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Go ahead, give them a salary.
Then type up the contract on your Electrolux typewriter, send them a turkey at Christmas, and flip your calendar ahead to 1983.
35 years from now, you'll ask your staff what they like; find their strengths; and put them in a job that rewards them financially and emotionally.
Or feel free to jump ahead to 2018 now.
Pay your staff for the value they bring to your business.
Start by breaking down every role in your business. Think of these as the "hats" that must be worn to run it.
Now determine the replacement value for each role. What must a person know to be good at that role? What's that level of education worth? (Don't worry, there's an example coming.) How much time is required every week to fulfill that role? How will you measure success?
Now group the roles together to create jobs and careers (they're different).
Add up all the roles in your business. Does your total payroll (including taxes and benefits) equal 44.4% of your gross revenue or less? Perfect. Sign the contracts!
If your payroll is more than 44% of your total revenue, panic. Just kidding! Take action to either increase your revenue or decrease your payroll. After you make the free appointment, read "The Salary Cap".
If you have no idea what percentage of your gross revenue goes to payroll, Call a mentor.
Now here's the example:
Let's say a business in the Farmer phase has 14 different roles. These include bookkeeping, personal training, group fitness coaching, nutrition coaching, cleaning, Customer Service Manager, and a few others.
We sit down with a staff member and ask a few questions (we teach the exact questions in the Incubator).
The staff person says, "I really want to make this my career."
We say, "Fantastic! We'd love to have you. Here's how we're going to do it!"
We pull out our Career Roadmap tool (given to you in the Incubator) and start filling their cup.
First, the big roles: "Here's how much you can make by coaching classes in our gym. Here's how much you can make by doing Personal Training."
We total those opportunities. Then we turn to the smaller (but still client-facing) roles:
"Here's how much you can make if we launch a kids' program. Here's how much you could make if we start a nutrition program with Healthy Steps."
We add those to the bottom line. Then we turn to the other roles, which are paid hourly.
We ask: "Do any of these roles fit into your Perfect Day?"
We pay hourly for those roles. For more, read Specializing Your Staff.
We add all the roles together, and we say "Here's the opportunity."
Then we say "Here's how we'll get there."
Here's an example with MATH:
A coach says: "I want to make this my career. I need $50,000 per year to quit my job at the glue factory."
We say: "Fantastic! Here's how we'll get there. $50,000 per year is $1000 per week, plus two weeks off."
"I can give you 8 classes per week. We pay $25 per class, so that's $200 to start."
"I can give you 15 personal training hours per week. That's $31.11 per hour. Add another $466.65 per week. We're two thirds of the way there already!"
(If you don't have 15 hours of PT to give the coach yet, don't worry--make it clear that you will, and work with your mentor to get there.)
&nbs
One of the most common questions asked by CrossFit gym owners is one of the most difficult to solve.
Like so many things in fitness, the correct answer is "It depends."
But I've never been satisfied on that answer, and when I hear it, I always want to reply: "Depends on WHAT?" So here you go: the real answer.
Should you put your prices on your website?
It depends what phase of entrepreneurship you're in.
If you're not sure which phase you're in, start by taking thetest here.
If you're in the Founder phase, keep your prices off your website. You need as many conversations with potential clients as possible. You might convert someone who would have been turned off by your rates before they experienced your coaching prowess; but more likely, you just need more practice doing consultations anyway. Get as many in the door as you can. Remain undaunted by price-objectors.
If you're in the Farmer phase and have a high ARM (average revenue per member per month) and a high LEG (length of engagement), keep your prices off your website. You no longer WANT every client, but the high lifetime value (ARM x LEG) of the clients you DO get
If you're in the Farmer phase and have either a low ARM or low LEG, put your prices on your website. Your best opportunity isn't to get new people in the door. It's to increase ARM and LEG for your current clients, and focus only on the clients who will drive those numbers out. Let people self-select based on price, and use the time on goal reviews with your current clients instead.
If you're in the Tinker phase, put your prices on your website. Right up front. You no longer have time for people who need to be sold on price.
When Catalyst passed the point of 33% profit margin, I started experimenting with our prices. I put the prices on our site; then took them off. Without a doubt, fewer new people booked consultations with the prices on our site. But by that point, I didn't want to talk to everyone.
The exact thing I said to our GM was: "If only four people out of ten are going to sign up after our consultation, then I only want to talk to those four." The other six were mostly price objectors.
When I put our prices on our site, our conversion rate virtually reached 100%.
Did I miss a few people that I might have convinced? Maybe. But at that point, I was willing to let the "maybes" fall away, and focus only on the people who weren't going to think about our rate every month.
One of the key differentiators between Founder, Farmer and Tinker phase is your Effective Hourly Rate (EHR). You determine your EHR by dividing the Time you spend into the Money you make (EHR is money divided by time.) We call this the Kingmaker Equation.
When your time isn't worth much (your EHR is low), then spend it on consultations. Get people in the door. Work on talking to people and helping instead of selling.
When your EHR moves past $50 per hour (Farmer phase), you have to think about the value of each potential client. If your ARM and LEG are high, then it's probably worth meeting as many people as possible, even if only 40% sign up, because their lifetime value is so big. If ARM and LEG are low, then you have bigger problems than how many leads you get anyway.
But when your EHR moves past $500 per hour (Tinker phase), you really don't have time to waste on someone who doesn't know your price. It's not their fault they can't afford you; do everyone a favor and save them the time.
It's no secret that many CrossFit affiliates have opened a second location and had a very bad experience. The mistake usually comes from the old, flawed model of "the more clients, the better" and has sometimes been fatal.
As I wrote in "Should You Open A Second Location?" A second location doesn’t double your work; it quadruples it. There's a checklist in that article to help you decide whether the opportunity is really worth it.
But Jeff Larsh is one of the very few who has done it successfully. Jeff is the co-owner of several CrossFit Tidal locations.
Over the last eight years, Jeff has opened four CrossFit gyms by successfully implementing a multi-site CrossFit model. Jeff has a wealth of experience to draw upon to help you create a profitable and well-run business. Whether just starting out or looking to scale your current operations, join us today as we talk about adding an additional location to your business and much more!
Jeff and host Greg Strauch discuss opening multiple locations from scratch; leadership; and holding several locations to the TwoBrain standard.
Important Steps when adding an additional location:
Step 1: Make sure it aligns with your vision and is not just a shiny object
Step 2: Ensure that systems and process are in place to scale your business
Step 3: Prepare the support structure required for a multi-location business
Step 4: Decide whether to purchase or start a second location from scratch.
For those considering the purchase of another gym, here's another resource:
Should You Buy Out Another Gym?
Step 5: If purchasing, finalize the offer and wrap up the deal.
Don’t Forget! Find out what stage of entrepreneurship you are in by taking the exclusive Two Brain test here: https://twobrainbusiness.com/test/or schedule your free mentoring call by clicking here!
Links:
https://twobrainbusiness.com/mentor-item/jeff-larsh/
https://twobrainbusiness.com/should-you-open-a-second-location/
0:25 – Introduction with Jeff Larsh
2:42 – What should the motivation be to open an additional CrossFit Gym
4:11 – What would be the first step, to look into opening an additional location
5:26 – How to financially prepare for a second location
7:02 – Taking a hard look at your offerings and products before scaling
9:40 – Preparing the support structure required for a multi-location business
14:18 – Deciding on whether to purchase an additional location or start from scratch
17:06 – Financing a new location with other partners and managers
18:47 – Finalizing the offer and wrapping up the deal
20:19 – Breaking a new purchase or major change to current or new members
22:20 – Why only one additional location is not enough
28:18 – Two Brain Stories with Kim Moore
On this episode, we talk to Tammy Friedt. Tammy is one our amazing mentors here at TwoBrain, and she recently sold her business!
Selling a business or a gym is not an easy task and it takes a lot of patience in order to do it correctly. Today hear directly from someone who has lived through this process and gains some insight and tips into how it all happens. Learn about what needs to be done to prepare and sell a business, what documentation and legal advice you will need, and also we talk about what it feels like after it is all over!
Don’t Forget! Find out what stage of entrepreneurship you are in by taking the exclusive Two Brain test here: https://twobrainbusiness.com/test/or schedule your free mentoring call by clicking here!
Links:
https://twobrainbusiness.com/mentor-item/tammy-friedt/
Built to Sell – https://www.amazon.com/Built-Sell-Creating-Business-Without-ebook/dp/B004IYISQW
Rig Equipment Evaluation – https://rigquipment.com/
Download our FREE guide here: How to Sell A Gym
Timeline:
0:20 – Introduction to Selling Your Gym
2:01 – Tammy’s background and starting her CrossFit Gym
4:36 – What made Tammy sell her business earlier than planned?
6:31 – What is the first step in initiating the sale of your business?
8:15 – How to assess the value of your gym when planning to sell?
12:08 – Negotiating a selling price between the buyer and the seller
15:54 – Managing existing leases and existing contracts under your current business
19:22 – Divulging information regarding your employees and creating a non-compete agreement
21:20 – Approximately how long does it take to sell a CrossFit gym?
23:55 – Is leasing to own an option when selling or buying a business?
26:29 – The feeling you have when your business is finally sold.
33:21 – Two Brain Stories with John Miller
Episode 147 – 1099 or W-2? With John Briggs of InciteTax
Recently, I have started to see a trend where gym owners are increasingly being audited by the IRS. Today we talk about such things as how to survive an IRS audit, Tax Planning for the New Year, and what exactly is a 1099 contractor
.
As the year draws to a close, now is the time to start thinking about closing out your books and taxes for the year. Additionally, John has also bought himself his own CrossFit gym and we check in to see how his new venture is going!
Don’t Forget! Find out what stage of entrepreneurship you are in by taking the exclusive Two Brain test here: https://twobrain.com/test/or schedule your free mentoring call by clicking here!
Links:
John@incitetax.com
https://www.linkedin.com/in/johnbriggscpa/
Timeline:
1:41 – John Briggs Introduction
2:19 – Why CrossFit gyms are being audited for having 1099 subcontractors
4:58 – What does a letter from the IRS look like?
7:17 – Is it possible to navigate an audit without expert help?
9:45 – The process of answering questions from the IRS
11:25 – How long does it typically take for an audit to occur
12:59 – Why it is better to communicate with an auditor rather than ignore them
14:28 – When should you start to look at preparing your tax return?
21:02 – Which tax structure is right for me business? What is an LLC?
23:03 – How does tax reform affect a CrossFit gym this coming year?
24:15 – John on becoming a CrossFit gym owner!
27:50 – How to contact John with Incite Tax
30:58 – Two Brain Stories with Brian Bender
Today we are talking about a very productive task that you can do for any business: mapping a client’s journey. This is all about determining what process you want a client to go through and what experiences you want them to have with your business. Today is all about the big picture and it is also an interactive session so be sure to have a whiteboard or notepad ready to write your own client story!
Data shows that the best way to start a client’s journey with your business is through an introductory program like a "no-sweat intro." Here are Catalyst, we want people to come in for an initial consultation where we can determine what the client’s needs are and we can recommend which services are most applicable to them.
Some of the most important questions to ask at this point are: What brings you in? What have you done in the past that you liked? What are the things you have done in the past that you didn’t like? The purpose of this part of the story is to point to a common goal that you can team up with the client and conquer together.
Another important part of the initial conversation is to make the client comfortable with the gym and feel like they can do the movements and exercises necessary to feel the part. Perhaps they do not need to feel crippled by the most intense workout your gym has to offer, but they do need to at least taste intensity before joining their first group workout. Part of the on-ramp session needs to address what it will take to get the client to this point and be integrated into the gym.
The next important component of the client journey is to review the logistics of their first training session. Do they book this session directly with you? When do they pay you for this initial session? Do you give them a gift for joining the gym? Do they need to sign a waiver before joining your gym? These are all tasks that need to be considered while the client joins your gym.
Additionally, other important questions that should be continually asked of your client are as follows: What should the client do (It is your job as a coach to tell them exactly what to do!) What should the client know How should the client be rewarded (Checkout BadgeOS)
FREE DOWNLOAD: Client Journey Map Template Mapping out your client journey will solve a lot of your business' onboarding problems. Start from the top down and ask yourself what kind of experience do you want your clients to have, what services will satisfy these experiences, and how do you want those services to be delivered.
TWO-BRAIN FAMILY STORIES: Phoebee Frost of CrossFit Long Haul (AUS) shares her journey, lessons learned, and experience with TwoBrain.
Timeline:
0:30 – What exactly is mapping a client’s journey?
1:53 – Where does the client journey story start?
5:41 – Making recommendations based upon what the client wants.
8:55 – Determining the logistics for signing up a new client.
13:43 – Organizing the client's first day at your gym.
16:03 – The three most important questions to be asking about your client.
18:15 – How do I ask a client what do they want next?
21:03 – Introducing the Level Method at your gym.
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