Barbell Shrugged - Increasing Your Sales with Alex Hormozi - Real Chalk #111

Episode Date: January 21, 2020

Alex is a former gym owner who like many, was having a hard time actually making money. While his gyms were full, he couldn’t acquire, serve, and retain enough customers to be profitable.    Fast forward just a few years and this same guy had 6 gyms fully capped out and he was making 7 figures on each one.    Fast forward another few years and that same guy owns a $50M+ business that isn’t showing signs of stopping anytime soon.    How’d he do all that? Well, you’ll just have to listen!   ---------------------------------------------------------------------- Show notes: http://www.shruggedcollective.com/rc-ep111 ---------------------------------------------------------------------- ► Subscribe to Shrugged Collective's Channel Here http://bit.ly/BarbellShruggedSubscribe 📲 🎧 Listen to the audio version on the Apple Podcast App or Stitcher for Android Here- http://bit.ly/BarbellShruggedApple http://bit.ly/BarbellShruggedStitcher Shrugged Collective is a network of fitness, health and performance shows that help people achieve their physical and mental health goals.  Usually in the gym, but outside as well. In 2012 they posted their first Barbell Shrugged podcast and have been putting out weekly free videos and podcasts ever since. Along the way we've created successful online coaching programs including The Shrugged Strength Challenge, The Muscle Gain Challenge, FLIGHT, Barbell Shredded, and Barbell Bikini. We're also dedicated to helping affiliate gym owners grow their businesses and better serve their members by providing owners tools and resources like the Barbell Business Podcast. Find Shrugged Collective and their flagship show Barbell Shrugged here: SUBSCRIBE ON ITUNES ► http://bit.ly/ShruggedCollectiveiTunes WEBSITE ► https://www.ShruggedCollective.com INSTAGRAM ► https://instagram.com/shruggedcollective FACEBOOK ► https://facebook.com/ barbellshruggedpodcast TWITTER ► http://twitter.com/barbellshrugged  

Ladies and gentlemen, it's Tuesday, and I have a huge announcement for you guys. Please listen up. Starting in February, I'm going back to my old Real Chalk podcast. So I started on the Real Chalk podcast, and then me and Barbell Shrugged hooked up together. We created the Shrugged Collective, and now we are all going back to our prospective networks, and we're going to be back to the OG ways. So moving forward, it's going to be so much better for you guys to find our shows and see what we have going on.

So as bittersweet as it is to break up, it's going to be a lot better for you guys. And that's really the whole point is to give you guys the best content possible. So if you guys want to follow Ryan Fish, you guys want to follow the Real Chalk Podcast, please look me up on iTunes under just Real Chalk. All right. It's such a crazy time. I can't believe that things change. It's bit a crazy time. I can't believe that, you know, things change. It's bittersweet. You know, what else can you say? I loved hanging out with Doug and Anders for the last couple of years. We traveled the world and had so, so much fun. But, you know, alas,

this is gonna be better for you guys. So it's what we have to do. So anyway, moving forward, this podcast coming up number 111 for me on the Shred Collective Network is with Mr. Alex Hermosi, who started as a gym owner and then built this giant 50 plus million dollar company that just took actually not that long for him. I want to say like five or six years. And he's just an amazing, amazing person, huge wealth of knowledge, incredible at sales and marketing and all that stuff. So you guys are going to hear all the things that he thinks are important for you guys, either as a gym owner or as a entrepreneur in the fitness industry. He has a lot of really good nuggets for you guys.

You guys are going to be so, so pumped on this episode. And if you guys just go on Google and even just Google Alex Hermosi, you'll see so many different things pop up with him and all the gyms that he's owned, all the gyms that he's helped, thousands of gym owners at this point. And if you've been on Instagram, you probably hit – he's probably hit you with one of his ads at some point. You see this jacked guy with a mustache, and he's talking about how to get your gym to run at the seven-figure rate. So it's definitely not bullshit. The guy's fucking super, super for real.

And not only that, I actually hung out with him. I was supposed to be at his house for like an hour. And I wound up hanging out with him for like eight hours. And then I actually stayed in Austin an extra day just to hang out with him again. And we all ate dinner together, him and his wife, Layla, who's also amazing. We had such an amazing time. And I definitely consider them to be friends of mine, hopefully, for as long as possible. I really, really, really enjoyed meeting them.

And I enjoyed their energy and everything they do. And I really respect them a lot. So I hope you guys really love this episode. I'm excited for you guys to listen to it. Anyway, with me going forward, I am going to be doing the carb cycle and keto cycle challenge in the future at the same time. And I'm going to be calling that the earn your carbs challenge. And you guys will get to pick whether you want to eat high carb or you want to eat high fat.

It kind of depends on what your goals are and how you prefer to eat. So moving forward, you won't just have to pick one. Because usually I'll run a keto cycle challenge. And then a few months later, I'll run a carb cycle challenge. And I'll go back and forth. And people love each one. But what I want to do going forward is kind of just create the earn your carbs lifestyle. And you guys get to pick which one you want to do. And if you've done one, then you try the other one. And then going forward, you're going to get all the same things with the Facebook group for life.

You're going to get, you know, free workouts. You're going to get the live Q&As with me in there answering questions every week. You're going to get all these things. But now you guys get to pick which style of eating that you want to do. And I'll be able to help you along the way if you're not sure exactly which one that is.

So we have that. And then I have the new Super Set 100 book that I'm super excited about. Super Set that I'm super excited about. And basically what that is, it's a mixture of German volume training. And I change the tempos and change the rest breaks. And I create something truly special that's only unique to me. And I wish I had a better name for it. But I'm just going to call it Super Set 100 for this point. And there's four 10-day cycles in this workout. And the first 10-day cycle starts with a two-minute rest break between all the movements and the big super sets. And then every 10 days, that rest break gets a little bit less, a little bit less, a little bit less.

And the tempos go from a little bit longer eccentric movements to a little bit shorter. And then eventually, the very last 10 days, you're doing all 100 reps basically as fast as you can and there is no tempo um and so you're technically kind of doing 100 reps for time of these big giant supersets that you started with this huge rest break about 40 days ago so really excited about that book the the results that people have been getting so far have been insane and i say that with a giant smile because you know people are just getting jacked on it and i'm so pumped for it but also what's cool about the program is it's it's a 24-hour fitness style program or Gold's Gym style program. It's something you do in a traditional gym. So, you know, you think Ryan Fisher, you think all this CrossFit stuff.

But this is the first time I made a book that is for the traditional gym. So I'm really excited. And it's been asked. People have been asking for it for a very long time. And it's finally here. All right. Moving forward, be sure to listen to me on the Real Chalk podcast going forward in February. Make sure you guys follow Mr. Alex

Hermosi and his wife, Layla. I put their Instagrams in this podcast. You guys will hear it at some point. And if you guys have any other questions about any of the things that Alex does, you guys can DM him. You guys can find him on his website and all the things. I hope you guys really enjoyed this episode. When you do love it, if you have a favorite section, make sure you tag me, Mr. Hermosi, on Instagram, and we would love to see it. All right, ladies and gentlemen, I am in Austin, Texas, in Alex Hermosi's home. It's not every day that I get to have somebody on the podcast and they invite me to their home. So not only was I excited to go to this man's house,

but in the first 15 minutes, we worked out, which was super dope. I feel like it wasn't a rare thing for you, but I want to feel like I'm extra special and we got to work out together just because that was cool. So for those of you who don't know who Alex Ramosi is, if you've ever been on Instagram and you've ever seen this man with a mustache and he's exorbitantly jacked and he's like,

hey, do you want to make more money in your gym? And this is how I do it. And he has a little book. And as he's holding the book, his bicep is bigger than the camera. And he's basically just talking about how to scale gyms. And then you look him up and you find out that he's actually super legit. So what exactly is your business just for the viewers right now or for the viewers,

for the listeners and the viewers, as I wear this hat right now, it says make gyms great again. This is the greatest hat I've ever been given. My hat actually matches your shoes. It was by design. We're very red. All right.

So let's talk about your business model and let's get into a little bit of like what it entails. Yeah. So we have three businesses. They serve the same avatar, which is gym owners. And so specifically, it's more micro gym owners. So affiliate boxes, boot camps, semi-private facilities, personal training facilities, real brick and mortar business owners. Typically owner-operated, most of them. I think the average gym has 1.3 locations that works with us.

And we just have a specific way that we run the gyms from an acquisition standpoint, but also from... So you help all gym owners. Yeah. It doesn't matter what type of gym it is. It could be a CrossFit gym. It could be a spin studio. So here's an interesting one. Yes, we 100% could help a bar.

We have some bar studios, you know, spin studios. What's interesting is that, and I've got yoga studios and whatnot, the type of owner who is attracted to that typically is not attracted to me. And so we just tend to be more in the more hardcore fitness side because I also look the way I look. My like is so funny. On Instagram, you can see your demographics. And so I'm 81% male. Dude, that's so interesting. I joke about this with my wife.

I'm 81% male. Are you? Swear. No way. I'm going to show you after this. Oh, that's hilarious. It's so weird. It's 81% male.

Okay. Well, that makes me feel bad. I told Layla. I was like, babe, don't worry about it. I was like, the only DMs I get are from guys who are trying to holler, which is not usually my, my preferred, you know, I'll tell you my most insane DM I've ever had in a little bit here. You'll, you'll love it from mail. Oh, even better. So basically, um, what we do is we, it's, it's more of a consulting business that has, uh, like an, uh, a step we've productized a service, right? And so we've broken

down a process for here's how we fix the acquisition process for a gym, how we get people in the door profitably for a small business owner, because the issue, there's three main problems with the traditional gym model. One is that on the front end, they can't acquire customers profitably. So they have to lose money in the acquisition. So they have to spend a marketing budget with the hopes that they'll be able to recoup the cost of acquisition within the next one, two, three months, et cetera. Right. And so we fix that by selling high ticket up front when people are the most excited, when their pain is the highest, and it makes the most sense to sell them the most expensive package and sell to goal. Right.

And that's where we can sell $2,000, $3,000 plus packages for, like you said, you know, CrossFit boot camps, et cetera. And so we do that up front so that if you... Sometimes I feel like the high ticket items make people feel more accountable. Oh, it's better for everyone. They're not shied away from paying for it. They're like, well, you know, I'll do it. Yeah. And then I'll feel, you know, invested in it. And I feel like, you know, even whether you can afford it or not, it's one of those things where it's, it's, it's almost needed. If you need to make a real life change, sometimes putting your money up.

If you want to be a good coach, the coaching conversation begins at the sale, right? Like if we want to have a superior outcome for someone, then it has to start with breaking their beliefs of what's possible and getting them invested. And the more they pay, the more they pay attention. And that's just a fact,

right? Like I'm sure everyone here is in the fitness world has given their mom or their aunt or their uncle, uh, a super in-depth program that they like did all the macros for and did all the periodization and then checked in with them like eight weeks later it's like oh yeah i've been meeting to start that it's because they didn't pay anything right so that's the first problem right is that they don't know how to acquire customers profitably and so we flip that so they can make three to one five to

one ten to one on the acquisition so that the acquisition side no longer is a bottleneck because they're not capital constrained they can make make money getting customers. So that's number one. The second issue is that traditionally, if they even are full, especially at the more full times, the 5.30 PM, the 5.30 AM classes, they start reaching capacity before they're profitable. And that's typically because their price points are off and the way that they do the fulfillment, both in terms of exercise selection, the duration of the classes, just everything is off. So it's not structured so that they can actually be at full capacity and be profitable to the extent that they want to be given the amount of time and capital they put into the business, right? So that's number two.

And so we fix that through what we call the profit levers. There's capacity levers, there's overhead levers, and then there's profit levers. So there's three types of levers that we kind of pool in the business. And then the third big problem is attrition, right? It happens. And so it's like... Hole in the bucket. Yeah, the hole in the bucket problem. So it's like, great, we're making money getting people in the door. Awesome. We fixed the model so that now we're actually making money even as we get, you know, spun up to full capacity. But how do we keep these people engaged so that they stay and

pay longer and then obviously, hopefully, refer friends so that that ultimately decreases our cost of acquisition overall. And the goal is to get to the golden ratio where your referral percentage is higher than your turn percentage. And at that point, it's self sustaining without without any paid acquisition. That's cool. So that's it. Is that kind of like where because you eventually get into like a is there a click funnel scenario? I mean, we give, we give plenty of templates for landing pages and things like that, but that changes all the time because market has to change. Oh, right on. Okay. So I had a few questions from viewers or, and listeners and stuff from Instagram. Cause I told him I was coming here and one of them asked me, I thought this was a good

question. They're like, where do you see the fitness industry going in the next five to ten years I'm super happy that that was one of the questions yeah just first off I mean there was a lot of good questions but like I picked the ones that I like and I was like I like this one and I always like talking to people that are in this space and see where they think it's going and I'll give you my opinion as well oh yeah I'd love to hear it um just an apology to anyone who's listening I breathe really bad I have like horrible, I can't breathe through my nose, so I'm trying not to mouth breathe on the mic. They understand.

It's a jacked problem. Okay. That makes me feel a little better. So big picture, and I talked about this in some of my marketing that went super viral, and it pissed a lot of people off. So actually, maybe I backed down, but I was pissing off my own customers, and I think it was just because it was such a harsh reality that I think a lot of people

didn't want to face it, but I still believe what I was saying, which is just, I believe that group training is a commodity and it will continue to get driven down in price. And that's what happens. That's what's happened to every single major fitness development in the last 50 years, you know, in the, in the seventies. I was going to say, give me an example. Oh, I mean, this is like, if you, if you watch the whole trajectory. So if you look at like the seventies when like LA fitness started and 24, all those ones started, right. They were able to get like 60 bucks a month, like 50 years ago, like crazy. And if you could account for inflation, they're like, they're almost charging like 80, 90 bucks a month. And now it's 20. Right. Exactly. And they have to

offer more, right. The facilities have to be better and cleaner. And like, so, so literally it costs more to get into it and they, they make less per customer. And so that's just because over time, every market becomes more and more commoditized, um, and more and more big players get into it and it becomes a volume game. Right. And so that's happened over time. And so, right. And so that, I mean, you've seen, we've seen that unfold. And then if you look at like 2005, 2006, which if you were in the fitness industry then, that was like the boom of personal training. That was when anyone could make $100,000 a year being a personal trainer because the economy was great.

That was when I was in school and I was like, oh my God, personal trainers make $100,000 a year. And I was like freaking out. Dude, I was there. You know how we're all on Google? All of us who are in the fitness industry, we're all on Google like, you can make $100,000 a year? In sweats? Yeah. I'm in. You can make $100,000 a year? In sweats? Yeah. I'm in.

Sign me up. And so, yes. And so that happened. And obviously, the crash happened after that. And so then that gave birth to the Boot Camp Large Group, et cetera, movement. And it was perfectly tough. The semi-personal training. Right.

Because what happened is, and that's where, and if you look at the price points, when people had personal, so personal trainers were at the big boxes. And then all of a sudden, everyone's like, within like two months, everyone canceled everything. And then you're like, oh my God. And they're like, okay, well, why don't you and a couple friends come to the park with me and I'll train you guys for 300 bucks a month. And they were like, great. Instead of 1,000, it's 300. It's a great deal.

And it was like group personal training. And so you had guys in outdoor boot camps charging $300 a month because of supply and demand, right? And it was novel and it was new and it was different. And it was also price anchored with personal training. So it seemed like a deal. And then obviously the more savvy business owners were like, well, if I do it inside, I can do it year round and I can put better equipment in. I don't have to just keep it on the back of my truck. You know what I mean? Like, and then the game got better, you know, the players who came into it got better. And there's like, Oh, if I put, if I put air conditioning and I clean this place all the time, like off and we have shower, like, you know what i mean like and then the game got better you know the players who came into it got better and there's like if i put if i put air conditioning and i clean this place all the time like off and we have shower like you know then it starts leveling up yeah but as that continued to

happen same thing happens again then it went from three hundred dollars a month to two hundred dollars a month and now depending on what industry reports read from like uh zen planner wadify things like that um the average gym they have three like tiers but most of the gyms are at like 119 ish per month on average for their eft which is a hard you know it's a hard place to be uh from a profit standpoint and it's only continuing to be driven down because now some of the bigger reference eft real quick for oh uh electronic fund transfer so like a recurring revenue member um if you look at that compared to like some of the big players now who are getting into it, like Gold's just came out with like Gold's Fit, which looks a whole lot like an affiliate box. Yeah.

I don't want to use my, you know, use the terms, right? But yeah, it looks a whole lot like CrossFit. And they're charging 59 bucks a month unlimited. So, and honestly, their trainers are just as good as everyone else's because, and this is one of the things I try to explain to our community, is that like, unless you are the person doing the training sessions, which we try to get our business owners out of it so they don't have to do that. But unless you are that person, you have the same access to talent that everyone else does. Except most of these bigger boxes have more one-on-one PT available because they have a huge pool of clients that they can ascend from. And most of those trainers, if they work 80 hours a week can make a hundred grand a year, you know, and a lot of times that opportunity doesn't exist for most, uh, trainers within a micro gym. So it's like you, you have access to the same pool

and the best ones typically will gravitate there. And so you might even have an inferior product as much as you want to be like, if everyone just knew about our gym, if people just knew about our gym, they'd come, people do know about your gym. They don't refer their friends because it's not good enough. And that's just the real truth. One of the incentives I do for my trainers at my gym is I let them keep all their PT money. Yeah. So that gives me like an extra leg up on trying to keep my trainers. A friend of mine actually did the same thing.

RBT, Travis Jones in Australia. He actually had the same model for his coaches. They could just do. You have to coach at least 10 classes a week. And then you get to keep all of your dough. Yeah. So it helps a little bit. For an enterprising trainer, yeah, totally.

All right. So now you have the group training is getting a little bit more watered down. Yeah. So where do you see it going now? I think I know where it's going, but I'm waiting to see. Yeah. So I think that group training on its own is a commodity. So the question is how can we combine other products services, um, such that the commoditized thing can be differentiated in such a way that we provide more value and that people are willing to stay

and pay more. And so I think there's a couple of different ways that that can happen. I think that you can combine products and services. Like you could say, Hey, if you, you know, have, if you take, if you buy meals from us, then you can get this for free, right? Or you buy supplements and you can get this for free. Like then all of a sudden they're getting multiple streams of value for the same perceived price. So now it's different and you can anchor higher. That's one way. Another way is the way that we teach all of our gyms right now, um, which is just by providing one-on-one accountability at scale. And so that means like texting your clients every morning for their workout, being like,

Hey, can't wait to see you tonight, Rosie, because most people just want, is this an explicit podcast? I don't know. No, you're fine.

Say whatever the hell you want. Yeah. Okay. I curse all the time. Okay. People just want other people to give a shit. Yeah. Right.

They just want someone to give a shit about them. Right. They just want someone to give a shit about them. And so they just want someone to wait. And there's been some models that have failed in the fitness industry where they tried to automate personal training with digital machines and things like that. And like, you can keep track of someone's reps and sets. Like you're talking about like Peloton. There's,

there's, I don't want to, I try to, I've tried to make, I'm trying to making friends with the franchisor. So I don't want to call any franchises out. But yeah, I think there's some that have done it and have failed. I think Peloton's done a good job for different reasons.

But from the franchise side, it has failed because no one wants to wake up at 5 a.m. for a machine. And that's really what it comes down to. And so there's the human touch factor, which I do think does protect gyms in the short to medium term. I think so, too. A lot of people are like, oh, God, what if like everything goes like online? I'm like human interaction. I pay $5 for a coffee every day just to go to the coffee shop. Yeah.

I like, I loved going to the coffee shop. Everyone's like, you know how much money you'd save if you just bought your own coffee? I'm like, you know how sad I'd be if I bought my own coffee every day? Which I wouldn't like life. Yeah. Like I'd be on my computer all day and I'd just stay home and just be a hermit and fuck that. And so that's what we kind of call the kind of hybrid model where you have both the one-on-one accountability.

And that can be used as an upsell. But typically when someone comes in, they really need that. And so we bundle that together and really position it as personal training. And that way we're able to sell boot camp or, you know, CrossFit, et cetera, for $400 plus per month, because they have a one-on-one coach. And so just like online trainers or Instagram trainers or whatever charging, you know, between 200 and $500 a month, depending on how good they are at business and blah, blah, blah, blah. We can do the same thing in person and have that one-on-one experience because if we're being super real, the thing that needs to be one-on-one is the accountability and to a certain extent, the food. But the workouts for most people who are general

population, it's like, if they just move, we've saved their life. Like if you can get just someone to walk for the rest of their life, like you've won. And so it's really taking a longer term perspective for, for what intervention is going to yield a sustainable client outcome. That's going to help them lose weight, keep it off, feel better, et cetera, that they're actually going to stick with, right? Like if I have to get you to wake up at four 30 every day and change your entire life, the likelihood you're going to stick with that for 10 years is really low. That's a great point. Because like, I always try to tell everybody, I'm like, please don't go zero to a hundred, like stop listening to Drake and like,

let's just go like zero to 10, you know what I mean? Zero to three and a half. You know what I mean? So like, I three and a half. Right. You know what I mean? So I feel like if you just have these little goals, it's way more sustainable. So everyone's always trying to sell certain diets and this and that. And I'm like, hey, listen, a good trainer all knows that as long as you're on a caloric deficit, you're going to be able to lose weight. But what's the difference between keto and carb cycling and this and that and blah, blah, blah? And really what it is is what feels the easiest for you so that you can do it in the long term. What deficit path works.

It all works for you. It's all going to work. But, like, which one works for you? So, like, do you like high fat? Do you like high carb? Do you like whatever it is, right? Like, I love high fat. And a lot of people don't.

And it's just the way I go. Yeah. Granted, I had a fuck ton of Kodiak pancakes with you this morning. And I went high carb. But I'm probably pretty sure I'm growing, getting my weight back. You're anabolic right now. So that's a good point. So I genuinely feel like right now, because I get a lot of people that come to me and

they're like, hey, you know, a lot of people in the space that know me from starting my gym and all that. And they're like, you know, I really want to start a gym and I want to do this and blah, blah, blah. I'm like, hey, man, I'm really excited for you. And I think that if this is the time in like you know i really want to start a gym and i want to do this and blah blah blah i'm like hey man i'm really excited for you and i think that if this is the time in your life where you're you're ready to make a big leap try not to put so much stress on yourself by like opening a million dollar facility and doing all these things and why don't you start a little bit smaller yeah and like have a small little personal

training studio and make good money yeah, and then scale from there. But I also don't like to see when people start a gym, like a CrossFit-style gym, because that's what I'm known for. They open this kind of big space, and they have two rowers and a couple dumbbells and stuff like that. I'm like, have you ever seen a Barry's Boot Camp or a SoulCycle or a big franchise? And they're like, you know what? We're just going to have four rowers today and like once we get big we're gonna grow into it

yeah nobody wants to walk in and see that I don't want to walk into Nordstrom and see like four pairs of jeans you know what I mean like I want to see 27 pairs of jeans I mean god good lord they probably have a thousand but like I need to see all the shit yeah and for me that makes a big difference but if you just have a small studio and you have dope shit yeah I feel like you know But like I need to see all the shit. Yeah. And for me, that makes a big difference. But if you just have a small studio and you have dope shit, I feel like, you know, you're already at a higher selling point. Yeah. I think the biggest one is just figuring out ways that you can provide more. So like I believe that every market there's two winners. You have the cheapest and the best.

And it's a lot easier to be, in my opinion, to be the best than it is to be the cheapest. I mean, like if you're going to try to be the cheapest, you need to go in with absolute like operational know how understand how to deal with volume, like there's lots of systems and most people are getting into fitness don't have that skill set. And there it's much easier to grow a business based on high ticket personnel, you know, clientele, and providing, like I said, $400, you know, plus per month. And you can do that with you can have a semi private only facility, like people were like, you know, what's the one models like there's, $400, you know, plus per month. And you can do that with, you can have a semi-private only facility. Like people were always like, you know, what's the one model is like, there's, there's so many ways, like you can have a hundred percent

zero training facility. And that's one of our, we, we espouse a few different models of gym launch. Cause it's just like the diet. Like I see businesses as a reflection of the entrepreneur, right? Like your style of how you, how you flow, right. Will be reflected in how you do business. And so we have some, some gym owners who do 100% hybrid model. What that means is basically they have a space this big, literally as big as this room, which for anybody who's not watching is like 200 square feet. It's nothing.

And so people come in and they basically talk to them and they're like, listen, Dorothy, you haven't stuck to fitness ever. So why don't we just start with walking? Can we just commit to that for the next like two months you know i mean and like let's like stop eating cupcakes let's just start there and so it's radically emphasized on the accountability and just hitting the small milestones and the thing is is like if darthee actually does those things she's gonna lose 40 pounds in the next two or three you know whatever four months yeah and she's gonna be stoked and

she didn't have to put nearly the amount of effort in. And I think there's a misconception within the space, which is like, I like using the dentist example when people are like, I had, it's funny. I had someone yesterday send me their pricing sheet and they're like, what do you think? And it was like, uh, X for eight sessions, X for 12 sessions, X for whatever. Right. And I was like, this is irrelevant darthy would rather do fewer sessions and lose weight right i was like so so if you're a dentist i can i make you can i pull your tooth out and have it take five minutes or an hour which one do you rather have and it's like oh gosh the five minute one right so then like it's all about selling the goal and the vehicle that we're choosing to get

there is whatever is really best for darthy darthy might not be able to make it into the gym it might not be convenient for her and she's got a track record of failing so like like, let's not jump back on the horse that we already know fails. And so that's where it becomes more customized. We call it a diagnostic selling process, but essentially we go through the process and we're just like, can you make it in in these times? Is that more like, we just ask, would you rather, would you rather make it in here? Would you rather work out at home? Would you rather eat lots, like two big meals a day or smaller meals?

Would you like, we'd literally just go or smaller meals? We literally just go through this so that we can just make a tailored program to the person. And then you just have the systems on the back end that make it simple for the coach to be able to do that at scale. And then that allows them to have a personalized experience and personalized pricing, but for the business owner to be able to have operational scale so they can make more, obviously. So you're just a huge fan of just incorporating other add-ons. Yeah, well, value. Just ways to differentiate because it's incredibly –

like every single gym is like our community is – I was going to say because everyone listening to this is going to be like, I just want to know how he can make me more money. You know what I mean? Like without – obviously, you guys could sign up for his course and his entire thing. You can get a book for free. Yeah, you guys can get a book for free.

And he has a lot of tips. But I want people to get a good little nugget or two from you. So if the biggest nugget is just creating more value by add-ons, that's a great thing to tell people and try to create a higher ticket item out of something that started at a lower ticket. So the easiest thing to do is that when you have clients who walk in the door,

you have to go through what we call a diagnostic selling process. You sell to goal. So let easiest thing to do is that when you have clients who walk in the door, you have to go through what we call a diagnostic selling process. You sell to goal. So let's say Dorothy wants to lose 40 pounds. Okay, well, we're going to say that safely we want her to lose two pounds a week. So that's going to take 20 weeks. So you're saying when someone comes in,

instead of selling them a gym membership, you're selling them a goal. No one wants a membership. No one wants a membership. They want their husband to look at them a certain way. That're selling them a goal. No one wants a membership. No one wants a membership. They want their husband to look at them a certain way. That's what they really want. I love that. And so memberships are relevant.

And so it's really like, why don't we just give Dorothy that? And she'll be willing to pay four times more for that because it's a defined end period of time. It's not forever. And it satisfies exactly what she wants. Not a $129 per month. Unlimited. Right? And so Dorothy comes in.

We go. We figure out what her goals are. And then we figure out what path of least resistance it is for her to get there. Now she feels like she can actually do this. So she has conviction that the likely that she succeeds is pretty high. And so now we're like, cool, it's 99 bucks a week for the, so like I'll finish what I was saying. So she needs to lose 40 pounds. It's going to take 20 weeks to get there, but we also want to make sure that she doesn't, doesn't just get there. She stays there. So we're going to either say we want 50% of that time or even 100% of that time added on the back end

to feed you back up above maintenance so that you can be at your lower weight, maintain it, and then hopefully recomp up so that we can actually get your calories above where you were when you started, but at a 40-pound lower body weight. And that's going to take another 20 weeks to get your metabolism revved up, whatever, right? And so that's going to be a 40-week program. It's going to be a 40 week program. It's going to be 99 bucks a week. If you want to pay like prepaid a day, you can save 20% instead of 4,000 it's 3,200. Like fair enough. Yeah. And then we just go from there. And then if she's like, um,

I can have $3,200 and you're like, cool, no worries. You can still save 10% if you put half down. So you want to just do whatever that is, 1600 bucks down. And then, then all you got to do is pay 49 bucks a week. You want to do that? You know what I mean? You just work your way down. And by doing that, the average EFT is 400, $430 a month. If you're including the fact that it's 4.3 weeks per, per, per cycle, right? Per month. So now you got people at $430 a month. It only takes like 120 clients to make a million dollar gym. Right. And remember the, the attrition problem that you have? Well, if you text a client every day,

what do you think the likelihood is that they're going to churn? Pretty good. Yeah. A lot better than just the standard 10%, which happens when you have a large group training facility that doesn't have a super strong anything. Right. If you're an average gym, as much as you're like our community is great.

So is everyone. So I'm thinking, I'm thinking right now, I'm like, man, I want my desk person to text everybody right now every day. I don't know how much they would love it or not, the people. My people are different from Newport Beach.

They're like, oh, fuck this people. Please don't bother. But if Susie comes in and she has that expectation of this is how she's going to achieve her goal, then she's more willing to do that. So that's number one, right? It's changing the selling process and matching it to the person's goal, which is what they want. Now, just by doing that, if you'll let me go on a little tangent here, the number one lever that makes profit is price. I'll give you a little example.

So let's say you have a genie with a magic lamp. And he says, I can either double the amount of clients you have, I can double how long they stay, or I can double your price. Which one would you like me to do? So if you walk through each of those examples, if someone doubles your business and let's say you're running a 20% margin, when you double the amount of clients, typically the marginal scale with you and you scale, you're still doing 20%, but just with twice as many people, because you have twice as you have more sessions, more trainer, like it all scales up. Right. And so you went from making, let's say you had 10,000 a month is what your gross was. And you're doing 20% margins, 2000. And so you went from making, let's say, $10,000 a month is what your gross was, and you're doing 20% margins, $2,000.

And now you go to $20,000 with $4,000 in profit. Cool. Okay. We doubled. If you double how long people stay, then it doubles your ability to acquire customers because the lifetime value is twice as high, right? And so over time, what happens is that the need to spend on marketing goes down. So your profit goes up because you don't have all the acquisition costs that you need to have,

right? And so that's what happens there. You get a little bit more than twice as much profit as you did before because you eliminate a cost as well, right? That's in the middle door. The final door is, let's say you still have your same 10,000, you know, 10,000 a month is what you were making before and 2000 in profit. Now, if I doubled the price, now I'm at $20,000 a month, but I still have the same 8,000 in costs. And now I make $20,000 a month, but I still have the same $8,000 in costs. And now I make $12,000 a month in profit. So I 6X'd my profit versus doubling my profit simply by doubling my price.

And so that's where when we talk about these little things, like, for example, all of our gyms bill on 28-day cycles. Why would we do that? Sorry, I'm going to breathe out. I have a friend who bills on 28-day cycles. Well, let me show you some math behind it. So the average gym runs on 12% margins per year. So if you make $300,000 a year as a CrossFit, for example, then it means you're probably making $36,000 a year take home.

Those are the real numbers. I have a friend who just runs a CPA firm, accounting firm, just for CrossFits. And I can attest that we don't make that much. Yeah, right. And so you get 12 margin now if you switch from monthly to weekly it means you get 13 billing cycles so 28 day cycles versus monthly you get 13 cycles rather than 12 in a year doesn't sound like much it's extra eight percent but if you go from 12 to eight to 20 percent yeah they almost double your profit by just changing the way you bill.

And so that's one of like 16 profit levers that we use to improve a gym, right? It's these little things that add up over time that make the gym more profitable. Beyond that, like we have a price increase letter where we like take most gyms and we add, let's say, 10 bucks a week. It doesn't sound like very much to most people, but that's $40 a month. And if you recall from before, if that $40 a month is 100% profit that comes in, and the average gym costs $90, this is based on the industry report from Zen Planner and Wattify, costs about $90 a month to fulfill on a group training member. So if it costs $90 and you were

at $119, you're only making $30 a month per member. All of a sudden, you're like, damn, that's actually not that good. So if you add another $40 know all of a sudden you're like damn that's actually not that good so if you add another 40 all of a sudden you go from 30 to 70 you more than double your profit just by adding 10 bucks a week yeah but how do you add 10 hours a week without pissing people off that's why we have rate increase letters that show the value that they're going to get and typically what happens is i've been 200 a month at my gym for six years yeah i've never increased it but i'm at the point now where like, I'm pretty much at capacity and I don't want to piss people off. And I keep telling my business partner, I'm like, Hey, I want to increase the prices. And he's like, dude, like, I just know

that people are going to get mad and like whatever. And I'm like, well, if you've been open for a while, you can also say like, listen, costs have changed. Like my rent has gone up. Like, I mean, like things have changed. And so this is just like, you can just call it an adjustment. And then in the letter, you just put a PS it says if this materially affects your life in any way you can't buy groceries you can't pay your mortgage please let me know so that we can figure out something and so that gives people an out and then obviously i feel like everybody would email me and be like you'd be surprised yeah um and so whenever we walk gyms through that um typically the like i've on a handful of times i've had people have more than 10 of their clients

leave but if you have 10 leave but you make 10 leave after they raise the price yeah but you make so much more uh like i did this at one of my gyms i actually went from 99 to 299 a month i was like holy shit yeah i was just like i had this like spiritual experience of like i was just like so i was like i don't believe in boot camp like it has to be like spiritual experience of like, I was just like, so I was like, I don't believe in bootcamp. Like it has to be semi-private. Like you have to lift weights. You have to count your macros. Like, I don't care anymore. Like this is what people need. And so I just gave this like spirited, like 40 minute, just like rant on, on Facebook. And I was like, everybody gets a 14 day trial. And then after that, that's going to, this is what it's

going to be. And we lost 30% of our customers. That's not bad, but I tripled my prices. Yeah. So I actually more than doubled how much money I was making. And I had to, and my overhead went down because I was serving 30% fewer people. So my profit went up twice. I went up because the price went up three X and because my overhead shrink by 30%. That's fucking great. And so a lot of people underestimate the cost of switching. So you started adding nutrition with that program. I've always had nutrition with my stuff. But even when it was 100 to 300, you had nutrition the whole time? So when people would come in in the beginning, I had nutrition because I give people templates and stuff.

What did you change from 99 to 299? They had the trainer ratio. So we switched it so that it was one on eight instead of just large group. Whoever shows up tells one. It was all barbell movements rather than boot camp style movements and then everyone got custom macros that was checked in every 14 days cool yeah it worked i like it yeah you know and i've i've had i had six gyms and uh leila makes fun of me because like every gym i actually had a different model so rather than like i didn't like carbon copy each one i always wanted to like improve and figure out new ways.

And try something new. Yeah. And different markets. Like I had a really big large group training facility in La Habra, California, which is a pretty low income market. I know where it is. Yeah. Yeah. Medium household there is 31,000 or it was at the time household.

So I mean like we weren't talking like super wise. Not Newport. Yeah. And so. Dude, our cheapest house, like literally no joke is like one and a half million. Right. It's fucking insane. It's insane. I don't understand. Anyway. Yeah. Um, so, so just to go back to the nugget stuff for, for, for your audience, diagnostic selling on the front end price is going to be the biggest lever. That's going to make you

more money. Change your billing cycle to weekly and or 28 day cycles um i prefer 28 day cycles it's less billing headache um but you can still present the price weekly so it's 99 bucks a week we bill in 28 day cycles you just say it like that you're good to go um people don't won't comprehend the difference between that but they'll get billed 13 times a year instead of 12 and you make an extra extra whole month of eft for nothing it's your your tip, my tip for everybody. Uh, hopefully this, you know, served you. Um, fucking mind blowing to think about like if your gym makes 40 G's a month, for instance, at the end of the year, you just made an extra 40 G's. And if your gym was already making a hundred, you just made 40% more at all. Yep. Yeah. It's nuts. Yeah. And one of the

other pieces is I always sold supplements on my facilities. Um, and the reason was because I was adamantly against it for the first, I think, year and a half that I had my gyms. The employees always ask for it. Not the employees, sorry. The clients. They're like, what should I take? Exactly. And I have to point them to the place to go.

GNC down the street or whatever. Right. And so I got one time, there was two stories that resonated with me that broke my belief about her. One was a girl named Susie, actually. That's usually what we call her avatar. Her name was Susie. And so she came in and she signed up for a challenge. And I think at the time I was charging 400 bucks for challenges. And, uh, she was like, okay, my friend says I need to take all these things. Like, what should I take? And she like, would not leave my office. It was after the 9am. So like, I had no more

sessions and she just would not leave. And so I was like, fine. Like in the name of good service, like you don't need this. Like you just need to eat and train, like it doesn't matter. And I gave her a list and she went to, you know, the vitamin shop down the street or whatever. And the guy disregarded the list that I gave her and pimped her out on $700 for the stuff. Right. And I remember being so angry because I just was like, one, she didn't get what I wanted to that guy, that store made more money from this client in one 20 minute interaction than I was going to keeping track of her reps, making sure she's making progress, telling her that it's okay that she's sore, showing her how to foam roll, like just all of the stuff I was gonna have to do for the next six weeks to service

her. While this guy had 20 minutes and I was like, what the heck? Right. And I, and I was the one who sent her there. Right. Like this is ridiculous. So that was number one. And the second was a guy named Juan, who was one of the best clients. Like

everyone's has one of those. He walked in the first day. He was like, bro, I just want to look like you. And I was like, you need higher goals, but I appreciate it. And so he signed up, he crushed his challenge and was like, bro, I want to look like you. What do I need to do? He wanted to start gaining muscle. So I was like, dude, like you don't need to worry about supplements. Just keep, I was like, I do the same thing you do. I was like, I've just been doing it for 15 years. That's it. Nothing changes. And he's like, bro, like you take all need to worry about supplements just keep i was like i do the same thing you do i was like i've just been doing it for 15 years that's it nothing changes and he's like bro like you take all these supplements and i was like and i literally he said this to me and i'm in my office and my whole floor behind me is all the products i was like so it's like my protein my casein my creatine my like everything was behind me and i was like i give i was like i'm at a point in my

career where you know like the extra five percent is like yeah yeah exactly and he was like bro don't know i just i deserve that it's like i want the extra five percent and i was like dude he's so right yeah like i'm i'm not giving him i actually felt for him just now i don't even know i was like oh damn yeah like i felt it when he said that and i was like you're right like here this is everything i take and he went there and he dropped 400 bucks and again i was like this is stupid and so i like, I should give people the opportunity to at least, you know, to know. And so what we did is, so for everyone, if you want another nugget for making your gyms make money, first you do a diagnostic sale for service.

24 to 48 hours later is when you should have an orientation to onboard a client, which by the way, between sale and orientation is where most customers are making the decision whether or not they're going to stay with your business. So whether or not someone's insurance at the end of a trial or a challenge is typically that decision is being made in that first impression period. So it's incredibly important to maintain communication between the sale and the orientation

and then through the orientation, make sure they feel like they understand what's going on. And so during that orientation, people are like, well, how do I pay for it? Let me tell you. So you have everyone get a one-on-one orientation with a coach for 30 to 60 minutes, depending on

your inflow, et cetera. And that's where you can talk about their food. You download the app to check in for the work, all the other crap that you got to do. Here's our Facebook page, put it, see first so that I, you know, that you always see your posts, all that kind of crap, right? Follow me on Instagram. They get everyone to follow you. And then, um, that's where you just recommend the products that you want them to take. And just like that, um, we averaged 200 bucks in, in, in supplement sales per new client that walks in the door. Now that may not seem like much, but if you're signing up, let's say 30 new clients a month, it's an extra six grand a month. And you just said like the average gym makes 12, you know, 12%, they make 40 grand a year in profit that extra six grand a month. And you're probably running a 40% margin on supplements, which is what

like people who sell prestige lab, which is our company, they make 40% in gross. So it's three times what they make from their gym. So if you sell $6,000 in supplements, it's just like having $18,000 a month in service revenue that's come in because it's higher profit, right? And because it's immediate, because it's only 24 to 48 hours after the initial purchase, it helps you liquidate the cost of acquisition. So if you're spending money on ads or whatever you're doing, that initial sale gives you more cash up front so that you can either reinvest in marketing or you lose break even on the campaign. Does that make sense? Or so that you can pay the trainer to do it so you don't have to do it yourself. Because if you're making, let's say a $200 sale, you make 80 bucks on each of the sales,

you know, you can pay your coach 20 bucks an hour and he's good to go. And like what we do is we do two people every 30 minutes when we do our orientations. So a coach can coach 20 bucks an hour and he's good to go. And like what we do is we do two people every 30 minutes when we do our orientations. So coach can make 60 bucks an hour based on the commissions he's making and selling product. But the gym is making 800 an hour. So, and if you're talking gross margin that we're making 320 bucks an hour.

So awesome. Yeah. Do you remember Jim Jones? No. He was the guy that trained all the people for the movie 300. Oh, okay. Yeah. And he had a space in Utah. And I remember when i was training for the olympic bobsled team in utah i remember hearing about this gym because the movie 300 came out and everybody was like oh my

god it was like the first time like a movie had come out or like everybody was fucking shredded yeah and then um he was in men's health magazine. And then everybody was just trying to find this gym. Yeah. He didn't have a sign. He didn't have an address. Yeah. He had a website. And if you wanted to work out there, you had to send an email as like, hey, this is why I want to work out there.

And he wanted good reasons. Yeah. And then basically what would happen is every hour was $500. Okay. And then you had to happen is every hour was $500. Okay. And then you had to just fill the hour. Like that's how much the trainer's time was that hour. Yeah. And if you want it to bring 10 people in with you,

you brought 10 people. If it's just you, it was just you. Yeah. And then if you showed up and he didn't like you, you couldn't come back. That's great. And then he basically got to the point where it was like,

you know, all of his trainers are making pretty good dough. They're all, it's 500 bucks an hour for the space space and then people were getting booked out and then basically the only people they had there are people who wanted to be there and i was like that is the coolest fucking gym model i've ever heard of in my life and now the second coolest gym model i've heard of is we have this gym down the street from us and it's a huge gym they have it's almost like your your home gym like there's a piece of equipment everywhere yeah and it's a huge gym. They have, it's almost like your home gym.

There's a piece of equipment everywhere. Yeah, yeah, yeah. And it's personal training only. Okay. And all of the personal trainers have their own app. Uh-huh. So they schedule people through the app

and then they pay rent for the facility. So you have all these trainers spending like $800 a month in rent. They're making way more than the actual rent. Yeah. And then they also make a percentage from all the people who are paying for the training, on top of the rent.

Is that self-made? It's self-made, yeah. Yeah, yeah, yeah. They have a great model. Love their model. It's pretty cool. It's capital intensive, so if you're a money person, then it's a great fucking model. That's amazing that you knew who it was right away.

Yeah. I mean, yeah. I love yeah yeah their thing is pretty cool but i think on their app i think they sell do they sell supplements and stuff on top of that um they probably do i would imagine that the thing is is trainers are it's kind of like it's like herding cats you know what i mean like everyone has their own it's like dogma it's like religion so they have their own thing they probably sell sell stuff on the sly yeah it's cool though it's a great model it's a brilliant model i love the model you're really not like you're not really managing people i'm a huge i'm a huge fan of the model yeah i we were talking before the podcast started and it's

like there's a lot of ways to skin this cat there's a lot of really good models it depends on like like most of the people that i serve don't have a lot of money. And so I can be like, yeah, dude, just drop two 50 on equipment and making a sick ass facility and then go to 24 and sit outside of the NASM certifications when they let out on their tests and just grab trainers as the, Hey, you want to train in my gym? Hey, you want to train in my gym? Right? Like you could do that all day. The thing is like that first part of the sentence where like, Oh, I need to get 200. Right. And so I have to find out ways that I can help someone who makes no money by teaching them skills like how to have conversations that create cash flow, real money. I think the first time you make a $2,000 or $3,000 sale and you're used to making $99 sales, your life changes.

You're like, holy, what just happened? It's a really cool moment. But anyways, hopefully that between adding in supplements or meal prep during that nutrition orientation, you should sell both. And having your diagnostic selling process on the front end, doing 28-day cycles for billing. I mean, I could keep going on how to do all this stuff. Does the gym just have a person who just does these diagnostics? Or are those the trainers? the gym just have a person who just does these diagnostics or is it are those the trainers or this other front desk person thing is are the type of gyms that we

work are so uh varied uh in terms of anybody right i've got guys who have you know 10 people on staff they've got two or three locations and then i've got guys who are 100 still on the training floor and i'm trying to get them out so like and then i have every variable the verbal process is that in your book or is that more of like something that's in your course um the diagnostic sale is in my court but like we have a closer framework in there that you can totally i mean like it's it's sales you know i mean like the only difference is that in the book i'm showing you how to sell a specific program which is what i always espouse anyways is like selling a defined period of time for a goal people

are always more willing to spend two three four times as much money to achieve a goal than they are to buy a membership. Where can someone get this book, by the way? Alex'sbook.com. Alex'sbook.com. Keep it simple. That is fucking awesome. It's free, by the way. Just cover the shipping.

It's like eight bucks. All right. So when you first started, your very first started, you opened your very first gym. What did that look like? It was actually like the worst period of time in my life. It was really hard for me. I think it was probably – This is good shit to know though.

Yeah. It was the second hardest thing I think I've ever done. When I opened the gym, I was supposed to have a partner who was supposed to do it with me and he backed out the night before. The lease was supposed to get signed. The night before. Yeah. It ended up being a blessing in disguise but I had to come over the other half the money and i luckily i did have the

other half the money but it was everything everything right yeah so i had um i'd i'd saved up sixty thousand dollars in the first two years after college um working at sixty thousand dude you and i are so fucking alike you know i started my gym with sixty thousand dollars yeah i mean i had i i had a partner. Yeah. But I had to put in $60,000 and it was everything I had. Yeah. So my business partner wanted to see my account at zero. Yeah.

And he's like, how much do you have? And I was like, I have $60,000. It's so crazy. But yeah, I had to give him $60,000. Go ahead. Sorry. And so I didn't obviously have enough money for rent, let alone rent for my own place and the gym.

The gym's rent was like 4,900 bucks a month and uh and where is this hb honey's beach cool yeah off uh gothard and talbert and uh it was an old warehouse next to a um automotive it's impossible to find they're all in automotive places yeah yeah yeah if you've seen them now they're all they're still there and and so uh anyways i i luckily went to and but but that partner who backed out was incredibly important to me because two weekends prior, he was like, hey, man, let's go to this marketing conference. And I was like, okay, sure. And he was like, it's $3,000. And I was like, bro.

Like, yeah, for a weekend? He was like, yeah, but they guarantee that you'll make $10,000 by the end of the weekend. And if you don't, they'll give your money back. And I was like, okay. Yeah, we'll fight that. Right, I'm in. And so, man, I still remember that we were both like, oh, what are we going to do with the $10,000?

That was the whole talk on the way there. Neither of us made $10,000 by then. Really? Oh, what a bummer. Do you still know the people that did the summer? Yeah, yeah, yeah. You still know them? I'm good friends with them.

Yeah, actually. But they talked about this thing called Facebook marketing. This was 2013. actually um and but they talked about this thing called facebook marketing this is 2013 and so uh i was and i learned enough to be like i i get how this could be something right and so i was able to run ads because i didn't know anyone i'm from baltimore um and so i drove out on a whim basically to california it's a longer story but basically i drove there and was like i don't know anyone like i'm gonna start a gym makes no sense Uh, really not a good idea. I just want to be jacked. Yeah. Just want to be financially small and financially and physically. That's the name of this podcast. And so, uh, anyways, I started running ads and I got, I think I signed up 28

clients in my first two weeks and I made it every mistake you can make. I tried to open as fast as possible because I thought that you started making money when you open your gym, which is not the case. Like you should sell for as long as humanly possible and just collect cash before you open the gym. So you can pre-sale, you know, if I'd done it again, I would, I did whatever, what I did for every other gym. So that's what I was going to ask at the end was what would you do differently? So if you want to just intertwine that as you go. So the, so there's two things i would do differently first off i wouldn't try and buy i would try to build a gym i'd buy a failing gym uh because you buy a failing gym you can get it for pennies on the dollar a you already have the conditional use permits which in most markets are

a pain in the butt especially a pain in the ass it's a good point yeah and that and that eats up your free rent and for those of you who don't know what a conditional use permit is it's basically to say that you can be loud and obnoxious. Yeah, and you can drop weights and all sorts of stuff. And then you have parking. Yeah, parking is a huge one. Parking is actually huge. A lot of people who open CrossFit gyms, they're actually telling the city, sorry, city, that they're personal training studios.

Only have five people who ever attend. Only have five people, and you have 30 people trying to find a parking spot. So, I mean, go ahead. That's a conditional use permit. Yeah, so there's a ton of hurdles that you don't have to do and there's also there's especially with a gym that's already existed for a few years there's a lot of knickknacks that you forget that you're gonna have to buy and it's like oh yeah a scale oh yeah a front lobby desk oh yeah uh like there's just a million things a solid five grand of shit that you never thought of yeah exactly and so um

like the the best deal that I've made of all the gyms that I started, well, I'd say three of them were smoking deals. One of them, I purchased a, a, a gym that was failing and I agreed on a $50,000 price tag. And so first, if you're ever negotiating, agree on price, then agree on terms. So we agreed at 50 and then I said, cool, I'm going to pay you over the next year. And he was like, Oh, I was like, it's going to be great. And so what I did was, uh, I put $0 down and I was able to assume the gym for 30 days before my first payment was due. Um, I gym launched the gym, signed up 150 people at 600 bucks ahead, made a hundred grand in the first month, and then paid him his $4,000 a month for the next

year. And then by week six, we already were at 15 or 20,000 a month in recurring because of all the people who had converted over to EFT, um, which is the recurring thing. And so, uh, that went super well. And that's kind of the process that, um, we kind of got, where was this gym? This was in, uh, Lake forest. Oh, cool. I know where that is. It's actually close to me. Yeah. That was a, that was a, that was a semi-private facility it was a higher ticket one-on-eight type model okay two trainers 16 people okay so it was a group training style though yeah but it was but it was what i had adopted what i changed the other one to where and it was traditional strength conditioning style like you guys lift and then was there a conditioning component yeah exactly okay so it was like it was actually similar to i would say

it was a little bit more strength uh because at time I was like, everyone should train the way I train, right? Yeah. Anyways, that's probably the biggest thing that I would do differently. I had two corporate locations that were inside of Yamaha, which is in your area. So Yamaha Motorsport and Yamaha Music. So they allowed us to outfit a facility within their company. And so I paid zero rent. All I had to do is pay for the equipment

that I brought there. And they paid us 50 grand a year. And it was pure profit minus the cost of a trainer once a day for an hour. That's awesome. Yeah, it was a great little, it was a great setup for me. I have a friend that makes like,

I want to say 8,000 a month and he just has to send a trainer into Ruka, the RVCA brand. And they're down there and he, yeah. It's, I mean, if you can get into corporate, it's a really good space because you have people spending other people's money and so they don't really. That's like the, you know, Jason Kaliba? Yeah.

So he has all those NC Fit gyms and that's where he makes the majority of his money. He's like in the corporate space and he's like, he has Facebook, Google. Yeah. Yeah. Kills it in that type of stuff. But yeah, so that's, I mean, I'll tell you a big mistake that I made. So my second location was the Le Havre location. It was supposed to be like my flagship.

So we spent $250,000 on this spot. And it made no more money than my first location did that it was like rag-tag, duct-taped together. Because at the end of the day, I realized it's about the service. You know what I mean? It's about the accountability. It's about that's the stuff that people actually paid for and valued. I, you can't compete with 24. You're not going to compete with LA fitness. They have their private equity funded. Like they can, they can build $10 million. You're not going to win at that game. Like we have to win at a different game. We got to play with a different

set of rules. And so we have to sell service. We've got to sell high ticket. Um, we've got to combine our services with other offerings so that we can become unique. And that's the, that's the game you got to play. So when did you get to the point in your career where you were like, I no longer want to open gyms anymore. Yeah. And then I'm going to do this other thing. Yeah. It all happened in a very short period of time. So there's like a very tumultuous six months of my life, which was horrible for me. Um, in that six months, I mean, I told you part of it downstairs, but basically, um, I went, I just came off of like a big high where like Russell Brunson had met me and was like, you need to speak on places about business. And I was like,

I'm just a gym owner, man. Like I'm just doing my thing. Um, and so he's like, no, speak your funnel hacker, uh, and talk about how you fill gyms up for the first day. And I was like, I just figured everyone did this, you know, like I just was doing my own thing and uh and so anyways i broke down our whole process and um i had a guy and i've never been so swamped after making a presentation in my whole life and i had nothing to sell and i was just like just use what i did like that's how i do it like i broke the whole thing down like there was no see i was like it's right there that's the whole presentation and i had literally like 30 people around me for the next two days like rapid fire like reaching hands through like it was crazy and uh finally one guy hands me his credit card and it's like charge me

five thousand dollars tell me what i get later and i was just like okay i don't have any he was like just do it i was like okay so i charge him five thousand dollars he's like what do i get this is like after the event and i was like i don't know yet i was like but i promise i'll make you more than five thousand dollars and he was like okay fair enough yeah and so luckily he was opening a gym and uh i don't know if luckily is the right word my mom just got hospitalized um it like in the same area so like all this stuff kind of like came together and so i was flying out to be with her um but like if you've ever had someone in the hospital, like I only had two hours a day of visiting hours. And so I just wanted to like stay busy. So I didn't like lose

my mind. And so I would sell during the day and then, um, meet up. And so there was actually three gyms all around. It was crazy. Three gyms all around her hospital that i could i did this at and so i signed up 191 people at 500 bucks i had his gym in 19 days and i kept in the deal i made and was like i'll keep i'll spend all the money on the marketing i'll do all the sales and i'll keep the upfront cash so i made like 100 grand in 20 days and i was like huh and i like looked around and i was like i think this is legal and And like, I was like, I have no employees. I'm like, I have no rent. I have no overhead. What are you doing to get these people, all these, all these leads? Yeah. At the time we were running a free six week

challenge and that was like it, I would say that offer has set the fitness community afire. Right. Um, it was the biggest fitness offer I would say of the last decade. Um, but you're saying it's free, right? And so you made $500 off each person. And so the way that it worked was if you, you'd come in and if you hit your goal of losing 20 pounds or 5% body fat in six weeks, you get the money back. Right. Most people hear that and they're like, Oh, like people, uh, you made the money cause people didn't lose weight. It's like, that's not actually how it worked. Most people hit the goal. We had like 70% plus that hit the goal at our gyms.

The reality was that if Susie loses 20 pounds in six weeks, she fucking loves you. Yeah. And she doesn't want to go anywhere. Right. And so basically the conversion process that we had, we called the Abandoned Hope sale, but it's at week three, is when we make the sale to convert them before they're even done. And so we're like, listen, you're doing awesome. You're down 12 pounds. Like, you're feeling great. So let's be real. You want to lose

50. It's not going to happen in the next three weeks. Right. So why don't I just give you the whole 500 that you just gave me? Let me just credit towards your membership. So like your six weeks is a hundred percent free. Like you won, you won. Cause you get that. It's not about the six weeks. It's about the lifestyle. And so they're like, Oh, cool. So it's an irresistible offer. And they're like, great. And so we'd be able to convert, you know, three out of four on the backend, um, to stay as members. And so the beautiful thing about that compared to like a trial model, like a low barrier to entry model, like a $21, 20 date model is that first off I was making five, 600 ahead on the front end. Right. And so if I signed up a hundred people, I made 50 grand. And at the time

my ad campaign was like two. So I made money getting customers. And then I'd convert three out of four on the back end at $200 a month, and we'd discount it from $250 a month. We'd take $50 a month, credit it for 12 months, and take that off the membership so they're at $199. So we'd back into the price that we wanted to be at. And so just like that, you get twice the conversion on the back end because a typical LBO will convert 35%. That's the industry average on the back of like a trial, uh, into a membership. So you're converting twice as many,

you're making money on the front end and you get way better results and way better engagement. Like, and that's why you convert twice as many people because they're like engaged, they paid to pay attention. And so that was, that was really that, that consolidates like in a nutshell, what, what I've spent the last three years teaching to gyms to flip the acquisition model. Now the free six week challenge in order to be a compliant advertiser, you need to make sure that you put the qualifications. Um, every state is different in terms of advertising laws. So you want to make sure that on the thank you page, you have all that stuff. That's where some gyms, um, didn't do that. Not people who work with us, but like people who don't know what they're doing. Um, and so you always have to be a compliant advertiser and facebook can just take your

they'll just take your ad campaign down well i wouldn't it wasn't as much facebook it was more like like if you want to be a a legal advertiser like it's like ftc like you want to you want to be a compliant advertiser for federal trade commission right make sure you're just applying you know abiding by the rules um that being, that was kind of the old way we did it. And it worked really well. But the new way we have it is just like so much better with the diagnostic process. Because like in the, in the beginning, we would just sell a program, right? It was like, we sell everyone a six week to start to just get them going, we make money, they get involved, blah, blah, blah. But now we sell everyone straight into diagnostics that's specific to their goal and to the, and to the

manner of fitness that they would prefer. The beautiful thing about the diagnostic process is that it's promotion agnostic. And what I mean by that is that it doesn't matter what promotion you run. And so you can run a 21 day free, you can run a $21, 21 day, you can run a 14 day detox. You can run, it doesn't matter. Like you can run anything you can possibly imagine because what happens if the sales process is followed properly, you get the person to admit, you can be like Susie, like given everything you just said, we can probably both agree that in 14 days you're not going to lose 60 pounds.

She's like, I was like, unless we start cutting off your body parts, which we're probably not. And then she laughs. Yeah. Same script. And then it's like, so can I just like solve your problem? Like for what you really came here for. Yeah. Same script. And then it's like, so can I just like solve your problem? Like for what you really came here for? Yeah.

And from that one hook, they just say yes, which means that you disregarded what they came in for and you can sell to goal. And so even though they came in for a $21, whatever, or a 28 day transformation challenge, or it doesn't matter, you flip that based on educating the consumer that they really don't want a 28 day challenge. They want you to solve their problem, which is going to really take more than 28 days. And then you can close a $3,000 sale. And that is now, in my opinion, by far the best way to do it. So you can make like, you don't even need a lot of sales to make your money back on a campaign.

Like if you spend a hundred bucks a day, you get one $3,000 sale, your campaign's covered and everyone else that comes in after that is per profit. What do you think about these people that are, like I was telling you about one particular person that I interviewed recently that I wasn't very stoked about how smart he was. And he's all about, he spends like $2,000 or $3,000 a day on ads. And I think he's going off of like a two to one return typically and i have you know i'll spend ads and get a ten to one return yeah i maybe spend four thousand dollars for a whole for like you know way smaller fraction of the time so do you do you like when people spend a

lot of money on ads do you think it doesn't matter or do you like more of i mean it's what i think it's like if you said you're getting 10 to 1, I'd be like, cool, 10x how much you're spending. Yeah, that's way better. Well, I mean like, well then, 10x how much you're spending. Oh, I see what you're saying. Right, like make more.

Yeah. You know, I mean, it's just an ROI game. So like, here's a great one. It's relative return versus absolute return. So... When I asked my ad manager though about that stuff, she's like, well, if we spend more, we don't necessarily...

The ratio will go down. Yes, it will. So she's like, well, if we spend more, the ratio will go down. Yes, it will. So she's like, it's nice to just stay where we're at. Relative return versus absolute return. Yeah. So let's say that you're getting 10 to 1. Because I'm like, yo, let's just go. Just hammer it.

Yeah. And she's like, I don't know. Yeah, I mean, I spent $2 million this year in ads. And as a community, we spend about $60 million a year. So I have a decent idea of what's going on in the advertising space. and as a community, we spend about $60 million a year. So I have a decent idea of what's going on in the advertising space. That's why I love to ask the question. Yeah.

For your example, I'll just pretend it's a gym. So let's say a gym is spending $2,000 a month, and they're getting a 10 to 1 return. So they make $20,000. And so they make $18, 18 as their their profit whatever right would i rather do that versus spend 10 grand and get five to one i would spend 10 grand and get five to one all day long because then i make 50 and then i have 40 after my ad spend versus my 18 now someone might be like well you you are less efficient with your ad spend i'm like yeah but i made twice as much money yeah and so i think that's's where it really comes down.

It's like the smaller the budget, you can always be more efficient. But at some point, like you want to scale. And like if you want to get to, you know, 10 times that, the efficiency is totally going to go down. But if I can, if I tomorrow, someone's like, you spent 10 million this year in ads, I'll get you two to one. I'd be like, cool, here's 10 million. Yeah, for sure. Right. You know what I mean? And so ads. I'll get you two to one. I'd be like, cool. Here's $10 million. Yeah, for sure.

Right. You know what I mean? And so that – or one and a half to one. I don't even – you know what I mean? Yeah, there's a difference when it's a huge number. Right. You can make me a 50% return. What investment can I get in that?

Right. Especially if it's up front. Like not even including lifetime value that I'm going to collect on the back end, which is why for me, our whole objective with everything that we do is making a profit or at least breaking even on the acquisition so that everything we do, so the acquisition is no longer a bottleneck. And so that works with, that's how we scaled general launch from zero to 50 million in 20 months.

It's how I went from zero to six gyms in three years off cashflow. It's how I launched every gym to full capacity out of the zillions of gyms. And we're, when we were flying out and do this was that like we weren't capital constrained because we made money in the acquisition. And by the second day of the campaign, we were making more than it cost us so we would make enough money on one customer to have acquired that customer and the next two customers and so then at that point you put a little bit back in the campaign and then it's just keeping money on

the table like chips on the table and then you're just gambling with the casino's money and that's how i see it and i it's actually another thing that I actually – I've said a few times is like the social media realm right now, if you're not playing with it at all, is like going to a casino and you know that one of the handles is going to be a million bucks and you're just not even trying. Like you don't even show up to the casino at all. And I don't have to call it social media, but like ad campaigns. You know what I mean? Like you should be doing some sort of ad or click funnel type of deal so the like what's like what's nice is if you learn the paid game so like i like you were like how do you not have a phone like i'm like i purposely so i delineate between being rich and being famous i've never wanted to be famous in fact i wish no one knew who i was and

i could just be in the background. But my ads tend to convert with my face better than others. So I reluctantly do them. It's just the mustache. It's just the cash dash, right? The money mustache. Anyways. But building an organic following.

So this is where the advice that I give versus the advice that I do are somewhat different because because like a lot of people, you got to make content, you got to make content. And I think that there's a certain degree on that like that that is true. But most people suck at most things, especially the things they think they're good at. And so usually the content they have is just very vanilla. It's just not that good. Now, you could say that they have to do that over time to develop their voice and all that stuff, which is true. But if I have to get someone to pay their rent next month, it's not going to be by posting, you know, memes on Instagram, right? Like I got, they got to learn the paid game.

The nice thing is the paid game is evergreen because you can always buy eyeballs always like the media will change and you got to adapt to the platforms, whether it was television or it's radio or it's, you know, or Facebook or Instagram or it's tick's TikTok, you know, when it's coming out, like it's like, I actually do too. It's really weird, but I'm like, I have to learn this stuff or I will become irrelevant. But like, if you learn the paid game and you learn the game, then it's all just clicks to conversions. It's all the same thing. It's just like, I have to get a click and I have to get them to either opt in so I can sell them something over

the phone or I have to get them to opt in and then read a sales page, or I have to get them to go to a webinar. It's just what's the conversion process, but all it's going to start with a click and some sort of offer that's going to be a result of the pull. You've got to learn that game. Yeah, for sure. And I feel like that's so far in my career,

that was one of the biggest things that launched me from a somewhat medium salary to... Can I give you something interesting yeah go for it so um there's a book called predictable revenue which was made by i can't remember the last name but he was the guy who scaled salesforce from their sales their outbound sales team from zero to 100 million for um for salesforce and what's interesting is that paid acquisition on media platforms especially within a niche like for me at a certain point it it's it's very very difficult to scale to a really hot very high level and i'm defining it like very

high levels like maybe you know in like spend you know i'm like a lot of and so i've actually gone a little bit more full circle um and i i really do kind of enjoy and prefer the outbound process because it is predictable and it's scalable by adding in humans. And so it's like I know that by adding one rep who does reach outs is going to bring in. So like let me give a numbers example for a gym. Right. So let's say you've got here's some money nuggets for anybody who needs them. If you have 3000 friends on Facebook, you have 1000 followers on Instagram and you've got 300 here's some money nuggets for anybody who needs them. If you have 3,000 friends on Facebook, you have 1,000 followers on Instagram, and you've got 300 contacts on your phone, right?

And you've got an email list maybe, but we'll just talk about those three for now. Which is very small numbers. Yeah, these are normal human numbers. Standard, yeah. Most people want to try and cold message people who aren't in their network. But I think that if I gave you tomorrow 4,000 leads, you wouldn't even know what to do with them anyways. Right? And so you have 4,000 leads that have already given you permission to advertise to them. And so the only way to do this to not be

sleazy is just by reaching out to people and saying, Hey, do you know anybody? I just like, Hey, I just graduated five clients from my program. Do you know anybody who was trying to lose weight in 2020? I have a couple openings. I'm giving a cool discount. We're doing a cool deal, whatever. What you'll find is that one, when you ask for a referral, you're not being sleazy at all. You're just, you're just like asking, but like nine times out of 10, the person says like, I'm interested. But if you just said, Hey, are you interested in this? They're like, Oh, he's trying to solicit me. And so that little pivot allows you to reach out to everybody in your network. And so if you did, let's trying to solicit me. And so that little pivot allows you to reach out to everybody in

your network. And so if you did, let's say 50 reach outs a day, right, you would realistically be able to close about one to two sales a day at a zero discounted price because you didn't have to give an offer for paid advertising. And so if I were paying someone, let's say $100 a day, to do all my outreach for me, and just set up sales consultations for people who are interested, right? And you follow the closer framework, which is my book, which is clarify their problem, label them with,

label them with, sorry, clarify their goal, label them with their problem, overview their past experiences of pain, and then sell them the vacation, which in this instance would be selling them the consult with you who's going to close them on the real thing, right?

If I'm spending a hundred bucks a day on that and I get two sales a day, I'm making 4,000 a day off of a hundred dollars in labor. Yeah, that's great. I'm getting 40 to one return. And so then you start thinking, huh, now I can't get shut down. I don't have to have advertising policies. And then someone's going to say, who's listening, but that's not sustainable. What happens when you, when you've reached out to everyone in your base it's like okay well 50 a day times you know for 4 000 is 80 days so in 80 days you reach out to somebody again so it's like you reach out to everybody network four times a year it's like once a quarter that's just follow-up like the average woman died five times a year it's just whether you catch them when their lights on you know it's a good way of thinking about it yeah yeah and so at that point and excuse me and so at that point you have a predictable inflow of revenue that isn't

paid acquisition required and so people are like well what should i do paid ads or that i'm like do both yeah how much money should i make make all of it people ask me all the time about um like recurring stuff or books. They're like, should I start a recurring? I'm so excited to start. I really want this $20 a month thing or $10 a month thing, a recurring thing, so I know how much money I'm making every month. I'm like, yeah, but you and everybody else in the world wants that.

I feel like a lot of people are missing out on one-time sales. There's a ton of people right now in the fitness space. They just want an app. They all want an app. Everybody wants an app, but they forget that selling an e-book is still – there's not a lot attached to it. I hate my iCloud bill of $10 every month, right?

Yeah. That little $10 a month just bothers the fuck out of me. But if it was like, hey, spend $100 and you'll be done for the year, I'm like, oh, let's just do it. It's a one-time sale for me and I'm fuck out of me. But if it was like, hey, spend a hundred bucks and you'll be done for the year. I'm like, oh, let's just do it, you know? And it's a one-time sale for me. And I'm that, I'm that type of person. And I feel like people who are doing just the monthly stuff versus just the one-time sale, they're missing out on 50% profit.

Do you want to know some stats around that? Yeah. So paid in full for a year has on average 2% month over month churn. So people who pay in full for the year are like for a gym, for example, it's 10% for monthly, it's 5% for quarterly, and it's 2% churn if you were to extrapolate it monthly for a paid in full for the year. And so it's purely a math question of like, do I want recurring? Do I want paid in full? It's like, well, if your average person who's at $10 a month stays for four months,

then your lifetime value is $40. If you can do a paid in full for $97 and they get lifetime access, then you make one and a half times more money. Yeah. Right? I like that. That's good. Where'd you get those numbers from?

Just like your own? That's from ProfitWell. Okay. So they are a subscription processing company. And so they process 20% of the SaaS space, so software as a service, software models. So they do all recurring-based billing. And so they have all the metrics on everything. Oh, that's cool.

I like that. Yeah. Back to that book you were just talking about. You said that you – because we were talking about how to scale to like – Predict how to scale to like predictable revenue books. So what's like the highlights of this book? I always like when someone recommends a book. Yeah. Basically like the, the, the, the, the bottom line of it is that like for us, for example, it becomes difficult to reliably scale. That's why it's predictable revenue to predictably scale revenue with paid acquisition as you get bigger and bigger. And the reason for that is like, let's say I have a sales team that's taking inbound leads, right?

Like I do now. If in the beginning, if you have, let's say one sales guy and you have a gym and you're spending, you know, X and all of a sudden your cost per lead doubles, well, you know, your fit, your sales guy is like 50% as busy, not as big, you know, it's like, okay. And then he gets a little bit more busy because you're 50, they, they, they come in half price this time. So he's twice as busy, but like it's one guy, it flexes, right? If I have a 14 person team, right. And I have lead costs that double one month, which happens, right. I have seven guys who aren't needed or the flip side happens. I have twice as many leads. I would need 14 more guys to handle the volume. It becomes more difficult to walk the fine line of getting just the perfect

amount of lead flow to service, to, to fill the pipeline for 10 guys or 14 guys. And that's where having outbound. Cause I remember when I started this, I was like, the reason these big companies don't do inbound is because they're just not as smart as I am. Right. And like they're billion dollar companies. Like I'm the fucking genius. Right. The reality is that they are smarter and that's why they're a billion dollar company.

Um, is that that outbound method is incredible. It's incredibly predictable. Like you just add more people and you know that each rep will produce consistently eight sales a month and it's based on activity. Did you do 50 reach outs today? That's it. Yeah.

I like that. That's cool. Yeah. And so if you're a gym owner right now and you're like, I don't have money for ads. I don't want to figure out tech, reach out to 50 people in your network and ask them if they know anybody. That's it.

And then ask them, they're going to say, I'm interested. Tell me more and be like, well, what are your goals? It's amazing how many people in your network are actually willing to help you. It's a weird human thing because when you ask for a referral,

people want to help. Whereas if you're saying, do you want it? They feel solicited. It's a totally weird psychology thing, but it works. I sell these nutrition challenges right now. They do incredibly well and they, and they really do work and I'm really excited about them. And I had a guy recently when you sign up, I had like this custom Excel sheet. And basically, everyone plugs all these numbers in that I create. And then it gives them their macros that they should be eating. And then the sheet, you have to sign into your Google account and make a copy. And I write it in humongous letters like, please do this.

Do not ask for permission to edit it or anything like that. And everyone edits it. They put in the numbers and it changes everybody's numbers in the challenge and i'm like god i do not know how to freaking do this you know okay i was like well i'll tell you what happened so eventually one of the members and dude this went on for like a year that's i i'm mind blown yeah yeah this went on for like a year so actually this just happened like three days ago this is like really good stuff so this guy's like hey i just made a website for you he was so frustrated i made a website and basically the website is like you just put the numbers in and it's done okay and then i was like

oh my god i was like hey could you help me do this this and this and this and this and then like we'll add on to it and blah blah blah and he's like absolutely and i was like i'm willing to pay you like just tell me what the number is like i want you to be happy so i mean this is someone who just came out you know he just did it he just did it he was like very happy to do it and it's probably something i could have asked people a while ago like hey can it is anyone like technology savvy like beyond my abilities that can help me with this you know if you just change the last four letters from forward slash edit to forward slash copy, when they hit the page,

it just tells them to make a copy. They can't even see it. And then it makes a copy in their own Google account. I just feel bad. Cause I'm like, that could have solved a year. Yeah. I mean,

I know nothing. Cause we share a zillion excellent like scripts and Excel sheets for our customers. And so they just click and it just says, when they get to the page, it says make a copy and they just click the button and then it makes a copy in there. I don't even know how to use Excel. There you go.

But I will forward this information. Yeah, it's Google Sheets. Yeah, I'll forward this to my buddies. So to get you more excited, I mean, that's all stuff that you can probably just play. I could just like push a button on you and you could probably say all that. That's what you're used to. Right now you're getting excited about meal plans. Yeah. Maybe not meal plans but you you have meals yeah and

i've i've seen them in my gym in california and you're in austin texas so they're getting pretty big i assume yeah they're doing really really well um if i could do everything over again i would have launched the meal company before the supplement company but then when i tell people that who are more experienced business people than me they're like yeah but you learned all these lessons and you wouldn't know to have like like, this is part of the game, you know? Everybody eats. And the number one issue, here's a lesson that I learned from 2019,

which is that in order to have a product, a product has to solve pain. It can't be an opportunity for gain. People don't care about opportunities for gain. They care about solving pain. And supplements, from a big picture, now, mind you, you should always definitely incorporate it in your process. But like big, big picture, it's an opportunity for gains. It's an opportunity for enhancement, better, faster, et cetera.

It's the 5%. Exactly. People still want it. You should monetize it in your business totally. But meals, the average one spends 5.9 hours a week prepping and cleaning food, not even eating it. And they spend 1.7 grocery ships per week, and it takes them 1.6 hours on average between getting the list and driving there. Dude, I go to the grocery store every single day. Right, so you're even higher than that.

But the average there is 9.6 hours, right? So that's a full work. That's 40 hours a month. It's a work week that the average person spends just not even eating food, just getting all the stuff around food, right? And so if you can eliminate that for someone, especially now consider somebody who's new and trying to change their lifestyle, they're looking at different brands. They're trying to find new recipes. They're getting frustrated. Like there's, there's so much, it's chaotic for somebody who's really

trying to do something new. And if we can eliminate one of the variables for them, which is food, which is the biggest one, then it makes the likelihood that they retain much higher, that they get better results. And then it also allows the gym to be a one-stop shop. They can truly be a full service facility, which up to this point, I haven't really seen anyone doing. And I think that's why we've gotten such a massive inflow. I mean, in the last, I think 20 days, we've had almost 800 new gyms sign up with us. Whoa. Yeah.

And we already had 1,400 that were active. So, I mean, it's growing really quickly. And supplements, I feel like I had to put a lot more effort into. I mean, don't remember I'm putting tons of effort into meals, but it felt like an uphill battle. Whereas with meals, it feels like more of a downhill battle. People are like, they get it. They see the value. They just want it.

Right. And the food's really freaking good. Yeah. And the food's really good. And we made it purposely plain and like just whole ingredients made it non-GMO, eco-friendly, all that stuff. It's all vacuum sealed, which is something that 99% of companies don't have because it's a $750,000 machine. But it extends the shelf life to like 21 days so you never have like the smelly fridge or uh the food that goes like i don't know about this gel on the side of this chicken like 21 days in the fridge that's pretty awesome i've

never i don't know what i'm legally allowed to say i've never had a meal go bad ever and i eat a lot of them and yeah we i usually order from ourself like 100 meals at a time. So we have a whole treasure chest. Some of them, at the bottom, I'm like, I wonder how long this one's been on the bottom of this stack of meals. But yeah, because basically when there's no oxygen, what happens first is that the actual proteins will break down. So it would become mushy before it would go bad. So it would just like, the texture would be weird. It would mush together before it actually rots uh which is kind of interesting but like no one would ever consume it even way before that anyways but but that's one of

the huge things is that um and it's all uh hand delivered to everyone's doorstep next day or shipping so by the time you order it's there 48 hours later at your doorstep independent of anywhere in the u.s and so like i think we're in an on-demand economy right now. That's why prime is, you know, crushing it. And like, you know, Netflix, like people just want things right now without any work. And so this is insane. I mean, you can't, they can't be. So, uh, if you're like, how do you, no one wants to cook. So this is really interesting. So there's a research report by Nielsen that was like meal delivery, uh, upsets to industries eating out and groceries because people don't want to cook, but they don't want to leave.

And so they just want, it's like everyone just wants to sit and do nothing and have everything come to them, which is essentially what this is. And especially for somebody who's trying to like lose weight and is starting a new habit, like the last thing you want to do is add even more variables. And so for a coach,

if I'm talking to Susie on my nutrition orientation, I'm like, Susie, what meals do you struggle the most with? And she's going to be like, I'm like breakfast, lunch, dinner, all three. And she's gonna be like, probably all three. I'm like, cool. Then why don't we, I love the person who says they just, they just really don't eat that much. Yeah. Like I really just don't eat that much. And they're like fucking 700 pounds. I'm like, how the fuck is that possible? Right. Yeah. If you didn't, you look like people in Africa who actually don't eat much. So, sorry. Sensitivities. Yeah.

So. Someone's just. Someone just got offended. Yeah. Someone just got offended. And so by doing that, we can say, listen, why don't we just take care of either like, let's just take care of your lunches and your dinners. And you only have to think about your breakfast.

But what we do, because I also in a supplement company, we give everyone on their first order a tub of protein too. And so that should, for anybody who's getting a 12 pack, which is like lunches and dinner six days a week, it solves 100% of their meals. And if you extrapolate the cost out, it's nine bucks a meal, which is fucking unreal. I was going to ask you how much is the typical meal and how much calories are in a typical meal? Yeah.

So, cause the lunches and dinners are going to be like chicken steak. So we have 10 proteins. We have bison, chicken, steak, salmon, cod, roasted turkey, ground turkey, ground beef, and brisket. And a vegan option. Wow, I named all 10. That was actually impressive. Wait a second. What?

You gave me, you asked me for my address before we started. That's where I saw your meals. They showed up to my house. You didn't even know. Dude, I literally was like, who the fuck gave me all these did you like them dude they were awesome this is a genuine reaction i actually really liked them a lot and i literally was like who the fuck sent me these you know because i just bought a new house for those of you who know me and i don't know if you know. I just bought this new house.

And I was like, you know what? Maybe somebody was like, we're just going to give it to all these people because they'll probably want to buy this stuff. I genuinely had no idea. I'm glad. I'm glad. It just like all came together just now. Car accident in my head. We spent like half a day together.

And I was like, oh, wait, you own that company? Yes, I own that company. Because you guys don't know, but he showed it to me earlier. I was like, I've seen this before. Dude, I swear to God, I think for like three days straight, I just ate only those. Because it was just so convenient. Yeah. Yeah.

And that's the idea. And if you're brand new to fitness and all you had to do was show up to the gym three days a week and just like- Dude, they were really good. Yeah. And those were sausage. I'm not even plugging right now. I'm just literally just like, dude, those were really fucking good food.

That was good food. Yeah. Thank you. Well done. But yeah, so they're purposely plain. And what we basically espouse is like, because I've dealt, Layla and I have ordered meals for four years. So we've gone through everything.

And like, she doesn't cook unless it's a special thing, you know, because, and I don't need her to like, I'm happy to just have it done. But if you're like me i don't know what i want to have for lunch next tuesday right i'm gonna know like 10 minutes before i have lunch i'm like same i'm gonna go for like but like if i have 16 lemon chickens i'm gonna murder myself right or my god shit i still have these barbecues left i gotta work through these right you know what i mean like i don't want to you know i don't want it to be that way so we made everything sauceless everything salt free so if you're like competing or something

got to manage that and so that way then we have just like recommendations for sauces that are low calorie there was really good flavor in that stuff there's so like for some of the carbs that there's like rosemary and things like that but um for how little was in it yeah and i looked at the oils and stuff there was no like canola oil or any of that bullshit i can't fucking stand when someone uses a cheap oil no it's whole ingredient it's's like foods that are ingredients, not made with ingredients. That's kind of the whole motto. But, uh, but yeah, then you can add barbecue today and you can add sweet chili tomorrow and you can add like, and you can add honey mustard the next day. And like most people were like, I need more variety. Cause like we purposely didn't make

a rotating menu. That's also for coaches. Cause if your clients are going through routine manage their calories and macros are changing all the time. It makes it impossible to stay consistent. And so with this, it's like you can have them have the set meals because most humans eat the same six to ten meals. Like that's like 90% of your meals are the same six to ten that you like and are convenient and they're made the way you like them, right? You probably know what you eat for breakfast most days.

You probably eat for lunch one of two or three things, right? Same thing for dinner. And so the goal is if you can just get someone to change those six to ten meals because people don't need variety what they do is they want variety in the beginning to figure out which ones they like and then they only want those ones and so this way it's like you're not going to change chicken right chicken's chicken as long as it's like moist and made well yeah like it's going to be chicken so it's more moist always fucks me up. Moist. Moist. And so now you can – It's just an instant feeling.

So you can put whatever you want on it. So then your clients can put whatever they want on the food, and it's totally like it gives them that variety, but you're still making sure you're hitting all the macros consistently. So it makes it easy for the coach, easy for the client. Everybody wins. And then the coach makes money. How much is the meal versus how much they – so, okay, hold on. Yeah.

Let's say you're a gym owner you're ordering a hundred meals so the gyms don't order the meals the people order the meals so the gym basically so this is kind of how the supplement company did really well too is we just built a point of sale on the back end for the gym so that um like we have a zillion ways someone can buy but it's like you can have a qr code on your phone they scan on your phone it takes them straight to the site um to the exact place you want them to buy and they can just click order and then it's automatically tracked through you um you can you can send them a link and they can go you can have it on your computer and you can turn the screen around and have them select the meals you want there's a zillion ways that you

can do it i like having them do it so that they understand the process the simplicity of that is unreal seamless has been the strategy dude so the biggest thing that i don't like about meals in my gym yeah is one they have to be in the gym. Pain in the ass. Pain in the ass. So I have a fridge that I sell water out of, and you're fucking up my mojo. Yeah. Right?

And then, two, sometimes they get to the point where they smell in the fridge. They're probably Tupperware. They're not vacuum sealed. They're Tupperware. So what happens, though, is somebody, there's a lot of rich people in fucking Newport. They don't give a fuck about $100 or whatever. They'll spend $100 on food and never get pick it up ever i know i don't need a beach i know and then it'll smell and i'm like what the fuck yeah so this is

a pain in the ass and then all these different all these they don't want to pick it up and that's the key point is they don't want to pick it up so i was like the whole point is like how can i make this frictionless for everyone how can i make it frictions for the gym how can i frictionless for the client so that everyone can just like keep moseying about their day and so the gym makes about 100 bucks a month per client they get on meals uh which is pretty awesome uh for them because it's another revenue stream 100 people that's fucking yeah it's real money and if like what's funny is that i always hear gym owners like scoffing at money and i'm like you run 12 margins i know the math so like why are you scoffing an extra three grand a month? Like it's double what you make now.

Like, you know what I mean? But it's like, it's heavy. It's the whole ego thing. Anyways. So with this, I think every gym owner just likes it.

Like they like people to think they make a lot of money. I think every, I think every human wants people to think that. I never gave a fuck. Like I never gave a fuck. Like if, I mean like if I was poor, I was like,

yeah, motherfucker, I'm poor. Like I'm broke right now. I just want you to know that but anyway so that is a fucking great answer well done thank you so the the to answer your question there's 10 proteins people can get four or six ounces that's the only variable is four or six ounces or the quality the you know the if you get steak or salmon it's more than than the, like, chicken or ground turkey. Yeah, as it should be.

Right. And so basically because I own the supplement company, like I said, I can do – so the meals are, depending on how many they buy, between $14, $49 to $16 a meal. Now, when they get their – they also get the protein tub as well. And so since they're having that for their breakfast, then the aggregate cost for all three of their meals is $9. It's $9.12.

Each? Yeah. And it's shipped to their door. That's cheap as fuck. I mean, dude, like where I live, like you get a Poke Bowl, it's $15. Oh, yeah. You get, I mean, God knows where you can go by me. It's super expensive.

And if you think about it in terms of a weekly cost, it's $1.78 a week, right? That's for 12, right? The standard person is trying to lose weight, get in shape, et cetera, right? And from that, they're going to get like 130 grams of protein a day. And if it's a dude, have him add an extra scoop of protein. I mean, like it's not complicated. Do you have options of like sizes of the meals? Yeah, four and six ounces.

Oh, four and six. Oh, perfect. Yeah, so the highest protein one is 50 and that's just like

the brisket and the steak and stuff. Yeah. But brisket's one of the, not basic, the standard protein so it's not like added. Oh.

It's also delicious which if you had the brisket it's phenomenal. The brisket was very, very good. It's a personal favorite. Yeah. I think that was very,

the one with the sweet, whatever one came with the sweet potato personal favorite i think that was the one with the sweet whatever one came with the sweet potato one was one of my favorites because i like the sweet potatoes were really good so that was no there was no spices on those yeah they're just good i mean that's what i'm saying yeah dude i literally just can't believe that i put all that together just now during the podcast wait a second but it makes it easy so what we did was um so i surveyed so many of our clients it was like how because like figuring out a compensation structure was incredible it was like it took me like a month to like just keep researching and talking and looking at what other people

were doing what was working was not working and so what i did was it has to win for three parties it has to win for the clients it has to win for the coaches and has to win for the for the owner right and so the clients by ordering through the gym to protect the gym from them coming directly to me because i'm not trying to steal anybody's clients, they get $2 off per meal by ordering through the gym. And that protects their base so I'm not trying to steal business from them. So that's number one. So the client wins there. The way that it's set up right now, and I may end up tweaking this, but currently they get 24% of the revenue that's generated from meals in meal credit.

When I surveyed them, most of them wanted to get free food for them and their trainers. If I sell $100 in food, I get $24 in food. I'm also making money too. The way we did it is there's basically a threshold. If you're a personal trainer, you would never be able to sell enough that it would make more sense for you to just get your meals covered for yourself. Because I can give you more meals worth of money than money's worth of money. Because food's not a very origin business, right? So that's why this was so creative for me.

So for the first basically 10 grand that someone sells in a month, which may sound like a lot, but it's not in food. Cause your average person spending seven 50 a month, like, so it only takes 15 clients to get there. Um, that covers five people's food. So that's you and your four coaches. So everyone has food at that point, everything after that, you're just getting a cash payout. So I set it up that way so that now I may, I may over time, make it three people. Like it's more expensive for me to do the food than it is to pay in cash, ironically. Oh. Um, but for me it was a branding thing of like, I know that if every trainer, if every trainer is eating the food, every coach is eating the food, every gym owner is eating

the food and they're posting about it and they're like, man, this is awesome. Then the clients are going to do it too. And they can walk the walk cause I really don't believe in recommending products that you don't use. You know what I mean? And so this way they could be an integrity. They could, you know, and shit, everyone eats. So like most coaches are very happy to just not have to pay for food. And I will tell you this, the moment you have had free food and then you have to pay for it again, you're like, wait, I, I don't want to pay for this. Like I get free food. And so our whole mission on the business side is if you are a gym owner, you're in the fitness space in general, I believe that between

supplements and meals, you should never have to pay for your food and you should never have to pay for your rent. Um, because of the amount of recommendations that people look to you as an expert or authority, cause they're asking you, which, what supplements should I take? Oh, you do those meals. Great. That's what i'll do right like we are these mini we were micro influencers and so we should be able to capitalize on that in an efficient manner so that like the two biggest expenses of your life are taken care of at the very least and so that's kind of the mission on that side i like that that's really really cool so is that so like the future for alex is probably meals and then just building your current gym company?

Yeah, right now we're basically putting gym launch at a maintenance level, so I'm not looking to scale gym launch further. I want to just continue to improve the systems, make it just better, more efficient, et cetera. I may even get to a point where I say, no more new gyms. I just want to keep taking care of the community we have. We may get there. I mean, I have plenty of different angles that I can take with this, but, um,

I know I saw on your Instagram goals for 2020 is more fun. Yeah. Yeah. Before we all get to the point where we've worked so much, we're just like, fuck, I just need to have a good time. I think it'll help the business too.

Honestly. We took, uh, this is our first vacation, uh, that we took in four years. Um, and so it was nice.

Where'd you guys go? We went to Deer Valley. Oh, nice. Yeah. Yeah. So we just three out of the five days I did not work. So I like, like we didn't talk about work. I didn't look at my phone. Like we just were married and it was really nice. So. And Deer Valley is a great place. Yeah. Especially for skiing as you're a skier. Yeah. I have some really, really, I can't't share it now but i have some really massive plans for combining food into the gym model uh that i think are going to be enormous and might break the industry but um i'll i'll wait to prove it out we'll do a follow-up yeah i'll do it we'll do a follow-up podcast i'm sure we'll all see it but yeah we have some really because the thing is is like when you have let's say supplements or you have meals and you have alternative methods of monetizing a customer, it means you can get really creative with the offers that you have.

And so if I can attract people and say, I'll give you this for free instead of this, it's like, we know what our back end numbers are. And so like, it's really just like configuring a puzzle to come up with an offer that's really compelling. It's back to the beginning of your whole thing. Yes. You're making upfront deals. Yeah. I like it. Yeah. And you're trying to make as much as you can yeah up front cool and you're saving money in the process because everything is actually owned by alex yeah which is right actually like my grandfather alex's fucking book alex's fucking

mails whatever.com um oh there was no fucking there sorry. Sorry. There should be. I'm going to buy the domain now. It'll redirect to Alex's book. My grandfather actually built an entire community where I grew up in Tom's River, New Jersey. And he built the entire community or he sold and rented all the buildings in the area because he built them all. Yeah. And then he opened a real estate company on the premises and then just

resold everything through the real estate company forever. Yeah. I was like, well, this company on the premises and then just resold everything through the real estate company forever. Yeah. I was like, well, this is the smartest thing I've ever seen in my life. He makes like 6% on every deal forever on shit he already made. Yeah. It was unbelievable. So it's almost kind of like the same thing you have going on right now.

But total side note, like how grateful do you feel right now? You're 30 years old. Yeah. And you built this massive company and i don't know 10 years ago you're probably a completely different person it was how amazing does that feel to wake up and awesome have this huge empire and like not only do you have an empire you have a real empire like there's people who are fake empire people right like they've made all this money and they're they suck right like they're shitty humans but you're like a good dude

you have really good principles like the shit works like obviously there's a lot of people you guys can google his name yeah you're always gonna get somebody who said something negative but i would say 89 if you help 2 000 people if you think five percent of people are fuckheads yeah right then that would be a hundred angry people yeah so but what's that feel like every day i mean like fuck so honestly gratefulness value. I have, I would say I'm, I'm grateful for the opportunity to play the game. Like, I just love the game. And so I think it's cool because I think being able to run at this level gives you growth opportunities that you wouldn't normally have that most people don't get.

And so I'm really, I'm grateful for those opportunities. There's definitely days that I wake up and I'm like, fuck. Yeah. Like, this is heavy you know so i don't want to i don't want to sugarcoat it for anyone and say like it is amazing all i do is i just roll around in my bed of money and i'm like oh my god i could buy whatever i want and like we can um but i will tell you this uh i think this is less brown quote but like we have made we've made a tremendous amount of money, and nothing has changed.

We live on $9,000 a month. You can see me. I'm wearing Champion sweats with stains on them. I think money just brings out whatever you are. So if you're just a dick, you're just a bigger dick. Yeah, I agree. If you're just a normal dude, you're just a more normal dude. You know what I mean?

But I just love the game, and i uh i just love the game i love the game i love the scars i have a whole list of all like right now i did a podcast it was 30 minutes of every single mistake of 2019 and like the lessons from those and they're they're like one-liners like i don't even know if they make sense for people because i'm like so we learned that uh this didn't work and uh this is what we learned instead and we learned that you know it's like and i just love that i'm able to do that every year and look back and be like, wow,

like if I knew then what I know now, and I'm excited to know what 40 year old Alex would probably shake his head and be like, Oh, you little shit, you know, if you only knew, but that's the game.

Yeah. It's amazing what, you know, two years later, two years is crazy. Well, all right. Thank you so much for your time.

We've spent an hour and a half on here. I've been in your home. We've worked out. We've spent a lot of time together. It's almost like a full-on bumble date. I'll go back and actually see how many people we have on standby on mine right now. But thank you so much again. And let's just reiterate real quick. So they can go to alexsbook.com. Yep. It free book it's eight bucks for shipping yep and then for the meals where can people find those so uh if you wanted to so if you're a gym owner right uh you can go to affiliate.prestigelabs.com i know it's a shitty url but affiliate.prestigelabs.com and right there you can go and sign up and become an affiliate there's a there's three a, step two, step three video onboarding process.

They're less than five minutes each. You'll be able to figure it out. And you can literally make your first, you can have your first customer purchase a meal within less than 120 seconds. So like I said, seamless. So you go there, you put your name, phone number, email. You check the box saying that you're not a crazy person. You submit.

And then you immediately have your links that are already tracked to you you can buy your own food through the links and get your 24 off um automatically so if you want to do that you can now that's only for fitness professionals we do verify that so if you're not a fitness professional then don't do it because we'll just kick you out uh but if you're a trainer or you're an online coach or you're a chiropractor or you're an acupuncturist anybody who helps people who are trying to lose weight um then this is this is for you and it's an easy way to add revenue. Sweet. You get to swipe right on yourself, basically.

Awesome. Well, is there any other websites or any other things that you want to throw out there for the people? What about the Gym Lords? Is there a website for that? Well, there's alexespodcast.com,

which is my podcast. You can go to alexesig.com for my Instagram. No, your Instagram is Hermosi. Yeah, but if you wanted to redirect, it'll redirect. Really? But at Hermosi is my Instagram. But yeah, I mean, if you're a gym owner, you've probably seen my ads a hundred times. And if you are listening to a podcast with me in it, Facebook probably already knows and will probably show you an ad within the next like hour. Yeah. So on one of those, you know, um, I should

probably have better call to actions, but honestly, I just hope that anyone, um, who just got value from it. And if you're a gym owner, just hang in and just understand that anybody who's trying to flex and show that they're like killing it. I can tell you that I know more gym owners than just about anyone. And it's a hard game. It's a hard grind. Um, it's, it's very difficult to become a millionaire strictly from the gym. The only path to doing that is either through licensing, franchising, or bundling up five to ten locations and then selling them. But it's extremely difficult. And typically, once you acquire that level of skill set, if you apply that level of skill set to a different opportunity vehicle you'll see. But the thing is, is like that first business is so key to you learning all the skills that you need to learn to level up. I mean, I wouldn't be where I am if I didn't have the gyms that I had. Um, that's how I learned how

to sell. I learned how to market. I learned how to like run the team. I mean, there's all these things that you learn that you don't have the opportunity to learn in most other businesses. And so like, I would just implore you to not think that any failures or failures were just lessons because like the only thing that you're investing in is just you and the, like I lost everything, which you guys didn't hear about, but I lost, I sold my six gyms and then I lost everything within two months. You lost everything twice. Yeah. I've lost everything twice. Yeah. Thanks for the reminder. Um, and so the thing is, is like, you're able to rebuild it if you have the skills. And so just always invest on the, on, on stacking more skills together,

because like, even like the next big play that I'm going to do this year, the only reason I'd be able to do is because I know how to market locally for a gym. I have a software that works leads automatically so that gym owners don't have to work them. I have, I know how to sell and I know how to combine supplements, meals, and service to create an absolutely crazy offer that no one else can do. Um, and then we can manage the fulfillment through other software that we have. Like the only reason we can do this because we've stacked these skills over time. And so I would just say like,

just don't get frustrated and just, it's your expectations is what's fucking killing you. The reason that, especially now in this age, everyone's like entitlement factors, fucking out of 50% of high schoolers think they're going to be a millionaire by 25, 50%. And they're all tragically mistaken. Many of them. 50% of high schoolers think they're going to be a millionaire by 25. 50%.

And they're all tragically mistaken. Many of them. Tragically. Right. And what will happen is they continue to try and find the big...

Because their work ethic is so low. And they try and find the big thing that's their big break and they keep jumping from shiny object, big break,

shiny object, big break rather than just realizing that most things just take some time. And it's because you're going to suck and then finally you're going to try six things of for the same business and then finally

one will start to work a little bit and then you're going to want to change it again but at that point you shouldn't you just got to keep doing that thing and so it's like one of our core tendencies do the boring work it's like if you realize that 50 reach outs a day is what gets you the inflow then keep doing 50 like repeat successful actions keep doing it so anyways just a word of encouragement for everyone like just hang in your expectations kill you if you can be if you could be a millionaire in 10 years guaranteed rather than try and shoot for it in two years if you thought about it as a 10-year plan the likelihood that you achieve it in six is actually pretty high if it was your real expectation. So, and this all goes back to Susie, instead of telling her that she's going

to lose 60 pounds in 14 days, let's tell her she might lose like seven. Yeah. Right. And maybe in a year we'll change your life. Same in your life, dude, crushed this podcast. Thank you so much for those of you guys who listened to this. And I know that you guys are going to love it. There's no chance that you're not going to make sure you tag myself, Mr. Hermosi over here. At Hermosi. Yeah, let us know that you love the podcast. Share it with everybody. Give us some of your favorite quotes or whatever it is,

and I will see you guys next week. Thank you so much for listening to the show. Love you guys.