What I Would Do If I Had My Gyms (Do This in 2020) [ALEX HORMOZI]

I would rather have a solution that I can get uh 90% of the marketplace to get an 80% win rather than have 5% of the marketplace get a 100% win. I uh slept like a cherub, which is a small angel baby uh last night. My gosh, I feel like a human being. Um and so I wanted to bring you a question that Ila asked me yesterday and I thought that would be a good podcast topic. She was like, "What would you actually do like right now? " you're like, like if you had if you were, you know, roll back the time clock and this had happened when we had our six uh gyms, like what would your actual what would you do to uh approach this and what would your play be? And so I want to first uh just at least say with my big disclaimer here is that uh something that I don't discuss a lot but uh I think is worth mentioning is that the advice that I give in general um I try to cater to the audience that I'm speaking to. Um, if I ran a gym, I would probably run it somewhat differently than what we espouse. And that is because I am not you and you are not me. And so I would rather have a solution that I can get uh rather than have 5% of the marketplace get 100% win. Um, and I've run my business that way. And I think that is why we've been uh really successful is because it's the same thing with like a weight loss program. Like if I can get if I can get, you know, 90% of people to have a great result uh rather than, you know, 10% of people to have a crazy result, then I would rather serve the 90. Um Elon Musk even talks about this. He's like, I'd rather do um a good amount for a ton of people rather than a lot for a very small amount. Um and so we've taken the same approach in terms of how we uh you know, like when we make offers, all my focus is like how can I make the best offer that anyone can sell, right? um how can I make a sales process that's so easy anyone could do it not necessarily like for me I'd be selling high ticket over the phone all day long right but a very small segment could actually do that successfully at scale so that's my first disclaimer now that being said this is exactly what I would do um if my gyms you know were in the midst of this uh you know COVID stuff so first off uh I would get out of the leases that I have now independent of because there's some people are like, well, we're going to get out of this soon or later. I have no idea. But what I know is just opportunity. If I have the opportunity to to flip my facilities in an environment where I'm being encouraged by both government and my uh clients to make the flip and remain open, uh then I'm going to take that opportunity and flip to a more profitable model. Right? Like we're gi we're being given permission in this instance to do that with zero repercussions. it's even being encouraged. And so the first thing is I would take all six. I have my recurring base of members and I would flip them to remote. Now then I would try and cut um all of the rent uh for each of those locations. Maybe even get out of the lease. I would likely just try and negotiate 3 to six months of free rent. See how it shakes out. But likely um this is what I'm saying I would do. You don't need to do this. All right? I'm saying like this is how I would play my cards. All right? And so what would happen is let's say each of those gyms is at 30,000 a month, right? Uh in recurring, just EFTs, not running cash flow, nothing else, not supplement, just like they're doing 30,000 a month. Cool. So now I've got 180,000 a month that I have in recurring. Now, let's be realistic. Let's say 25% of those people drop off because it's not an owner operated facility. I've got staff. They don't care as much. They're not rubbing bellies and kissing babies the way I would if I were at a single location. Um and so let's say I lose 25%. So that means I lose roughly, you know, 45,000 off that. Um I think no 40. Yeah, 40ish. Right. So I lose 40,000 off that. Now I'm down to like 140ish or 135 uh per month. That's my recurring none. Okay. There's a lot of cash there. All right. Then I would take my best trainer at each facility. the guy or gal who cared the most who was the most engaged with members upbeat the most positive um and truly cared about uh keeping them and I might have to take two at each facility if there's too many for one person to handle and that's fine uh the rest of my personnel would be considered non-essential because in this new model they would not be able to provide value right that's what I would do all right so I've got let's say we got six that means I've got 12 staff that I'm keeping on to maintain $135,000 in recurring revenue per Now, let's say conservatively I pay each of these people $3,000 a month, right? To stay at home. Now, that's a great for some of these guys that might actually be a big pay jump from what they were doing in person. Cool. So, now they're making 3,000 a month staying home to just provide accountability. All right, that is it. So, big thing here. Now, like at gym launch, what we're doing is we have um we just so I'm kicking this off

today. Uh starting on Monday, we're running 16 remote workouts per day. Basically, every hour during the normal workday, uh there's going to be a class that's being held and that way all of our gyms can cut their overhead and just have all of those workouts as fulfillment for their online clients, right? And so now they don't even have to staff that stuff. It's already being taken care of centrally by all of us. So all of our gyms can participate that cut their overhead even further. Right? Now rewind back to the six gyms. So, step one, I'm going to get out of the leases that I can because right now, uh, you have a pretty good opportunity to be able to break leases uh, and or at the very least get three to six months of free rent uh, right now. So, that's one. Two, I would flip um my recurring revenue into uh, remote, which would be nutrition and accountability primarily. I'd have the workouts that are being done. If I have 12 trainers, I can say each of you guys are responsible for one workout a day. That's it. So, that's one every hour. And that allows all of my people to participate in a session at any given time, but it's not that hard because each of them can do it from home, right? And the whole point is that like I'd love to say it's going to be from the gym, but reality, if you're getting quarantined, you might not be able to even go to the gym. So, and most of the clients are even consuming this from their homes. And so, it would make sense to have a trainer that's from home. Not a big deal. So, that's what I have on the workout part. Big caveat here. No one cares about the workouts. If you're selling over the phone, you can get workout apps online, you know, like uh, you know, Beachbody and Kayla's got a sweat app. Like, there's all these other apps that are like $10 to $20 a month that have probably better already pre-existing stuff. So, you're not going to win on the workout front, right? You're accountability and the service. That's how we've always won. And that's how we need to keep like remember the rules haven't changed. Your workouts never mattered. They don't matter now, right? What matters is the relationship that you have with these people that they feel like someone is checking in on them, right? They pay for you to pay attention. That's how it works. All right. So, I have my 12 trainers. Let's say I said I'm paying them 3,000 a month. So, I'm paying 36,000 a month in overhead for those trainers, right? And the only thing they have to do every day is one workout and then reach out to the customer. So, make sure that they are uh being taken care of, making sure that their head space is good, making sure that they're not going to the pantry and raiding it and getting cookies every day. Make sure making sure that they attend one of the workouts. That is what they do all day now. That's it. That's all they have to do. All right. Now, overnight by doing this, I have a h 100,000 a month that's left over in all profit. Holy smokes, that's a pretty good deal. But wait, now what do I do with my time? Right? So, my time would be focused um the other thing that I would ask them to do is um I would dedicate their first two hours of the day every day to doing 100 cold reachouts. All right? They want to pay for themselves. Cool. 100 cold reachouts. What you do is if you have someone who who's interested, you book them on my calendar. I'll close them. All right? So, I'm going to fill my day up with uh appointments that my team, my 12 people doing reachouts are going to set for me. All right? And then I'm going to close. Beyond that, um I'm going to start turning on cold traffic and I'm going to run because right now in this hypothetical environment, which is the real environment currently, uh lead costs are like 50% to 75% off. It's nuts, right? I've never seen anything like this. It's crazy. Um, and so we would be scheduling uh phone calls to sell. And so my trainer day looks like this. First two hours of the day, all they're doing is doing cold reachouts. They get their daily 100 in. You give me a 100 reachouts, that's what you owe me. All right. Get me one scheduled a day. I don't care. Just get me one schedule a day. All right. What are they going to say? They're going to say, "Hey, name. Do you know anybody who's trying to stay in shape during the quarantine? Who doesn't want to get make turn their sweatpants into yoga pants by the end of this? " Ha. Right. whatever. Now, when you say that, all of a sudden, the people who are responding are like, "Oh, this person's not fishing. They're asking genuinely if I know anybody, right? " And now more than ever, people have a lot of goodwill that they want to help out other small business owners. Like, that is definitely the zeitgeist of this moment. Zeitgeist, a German word for the general vibe of an era. Um, anyway, so people are trying to help out small business owners. So, if you're asking like that, you're not even soliciting them. You're just saying, "Hey, do you know anybody? " And a lot of times we'll be like, you know, I'm trying not to lose weight. Perfect. Or gain weight. Perfect. Let's get you booked for a call. we have a totally remote thing to make sure that you stay healthy, etc. Right? So, their first two hours they're doing the daily reachouts, then they're doing all the reach outs to their existing customers that they're maintaining, right? And then one hour of the day they're uh required to do their workout. Now, most of the time you'd want to have your trainers are working out anyways at home. So, it's like just record it like have fun with it, right? And then that way all of my people can actually have more sessions than they ever had in person. So, I'm adding value from what I used to have. They have more availability than we were at. they have more variety because they probably have access to trainers that they couldn't have had access to before. All right? And it's also my best coaches. So, it's like, you know, we all know we have got a couple coaches who run stuff and if somebody who's new coming in, you probably want to put them with Jessica and not Eric, right? You're like, "No, Jessica's awesome. Don't put in Eric's as your first session, right? Maybe save that for some of the later people who already like us. "

Right? So, those are the trainers who are going to be getting those at home workouts. Big picture again, big reminder, no one cares, right? No one cares about the workouts. They only care about the accountability. All right? So, if I flip my gyms, right, I renegotiate my leases. I push them out or I break them. I take my recurring. I would get it into 100% remote. I would let go of non-essential personnel who are not generating revenue or keeping revenue through fulfillment, right? They're generating revenue in their first two hours of the day by getting new calls. The rest of their day, they're focused on doing the fulfillment for the clients that they already have and maintaining that EFT and recurring. um they're filling back the bucket because I'm going to be doing the sales because in a time of strife, I'm going to do what I need to know how to do best and make it rain, right? And so the people who are not going to be able to succeed are the ones who don't want to roll up their sleeves and get dirty. If you're the best salesman at your gym, then you should sell. That's what you should be doing, right? And then they do their one workout a day. So that's all trainers have to do. Three things. Reach outs to to get new customers, reach out to existing customers, make sure they know we're paying attention, and then finally that they're doing one workout a day, which they should be doing for themselves anyways. They're just going to record it. Awesome. Box is checked. All right. My day is going to be making sure that we're marketing and filling the bucket back up. All right. That's it. That's my day. All right. So, I'm marketing and taking sales calls. I'm taking sales calls from paid traffic, outbound. I'm taking sales calls all day long. That is what my job is to make it rain and feed the machine. All right? That is what I would have done um if I had been in that situation or in this situation. Um I'm not necessarily saying you do that. I'm telling you what I would have done and that would be the play that I would do because it would give me permission to overnight transform six facilities into one massive recurring revenue stream that's 100% remote that is high way higher profit margin uh for fulfillment and I will say what I said yesterday but I will say it again uh so hopefully it sinks in is that just because this has changed does not mean it's bad right eight months ago I walked through all the math about why having a remote fulfillment is a better solution there's a reason people like going online Right? There are better margins, right? There are. The thing is that a lot of people felt like for some reason that was bad. That's okay. But now people are being forced to do it. Doesn't mean it's bad. It actually makes more money. And now we're getting permission from the government and from society to do this for ourselves. So I would take that opportunity and uh run with it. So that's my recommendation, excuse me. That's what I would have done. Uh you can take that for what you will, but that is exactly what I would have done step by step. That's how I would have broken out my trainers. That's what I would have done with my overhead. That's what I would have redefined their responsibilities as. And then beyond just lead them through the crisis. Um I would also try and paint a vision or for a better future. It's like guys, you liking this? You're staying at home. You can work out whenever you want. Um you're just actually getting people good results because we're making sure that they're just staying accountable when they need us the most. Right? And um one small note that I want to add to this when you're selling or when you're talking to customers, everyone right now is at the airport. So, if you've noticed, everyone at the airport is always just like immediately a three out of 10, three out of five stressed, right? They're already at six out of 10 stress levels. What people want is to feel good. All right? And so that's going to And so when you get on the phone, if you want to sell, right, you got to make them feel good. Like the fundamentals have not changed. It's just you got a little bit more resistance when you're starting because they're already at a negative point. They're not at neutral. Most people are now going to be a little bit negative because they're quarantined. They got their kids around. They feel like They're smelly. They're, you know, they feel sloppy and bloated because they're eating cookies all day, right? And uh, you know, they're uncertain about their future. What they want from you, what your employees clients want from you, and what your prospects when you get on the phone with them want from you is one word, hope. All right? So, you have to be the hopefulst that exists. All right? And the way that you have hope is that you have optimism about what you are willing to do to endure. And as long as you know that you're willing to endure just about anything to get through this, then you have confidence and certainty in the fact that you will get through this and you can uh convey that conviction to your prospects, to your team, and to your customers because that's what they're going to want. They like right now therapy is blowing up. Life coaching is blowing up in ter in terms of like growth. Tons of people want life coaches. therapists right now because they're stressed out of their minds. And so if you're looking for more ways to provide value, someone will buy after how you've made them feel from the first 15 minutes of the phone call. is just like caring about them, throwing them some love, making them feel good about like, hey, we're going to get through this. No worries, right? They want to be around more of that. They want more of that feeling. The fact that you're going to sell them weight loss and that's going to be the vehicle that you monetize is almost secondary to how you will make them feel in that moment because they're just going to want to feel more of that. And so that goes for your trainers, reminding them, dude, like we're just trying to make people feel good right now. All right? We're trying to get people through this. Like if we can get them to put down the cookies and move a little bit, they're probably going to feel better. And if that's what that's

feel better. And if that's what our value is right now, then that's what it's going to be. All right? So that is what I would do step by step. Um if I had my gym during co right now, um I make no recommendations. You are all grown ass individuals who make your own decisions for yourself, but that is what I would do. So, anyways, hope you have an amazing Wednesday. Keep rocking. You can make it through this. Um, you just got to want it. All right, lots of love. Catch you guys soon. Bye.