The Long Journey Back

Uncategorized Jul 15, 2020

Change is a part of life and a part of business. You accept the world as it is now, adapt to how you have to live and build a forward-looking life.

There will be a short window of stabilization in the industry followed by a second round of misery when the virus meets the flu season. As cases rise now, states are already reversing course and adding more operational restrictions so we will have to operate on a week by week basis adjusting to what is happening in front of you at the time.

The overall consensus is that by the early summer next year we will be working with vaccines, improved treatments and possibly the arrival of a saturation point whereas a group we have moved past this thing.

Until then, we will be regulated and restricted in our operations, and the clients will be dazed and confused by the ever-changing rules we will have to give them to get them into the gyms again.

 It does not matter if you do not believe this thing is real. The reality you do have to deal with is the rules and restrictions handed to us as those in charge fight back and these rules dictate how we as owners have to operate. I cannot fight shadows of what might be, but I can punch a rule in the face because it is there and I can deal with its reality.

 In business, you have to make the same choice. You analyze what is, give up what was, and move on adapting to the new demands of how business has to be run. The virus has changed the nature of how we have to do business for the next several years, which in terms of small business, is a forever time of change.

 If you refuse to change, you fight back clinging to what was denying the change that is already wrapped around you. When you deny, you live in anger fighting to get back to a “normal” that will never exist again in this business. You fight, you rage, and you rant, but how it was will never be what it is again.

 If you want to survive as a human, and as a businessperson, let go of what was and embrace what is. Today belongs to those willing to give up trying to capture what used to be and figure out how to function and win as things are today and will be during the next few years.

 None of your anger brings back how it used to be. None of your rants change the reality you are now living in. Scream unfair, I want my life back, yell all you want, but it makes no difference.

 And while you are whining there are those who quietly accept how things are and readjust their lives to fit the world as it is, not how they want it to be.

 You have a choice to make now while you still have time: evolve or die.

 Nothing will change in the fitness world until at least May, 2021

 In the earlier letters in this series, I made several key predictions, which all came true:

  • At least thirty percent of all the gyms in the country will permanently close
  • Most gyms will not get reopened until July
  • Government restrictions will force us to drastically change how we do business
  • Gym owners who force openings will suffer
  • Gym owners who let their personal frustration rule by exploding on social media will pay the price by opening with a reduced membership having driven away a large percentage of their membership
  • Gyms not using contracts will hurt the most. The month-to-month membership gyms were the first to fold
  • Online is a support tool, not the total answer
  • We have to change to meet the new client who has evolved out of this mess

Be prepared for the long haul

Now is the time to reorganize your business for the long year to come. Business will not, and I emphasize again, will not return to the normalcy of 2019, if ever, until early summer of next year.

The combination of flu season, the resurgence of the virus in multiple states, and the slow adaptation of the population to safety practices is going to make this a long year. Remember, hope for the best but be prepared for the absolute worst days and this is what I am advocating here. Here are a few things you can do now to make the year easier:

  • If you can, work with your landlord and put together a scaled rent proposal starting at about half of what you pay regularly then working slowly upward back to full rent starting in May. Even landlords who were rigid in the beginning are now understanding this is not going to go away in a few months and everyone starts to pay again as promised in leases.
  • Refinance all debt and extend it out for 7-10 years if you can. This is also true for private investors. By refinancing, you lower your monthly operating expenses allowing for more free cash flow as business begins to build again. The SBA, working with local banks, is doing great work in getting owners those $150,000 express loans, but there are other options available to and the feds are expected to open up new loan options as well
  • Restructure your personal debt and do not be afraid to ask for help. If you have a new car loan, can you refinance for a fresh five years? Can you refinance your home for a fresh twenty and ask for three months of non payments too? Can you hit the parents or a friend for a loan and do a complete debt consolidation package?

What money will you need

You will need at least three months of reserve capital to cover operating losses between now and May, 2021. For example, if it takes $25,000 per month to pay all your bills, including your team, it will take you an extra $75,000 between now and May, 2021 to cover shortfalls as you rebuilt your business.

If I am wrong about this, you kick butt and your business is back and covering expenses, I will apologize later and buy you a beer or two. If I am right, then you are safe and will not need the reserve but let’s plan to need the money.

What has to change in your gym to keep you in business

Some form of distancing, advance cleaning and sanitation, and most likely wearing masks is going to be the new reality in your business throughout the winter.

The gyms who opened without masks in the states that opened early are now mostly shut again and most likely be able to reopen a second round with increased distancing loads and mandatory masks for everyone in the space.

I do not care about your politics here; you are going to be mandated to wear masks indoors in your gyms in most every state. You accept it and figure out how to make it work or you posture and resist. Your choice, but remember again, the client also has the right to take his business, and money, somewhere else.

Most chain gyms simply are too large to maintain the extra needed level of cleanliness needed to keep everyone safe. These gyms claim to be clean, but by the nature of how they make money, which is by cramming more people into smaller space, maintaining this visual will be unlikely because of the increased cost and reduced membership through spacing requirements.

Training gyms, the heart of the industry these days, are clean by our normal business standards, but not clean enough by virus increased standards. Bluntly, most training gyms have never been as clean as we believe them to be because we clean them using our coaches, family members and the dog and this looser standard will not work going forward.

You will need to get these gyms professionally cleaned on a daily basis, meaning you will have to hire a dedicated cleaner who has training, invest in equipment, such as foggers, and learn the safety protocols for destroying a tenacious virus.

You also have to learn to exploit your cleaning procedures. Daily videos, using testimonials citing how clean the gym is and how safe the person feels in your gym, coupled with short clips of the cleaning process underway with someone masked up, shield on, gloves and fogging the place, will become part of your daily marketing.

Import side note here

Most states are slowly adapting a set of rules that seem consistently accepted by the powers that run your individual state. These are current rules used early by the northeastern states and seem to be making their way to the states that went early without guidelines and now must close, adapt and reopen.

Here are a few of the key points you should expect to come your way, especially in the early states that shut down the gyms again:

  • You may be mandated to keep fixed equipment fourteen feet apart, including center to center on treads
  • Mandatory masks for staff and every client entering your space. There will be no exceptions for this rule. You will have to adjust and figure out how to make this work with your clients. You may need a blue tooth headset coupled with a small speaker to be heard in small groups
  • Your group rooms (more on that later in the letter) will be forced to operate at about one quarter capacity and probably a max of half your normal load
  • You may be forced to create a thirty-minute window between all groups so the gym may be properly cleaned
  • You may be forced/allowed to offer outdoor workouts for any groups of more than four. If you have the dirt, consider a permanent fourteen-hundred-foot permanent structure like a park pavilion
  • You as the owner, and the clients, will be fined during random inspections if you are found in violation of these rules and many states will forcibly shut you down and might take your business license
  • The city you operate in has the right to go beyond what the state will mandate, so expect weird rules that do not seem logical. Most of these dissipate in a few weeks, but you may get surprised

Follow the rules and error on the side of the most terrified client

Gyms in the states that have gone slower, set and followed more safety rules and are only now slowly increasing loads, have found it still takes their client base a full ninety-days to regain traction.

The clients, as discussed in earlier letters, fall into three categories: the ones who do not believe and do not care about the virus (although this group is shrinking) and who are the first in after reopening; the timid who wait a full thirty to forty-five days to reenter waiting to see what happened to the first wave (did they get sick or die); and the truly terrified who may, if proof exists supplied by you over time, will come back toward the end of the ninety-day opening window.

Most early openers really messed this up. The early guys fell victim to the social media trap, where a handful of your clients are pounding you every day begging you to open and swearing they will all be there when you do.

The mistake is you believe the handful represents the entire membership. The early guys refused to follow the “recommended” procedures opting to go without masks and the other things mandated in states that have had successful reopenings for gyms basing their opening model on the belief the few loud clients represented the majority, and this proved to be false.

Run your gym as if you are operating for the ten most terrified members you have. Yes, the first group of live forever clients may snicker, but eventually everyone allowed in your gym, in most states, will have to wear masks or be banned or fined.

Overkill is a good optic. Exploit it through consistent social media posts, such as the cleaning staff doing its thing and let the clients speak for you. You can always back down later and go easier if the situation allows, but opening, getting shut down, the trying to reopen again will be easier if you overkill it rather than going to easy and trying to ramp it up later.

Marketing that works

Exploit the closures and fear members have in your community. There will be a large number of clients without gyms as they fail, and an even larger number of members who do not believe their current gyms are safe and therefore refuse to go back. Chase these groups.

Offer a mini-membership using six-weeks for somewhere in the $149-299 range and actually call it a mini-membership. Here are a few thoughts on promoting it:

  • Use two different social media tracts to promote this for the first ninety-days you are back
  • Track one is the owner stating in a video: We are still here. If your gym has closed, or if you do not feel safe in your current gym, please come try us. We are offering a six-week mini-membership for only $$$$ to give you a chance to try us and see if we are the gym for you. Here is what we are doing to keep you safe….
  • Track two is the same theme but using clients in short testimonial videos saying how safe they feel in your gym. If you shoot these outside of the gym, it is okay to do it without masks, but in the gym let the client wear a mask to validate your safety point.
  • Go back to every old member you have had since January, 2018, and send him or her and old fashioned snail mail using these four paragraph themes. Also back this up with an email and call as well:
  • Para #1: Thank you for being a former member. We want you to know we are still here and still in business despite everything that is going on
  • #2: Here is what we are doing to keep our clients safe
  • #3: Bring this letter in by September 30 and I will give you, as a former client, a thirty-day trial to check us out again and see everything we are doing to protect our clients
  • #4: Thank them for their past loyalty and let them know you would love to see them back with you

 

  • Remember it is about safety, not results these days. I will trust you with my body if you can prove you are safe and care about me as a client. I assume you can get me results, as all gyms claim, but there are few gyms the clients trust these days with their personal safety
  • You will get frustrated and get sloppy. Keep up a steady weekly supply of videos through the end of the years talking about safety issues and what you are doing to keep you current, and future clients, safe. Post three different videos per week, running for seven days each, at about $2-3 per day, for at least the rest of the year. Again, these are a combination of you as the owner and using your clients as testimonials

 

Big boxes will hurt the most

The big box players, as of now, have done little to sway the clients they will be safe. Even the stupid details, such as how do I open the door to get into this place, are being overlooked.

Treadmills with out of order signs no every other one does nothing to make the client feel safe, and in fact, makes them mad as they know the treads work and you just blocked them from their favorite spot.

 Visuals and optics are everything. You must take out every other tread, reduce your amount of fixed equipment, severely cut down or eliminate most of our traditional group exercise, and basically reinvent your entire membership plan.

You will not be allowed to operate at full capacity in most states until at least early summer of next year. Adjust your emphasis away from group driven activities and rebuilt toward smaller groups and one on one.

The basic concept for decades in the mainstream world has been to chase volume, or in other words, how can we get the most members, at the lowest competitive price, into this box? This does not work in the world of virus where total capacity will be limited for the next year.

The question is now; how can I improve my return per client served learning to make more money from fewer clients? Volume is gone: return per client will rule in the big boxes.

Traditional group can be replaced with smaller, but pricier options, such as boxing, meditation and restoration of natural movement. One on one, usually less than six percent of most box gyms, can be enhanced if you create smaller, gyms within our gyms where the client does not have to share equipment or come in contact with other members. The days of dragging a client through your gym sharing equipment with other clients, in your box and in a training gym, are dead forever.

Training gyms who rely strictly on groups need to adjust now

We know it is coming, so why not evolve now? Team training was fading pre-virus and the market was becoming saturated and the days of thirty people crowded into a small eighteen-hundred-foot gym are gone.

Embrace the change and adjust your plan by starting small group coaching, limited to four or less, and chase one on one, which is back and growing again. You already have a segment of clients who will pay more to not share equipment, work in restricted and safer space within your gym and who love you but no long want to be one of many. Take advantage of this and add small group as a more expensive option.

You are not going to have the luxury of getting back to your full team quotas for almost a year. The second wave will force the states to step in yet again. You will not get closed, but you will be forced to operate under heavy load restrictions.

What part of this do you not understand? It is coming and you have warning. Segment your clientele, charge more for smaller groups and one on one, and be prepared. If you can go full group, then you simply made more money, but if you cannot, then you are prepared for the long year I anticipate.

 If you have to close your business for good?

Sometimes there is no way forward. When you get to that point, consider these steps and ideas:

  • If you are a small group and one on one gym, can you switch to totally online coaching? The answer is yes, but only if you target a specific target market. For example, becoming a fitness after fifty specialist gives you a unique brand for your area and could be turned into a online business. Use twelve-month contracts, charge full price, or more than you did in your gym, and offer full support
  • Contact your attorney if you anticipate closing. You need to kill the liability trail, meaning your company will have to end legally and you may have to file personal bankruptcy. This used to be a big thing but not any longer. Just make sure you talk to your attorney about protecting personal assets if you chase this. Do not do this without legal help.
  • Can you downsize? Going from a six-thousand-foot gym into a smaller box, such as fifteen hundred feet, might make sense for you. Talk to your landlord and explore this if it works for you.
  • There is no shame in closing. This virus has killed many good businesses, but many owners entered into this without reserves and it is going on too long and this is taking many gyms down.

 

Someone will get sick/be prepared

It will be inevitable that a staff person or client comes down with the virus. How you handle it will either close you or enhance your business.

Think of these things and have a written plan in place when this happens to you:

  • If staff say they are ill, send them home for self-isolation. Talk to your attorney about pay for this person.
  • If this happens, shut the gym down for 24-48 hours, fumigate, clean and start all over again. You should have the entire team, including you, tested.
  • Clearly state online what happened and what you did to respond. Hiding this will kill your business when it leaks out. Show leadership and close if for at least a day to make sure it is safe to go in there.
  • You might have a client call and tell you he or she has it and worked out in the gym. The same procedure has to happen; close it for at least a day and make it safe again.
  • If you do not take leadership, the clients tend to make up their own stories and these stories are always much more horrible than the truth. Control the spin or the spin will control you.
  • Again, talk to your attorney about this. It will vary from state to state and city to city. Review this with him or her now, before it happens, and have a plan, because it will happen

 The reality you should not deny

We are all frustrated, but you have a choice to let this frustration ruin your life and your business or you adapt to the world as it is, learn to adjust and accept what is, not clinging to what was.

The gym business will be under continual restraints, restrictions, half-closures and oversight until May of 2021. The virus will meet the flu and we will be going backward for many more months during the winter. Change your business now for the long haul.

Your anger expressed through rants, your reposting of other’s unproven rants and misinformation, and your frustration at mandated restrictions you do not agree with will take down your career and your business. It takes decades to build a great reputation, but only a few texts sent out after a couple of stiff drinks to destroy it.

Yes, you have the right to express your opinion and I respect that right… and your clients have the right to walk away taking their money with them. Stay out of the social media rant wars; they kill your brand.

 If you want to keep your business open, stay out of politics. If you rant and post, that is your right, but it will be hard to save your business and your personal brand when you alienate the half of your clientele who disagree with you.

 I stated in March we will lose thirty percent of all the gyms in the U.S. I was wrong; the number is going to be higher. Most of the closures up to now are owners who simply refused to accept that about half of your clients are afraid and want to see you showing leadership by proving you can keep them safe. If you reopened with only about half your clients, then they voted, and they decided they do not trust you.

The gyms in the states that reopened with no guidelines in place, then got shut down again, ignored the part of their client base who want you to wear masks, practice social distancing and prove you are safe.

If you opened without safety protocols, and got shut down again, get it right the next time. Always error toward the most terrified clients in your gym… even if you do not personally agree.

 The year 2019 is not coming back. We will not be running anything close to a gym as it was then. You adapt and win, or you fight back clinging to the old days, and you will lose.
Think about these things before you blast me.

I am talking about your business. You have the right to run it anyway you desire, but as a lifetime business coach, I have a right to point out what you are doing may kill your dream… and I will point that out as best I can

 

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