ve made it even easier to see where your gym stands across 10 key metrics with a simple rating scale:
- Red: bottom 25% of gym owners
- Yellow: meeting the average
- Green: top 25% of gym owners
We’re breaking it down to show minor tweaks can take your gym from average to good.
💬 FYI: The report includes data for big group, small group, 1:1, and other gyms, but we’re focusing on big group numbers.
Revenue
In 2024, big group gyms averaged $24,946 in revenue a month.
We’ve seen these gyms can boost revenue by:
- Raising prices. It’s one of the quickest (and easiest) ways to grow your top line. Nick Page charges $199-$239/month and offers premium perks like 3D body scanners.
- Changing the model. Dan Purington and Eric Chang made CrossFit more profitable with a semi-private training approach.
- Cutting costs. Daniel Chaffey and Matt Wilbur saved on operating expenses by optimizing small spaces for group training.
Members
We know gyms with 150 members should be able to take home $100k a year. To get there and close more leads, focus on:
- Using 2-3 reliable marketing channels
- Creating solid systems for lead nurturing
- Calling leads as fast as possible
💬 If you have more than 150 members but aren’t earning $100k, your model might be broken.
Pricing
The average price for the most expensive package rose to $177 a month. This number is up from $165 in 2023.
💬 If the average big group gym has 122 members, each paying $177 a month, taking home $100k a year after expenses will be difficult. Big group gyms often have higher overhead, which suggests many are undercharging.
A dataset of big group gyms also revealed that nearly 90% of their revenue comes from large group classes:
And while big group gyms do offer higher-ticket services, these should play a bigger role in their revenue.
Average Revenue per Member (ARM)
ARM measures how much a client pays you each month, including memberships and anything else they purchase.
ARM is lower than the most expensive package because:
- Most gyms sell cheaper packages
- Discounting is common
That’s why building a more robust business beyond group training is important. Some of the smartest gym owners on Gym World increase revenue by adding:
- Personal training
- Semi-private or small group training
- Premium services (InBody scans, recovery, lifestyle coaching)
Length of Engagement (LEG)
LEG tracks how long the average client stays at your gym.
If you don’t know your LEG, here’s a quick ‘n dirty way to calculate it:
💬 LEG = 1 ÷ monthly churn
Churn = lost clients ÷ total clients at the start of the month
For example, if your gym starts with 100 clients on March 1st and ends with 95 clients on March 31st, you lost 5 clients (not counting any new sign-ups in March). So, your churn = 5 ÷ 100 = 0.05
That means your LEG = 1 ÷ 0.05 = 20 months
If your LEG is under 14 months, you’ll need to be really good at marketing to stay in business. You’ll constantly have to find new clients to replace the ones who leave.
Our data shows it’s much cheaper (and more profitable) to keep an existing client than to acquire a new one. Two-Brain found that adding just two months to your LEG for every client can add an extra $45,000 in revenue.
So, if you struggle with retention, try:
- Reviewing client progress quarterly
- Delivering results
- Building world-class communities
- Getting referrals
💬 A tiny reduction in churn can also lead to a huge increase in profitability. If you want to be in the top 25%, keep monthly churn at 4% or less.
Lifetime Value (LTV)
LTV is how much a client pays your business over their lifetime as a member. It’s calculated by multiplying ARM and LEG.
Top U.S. gyms have an LTV that’s $300+ higher than the average because they:
- Charge more
- Keep clients longer
💬 A long LEG gives you a big marketing edge because it lets you spend more to acquire new customers.
Expenses (Staff & Fixed)
Here’s what we’ve got:
Let’s be real—it’s unrealistic to keep staff expenses under 16%. This low percentage likely means the owner is doing most, if not all, of the coaching. And if they’re coaching everything, they don’t have much staff to pay.
💬 A staff expense target of 16% is unrealistic if you plan to remove yourself from the business. My guess is that if you profiled gym owners who work less than 20 hours a week and make more than $100k per year, staff expenses would be closer to 30%.
The data shows that the average gym owner spends close to 50% of their revenue on fixed expenses. That doesn’t leave a lot of room for staff pay and a healthy profit margin. If you’re in this camp, consider downsizing your space.
Profit
Owner profit is how much you take home each month after covering all business and personal expenses.
Data shows big group gym owners can earn more by:
- Raising prices and removing discounts
- Developing strong sales skills
- Getting a mentor
💬 Your take-home profit should grow every year as your business scales.
Effective Hourly Rate (EHR)
EHR is your monthly profit divided by hours worked.
Your business should give you a decent lifestyle. Good gym owners maximize their EHR by:
- Building strong systems and processes
- Hiring a great team
💬 Making $6k a month sounds okay, but if you’re working 100 hours a week, is it worth it?
So, how do I level up my gym?
👉 Step 1: Grab a FREE copy of the State of the Industry report here.
👉 Step 2: Compare your numbers with other gyms using the data.
👉 Step 3: Consider getting a mentor or checking out free resources in the Gym Owners United Facebook group.
And for an in-depth look at the industry, be sure to watch or listen to our exclusive interview with Two-Brain Business CEO Chris Cooper:
hope this helps,
j
📣 P.S. If this was valuable, share it with a gym owner who’d find it helpful too.
