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Your Pumps

June 14, 2012

Can a personal trainer make as much money as a medical professional?  Can a personal trainer help the largest segment of our population at a higher level than the medical field?   Can a personal trainer command income in line with community business leaders?  Yes. Yes, and Yes . . . if they learn to master the principles business leaders rely upon.

My Be Better Project (next group starts in July 2012 and will teach about 100 personal trainers to excel and prosper) is built upon principles.  The Be Better Principles are the legs of the table, the foundation of the building, or whatever metaphor you choose to describe the solid structure upon which any successful creation rests.

With each principle shared in Be Better comes a directive, an action step.  One of my favorite directives from the Project is the one that relates to Profit Centers.  After going through a personality type assessment (which is fun, revealing, and provides invaluable relationship-building insight) I match the personal trainer / students into pairs.

The directive, to be tackled by two-trainer teams, is “create a real profit center.”  Over the course of the curriculum, we spend about three hours discussing successful profit centers, but the directive is wide open. The idea is, for the two trainers matched to create a revenue stream that complements their core businesses, that generates significantly more money than it costs, and that can be integrated into BAU (business as usual) without creating a time drain.  Interestingly, the two trainers are often in different parts of the world, but through collaboration and commitment they create profit centers that they can connect on or respectively replicate.

There are two reasons I enjoy this directive so much.  Firstly, I love the creativity that gets unleashed after months of learning the foundational principles of betterment.  By the time we reach this point in the project, participants have learned to drop their egos, to release their protective guard, and to trust that a group-think is a powerful undertaking.

The second reason I so enjoy this phase of the project is . . . there’s a tangible outcome.  The trainers make more money!  They’ve all been growing their businesses strategically throughout, but at this point a new revenue stream is built and it becomes financially palpable.  Some of the trainers create new bootcamps, each with a unique spin.  Others create healthy foods, food resources, or snacks.  Some create electronic products (ebooks, downloadable videos, etc) or saleable information targeting specific needs.

With four principles all related to desire and achievement already released, the fifth one is directly related to control over your revenues.  In its simplest form it says, “make sure your pumps exceed your drains.”  Before I share the more complete principle, allow me to explain.

As I developed a consulting clientele with health clubs around the world, I came to see common threads that could be considered industry-wide shortcomings or pitfalls, and one such shortcoming was the maintenance of an intended profit center that costs more to operate it than the money it generates.

I know the first instinct is to scratch your head and wonder, “why would someone keep driving a failing undertaking?” and the answer is, because they’re doing what they’re wired to do.  They’re following a flawed model.  Want some examples?

A health club pro shop may generate $18,000 in monthly sales selling little accessories and exercise aids, but when rent for the space is considered, staffing needs and related payroll costs, inventory investment, cost of lost items (theft), and the pile up of dead inventory in some back closet, that pro shop may cost $20,000 a month to operate.

A juice bar set up at a health club front desk almost always invites employees and favorite members to “owe” or to “forget to pay” or to slip an energy drink out of the fridge when nobody’s paying attention.  If they include smoothies and use produce, bananas, mangos, and pineapple chunks can go bad . . . as can milk.  Waste is high, “sampling” is high, and if they sell packages of vitamins, minerals, or protein powders, trendy items that fall off the public radar become unsellable.  When I would find a health club pumping dollars into their juice bar drains, I wouldn’t suggest methods of fixing it.  Instead I’d simply insist they stop doing it!  If it isn’t generating a profit, it isn’t a profit center!  At tirst that’s hard for the owner to swallow, but put a pen to it, and then calculate the simple profit potential of stopping the wheels from spinning.  The appeal of making a change is enhanced greatly when the owner looks at the simple “new start” model of buying bottled water for 50 cents a bottle and selling it for a dollar or two at the front desk.  That becomes the initiation of a healthy pump / drain relationship which can be built upon.

Perhaps the worst violation of the pumps vs. drains principle is personal training.  “We generate $30,000 a month in training” is common boasting among established health club owners following the rules of convention.  When we do a cost breakdown, the cost of “free sessions,” package discounts, and payroll related expenses can bring that $30,0000 revenue machine a $35,000 monthly cost!  Of course, in this scenario there are many strategies we can use to turn it around, but it starts with stripping it down to pumps vs. drains.

With those examples, it becomes clear why it’s important to emphasize what might initially appear to be obvious.  A Profit Center must be an added product or service offering for which the revenues generated exceed the associated costs. It should stand as an adjunct, a separate but related business model that has its own set of books and shows black ink at the end of every quarter.

It’s also important that any Profit Center you implement supports your core business with little need for ongoing energy output.  In other words, if you run a personal training business, and you decide you’re going to get licensed as a massage therapist, unless you are going to find a way to leverage that massage offering, you’re going to trade core business time and energy for profit center time and energy.  Writing a book, creating a food service, or building your own private label supplement line (I’ll share an opportunity to add in a simple supplemental profit center shortly) take time, energy, and more effort than is typically anticipated.  These have proven viable profit centers for some, but an evaluation of the required work, the required marketing, and the “what if” back-up plan often reveal them to be too aggressive or burdensome to be considered a simple “pumps vs. drains” addition.

One of the most appealing ways for personal trainers to increase revenues is the addition of a supplement offer.  I’ve been selling my own line of supplements for 20 years.  My EAT! product became more than a profit center.  It became a solid business throwing consistent profit to the bottom line.  There are two important caveats you should consider before considering following the path I chose.  I did this 20 years ago when the marketplace was MUCH different than it is today, and two, I just decided to STOP manufacturing my EAT line to replace it with something else, something I daresay is “better” in today’s 21st century climate.  Whether you sell protein supplements, anti-oxidants, or muscle building nutritional aids, the appeal of the addition of a supplement line is, it increases the revenues you generate per customer and it ties in nicely to your core business.

Here is the principle:

“Revenue growth should come with crystallization of your core business, attachment to a personal mission, and a willingness to grow in part by adding complementary revenue streams, periodically adding new pumps that override any necessary drains.”

Here, in review, is the language taken from the actual Be Better Project notes:

Profit Center – A segment of a business for which costs, revenues, and profits are separately calculated.

A second definition for our purposes is, “a new revenue stream that generates more money that it costs to implement. “

A profit center should align with your core business, exist without you having to do anything to take your attention away from the primary business needs, and it has to net some money.

Think of revenue streams

  1. a product to sell to consumers (not trainers)
  2. a program to offer for a set fee with a start and a finish
  3. an additional paid service (car detailing during training session, telephone consultation, travel workout program design, etc.)

I’m going to offer two vehicles for growth.  The first is . . . become a part of the last live interactive Be Better Project.  Join a group of your peers, personal trainers seeking the highest levels of excellence, and use the year between Summer 2012 and Summer 2013 to grow your business into the source of your present and future prosperity.  It’s affordable.  It’s powerful.  It’s proven.  Get details.

The second vehicle is . . . Isagenix.  I’ve traded my own 20-year supplement business for an Isagenix distributorship.  After conversations with Dr. Michael Colgan and with Jim and Kathy Coover, the founders of Isagenix, I’ve put together a lengthy article explaining why I made what I now know to be an exceptional valuable decision on many different levels.  I will mention that I personally know scores of personal trainers who are earning significant profit center revenues from Isagenix.  I’ve always (yes always) rejected MLM and network marketing offers, as they were almost always driven in part by deception, but this is different.  It’s a product I (we) can stand behind, the compensation plan is sensible and allows for significant revenue streams in a short period of time, and the product line targets our market well.  If you’d like to add a simple Profit center, and Isagenix interests you, email me directly phil@philkaplan.com with the Subject: “Profit Center,” and I’ll respond and set up a time to talk.  I promise you, there is no pressure, no obligation, and no hype.

I look forward to coming to know and coach a great new Be Better group beginning in July.

Want to order Isagenix products?  First read my report.  Then you can try IsaPro or the new Isalean Pro by going to http://philkaplan.isagenix.com/us/en/home.dhtml

Most of all, realize that your potential goes far beyond “taking people through workouts,” and while that may the drive behind your core business, your only limits are created by those opportunities you fail to see.  I’m shedding light on these opportunities and it’s up to you to take advantage of those that you feel will best serve you.

One Comment leave one →
  1. June 15, 2012 12:24 pm

    Makes a lot of sense to me ! jaime

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