So you want to operate multiple clubs?
To successfully take your fitness operation from one to three, 12 or even 20 clubs you need to upgrade these skills at every stage, writes Mike Gelfgot.
In his book Cash Flow Quadrant, Robert Kiyosaki talks about four quadrants. He says that in order for someone to move from an ‘E’ (employee) quadrant to an ‘S’ (self-employed) quadrant, a different set of skills is required. In fact, Kiyosaki makes the point that in order to move up from any of the quadrants to the next, you need to upgrade your skills. It typically requires some form of stretching yourself and growing, reading and learning to gain new skills and hone others that are of greater importance in the new quadrant.
If you currently own and run one fitness facility and are contemplating whether or not to take the next step and expand the scale of your operations, this quadrant provides some food for thought. When scaling your fitness operation, your ‘Club Flow Quadrant’ would look very similar, and require different key areas of growth for each quadrant. Let’s take a look.
1 – 3 clubs
This is essentially a one-person show. You open up your first facility and hire two or three people, depending on your business structure. In this quadrant, the key area of skills growth will be in sales and marketing, of both memberships and personal training. At this scale, you will be responsible for conducting most of the sales and marketing yourself. You will also be responsible for organising all community and promotional events, as well as for training, hiring, and firing. You are the CECM – the chief executive culture maker. The entire operation operates based on you and your abilities. You have a few people you can count on, but for the most part it’s all on you as the club owner. You are the district manager.
4 – 7 clubs
As a club owner, expanding to this number of venues puts you in the position of manager and developer for your organisation. This is the phase in which all your systems and processes must be written down and, importantly, inspected on a weekly basis to ensure they are actually getting done. In this phase you will most likely have at least one DM (District Manager) that helps you oversee two or three clubs. Your time is spent on managing and developing your current DM while overseeing the other clubs and the rest of the company. The biggest areas for skills growth in this quadrant will be time management, delegation and people management (with a focus on practicing patience with staff).
8 – 12 clubs
This is the most critical phase for your organisation. Again, all systems and processes must be outlined, detailed, and tested repeatedly to ensure they are still effective and the most efficient way of doing things now that you are operating on a larger scale. Depending on the type of business structure you have, you will probably have between 34 and 50 people working for your business, the logistics of which may make you feel less like a health club operator and more like a recruitment agency. You should be employing between three and five DMs who report directly to you. You are the regional manager for your organisation, and as such will be spending more time working on the business than in it.
In order to assume this role, you will need to learn to let go of the hands-on aspects of much of the work you previously did, by delegating to your team and accepting that as long as they do 80% of how you would like for things to get done, that’s pretty good going. By the time you are running an operation of this size, you simply can’t do everything you once did, so you must entrust your team with the day-to-day.
In this phase the area of growth you need to focus on is that of culture, much like the one you had when you had only 1 to 3 clubs. This means leading your organisation, training your staff, providing vision for future growth, and creating opportunities for your team to get together outside of work.
People want to work for an organisation in which they feel like they have a best friend at work and that what they do matters. You want your best people to stay with your business, firstly because they grow your success, and secondly because replacing them due to attrition is a time-consuming headache. Having company social events, contests where the entire company can earn a trip if they hit 100% of goal, and fun team activities, such as a Mud Run, can give your team members the opportunity to get to know each other outside of work. Clear expectations based on your vision, BHAG, core values, core purpose, and your mission statement will help your team feel like their work matters, make them much more likely to stay with you and push the company forward.
13 – 20 clubs
In this phase your biggest area of growth will be in managing your emotions, being honest and transparent with your team, and not being fearful of making hard decisions. Your challenge will be to keep everyone in your team on an emotional edge. Let’s discuss this further.
At times you will feel inadequate, you will feel like you are making all the wrong decisions, and you will be attacked from many different angles, whether it be staff leaving, staff stealing, competitors moving into one or two or five of your markets, or people calling you every single day and asking you to make financial decisions. Everyone wants to get paid more money and everyone wants new equipment.
At the beginning of the hour you might feel like you are on top of the world because finally the team is coming together, and by the end of the hour you find out that one of your trainers has been sleeping with a client and her husband is at the club right now demanding to speak to the owner – all while getting a voicemail from one of your district managers letting you know that you have a low budget competitor moving into one of your best markets.
As these challenges occur, you cannot carry this burden by yourself. In his book The Hard Thing About Hard Things, Ben Horowitz talks about being open and vulnerable with your executive team, your district managers. He says that trust within the team is what will pull the company out of hard times. It might seem during periods of difficulty that, as a leader, you should be upbeat and lead with positivity, but this couldn’t be further from the truth. Horowitz suggests being real with your team, talking about the current challenges, and collectively putting together a plan to solve the problem. This, he says, is precisely the kind of an activity that unites a team and strengthens the bond between them.
Although you will definitely have challenges as the business grows, you will also experience really good times. At this point, your company’s expenses and liabilities will be the highest they’ve ever been, but so should its profits. However, here lies the biggest problem you will ever face as a successful business owner – you are winning.
Life coach Tony Robbins frequently alludes to this, saying that ‘The problem with success is success’, meaning that, as people become more successful they lose their hunger, their emotional edge, and their hustle because there’s no pain driving them anymore. They forget where they came from and stop appreciating the level of success they’ve achieved. They start taking things for granted, like a team member staying late one evening to get a member started, or a new sales guy closing his first deal. In the past, they would celebrate all the small victories, but now it just doesn’t seem to matter as much. Isn’t that the responsibility of the district managers…?
As your company grows to 13 and more locations, you need to focus on being a really good cheerleader. Look for reasons to acknowledge your team and publicly recognise their hard work and successes. Your objective as a leader is to push your team and challenge them to grow. Set goals with your organisation, inspect those goals on a regular basis, provide feedback, and move forward. Make it a point to align your vision and goals with those of your team. Every team member must have a direction they are heading in within your business. They must have something they are working on or developing in order to stay hungry, in order to stay alive. Again, Tony Robbins puts it best when he says ‘If you aren’t growing, you’re dying’.
To successfully transition from one club quadrant to the next, you must learn new skills and adopt new habits. Change is the only thing that’s constant when growing and scaling your operation.
Mike Gelfgot and his two business partners operate 21 Anytime Fitness locations in the US. With a number of accomplishments under their belt, including Club Operators of the Year, Success Story of the Year and Community Outreach Award, Mike credits all of his own success back to his team and business partners.