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August 21, 2025 13 mins

Think you need 300+ members to run a profitable gym? The data says otherwise.

In fact, the average gym can generate an extra $45,000 per year just by keeping the clients it already has for two extra months.

In this episode of "Run a Profitable Gym," Chris Cooper cuts through the noise with hard numbers from the “State of the Industry” report—the most comprehensive data set in the fitness industry.

He walks through the six metrics every gym owner needs to make smart business decisions:

➡️ Average revenue per member (ARM)—earn more without adding clients.
➡️ Length of engagement (LEG)—keep members longer.
➡️ Net owner benefit (NOB)—your rewards as an entrepreneur.
➡️ Return on investment (ROI)—which expenses allow you to increase revenue.
➡️ Effective hourly rate (EHR)—are you a trainer or a CEO?
➡️ Client headcount—the lives you are changing with fitness.

Listen to hear all six metrics explained, then help build the next report by filling out the survey via the link below.

Links

"State of the Industry" Survey

Gym Owners United

Book a Call  

1:32 - Earn more per client

3:10 - Keep clients longer

6:17 - Take home more money

7:57 - Increase return on investment

11:11 - Earn more per hour

Mark as Played
Transcript

Episode Transcript

Available transcripts are automatically generated. Complete accuracy is not guaranteed.
SPEAKER_00 (00:00):
Hey, it's Chris Cooper, and this is Run a
Profitable Gym.
Today, I'm going to help you dothat even better by using
numbers and data to makedecisions.
I want to help you cut throughthe noise in the fitness
industry because there's a lotof BS out there.
You've seen advice, I'm sure, inFacebook groups, emails,

(00:21):
Instagram, Reels, TikToks,whatever.
And some of it actually soundsgood, but it won't actually move
the needle on your business.
And some will actually hurt yourbusiness.
Here's one of the worstoffenders.
I heard recently that you needthree to 500 members for your
gym to be successful.
That's simply not true.
And the reality is that mostgyms can be rock solid with 150

(00:43):
members if the other parts oftheir business are dialed in.
And that's where data comes in.
We want to work from truth andtruth means numbers.
Truth means prove it.
Truth means let's actually seethe metrics to determine what's
true instead of just sayingrandom things to get views and
clicks.
In the State of the IndustryReport, we track six simple but

(01:05):
critical metrics that tell thereal story about your gym.
Today, I'm going to walk youthrough each one of them, what
they mean, what the industryaverages, how they help you,
what happens if you get themwrong, and an example of
somebody who's fixed them.
By the way, you can get thisfree guide by just clicking the
link below this video,participating in our annual
State of the Industry Report,and then we'll send you a copy

(01:25):
of this with all the numbersthat I'm going to be talking
about here, graphs, here's whereyou should be, and some tips to
get there.

UNKNOWN (01:31):
THANKS FOR JOINING US.

SPEAKER_00 (01:32):
The first metric I want to talk about is ARM,
average revenue per member permonth.
This is the average amount thateach paying client spends with
you every single month.
The industry average for biggroup gyms, gyms that primarily
do group training, is$167.76.
For small group or semi-private,it's$230.18, and for one-on-one,

(01:55):
it's$353.37.
Now, that big group number isstill too low, but it's getting
better.
So here's how knowing thatnumber helps you.
First off, if your averagerevenue per member is way below
the industry average, thenyou're likely undercharging or
you're not offering high-valueservices.
A higher ARM means more revenuewithout needing more members.

(02:19):
If you get this wrong...
Well, let's say that you're 20bucks under the big group
average and you have 150members.
That means that you're losingout on$3,000 a month.
Over a year, that's$36,000.
And over three years, that'sover$100,000 just because you
don't have your prices set oryou're not offering a high value
option to the people who wantit.

(02:39):
Here's an example of whathappens if you fix that.
If you raise your ARM by$20 andyou don't change it again for 10
years with 150 members, you'readding 360 We'll be right back.

(03:02):
is enough to at least put a downpayment on your building, right?
What will that difference maketo your family?
Who would you hire if you hadthat money now?
The second metric that you'regoing to uncover in this guide
is leg, length of engagement.
And what this means is theaverage number of months a
client stays with you.
So the industry average in theUS is 18.61 months in a coaching

(03:24):
gym.
Above average, the two brainaverage is 24.94 months.
Now, here's how this numberhelps you.
The longer your client Bye-bye.

(03:44):
for the next 70 years, then weneed to keep them for at least
two years to change their habitsand behaviors.
The less pressure you'll have toconstantly be finding new ones.
And you know, you're not justrunning a marketing machine
anymore.
If you get it wrong, and you cutyour leg from, let's say, 18
months to 12 months, then you'relosing a third of each client's

(04:05):
potential value.
You're also losing like most ofyour impact because they're not
with you long enough to change.
And if your arm is$170, that's$1,000 less per client.
With 150 members, that's$153,000gone every year.
Just increasing your leg by twomonths across the client base,
and you can add around$45,000 inprofit each year.

(04:29):
What would you do with that?
What would your family do withit?
I'm sure they could findsomething to do with an extra
$45,000.
Changing your leg is a big deal.
I'm just going to do a littlesidebar here before I get to the
next metric.
There's people in the industrywho want you to believe that a
three to 5% churn rate is good.
It's not good.

(04:49):
If you have a gym and you've gota hundred members, that means
you have to get three newmembers every single month just
to break even.
Well, that's not too bad, butyou know, what if you've got 200
members?
Well, now you have to get 60members every month just to stay
the same.
What happens if you've got a gymwith 300 members and At a 3%
churn, you have to get nine newmembers every single month just

(05:12):
to tread water.
And a lot of the gyms,especially the old CrossFit
gyms, you know, five years ago,six years ago, they were
advocating for this.
They were like, no, 300 members,you got to get 300 members.
And then they quickly realizedthat they just spent all their
time marketing because they werechurning clients through.
And that's just with a 3% churn.
If you've got a 5% churn rateand you've got 300 members, you

(05:33):
have to get 15 new members everysingle month.
Now, if you don't know how Ifyou don't know how to do that,
if you don't know how to get 15new members net every single
month just to stay where youare, you might want to ask
yourself, like, is this reallythe right model for me?
And by the way, in the State ofthe Industry Guide, we'll show
you how many members the averagecoaching gym has.

(05:54):
It's like 124.
The people who are telling you,get 300 members, get 400
members, do whatever it takes.
They're not using metrics,right?
They're using shock to try andsell you on their coaching
program instead of using proofto mentor you to build something
that lasts.
Okay, retention is my favoritebone to pick, and so I'm going
to stop there.

(06:15):
Let's move on to the nextmetric.
The next metric in the guide isnet owner benefit, which is like
profit plus the pay that you payyourself.
We all pay ourselves slightlydifferently based on taxes or
where we live, whatever.
Net owner benefit is what youget from the business, and it
can include pay, salary per Youcan also include perks like, you
know, my gym pays for my cellphone and it pays for my

(06:37):
vehicle.
The industry average, and wetook a median here instead of a
mean, because let's face it,like there's a lot of gym owners
out there who are making zero.
And if I took a mean average, itwould be much lower.
The median is$4,000 a month.
The top gyms are taking home$20,000 a month plus because
they've mastered the basics.
Now, here's how this helps you.
Being more profitable isn'tgreedy.

(06:58):
It's what keeps you in the game.
No profit means no future.
If you get it wrong, then ifyou're at$2,000 a month instead
of$6,000, then you're missing$48,000 a year.
That's money that you could beinvesting in growing your gym,
careers for your staff, orpaying yourself a real salary,
like actually getting your kidthe jeans they want before they

(07:19):
go to school.
The way that you fix this isthat you fix your pricing, you
control your expenses, and youretain your clients, and you can
move from average to top-tierprofit in under two years
without doubling your workload.
And those numbers are all inhere.
What should I charge for priceif I'm going to fix this
problem?
It's in there.
How long should I keep myclients if I'm going to solve
this problem?
It's in there.

(07:40):
How much should I pay my staffif I'm going to solve this
problem?
It's in there.
How should I pay myself?
It's in there.
All the metrics that you need torun the gym are in this guide,
and the way that you get thisguide is by helping other
people, by sharing your ownmetrics, no matter what they
are.
And we will get you a copy ofthis to help you run your gym
better forever.
The next metric I want to talkabout is your expenses.
We call this ROI because you'resmart.

(08:02):
Every dollar that you spend inyour gym, you did for a reason.
And so what we want to help youdo is get a better return on
those invested dollars insteadof just trying to cut expenses
all the time.
So we call this ROI.
This is probably the least sexymetric, but it's the one that
most people ask about.
Like, what are you paying inrent?
How much do you pay your staff,et cetera?

(08:24):
ROI is how much you spend andwhat you get back from that
spend.
So we break this into staffcosts and fixed costs.
On average, if you've got a biggroup gym, your staff costs you
about 33% of your revenue andyour fixed costs are about 47%.
Okay.
So that's 80% of your revenuegoing out before you see any of
that or before you've got adollar that you can spend on

(08:45):
coffee, right?
But knowing that tells you whereyour money is actually working
and where it's being wasted.
So right off the bat, I can tellyou that most people are paying
their coaches too little.
If only 33% of their revenuegoes to their staff, but they're
paying the landlord too much orthey've bought too much
equipment, they've got too muchspace.
If half of every dollar that youmake goes to the landlord, 47

(09:07):
cents, that's too much.
The way to make yourselfprofitable is not to go crazy
with expenses, but now you knowlike what the average is and
what you should strive for.
How you fix this is you auditeverything.
If you've got too many classeswith low attendance, then that's
dead weight.
You're losing money on thoseclasses.
If you're paying only$25, whichis the industry average for a

(09:27):
class, by the way, it's all inhere, and you're only bringing
in$20 from the attendees of thatclass, then you're paying and
losing money to coach people.
So an example of fixing thiswould be cutting or
consolidating yourunder-attended classes, and that
will free up thousands ofdollars a year, and that's money
that you can reinvest inmarketing or staff training that

(09:48):
will actually bring you somegrowth.
That's just one thing, and wecan't cut our way to
profitability, but going throughyour expenses will tell you
where you should be getting abetter return on your money.
The next metric is EHR.
This is your effective hourlyrate.
Now, what this means is, howmuch do you get paid per hour
that you spend in the business?
And this number should be higheras the CEO than it is as a

(10:10):
trainer, because let's face it,if you could make more money
just coaching for somebody else,you should probably go and do
that.
The industry average though ispretty low.
The average owner of a big grouptraining gym is only 25 bucks,
but the top gyms are at$46 anhour and beyond.
How it helps you?
Well, EHR shows if you're reallyworking like a CEO or if you're

(10:31):
just grinding it out withoutgetting ahead.
If you get this wrong, forexample, if you're only taking
home about 10 bucks an hour fromyour gym, then you'd actually be
better off coaching for somebodyelse or and buying a membership
or going and getting a job andbuying a membership at your gym.
You need to become better as aCEO.
And I'm not trying to tell youget out of the gym business.

(10:52):
I'm trying to tell you focus onbeing a better CEO.
Streamlining your operations,delegating your low value tasks,
and focusing on the highleverage work could easily jump
you from earning 25 bucks anhour for your time to 46 bucks
an hour.
That's 80% more for the sameamount of hours worked.
And the sixth metric that wetalk about, this is the sexy one

(11:13):
that I everybody loves talkingabout is client headcount.
How many clients you got is kindof like the new gym equivalent
of what's your bench that weused to say back in the 80s.
What client headcount means isthe number of paying members
that you have, okay?
So this is really important.
The median big group average forpaying clients like CrossFit
gyms, Fit Body Bootcamp, it's122.5 members.

(11:37):
And you can have a veryprofitable gym with 150, but it
does not make sense when theaverage gym has 125 2.5 members
to build your model on gettingto 300 before you get paid.
Because headcount matters, butit's not everything.
Your ARM times your headcount,that is your revenue.
And if you're chasing 300members without the systems to

(11:58):
support them, the systems thatwill make you profitable at 150,
you're just going to getburnout, bad service, and crazy
high churn with your members andyour staff.
So instead, focus on getting to150 members, paying the right
amount, and you can take homeover$100,000 a year, cover one
full-time staff person, work 40hours a week, and have a
part-timer that does the adminstuff for you without running

(12:21):
yourself into the ground.
Look, data doesn't lie.
There's six simple metrics thatyou can use to run your gym and
grow it to really profitable andsuccessful over 30 years.
These are called the simple six,ARM, LEG, NOB, ROI, EHR, and
headcount.
And they give you the clearestpicture of your business health.

(12:42):
If you get them right, right,you will build a gym that lasts.
If you get them wrong and you'restuck chasing fads and gut
feelings and guru advice thatisn't grounded in any reality,
you'll be out of business andprobably selling real estate
within three years.
So stop guessing.
Let's use the numbers.
Let's make the changes and let'sbuild something together that
lasts.
If you want to get a copy ofthis guide, you just got to

(13:04):
participate in building theguide with me.
Click on the link below thisvideo and it'll take you about
10 minutes.
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