SURVIVING COVID-19

5 Immediate Action Steps for Surviving and Thriving During COVID-19

We are undeniably in an unprecedented, uncertain time. All small gym owners are sharing the same fears and questions:

  1. How can I ask clients to pay their monthly fees if I don’t have a physical gym? 
  1. How long will they keep paying on goodwill? 
  1. How do I pay (keep paying) my coaches?

We’re all in this together, but here’s what our gyms have come up with so far:

Step 1. Consider: Is it worth it?

This is a real question you need to ask yourself. It’s not going to be easy. Are you willing to stick it out? Should you stop accepting payments, or continue operations virtually without a physical space?

The relationships you have already built—or haven’t built—will probably be the deciding factor. Do your coaches have strong relationships with the clients?  What have your clients been paying for up until now? 

a). Hard workouts, where they can push themselves physically against others, in a group class? 

OR

b). A professional coaching service and a relationship with a coach to help them manage their health and fitness for life?

If they think they have only been paying for a location and programming, chances are they’re not going to stick around long. But if they hired you as their coach for life—similar to having a doctor or an accountant for life—then you have a real chance at continuing to service them through this pandemic and beyond. 

While common sense, should you choose to continue, take a close look at what’s going out and eliminate all the variable costs you can immediately. 

Step 2: Contact every single member

Call every member and have a one-on-one conversation with each of them. Explain to them your current value proposition. Ask them for their buy-in to your plan moving forward, and ask them about their concerns and what they need from you in order to stick around. Be real with them. Tell them you are going to be constantly improving the service and ask them for a few weeks to iron it all out.  Start delivering immediately.

Step 3: Create

Decide the best way to deliver your new product/service, but start delivering it now, even if it’s not perfect yet. It will take the next couple weeks to figure it out, so test things via trial and error and eventually develop best practices. Hone it and make it awesome. 

Then go back and connect with all your clients and offer your new value proposition.

Now is not the time to live in a vacuum, so speak with as many small gym owners as you can. Build yourself a support network and work together to figure this out. Share knowledge about what’s working and what’s not. 

Consider Facetime, Facebook live, ZOOM, etc.

Do not be insecure with your ability to deliver this new online coaching service.  It might take us a few weeks to hone and refine to make it excellent, but know that there are plenty of people out there that are paying $300 a month for online coaching services. 

Step 4: Compensate coaches

Dollars per hour class pay isn’t going to work… now more than ever. You will live or die on your client retention in these upcoming weeks, your ability to retain clients and charge them for your new HIGH VALUE service is PARAMOUNT.

On the client end, this will give each client an assigned personal coach in their corner to hold them accountable during this time and help them with their individual needs.  Clients want and need this service.

Coaches should be paid based on a success metric that directly ties into their success and the clients success.  Paying a coach on a $/class or $/hr basis made little sense to us when we had physical locations, it makes absolutely no sense now.

Much better to pay your coaches on a percentage of revenue of their clients’ monthly dues for the lifetime of that client..   

We have a comprehensive, progressive coach compensation model that combines with a 3 year accredited coach development process to gradually increase net revenue over time.   With Covid – 19 on us, you don’t have that kind of time. 

So… Divide your clients up amongst your coaches (sort based on prior relationship) and give them a % of the gross revenue.   Depending on what you can afford, to still pay your bills etc. For now let’s say the coach comp is somewhere between 30-50% of gross revenue, per client. 

Now, you need to assign tasks and pay on definite outcomes.   Make the coaches become excellent at delivering your new online service.   They only get paid if the clients are thriving and continue paying. If the product is bad and the clients leave the coach does not get paid for the client anymore.


We will define this further in another upcoming article…

Step 5: Continue to learn, implement, evolve.

If you are on top of this, then… Your business is solid. Your clients are solid. Your coaches are solid. Now you can go about reducing/eliminating fixed costs. 

Continue to hone. Continue to get better. Continue to share. Continue to learn.

Apply for government assistant or any other help/assistance you can get, should this time continue beyond current time estimates. You will need to begin Gathering financial documents, W-2/W-3, P&L, Tax returns etc… you will need to show / explain your “loss”.


FREE COVID-19 MadLab hotline: If you want to talk with an experienced gym owner that has done these 5 steps, book a call here. Free of charge. We are here to help, with all of the resources, knowledge and experience from over a decade of testing and honing best practices… A PROFESSIONAL GYM

LONG TERM APPROACH TO BECOMING A RESILIENT AND SUSTAINABLE PROFESSIONAL COACHING FACILITY AFTER COVID-19

Franchise gyms— {Orange Theories, F45, Curves, Zumbas and “commodity type” independent gyms} of the world have already shut down with NO PLAN , NO PAYMENTS COMING IN AND NO PLAN.

The professional independent gym owner.

Professional gym owners and coaches, like those found within MadLab Group, are already positioned, because of relationship based coaching, to fully engage with  and RETAIN their clients WITHOUT a brick and mortar facility.

Why are the franchise and commodity gyms CLOSED, while the independent coaching gyms are still providing fitness solutions? 

Franchise and commodity gyms  are designed to take on 300 new members on opening day. They sell workouts, equipment and classes… Independent coaching gyms sell RELATIONSHIPS. Those relationships with individual clients, allow them to continue servicing, helping ad coaching… even when the doors are closed.

Franchise and Commodity gyms are not designed to be sustainable or even profitable in the long run. They are designed for investors to sell franchises and earn a return on investment in a short period of time. They are not designed to retain clients, or to create a professional class of coaches with the ability to earn a professional wage.

The independent gym has so much more to offer than this. We have the opportunity to develop a professional class of coaches—coaches who build relationships with endocrinologists, neurosurgeons, orthopedic surgeons, physical therapists, registered dietitians etc, and work to bridge the gap between the medical community and their clients.

This long-term, ethical, responsible approach to developing a professional gym also provides the best long-term return on investment for the small business owner.

Exercise and diet delivered by a professional coach is what is required to reverse and prevent obesity and Type 2 diabetes, and help ordinary people avoid hip replacements, knee replacements, chronic pain and other all too common ailments.

If you’re an independent gym owner, who is having a hard time getting past 120-150 members, you find yourself paying the bills but aren’t thriving, and you’re struggling to develop full-time coaches and end up doing everything yourself, consider a new path with these 5 shifts.

The 5 Shifts

Switch from short-term to long-term thinking

There needs to be a mindset shift away from mass scalability, and constantly searching for new leads to creating a sustainable business that retains coaches and clients and can function even if you, the owner, are not present.

All business decisions must be designed for everyone to win

This means every decision must consider the success of the coach, the client and the business.

This success can be measured through these 6 key performance indicators (KPIs):

1. Client retention
2. Average client value (ACV)
3. $ per coach hour
4. Total coach pay
5. Business profit (EBITA) (earnings before interest, taxes, and amortization)
6. Business value

Attract and retain high value clients

6KPI’s #1 and #2: The focus needs to shift from being about bringing in as many leads as you can to being about client retention and increasing ACV.
Good numbers to strive for include:

  • 80 percent annual retention (the industry average is 30 percent)
  • ACV: $300/month (the industry average is $135)

Attract, develop and retain professional coaches

6KPI’s #3 and #4: To create true professionals, you need:

A coach compensation model that allows them to earn a professional wage (percentage of revenue on all clients for the lifetime of that client),
a coach co-op that allows coaches to share the workload and operate like a co-op in a law or engineering firm, and professional coach development through mentorship and education (including both technical training and sales training).

The Business must be profitable

6KPI’s #5 and #6: The business needs effective client and coach development processes (measured by 6KPI’s #1, #2, #3 and #4) to flourish and be profitable.

This means the business needs a minimum of 20 percent business profit. Secondly, business value must eventually be high enough that owners can one day sell their business, retire comfortably, and leave a legacy of having created a sustainable, ethical, profitable business for the next generation.

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