15: 0-17 Gyms: How a PT Became a Franchisor

You are currently viewing 15: 0-17 Gyms: How a PT Became a Franchisor

This week’s guest on the podcast is the youngest Stepz Fitness Franchisee, Sam Waller.

In this episode, Sam shares his journey from being a PT to Franchisee to ultimately becoming the Franchisor of Stepz Fitness.

Richard and Sam also talk about the different revenue steps for a multi-studio owner, the pros and cons of franchising and how to become a successful franchisee.

Tune in!

Transcription:
Hey, it’s Sam Waller here, the franchisor of step fitness. Listen to my episode on the marketing muscle up show with rich.

Welcome back to the marketing muscle up podcast show. I’ be host Richard to turn. And in today’s episode, we are talking all about scalability. We’re talking all about how do you go from one location to a multiple. Location then to becoming the franchisor of steps, fitness, which is a gym 24-hour gym with a functional training facility into it.

I’ve got on the show today, Sam Waller, and he’s gonna take you through how he did it and he’s gonna uncover, uh, the mistakes. The impact and the successes that he’s had to face over the last 12 years, uh, from when steps were him to zero to 17. Welcome to the show. Sam Waller. Thanks rich. Thanks for the introduction.

No problem. Um, Sam it’s, it’s a challenging time in the fitness industry. When we say that, not just COVID, I’m talking about floods, I’m talking about, uh, fires and you know, one of your locations was, uh, that you have is, was in floods and you are, we’re sitting here going, you’re sitting here going well, we’re still growing.

And I wanna talk about that. You know, first of all, let’s talk about the mind frame that you need right now in the fitness industry. Um, a lot of people at this point, Have have endured a lot. Mm-hmm but you are here going. Yes. We’re gonna quit push through and you are selling more locations. So let’s, let’s just go straight into that quick question.

And then I wanna get a bit more of your background. What are, what are your thoughts on what you need to succeed as a, as a great business leader today? Yep. Good question. So, um, the first thing I’d say is you need to be MIS mission focused. Like you need to have a passion for the industry, passion for helping others, and you need to have a mission.

So personally, my mission is to help as many Australians become healthier and fitter through health and fitness. These are the same sort of benefits I got when I broke my back was overweight through school and, and had some bullying and struggled with being overweight. And then I changed my life through health and fitness.

So my driver and my mission is clear and when things get tough, that’s what gets me through. And that’s what I find with the good personal trainers or the good gym owners. They’ve got a really clear mission. And usually that mission is for helping others. So. Before you jump in from a personal trainer. I think personal trainer is great to sort of build some as when you’re young or, or change a lifestyle.

It is a great change of lifestyle, but before you take this next step in your career or life, you need to make sure you’ve got a clear mission and vision. So that’s the thing that helps me drive through. Um, and on your other point regarding COVID in the tough times, there’s always a silver lining when, when you are mission focused.

So I’d say. Looking at the numbers of our clubs, our 16, 17 gyms, um, 95% of them were at a better point post COVID than they were pre COVID. And we’ll go through yeah. What, what that outstanding. I’ll say numbers. And, um, it’s good to get straight into that. So talk about your background. I mean, you, you started it off in the business, quite young 20, and we just talked about four and similar age when I started off and you, um, reshaped some things.

So talk about the early stages you. . Um, and, and also, I, I wanna talk to anybody who’s a personal trainer right now, possibly, you know, maybe only $35,000 a year, and you have been able to take a traditional, you know, uh, PT industry and, and continue this to serve more. So talk about how you did that and how others can kind of follow this step footsteps.

Where do you start off with? Sure. So personal trainer starting as a personal trainer, um, the goal, like the key thing here that you want to be doing, if you’ve gotta sort of, you want to progress your, um, careers from sort of PT to gym owner, then to multi owner. If you want to do that, it’s about building a loyal following, um, and thinking about your members and.

One of them may be your first investor, like what happened to mid right. Solution first investor, right. That now that changes the changes the game bit. Yeah. Well, um, I think, you know, I had a great sort of follow a great sort of loyal client base as a PT. Yeah. Um, people that I love to spend time with because you are spending a lot of time with them on a day to day basis.

So I didn’t initially know that this would be, this would happen, but a member from the gym when I went to every bank, um, every credit union to try and get a loan, to buy the gym, a member from the gym actually invested, um, 50 50 with me and I’ll be forever grateful for them. So if they’re listening, thank you.

I don’t say it enough to them because my life sort of on a path where, you know, thinking about those small things, they, they drive me every day, but, you know, giving the thanks and gratitude for that, I don’t do it enough. Um, initially being a PT, it’s about building a loyal following, and that’ll bring on a good business, PTs all about people as you know, rich.

Um, it’s all about networking people and, and just local community and what you are providing. Um, I wasn’t the best technical PT, but I always had a great relationship with my clients. Once you’ve done that. The next step, if you wanted to take it is a gym owner. So. It’s gonna be hard to get finance for the gym because it is, it is a big cost, but then you’re building a recurring revenue where if you’re not there for an hour, or if they go on clients, go on holidays, you’ve still got the money coming in and you can live a sort of, you can step up your life and, and progress financially as well, which was important.

Um, so the early stages, you’re saying that you’ve gotta have a good following meaning a good product as well. Be a nice guy. Nice person. Nice girl. Yeah. Because if you wanna continue, you, you gotta figure out well, how, like for you, it was getting funding. And that was that pivotal point where you were able to do.

Yeah, agreed. Um, and, and I think it’s good business too rich, like, um, the basics and fundamentals of, of, of owning a gym, owning a, a multi gym and running a franchise is people. Um, so I’ve got a mission to help people and I’ve, I want to, I’ve got a vision that I want to help people in health and fitness.

Yeah. Uh, the next part is, you know, achieving those results for the people that we serve. Um, and also treating people right. Awesome. And so tell me about now, like how long was, um, when you first started to, and you said you got 17, um, locations at the moment and are they all, um, individually owned? How.

Locations is one person owned. Yeah, so I own three. Um, we’ve got a multi franchisee, um, who, who, once again, started as a PT, had a warehouse and now he’s our top performing franchisee financially, um, Daniel, um, in DTO and she Harper and then the rest are individually owned. So. I’m um, a couple of multi franchise, I own three corporates myself.

Um, and then the rest are individually franchised. So as you progress in lo different location, different location, there’s, there’s a lot of different, um, you know, ladders that you have. Um, yeah, but before we get to that question, I wanna know to get, so, you know, you’ve owned. Did you own three yourself before.

You, um, you know, got the franchise. Like what, what was that number? I just, it was one, it was one of the top performing gyms in the group. Um, the franchisor at the time took notice and offered me the master franchise role. And at the time we were just a 24, 7 gym, um, steps was just 24, 7 gym. Um, but I had the idea, um, to bring in the functional group fitness.

Probably we were the first to market with a hybrid functional group training and 24 7 gym approach. Um, and that was Thornley in 2017. So, um, one gym, one gym was what set it apart for me. Um, and just doing it really well, I guess. And so that’s how you got approached then to be asked to, to take over this, correct?

Yep. Okay. And so from there, um, how did you go and get. More locations, more people to invest in to, to believe in where you wanted to go. What were, was it just again, more clients? Well, well, I spent, uh, spent all the money I had on a master franchise agreement, moved to Sydney with nothing to my name. Right.

Um, and I just hassled, I had to, that was probably the hardest time in my life. Yes. Um, no money. I couldn’t sometimes I couldn’t afford food because I’ve, you know, I was basically just hustling and just finding the right people as well. So, um, that was a step that really set, set things in motion and put, I had to hustle and put things to the ground.

And then, you know, and then I started to marketing Mar I started to, you know, learn marketing and build that up, which was, is crucial now. So I don’t have to do all the hustle and bustle that I once had to do to get started, but finding some people that. Believe in you. Um, and believe in what you’re doing, even when, what you’re doing, doesn’t look all shiny and perfect, I think is crucial.

So at the time step still had a bit to bit to do in terms of branding, which I’ve now updated. It’s now a top brand. Um, but it’s basically, I believed in what I was doing and I found some people who also believed in me and now, you know, they’re with me today. It’s interesting. Um, the early, I mean the early is really important.

You know, anybody can go and get a franchise that has 150 locations. Right. But the early, I, I just love the conversations, the early adopters, because it’s, it’s it’s risk. Um, you don’t know if it’s gonna happen. So it ultimately comes down to one thing. It’s, it’s the individual that is selling that franchise or that is selling that, uh, dream to somebody else.

Yeah. How, tell me about that. Like, uh, you know, Having multiple occasions that you are not running, right. You get your franchisees there. Um, if they do well or don’t do well, you know, how does that affect you and your mental state and your stress levels and so forth? Sure. Big time to be honest. Um, it was really hard.

It’s really, it is still really hard for me when there isn’t a performing gym. Um, Which will happen, um, which does happen from time to time. I can only do what I can do and I, that tends to be more than more than I should be doing. I’ll have sleepless nights working all night. Um, you know, back in the day when, when I needed a gym needed help.

Um, I take on a lot of that responsibility, but I think what’s helped me with that is getting back in, getting back in the cold face. We discussed this before and opening gyms up myself that. Just recently, probably 2020 when someone pulled out of the franchise with co, um, because of COVID and risk and scared.

Um, I jumped in, backed into it, and then that gym took off, um, 500 members in, I think, 18 months. So, so, so it really comes down to the, does it come down to the individual that is owning the gym? How what’s the, you know, if you look at all your owners, the franchisees, what, how do you know who’s gonna do, who’s gonna do best.

Before, that’s the challenge, I guess there’s, you’re never fully gonna know there’s a lot that goes into it, but it’s usually the people that have that drive for other to help other people that have that drive for, for fitness and in the industry. Yeah. Um, and one, one other thing I’d say rich is people who have been a personal trainer for a while.

They’re usually ones that. Um, that can face adversity that know what it’s like, not to make money at times. Yep. Um, and that, I think personal trainers, I think anyone that’s been a personal trainer for, for a while is a, basically a unsung hero because I know how hard it is, um, how the income can fluctuate.

Um, so I see them as. As people that I want to help, because I know that they’ll, once they step into a gym with, especially with a franchise where it’s systemized, they’ve got all the tools they, and they’re gonna listen as well. I guess that’s the other thing. And they’re gonna listen to that’s a good one.

yeah. They, they, they, they can listen and take, um, take feedback, take advice, I guess you with com you know, when people, listen, it’s amazing. What can happen? Um, the results when they listen and do the work. Yeah. But there is an investment. There is a, um, I guess, dropping your pride a bit. Thankfully, I’ve always been one to take, um, take feedback, take, you know, take, learn from what other people have done and I’ll listen.

Um, I know, you know, at each step, you know, we talk about a good bio and stuff like that, but I’m, I’m still human. I’m still learning. Um, there’s still a way for me to go. So I’ll listen, um, to other to other people who’ve been successful. Other franchise competitors, if they’ll give the. Yeah. Great. Well, let’s, let’s get into the, a bit of a conversation on, um, you know, if there’s a personal trainer or a studio owner out there and you know what, what’s the pros and cons of, um, you know, investing in a franchise or just going out and doing it yourself.

Um, you know, who’s that perfect person, because I think if anybody’s listed this and they wanting to be a franchisor and get multiple locations, or they’re listening to this going. Actually, yeah, I just wanna, I just wanna be part of a, a network, you know, what, what’s the pros and cons who should do what?

Um, and let me clarify this rich with, with your life is, um, you know, what, what you want out of it. I’m not saying what I’m doing, or I’m not saying you should grow and take these next steps. I’ve got a really good mate of mine. Um’s got one studio and that studio heaves yeah. Is a lot less stressed than I am.

And we we’ve basically just gone down a different path. Um, That’s been from movement enhanced in, in, in Queensland Queensland there. So it’s up to you which way you want to go. But at each step there is a sort of level up and a change of thinking and a change of what you do. So, um, I loved being a PT and helping people with their and seeing results.

Yeah. Um, I don’t do that anymore. As much I can do it on a scale, but I’m sitting in an office I’m, I’m having meetings, I’m having financial discussions, accounting, um, all the big business stuff that, that, you know, that changes your life a bit. But there obviously is financial incentives and rewards, um, at each step.

But you have to sacrifice a bit as well, so. Okay. So let’s talk about these different revenue steps and, and what you have to do. If you can break it down and maybe we can break it down to. You know, a half full studio, then a studio, and then getting to that second studio on third studio, that would be a great progression.

What are the key differences that you’ve had to overcome in those, in those stages? Yep. So PT, we discussed this, it’s just about. Building a good client base and building a loyal following around you in your local area. Yeah. Don’t worry about going too deep, too wide. Um, if you are, then next step is to buy the gym that you’re operating, operating out of, which I think is a great idea.

Yeah. Um, because then, you know, the operations, you know, the people and, you know, you’ve at least got a core group of people that are gonna stick by you. Um, And then as a gym owner, it’s more about systems and staffing. So before you take the step to a multi multisite, you need to have the systems in place.

You need to be able to trust staff and employee staff in the business. So well, trust staff and employee staff. Just, just dissect that for a little bit. Yeah. But I think that’s a big problem. People, one, they, they struggle to get staff, but two, when they have them, it’s like, oh, staff did this stuff. Did that.

How do you trust staff? What’s the definition I picked, firstly, I picked the right people, um, which not always gonna be able to do, but I pick people who have this mission, have this dream, um, of helping others. And I basically step back. Um, I’ve been to one of the gyms, Dubbo that I opened, um, in 2021, I’ve been there once.

Um, but I found a great staff. I found bohi who’s, you know, amazing was a franchisee at Harvey Norman at one stage, and now I pay him. I pay him really well as well. So because of that, you know, he’s got it under control. Got it. I don’t need to, you know, I need, I don’t need to worry about that. Jim. Love it.

Yeah. Thanks for that. Um, And then I think you’d only take the step to a multi owner. Um, if you have that, that those systems in place, sometimes you get that from a franchiser. If you’re independent, you’ve got your own system set up. Yep. Um, if you have that in place and you can have staff without you needing to be there, because that, it’s all about that at the multi multilevel and, um, You mentioned that, you know, you’re in an office more, obviously you’re not on the gym floor more, even if you had, you know, two locations or three locations, you know?

Yeah. What is the reality here? You know, do you have to be a better. Um, communicator or better business operator. What’s who, what do you have to do at that stage? Yeah. You have to level up like, um, at a multi gym level, you have to level up and bring in the right people. So then you’ve got accountants that sort out your accounting.

You’ve got people doing basically a lot for you. Yeah. Um, so you can, you can do you, you can just manage. You know, manage the staff, you get the reports, it’s all about sort of reporting, trusting your staff, but also knowing what’s going on in a day to day basis. So it’s all about those systems and, and procedures that you put up as a gym owner, um, at that level.

Um, and once again, it all comes down to basically also members like. Um, you’re not there every day. You don’t see what’s going on, so you’ve gotta really speak to your members. So just recently, I’ve, I’ve got a gym in Queensland, um, just recently. And I went there. The first thing I did, um, when I got to Brisbane, I was there for two days.

Yep. Spoke to members spoke to different age groups or the members there got their feedback. Um, and it was clear. Now I feel a lot better about what I need to do at that gym. Um, well, so straight to members, not teams, just straight to the members. See what they’re saying? Straight to the members. Yeah. A hundred percent because they’re the people that I’m serving.

Um, they’re basically what, you know, they’re, they’re basically what pays our bills in the fitness industry, um, before anyone else it’s all about members for me. So good. Now, um, I just wanna probably probably ask you this, ask you this question a little bit earlier, but can you just take us through steps?

Um, how much you’re charging for the membership? You know, what’s the clientele that you’d get in just the basics of that for us. Yeah. So steps is, um, steps is a sort of hybrid model. So we’ve got the 24, 7 gym side of things, which at the time, when we started in 2009, that was all you needed to do. You could open a gym, it could get really successful, really fast with just a 24 7 gym model.

Um, I realized as a personal trainer, we weren’t getting people. We weren’t able to impact people’s results and health and fitness in a way that we could in a, with functional group training. So I had it all set up to run a fun to start a functional group training franchise. And then I just thought, no, the 24 7 gym and the mix together is crucial.

Um, and although it’s a higher investment because the 24 7 gym equip. You know, a pretty big investment. Yeah. Um, I think now we’ve got a, we’ve got a great model with functional group training on one side and a high quality functional group training. Um, and also 24 7 gym. So there’s, the markets now are moving this way, but.

Now that’s why I’m scaling, because now it’s about, we’ve got, we’ve got it all sorted and it’s working beautifully. Um, now it’s about scaling up and our members are loving it. So if you look online, um, you know, we’ve got some great reviews, which, which I really. It’s important as from a marketing perspective as well.

You Google reviews. I know you, you are big on this, um, are, are crucial for SEO and ranking. Um, so yeah, it’s about, it’s about sort of that. Yeah, so, so good. And, um, it’s, it is true because, well, we work with gyms. We always recommend to put a higher priced, um, package in there. Making sure that there’s percentage that will always want a different level of service and you’ve got the space and the facilities for it.

So, yeah. Um, really, and I guess, um, sorry. Rich, can, I’ll just add one thing, I guess like now we’ve got that in terms of a business perspective, we’ve got a dual sort of membership option. We’ve got the premium group fit, functional group training, um, membership. And we’ve also got the 24 7 membership. So now it’s not about like our competitors.

It’s about as many people as possible under one roof, um, which I saw. Pretty challenging prospect. Um, now it’s about, we, we don’t need to have as many memberships and we’ll be a lot more profitable with lower amount of members, which for me, long term and strategically, I saw that as crucial because a huge amount of members.

For me, I, I I’ve never achieved it. I’ve never achieved that thousand member in one gym. I’ll be honest. Um, I don’t, and I don’t need to achieve that now and make it profit. Well, you’re talking my language. Um, I have a big belief that the fitness industry we need to, we need to personally earn more money.

And, um, you know, we are not a $9 industry anymore. We really need to up our, up our game because you know, we are changing lives. And I think this industry, you know, Sam overall, it, it, everybody needs to get together and, and, and up the prices. So people understand the value of it. And, um, because it’s just, you know, overall, essentially it was too cheap.

So I’m all in for that. Yeah. You’ve given me goosebumps made. I think, um, we, yeah, we are changing people’s lives. We’re changing people’s lives and we’re, you know, impacting them on a level that not, you know, lawyers, professionals can’t do. Um, so. Let’s yeah, let’s raise our game together. I think we also need to take some responsibility for what level of education, you know, what level of constant education we’re at as well.

We can’t, we can’t sit on a cert three and four and say, that’s all I need to do in terms of education. Yeah. Um, you know, I, we can talk about this later, but I got a law degree just to make my parents happy. Um, that’s what I guess drove me so young and so early is I came from. I had a great upbringing. I was blessed to get a good education, but every one of my friends and my family was encouraging me to become a lawyer.

Yeah. Um, which would’ve been great. The money’s good, but I just couldn’t sit at a desk all day. Yeah. And I, and I wouldn’t have been a good lawyer as well. So my driver is also to, to move so young and so fast has been to. Create a career in the fitness industry, um, which is really hard, but also make the money that I could more now than a lawyer.

Um, so yeah, I guess so good. And it, uh, it is important, like to think that way, because otherwise you don’t have longevity in this industry. Yeah. You go other, you go elsewhere, you know, agreed. Um, so, okay. So, so you’re at how many locations at the moment Sam, so we’ve got 17. And how long did that. Um, zero to 17.

Yeah. Uh, well I think you can, well, we’re 12 years, so 12 years put, put simply, um, 12 years, but, um, I think you could grow pretty fast and, and have a lot of issues with product issues with people. And it’s not been something that I wanted to do. So when I took over steps in 2017, I think we probably dropped some.

um, I consolidated, um, because if they, you know, I, you know, I want, I want the right people. I want good performing locations. I wanna do the right thing by people. And that took some consolidation slowing down. I didn’t grow. I just worked on all the systems, worked on the brand. We updated the brand in 2009, 18 or 19.

Yep. And that’s really, that’s really assisted thing. So it speaks more to what we’re about and what we’re doing. Um, and then we could add the premium group fitness. And now, now we’re at a point where we can scale, but, um, it, it takes a long time. Well, the reason why I ask that question is because there’s, you know, the, the, the, the focus that I always put people, see you go, oh, where do you guys just pop up from?

You know? But I always love the real story. Anybody that has any level of success. I always say it’s a minimum minimum seven years. Um, and, and much more before you even can consider even, uh, doing what you say, oh, I need to be that person or do that. You know, I love the backstory of these things. I wish.

Yeah. I wish you told me that when I was starting out as a, this is franchise all because, um, it was half may also saw competitors. I dunno how some of them do it one a week. Um, it’s starting, like now that I start to open, I can see it, but for me, I, I want to steady and sustain growth, a long term growth with the right people in good gyms that, you know, for me, I’d be a lot happier with 50 gyms or successful, or majority 99% are successful than having a behemoth because, um, yeah, each step there’s a lot more stress involved, a lot more.

I guess ethically and responsibility away. Yeah. I think what you’re saying is ethically, like you, you wanna make sure that each location is performing and doing well. And I think that’s a big thing that, um, you know, sometimes lacks in, in certain franchises and, um, you know, I think everything needs to improve everywhere.

So I think, I think that’s solid, uh, solid. Strategy there. You, you touched on brand just before. Let’s get into a little bit of marketing here. Yeah. Um, I’m a big believer in brand and work with one of your locations, thorn Lee vet down there. Great, great operator. And, um, I saw, you know, the brand switch and you just said, as soon as your brand switched, things changed, talk about brand and how important it is for, you know, to be selling each location to a franchisee and, and what it means for people to come.

Yeah. It’s. Um, so at, at the time when I was looking at the investment, um, I, I guess the investment is huge in updating a brand, especially with existing locations. It’s an investment at all levels as well. Um, but. It’s it steps for me. Wasn’t speaking to what it actually was. Um, you know, it was just a, it was, uh, it had a steps finish 24 7 logo.

It looked a bit commercial. It didn’t speak to where non-intimidating gym. It didn’t speak to. Everyone’s welcome. Um, it didn’t speak to, we will help you achieve your goals and where goal orientated. So sitting down and doing. Brand workshop with some of the best in Australia, branding wise, brand strategies was an eye opener.

And that’s also when I, I had that rein reinvigorated sort of drive in me because then I’m now selling a brand that speaks to who I am speaks to who our franchisees are and speaks to our vision. And then I guess whether it’s a, whether it’s a way that customers see that and they, um, relate to it, I think of course they do, but also.

The people that are in the brand are confident and happy and believe in what they’re doing. And then it’s just a sort of networking scale effect. Um, but it’s crucially important to invest in brand, um, and, and reinvest. Uh, rich, we talked about this recently, how the fitness industry is very fickle. Um, I see it as like a two year five year cycle.

Yeah. Just as you think you’re onto something, it changes. So yeah. That’s why your brand needs to evolve, um, with it. And, and talk about that. Um, you, you mentioned before every two years, You kind of readjust clean up spring, clean talk about how to stay current, you know, with brand and, and, and what you do.

You, you are saying every two years, you make some serious adjustments that cost a lot of money, but they have a return. Can you, can you go through that? Yeah, I think firstly, I think firstly, and why I didn’t start down the track of just a small functional group training was, um, Long term wise, thinking, looking long term.

I know that 24 7 gym is always gonna be, um, is always gonna be around. There’s always a prospect to it. It’s affordable. Yes. Um, and, and then combination with functional group training. We’ve got the best of both worlds. So. That instead of being a small, lower investment cost, highly scalable functional group training.

Yes. A franchise. I decided to do the hybrid, which was more, more money because I saw a longer, longer term, longer yield, um, yeah, more, more life cycle in it. And I see it to be forever a forever sort of product. Um, but behind that, there’s always new. New, like the treadmills these days rich after COVID I was running outside a lot.

I put on a bit of weight with COVID stress and down stress. So I, I went back to basics and started to do a lot more outdoor runs. And then I was like, oh, I don’t really need to go into the gym. Um, you know, I’m, I’m enjoying my running. Yeah. But then I went to one of our new gyms with the virtual running.

Yeah. Um, so I could run in Paris. I could run all over the world. Right. And the. The tech enhancements that’s happened over the last two years. Um, that’s where from a brand perspective, you’ve gotta reinvest, um, with the new tech that members want. Um, otherwise, you know, some of our, you know, you’ve gotta gyms that are 12 years old.

Um, haven’t reinvested. It’s a, it’s not gonna go well. Um, you’ve gotta reinvest, I think. And this is where you are seeing the return for that reinvestment people. Yeah. Saying, yep. I want that. I want, I want. As a franchisee. Um, when I was a franchisee, I saw the reinvesting in the refurb clauses or, or, um, as, as potentially the franchisor, just looking to, um, you know, looking to scale up, make some more money themselves.

And I thought it was just a sort of big business type of. Revenue raising. Yeah. Now I think the opposite. Um, I think that there is a real yield to it. There is a real ROI and, and we’ve seen that, um, this, the gym that my first Jim St. Lucia they’ve under the franchisee, he’s just recently got some new equipment.

Um, and in, you know, about eight months, they’re up net, a hundred members, which, which for a gym that’s been around since 2009, um, it’s a pretty, pretty big jump. Yeah. Tell some truth, dos tell some truth. Let’s continue. The marketing conversation. Let’s say you are a, uh, a new, um, location. How do you, what’s your secret source to get to your first a hundred members?

Sure pre-opening is crucial. Um, a lot of, a lot of new gym owners, um, or independence, I would, I would think don’t put don’t allocate enough to pre-opening, um, which, and allocate enough cash to pre-opening. Yeah. And I’ll be honest here, rich. Yeah. Our first gyms that I did. I didn’t do it because I thought it was too much money.

The franchisee just spent so much on, um, equipment and everything else. I almost felt bad for them and I didn’t push a huge budget for pre-opening now it’s absolutely necessary. Um, so having that, uh, think it’s probably 10 to 20 grand for a gym, like we’re doing, um, for the first two months, even couple of months.

So 10 20 grand. Uh, and you’d spend that on. What type of marketing would it be top of the line? Would it be digital? Where would you put that spend? Yeah, so it’s all I think at that early stage, it’s all about that. Facebook digital ad, the sing like virtual videos, like 3d videos of walkthrough, because then you don’t have a gym that you can take photos of and you can show them around.

Yeah. You’ve, you’ve really gotta get creative with. The 3d videos, the walkthroughs and, and your marketing and what you’re gonna bring. So Facebook, I think Facebook brings that more. You have a really nice landing page, and then you’re just driving as much traffic as you as possible locally stuff. Like if you’re next to a shopping center, you need to be in that shopping center, getting your face out there.

You need to be on the ground. Getting your face out there, locally partnerships. Um, but yeah, spending money on digital advertising, Facebook and Instagram, like that visual sort of look and feel type of advertising is crucial and then being right in, right in their face in shopping centers and so forth once.

Yeah. Yeah. Yeah. It’s huge. I think, um, shopping centers and, and high traffic areas, you probably would’ve done this back back a while ago. Rich, you would’ve handed out flyers at a local high traffic area. Yep. Yep. Um, that still works, uh, with all this digital marketing stuff. It is, it is hugely important, but it’s important that we don’t forget everything that we used to do as a sole marketing thing.

So stuff like flyer drops, we still do that. Um, so good. You’re talking my language, the, the game has changed and, uh, we do need to know that we’ve gotta be, I always say it’s a, a five funnel approach, at least multiple funnels at all. One time. Yeah. Understand. I think the heyday of Facebook only doing, uh, will land you in a lot of trouble.

Um, yeah, if you don’t approach everything and it’s good, it’s good that you’re saying that you you’re pushing everything across and, and how far out would you mark? Um, for a new location, like your pre-opening how far do think? Oh, um, I, I, some, so it’s a hard one, but I would say the minute there there’s a risk to start it before you get that council approval or before you even know a hundred percent, the gym has to open.

So yeah, we usually start at the day we get the 24 7, um, for us, we needed 24 7, um, Requirement that we can operate those hours from council. That’s when we’ve already systemized, we’ve already got that opening schedule, but that’s when we start to put the dollars, put the dollars into Facebook, Google, and, um, digital marketing and get on the ground.

Yeah. So good. So good. It’s probably when you start your fit out. Okay, good idea. Start the fit out, get it done. And, uh, you just do a pre foundation. Do you do a pre pre foundation? Do you do a foundation? Like how? Just one that’s the goal. We’ve just got to pre foundation reach. Like we’ve just got to a foundation membership.

Um, and, and. I think the ones that do well as well, the ones that don’t necessarily discount it too much. Like I think our product is really good. We don’t really need to discount it over the top, but we wanna look after those, those key members that hold us together. So stuff like welcome packs, um, backpacks, merchandise.

That, that stuff’s all important as well. Making them feel really special because God damnit, they are special. Yeah. They’ve they, they’re the first people through the door. Yeah. Great. Okay. Just a couple more questions for you. Um, yeah. A lot of people talk about this million dollar mark, you know, get to a, get to the million dollar mark.

What is, you know, when you, when you’re selling a, a location, a new location, what, I mean, this could be specifically to you or, uh, even independent location, but. What do you target to be a successful operation? What should we be targeting? So I’ll be honest. I, I never got to 1 million in revenue in one location.

Um, at three locations. Yes. Um, but not one, one location. So realistically, um, I think one location for us. 600, 600 to 700,000 in revenue would be amazing. Um, so, so yeah, realistically speaking at 200 to 300 K net profit, um, is, is huge and, and probably gonna be great on the high end and then a hundred grand net passive profit, um, would also be, would be more, more sort of achievable and, and everyone.

Everyone can achieve that, I believe. Um, so I think it’s been about being real realistic about what one gym can make. I don’t know what the other guys do, but that’s us, we’ve gotta, we’ve got an operation that, you know, if, if you systemize it, it’s very easy business, um, to run. Um, so for, for that million dollar mark, I’d say for us, it looks like three gyms, um, operating well.

Um, great. And I like the realisticness. This is where I, I believe that people, you know, for us, we have a program called the half a million dollar club, and we wanna get businesses, you know, studios, uh, to half a million dollars. Yeah. Um, with the easiest simplest, uh, most profitable model that doesn’t require you to, um, you know, be someone who you’re not, and to.

The hours and what you do and, and rich, I think that half a million dollar mark, I think if you’ve got a good lease, there’s, there’s a lot, there’s a lot that goes into it. You know, if you’ve got a good lease, you’ve got your, your fixed costs are, are under control. I think half a million bucks should, should give you a, a tidy little profit.

So, um, The next level would be a bigger size yeah. More rent. Um, so I’d say in that respect, yes. Revenue’s important, but get your fixed costs down, get your operating costs down and then, you know, you can make, you can make good money off three 50, um, 500 would be awesome. Yeah. So good, Sam, this has been very interesting.

Um, I’m I, I guess I’m, I’m, I’m fascinated with, um, a few things. One of those. Just, you know, just sort of being focused, doing what you need to do to get it to a stage, uh, that you’re at now. I can see that it’s been a, it’s a, it’s been a progression of 12 years from zero to that, to that 17 mark. And, um, I think that’s a really good thing to say because a lot of people I think have wrong expectations of the time that it’s taking and putting themselves under pressure, say I’ve gotta be a three or four.

Um, you know, Jim, when sometimes I don’t think you have to, he no, agreed. Um, you can do, you can do really well off a, um, nice one location, Jim. Um, there’s, there’s also rich there’s debt, there’s debt and financing. That’s involved in a three location, um, which brings stress sleepless nights. Um, so you just gotta think about that.

A three location. Yeah. Good performing three location. That’s when you start to get that scale. My competitors are now private equity owned usually. Um, so I’m up against the big dogs. Yeah. Yeah. Um, so, um, you know, there there’s that scale there in, in more locations, but if you’re like me and you’re a vision focused, your mission focus and you want to help people, um, I’m happy to go up against private equity.

Our gyms are good against. Those type of big competitors, because we’ve got that, we’ve got that personable nature. Um, the good, the good operations and, and, you know, as a franchisor members from steps will see me, call me, um, I’m here available. So there’s. You know, 20 plus thousand people that, um, can access me, um, which for me is important.

Um, I’m, I’m committed to this industry. I’m committed to helping people and helping our members. So I wanna be available, um, as much as I can. So, so good. And, uh, final question for you where where’s, where’s the future for steps and where do you think the future is for the fitness industry as. Sure. Oh, good question.

Um, future for steps is, um, my goal is, uh, sort of 10, 15, um, high performing great locations in each state of Australia. Great. That’s our, that’s our, um, initial goal then we’ll look, um, overseas. Um, and look at those markets, but if I get, you know, if I get 10, 20, well performing locations in each state of Australia, I’ll be a very happy man.

Um, and then, you know, we will look overseas because for me, I guess, It’s all about giving health and fitness and what we are doing, um, to as many people as possible. Um, and the benefits of health and fitness. I’m, you know, I’m the biggest believer in that. Um, that’s why I resonate with what you say about being able to charge it as an industry.

We need to step up, um, you know, it’s changed my life, um, and I want it to change other people’s lives as well. So let’s get our word out. So good. I think that sums up the second question too. Right? Let’s get our word out there and, um, yeah. Raise our prices. Yeah. Good one rich. So good. Well, thanks for coming on the show, Sam, uh, it’s been a pleasure talking to you and, uh, really enjoyed our chat.

I’m sure I have you back and, uh, really look forward to seeing, uh, the growth of, of, uh, steps and, uh, where it’s going and li listen, let’s have a bit of a plug. I think you guys are doing something really cool. There where’s the best spot. If somebody wants to, uh, you know, chat to you about possibly opening up a location.

Yep. So go to steps, fitness, franchising.com AU. Um, reach out to me there. Um, put an inquiry in on, even on steps. If you wanna become a member, step fitness.com AU, but reach out to me on LinkedIn. I’m available. If you’re a personal trainer, wanna open a gym I’m available to help and chat to you and mentor you.

Um, it’s something that I didn’t get as much of when I was a younger guy. Um, but I think what you guys are doing at com marketing is also. Helping a lot, like pick good professionals to help you out that know the industry, someone like yourself, rich who’ve you’ve you started younger than me. I just realized

So reach out to those people who are veterans in the industry, that some won’t give you the time. If they’re. You know, if they don’t have it, but people like yourself and myself, you know, we are here to help the industry. We’re passionate about it. So I think I thank you for what you’re doing, getting my message out, having me on today and getting, you know, raising the profile of the fitness industry.

Rich. Awesome. Thank you. Appreciate you. Thanks so much, Sam guys, have you enjoyed this episode? Um, give it a, give it a light, give it a subscribe. Go check out what Sam’s doing there at steps and, uh, go walk into a location. When you go past one, I will catch you guys next time on the next episode. Of the marketing muscle up podcast, show B for now team.

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