¶ Intro / Opening
Are you generating the revenue you want at your gym? What would happen if you cranked out 40 to 70 grand a month in gross revenue? If that sounds like a huge number, I'm here to tell you it's possible. And my guest today is the proof. What does it take to be one of Two-Brain's, top revenue generating gyms? Anders Gatti will tell you on this edition of Two-Brain Radio. Welcome to the show.
I'm Mike Warkentin, whether you're listening to the podcast or watching on YouTube, remember to like subscribe, and ring the notifications bell, I really appreciate it Now. Onto dollars or more specifically, krona. Gatti Training is based in Stockholm, Sweden, and it's run by Anders and Yamina Gotti. Anders taught me how to say that. And I'm making sure I get it as close to correct as possible. In January, the pair, they cracked a tough Two-Brain leaderboard, monthly revenue. This is a huge one.
The top 10 ranges from 43,000 to over 71 grand US. Anders and Yamina almost hit 50 grand. So we're gonna talk about his secrets. Anders . Welcome to the show all the way from the afternoon in Stockholm, Sweden. How are you ?
I'm fine. Thank you, Mike.
Yeah, I'm very excited to talk to you about this because it's a huge one. And I know that it's tied when you tie it like a giant revenue total to a profit margin. Really amazing things happen in business. So before we get into the details, tell me about your business. What are your main offerings? What's your target? How much space do you have kinda gimme the lego blocks of your business.
Right. We started out , 11 years ago, first we started as a small time personal training studio, and almost five and a half years ago we started this gym . We have 530 square meters. I don't know how much that is in feet , but.
It's decent size .
Yeah , it's decent size. Yeah , we have about , 140 members. OK . And , the most common member is a middle-aged man or woman , more commonly woman. For every, every new man we get three or four new women these days. That's interesting. The most common people you see is , either business owner or someone that , works in a more high position in the company. Yeah . And we run personal training and we run a kids program and nutrition program also. But , personal training is the main thing we do.
Do you run any group classes?
Yes, group classes also.
But personal training is the big focus.
Yeah. Group classes not as many. We run about three classes a day, one in the morning, one in the afternoon, one in the evening.
So I'm gonna ask you a question. I'm gonna jump ahead because this one really stands out for me. You're getting close to 50 grand US in revenue from 140 members. So the average revenue per member there has to be pretty high. Am I right? Yeah.
Yeah. It's really high.
We're gonna ask you some questions. I need to dig into that in a moment, but I first wanna ask you, we touched a little bit. Do you have an approximate revenue breakdown as in like what percentage of revenue does your group training provide versus your personal training versus your kids or anything like that? Do you have some approximate numbers?
Yes. personal trainer stands for almost the half of the revenue.
OK . 50% . Yeah. Yeah.
The group classes is around 40 to 45 and the kids and the other revenues is the rest.
So that's interesting. So three main, three main legs of your table, so to speak. Yeah . do you have programs that see your personal training clients also doing group classes, like a hybrid program at all?
Yes. Yes. Most of our clients do some kind of hybrid
¶ Gatti Training's revenue growth over time.
program.
OK. So now we're gonna dig into some of this other stuff here, but , how has this revenue grown over time? Like when you started just as personal training and then you grew to this gym, what , you know , what were the major changes that caused this revenue to increase? And do you remember what it was when you first started ?
Yes . The biggest change was when ee joined Two-Brain Business. That was the biggest one. And we did have the courage to all new members start with our on ramp programs. So all new members have to start with three months of personal training. Yep . And , that's was the biggest difference.
What was your revenue before you did that? Do you remember?
It was around half what it today.
OK. About half. And what does it cost to do your intro program ?
In the Swedish, it would be for the first three months , it would be around five to 10,000 Swedish kronas a month.
So I'm just typing this in.
Probably about , yeah, one Swedish crown is like , eight Swedish crowns is like , one us dollar .
OK . So that gives you some perspective on that. OK. So I find it interesting because a lot of the time back in the day, like when I started my gym, I think in 2010 or something like that , and it was a CrossFit gym , we would just chuck people into group classes. There was no personal training. We even know it was a thing that you could do CrossFit and personal training or functional fitness and personal training . Eventually we actually started doing an eight session personal training intro .
And that changed a lot for us . Did the same thing happened to you when you put that program in, you've got like, is it hard for people to sign up for that and say, OK, I might wanna do group training, but I'm still gonna do three months of personal training right off the bat. Is that a tough sell ?
No, not a tough sell . Yeah . I thin, it's easier to make the sell nowadays. Before we did on ramp, some people would request our price. Why do we have to pay more at your place than the neighbor gym? But now they see the difference we make with people. And we tell them that you have to qualify for group class .
Tell me about that qualification process . How does that work?
Yeah . We look at your weaknesses. we look at your mobility and strength. If you have any injuries, something like that, we don't want to let you in a group class , you might hurt yourself. Or when you don't have the technique to do the movements we do in the group class. So we're not gonna stop you from doing group class , but we're gonna tell you, we don't want you to do group class until you're and people listen to us.
They should. You're the fitness expert . So I like that. How many trainers and people do you have on staff?
We have , three full-time trainers and , one kid coach and , one more trainer and one more group trainer, the full-time trainers work, mostly PT , but do a few group sessions every week.
Also. How much of the training do you do or do you just have a management role where you're organizing things?
No, I do training , I love doing training, but before Two-Brain I did so much, I did like 35 to 40 PT session each week. A and also did , like 10 classes a week. And I was the janitor. I was the cleaner, I was the marketing guy , you know, and nowadays I do, I do like 15 PT and group plus sessions a week. So 15 hours a week. And the other hours, I work in my business nowadays.
And I'll ask you this one , because it sounds a funny answer. How many hours a week do you work in general? Total.
Nowadays I work like 35 to 40 .
I wasn't sure . Maybe you had the 15 hours of training attached on 60 hours of other studd.
No, no, no, no. And the goal for this year is for me and Yamina to work 30 to maximum 35 a week is the goal. Decreasing the number of hours .
So talk to me a little bit about getting these high value clients . So an interesting part of your revenue structure, and I've seen gyms where it's a little bit different. Let's say there's a gym that has 300 members and a high average rate, and they'll get up around 70,000 a month or something like that. You're getting 50,000 with 140 members. Talk to me about how you find those high value clients.
Like some people be like, literally they'll look at our Facebook's ads and say, there's no way you can do this. There's no way you can generate that much revenue. And there's no way that you can make that much money off one person. How do you find these guys?
¶ Finding high-value clients through affinity marketing.
We do it with affinity market. We've been doing affinity market since before Two-Brain Business. Yeah , but we didn't call it affinity marketing. We have learned a lot about affinity marketing since joining Two-Brain Business. Also. The big secret is caring about people and really caring about them . You know, knowing the people and get them th results they deserve and the results they want. And , always show them what's around the next corner.
When you can do this, you can do this thing and this thing. So there's no end to it , show them the path forward and they will be holding your hand forever.
There's a lot of stuff you just said there. That is super important. So the first thing I'm gonna tell listeners , it's affinity marketing is basically using your current clients to find more people just like them. It is a formalized documented process where you actively ask them for contacts, friends, family, coworkers. Then you start moving outward to people who may be a little bit more distant, that you can find the exact guide to this at free tools. That's the free tools button .
The top of Two-Brain business.com. Do check that out. This process doesn't just happened . I've learned this from experience. If you just sit there and expect your clients to give you referrals, you'll get a few, but you won't get as many as if you actually say, Hey, you had great results. Is there anyone else that I can help? Tell me a little bit, Anders, about your affinity marketing process. When do you ask your clients for these contacts and how do you do it ?
¶ How to get your clients to send referrals your way.
Sometimes you ask them during coaching hours, but then y ou sit down a nd chat with t hem with a coffee. And also when we do a g oal session, y eah, w e a lways, we always ask them if they h ave any other k ind o f people like them that w ants t o join us.
These goal review sessions are so important because you sit down , with your clients and you go over what's happened. And if they've accomplished their goals, you highlight their successes, their bright spots. You show them that they're succeeding. Then you ask them what else they want to do. And you keep the progression going, giving them a new plan.
So for example, if someone says, I wish I was losing weight faster, you would then say, Hey, you could do that if you add a nutrition services and personal training or something like that. So there's some very good upsell. Generally what happens people have told me is that in these meetings, clients are so happy with their progress. They're generally overjoyed to send you referrals. Is that what happens in your process?
Yeah, exactly. Exactly.
Yeah . It's the exact right time to do it also a good time. I'll give you a pro tip is to ask them for a Google review right there. They're super happy . Ask them for a review of your business when they are more than happy to do so. In that referral process, then when you contact these people, how do you do it? Do you just say , you know, Tom gave me your info. I'm, you know, Anders from this gym , how do you contact them and make that conversation happen?
First, I ask the client to tell their friend , the family, or coworker if it's OK that I call. Yeah . If they tell me it's OK, then it's a really, it's a warm referral. Then I call 'em up and introduce myself. And maybe I heard that you had a knee issue and I talk about them about the knee issue. I try to find something , to talk about them, to learn about them and then ask them to, would you join for a coffee, sit down, have a chat and see what it ends. OK . Yeah. Yeah. It's , it's not hard.
Oh, it's funny because it's such a simple process, but so many of us, including me missed it for years and years and years. How often do do you do goal review sessions?
Every three months.
¶ Mapping the client journey and improving retention after on-boarding.
Yeah.
Every three months. So what I'm kind of getting at here is that you have a really concise idea of your client journey, right? Like, you know, how most of your clients are coming to you, you know, where they're coming from, you know exactly who you are. You told me in the intro exactly who your market is for the most part, you'll get some outliers, I'm sure. But you know, it's predominantly women professionals and so forth.
And then, you know, in the three month blocks, you're gonna progress them through your business. You have a three month intro personal training session, and then you have the rest of your options. Did you have that client journey in place before? Or was this something that you've just developed over the last few years? Or when did that get in place?
We had kind of a client journey, but not written down. A couple years ago it was me and my wife, but now we have a lot of people working at our place. So we had to write it down so everyone else can follow it and do this same thing. But it's been an evolving process , we evaluate it every now and then, and try to do improvements all the time. So, yeah. It's big difference of the last two years.
And it's funny because when I talk to successful gym owners, like you guys who are running really good gyms, every single one always knows their client journey. And it's funny because again, I didn't do this back in the day. I just thought you come to the gym, you work out , we work out forever and that's the end, you know, but it's not like that.
There's a lot of things that happen where it's like, you know, as a for instance, when I would lose members, a lot of times it was like someone had a baby, someone maybe moved to a different city, someone got married, those were often life events or job change that really altered my client journey. And I didn't even know about it.
Some of the things that would've fixed that would've been like online training, online programming, online nutrition programs that would continue, even if people weren't in the gym. But I didn't, I wasn't really equipped to figure out how to do that at the time. Now that we're getting better sense of the client journey, you can really figure out what people need when, why people are more apt to leave and then you can solve those problems.
So I'll ask you this retention is obviously a huge part of your revenue. You have to keep these high value clients. Do you see spots in your client journey where they're more likely to leave and how do you plug those holes? So to speak , fix those problems.
If you don't get t hem o n b oard the first 90 days, if you don't get t hem to come into your community and, f eel a difference in your gym and get t he social thing with other members a nd with t he trainers, I think most o f t he t ime you lose t hem.
That first 90 days . Yeah .
It's yeah . It's really critical. If you get them to love your brand during those days, then it's much, much easier to keep them after that.
I've heard from other gym owners that say the same thing. And some of them have even told me that the longer and more involved your intro program is, the better the retention is. Have you found that to be the case ?
Yes . Yes, of course . The longer you can have on board it's easier to have them time and hopefully stay with you forever.
It's funny because that's the opposite of what I did . Right . Where I was in a rush to get people into group classes because I thought that's what they were coming for. So I thought, OK, if I give 'em these eight personal training sessions, but I gotta get them through there. And then I gotta get 'em into group classes that was maybe the wrong approach, you know?
And I think what I could have done better was space things out longer and offered more personal training and more customization and so forth at the time, rather than just focusing on funneling into group classes . You, it sounds like in your history, you didn't have a huge focus on group classes because you came from a personal training background first, is that right?
That's right. That's right. Personal training has always been the biggest leg for us to stand on .
¶ Selling high-value packages.
Best part about that is that personal training clients tend to be higher revenue clients and they tend to see the value in training. Right. And what I didn't realize was that group classes are a discount option, right. That you don't get as much attention you don't pay as much.
Is that how you present them in your, like when you're selling a package to a client, do you present the, I mean, not as a discount, like a cheap option, but as if you don't have the money for personal training group classes are your next option? Is that how you do it?
Yeah. That's how I do it. But if you don't have the money for personal training, they can still pay for individualized programming. I do your own programs. You can train by yourself and do group classes a couple of times a week. And that would be the next best option. And the last option is to fly with the classes. Yeah.
OK. Yeah . Let me ask you about the other leg of your business, the kids program, is that generally the children of your members , or are these kids from outside ?
Twp thirds are from gym members . The other third is outside . We started a kids program last year and it's started to grow now. This week starts this season and we have all the classes are fully booked. So either our kids coach will have to step up and work a few more days or we have to hire another coach again.
Now are these group classes, or is it personal training with kids?
It's , small team , personal trainer with kids.
OK. Yeah . And so you're filling that essentially through affinity marketing, right. You're using the children of your current clients , which is , it's a home run for gyms, really? Like if your clients love your gym, how easy is it to get their kids into your business?
It's easy. It's really easy. And the kids that come from outside , after a while they bring the parents, so we get new members from the kids also.
Yeah, it's right. Yeah. And that's a really cool thing about the children's thing is like once and that's why affinity marketing works because rather than having to market and dump ads into like, you know, the internet and try and find random people, you're now using someone who loves your service to find someone else who's going to love your service . I'll ask you this . Do you market , do you do ads and paid advertising? Things like that ?
No paid advertising.
Nothing at all? Really. Have you ever in the past?
Little tiny bits of it.
So it wasn't something you needed to do?
No. No. our mentor Per Mattsson, he told us that you don't have to do marketing right now. If you do marketing, probably you will be overwhelmed with the work. So we're growing at a steady state and we can handle it at this pace. But if we would do to paid marketing right now, probably too much work.
Yeah . And that's interesting. That's a lot what , like what Chris Cooper, Two-Brain founder does at his gym Catalyst Fitness in , Ontario, Canada, he runs ads very infrequently, once in a while, maybe three months or something like that. But in general, the gym survives on referral marketing or affinity marketing. So do go to free tools if you're listing and get that guide, it's costs you nothing but time.
And you can make some crazy money just by finding, you know, following the step by step plan that's in there. So do get that guide. I'm gonna ask you a little bit about growth. What are your goals like? You're at, you know , 140 members, 50 K revenue, US. What are your goals for the future? How high do you wanna get? Do you wanna expand your business and get even more space or stay tight and small like this?
¶ Balancing growth with providing high-value service.
I would like to stay tight and small like this. I think , the gym could handle top 200 people , with a high quality service that we deliver today. So 200 people is the goal for the future. We'll see what the future bears , if we open another facility , but it's not necessary right now . Right now. I just want to sit down and savor the moment a bit . It's a couple of rough years before the gym started to fly. So
Now in those rough years, what was the main problem?
It was , me and my wife doing all the work all by myself and not , taking in other people, taking in new coaches.
Yeah. I imagine you were probably a great trainer, but probably ran out of time and energy to do some of the things that would grow your business. Am I right? Yes. Yes.
yeah . I'm a great trainer but I was a terrible business owner
But that's something you can change because it's funny when like a lot of us, like, I thought of myself as a trainer first. Right. And that was why I got into it. And then all of a sudden I realized I can teach a squat really well, but I haven't a clue how to run this business, you know, and that's where Two-Brain came in to like, educate me on all the stuff that I missed. Here's a question for you.
Chris Cooper often talks about 150 clients being a number where you can maintain really, really tight relationships with each member. So you I'm sure, you know the names of every single person in your gym . Once you get up to 200 , that kinda changes a little bit, because 150 is often that mark where it starts to get hard to maintain your relationship . So if you were to grow to 200 , how would you make sure that each client had the same really tight relationship with you and your business ?
What would you need to do ?
Really consistent client journey. We have to coach the coaches and the staff really, really well to make that happen. And that's the big challenge in the future to maintain this kind of service, this kind of high quality service that we do today and , have a lot more people to handle. See if it works, if it doesn't work, I will cut down to 150 . Yeah . I'll stay there.
Yeah . And talk about profit margins. So we talked about revenue, we've said like you have a great number. How does your profit margin figure into that revenue number?
¶ Talking profit margins.
Yeah. Our profit margin is increasing. Yeah . The goal is to hit the magic 30% . Yeah . Yeah. So we're getting to it.
OK. That's good. Cause often, you know , one of the things that we often talk about is like fake numbers is like, if, if someone's got a hundred thousand dollars in revenue and their profit margin is like 1% , it's not a great business, you know ? So you have to tie it to that profit margin. Yeah .
This year we will be debt free . We have paid all loans for the gym since we build the gym and all equipment we'll own everything. So that will be a game changer for us.
Yeah. So that frees up some monthly payments right on debt servicing. So that's cool. And you said this month?
This year in , September, October.
So what are your plans once, you know, you celebrate that that debt is gone. What are your plans for that extra cash flow?
Somewhat w e b e t o increase our s alaries, me and my wife's.
There you go.
And then we will be , we invest it . So the money works for us. So we'll see what we invest it in.
When you spent the money originally, did you , what was it mostly spent on? Was it equipment and gear and things like that ? Or what was it directed to?
Equipment, gear. And we build a gym from the ourselves . We build the facility. Yeah.
Oh , so I didn't even know that one. Soyou actually built, do you own the building?
Not the building, the inside.
Oh , OK . So yeah , yeah, yeah .
But the inside was a dump.
Yeah. So you had to spend a lot of money to make it nice and get the stuff. Bathrooms and showers probably. Yeah . Yeah.
OK. Around $150,000 , something like that.
So now paid off , looking for the future. That that's pretty, that's pretty interesting. If I were to ask you this, so a gym owner right now is out there and there's so many of them who say they look at these totals and I was certainly one of 'em back in the day and say, I could never imagine taking in $50,000 a month, let's say they're in that 12 to $15,000 range. What would you advise them ?
How would they take some steps today to start moving from a lower revenue total in the direction of where you're at.
To try to replace yourself in the lower value roles. All the cleaning, all this small stuff , get someone else to do it. And the time that you free up do some higher value roles, do PT instead of cleaning. And , if you don't have some personal training coaches, try to hire some coaches to work for you and that will be a big change also.
So here's a question that I , this is an interesting one because this is , we call this climbing the value ladder. And there's actually a process that Chris has written about on the Two-Brain business blog. You basically value your time. You look at the roles that are beneath your value . So let's say my , I basically am worth $50 an hour and cleaning is $12 an hour. I need to get rid of those cleaning hours then use those hours to reinvest into more valuable activities.
So, but the thing that a lot of people do is they offload those roles and then they don't do anything or they don't focus on the right
¶ Climbing the value ladder.
things. How hard was it for you to get rid of cleaning or some low value rules and then actually generate money in those three hours ? Were you able to do right away?
Yeah, I did right away.
How'd you do it? I took a paper , and draw a line and , write down the stuff that I wanted to do. And on the other side I wrote the stuff that didn't wanna do. And , then I calculated, how much does this cost ? What can I do in the time that is available for me now instead, and then start to hire people. And so I'm guessing an easy one for you being who you are . It would be pretty easy to hire a cleaner and then spend the hours that you normally spend cleaning doing personal training.
Was that something you did ?
Yeah.
What other stuff did you do? Were there other high value roles that you hit on that you needed to do that would grow the business?
Yeah, I would do all the no sweat intros, I started to do. And we hired a client success manager to help with the reception and to manage clients also. And that was also a big game changer for us.
OK. Yeah . So that's the first step gy, owners , if you're out there, if you are looking to increase your revenue, you need to look at where you are spending time in your business, do a time audit, figure out all the hats you're wearing, what are you doing? Then start looking at, which are the lowest value roles . Can I hire someone in these roles to free up some of my time to do more important stuff?
And again, these aren't low value people you're cleaner as a very important person, but it's not as valuable as doing personal training or something like that . Any other tips that you would offer gym owners ? Is there anything else that you would tell them to do to
¶ Ask your clients what they need.
generate more revenue?
Ask your clients, what do they need? What do they want? Yeah . Yeah . Ask them, sit down and ask them. If you don't have an nutrition program, maybe you should try and run the nutrition program. If you can't run nutrition program, bring someone else in who can.
So I made a mistake and what I did was I would often think I know what my clients need. And so I would create programs that I thought filled their needs. I didn't ask them what they actually needed. It was a mistake. If I had actually asked them , I would've done better sooner. Did you ever make that mistake or have you always been really good at talking to clients and asking 'em what they want .
No, I did that mistake for a lot of yeras.
I don't feel so bad then.
I also thought I knew what they wanted. When I started asking , I get more answers and different answers than I thought.
What kinda answers did you get? Was your kids program? Did that come from that?
Yes. That's one of them. Nutrition program and more high value service at all.
It's interesting because basically, you're saying that when you talk to your clients they essentially told you how they wanted to spend more money. And then all you have to do at that point is create the services, which is not that hard in the sense that like you have coaches, you have a gym, putting in a kids program, not that hard.
Not at all. Yeah . And the sale is easy. You don't feel like a salesperson and you don't push to them new services. You ,
Yeah. So again, that's that step two, listeners, go out and ask your clients what they want and what they need and what other services they might like, what do they like about your gym ? Again, we have an exact plan for this, for Two-Brain clients of exactly what you should ask and the order of the questions, but do have those conversations. And I'll give you the pro tip here is ask your very best clients. These are the people that bring you the most joy.
And they're the people that also spend the most money in your facility. We call them seed clients, or sometimes apple clients identify them, take 'em up for coffee and find out what they need. Do you know, Anders, I'm guessing you do . Do you know who your top 10 clients are right off the top of your head? You've done that exercise.
Yeah. I've done it a few times. It's so important. I can't tell you how much, how important it's really, really important
When one of these clients tells you something that they want, how fast do you react?
Try to react as fast as I can. Yeah . To try to make a plan and then , and bring the service as can , if they want it now you should give them to now. If you wait then maybe they're not interested in a week.
If someone else creates it for them, right? I've got two huge tips already. Is there anything else you would advise to gyms owners? No pressure. Cause that's two big ones already .
Take care with your health. Sleep well, eat well, train, do all the things that you love , better go see your friends, see your family , and you have to live your life. Can't always be in the gym. I love my gym, but my gym almost killed me a couple years ago. Cause yeah . Working like 250 hours every month. Yeah .
Yeah . That's really tied to that value ladder though. Right? Because if you start to offload some of your low value roles , you can start to reduce your total hours and actually make more money. So it's like you pay the cleaner, but you don't have to clean anymore and that's free time.
And then you could eventually, as you start to get this momentum, then you can start getting to that what Chris is called, the tinker level, which is that third stage of entrepreneurship at that point, you're working more on yourself than you are in your business. And the cool part about that is that you have to be mentally fit, physically fit. You have to do the things that keep you in quote , unquote , tiptop shape as an entrepreneur, or your business fails.
So I think that's really, really important advice and not to overwork yourself because it's so easy as gym owners to just like work 250 hours a month.
Yeah. Yeah . It's so easy. Cause you tell yourself that you love it so you can do it in anyway , but no one can work that much for a long time.
I loved it too for a bunch of years. And then all of I was working way too much and I was burning out and I didn't love it anymore. And that was a shame, you know? And it took me a while to like circle back, Two-Brain helped me do that. And now I feel much happier about everything.
Yeah. Same for me. Exactly.
Thank you so much for sharing all of this with me. I really appreciate all the insight. will you come back on the show , later on when you get that debt paid off, and you get , into the realm of like 150, 200 members?
I love to. I love to
I appreciate it. That was Anders Gatti on Two-Brain Radio. I'm your host , Mike Warkentin. I'm all about telling these stories of amazing gym owners. Please subscribe for more episodes. And if you're on YouTube , please hit the like button too.
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