KEY SUCCESS: TURNING COACHES INTO PROFESSIONAL ENTREPRENEURS
CROSSFIT-NORTH-SHORE-300X94NORTH SHORE CROSSFIT – THE BACKGROUND:
Before Dave Picardy got involved with CrossFit, he worked from a small home gym as a personal trainer. Eventually, he opened up a small space above a martial arts school, and his client base started to boom.
He was charging $100 an hour and was solidly booked, even overbooked to the point that when people went on vacation they continued to pay for their sessions just to hold their time slot until they returned.
By 2005, Picardy was coaching 55 private one-on-one sessions a week and was bringing in $14,000 a month. “I was always booked solid. But I was good at it, and we billed out a lot of money,” he said.
Soon he started messing around with CrossFit and began introducing it to his clients.
In March of 2006, he opened his first affiliate, a 3,500 square foot facility in Boston – North Shore CrossFit.
Like Glage, since he was so busy and didn’t have enough man power, in order to accommodate the influx of eager clients, he went to the group exercise business model (a.k.a. Group X). This meant replacing his one-on-one time slots with group exercise and started forcing his one-on-one clients to attend group CrossFit classes.
What happened next was tragic. “I lost most of my private clients – they just weren’t interested in group training,” he said.
And his revenue tanked. “We went from billing $15,000 to $6,000 a month just like that,” he said. “And we never recovered from it. I spent the next few years trying to get those numbers back, fighting to get those numbers back without one-on-one training.”
“If I could go back in time, I would never have gone to the group X model,” he said.
The problem only got worse as people kept asking for more classes to be added to the schedule. “Why would I add another class? One private sessions would pay the same as hosting another group class,” Picardy said.
And he blames himself for being one of the instigators of the flawed system that most CrossFit affiliates around the world use today – the group exercise business model a.k.a “Group X”
He was one of the early affiliates, and in those days any new CrossFit box checked all the other affiliates’ website; it seemed everyone was following the Group X model. So what emerged in the next couple years were hundreds of affiliates all following the same system, a flawed system that leads to burnout and a serious lack of revenue.
By 2011, Picardy hit the wall. “Then two years ago, I thought, ‘Enough is enough.’ I was actually thinking of leaving the industry completely,”Picardy admitted.
After much reflection, he chose to stick it out but he knew some serious changes were necessary. So he decided to switch over to the Madlab system in May 2011.
NORTH SHORE CROSSFIT – MAKING CHANGES:
Today, North Shore CrossFit lives in a 12,500 square foot facility in Boston. His membership totals 300.
In two years since implementing changes, Picardy’s revenue went from $22,400 to $46,400 per month. And he’s less burnt out as he doesn’t have to coach 50 plus hours a week.
The biggest change that helped him dig his business – and his sanity – out of a hole is the way he raises his coaches from Junior apprentices into independent entrepreneurs with businesses of their own.
Today, his coaches, who go through physical training, coaching training and sales training are knowledgeable fitness professionals. Secondly, they’re entrepreneurs with their own clients, so there’s incentive to treat their clients right to keep them around. Because of the incentive created by the free market, retention is way up. And ultimately, everyone is better off.
Like Glage at RAW CrossFit, Picardy follows the Madlab compensation system. Apprentices are raised slowly from Junior apprentices to Senior apprentices, and eventually to associate coaches. They must earn their stripes every step of the way, and it’s the free market that dictates when they graduate from one level to the next – a true meritocracy.
Junior apprentices begin by shadowing more senior coaches and once they’re ready to coach on their own, they begin by making 20% of the revenue they bring in. As apprentices work their way up the latter, they graduate to the next pay scale.
Picardy’s top coach today makes 50% of the revenue he generates and consistently earns $4000 per month working no more than 30 hours per week. Each coach is responsible for about 7 group classes per month, and the rest of their hours are in the personal training realm.
Picardy’s job today is to raise new apprentice coaches. Currently, he has 7 full-time apprentice coaches. “I don’t teach classes unless I want to . I still do some private stuff – but only two clients. That’s it,” he said. This allows him to focus his attention on turning his coaches into true self-sufficient fitness professionals.
His life is much better than it was three years ago. And he can see the light now – his goal is close. “I tell my guys all the time, ‘I coach you guys so you guys can make $100,000 a year to coach your clients,” he said.
North Shore CrossFit – Numbers Don’t Lie
Gross revenue: 108% increase ($22,400 to $46,700 per month)
Profit: up 97% ($9.7k to $19.1k per month)
Owner hours on floor: down 96% (30 hours to 1 hour)
Coach 1: $1740 to $4000 per month
Coach 2: $1100 to $3500 per month