What We Stand For
We want to see all parties in the gym succeed = PRIME DIRECTIVE
All business decisions need to work for:
- The client
- The coach
- The business
If it doesn’t, somebody will suffer, and the business will ultimately die because of it.
SEARCH FOR THE TRUTH = Data driven BUSINESS solutions
By using the scientific method, trial and error, and by asking ourselves, Is this
We found the 6 Key Performance Indicators you want to measure and improve to ensure that the Client, Coach and Business are winning
What clients need to win:
KPI #1: Churn: Are your clients staying 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 sellable asset, so you can retire and sell your business one day at 5 X EBITA?
PURPOSE: Create a class of professional fitness coaches
The only way we transform this industry from being about making a quick buck in the short-term disgracefulness, to one of respect and dignity is to create a true professional class of coaches.
- Coaches that are respected by doctors and physiotherapists, and more importantly, the general public.
- Creating a class of coaches that can truly impact the healthcare crisis we face today and into an ever gloomy future.
These coaches, if they are to survive and change our world, need to make a professional wage, get paid vacation time, work less than 30 hours per week on the floor and have a 401k(RRSP) plan for retirement.
SACRIFICE: We have suffered for the TRUTH
The industry standard is an EPIC FAILURE
- Clients quit at a 70% + rate per year, only 4% go to a gym, Type 2 diabetes and obesity are bankrupting the healthcare system
- Nearly all Fitness Coaches QUIT within 3 years
- 80% of Independent gym owners fail in 5 years
Yet when we expose these truths we get attacked unmercifully.
Humans love to follow the herd.
Our business model is from over 15 years of data-driven experience gleaned from our own experience and taking data from working with THOUSANDS of gym owners and coaches.
In 2014/15 Madlab group and Zen Planner did a landmark study on 1,600 gyms in which we looked at the client development process and how they related to 6 key performance metrics.
The study showed beyond a doubt that the current gym model has some serious inherent defects, most notably group onramps churn clients at over 75% per year which in turn churns coaches every 18-24 months.
We learned a ton more from all our research, but those 2 key metrics: client churn and coach churn should be a wake-up call to every independent business owner and fitness coach out there……….
What is your purpose? What do you stand for?
If you want to:
- Retain 85% of your clients year after year
- Develop professional coaches who earn $80k-$100k per year and stay in the industry
- Make a real sustainable profit – 20% EBITA
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.