# Reopening the Right Way (ALEX HORMOZI)

## Метаданные

- **Канал:** Alex Hormozi
- **YouTube:** https://www.youtube.com/watch?v=mOKl6dodMTg
- **Дата:** 29.10.2020
- **Длительность:** 12:47
- **Просмотры:** 6,106
- **Источник:** https://ekstraktznaniy.ru/video/16739

## Описание

Download your free scaling roadmap here: https://www.acquisition.com/roadmap-yta14
The easiest business I can help you start (free trial): https://www.skool.com/hormozi
Business owners: Want to scale faster? We provide in-person advisory for companies doing at least $1M per year: https://www.acquisition.com/workshop-yta14

If you're new to my channel, my name is Alex Hormozi. I'm the founder and managing partner of Acquisition.com. It's a family office, which is just a formal way of saying we invest our own money into companies. Our 10 portfolio companies bring in over $250,000,000+ per year. Our ownership stake varies between 20% and 100% of them. Given this is a YT channel, and anyone can claim anything, I'll give you some stuff you can google to verify below.

How I got here…

21: Graduated Vanderbilt in 3 years Magna Cum Laude, and took a fancy consulting job.
23 yrs old: Left my fancy consulting job to start a business (a gym).
24 yrs old: Opened 5 gym locations.
26 yrs old: Close

## Транскрипт

### Segment 1 (00:00 - 05:00) []

How's it going everyone? Uh welcome back. So I want to make this uh video because I uh in our community was talking yesterday about the math behind how to know how many sessions you should have uh as you're reopening to make sure that you are profitable. Issues that's going to come up is uh a lot of different states have different recommendations. Some of them are based on percentage of capacity uh you know reopening uh through co some of them are uh you know limited to 10 people or it's the greater of the two or the lesser of the two excuse me. Um, and so what that does is it it creates a lot of issues for most gyms because the profit model is not built for large group training to not be able to do large group training. All right? And so what I mean by that is if you're charging, let's say, $5 a session or $10 a session for what it would work out to in terms of the attendance for your $100 a month clients. If you're only able to have 10 people per session at your facility, that would include you and probably one other person. So now you're down to eight. Now, if you're providing one-on-ate service, it doesn't make monetary sense for you to be in business, right? So even though you get permission to open back up, it doesn't mean that you're necessarily going to have the profit to be able to do so. So if you were to come back to your full client schedule, uh when you come back, you probably won't be profitable. And so this is how you reopen the right way. Okay. So there's two main components to this and I'll go through each one um as in depth as I can. All right. The first is what I was mentioning just now. If you're only able to have 10 people per session, then you need to price your services at the price that service would be normally offered. So, if people are normally paying 129 a month at your facility or 150 a month or whatever for unlimited and you're only able to have 60 people a day at your gym, if you had six sessions a day, for example, those sessions, uh, you can't even have 60 because you're going to be included in that. So, now you're talking, you know, 50 people a day that you can service, which means you can only service 50 customers. All right? So, if you're having a one-on-one scenario, then you need to charge $300 or $400 a month for that service as long as that happens. Now, here's the good news. The people who will want to come back are going to be itching to come back. Not everyone is going to come back, but the people who do want to come back desperately want to come back. And so, they'll likely you'll have the supply demand curve in your favor. Meaning, there's more people who want you than there is availability of time for you to be able to train clients. All right? And so when you have supply and demand in your favor, then it means you can increase your price, right? And so those things work together for kind of scenario one. Okay? If you are limited and can't do like that many people per session, etc. Okay? You need to adjust your price to reflect the level of service being provided. Not just letting people back in at their old price because it doesn't make monetary sense. Okay? Now, what I'm going to do is talk about the second piece, which is how do I know when it makes monetary sense? So, one of the things in the gym launch secrets book uh in section two, which is the profit levers, which I would highly encourage you uh to read before you reopen because it'll allow you to fix everything that you did wrong in your gym. This is one of the biggest opportunities of all time for people who own a gym because right now society is giving you permission to change all these things in your gym at once and then restart the right way with the right price points, the right hours, the right amount of people per session, all of those things done right so that you can maximize the profit and capacity of facility. All right, so this is like never before will you be able to get this opportunity. So take it. Please take 35 minutes and read section two of the gym launch secrets book. It's free plus shipping. Go read it. All right. Now, here's the here's one of the biggest pieces that I have to provide for you. Okay. You want to make sure that you're making an 80% gross margin minimum on your services. All right. This is this has been a rule of thumb that we've used at Gym Launch forever. If you are running on that, then you will be able to make a profit and have a good business. If you do not, and you're like, "Well, we're at 75. " I'm telling you, every percentage point makes an enormous difference. So, let me give you an example. If the average gym is running on 12 and a half% margins per year, all right, that's the average gym. If you go from 75 to 83% margins, then you added 8% to your bottom line. So if you went from 12 to 20, that would be a very big deal, right? It'd be almost twice as much money. So these percentage points matter. All right? So for us, now mind you, you can set the number whatever you want. My rule of thumb is minimum 80. If you want to be at 85 or 90, by all means, go for it. All right? You could. It's your business. you can set it up the right way. But let me walk you through a simple math example to explain to you exactly how many sessions you can know by math that you can reopen at any given moment. Okay, so if you have let's say 150 customers before this and then you reach out to all of them and only a hundred want to come back. Cool. So let's say those hundred who have said yes, I want to come back. You can build my card now. All right. Are billing at $100 a month. I don't recommend that price point, but I'm saying if that is what they are saying, then that's what

### Segment 2 (05:00 - 10:00) [5:00]

we're going to work off of for the money math. All right. So that's $10,000 a month of recurring revenue that you have built in. Now, if you're running an 80% gross margin, that means that on the cost of delivering the services, that doesn't include rent, that doesn't include admin, it doesn't include marketing, just your hard cost of fulfilling a session. All right? Is 20% or less of what you are paying or what you are making. Okay? So, what that means is if you're making $10,000 a month for your services, then it should cost you $2,000 a month or less to fulfill those services. So, if we know that we only have $2,000 that's earmarked for payroll for fulfillment of those services, and you know it cost you $20 per session, then it means you have a 100 sessions that you are able to fulfill on per month. Now, if we're going to be smart about this, then we're going to divide our 100 sessions by 4. 3, which is how many weeks there are per month on average, which means we have 23 sessions per week that you're going to be able to fulfill. All right? Given the number of people and the amount of revenue that's being brought in, that is already happening. All right? Don't go off of promises. I'm begging you. Go off of reality. All right? You're going to have like some people's cars won't go through because things have changed over the last two months. Some people say they're going to come back and then don't. Some people are like, "Actually, I got to wait for my kids. " Blah blah blah. All right. Go only off of reality. Go off of what goes through. So, you get everyone in, you start their billing, and then you see what happens, and then you dictate the schedule, right? If you can do that. If you can't, then you're going to have to downgrade your estimation by how much you were making before with all the cancellations included, and then drop another 10% just in case, and then use that as the number to base this off of. So, $10,000, $2,000 for payroll. That means if we're getting $20 a session, that's a 100 sessions. We divide that that's per month by uh the number of weeks in a month, which is uh 4. 3. So we have 23 sessions per week. Okay? And so you can allocate those. Let's say that we've got five days a week, Monday through Friday. That might be normal hours. All right? So on those days, let's say we did four sessions a day, two in the morning, two in the afternoon. So now we got 20 and we got three left over. And so we can go three on Saturday, right, in the morning if that's what we wanted to do, right? And so just like that, you can get your payroll and business to a point where you have an 80% gross margin or higher, right? And so like I said, that is the minimum, but that is the way that you can know in your gut that you're opening up in a position to be profitable. Now, if you've done the math and you're like, you know what, I can only have $10,000 a month recurring and my rent is six. Well, then you're probably not going to start out profitable anyways. And so, at that point, you're going to have to make harder decisions of like, do I want to uh do a big pre-sale and then get another, you know, 50 or 100 people pre-sold on a trial to be able to monetize this. Um, and that's where cash is really important, right? But big picture, most of you don't have that situation. Um, and if you did have that kind of rent, then hopefully your revenue is higher than that, and hopefully your price etc. Um, but that's how you can figure this out. And most people do this wrong. Most people are like, I'm going to try and open up as many available times, right? Or the worst scenario you can have is, and this is what I feel like is going to happen for a ton of people, is I'm going to be limited to 10 people per session. I've got 100 clients. I'm going to increase my overhead so that I can have 10 sessions a day so I can see all my clients. And there goes your margin forever. And then how do you transition back and having to cut sessions, right? It's not a good way to do it. Start as little as you can. Start with two sessions a day. Start with 90% margins. Right? That's fine. It's okay. Work at two sessions a day and work your way back. Start at three sessions a day. Whatever. Right? And so from there, um this is one of those beautiful opportunities that if you ever had that session that never really had good attendance, right? Cut it, right? Cut it. Get your margin back. Right? And uh like I just want everyone like thank co like sure there are things that you probably wish didn't happen. Okay? But take what you can right now. You can click reset on your business. These are the five things that you need to do right now. All right, I'm going to give you the cliff notes on what you need to do. One, you need to switch from unlimited to two or three times a week is your main offer. All right, because right away that'll double or triple your capacity. Two, you need to switch your billing to a weekly cadence. Now, it doesn't have to actually be weekly, but it has to be on a weekly, bi-weekly, or four time or every four-week cadence. Why? Because if you do it on every 28 days, you're going to get 13 billings a year instead of 12, which means you get an extra almost 8% in topline revenue for the same amount of service, right? What that means is if you have a 12% margin, you get another 8%. Now you're at 20. All right? Almost doubles how much you make just from that one change. All right? Each of these levers is like that. Okay? So unlimited to two to three times a week. You're going to switch to uh a billing uh cadence of weekly, bi-weekly, or 28 day

### Segment 3 (10:00 - 12:00) [10:00]

cycles. You're going to change your pricing to match your service. All right? Which means when you make these adjustments, typically uh when you limit people's sessions, fewer people show up, which then means that number of people per session goes down, which means your value goes up. And so that means that you can build more, believe it or not, because people change it changes the value proposition to the end user. So just remember that you're not cutting sessions, you're adding value by making it more personalized because the sessions are going to be smaller and more controlled. Okay? And so when you do that, my minimum recommendation is 167. All right, that's my minimum. Bare bare bare minimum. Uh, which works out to $39 a week. All right, bare minimum. Most people will be at 49 a week or 59 a week or 69 a week. Okay, and that's what you can do for those. Uh, and that's what the overall pricing would be. So if you did it at $49 a week, uh, it' be $49. 99. Don't forget your 99 cents. All right, which means you're going to be $199. 99 every 28 days. All right. Beyond that, if you typically have uh exercises that you use that you wanted to get rid of because they take too much space up and they eat too much square footage, this is the time to get rid of those things and take them out of the programming. In terms of your sessions, instead of being 60 minutes, cut them to 45. All right? It'll also increase your capacity and decrease your payroll. So all of these things are things that you can do right now, doing it the right way, starting with the right price, with the right services, the right amount of sessions, the right margin, so that you can actually come out of this profitable or even more profitable than you did before. Every person who goes in and tries to increase the amount of sessions they're doing, keep the pricing the same, and then have more individualized service uh that they're going to do is going to go out, right? The math doesn't support it. And so just like if I can give you one thing, just trust the math, right? You will be able to make a profit, be able to provide more value to your customers and actually get through this so you can grow your gym, which hopefully is your goal. So, um, that's part one of how to reopen the right way is structure everything properly. Um, I'll probably make another video on how to market and sell before that, but right now, make sure to get this stuff right. Um, if you get the book, there's a letter inside the book on how to communicate the changes. Um, you can literally copy it. Go for it. Um, it's my gift to you. Uh, but yeah, if you don't know where the book is, just go to alexisbook. com. Um, there's a free book there. I think it's on Amazon, too. Um, if you do, by the way, leave a review. Lots of love. Um, anyways, happy Wednesday. Wanted to make sure I got that out for you. And, uh, keep being awesome. Bye.