Episode 450: How To Create a £70K Salary in 40 Minutes

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She built a buzzing fitness facility… but after 8 years, she still couldn’t afford a decent salary.

The passion was there. The impact was real. But the numbers? Brutal.

In this transformational Business Growth Secrets audit, Adam Stott – the UK’s go-to expert on starting, growing and scaling businesses – rips open the structure, pricing, and team strategy to fix what most founders ignore.

Inside this audit:

• The invisible leak that was draining £70K in potential salary
• How a few tweaks to product structure created instant cash flow
• Why her loyal team were stuck – and how to turn them into revenue generators

Listen now to find the cash hiding in your own business.

Links Mentioned:

Get your Business Growth Secrets SUCCESS PLANNER for FREE and profit like a pro: https://adamstottplanner.com/free-book47315172

Adam’s website: https://adamstott.com/?el=Pod

Watch the Episode on Adam’s YouTube Channel: https://www.youtube.com/adamstottcoach?el=Pod

Connect with Adam on Instagram: https://www.instagram.com/adamstottcoach/?el=Pod

Join Adam’s network on LinkedIn: https://www.linkedin.com/in/adam-stott-coach/?el=Pod

Transcript:

Please note this is a verbatim transcription from the original audio and therefore may include some minor grammatical errors.

How do you take a business of in struggling to make a profit for eight years and turn the entire business around in just one session?

Not only will we make this business profitable, we will double the revenue by sorting out the structure of the funnel, the operational cost, and so much more.

I’m very, very excited today and you should be too.

Let’s jump on in to this business grow secrets business audit.

[00:00:00] Adam: So big, big welcome to Meg Bachelor today, um, who we’re gonna be working with and I’m really excited, Meg, to start deep diving into the business. So give us a bit of a, an overview as to where you are now, and then we’ll jump in and we’ll start building out this business for you.

[00:00:15] Meg: Yeah, so my career in uh, fitness actually started in indirect way.

[00:00:20] Meg: I started out in traditional way working one-to-one in large commercial gyms. So I had that experience and that exposure. But after a while, I knew that that wasn’t a place that I wanted to remain in because I felt that there was something missing in the fitness industry, how it helps. People and this kind of over obsession with aesthetic over health and longevity.

[00:00:39] Meg: So I went out on my own trained people from homes and parks, but again, I met another barrier in terms of being able to deliver what I felt really passionate about. I was a competitive international power lifter. I was winning titles representing my country, but I wasn’t able to translate that passion for strength and empowerment and resilience to my clients.

[00:00:59] Meg: So I knew that the space didn’t exist and that I needed to create it. So 10 years ago, I opened up my own facility and that’s where I started kitten it out. Operating absolutely on a shoestring, built it from the ground up. And over the years, I, I realised how important it was not just to deliver in terms of strength, resilience, and fitness, being about freedom for people to live the life that they want to, but to make the best possible impact I needed to be able to scale up.

[00:01:26] Meg: That’s where we became specialists in small group personal training, really leaning into that social connection and also were able to impact more people, seeing more people that way as well. When I decided it was time to have a family, I knew I needed to build out my teams. It’s from about eight years ago onwards that I started employing staff, and we have grown from there.

[00:01:48] Meg: The challenge I really found myself in when I first came across BBE was I was making an impact. I was passionate about what I was doing, but I wasn’t making any money. And I was very proud of what we were doing in terms of how we were helping the clients that we had. But brand awareness was none sales process needed working on, and just the longevity of the business.

[00:02:08] Meg: ’cause it’s, I can’t help no one. If the doors have to close.

[00:02:12] Adam: Yeah. So true. Right? Yeah. Yeah.

[00:02:14] Meg: So I So you’re very

[00:02:15] Adam: impact driven. Yes. Obviously you need to make money to keep yourself going and Yes. I think it’s really good to get that background, understand where you are at in your business, the challenges you’ve had.

[00:02:23] Adam: Eight years ago, you, you had a family. I know that when we first met, that was. Top of mind. Right? Yeah. You, you had a lot of challenges there, didn’t you? And I think there’s a lot of people that watch this, that, you know, are business owners that are, or even moms or dads running businesses, managing children, and that can be difficult.

[00:02:42] Meg: Yeah, absolutely. I’ve done some work. On myself in many different ways. So I was coming into this knowing that I know my stuff when it comes to fitness.

[00:02:51] Meg: As women, particularly modern day society, we’re told we can have it all. But it’s very difficult to balance wanting to have it all but also be present as a family and present.

[00:03:02] Meg: So scaling up also means being able to be present with your family whilst having a successful business. Because if everything hinges on you, you are never gonna achieve that balance.

[00:03:12] Adam: Worked with us now for how long have you been with us? Two years,

[00:03:14] Meg: Elise? Yeah, about 18 months. Yeah. Okay.

[00:03:16] Adam: What’s some of the biggest lessons or the biggest differences that that’s made to you?

[00:03:20] Meg: The confidence to make decisions, which is obviously really, really important because if you spend too long thinking about something and not acting on it, there’s no such thing as staying still. You’re either going backwards or even moving forwards. So making decisions is absolutely imperative. So that’s one thing, but also.

[00:03:35] Meg: I think there’s a real similarity between being a parent and being a business owner, um, and the realization that like, as a parent, it’s actually quite comforting to realize we’re all making it up as we go along. And to an extent, as business owners, you look at other people and think they know everything.

[00:03:51] Meg: Being around a network of other business owners, you can see areas that they know so much more than you, but also areas that you can contribute to them. Yeah, of course. Yeah. As well.

[00:03:59] Adam: Yeah. Yeah. Which is super important. So that community, community that support’s really helped you. Yeah. Okay, great. So today.

[00:04:06] Adam: Obviously wanna work on the business. For those of you that are, uh, listening along or you’re watching at home, Mega’s done a really great job and when I look at the different clients we work with, I think our ads are right up there. Our funnels are doing very well. [00:04:20] Um, yet there is some resistance to scale.

[00:04:23] Adam: So I think you, some of the quality of what you do is excellent. The volume. Yeah. And how much we push it is not necessarily there. So we need to look at that and say, well, how are we gonna take some of this great work and great creativity and take it to the next level? Is we establish where Meg is, where she wants to be, what are the blocks, how to remove them and put a game plan in place for how to get her there.

[00:04:43] Adam: So over to you, Meg. What you’ve gotta show me,

[00:04:45] Meg: we are focused personal training in Southampton. We’ve just finished our financial year and. Last year was just a little over 225 grand. Our average lifetime with a client is about 19 months. There’s quite a big variation on that. Some will be with us for years, and that’s the current spend that they would have with us during that time.

[00:05:03] Meg: At the moment, we invest around about 1500 to 1800 pounds per month in advertising, which is primarily on the meta platform.

[00:05:10] Adam: That’s a really great start. We know where we are in terms of sales. We know what happens when a customer becomes a client of the business and we know what we’re paying to get them there.

[00:05:20] Adam: Where do you want to be?

[00:05:21] Meg: So it is really important to me to become profitable. That also speaks to what we were talking about in terms of being present as a mother, being present as a wife, and sort of my own core values. Without becoming profitable and having a consistent salary, I will just work myself into the ground.

[00:05:35] Meg: ’cause there’ll be no holidays, there’ll be no breaks. The second part is to double our turnover. So we have quite. A expensive model, but it’s one that doesn’t actually increase as we increase our client base.

[00:05:48] Meg: So the, it is all blue sky up here, but we’ve just been stuck right on that level for such a long time.

[00:05:54] Meg: And so actually to double our turnover shouldn’t include doubling our spends. You often say Don’t quit before the magic. And I feel like the magic’s just up there.

[00:06:02] Adam: Yeah.

[00:06:02] Meg: And we are just stuck just behind it.

[00:06:04] Adam: So one of the things we wanna establish, we know where we are, we know where we want to be. How badly do you want these things?

[00:06:10] Adam: And, and when you look at double turnover, double the turnover. Get turnover to 500,000 pounds is measurable.

[00:06:18] Meg: Yeah.

[00:06:18] Adam: We know whether we achieved [00:06:20] it, we know whether we didn’t achieve it, become profitable. How profitable. It’s slightly more obscure.

[00:06:26] Meg: Yeah,

[00:06:27] Adam: you’ve gotta take a salary in there. If you were gonna fast forward 12 months, what is the salary that you’d want to take?

[00:06:32] Adam: And you’d say, okay, maybe I’m not in Harry Potter or Wonderland, but there is some magic happening, there’s a spark. [00:06:40] What would that look like?

[00:06:40] Meg: My ego wants me to earn as at least as much as my husband. Um,

[00:06:46] Adam: so Right, but first of all, it’s always good to be aware, you know, of these things, but I think your ego is often not your amigo.

[00:06:52] Adam: I

[00:06:53] Meg: know, right? I think I’m, I am like stubbornly independent, like I’ve had part-time work since I was [00:07:00] 12 and I would never stop working in between that. ’cause to me being able to make my own way. Mm-hmm. Even though I am, I am in a relationship and, and we are working together. To be able to feel that I can hold my own, that matters to me.

[00:07:12] Meg: So

[00:07:12] Adam: we’ve got two choices. We either make more money or we get your husband fired.

[00:07:18] Adam: Yeah, possibly not. Right. Okay, cool. So what, what have we got? What’s the target? Yeah, so I

[00:07:23] Meg: think for me, and I’ve done the maths in the past and like a place that would allow me to take breaks, have holidays, have a nicer car, all of that sort of thing. If I was on 70 k. As a consistent salary that allows me to live the life that I want to within reason.

[00:07:37] Adam: So obviously when it comes to the business owner pay plan, we’ve got, uh, a certain amount that we can take out the business tax free, and then we’ve got dividends that we can take as well. Right? Yeah. So when you say 70 k. Are you envisioning you running yourself through as a PAY employee or are you talking about actually taking dividends as well as your baseline?

[00:07:57] Meg: Baseline and dividends? Okay, fine. Um, I just haven’t been in a profitable enough position to take dividends before. It’s generally just whatever’s left in the pot after I’ve paid everyone else. The reason

[00:08:05] Adam: I ask those questions again, uh, for those people that are, are listening or watching, if Meg’s actually saying, well, I need 3000.

[00:08:11] Adam: Take home. And, and that’s a very different situation for a business owner because, you know, we’ve got a tax free allowance as a business owner that we can take tax free. And then to top that up to 3000 pound a month is not that hard. Right. So if we put that as the target, that’s now measurable. Correct.

[00:08:27] Adam: Yeah.

[00:08:27] Meg: Yes.

[00:08:28] Adam: So you’ve said become profitable, so we wanna be making enough money.

[00:08:31] Meg: Yeah.

[00:08:31] Adam: Right. So you can take a decent salary, which is two twofold, right?

[00:08:35] Speaker 3: Yeah.

[00:08:35] Adam: Where we’re currently at, at the moment. Is 227,000 pounds in sales [00:08:40] a year. We are spending a small amount on marketing per month. In order to drive that revenue and drive those clients in the business has some operating costs, which are, are making it not profitable, which we need to dig into those.

[00:08:53] Adam: And where we want to be is we want to significantly increase the turnover and then make sure that we can take home at least 3000 pounds a month ’cause we’re profitable enough to do that. To give you some breathing room, make you feel chilled out or make you in a good position.

[00:09:04] Meg: Yeah. Correct. Definitely.

[00:09:05] Meg: Yeah.

[00:09:05] Adam: Okay, cool. How badly do you want that.

[00:09:07] Meg: You might have to bleep me a bit of bust, basically, because I can’t keep operating the way that I am.

[00:09:12] Adam: Yeah. And I

[00:09:12] Meg: also can’t imagine a future where I go back into employment. So it’s, it’s now or never really.

[00:09:17] Adam: Yeah. It’s gotta happen. Yeah. Yeah. Okay, cool. [00:09:20] Alright.

[00:09:20] Adam: Again, reason I ask that is because we wanna be really attached to the outcome. We’re gonna make the outcome happen. Okay. Tell me why you think you’re not there. What are the challenges been so far?

[00:09:28] Meg: So, we are a human based business, which I know are the most expensive ones to run because, uh, but we, that’s.

[00:09:35] Meg: A, a big part of who we are as our core values is, is an in-person business. It’s [00:09:40] presence. So the coaches and the staff salaries are the biggest chunk of what we spend. I keep things pretty tight in terms of expenses outside of that.

[00:09:47] Speaker 3: Mm.

[00:09:48] Meg: So in terms of 20 K per month, about 60% of that is staff salaries.

[00:09:54] Meg: And then on top of that, you’ve just got operating costs. So that does factor in a 1500 pound salary for me.

[00:10:01] Adam: Alright, so that’s what you’re taking 1500 sometimes? Yeah. Okay, fine. Yeah, so we’ve got operating costs. Uh, you are saying one of the biggest reasons that you’re not there yet. We, we need to talk about that.

[00:10:11] Adam: So that’s 20 KA month? Mm-hmm. Okay.

[00:10:13] Meg: Yeah.

[00:10:13] Adam: Uh, clients getting the, so

[00:10:15] Meg: yeah. I’m not charging enough. Yeah. Um, to be sustainable, but also we struggle with attrition sometimes because the clients that we have as much as they love us, are really stretched to afford what we do. And so the slightest bump in their own financial circumstances, and we’re the first to go.

[00:10:32] Meg: What we want to do is try and magnetize the clients that can afford us more comfortably, as well as increasing our prices to make us more sustainable. So our client [00:10:40] numbers are quite stagnant, like ideal client situation and they’ll stay for years. We

[00:10:44] Adam: definitely need to look at the operating costs and understand why we running at 20 car month.

[00:10:49] Adam: We’ve gotta look at that. We’ve gotta understand that, uh, the right clients, we can do some work there. And the fact that there’s no growth, we can obviously do some work there as well. Mm-hmm. So what we’re gonna do is we’re gonna get into the numbers and start to map out and really understand how we turn this business around, how we make it profitable, get you more money, and really get going.

[00:11:08] Adam: Does that sound good? Yeah, absolutely. Okay. Let’s jump in. Let’s start building out this business. So very quick recap before we get into breaking the business down. We’ve got focused [00:11:20] PT. Based in Southampton. And by the way, if you are in Southampton, you wanna get super fit, go and look ’em up. So this is what we’ve got now what they do.

[00:11:29] Adam: Small groups bring people in, get ’em into a great place with their personal health, with their strength, with their fitness, and do an amazing job. Okay, so we’re on that, Meg, we’re all correct. Yeah. Yeah. Uh, where we currently are is we’ve got a business. And business has been tough, right? Eight years working very, very, very hard.

[00:11:48] Adam: But not making enough money. However, we’ve done a good job of getting the revenue to 227,000, so we want to actually be making some money, bringing some money in. We want the business to be growing and we want to create more profit. Within the business. So essentially Meg can make more impact. So now we just gotta say, how do we bridge that gap?

[00:12:08] Adam: So there’s three challenges. One is operating costs, one is growth, and one is the clients we want to bring in, essentially clients that got more affordability, so we stop the churn, [00:12:20] correct? Mm-hmm. The first thing that I want to look at, and the bit that I was really keen to understand is the operating cost model.

[00:12:28] Adam: You said that’s 20,000 pounds a month?

[00:12:30] Meg: Yeah.

[00:12:30] Adam: So let’s look at that. First of all, and this is something that we should all be looking at doing with our businesses, is understanding what are our costs, what is our break even, because that’s the way we can build forward and grow the business. So if you just rattle off an idea of where that 20,000 a month is built up from, how does that work?

[00:12:46] Meg: So we’re at about 11.5 K staff costs. So their salaries,

[00:12:50] Adam: staff? Yeah.

[00:12:51] Meg: Yeah.

[00:12:52] Adam: How many staff?

[00:12:52] Meg: Three full-time.

[00:12:53] Adam: Three full-time. Any part-time?

[00:12:56] Meg: Uh, we then have a freelancer two days a week.

[00:12:58] Adam: Okay, so one freelancer? Yeah. Yeah. Okay, cool. Plus Meg. Yeah. So that is currently the team and that is essentially, you know, you said it’s 20 K costs, this is like 55, 60% of the costs.

[00:13:10] Adam: Yeah. Okay, great. Now, uh, those three staff tell me what they do.

[00:13:16] Meg: The equivalent, two full-time coaches and one full-time person. Uh, [00:13:20] delivery facility. Um, operating manager. Okay, so general manager, operating

[00:13:24] Adam: manager. Yes. Gym manager. Okay. So you’ve got someone doing all of the operation stuff, the delivery.

[00:13:30] Adam: Yeah. Going back to the clients, making sure they’ve got emails, make sure they know who the sessions is, organizing everything. And you’ve got these two people delivering here.

[00:13:35] Speaker 4: Yeah.

[00:13:36] Adam: Great. So that’s currently what makes it up. That’s 55%. This is pretty easy. We’re gonna break this down quick. What comes after that?

[00:13:42] Adam: You’ve got marketing, you said you’re spending 1500 pound a month. Yeah.

[00:13:46] Meg: Uh, yeah. Recently increased to 1800 pounds, but

[00:13:48] Adam: yeah. Okay. So we’ve got, uh, we’ve got that 1800 pounds. Alright, so that gets us to, um, 13.3. Yeah. Or 13.2. Okay. What else we got?

[00:13:58] Meg: So the facility [00:14:00] costs are about two and a half thousand pounds a month.

[00:14:02] Adam: Okay. So Jim, this is Jim office. Depending on what business it is,

[00:14:05] Meg: yeah.

[00:14:06] Adam: 3000?

[00:14:06] Meg: Yeah.

[00:14:07] Adam: Okay, cool. Why not? Okay, great. What else we got?

[00:14:10] Meg: So we’ve got debt management because where we’ve not been that profitable, we’ve had to kind of dip in and out of, um, loans and things like that. Okay. So servicing that debt is about a thousand pounds a [00:14:20] month.

[00:14:20] Adam: Okay. So you’ve got a thousand pounds worth of debt. Okay. What else?

[00:14:23] Meg: Uh, my own, uh, take home, which would be about 1.5.

[00:14:27] Adam: Okay. Right. So this is, uh, directors. Okay. Costs. Yeah. What else?

[00:14:33] Meg: A big chunk of that operational cost is the facility, but there’s about another thousand pounds on top of various support services.

[00:14:39] Adam: [00:14:40] Right? Any others?

[00:14:40] Meg: I think that’s about it.

[00:14:41] Adam: So about right there or thereabouts. Okay. That’s our cost base. When you look at that, most people go, well, what can I really do with that? Well, I’ve got the people. I’ve gotta pay the people. Well, got the marketing, I’ve gotta pay the marketing there. Don’t any marketing, I’ve got no people in here.

[00:14:57] Adam: And it feels like we end up being stuck. We’ve got the gym cost, [00:15:00] which is exactly the cost we’ve already got. We’ve got these different bits and pieces that we’ve gotta pay for it, and they’re all there. It looks fixed. So what do you do when you’ve got a cost base like that? Well, the first thing is I would be looking to do is I’d be looking to understand that most of our costs comes in these three people.

[00:15:17] Adam: Okay? Now I have this principle, which is a [00:15:20] great principle for everybody that’s listening, everybody that’s watching, it’s never what it costs you. It’s only what it makes you. So the way that you look at this, if 55% of this business, the cost is made up here, okay, my question is, well, what are these people actually making us?

[00:15:35] Adam: What are they actually delivering us and how can we get them to deliver more because we need them [00:15:40] to add more to the operation. Mm-hmm. So. Explain to me you pay that out for these people. What are they delivering back to you? Yes. They’re servicing your clients. Mm-hmm. But what else are they adding to the business in terms of what they’re doing currently?

[00:15:54] Meg: It is primarily servicing the clients, so client retention freeing me up to focus on the marketing and [00:16:00] sales. So I don’t get involved in the day-to-day operations so that I can be the person who brings the new customers in.

[00:16:04] Adam: You are saying the business currently is at 20,000 in sales. We’ve got 20,000 in costs.

[00:16:09] Adam: We basically break even.

[00:16:11] Speaker 3: Mm-hmm.

[00:16:11] Adam: With your salary, correct?

[00:16:12] Speaker 3: Yeah.

[00:16:13] Adam: Because of that, every month’s a struggle, cash flow issues, et cetera.

[00:16:16] Speaker 3: Yeah.

[00:16:16] Adam: If each of these just added 1,500 [00:16:20] pounds in revenue to the business,

[00:16:22] Speaker 3: our

[00:16:22] Adam: entire problem would be solved.

[00:16:24] Speaker 3: Yeah.

[00:16:24] Adam: Right. Because you would then be able to take an extra one thou and you’d have 3000 left over.

[00:16:29] Meg: Yeah.

[00:16:29] Adam: Right. So the question is, how do they add revenue to the business? Currently?

[00:16:33] Meg: They don’t at the moment. I think one way that I can see a need to build out is, uh, is selling horizontally.

[00:16:39] Adam: Okay. [00:16:40] What is their targets?

[00:16:41] Meg: They don’t have targets.

[00:16:42] Adam: Okay? Right. So we can see that there’s a challenge here, right?

[00:16:45] Adam: So if we wanna give them some targets and we were to go and we were to talk to them and we say, look, I love you and you do this in exactly the right way, because a lot of people struggle with these kind of conversations with their staff, right? Oh, how can I possibly go and have these conversations? I can’t tell my [00:17:00] staff we’re struggling.

[00:17:00] Adam: I can’t tell my staff in this situation. They’ll absolutely hate for me. That’d be an absolute nightmare. I dunno what I do. Oh, going into panic mode and all this kind of jazz. But if we simply went to the team. You delivered it in the way that you did it, or you can get ’em to watch this might be easier.

[00:17:13] Adam: Ah, right. Okay. Right. If you literally went and you said to ’em, right. Okay. Where we currently at in the business is we’re breaking even. I’ve been doing this for eight years. I wanna make an impact. I really need your help to drive this business forward. And you were to hold a small workshop with these three people and you were to say, how can you help me to drive more revenue into this business?

[00:17:36] Adam: I want to give you all target of you being able to find [00:17:40] 2000 pounds a month worth of sales, and they were to go and hit that you wouldn’t even have a problem. Mm-hmm. That one thing we’re gonna do more than this, but that one thing would change things.

[00:17:51] Speaker 3: Mm-hmm.

[00:17:51] Adam: So first of all, what could they sell that they’re not currently selling?

[00:17:55] Adam: Could they sell an add-on service? Could they sell a retreat service? [00:18:00] Could they sell a bootcamp service? Could they upsell the year? So they’re currently paying monthly. Could they upsell the year for you and get ’em to pay in full for the year? Um, and if they pay in full for the year, they get two months free.

[00:18:13] Adam: Yeah. Right. What could they do that would allow them to sell further with you? Because one of the things you didn’t say was one of your challenges is you said nothing about product range. Yeah. You said, well, I want to get better clients. But you also said, I’ve already got these amazing clients, they love me and they stay forever.

[00:18:30] Adam: The problem is if you don’t sell these people that love you and wanna stay forever, anything else, you’re forever looking for new clients, you’re gonna run into these problems. You’re gonna run into.

[00:18:38] Speaker 3: Yeah.

[00:18:39] Adam: So let’s look at the clients you have and the product range you have. So first of all, we’ve got a mission.

[00:18:45] Adam: We’ve got three people. We’ve our business. If they don’t come and help us out, there’s gonna be a challenge. Agreed.

[00:18:52] Meg: Yeah.

[00:18:52] Adam: So tell me the products that you currently have in the business.

[00:18:55] Meg: So we have small group personal training sessions, which is a maximum of six in the session. They [00:19:00] come and train with us three times a week.

[00:19:01] Meg: They can purchase on a monthly rolling basis or a 12 month prepayment basis.

[00:19:05] Adam: So it’s monthly rolling?

[00:19:06] Meg: Yeah.

[00:19:07] Adam: Or 12 month payment. Uh, prepay.

[00:19:09] Meg: Yeah.

[00:19:09] Adam: How much?

[00:19:10] Meg: Uh, at present it’s 3, 2 7 monthly. 3 2 70 Annually.

[00:19:16] Adam: So 3, 2, 7.

[00:19:17] Meg: Yeah.

[00:19:18] Adam: Per month.

[00:19:19] Meg: Yeah. [00:19:20]

[00:19:21] Adam: And if they do an annual plan, they can pay, they basically get two months for free.

[00:19:26] Adam: Yeah.

[00:19:26] Meg: Yes.

[00:19:27] Adam: How many pay in full?

[00:19:28] Meg: We have about 25% of our clients on paid in full.

[00:19:32] Adam: Okay. 25% just pay for the year like this? Yeah. And then 75% pay for the monthly.

[00:19:37] Meg: Yeah.

[00:19:37] Adam: The ones that pay for the monthly, how many of ’em drop out

[00:19:39] Meg: [00:19:40] more often than not? They might just do their three month minimum and then move on.

[00:19:43] Adam: So you end up. Only getting 900 qui.

[00:19:46] Meg: Yeah.

[00:19:47] Adam: Rather than 3000. Yeah. And correct me if I’m wrong, but didn’t you start this business to make an impact?

[00:19:52] Meg: Yeah.

[00:19:53] Adam: And if they only stay with you for three months, what type of impact does that have?

[00:19:56] Meg: Very restricted.

[00:19:58] Adam: Can we see this? Right? So there is, uh, something that needs to be done here.

[00:20:01] Adam: Yeah. And this, whose job do you think this is To upgrade? The other 75%. Yeah. And what type of bonuses do you have around this?

[00:20:13] Meg: Bonuses for the staff,

[00:20:14] Adam: the two people that are paid in full that committed for the year, how do they get treated differently to the other ones that are in there?

[00:20:20] Meg: I don’t think we have a defined difference.

[00:20:22] Meg: No, they

[00:20:22] Adam: don’t. Okay, so that’s also an issue. Mm-hmm.

[00:20:24] Meg: You’ve

[00:20:25] Adam: got no incentive for them to become one of those. So we need to have two memberships. We’ve got one membership with this, one membership with this, you are trying to sell on price, but you need a status increase. For bringing these people into this program.

[00:20:44] Adam: Okay. Not just a price increase. So it would be like, well, Sally’s in the class. Sally is platinum member. Or Sally is the ultra action taker or a player, whatever it is. Sally’s got that identity because she’s paid for the year. She’s committed for the year. Yeah. Well done to you, Sally. ’cause you deserve that recognition because you’re, whatever it is, whatever we decide, we’re gonna call that identity.

[00:21:08] Adam: That will get these other people that are not that identity to wanna come on for the 12 months.

[00:21:12] Speaker 4: Yeah.

[00:21:13] Adam: And it should be their job to get as many people onto the 12 months as possible. Currently you are losing, you’re getting 25% of the people are doing the full pay. Mm-hmm. And the rest of ’em not doing the full pay.

[00:21:26] Adam: Now some of them won’t do the full pay ’cause they’re, they’ve gotta get going. They wanna see what it’s like, et cetera. So we understand that. Mm-hmm. So they can come in for the three months, but we want all the other people to pay up front and to be able to get this special relationship with you. Where they get something special for doing so.

[00:21:42] Adam: Does that make sense?

[00:21:42] Meg: Yeah.

[00:21:43] Adam: So we’re gonna come back to that, right? What other products you got?

[00:21:45] Meg: We also offer large group training. So it’s only one in four training sessions they have access to, and that is charged at 1 9 7 per month at the moment. And

[00:21:53] Adam: what do they get? Same Paying for same one. Nine

[00:21:55] Meg: 70.

[00:21:56] Meg: Yeah.

[00:21:56] Adam: I think you’re missing a value ladder in the business. Do the people in here [00:22:00] go here?

[00:22:01] Meg: Very rarely.

[00:22:03] Adam: Okay. This is why the products are not linked together. Alright, what else? What else we got?

[00:22:07] Meg: So there’s an introductory program into that, which is a six week plan. That’s what we call our inner circle, which is the longer term plans.

[00:22:14] Adam: Right. So six week plan?

[00:22:15] Meg: Yes.

[00:22:16] Adam: How much is that?

[00:22:16] Meg: Four. Nine. Seven.

[00:22:18] Adam: Okay. And then what happens after they [00:22:20] do the six week plan?

[00:22:20] Meg: We aim to convert ’em into one of the longer term plans.

[00:22:23] Adam: So one of these? Yeah, or these, which is one’s the inner circle.

[00:22:27] Meg: If it’s not the six weeks, it’s, we just call it our inner circle.

[00:22:30] Meg: It’s a bit undefined, I suppose, at the moment, so

[00:22:32] Adam: okay. You’ve just given the status, but you just give it away too easy.

[00:22:35] Meg: So

[00:22:35] Adam: you had it, but you didn’t set out right. Yeah. Okay, cool. Alright, so any other products you [00:22:40] sell?

[00:22:40] Meg: That’s basically it at

[00:22:42] Adam: the moment. Nothing else. What else could you sell that would be a higher price point that people would buy?

[00:22:47] Adam: What else do you get asked for that you don’t serve people with? Do people ask you for anything else? Is there something they come to you and go, oh, can you do this? Oh, do you do this? Oh, can you help me with

[00:22:57] Meg: this? Most of the time it’s more like referrals for physical [00:23:00] therapy of some kind. Yeah. Um, but I think we would only,

[00:23:02] Adam: people just say, I wanna just train one-on-one.

[00:23:06] Meg: No, because we sell based on community and people like that aspect, being around other like-minded people, but also, uh, from a scalability perspective, it’s quite difficult to staff one-to-ones. ’cause it blocks out their time. Yeah, of course. And yeah.

[00:23:19] Adam: Yeah. Okay. So currently you don’t need to do that. Uh, tell me about an average client that comes into this world.

[00:23:25] Adam: You said that eventually they’re 3 7 90, right? You said clients typically stay for about 18 months. What does this client journey look like? This is really important. But what we always want to look at is when a client comes into your world, what is the sequence? In the order of what happens? This is definitely missing from this business.

[00:23:45] Adam: It seems like the client is control rather than actually Meg and the team being in control. And we want to control that client journey. So client comes into your world, they’ve seen your ads, they’ve seen your landing page, they book a call. We got that bit. Rock and roll. [00:24:00] You’ve got great ads. You’ve got great funnels.

[00:24:01] Adam: Your marketing’s pretty awesome. Problem is your structure of actually your client journey and how you take people through the process. The operating costs is not even that big a problem with the operating costs. It’s not like you got all, so the defined challenges don’t actually end up being the defined challenges.

[00:24:16] Adam: What actual challenge is, is that you are not taking someone for a structured journey that increases the lifetime value of the client. So I come in, what do I buy first

[00:24:25] Meg: is the four. Nine. Seven. Yeah.

[00:24:27] Adam: So client buys the 4, 9 7. Then what happens? Um, what do I buy next?

[00:24:33] Meg: From week three on, we start to telling you about the other programs.

[00:24:36] Meg: Yeah. So that they’ve got time to Yeah. Afford it. At the end of the six weeks, we aim to get them onto either the SGPT, the small group stuff, uh, which is, uh, currently 3 2 7 T Yeah. Um, or the LGT, which is currently 1 9 9.

[00:24:51] Adam: Okay. Yeah. So the 1 9 9, the 3 9 9, whatever. It’s the 3 9 7. Yeah.

[00:24:55] Speaker 3: Yeah.

[00:24:55] Adam: Okay. So basically I buy the 4 9 7.

[00:24:58] Adam: Yeah. And then I go here or here. By the way, I said that the structure, we’re gonna work on that for Meg in a minute. This is actually quite good. ’cause what Meg does is Meg is allowing someone to come into a world at a lower cost option. I like that. That allows people to say yes, it brings more people into the pipeline.

[00:25:16] Adam: If they came in first and Meg said it’s 3,270, they’d run a mole. She’d never get a client. So the fact that Meg does this part, well, I’d actually don’t mind this, but what I don’t feel is being done to the maximum is this next part. We’ve got these two options. So what is the fallout? What percentage of people buy at 4, 9, 7?

[00:25:35] Adam: Don’t go into the program.

[00:25:37] Meg: It’s quite high at the moment. It’s probably about 50 [00:25:40] 50. Possibly not. So

[00:25:41] Adam: 50% drop? Yeah. Out the client journey as much as she said

[00:25:44] Meg: sometimes.

[00:25:45] Adam: Okay. 50% drop out of the client journey as much as two thirds.

[00:25:48] Meg: Yeah.

[00:25:49] Adam: You’re saying 50% will go into Yeah. A program.

[00:25:52] Meg: Yeah.

[00:25:52] Adam: Correct. Okay, cool.

[00:25:54] Adam: Alright, so, um, how long did they get in the four? Nine? Seven?

[00:25:58] Meg: That’s a six week plan.

[00:25:59] Adam: Okay. So they go six weeks. And then they get to this decision point where they’re either gonna drop off or they’re gonna go forward?

[00:26:05] Meg: Yeah.

[00:26:06] Adam: Correct? Mm-hmm. Okay. There’s a fix for this then what happens? How long do they go here?

[00:26:10] Adam: How long do they go here?

[00:26:11] Meg: Minimum three months or a 12 month program.

[00:26:15] Adam: Okay. So three to 12. Who makes that decision?

[00:26:18] Meg: They do.

[00:26:19] Adam: Alright. That’s wrong. What they can. Okay. We don’t want that. Okay, cool. What happens after that?

[00:26:24] Meg: At the moment, the three goes on to monthly rolling and the 12, it would be a case of them renewing at the end of the 12.

[00:26:30] Adam: Okay, so then basically got renewal. Mm-hmm. Yeah. So the renewal, what’s the rate of renewal

[00:26:38] Meg: on the annual plan? It’s really high, so it’s probably about 90%.

[00:26:42] Adam: Yeah.

[00:26:42] Meg: And the rolling one, it’s lower, so the lifetime is much shorter. So it’s probably about. 50%, something like that.

[00:26:49] Adam: Okay. So if we said 70% of people Yeah.

[00:26:52] Adam: That buy a plan, renew.

[00:26:53] Speaker 3: Mm-hmm.

[00:26:54] Adam: So hopefully, um, if you’re listening and watching along, what we’ve just established here is what is the client journey? Client sees the ads, books, a call makes a purchase, and then 50% of ’em are going on the journey. 50% of ’em are dropping off the journey. We are gonna fix that in a moment once we understand the numbers.

[00:27:14] Adam: Here. They come into this world and they choose. They’re doing three or 12. We’re gonna fix that in a moment because there’s breakage. There’s breakage in this model here because people are dropping off. There’s breakage in this model here because people choosing their term, and there’s breakage in this model here because there’s people not renewing.

[00:27:34] Adam: So if this were a funnel, it’s like holes all in the funnel where people coming out of the funnel [00:27:40] rather than going all the way through the funnel, which is what’s impacting the business and impacting the revenue. Hopefully that makes sense, Meg?

[00:27:45] Speaker 4: Yeah, absolutely.

[00:27:46] Adam: Okay. Most people don’t look at their business in this way, but this is exactly how you should look at your business.

[00:27:51] Adam: ’cause when you do, you can fix the problems and you can fix the pain points. So now we understand this. There’s some simple fixes. How open. To change. Are you? How coachable are you?

[00:28:01] Meg: The way I’m doing it now isn’t working, so I’m ready to take on action. Yeah,

[00:28:05] Adam: you mean it.

[00:28:05] Meg: Yeah, I mean it. Yeah.

[00:28:07] Adam: Okay, cool.

[00:28:08] Adam: Alright, so this is what we’re gonna do. First of all, you can fix this breakage with a very simple fix. Okay? Which is you say with, instead of losing 50%, okay? This is how it works, Meg. We work with you for six weeks, it’s 497 for the six weeks. You then automatically move on to our 1 9 7 a month, which is the long term training.

[00:28:35] Adam: Now if after you’ve done six weeks of us. You don’t want to do the 1 9 7, we will have a review. And if you don’t wanna come outta that, that’s okay. But we set that up right from the beginning because our intention here is to make an impact. Our intention is to get you the result. And we know if people ought ever do is the 4, 9 7, they don’t end up with a result that they want.

[00:28:58] Adam: So what we wanna do is we wanna get you into the program automatically, move you onto this, and we’ll have review meeting. So what you are then doing is you are selling upfront the 4, 9 7. You can tell them and they know if they don’t wanna move forward after that, they don’t have to, and that’s okay. But the fact that they’re now expecting to move forward and they’re gonna agree it, you’re gonna lose a ton less people.

[00:29:20] Adam: So you’re probably gonna take this 50% drop off. Instead of it being a 50% drop off, you might reduce that to like 30% drop, okay? Mm-hmm. Because now they’ve gotta have an awkward conversation with you to drop off. And I go, oh, this woman’s helped me so much and now I’ve gotta tell her I don’t wanna do a 1 9 7.

[00:29:37] Adam: It’s gonna be a lot less likely ’cause it always set up. So when you [00:29:40] take the strike payment, you go here, you go 4, 9, 7, and then after three months, 1, 9, 7 after six weeks, 1, 9, 7 per month. Just check out there. And then this is, uh, you know, a cancellation window. Um, review meeting at the end of the end of the six weeks.

[00:29:57] Adam: You just save 20% of that breakage in that funnel. Don’t get me wrong, there’s still some people that go, this ain’t for me, and that’s fine. But what you’re gonna do is you are locking them into the long term expectation. That’s option one. Or option two is you sell at a higher price point. But I actually like this price point into this non breakage model.

[00:30:15] Adam: Now what you have to do is you have to set a review period here, and at the end of the six weeks you have the review meeting. You come to a review meeting and you say, Hey Meg, uh, great stuff. You did very well in your six week. You’re now on the 1 9 7 plan, which means you’ve got this already. And I go, okay, I’ve got that.

[00:30:35] Adam: That’s what I’m on. So now the relationship’s not ending. Now you need to say, well, what I want to talk you through is you can stay on that, or you can go to this model, or you can have this model. Which is you can pay for the 12 months upfront. You can upgrade. You save two months of free. Or you can go into our inner circle version, which is much smaller, much more private, et cetera, which is this version.

[00:30:58] Adam: Do you want to stay on the plan you are on, or do you wanna move up into that next level?

[00:31:02] Meg: Yeah.

[00:31:03] Adam: Make sense? Mm-hmm.

[00:31:04] Meg: Yeah.

[00:31:05] Adam: Now it frames the conversation a completely different way and you’ve got a much better result. Are you getting this? You understand it? Yeah. Yeah. Okay, so review meeting. You are already on plan.

[00:31:15] Adam: But I need to talk to you now. This is the plan. These are all 12 months. They’re not [00:31:20] three months. Yep. You can’t dictate, you can’t control three months. Right. And the way that you say this is, we’re gonna call these two different things. This can be your inner circle. This has to be 12 months to get in.

[00:31:33] Adam: Mm-hmm. Because this is status driven. This has to be sixth. ’cause I could see in your face you’re gonna struggle with that. So they’re on that no matter what. Okay. On a six month. This is Inner Circle. We need to rebrand this. What result do they get if they come in here?

[00:31:48] Meg: It’s pure training. So whereas the inner circle is more about the port and coaching and, and contact and time and smallness, intimate ness, the, uh, that’s more pure training.

[00:32:00] Adam: Is it body transformation or energy transformation?

[00:32:02] Meg: Like, uh, fitness and energy transformation. Yeah.

[00:32:06] Adam: Okay. We’ll call it e energy transformation.

[00:32:09] Meg: Yeah.

[00:32:10] Adam: So we’ve got energy transformational. We’ve got in a circle. Which one do you want? You’re currently on energy transformation where we’re gonna do that over the course of the next six months.

[00:32:17] Adam: You’ll be more energetic, you can sleep better, you can get these results or the rest of it. Or you can come in the inner circle. And the inner circle is 12 months. This one, six months, which one do you wanna

[00:32:25] Meg: do? Mm-hmm.

[00:32:26] Adam: So now what you’ve done is you’ve decreased the drop off, you’ve increased the amount that you’ve been paid by double for these churn, and you can present the pay in full options.

[00:32:36] Adam: Okay. Now with the inner circle, this is where you loop it back. Your free people’s job is to say, how do I upgrade these into the inner circle?

[00:32:49] Meg: Yeah.

[00:32:50] Adam: And they need to be saying, you are ready for inner circle. You’re ready to move into this group.

[00:32:54] Meg: Yeah.

[00:32:55] Adam: Then you start to build those through the process. Okay.

[00:32:57] Adam: So is that all making sense to you?

[00:32:59] Meg: Yeah, absolutely.

[00:33:00] Adam: Any challenges with that? Any reason you can’t do it?

[00:33:02] Meg: No, it makes a lot of sense.

[00:33:03] Adam: Yeah. So you can make those changes? Yes. Okay. So tell me the changes you’re gonna make.

[00:33:07] Meg: So we’re reframing it from, uh, the start. That it’s not just a six week relationship, but an expectation that they can continue for a longer term.

[00:33:14] Meg: And also you are creating this element of sort of hierarchy of training as well. Yeah. So if they want [00:33:20] more, it’s there for them to spend. But also it means if we kind of define that lower ticket offer as being pure training, it also reduces the amount of fulfillment time that the staff need to put in.

[00:33:31] Meg: And so that can be used for other things.

[00:33:34] Adam: Okay, great. Okay. Now, what I would do when you pay for Inner Circle in fall, you [00:33:40] get the three day retreat for free. It’s their job to get your inner circles paid in full.

[00:33:45] Meg: Yep.

[00:33:46] Adam: Because now instead of them, they’re paying 12 months. Now this person be, yeah, I wanna go and treat.

[00:33:51] Adam: Yeah, I wanna go and treat. Yeah, I wanna go and treat. Yeah, I wanna go and treat. And then this is three K. Three K, three K, three K. Three k. You were gonna getting 25% to pay like that. [00:34:00] You’re now gonna be moving older people to pay like that. Yeah. Which just means you’re just gonna be increasing revenue constantly and this is gonna help you.

[00:34:07] Adam: So you’ve got the revenue coming in, but these keep growing. ’cause currently what’s probably happening is you, you were talking about growth in clients. What’s happening, the amount of clients coming in the top, your churn is consummate to the amount of coming into the top. So you’re just flatlining.

[00:34:22] Meg: Yeah.

[00:34:22] Adam: What you need is a bump. The only way you can get the bump is by getting these to be paid in full, which is their job.

[00:34:28] Meg: Yeah.

[00:34:29] Adam: Okay. So I would be targeting these people with, uh, two pay in fulls a month so they can go, or even one.

[00:34:38] Adam: Right. It’s your job to get one of these people onto the retreat per month.

[00:34:41] Adam: Now what you can do is bring the retreat in, turn the retreat into a two grand option. Don’t need to go crazy on costs, make it sensible, and then go and offer it to all the clients, and they’ve gotta sell two retreats a month. But the inner circle can get it by upgrading.

[00:34:56] Meg: Mm-hmm. And if they

[00:34:57] Adam: upgrade and they pay in full, they can get the retreat for free.

[00:35:00] Meg: Yeah.

[00:35:01] Adam: But if they do it monthly, they’ve gotta pay for it.

[00:35:02] Meg: Yep.

[00:35:03] Adam: Two grand. So it makes no sense. So they might as well just pay for it, which means everyone’s going paid in full. Are we getting this? Hopefully everyone’s watching. He’s understanding it. Yeah. Well, you’ve had a ton there. Let’s just go now to your action list.

[00:35:15] Adam: Okay. What we’ve done. Is people coming into the world now, we’ve set the expectation that training is a long term thing, not a short term thing. So when they come on, they pay their 500, they’re set up from the very beginning. We’re gonna have that review meeting and we’re gonna offer them a status increase by going into the program, paying in full the program, or going to the inner circle level, which is smaller group, better quality, being in that position, which gets them an incentive to upgrade and to go to the top level which people will want.

[00:35:48] Adam: We have got the team upgrading people through this process because now the team, we’re gonna introduce this product of the retreat. By the way, you’re giving [00:36:00] that away that money. You could even train the team to do it first, and then you can upgrade the price later. But because you’re doing it for the first time as you wanted to bring it in, now you’ve got the team.

[00:36:09] Adam: They’ve all got a target of selling two retreats per month, so that is six retreats. Now, even if you only sell three, it’s a two grand product. You’ve got another six grand a [00:36:20] month, you’ve got your outcome because you, you told me your outcome was you wanted to one. Become profitable. If you do what I tell you, you will.

[00:36:31] Adam: Two, you wanted to pay yourself an extra plus 1500 plus, take your salary regularly.

[00:36:37] Meg: Yeah.

[00:36:37] Adam: And really have that feeling of impact and success, right?

[00:36:41] Meg: Yeah.

[00:36:42] Adam: Which these elements here, so the team, even if they only hit half the target, they get you the profit. Even if they only hit half the target, they get you the extra salary, you’ve got the money coming in.

[00:36:53] Adam: Even though you get half the target, you’ve got a better group. You’ve got the impact and the success. Now the value ladder, which I’m gonna talk to you is the last thing I wanna do with [00:37:00] you. Okay. Inner circle covered retreat product covered, but I think you haven’t got the understanding of how to move people through it, which is where the challenge comes in.

[00:37:08] Meg: Yeah.

[00:37:08] Adam: You’ve got the 4 9 7 plus the six month 1, 9 7. Okay, I’m gonna give you an awesome tip on value ladders for everyone watching in a minute. When you see this, the minute you see it, it’s gonna make so much sense to you and you’re really gonna get it. Okay? So we got booked call into four, nine seven with the 1 9 7.

[00:37:27] Adam: Okay? We then got, um, the next move, which is p for that product. Or inner circle, correct?

[00:37:38] Meg: Yeah.

[00:37:39] Adam: And then finally we’ve got the retreat, which layers on top, which is the two grand. And then in time we’re gonna raise the prices. Make sense? So this is the challenge because you have got part of that value ladder this bit.

[00:37:53] Adam: You’ve got that, right? So I think no one really understands this or teaches it, but in the value ladder step, you have to have a moment where you spend time. With the person to move them to the next step. And this is what’s happening, is you haven’t got a formalised moment in time where you spend time with someone.

[00:38:15] Adam: This is where we have the review meeting to sell them into these options. Following that.

[00:38:23] Meg: Yep.

[00:38:24] Adam: And then you’ve got the team upgrading to here or here.

[00:38:37] Adam: Now you’ve got a steady flow of the client journey where you’re moving them up every single stage. It’s gonna become very simple and very easy for you to you to turn that business. Really, the moves are this big move, this move here, this move here, the introduction of another product to sell ’em, and you are absolutely golden.

[00:38:57] Adam: If you’d like to see Meg back and [00:39:00] see how the implementation of this goes, what we could do is potentially bring Meg back. Work on the bottom of the funnel where we say, how are we gonna bring loads of people in through the ads and through the marketing. ’cause now we’ve increased the amount of inquiries, we’ve got a much more formalized model to take ’em through.

[00:39:16] Adam: That’s how we can get this business, um, way past, ’cause you wanted 500 [00:39:20] k you know, introducing this. We can get ’em there, but this is how we can go from 500 K to a million to 1.5 and beyond. Do, do you get in all this?

[00:39:27] Meg: Yes. Fantastic. Thank you.

[00:39:28] Adam: Yeah. And how do you feel now?

[00:39:30] Meg: Yeah. Excited. Yeah. Yeah. Are you gonna put this in

[00:39:32] Adam: place?

[00:39:32] Meg: Yeah, a hundred percent

[00:39:33] Adam: Good. Hopefully you’ve enjoyed that business Audit today. Team, we’ve covered a ton of stuff. There’s lots here for you. If you’re a business owner, maybe you’re not in fitness. Doesn’t really matter what industry, and it’s the principles. It’s the principle of how are your teams maximizing your results?

[00:39:49] Adam: How are you collaborating to maximize results? How are you traveling people through a client journey in order to take them on a journey with you? So you can make more income and you can make more impact. Hopefully that’s, uh, you’ve enjoyed it. If you have, go and tell us in the comments. I look forward to seeing you on the next business Growth Secrets audit.