Many years ago, I learned a costly and valuable lesson on scaling. Our leadership team sat in an office discussing our membership model, or staff profiles, going back and forth as to whether or not we should change the model, add management, add automation, change our marketing spend. All just to come out of the meeting frustrated and seemingly having more questions than we did answers.
We realized that we scaled too fast. Big dreams and driven personalities caused us to open more locations without figuring out some of the basics first. The lessons that I learned early on in my career have allowed me to have a much better understanding of what needs to happen before you get too ahead of yourself to scale your fitness business.
Let’s take a look at some common misconceptions about scaling and the truth behind their solutions:
MYTH #1: More members and more locations means more money
This common misconception is based on the fact that simply adding more memberships to your top line allows for more profit, and even worse, the assumption that adding locations will increase profit. The hard part about this myth is many of your members will be excited about your product and your team and so they will often offer social pressure to add more classes, open new spaces and seek new partnerships. Now, when you are first opening and growing, this is amazing and can be massively helpful to use the excitement to drive more guests, but once your location is mature, this needs to be much more strategic, and so before looking at more locations, we must ask this question first:
SOLUTION: Am I maximizing on my ideal client?
When you first begin to consider additional locations, you must be sure that you have very clearly defined who your perfect client is, and also that you have identified the best long-term value for this client. If you are clear in this identification, then you understand who your business is for, and who it’s not, allowing you to make strategic decisions on the best partnerships, referral programs and even choosing a location for your next venture. Everything becomes easier when you understand exactly who you are speaking to.
MYTH #2: When I open the doors more people will come
Another myth I have heard so often, is most owners assume that actually opening the doors will get their prospects to buy. This argument makes sense if you think about your fitness center as an exchange of goods like a grocery store or car dealership. If I have inventory, then people will come and exchange their money for my inventory. The issue with this thought process is that we don’t sell gym memberships, we sell results, wellness and community. When you are selling pre-sale memberships, the most dangerous thing you can do is allow all your prospects to give you an objection of “I’ll definitely sign up once you're open.” If you have been in the fitness industry for any amount of time, you likely know that this simply means they aren’t ever going to sign up. We simply didn’t do a good enough job of selling them on why they should choose us.
SOLUTION: Have a documented and accountable sales process
Too often, I have talked to gym owners that use a CRM software, have some decent follow-up plans in place, have well priced memberships and options, but aren’t auditing or holding accountability to a sales process. If you have identified exactly who your ideal client is, and are spending marketing dollars driving them through your doors, you are burning crazy amounts of money by not ensuring that your team is following through on getting you a return on your capital. Have a documented sales process that is part of each team member’s onboarding when they are first hired. Be sure to test them and have them role play the sales process and know it well before allowing them to take guests. Host a weekly team meeting where you practice portions of the sales process and encourage team feedback. And finally, audit your process monthly to ensure that guests are experiencing the proper onboarding each and every time. Doing this allows you to be confident in knowing that opening new locations, sales can be audited from afar instead of you having to be in multiple places all of the time.
MYTH #3: All of my locations have to be slam dunks
Once you decide to scale, the most important thing to remember is that you will need to constantly review data points. You likely decided it was time to scale because your first location is jam packed, or you found a great additional location that makes sense for your coverage area. Another common problem I have found is many owners tend to compare their secondary locations to their original. Now don’t get me wrong, there is nothing wrong with setting goals and KPIs for new locations comparable to your initial location; however, the key is to constantly review as many data points on marketing dollars, guest traffic and member behaviors. These data points allow you to see consistencies across all locations and also allow you to see differences where you may need to reset expectations or evolve your KPIs to make more sense across locations.
SOLUTION: Develop a team that will help you scale
It is no secret that the best leaders are the ones that hire people that are better than they are at tasks they need done. When you decide to scale, you are also agreeing to evolving from the owner of your business, to becoming the CEO of your business. This also comes with very different responsibilities that many owners aren’t truly prepared for. So what does this mean for you? Developing a team doesn’t necessarily mean hiring a bunch of payroll or hiring high level executive suite. Most companies that scale well have a group of people that believe in the mission and vision of the company and deeply care about its people. When you can find specific skill sets within your current team that you can evolve and develop, this is a level of investment that not only grows the business but creates a career path for your team. Also, it’s imperative to remember that developing a team can look very non-traditional. Many marketing, IT, customer service and HR roles can be outsourced or created as part-time or contract roles. Also, developing great relationships with third-party companies can be a game changer, such as having a third-party marketing agency that is willing to dive into copy and messaging with you, a CRM customer success team that can help you develop dashboards custom to your business, and so much more.
The key to knowing when to scale is knowing that there will never be a perfect time. There is no time like the present; however, scaling doesn’t have to be a painful “learn as you go” process either.
By choosing to follow these three steps, you can shorten your learning curve and save yourself so much frustration and stress. Take it from someone who has learned way too many lessons the hard way! Scaling will be tough but can be totally worth it in leaving the fitness industry better than you found it.
Ben Ludwig is a leadership, sales and strategy expert. He has led global trainings on fitness sales, marketing and operations for over 60 countries, has taught in person and virtual seminars for fitness business owners, and has created sales material for owners and brands across the globe. Ben is the President of D1 Training 45 Sports Division - the largest franchisee group for the brand, serves as the Growth Pastor for CrosspointNow Network of Churches across Kansas, is a collaborative author of the Best Selling Book "Real Talk with Real Business Pros" available now, and he consults fitness business owners globally.
