July 21, 2025 • 10 mins
Most gyms don’t fail because of one big disaster. They fail because of small, repeated mistakes that drain money, energy and time until the owner burns out.
In this episode of “Run a Profitable Gym,” Two-Brain founder Chris Cooper explains how to spot and avoid common mistakes in your gym—in other words, how to stop paying the “dumb tax.”
From undercharging to chasing the wrong metrics, Coop shares how he paid the dumb tax in his own gym and learned some tough lessons.
He explains how to replace guesswork with clear data, build pricing and systems that work, and make decisions that increase revenue instead of eroding it.
Ever feel like you’re working harder and harder but never getting ahead? This episode will show you how to break the cycle and start building a sustainable, profitable gym.
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Gym Owners United
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0:52 - What is the dumb tax?
3:47 - Always chasing more clients
4:34 - Undercharging and discounting
6:18 - Confusing the model with the method
8:09 - How to avoid the dumb tax
Mark as Played
Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
SPEAKER_00 (00:00):
Gyms don't fail because they've made one
colossal mistake that they can'tfix.
They don't fail because they'verun out of good ideas.
They fail because they repeatthe same small mistakes over and
over.
And these mistakes cost themtime and money and clients and
staff and energy, and eventuallyit's all too much.
(00:20):
The gym owner finds themselvesworking harder and harder and
making less money until they runout of time or money or energy
and they close down.
In his book, The Road LessStupid, Keith Cunningham calls
making these small mistakes overand over paying the dumb tax.
This is Run a Profitable Gym.
I'm Chris Cooper.
And if you're like me and you'veread The Road Less Stupid,
(00:43):
you'll love the audiobookversion.
And I think you'll get a lot ofenjoyment and maybe like, oh,
that's me, forehead smack or twoout of today's episode.
So what is the dumb tax?
Well, you pay the dumb tax whenyou make decisions about numbers
without understanding the mathor ignoring it.
The dumb tax is the price ofguessing or winging it or assume
(01:04):
something will work just becauseit feels right to you.
So for examples, a lot of peoplewill tell me, Coop, I want 300
members.
And that number sounds greatuntil you realize that you
haven't done the math on howmany of those people you can
actually serve.
You don't know what they shouldbe paying.
You don't have a plan toconsistently acquire and retain
clients.
You haven't studied who'sactually successful with 300
(01:26):
members, because a lot of peoplesay they are and they're not.
And the result is years of chaosand lost cash.
That's the dumb tax.
Look, I've paid more dumb taxthan...
Anybody I know, I've paid enoughto cover everybody here
listening, okay?
So learn from my mistakes.
I'm going to start by giving youan example of like one of the
first ways that I paid the dumbtax.
(01:48):
And later this week, I'm goingto give you another blog post
about what these mistakes areactually costing you.
So one of the first and one ofthe many ways that I've paid the
dumb tax as a gym owner is whenI opened up, I gave a 20%
discount to military, police,nurses, firefighters, and
teachers, because I thought itwould build goodwill in the
(02:08):
community, whatever that means,and lead to referrals somehow
and make up the gap in volumewith people.
But in reality, it didn't buildany loyalty.
It didn't increase referrals.
It gutted my margins.
And it taught my clients that Ididn't believe that my service
was worth the price that I wascharging for it on paper.
(02:29):
Keith Cunningham would say,dumb.
Coaching is not a high volumegame.
And so that was the lesson thatI had to learn, but it cost me
hundreds of thousands of dollarsto learn that.
I don't want the same for you.
So I'm going to give you someother examples here.
So first, selling a year longpaid in full membership at a
discount.
(02:49):
Now, this used to be popular inthe access gym world where You
don't care if people show up.
You just want as much money upfront as you can get from them.
And then if they never show upagain, that's fine.
But that doesn't work in acoaching business.
If you give your best clients adiscount on their membership,
you are paying the dumb tax.
Because think about this.
Who is most likely to stickaround for a year without a
(03:11):
discount?
Well, it's your best clients,right?
So why on earth would you givethem 20% off or a couple of free
months to keep them for a year?
Now, I'm putting this one firstbecause there are actually
business coaches out there, Ijust found this out, who are
telling gym owners to sell thisyear-long, paid in full
commitment at a discount toraise money to pay the business
(03:32):
coach.
And of course, this is crazy,and it's the gym owner who winds
up paying the dumb tax on thatdecision.
I would never tell you to dosomething that's gonna hurt your
business just so I could getpaid.
Don't pay the dumb tax on that.
Second example, chasing clientheadcount.
Most gym owners pay the dumb taxby chasing the wrong metric,
which is more clients, moreclients, more clients at any
(03:55):
cost.
But the truth is that two-braingyms routinely take home$100,000
a year, like profit, on 150clients or fewer.
And let's face it, you probablyhave 150 clients or fewer.
According to our data set of15,000 gyms worldwide, the
average number of clients acoaching gym has is 126.
But they're charging as if theyhave 300, So those 126 are not
(04:18):
enough.
The best gyms in the world earnmore with fewer clients because
they focus on value, not volume.
It's a coaching business, not amembership warehouse.
And if you undercharge to tryand get more clients and make it
up in volume, you are going topay the dumb tax.
The third example isundercharging because other
people are undercharging.
(04:39):
But Coop, the gym down thestreet only charges X.
Yes, and the gym down the streetis going out of business.
They're paying the dumb tax.
If you assume they know whatthey're doing and anchor your
price on them, you will also bepaying the dumb tax.
The fourth example is related.
It's discounting to bring inbusiness.
It's thinking that a discountequals marketing.
(05:00):
But giving people 20% off ormaking an offer just to get
people in the door is attractsthe people in the door who are
going to be out the door againnext month.
You are not competing on price.
You're competing on outcomes.
The coach who can get the bestresults, the results that the
client care about, the coach whocan do a no-sweat intro, measure
what the client cares about, andthen produce the results is
(05:22):
going to win, especially with AIspeeding everything up now.
If you can't get your client'sresults, it doesn't matter what
you charge.
You're going to be paying thedumb tax by consistently
bringing people in and thenlosing them.
This is a related example, andthis is my fifth and that's
offering 40% off on PT ormemberships.
So if somebody is a member ofyour group training program and
they want to do personaltraining, you give them 40% off.
(05:45):
You will be paying the dumb taxbecause again, these are the
people most likely willing andable to pay full price.
Big discounts tell your clientsthat your service isn't worth
that full price.
It also kills your margin andyour momentum.
So if you sell personal trainingfor 40% off, somebody is paying
that 40%.
The client's not So it's eithergot to be you or most likely, or
(06:09):
the coach.
You are not going to make up ahigh value service in volume
just by selling a lot of it.
And you're not going to sellmore of it by discounting.
My sixth example is confusingthe model with the method.
So a lot of people will get aPilates certification and
they'll say, okay, I knowPilates.
Now I have to set up someone-on-one appointment times.
(06:30):
But Pilates can be taught to agroup.
On the other end of thespectrum, a lot of CrossFit
coaches still think thatCrossFit has to happen in a big
group.
But what they're doing isthey're confusing the model and
the method.
So your method is the tool thatyou're going to use to get
people results, and the model isthe way that you deliver it to
the client.
So if your method is Pilates, itcan be delivered to the client
(06:51):
one-on-one, in a small group, orin a big group.
If your method is CrossFit,great, you can deliver it to
your clients one-on-one, in asmall group, or in a big group.
You determine your method.
Usually the client determinesyour model by telling you what
they want.
I want schedule flexibility.
Let's do one-on-one.
I want schedule flexibility.
I want a lot of individualattention.
You know, I don't want to be ina big group.
(07:12):
I'm a little bit nervous, but Idon't think I want one-on-one
rates.
Semi-private.
I want the fun and energy ofworking out with all my friends.
Big group.
Fantastic.
The method doesn't change atall.
The model does.
And if you confuse the twothough, you're going to be
paying the dumb tax becauseyou're going to limit what you
think is possible.
And you're going to try andforce a model on your clients
(07:32):
that they don't want.
They'll leave for the wrongreason.
And that is paying the dumb tax.
So the seventh example is notknowing your numbers.
And this one is brutal.
Because I've been talking aboutthis for 15 years now.
There's no excuse not to knowthe numbers that drive your
business.
If you're 20 years old, you'vegot a garage in your parents,
you know, a gym in your parents'garage, and you're selling
(07:53):
memberships while you try tomake it to the games, fine.
But if you employ staff, ifclients rely on your gym being
around next year, then it'sirresponsible not to know your
numbers.
That doesn't mean you need to bean accountant to be a successful
gym owner.
Knowing your numbers meansknowing what your AR I'll see
(08:15):
you next time.
(08:40):
you know, we're grown up gymowners now.
We have to be responsible.
The best part about knowingthese metrics is that now you
can filter all of the otherstuff, the hype, the
overexcitement, therecommendations from people who
aren't doing as well as they saythey are, the advertisements
coming in from the marketers whoare struggling to get their own
(09:01):
clients.
You can look at these metricsand say, okay, will your claim
improve my ARM?
Will it improve my retention?
Will it improve my clientheadcount?
By how much?
In how long?
You don't have to take claims atface value anymore.
You can take anything that I'mtelling you too and say, which
one of these metrics will itimprove?
By how much?
And in how long?
(09:21):
And I should be able to answerthat for you.
Here's the thing.
If you are doing things by yourgut, if you're winging it, If
you're just jumping in andhoping that you'll fix it or
build your wings on the way downor whatever, you're going to
wind up paying the dumb tax.
The dumb tax is not 15% or 13%.
In many cases, it's 100% becauseit costs you everything.
(09:44):
This is what drives businessesunder.
This is what makes gyms fail.
It's not that you lackcreativity or you're not working
hard enough.
It's that you keep repeating thesame old mistakes over and over
and you don't have the knowledgeor maybe the guts to make the
change.
That's what mentorship is allabout.
And the last recommendation fromKeith Cunningham is always avoid
(10:04):
paying the dumb tax by payingsomebody who's already made
these mistakes so that you don'thave to.
In our next video in this seriesand in the blog post, I'm going
to share the true cost of whatpaying this dumb tax actually
means.
And spoiler alert, my firsthiring mistake cost me over
$100,000 in actual wages, letalone the year of wasted time
(10:26):
training and evaluating andtrying to fix this person.
And I've got plenty more ofthose examples.
So we'll see you on the nextvideo.
In the meantime, share your dumbtax stories or your questions at
gymownersunited.com.
Gyms don't fail because they've made one
colossal mistake that they can'tfix.
They don't fail because they'verun out of good ideas.
They fail because they repeatthe same small mistakes over and
over.
And these mistakes cost themtime and money and clients and
staff and energy, and eventuallyit's all too much.
(00:20):
The gym owner finds themselvesworking harder and harder and
making less money until they runout of time or money or energy
and they close down.
In his book, The Road LessStupid, Keith Cunningham calls
making these small mistakes overand over paying the dumb tax.
This is Run a Profitable Gym.
I'm Chris Cooper.
And if you're like me and you'veread The Road Less Stupid,
(00:43):
you'll love the audiobookversion.
And I think you'll get a lot ofenjoyment and maybe like, oh,
that's me, forehead smack or twoout of today's episode.
So what is the dumb tax?
Well, you pay the dumb tax whenyou make decisions about numbers
without understanding the mathor ignoring it.
The dumb tax is the price ofguessing or winging it or assume
(01:04):
something will work just becauseit feels right to you.
So for examples, a lot of peoplewill tell me, Coop, I want 300
members.
And that number sounds greatuntil you realize that you
haven't done the math on howmany of those people you can
actually serve.
You don't know what they shouldbe paying.
You don't have a plan toconsistently acquire and retain
clients.
You haven't studied who'sactually successful with 300
(01:26):
members, because a lot of peoplesay they are and they're not.
And the result is years of chaosand lost cash.
That's the dumb tax.
Look, I've paid more dumb taxthan...
Anybody I know, I've paid enoughto cover everybody here
listening, okay?
So learn from my mistakes.
I'm going to start by giving youan example of like one of the
first ways that I paid the dumbtax.
(01:48):
And later this week, I'm goingto give you another blog post
about what these mistakes areactually costing you.
So one of the first and one ofthe many ways that I've paid the
dumb tax as a gym owner is whenI opened up, I gave a 20%
discount to military, police,nurses, firefighters, and
teachers, because I thought itwould build goodwill in the
(02:08):
community, whatever that means,and lead to referrals somehow
and make up the gap in volumewith people.
But in reality, it didn't buildany loyalty.
It didn't increase referrals.
It gutted my margins.
And it taught my clients that Ididn't believe that my service
was worth the price that I wascharging for it on paper.
(02:29):
Keith Cunningham would say,dumb.
Coaching is not a high volumegame.
And so that was the lesson thatI had to learn, but it cost me
hundreds of thousands of dollarsto learn that.
I don't want the same for you.
So I'm going to give you someother examples here.
So first, selling a year longpaid in full membership at a
discount.
(02:49):
Now, this used to be popular inthe access gym world where You
don't care if people show up.
You just want as much money upfront as you can get from them.
And then if they never show upagain, that's fine.
But that doesn't work in acoaching business.
If you give your best clients adiscount on their membership,
you are paying the dumb tax.
Because think about this.
Who is most likely to stickaround for a year without a
(03:11):
discount?
Well, it's your best clients,right?
So why on earth would you givethem 20% off or a couple of free
months to keep them for a year?
Now, I'm putting this one firstbecause there are actually
business coaches out there, Ijust found this out, who are
telling gym owners to sell thisyear-long, paid in full
commitment at a discount toraise money to pay the business
(03:32):
coach.
And of course, this is crazy,and it's the gym owner who winds
up paying the dumb tax on thatdecision.
I would never tell you to dosomething that's gonna hurt your
business just so I could getpaid.
Don't pay the dumb tax on that.
Second example, chasing clientheadcount.
Most gym owners pay the dumb taxby chasing the wrong metric,
which is more clients, moreclients, more clients at any
(03:55):
cost.
But the truth is that two-braingyms routinely take home$100,000
a year, like profit, on 150clients or fewer.
And let's face it, you probablyhave 150 clients or fewer.
According to our data set of15,000 gyms worldwide, the
average number of clients acoaching gym has is 126.
But they're charging as if theyhave 300, So those 126 are not
(04:18):
enough.
The best gyms in the world earnmore with fewer clients because
they focus on value, not volume.
It's a coaching business, not amembership warehouse.
And if you undercharge to tryand get more clients and make it
up in volume, you are going topay the dumb tax.
The third example isundercharging because other
people are undercharging.
(04:39):
But Coop, the gym down thestreet only charges X.
Yes, and the gym down the streetis going out of business.
They're paying the dumb tax.
If you assume they know whatthey're doing and anchor your
price on them, you will also bepaying the dumb tax.
The fourth example is related.
It's discounting to bring inbusiness.
It's thinking that a discountequals marketing.
(05:00):
But giving people 20% off ormaking an offer just to get
people in the door is attractsthe people in the door who are
going to be out the door againnext month.
You are not competing on price.
You're competing on outcomes.
The coach who can get the bestresults, the results that the
client care about, the coach whocan do a no-sweat intro, measure
what the client cares about, andthen produce the results is
(05:22):
going to win, especially with AIspeeding everything up now.
If you can't get your client'sresults, it doesn't matter what
you charge.
You're going to be paying thedumb tax by consistently
bringing people in and thenlosing them.
This is a related example, andthis is my fifth and that's
offering 40% off on PT ormemberships.
So if somebody is a member ofyour group training program and
they want to do personaltraining, you give them 40% off.
(05:45):
You will be paying the dumb taxbecause again, these are the
people most likely willing andable to pay full price.
Big discounts tell your clientsthat your service isn't worth
that full price.
It also kills your margin andyour momentum.
So if you sell personal trainingfor 40% off, somebody is paying
that 40%.
The client's not So it's eithergot to be you or most likely, or
(06:09):
the coach.
You are not going to make up ahigh value service in volume
just by selling a lot of it.
And you're not going to sellmore of it by discounting.
My sixth example is confusingthe model with the method.
So a lot of people will get aPilates certification and
they'll say, okay, I knowPilates.
Now I have to set up someone-on-one appointment times.
(06:30):
But Pilates can be taught to agroup.
On the other end of thespectrum, a lot of CrossFit
coaches still think thatCrossFit has to happen in a big
group.
But what they're doing isthey're confusing the model and
the method.
So your method is the tool thatyou're going to use to get
people results, and the model isthe way that you deliver it to
the client.
So if your method is Pilates, itcan be delivered to the client
(06:51):
one-on-one, in a small group, orin a big group.
If your method is CrossFit,great, you can deliver it to
your clients one-on-one, in asmall group, or in a big group.
You determine your method.
Usually the client determinesyour model by telling you what
they want.
I want schedule flexibility.
Let's do one-on-one.
I want schedule flexibility.
I want a lot of individualattention.
You know, I don't want to be ina big group.
(07:12):
I'm a little bit nervous, but Idon't think I want one-on-one
rates.
Semi-private.
I want the fun and energy ofworking out with all my friends.
Big group.
Fantastic.
The method doesn't change atall.
The model does.
And if you confuse the twothough, you're going to be
paying the dumb tax becauseyou're going to limit what you
think is possible.
And you're going to try andforce a model on your clients
(07:32):
that they don't want.
They'll leave for the wrongreason.
And that is paying the dumb tax.
So the seventh example is notknowing your numbers.
And this one is brutal.
Because I've been talking aboutthis for 15 years now.
There's no excuse not to knowthe numbers that drive your
business.
If you're 20 years old, you'vegot a garage in your parents,
you know, a gym in your parents'garage, and you're selling
(07:53):
memberships while you try tomake it to the games, fine.
But if you employ staff, ifclients rely on your gym being
around next year, then it'sirresponsible not to know your
numbers.
That doesn't mean you need to bean accountant to be a successful
gym owner.
Knowing your numbers meansknowing what your AR I'll see
(08:15):
you next time.
(08:40):
you know, we're grown up gymowners now.
We have to be responsible.
The best part about knowingthese metrics is that now you
can filter all of the otherstuff, the hype, the
overexcitement, therecommendations from people who
aren't doing as well as they saythey are, the advertisements
coming in from the marketers whoare struggling to get their own
(09:01):
clients.
You can look at these metricsand say, okay, will your claim
improve my ARM?
Will it improve my retention?
Will it improve my clientheadcount?
By how much?
In how long?
You don't have to take claims atface value anymore.
You can take anything that I'mtelling you too and say, which
one of these metrics will itimprove?
By how much?
And in how long?
(09:21):
And I should be able to answerthat for you.
Here's the thing.
If you are doing things by yourgut, if you're winging it, If
you're just jumping in andhoping that you'll fix it or
build your wings on the way downor whatever, you're going to
wind up paying the dumb tax.
The dumb tax is not 15% or 13%.
In many cases, it's 100% becauseit costs you everything.
(09:44):
This is what drives businessesunder.
This is what makes gyms fail.
It's not that you lackcreativity or you're not working
hard enough.
It's that you keep repeating thesame old mistakes over and over
and you don't have the knowledgeor maybe the guts to make the
change.
That's what mentorship is allabout.
And the last recommendation fromKeith Cunningham is always avoid
(10:04):
paying the dumb tax by payingsomebody who's already made
these mistakes so that you don'thave to.
In our next video in this seriesand in the blog post, I'm going
to share the true cost of whatpaying this dumb tax actually
means.
And spoiler alert, my firsthiring mistake cost me over
$100,000 in actual wages, letalone the year of wasted time
(10:26):
training and evaluating andtrying to fix this person.
And I've got plenty more ofthose examples.
So we'll see you on the nextvideo.
In the meantime, share your dumbtax stories or your questions at
gymownersunited.com.
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