The Fit to Grit Cast
Fit to Grit is an audio/video/newsletter hybrid featuring in-depth conversations with leadership within the athletic space. Guests range from top executives within the athletic space to professionals in adjacent industries with a proven track record of success working in the athletic industry.
We explore visionary ideas and practical strategies driving the industry forward, covering areas such as marketing, finance, branding, equipment, product development, biz dev, and more. Join us as we share actionable insights and real-world experiences while embodying the "fit to grit" spirit.
The Fit to Grit Cast
The Hard Truth About Gym Debt Most Owners Miss
Ever wondered how a repossessed Honda Accord and a mountain of $130,000 in debt could spark a journey to financial redemption? Billy Hofacker, our guest on this episode of the Gym Break Cast, shares his inspiring story of overcoming financial hardship. From the brink of financial collapse to becoming a beacon of hope for other gym owners, Billy reveals how strategic management of his gym business helped him claw back to stability and ultimately become debt-free. His journey is not just about paying off debts but transforming personal struggles into a mission to empower others in the fitness industry to achieve financial success.
The connection between money and emotions is a complex dance, and this episode uncovers how insecurities and the need for self-worth often stand in the way of financial success. Billy and I dive deep into the emotional resilience required to overcome financial challenges and the transformative power of collaboration with partners or coaches. Personal growth and professional evolution often start with small, deliberate steps, and we reflect on how aligning financial decisions with personal goals can lead to profound changes in one's life and business.
For those gym owners looking to grow their business, we discuss strategic marketing and the importance of grassroots efforts. Billy highlights the value of personal connections and customer gratitude in building a strong foundation, especially in the early stages of a gym's journey. We also touch on the necessity of tracking marketing efforts to ensure every dollar spent contributes to sustainable growth. This episode is packed with valuable insights for anyone, whether you're managing a gym or an aspiring entrepreneur looking to navigate the path to financial stability and business success.
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I got a knock on the door, opened it and there was a jacked bald dude covered in tattoos and piercings standing on my stoop. And as I looked beyond him I saw my brand new white Honda Accord was hooked up to his tow truck. My car was being repossessed.
Speaker 2:Hey everyone, welcome to another episode of the Gym Break Cast where we sit down and talk to professionals in the industry and just kind of go through those visionary ideas and integrator ideas that kind of you know come up to us during our normal daily gym break. I'd like to introduce a special guest today. He got brought over to me by a good friend of mine, bill, why don't you tell everyone a little bit about yourself and what you do?
Speaker 1:Yeah, sure, yeah, billy Hofacker and I have a. I'm a gym owner. I've been a gym owner for a pretty long time a decade and a half but now my focus has shifted to helping people lots of gym owners improve their finances to help them improve their life, to ultimately help them make a greater impact with the people that they come across. That's beautiful. I can share how that started.
Speaker 2:If that's helpful, yeah, definitely. Why don't you share a little bit about how the journey started with the studio and then we can kind of move forward in how you've evolved and started through the finance side? Absolutely.
Speaker 1:Going back 15 years ago, I thought I was living the dream. I was married to my lovely wife, melissa, who's now my still my wife, my current, my current wife and my only wife, and we are about to have our fifth child. But going way back to the 15 year ago mark, I had been a business owner since I formed my first ll. I think it was November of 2000,. Which is crazy. That was like 24 years ago. But like a lot of trainers, I started off just doing what I was able to do I had. I had less than no money. I was working in gym as an independent contractor. I worked at one point for a. I was called like a gym on wheels. It was this big box truck that I drove up to. At that point it was like, I guess, relatively well off people's houses who would come in the truck and I would train them. So I did all types of things there During that time. I was also a professional martial artist for years, which we can get into or not.
Speaker 1:But about 15 years ago, as I was getting ready to head over and work with my clients, I got a knock on the door, opened it and there was a jacked, bald dude covered in tattoos and piercings, standing on my stoop. And as I looked beyond him, I saw my brand new not my brand new Ferrari or supercar, but my brand new white Honda Accord was hooked up to his tow truck. My car was being repossessed. I was confused. You wouldn't really think that I'd be confused, but I was. I didn't understand what was happening. I was embarrassed. What if my neighbor sees? What am I going to tell my wife who's inside? And I was angry. I was angry at myself Deep. What am I going to tell my wife who's inside? And I was angry. I was angry at myself deep down. I knew it was my fault. That led to some difficult conversations with my wife and a discovery and a discovery is the correct word here. I was unaware of our situation, which is crazy when I look back, but we had $130,000 in debt, we had difficult conversations, we were our family, we did all types of things, sacrifice. I'm kind of speeding through a little bit or a lot but in five short years we were able to pay off all of that 130K. And that was predominantly through the gym. I would say it was like at least 90% of that was because of the gym, there were a couple of other things, and then fast forward another eight years and we became completely debt-free, paying off a total of half a million dollars. And I share all that. And the reason why I'm here is I know what it's like. It was a long time ago. Sometimes it's hard to get back there because I've kind of removed myself from there, but I know what it's like to, and I still know what it's like to have financial challenges.
Speaker 1:That's a, I think, a myth that I mean this is not the encouraging point that people want to hear, but I don't know. I mean I guess there was some point, but I heard recently there was a guy who was a billionaire and somebody asked him. He said when did you stop worrying about money? And, billionaire. And somebody asked him I said when did you stop worrying about money? And I, like I was fell off the chair when I heard this. He's like, yeah, a few years ago I really stopped worrying about it, but at that point he was already worth like hundreds of millions of dollars and I don't know if that's typical. But I will say that it's not this thing, it's not this point that you get to.
Speaker 1:Money is there's a money is a great servant but a terrible master. Money is meant to work for you. You're not supposed to work for the money. It's not a. It's not a. It's not an end, it's a means to an end, and I've discovered that multiple times through my journey, and even now I mean we. You know, it's like when it rains, it pours. We got like three appliances that broke like in the last like week or so, right, so there's always going to be things to deal with. There's a lot less stress now than there was, but I'm just super passionate about helping people.
Speaker 1:I'm sort of like a, I guess, a financial nerd on one hand, not like an academic type nerd, but it's sort of like a financial, practical nerd. I love to see how the finances relate to the business and how we tie all that in to the goals and the roadmap. It's kind of like a puzzle in some ways. So I guess my logical, practical side really appreciates that. And then there's a lot more to it than that. There's the mindset there's how it affects every other area in your life, and that's what we saw is like our marriage improved, our relationships improved, business improved when your finances are better in the right way, not when it's an obsession to the point where it's an idol, but when you are taking care of your money, your life is going to be better, similar to how if you take care of your body, and I feel the same way about that.
Speaker 1:I don't know, they're close, they're like two favorite uh, try to choose a favorite kid like fitness and finances. Like I really do value both tremendously. I just find the finances I think it's just because of my unique path of being a gym owner and having that financial journey I, if I had to choose one, that really lights me up something about it I obviously for myself and for my clients. I also am, you know I'm passionate about fitness as well. So I have those two passions. I've sort of figured out how to connect them and share my experience to others and that's through private coaching and through fractional CFO stuff and do a bunch of different services for for gym owners and people.
Speaker 2:No, that's great. I think one thing you really said there that I want to kind of touch on a little bit and I want to kind of dive in a little bit in a deeper, if you're willing to is the spectrum of. You talked about these billionaires who always talk about and it's true, I mean, I would think still to this day you're financially free and though you may still have some a lot more relief, money is always going to be something that we have to pay attention to, and I'll just say that, pay attention to. But what did you have to do as a business owner to change your mindset, to kind of allow yourself to look at money differently? Because I think there's a contradictory.
Speaker 2:When I see a lot of people and I'll just give this as an example when you start to have an emotional tie towards money, you end up actually spending it on the wrong things because you get desperate and that actually kind of puts you in debt. It was once I started utilizing money as an energy and understanding money is going to flow, we're going to have ups and downs, we're going to have different periods of business, that I was able to start looking at money in a lot more healthier perspective. So how did you kind of go about that? When you were in debt, you went through your phase, you lost everything. What kind of really helped you kind of start to look at money differently, because, I will say, if you have a really deep emotional tie to money, it's hard to pay off debt Like you don't want to, because you feel like you're losing your money to pay off debt that you kind of, in reality, may not have to pay off in some circumstances.
Speaker 1:Yeah, man, that's a really interesting question. I feel like we can have like 17 podcast episodes about that. It's really really good. There are a few things that come to mind as I try to organize my thoughts. I will say and this may not be super duper helpful for people I do think that I am wired in a way to be resilient and I think that that is going to be a tremendous advantage for someone. I don't know how conscious this was, but I had. I had overcome a lot in my life. This was an area that I was obviously failing at, but I think I was able to at some level. I don't know where it was because it was missing for a while, but at some level I knew that I could figure this out. Like I knew I can do this, I'm gonna do whatever it takes.
Speaker 1:And you mentioned about the emotions and I have two thoughts on that. One is there's so much research on this. I'm actually reading a book right now by the Heath brothers called Switch and it's all about change and they've done a lot of research. And this idea, like with goals, is like they don't really work if there's not emotion connected to it, like if you just say to yourself oh, I want to make $100,000 or I want to make a million dollars, or I want to have a million dollars. It doesn't really change you. You're not really going to do the things you need to do to get there. It's not until you can they have these different terms, they call it the elephant, it's like your emotional side. It's not until you connect that in a major way that you're going to be able to do the things and do the changes that you need to do.
Speaker 1:And, as I think I try to, where did that happen for me? And I don't know exactly, but I will say that I got so emotionally connected to the whole issue Some of it was negative, but I got so mad, I got so frustrated that here I was, I felt like I was, I don't know, like duped or something. And it was like, probably by myself, like, how did I get to this point? Like, why, like? Why Like, how could I have been so stupid? I used to look at people that were, let's say, a hundred pounds overweight and not proud of this. But I would say what were you thinking? Like, didn't you realize at the don't know, like the 37th Twinkie, that it was not going well for you. But but I realized I was such an immature thought because I did the same thing.
Speaker 1:It was just with something that wasn't as easily seen and just like and I don't want not to turn us into a therapy session, but just like those people have underlying issues why that happens. There's all types of things. There's insecurities, they don't feel good enough, they're not worthy. I had some stuff underneath all of it and I'm still, even 15 years later. It's so much better, but I'm not there. I'm still working through things and I probably will to my last breath.
Speaker 1:So I think it's sort of two points to that. One is the underneath Like. If you look at like the Titanic, you know there's a bunch of chairs on the top deck and you can move those chairs and place them perfectly, but they're not staying there because there's the underneath stuff that's really moving things around. And that's what happens with a lot of people. Like they don't realize why am I good at making money but I can't save any? And it's like I just need to figure out this skill or this system. But really what they need to do is process why they're not saving. Is it because they're trying to buy their happiness. They're trying to prove something to other people, to be somebody that they're really not.
Speaker 1:I mean, there's all types of possibilities there but that's not really talked about and it's like the band-aid thing doesn't really work. It's part of it, like you do need to take action, you need to have a plan, you need to follow through, but why is it that it's so difficult for people and for me it was so that that was the underneath stuff. And then there was like the practical things, where my wife and I doing it together was tremendous. We were also both very resilient in that because we could have given up, but we stuck with it. And that was just monumental is having somebody else that I was doing with. So I encourage couples to get on the same page with their finances. Yeah, easier said than done. And if the person is single, then they still need support, they need a coach, they need a friend, they need some accountability, because we all know the value of having that support.
Speaker 1:And then, just little by little, even now, like there's there's constantly new possibility, even with my business I'll just be completely transparent is like when I first started, I was like, yeah, is this really going to be a thing, like are people really going to want to pay me to help with their finances when they're already struggling with finances? And I'm like, whew, they actually will, because it's worth it for them, because this is a big deal. And then, as time goes by, you think, wow, what else can I do? Maybe I can help them with their bookkeeping and then maybe I can help them with fractional CFO. I can start working with bigger gyms and now I can help them build wealth, I mean.
Speaker 1:But it didn't, it didn't all. It didn't start that first day. First it was like I want to just help people get out of debt. Now, that's really not so much of what that's, that's the least of what I do now. So things evolve. You start maybe getting bigger dreams, bigger visions, bigger. The same thing with the money Like let's start with tracking our spending. Okay, interesting. Like there's, there's quite a bit of money here that is being directed in an area that we don't want it to be. What happens if we, if we direct it here? Hmm, wow, maybe I can do this, maybe I am capable of doing this. So I think it's like that combination of those little steps that sort of give you the identity that you need that. I am somebody who's capable with money.
Speaker 1:A lot of us don't have that for lots of reasons, predominantly because our parents or caregivers didn't show us what it looked like to be responsible with money. They either argued about it which is completely unhealthy I mean arguing, like and like in an unhealthy way and they or they just never talked about it. And what does that? Do you know what? What do you? What are you saying? What are you saying to your children by never talking about money, which is obviously some one of the most important parts of life not the most important, but it's very important and we never talk about it. So that shows the kid either that it's bad or that it's not important, and both of those can be flawed and create unhealthy behaviors in them and it just gets passed all around. So those things are crucial to to work through.
Speaker 2:Yeah, it's funny because I think that there's something in there that you said that that is interesting to me because when I look back to my childhood, my parents owned a business. It wasn't in the studio space, but it was a retail sort of store Big, big luxury. I'll say they sold spas. So they sold something in the athletics because they sold them to athletes, but they just weren't the greatest at money. And I actually ended up doing the opposite. I looked at what gave me happiness was saving.
Speaker 2:And this is going to kind of lead to my next question here, because I think that there is multiple ways to be unhealthy with money, is multiple ways to be unhealthy with money, and one is, yes, you know, from a personal or from a business perspective, you're just, you know, spending money on things because you're desperate and you're getting your self-validation through, like what you think the business is supposed to be.
Speaker 2:And then you have vice versa, which was something that I had to really work on, which was, hey, like why am I saving all this money? You know, like I don't need it to be happy, like I have kids now, and you know there's other things to be happy. Yes, and I always say, this is. You'll say too, money is a part of a business. So, no matter how much you focus on people and you focus on culture and you focus on, you still have to be a good leader and know, hey, I have to be straight with you here and like, hey, the gym itself started bringing home much more personal income. How were you able to look at the finances and delegate your money effectively to be able to, one, pay you more money but, two, help the studio still?
Speaker 1:grow. When I look back at that, it's interesting because, you know, thankfully I've done pretty well and once in a while, when I get into my negative mode, I'll start thinking, man, I had like even just the 130 that I shared in that story. Like, can you imagine if I didn't have that? And you know, we all, we're all where we're at for a reason. I believe all that. But I can't help but sometimes have those thoughts.
Speaker 1:If I would have only invested that money 15 years ago, that alone would have been probably millions in the long run. Maybe I could have opened up more gyms. Who knows, like, like what would have happened if I had that cash to free up. So I had to, to your point, I had to find a very delicate balance, and this is something I do help people when I work with private clients is figuring out where are the best places for those dollars, because every single dollar that you spend it comes with an opportunity cost. If you're putting $500 towards marketing, that's $500 that you're not putting in your pocket and it might be a wonderful idea to put it into marketing. But you do want to analyze that and figure out where is the best place for those dollars. As I was going through that and sometimes I still have these thoughts of was that, was that the right? Like we paid off our house, which is, which was a lot of money, and I still sometimes second guess that I'm I am ultimately glad I did it, which was a lot of money, and I still sometimes second guess that I am ultimately glad I did it, but that's a lot of money I could have done something else with. And you start thinking through that I leaned towards working through personal goals as a big priority Other people.
Speaker 1:I think either extreme is potentially dangerous. If you starve your business of cash so that you can get ahead personally, your business could suffer because then you maybe don't have enough to hire the best people and that could make your business struggle and the flip side. This is, I think, more common. So I'm glad you asked that because I'd love to get this message out there. I think the more common scenario is the opposite of mine, because possibly people that don't feel as much of a need. They feel like maybe things are okay, but I would not to scare people, but I would caution people. Are things okay? Like, do you have enough for the long term? Are you going to be able to take care of yourself, because you don't want to be relying on other people and you want to think about that long term vision you have for your life. Life is a business, is there to serve you and, yes, to serve your customers. But if they're to serve you, so you really want to think through that. So they put all of their eggs into their gym business and nothing's guaranteed, like hopefully that works out really well for you.
Speaker 1:But I've been working with I don't have the number, but a lot of. I've either worked with or been around a lot of gym owners. I know a handful that sold for, let's say, seven figures or you know something significant, but that's a like a really small percentage of the total. And not only that, but you also want to be thinking through the years that are not that distant, like, for example I'll just use myself as an example I moved a thousand miles from my facility to pursue something that I thought was a bigger part of my vision. And, yeah, like a lot of ways, I wish I didn't have to deal with all of that debt, because I possibly could have been further, but because I was able to get a hold of it with some time.
Speaker 1:I was about 30 when I really started this wake up call like 30, 31. Thankfully, I always wish I was younger. I wish it happened at 21. But you know, but thankfully I wasn't 41, 51, 61, because it gets harder you can still do it. Don't get discouraged if you're a little bit older, because I have clients. I've helped get through things.
Speaker 1:But I got to a point where I was able to have enough freedom to say, hey, if we want to, we could actually live in a different part of the country, and you may or may not want that for yourself, but think about the things that you do want for yourself, even from a personal lifestyle standpoint. Do you want to be at the gym at 5 am every single day, working till noon, maybe getting a few minutes for a half butt workout, and then having to be back and working saturdays? It's really common and, yes, you have to do that for a period. Oftentimes businesses is hard work, takes a lot of time, takes a lot of effort. But if you're like in a stage with like I am, where you have a bunch of kids, that that's not, that's not going to work. It's going to be really hard to balance that kind of schedule, because somebody is taking the brunt of that and if that's your spouse, that's not going to go well, your kids are going to, I mean there's like all types of things. So if you know, if someone's in that scenario, that's fine.
Speaker 1:But thinking through, how can I use my gym business as a vehicle to get ahead personally, not just put every dollar into the gym. So that was like sort of like a broad answer. But to get more specific, I love the idea of having priorities. So this is a good question for people to ask themselves, and there's a couple of different ways I could frame it. But one is where is your next dollar going? Like, if I gave you $1, what are you going to do with it? So some examples are it's going to go to pay off my debt, or it's going to go to pay off my house, or it's gonna go to pay off my car, or it's gonna pay off my credit cards, or it's going to go to build savings for something that I need, or it's going to be to build long-term savings, or I'm going to take 50 cents and put it here and if it, you know however that looks for you, but having a plan for those dollars. I think is is huge, just like you have a plan of what you're doing at the gym.
Speaker 1:And then another way to frame that is just with a large amount, like if I give you $10, like, like I could answer that question. Like if you gave me, I can answer it super specifically, like if you gave me $10,000, I could actually tell you. Well, you know, what I would do with that is I would take 20% of it and I would give it away. I would take X percentage of it and I would put it towards some kind of fun spending for my family. I would take a certain percentage of it and I would put it into investing. And I think that's a really good thing to know because if not, you're probably not optimizing your finances.
Speaker 1:And it's possible to hear that and think, oh, my goodness, that sounds so restrictive, like I have to have a place for all my money. I am telling you that it is the exact opposite of that. Having a plan actually helps you to feel more free because it sets boundaries, it sets guardrails. Like we have a pretty large food budget, like a lot of kids, and we eat healthy, but we still have an amount that we stay within. We could.
Speaker 1:It's, you can exceed anything, right? Yeah, I think about that. If you're like Warren Buffett, like to you and I, it might seem like he can never spend all his money, but the truth is he can because he doesn't have everything in the world. He doesn't the Gates Foundation, like they have to choose. You know, we're going to fight this big cause, whether I don't, whatever malaria or whatever it is, but I can't like tackle like a hundred different world issues because I have to allocate certain resources to certain things and it's the same as I think, for us, just on a much smaller, smaller level, and that's a powerful concept.
Speaker 2:Yeah, it's the vision, right, not just the personal vision, but kind of looking at the vision of your studio. And there's one more topic I want to kind of talk through on this, because you know, I'm in branding, I'm in marketing, and one of the big things I see when I'm working with studios myself is they'll come to us, for instance, and they'll be in desperation mode, right, they'll be like oh, you need to get us, we need 100 leads tomorrow, we need 100 new members tomorrow. And the first thing that I look at is I say, all right, if that's where your mindset is right now, you're not necessarily in marketing mode, you're in operations mode. My friend, you need to fix your operations before you come to us, because no marketing is going to fix bad operations, which, funny enough, makes it very hard for me in particular to make sales, because I'm not just going to sell you marketing.
Speaker 2:When you got to a point with the health of your gym and what you see as a fractional CFO, when you're working with these gyms and you're doing exactly what you just did with hey, if I give you a dollar you would split it Do you feel like most of the studios you work with try to bootstrap their marketing. Do you kind of say, hey, you should put 10% of this dollar to marketing. This is an energy that's going to help you bring more business. And with that said, do you feel like there's a certain stage in their growth cycle that that those, the your fractional CFO kind of mentality and kind of breaking stuff out, really starts to take root and help a studio really evolve to that next stage?
Speaker 1:I think so. I'm a big fan. Part of this comes from my background as a self-proclaimed bootstrapper. I mean, I started my gym. I didn't get to this part in the story, but I started my gym right after that story. So can you imagine like I had? You know, I had my net worth. Was was so in the negative is ridiculous. And I had this. This. It was called a boot camp. It actually still is, but it was like what you would think of a boot camp. It was a large group. I had a job as a full-time martial artist at the time.
Speaker 1:That debt, by the way, was not from my gyms, it was from previous things, all types of things. We won't have to get into that now and I can just share that because they were separate. That was mostly personal debt. I had a little bit of IRS debt, but most of that debt was just personal things and I had no choice. I had to bootstrap. So our first facility was subleased out of a tiny hole-in-the-wall soccer facility. It was not nice. We did our best.
Speaker 1:I decided, to your point, to focus on the customer and give them an experience that they wouldn't care how nice the gym was. In fact, I think that was turned into an advantage and it was like you guys are awesome, you're showing up here and the paint is peeling off the wall and we're going to get to a better spot. I really this is huge. I'm glad you asked that because I think this is a great takeaway for people. This short phrase it's two words will change your business, and I would say 90,. I'm making this up, but just my assumption based on my experience 95% of people are not going to follow it and you're not going to see the benefits because of it. The words are thank you, and you might be thinking that you have said that to your clients, but I really want you to think about that. I went bananas with gratitude. As we're recording this a week after Thanksgiving super appropriate I was constantly thanking them hey, I just want to thank you for coming today, because I realized that we're small, we're just starting out and that means the world to me and I believe that helped our retention and our business so much. So I'll fast forward a little bit. So we outgrew that really quickly.
Speaker 1:Then we had no facility, so we were in New York and it was nice weather, it was the springtime. We took it outside. No rent. There was ups and downs, right. We like lost a bunch of clients Again, like different story for a different day. Then I kind of got refocused, started building it back up. We subleased a larger space. A year later we got our own space. A little bit after that we expanded to a bigger space.
Speaker 1:I was like, maybe three years later we opened up a second place, but it was all gradual with we were growing at the speed of cash, meaning that I was not going to leverage myself more at that point because I was just I wasn't able to. I there's no way I would have been able to to get money. So for that reason I am a big fan of the bootstrapping, as, as people are starting like, I have a few clients that are in the very early stages, like they just opened, like literally just either like are opening now or just open a couple months ago, and I mean, if they have a few extra bucks, I have no problem with them throwing a little bit of money into advertising. But I really like them focusing on just the grassroots belly to belly type marketing, personal outreach, connecting with local businesses, testimonials, referrals, just real, because you're the face of the business at that point. You're there all the time, you have those relationships. It's a. It's a great way to grow the business early on.
Speaker 1:But then, yeah, there's going to be a point where there's going to be competitors. They're spending lots of money on marketing and if you want to grow I don't know, I don't know if I know of any, maybe there's a unicorn somewhere um but like large gym businesses that don't do a paid advertising. So, yeah, at some point, where is that point? I mean we could throw a random number out there. But I would say if a gym is under like 10 K a month, um, that it should probably be focusing more on just driving that, driving that business and driving that, um, driving those leads themselves. But then after that, yeah, we just start thinking about, yeah, let's allocate whether it's a percentage of revenue I know there's like numbers whether it's 10%, 15%, 20%. I mean there's some different factors to consider there, but I think that's great. But more importantly, it's to really measure those dollars and track how that market.
Speaker 1:Because I have clients, one in particular just currently, who was spending a lot of money on marketing that was producing nothing. And it's like, hey, if you're spending like two or three thousand bucks a month and you're not getting anything out of it. I'm putting that money in my pocket all day rather than spending it on something that's not producing any return. And the flip side is true. I heard people say, hey, I'm trying to save money, I'm thinking about cutting my market. Well, hold on. Like these Facebook ads are like driving all of your leads. So unless you have a way to replace those substitute that you gotta, you gotta, you gotta. Look at that. So there's a couple of areas I like to caution people to cut back too much. One is marketing. Two is personal development. Within reason, I mean I see too many gym owners spending too much on personal development.
Speaker 1:Sometimes, especially like with these high-end masterminds, they're just not there Like there's nothing wrong with those things I've been in there but they almost like they think it's a magic bullet. Where I love to just like scale with the business, the first thing I did when I had no money was I bought a book and that was a little bit of a stretch for me, right, and then I went to an event and then I joined sort of like a lower investment type mastermind that was designed for businesses like me. So I think you want to be over your skis a little bit. There's nothing wrong with that. Like we're doing that now, like my wife and I are investing in some marriage things and it's like, yeah, like that's a little bit more than we wanted, but it's like it's not going to crush us. It's just a little uncomfortable and we'll make that work, but we're not going to go and just completely spend way more than we have and just ruin our financial position over it, over it.
Speaker 2:Yeah, it's a hard shift. I mean, when I have prospects come to me, it's one of those situations I call it. You get stuck in validation mode. And it's this spectrum and I see it somewhere around the 250 to 300 a year mark where they come to me and they and I see I kind of see something similar to you Like, for instance, if they come to me and they're like, hey, we want to develop this great brand, I'm like, dude, you're just starting out.
Speaker 2:You don't need a brand until you're ready to build culture and you're ready to build a solid team and all that stuff. But vice versa, they'll have like six different marketing directions going on. And I'm like, let me ask you a question when is your conversion rate coming from? And they're like, oh well, it comes from our walk-ins. And I'm like, not our challenges. I'm like, then, why are you spending $3,000 to $4,000 a year?
Speaker 2:You're not at the point yet where I'm not saying challenges aren't good and trying to bring doing a deal at the end of the year good, but like ads, for instance, are really meant for mass e-comm and large gym scenarios, or the cost per click isn't there, or you're at the very beginning and you have to hustle and get on low quality calls right and I'm a big believer that referrals are still to this day, especially for the gym community.
Speaker 2:You just have to find what I call a sustainable model of utilizing referrals to bring in more business. Stop looking at eight different marketing, find the one that's working and stick with that, and not until you get to a certain point when you feel like you can invest more in marketing. Do you test another channel to kind of complement that first channel? I want to hear more about when you lost a lot of your clients and the mental stuff. So maybe what we'll do, since we're getting close to the end of this, maybe you and I, when the time seems right, we'll try to have you back on the cast and we'll go a little bit deeper into that psychological counterpart of your growth cycle. But for now we'll leave it at that. Why don't you tell everyone where they can?
Speaker 1:find you. I think the best place. Thanks for the opportunity there. I think the best place would be you could just find me on social media. It's Billy Hofacker and you can just shoot me a message if you want to connect. I do have a podcast as well. It's called your Fitness Money Coach. You can check that out. If you want to hear more of the content, I uh, you can email me. It's financial freedom pt at gmailcom and and yeah, I can always send you links so people can book calls and all that stuff, Whatever is easier.
Speaker 2:All right Sounds good. Well, again, thank you for being on the. The next episode of the gym break cast and we will have you on again soon.
Speaker 1:Awesome, Zach. Thank you, brother.
