What is a Professional Gym
We teach independent gym and boutique studio owners how to build a profitable business with the greatest long term return on investment.
Our business model is a relationship-based approach designed to retain both clients and coaches, and to provide coaches the opportunity to become career coaches, who earn a professional wage.
When clients and coaches are properly serviced with a long term mindset, independent gym owners can beat franchise gyms, and build sell able assets they can one day retire on.
Watch this video for a crash course
The 3 Key Concepts that make up the foundation of our business model
1. All business decisions must work for:
- The client
- The coach
- The business
This is our prime directive. If decisions aren’t made this way, one party will suffer, and the business will ultimately fail.
2. 6 Key Performance Indicators (KPIs) to measure success
Since 2005, we have been seeking data-driven business solutions to find observable, measurable and repeatable best practices. These years of research have helped us uncover the 6 KPIs—key performance indicators to measure client, coach and business success.
What clients need to succeed:
KPI #1: Churn: Are your clients staying at your gym for years and years?
KPI #2: Average client value (ACV): Are your clients paying for a high value service?
What coaches need to win:
KPI #3: $/ Coach hour: Can your coaches make more per hour than a journeyman electrician?
KPI #4: Total coach pay: Are they able to earn a professional wage?
What the business needs to win:
KPI #5: Business EBITA: Earnings before interest, taxes and amortization (i.e. are you making a 20% + profit?)
KPI #6: Asset value: Are you building a sell able asset, so you can retire and sell your business one day at 5 X EBITA?
3. The Future of Fitness: The Professional Gym and Preventative healthcare
Three billion people around the world are overweight or obese. $US 2.5 trillion is spent annually on diabetes treatments. Professional coaches have the opportunity—and quite frankly are needed—in order to make a real difference in that growing health crisis, now and in the future.
We have known about the importance of diet and exercise for health for more than a generation—and for their ability to put these diseases into remission—yet our healthcare system perpetuates pharmaceutical solutions to these problems. The result: People continue to become less and less healthy.
The question begs to be asked: We know the solution, so why have we been unable to do so?
Our answer is to create a class of true fitness professionals to help people regain their health and to save our healthcare system from going bankrupt.
By fitness professional, I mean someone who has been coaching for a long time, who has done a lot of training and education and is well-respected in their community. They have connections to the medical community—to doctors and physiotherapists, who consistently refer clients to them. They’re coaches who make a professional wage—$80,000-$100,000-plus year-after-year. Just like a physiotherapist or a journeyman electrician, or an engineer.
When fitness coaches become professionals, they can work with other health practitioners—doctors, physiotherapists, Registered Dietitians, osteopaths, RMTs—and together we’ll be able impact the healthcare crisis we face today to combat obesity and Type 2 diabetes.
In short, professional coaches are the answer to bridging the gap between healthcare and fitness.
After 15 years, I’m pretty proud of what we have created in Vancouver. We earn a minimum of 20 percent business profit each year, our client retention rate is between 85 and 87 percent, and our six full-time coaches, who have been with us for 7 to 14 years, earn between $60,000 and $110,000 a year. That’s what a professional coach, and a professional gym, looks like. And the world needs more of them.
Since the founding of Madlab Group we have helped hundred of gyms transform themselves and their coaches into true professionals.
Here are the five shifts that they made to become a professional gym with professional coaches: Link to 5 shifts page
WHAT WE KNOW
The MadLab Business Model Works
We have spent the past 10 years of our lives on a 14-hour a day mission to build the best gym in the world. We have invested $250,000 of our own money, building tools and auditing 1,000 gyms, using the funnel as our basis for analysis.
We have been implementing the concepts that we have unearthed that work and have found better ways at better prescribing how to implement change.
Flat out – If you are 100% committed to the work……. They work. 100% of the time.
1) Do Personal Training
One-on-one or one-on-two for every person who comes in to your facility. Lay out physical benchmarks that each person must reach before they can begin group classes. Charge market rates in line with other personal trainers in your area. Personal training sessions should fall in a range between 12-20 sessions depending on the person’s fitness level. The quality control for this process alone will put you head and shoulders above all other gyms in your area.
2) Develop An Accredited Coach Diploma Program
The program should take coaches two years to complete; it should require due diligence and hard work, but the benefits will be enormous.
3) Don’t Pay Your Coaches By The Hour, Class or Salary
Pay them based on their ability to attract, retain and generate referrals from clients. Base compensation on the gross revenue they generate directly. This process allows coaches to earn professional wages between $5,000 – $10,000 per month and will double the box’s gross revenue.
The latter three rules alone will put you ahead of 95 % of all gyms in the world. Follow these rules and you will earn real profit, a professional wage for you and your coaches, and you’ll have the best retention and referral numbers in the business, as well as a business with real worth that you can sell and retire on.
What our group does is show people what works and what doesn’t, so gym owners can skip through 5-10 years of misery and possible bankruptcy.
Then once you understand what works (it is 180 degrees different than how 95% of all CrossFit boxes are run currently), then we will show you how to implement the changes. All our information is available on our online school.
We have to give special thanks to Greg Glassman, whose thoughts, insights and experience, was crucial to developing our systems. The legacy of working closely with him in 2004-2007 put us on a path to excellence that shines through today.
Why Group X
The Fitness Industry
WHAT WE DO
Along the way you will learn how to become a true professional, teach your coaches how to become professionals and earn professional wages that coincide with the service you are offering. Business owners NEED to make over $150,000 a year while working less than 40 hours a week and Coaches NEED to make over $80,000 a year while working less than 25 hours per week on the floor.
I personally have done this in Vancouver and many of our member gyms are doing this today. Our job is to teach you how.
The first step in this process is understanding that the business model used in 98% of gyms that employ complex and potent fitness regimes like CrossFit are fatally flawed. They were designed for Aerobics, Yoga and curves, not for world class fitness.
The second step is understanding and accepting that in today’s market taking a 2 day course on “9 movements” and then opening a gym DOES NOT prepare you for owning and running a successful gym. It is a recipe for financial disaster. In fact every affiliate gym we talk to, even those who have been around for a decade that operate their gyms with a group X model are in financial straights.
Lastly, you have to earn it. The days of opening your doors and having 150 members flood in are over. They maybe should never have happened in the first place, but no matter, you have to learn the essentials to have a successful business:
- Learn how to earn clients
- Learn how to retain clients
- Learn how to train Coaches
- Learn how to compensate and retain coaches so they never want to leave your business
As we mentioned previously, most gyms have no chance at doing well in any of those 4 categories. With the MadLab business model, and a lot of hard work, you can do all four and thus build a business that is sustainable, has real worth and can be sold in order for you to retire.
Our job is to show you how to do it.