The truth about opening your own studio – is it worth it?

You’re at a family catch up with those cousins you see once a year.

“So what are you doing these days?” asks Susie.

“Still personal training” you reply.

Susie comes back with, Oh, yep?

Well, it’s great you are doing something you enjoy, you know?

A subtle condescending tone in her voice gives off her vibe that she thinks you’re holding off getting a real job.

You never did like Susie anyway.

Let’s rewrite the script and start again:

“So what are you doing these days?” asks Susie.

You puff your chest out and answer, “Well, I’m running my own fitness studio now, I have multiple trainers who train clients with me, and we’re building a really amazing community”.

Susie chokes on her almond latte in surprise as the rest of the family are impressed and want to know more. Score 1 for you.

This may be a fictitious scenario, but I am adamant the drive for a lot of studio owners sign a lease was created more so by the desire to be more than a trainer, to have something to show for themselves rather than what actually makes the most sense for their life.

So is opening a studio really worth it? If you want to make your mark and earn the big bucks should you call the bank up for a loan ready to take the plunge?

Let’s breakdown the reality of your own studio. Explore the reasons you might want to do it, and examine them. I’ll share many of the mistakes I’ve made in my journey, then at the end, I’ll share how to do it the right way.

Is a studio the way to really make bank in the fitness space?

I took my plunge back in 2015 when my completely risk adverse 20-year-old self joined a $25,000 business mastermind program (with about $3k in the bank) with the goal of opening my own studio that year.

I joined in Jan, and by April my doors were open.

The motivation for myself at the time was highly financial.

My coach who originally sold me on joining his mastermind cranked out the numbers with me if I had 50, 100, or 200 members in my small group training studio.

I was hooked – at that age, the idea of doing multiple 6 figures or pushing toward 7 was too hard to get away from.

It was also how I justified $25K investment; that’s nothing if I do $500K in the gym, right?

The allure of gross profit of a studio is strong, but the stats don’t paint such a pretty picture.

In the small group studio space, which is what I open and still run to this day, average profit margins actually fall about 12.5-25%. So the $300K a year on paper looks cool until you pull out $50K for yourself for all those 4:45am wake ups.

For my first 2 years, this was the reality. We grew fast, my coach taught me FB ads (at a time where very few were doing them) and how to sell so I was filling members week over week.

But this whole time I slept on a couch in the office.

It wasn’t until we reached 150-200 members was there any substantial profit.

Before opening my studio I was PTing at a Goodlife health clubs and pulling $1500 net profit approx per week.

If I had spent those same 2 years PTing, I could’ve put 6-figures in the bank, instead of still chasing my tail financially even with a growing studio.

So, I’m painting a pretty depressing picture so far, but not everyone is doomed and there are plenty of profitable studios above the average. The point I want to make is that it’s crucial to know the numbers intimately before beginning.

Exactly how many members do you need to:

• • 1. Breakeven
    2. Take $50k home
    3. Take $100k home
    4. Take $200k home

This will be worked out by knowing the avg amount people will pay you, against your expenses.

Decide on what you’ll be charging – at least hypothetically for now, so you can do the revenue calculations.

Next, work out your expenses, and leave no stone unturned. Yes, it’s tedious, spreadsheets aren’t as fun as squats but do it properly.

Expenses to know are:

• • • • Rent
      • Electricity, water
      • Insurances
      • Softwares (booking, marketing, websites, payment)
      • Wages
      • Marketing spend
      • Misc (toilet paper, cleaning supplies, office stuff etc)
      • Equipment repairs or updates

There are a few sneaky things most people leave out when first doing this too:

• • • Wages come with super if people are employed. If you want to pay a trainer $30 an hour to run a group session, really it’s $33 as super is 9.5%.
    • If you decide to have them as contractors then you don’t need to pay super, but generally, you have to pay them more per hour.
    • Often you lose money on payment processing. The payment processing system Stripe for example, takes 1.75% + 30c per charge. So if you have 100 members paying $50 a week, you lose $30 a week to the .30c charges, plus 87c per person. Equalling $43.50 less. So your $5,000 per week on paper is actually $4926.5 to you.
    • Don’t forget GST, which shaves 10% off your gross revenue minus GST included expenses. Typically that will take about 3-7% off your revenue, depending on your profit margins.

I know all this seems small and petty, but the little numbers add up and if you aren’t aware of them leave you scratching your head to where the profit has gone.

Long-story short, know the numbers.

Once you know that you need 125 members to really make it worth it financially, then you can lock in and apply the strategies at bottom here to grow.

Is the lifestyle better running your own studio?

There are 2 obvious downsides to typical PTing that cause the most frustration and likely contribute to why so many leave the industry.

• • 1. You work draining hours – early mornings, late nights, sometimes everything in-between.
    2. If you’re not there, you aren’t getting paid. Holidaying for 2 weeks now costs you the holiday + all the money you would have made

Is a studio the solution to those things? Short answer. Yes.

Long answer. Yes, but only because you trade problems.

In my journey, it took somewhere between 2-3 years before I hired trainers to do enough work where I felt that sense of freedom. Where I wasn’t training clients first thing in the morning and last thing at night.

When I reached this point is was definitely one of the most rewarding times of my business growth.

It’s satisfying to see what you have built run without you and liberating to be able to go out to dinner with your partner on any night you choose.

I went to Europe for 2 1/2 weeks at the end of 2018, and I woke up one morning in my Edinburgh hotel to my gym manager Steph making 9 new sales in a single a day @$400 a pop each.

This point is 100% reachable, but there is a whole new skill set you need to build to do it. You need to think more like a biz owner, not operator.

That means building systems. That means empowering people to do the roles they need. That means dealing with the inevitable upset of your clients who are used to you doing everything, then watching you fade yourself back.

So you can win back the time freedom, but only at the cost of solving these new problems. Your time is now more scalable, but it’s still required a lot.

And even though you can build a team that truly cares about your business, when there is a leak on a Sunday morning and someone needs to go in and clean it up, it’s probably going to be you.

Is my own studio the way to make a better mark? To share my message and workout philosophies?

One of the things that drove me mad working at Goodlife was the limited equipment and space at prime time. I remember training this girl Emma who was extremely underweight and skinny. Her goal was to add weight and muscle.

But she could only come in at 6pm at night. I wanted to train her with barbell movements and get her on a traditional strength program. Unfortunately if you’ve been in commercial gyms at 6pm it’s more like the WWE Royal Rumble then an inviting place to exercise.

Most of the time I was limited to light barbells and a few square metres of floor space for Emma. Not that I still couldn’t get her results and a great workout – the skillset of being versatile with your training is paramount for any trainer – but it was still frustrating to not be able to train her the way I believed was optimal.

When you open your doors you get total control of what happens inside them. How the sessions run, the equipment you want, your own banging playlists, it’s a great sense of freedom.

This is 100% one of the true joys of your own studio. The only caveat is at the end of the day it still needs to be profitable.

You may love deadlifts, but in terms of how hard it is to coach + how much space it takes up on a gym floor, it’s not actually the best business decision to have all your clients adding plates to the bar.

So you have to find the balance; how can I still do the training I love, the way I believe in, AND make the business run?

The answer to that will come in the business model and the pricing structure. You want to do those barbell lifts? Well, you’re probably just limiting the session sizes, so your prices will have to go up.

If you aren’t confident selling higher prices, it’s probably not wise to cap your sessions at 12 people because you run out of barbells.

The model f45 has made well known has blown up for a reason. They don’t do a lot of traditional strength training, allowing them a lot of people in a smallish studio at once, and the ability to still coach them as they go.

Think what you want about whether it’s actually the best training, or whether people’s form is perfect, but it’s a business model that works.

And if you go into this journey without the model making sense but assuming your love of barbell training is enough, you’re in for a bad time.

If you truly love a methodology – barbell training, bodybuilding workouts, HIIT etc then an underrated option is to coach people remotely. Or have a hybrid business with some face to face and then another chunk online.

Why? Well, now you can teach and share the method you love without the hindrance of making a feasible business model, fitting into your space, equipment requirements etc.

There are so many ways to share your message and make a mark on the industry without having the risk of a studio.

So the studio does come with a lot of freedom of how you run it, but when you look at the books at the end of a quarter and barely made profit, you might well realize you could’ve taught these clients to squat their bodyweight for reps with a lot less overheads.

What are the right reasons to open a studio?

One of my closest friends Ben runs an awesome studio himself and I’ve been fortunate enough to be close with him on his journey to take it from nothing to something.

Funny enough, he came into my studio about 3 years ago to pick my brain about how he could do the same. We talked shop, and then he put his head down and go to work.

Ben’s greatest asset and reason he’s gone from 0 to over 200 members in just a few years are he has genuine care and love for building a community.

I’ve seen the way he treats his clients. The culture he has built. The joy he gets from improving his facility and bettering the programs.

He has a desire to create a place that is special, that wows his members and build real relationships.

In my opinion, this is probably the most optimal fuel for a potential studio owner.

You can make great money if you grow it big enough.

You can have a great lifestyle if you learn the skills of leading and owning vs operating.

You can share your message and do it in a way you believe in but the business model must work.

But if you really want to build something special, something that stands out, a community of people that love coming to you every week, that will be your winning ticket.

That drive will actually get you to build something great. It will help you push through the early days of minimal profit. It will get you to continually re-invest in the business to get it growing to the point you want it to be.

If you have no desire for that, I’d seriously reconsider the goal of a studio. If you’re motivated by the money, freedom, ability to do it your way, there are simply better vehicles to do that. Put the same time into a different vehicle as you would a studio it will work.

For example, in late 2018 I began helping other trainers and gym owners with their business. I create a small group coaching program where I took all my systems, marketing, experience and put it into a back end site. Then my clients got access to me, live calls, etc.

In my 6th month of the business coaching biz, I made more net profit than my best ever month in my gym. Just some perspective on vehicles to making money. This is also why there are a lot of failed PTs or gym owners turned biz coaches. So just keep an eye out for them if they don’t own a fitness business still, it could be because they did really well and sold it, or maybe cause it wasn’t making a profit. In the latter, they are probably not the person to get advice off.

So know your motivations and ensure it you’re doing it, it’s for the right reasons.

What are the keys to launching and growing a profitable studio?

I clawed my way through the hard early stages of my studios, but I know if I went back in time with the knowledge I have now I would’ve gotten to where I am much faster.

There are 4 key skills to develop to succeed with your studio, and you’ll end up developing them in this order:

• • 1. Lead generation

You’ll have to get reasonably proficient at attracting leads. The most reliable sources are going to be organic social media (posts, Instagram stories, lives) and paid ads (across FB and IG mainly). If up until this point you’ve got all your clients through referrals, word of mouth, or just right place right time, you have some learning to do.

When you need to start adding members fast these methods aren’t reliable. You should definitely still have a referral system in place, and encourage word of mouth, but I don’t know anyone who has made serious progress with these alone.

Once you get lead gen down pat you move to the next level of?

• • 2. Sales

In my experience, a lot trainers overestimate their sales ability. Once again the majority of their sales have come from warm referrals or people desperate to sign up anyway.

When you start marketing more proactively and attract colder leads who don’t know much about you it is a different game.

The difference between closing 4/10 leads who walk in vs 8/10 will likely be the difference between barely making rent and making a profit.

If there was only one skill I could have and had to grow my studio again, I’d take the ability to sell. Reality is for the first months minimum you have to roll up your sleeves and do the selling. And do it well.

• • 3. Retaining clients

Once your filling numbers you need to get good at keeping them. Once again, this is super easy when you have 25 clients and your buddy-buddy with each of them. As you scale up and have 87 people to watch, the personal touch of the experience tends to diminish, you don’t remember when Sarah misses her Monday session, and attrition catches up with you.

For example, let’s say your average dropout % is 5% per month. At 25 clients, that’s 1-2 a month. No biggie. 50 clients are now 2-3. And 100 is now 5 a month. So you need to sell 5 just to breakeven.

That’s at 5%, if you don’t have good retention systems I’ve seen 10% dropouts (my studio was at 10 for a while when I was too focused on selling). 10% dropout rate at 100 members means 10 sales that month just to breakeven.

Getting this as low as possible is a must to avoid going 2 steps forward and 1.5 back.

• • 4. Developing systems and leading a team

These really are 2 different things, but for brevity, I’ve bucketed them together because they really achieve the same outcome: have the business begin to run without you.

All the things you’ve done to attract leads, sell them, deliver consistently and keep them happy must become processes others can replicate.

Then your job is to lead the right people to execute these processes.

The customer journey

If there was one concept I would’ve paid 100K for when I first opened, it’s understanding exactly how a person goes from stranger to raving fans.

Once this sequence became dialed in we grew easily, without me doing all the work, and we started getting incredible results from members.

Here’s the big picture process we use and I help install in my coaching clients

• • 1. Front end short-term program offer – marketed organically and paid ads
    2. Book them into the gym/ phone consultation
    3. Sign in to front end program (which is more expensive than regular training)
    4. Group onboarding session at gym with everyone else who signed up for scalability and to build relationships
    5. High accountability for the front end program
    6. Ascend to longer-term membership halfway through their front end program
    7. Offer higher service of PT, supplements, clothing etc

For my studio, our front end program is a 6-week challenge @ $79 a week. This has proven to be a reliable offer that gets plenty of leads and we can sell in 30 mins at 90%+ conversion.

We launch a group at a time every 3 weeks. Each person has a personal accountability coach and checks in with them daily for the first fortnight, then weekly after that.

Then we ascend to a longer-term membership between $49-$69 a week depending on the membership.

After running the program a few times you can dial in the system for the sales process, on-boarding session, accountability etc and growing becomes a rinse and repeat process.

Getting this together should be no.1 priority for a new studio needing to grow fast.

As people train you can dial in your specific training methods and workout structure, which are of course still important, but not what drive the growth.

Wrapping up

I threw a lot at you there, but not only will you be opening a studio for the right reasons, but you’ll know what to focus on to grow.

If you want these strategies laid out for you in an easy to follow way, I have created a course on How to Transition from PT to Studio Owner, which is accredited by Fitness Australia.

If you’re interested in that click here.

If you want to connect and ask any questions, find me on Facebook at David Mifsud, or email me at david@thebodyshapers.com.au

Keep moving forward wherever you are at with your fitness career.

Blog Contributed by Dave Mifsud

Dave Mifsud

After my own personal transformation as a teenager, I was hooked on fitness. I became a PT at 20 years old and after many months of struggling found a coach to guide my career. I rapidly grew my PT business and then took the plunge to open my own studio at 20 years old – just 9 months after training my first ever client.

Since then I’ve built a team of 4 trainers plus myself that run my small group studio at Kirrawee in Sydney.

After countless other trainers asked me how I did it in 2018 I began coaching and teaching other trainers how to grow their business and succeed in the industry. I’ve coached people all around the world to double or triple their current business, and others to launch their studio.

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