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Hi, everyone. Welcome. Happy Friday. Hope you guys are having an amazing or have had an amazing week.

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I wanted to talk to you about something that I bring up a lot within our gym or arts community,

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but I don't think I've talked much about it publicly. And it's why I tell people to close locations.

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And so kind of an interesting topic because a lot of people are like, wait, what? You tell

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people close locations and the honest truth is yes. And the reason is because I think a lot of

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gym owners, or really business owners and entrepreneurs in general, tend to open locations not based on

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math, but they open it based on emotion and ego. And so what ends up happening invariably,

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and this has happened so many times when we've had so many gym owners have come into our world,

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who when they watch a video like this, or what I'm about to say, or like, I feel like you're speaking

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to me. But the reality is that if you have a single location and it starts to make you money, right?

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I can't tell you the amount of times that we've, you know, we've even turned to gym around. And then

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within 12 weeks, the gym owner's like, hey, man, I'm looking at my third, my second location.

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And it makes me want to run my head through the wall because they forgot what the objective was.

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And I think the reality is that they didn't forget what the objective was. The objective was always

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for them an ego thing and had nothing to do with making money. And that's because a lot of

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entrepreneurs are driven by status. And the interesting thing is that you can't eat status. You can't

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pay rent with status, right? You can't do anything with status. But you can with money and money

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works different than status steps. And so a lot of times the things that it takes to grow your status

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are contrary to what it takes to grow your bank account, right? And so if we have a look,

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a single location owner and they're like, okay, I mean, 10 grand net last month and this month,

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like immediately in their mind, they're like, I can't wait to have 10 locations that are doing this.

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I'll be making 100,000 a month net, whatever, right? The thing though is that what it takes to make

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one location really, really good is a lot different than what it takes to take two locations or three

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locations or 10 locations, right? And the reality is that most times what happens is if they go and

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open the second location, the amount of time and effort that they can put into that first location

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goes down. And then within the margin of the industry, right? So let's say you're running a 25%

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margin, okay? And you're making your 10,000 a month net. Then all of a sudden that one location

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because you're not focused 100% on it, even if you split your attention, having a 25% decrease in

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sales is actually fairly, fairly normal, especially if you go from owner operated to remote, right?

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And so what happens is they start another location and then that one does,

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usually not even as high as the first one does, it does maybe two thirds of what the first one did.

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And now both of them are basically running at break even. And so the gym owner says, okay, well,

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if I open a third location, then now I've kind of covered this and then I'll be able to make

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a little bit more on all three of them. And then obviously you kind of know how the story goes

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because then they stress themselves extremely thin. And then obviously they get into this

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really horrible situation where they're stressed out on time continually. And the solution for

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that is not to like, let's double down. The solution a lot of times is to, is to simplify,

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is to get rid of locations so that we can focus on one location and make it better, right? And so like

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for me, the benchmarks that we have for our gym lords community for like, I don't even want to

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hear you talk to me about, you want to open a second location until you have made 20,000 a month

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net for six months in a row without being there. And on top of that, it should have grown.

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So during the six months that you've been away, your gym should grow. And when I say away,

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it doesn't mean that like you're checking on everything every day and you're just remote. But I mean

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like gone. Like you can total your hours to five hours a week, 10 hours tops tops true 10 hours.

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Not where you say you're doing 10 hours, but you're still working like a normal 40 hours because

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you're thinking about the other 30 hours and you're doing stuff and you're messaging people and

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you're talking to your coach like, no, I'm saying a legit 10 hours. Because what happens is if you have

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a second location, you're going to put more time into that one. And very realistically you won't

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even have 10 hours really to give to that first one. And so once like, those are the benchmarks that

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you need to give to yourself. Now the $20,000 a month net. It also assumes that you've already

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taken care of your personal need for money. So if you have let's say $10,000 saved up and then

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after six months, you have $100,000 saved up. Do you think it's a good time at that moment to go

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open the second facility? My argument would be no. Why? Because you're about to drain your account

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again. You'd be down zero and now you have twice the liabilities, right? And less ability and

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attention to make sure that they're both working. And so a lot of the advice that I have is really

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boring and not sexy, but it will keep you out of trouble. And so what's happened is that every

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gym lord that has has taken this advice has shut down locations or has said, you know what,

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we're going to just double down on this location makes way more money than the guys who have

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three or four locations. So if you go to one of these, uh, these conferences or these events or,

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you know, these masterminds that sometimes get held and some guys like, yeah, I've got, I've got

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four locations. You should immediately be like, cool. This guy's probably not making anything. And

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he's probably really stressed out. Like I am immediately think that. So if I hear a gym owner,

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like we get on the phone with the gym owner and he's new and he's got, you know, four locations

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and some like, cool man, you're probably really stressed out. Are you making anything? And then

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no joke nine times that attend their like, dude, I'm strapped right now. And then I tell the same

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story. I'm like, I'm guessing you're your first location that was making 10 maybe 15,000

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a month net. You open your second location and now drop down to two making five or two making

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2500. Then you're like, okay, well, maybe I'll make 2500 from each one. You open your third one

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and now you have three that are breaking. Hey, if you're a return listener and you have not

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rated or reviewed the show, I want you to know that you should feel absolutely terrible about

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yourself and everything else in the world. I'm kidding. Um, but it would mean the absolute

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words to me. If you guys would go ahead and do that and you don't even have to pause to show you

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keep listening and you can just do it with your thumb right now. It'll take you less than 60 seconds.

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And like I said, the only way that podcast grows through word of mouth and this is you joining

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hands with me and helping as many entrepreneurs as we possibly can because no one is coming to save

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us. It's just us. All right. So please go do that now and let's get back to the show.

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Right. And then you've a hiccup and you're screwed. And now you have not just your family,

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but you have all the trainers and all their families that are relying on you and the decision

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was made based on status and not money, right? And so if the goal of the business is to actually

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make a profit and actually make you money, then don't forget to do the thing that it actually was

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supposed to do, which is make money, right? Like, what do I do? After this month, when I make 20,000

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a month, do it again, right? Do it again and do it more efficiently. And then next month, do it

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again and do it more efficiently. Now what to circle back to what I was saying earlier, every gym

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that we've had who said, you know what? I'm in a stick with one location. I want to see how

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vertically high I can go, right? Because there are fixed costs within the gym. And then as you've

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scaled up a higher and higher percentage of the revenue contributes to margin, okay? So it's

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the inverse of diminishing marginal returns, meaning let's say, let's say you have a gym that

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does $30,000 a month and you have $20,000 of overhead, okay? And then you add $10,000 a month

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of revenue to that $30,000. So let's say you're netting 10 from the from the 30, right? And then

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you add another 10. It might cost you another $2500 to make the extra 10. But your margin on that

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next $10,000 might be a 75% margin. And for you to make that from your second facility,

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means you're going to have to go all the way up to $29,000 to make that same additional $7500.

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And so what happens is that most people don't know that you can make a lot more money from one gym

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because they just don't know. And so they're like, well, I just assume that $10,000 a month is the

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max I'm going to be able to make from the gym. And so the question you should ask yourself,

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and hopefully tire ego to this question is, is this really the best I can do?

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Is this really the best I can do? Is this the best business I can possibly make? No, we'll then

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don't open another one, right? Work on that one and stack vertically. So instead of growing

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horizontally, which builds ego, build vertically and build your bank account. And so the whole point

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here is that once we had gyms who broke the four minute mile and hit $83,000, hit $100,000,

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hit $120,000 a month, right? In recurring, then all of a sudden, everyone believed it was possible.

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And if you're making $100,000 a month, do you think that you'll probably be making more than

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you would from two making 40? Absolutely. Because you have a higher percentage of the revenue that

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is contributing to margin. Okay? And so it's just, I just wanted to make this quick video. And I

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started it with why better leaks the bigger. And so most people think that I need to get bigger to

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prove to everyone that I'm better. But the reality is that you need to make your gym better. And then

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only when you truly have a full bank account, you have grown every month for the last six months.

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You've been at the gym, well, at the gym zero, but working on your gym less than 10 hours a week

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during that period of time, would you then and only then be allowed to even think about the concept

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of a second location? But the reality is that usually when you follow those first three steps,

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most gyms that we work with are like, damn, that was awesome. I wonder if I can stack 30,000 a month.

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And then they do without taking on more liability and risk. And so it's really shifting your

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main driver from a status driven driver to a bank account driven driver. And I will tell you that's

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the big reason why like we're not trying to be influencers. It's not my game. I don't really want

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to do that. I want to have all the Instagram quotes and whatever. This is not my thing.

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Is because like I just I really I did the status thing when I was when I had my gyms and I was

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really stressed and it was a mistake. And so I don't want you to repeat the same thing that I did

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hopefully. I can tell you a lot we're a lot more comfortable now with one vertically stacked

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business than lots of horizontal businesses. And so for anyone who's who's out there who's like,

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man, maybe I'll open a second location like, okay, I would use those benchmark criteria. And if

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you're in the flip, flip scenario where you're like, you know what, shit, I think that's right. This

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does kind of resonate with me. I'm making less than I was with I'm making less with two locations

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than I was with one location. That should be an indicator for you. Like, okay, I did something wrong

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because I should be making more. I should be making twice as much, right? And you should have

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some economies of scale with multiple locations ideally, right? And if you don't, then it means like

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even with economies of scale, even with shared labor costs for like admin things, things like that,

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even with shared subscriptions for software and all that stuff, you're still making less.

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Which means that the model that you used was not as strong as you thought it was. And so what you

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should do is in my opinion, cut, refocus, and then watch what happens because every time we have

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done this with a gym and they refocus their attention on one location, I'm like, imagine how easy

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it would be because when you have three locations, and I said, imagine if all you had to do was make

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one gym make money, how easy would that be? They're like, really easy. And I'm like, cool, why don't we

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do that? Right? And then actually make money, which is the point, right? And so then we focus on

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making that one so good, so amazing that it starts growing super, super vertically. You take home

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tons of cash, you have some of the bank account, you don't need to work as much on the facility.

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And then you can make the decision from an informed standpoint of abundance rather than from a

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scarce ego standpoint of like, I need more status. So anyways, I hope that makes sense to anyone.

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Thank you guys for dropping in on a Friday. I know that at least here is a rainy day in Austin.

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But maybe you know, shoot a shoot a like if you're if you're feeling super rambunctious.

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Tags and one who is in your facility who's been like, let's open another one. And then like this is

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just my video of like pump the brakes. What's the point? Are we making as much as we want to and

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how we made as much as we needed to make it and that we set out to make when we started this

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business originally? So hope that makes sense. I hope you guys are having an amazing, amazing day.

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I'm sorry I've been late on the content. I've had we've got tons of amazing stuff that's

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going on in the background for us that is coming down the pipeline for everything. So anyways,

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have an amazing day. Keep being awesome. Don't get your shoot.