The Perfect Business

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A few years ago you might remember seeing a lot of photos of me meeting with (then) UFC Heavyweight Champion, Randy Couture. The back story on that was that I taking a serious look at opening up a Xtreme Couture gym here in Lincoln, Nebraska.

After getting initial pricing and all the franchising info I also started doing some due diligence talking to everyone from personal trainers to management at gym’s finding out some information. I quickly figured out that it wasn’t for me but not before getting some amazing (to me) information about the business.

It turns out most gyms, especially nationwide chains, have target numbers to oversell by a minimum of 1,000% and one of the gyms I talked to said they thought they were current oversold at about 2800%.

That means that even though that gym only can have room for 100 people at any given time, they have sold memberships to 2800 people. Talking to a few friends in the industry across the country they said its not unheard of for a gym to sell 50x more memberships then they could accommodate people. wow…

Now some of this makes sense because different people can only go at certain times. Some people work out before work… some during the day… some after work etc…

But the sad fact is a gym makes money by counting on you to be lazy and not go.

I pay $90 a month for my gym membership (full use + locker rental) and I think I have gone 2 times in the last year. Thats $540 per work out…. great deal….

But is the gym a rip off? Did I get scammed? No, I am just being lazy – and doing exactly what they expected me to do…. eventually…

One gym manager told me they estimate the average new member works out for 68 days before quitting…. He said the number is probably closer to 20 but the few who go years make it look a lot better then it is.

He also told me that the LTV (life time value) on a new member is about $1,500.

My gym also has implemented items like giving a 10% discount if you pay by direct deposit with your checking account monthly. While people change credit cards and they expire they rarely change checking accounts.

Looking at the model:

  • Sell the user on a dream.
  • Deliver a quality product.
  • Know only 10% of users will actually do the work required to get the results.

A gym membership is a perfect business and if people don’t do the work they are “lazy” and they are out the money.

But with other business models that are designed to count on humans failing – pay day loans, mortgages, credit cards, selling drugs, online gambling, info products, web hosting, etc etc

Its interesting to me which services knowingly hurt consumers are illegal or sketchy and which one appears to be the perfect business.

158 thoughts on “The Perfect Business

        1. melg

          Let’s just say that they’re in charge of renweing your waning enthusiasm for that workout.

    1. Zander Chance

      Jesus, for $15/mo I get Pool/Sauna/Steam Room, along with all of the amenities of a regular gym. And it’s a nationwide chain, so I can visit any of them when I’m travelling.

      $90 sounds criminally high!

    2. Alexis Wilke

      Actually, here in California it is more like $120/mo. and an excellent bike is $1,200 so I got the bike. But the tires are now $50 each (4 tires a years min.)

    1. RedBlack88

      Yeah, the New Year’s Resolutionists. “This year, I swear I’ll get back into shape!” Come March, I wonder how many of them are still keeping at it.

  1. Kiesha @ We Blog Better

    I have long come to terms with the fact that I’m just not going to make it to the gym with my hectic life so I use the outdoors and my own equipment as much as possible (been lazy though :) )
    Anyway, this reminds me of a lot of the online products – ebooks and money making courses that give people the knowledge they need – yet somehow people usually drop the ball and rarely read the entire book, finish the course or even if they do – they often don’t apply their knowledge.
    It’s not the ebook/course creator’s fault – yet people don’t always view it that way – if your product doesn’t work for them, they automatically assume it was a quality issue.
    Do you agree with this comparison, or do you think I’m stretching the analogy?

  2. FTB

    Shoe-man you are right on the money! (as usual) I was listening to a Jim Rohn seminar and he was talking about a book called the Richest man in Babylon. How it changed his life after he read it and it’s only 160 pages. He said that people felt like just buying a ticket to hear him speak was enough to make them rich and that out of the 5000 people in attendance only 25 (1/2%) of the people would buy that book. People feel like just becaue they brought a gym membership that it’s good enough to make them thin. Everyone counts on that 1/2%, if everyone of your readers did what you asked you would be richer, but you would also have a lot more compettion so you are already following your own rules: Sell the user on a dream.
    Deliver a quality product.
    Know only 10% of users will actually do the work required to get the results.

    I’m in that 10%….for now.

      1. Traffic Secret Revealed

        That book is a must read. It was written along time ago but its ever green. Here are the 2 most important things I got from it. 1) Always save 10% of your income however small then when it has accumulated, get advice only from people who’ve been there done that in what you want to do. 2) If you are paying house rent you are still not rich and you probably won’t be. Work at eliminating your landlord. Very important!

    1. Marianne

      Quote: 1) Sell the user on a dream. 2) Deliver a quality product. 3) Know only 10% of users will actually do the work required to get the results.
      Hmmm … a lot like internet marketing. How many people spend thousands and thousands on WSO’s, plugins, training courses, memberships. And then do nothing at all with any of it. Most people are basically lazy, and live their lives in the hope that a miracle will happen without them doing anything. (I think I am one of them).
      Jim Rohn has been one of my heroes for years, but do I put the info I have gotten from him to use?.

  3. Brian Breslin

    you could argue web hosting is comparable, or godaddy’s entire business as well. they oversell the crap out of their servers, and assume most people will be using them minimally (i.e. their wordpress site will take 20MB and use 50MB max of bandwidth a month).

    FTB’s recommendation is good, richest man in babylon is about making your money work for you. great weekend read.

  4. Shawn Christenson

    This covers the exact topic i’ve been discussing and struggling with, with acquaintances. It seems wrong to operate this way – but why? Why is it wrong that some do it and it’s amazing that others do it?

    It’s the exact same with info products. A new big launch knows full well only like 3% of it’s buyers will actually put it to use.

  5. Purple Martin Houses

    I think it is a little bit two fold though for those really in that business. Where credit card users are not going to recommend other credit cards to others (most of the time), someone who is passionate about going to the gym will often try to bring others on board with them. I have a guy here at work who does it all the time. He is super-passionate about working out and has asked numerous times if I would do it with him. I’ve opted not to. However, if he wasn’t passionate then there would be no desire for him to recommend a gym to me. I think for a gym to be healthy (good income, etc) it needs those that utilize the services there and are passionate about it.

  6. Jaydreaming Media

    Great article Shoe! It is crazy to think how much money people really throw away with things they don’t every end up using. I know many people that have smart phones and don’t have email setup and NEVER use the web. Crazy.

  7. Dave

    There’s a no-frills gym in chicago called “Cardinal Fitness” that does $19.99 monthly memberships. The gym is pretty small. I’d guess they oversell those memberships by about 5000%.

    But, it’s kind of genius because $19.99 is such a small amount that it’s not worth the hassle to quit. If it’s $80/month, people might notice it more.


    Come to think of it, that IS a great business, though I’d wager it’s difficult to sell folk something similar without that same desire for losing weight, getting fit etc desire. That drive to endure such a system is limited and products to tempt customers with such a ridiculously deal is even more limited imo.

  9. Negbox

    Jeremy, you’ll be interested in the book “Moral Minds How Nature Designed Our Universal Sense of Right and Wrong” by Marc Hauser. Awesome book that uses real science (evolutionary biology and tons of primary research) to explain why we perceive some actions as right and others as “wrong” even though the net outcome and even the intentions of the actors is the same. The differences are subtle and amazing since you’ll understand what he is talking about intuitively – its like peeking behind Malcolm Gladwell’s “locked door”.

  10. Husher50

    I am not surprised by these numbers. This reminds me of the post you did related to successful blogs. It’s hard to remain committed to something. It’s interesting to see that gyms have made a mega-business out of this simple principle.

  11. Robin Sterling

    I read your post and wondered if I was that person. I am trying to recall subscription based models, clubs I have joined, or contracts I have signed to required obligation our effort on my part. Here are a few I came up with: (yes – at one point!), Weight Loss Plans, Link Building Services, Keyword Research Tools, Article Drip Services, Yoga Studio, Tennis Club, Animoto Subscription, (job hunting tool), magazine subscriptions, LinkedIN pro level, etc.

    I end up with so many things to manage from a professional level, and so many things to think about on a personal level, that I find I can’t do it all. Inevitably, I end up starting strong in the beginning, then trickling off. I also find that two or three billing cycles may pass before I get around to cancelling. I hate to admit, but I think that someone like me is probably the target market for the gym.

  12. enajyram00

    A part of me feels that this is a shameful business practice. The other part of me is trying to invent opportunities to line my own pockets. πŸ˜‰

  13. AnnieP78

    You are such an entrepreneur. How many different business models do you have your hands in?

  14. Jason S.

    There’s a sucker born every minute… And with America’s increasing obesity, this sounds like a good business idea!

  15. Roshaun Philips

    So you’re saying you paid a monthly $90 fee including the use of all gym amenities and you just worked out twice? That’s *definitely* a great deal of cash, Shoe. You can even buy an exercise machine or two for $540. What were you thinking?

  16. Baseer Hannan

    Nice one, Shoe! This is one explosive post to start off your 36th birthday. Speaking of gyms, I’d even pay a grand if the gym I join promises not to take in the following individuals I couldn’t stand while working out: the unsolicited advice-givers, people who carry around too much luggage, people who can only use the specific piece of cardio equipment you are already on and, of course, the stinkers!

  17. The American Dream

    Every business known to man — legal or illegal — caters to a specific need people just can’t seem to get enough of or can’t live without. Concrete examples of these are doughnut shops, liquor bars, gasoline stations as well as convenience stores. With the current rising obesity crisis in our country, we need something to assure us that there is still an emergency plan in case our respective weights do balloon out of proportion. And what symbolizes health and fitness better than a gym?

  18. Cristina Dy

    When my brother’s weight suddenly progressed three years ago from a healthy 180 pounds to a shocking 340 due to excessive eating binges, he knew he had to find a way to slim down or become a victim of the numerous health risks obesity involves. He tried to join a well-known gym here in Texas but stopped after three months. Aside from the enrollment fee of $78, you still have to dish out $30 for full gym use (e.g. pool, sauna, etc.). His solution? He volunteered every weekend to round up cattle in a nearby ranch and lost half his weight in a jiffy!

  19. medomoc

    Why join a gym when you can shed those excess pounds by good ole’ walking and eating healthy? Look at me, I am close to 50 yet I am still as fit as a horse. Gyms are nothing but glorified rip-offs.

  20. WilmaP

    What gyms count on is basically people’s laziness. They know most members just enroll to make themselves feel better, not make themselves healthier. In these times of economic turmoil and environmental crisis, shelling out $50 for a turn at the treadmill is just too costly.

    1. WanderingMommy

      This is so true! My husband and I invested in a really nice NordicTrack machine which cost us about $750. The annual fee for lining up in some sweaty fitness club to have a go at the equipment? $950. We definitely got the better deal this time.

  21. KrisM77

    You said it perfectly, Jeremy. They just did what they expected you to do. 2800%, you say? Nearly all gyms these days are just focused on how to grow their business, not the health and welfare of their members.

  22. spameater

    Not because a gym got one over you doesn’t mean you should not appreciate its contribution to America’s current health trends. Images and norms may matter but I say anorexia and bulimia are not public health issues. Obesity is and it is still ravaging millions of people all over the nation. Who can possibly help them? Gyms, of course. Your duty, in turn, is to pay up.

  23. WhoisDoyle

    I’ve read somewhere that a hundred years ago, fat people (even overweight ones) were so rare that people would pay to see them. That was a hundred years ago. What will people look like a hundred years in the future? Off to the gym!

  24. moolamachine

    You know what gyms lack? A motivational hotline for their patrons. They should put up 24-hour call centers where they can check up on members who stopped working out. This may sound a bit crazy…but it is just too crazy it may just work!

  25. AnnieLouJ12860

    My only beef with gym patrons? If you’ve spent your entire lunch hour staring at the calorie counter waiting until its number meets or exceeds the number of calories in the frozen yogurt you’re going to order as soon as you leave, you need a psychiatrist, not a gym.

  26. FirenzeZ

    Let’s make this thread lighter, boys and girls. What your scariest or funniest gym story? Please do share!

    1. TheSandMan5050

      I once saw a man who has a moderate cold on the treadmill sweating it out. One in a while, he coughed or sneezed. The man then picked up a moist hanky from the treadmill panel, wiped his mouth and nose and carried on. When it was my turn, I observed the whole panel was covered with snot. Epic FAIL!

    2. F2Xsites

      When I was still in Miami, a man was washing his underwear in the public sink. I asked him why and he just answered coolly: “Hot water got cut off at the apartment.” Fffuuu!

    3. Yes2Freebies

      When I was doing a legpress set, I caught a woman staring at me intently. I though it must be the new shoes. After moving on to have a round at the elliptical, I saw her again watching me. This time I asked her why and she just silently pointed to a gaping hole on the seat of my spandex.

  27. internetFTW

    I guess nearly all high-end gyms nowadays are cashing in on the current obesity trends the country is experiencing. While 30.6 of Americans are obese, as compared to a combined 3.2% of all Japanese and Koreans, what we need to do right now is to show obese people some support. Determination is the key to proper weight loss.

  28. Bryan Jake T

    I live in Colorado and obesity is not that much of an issue here. I believe the reason why gyms flourish is because they have uncovered a business secret formula. They zeroed in on the primary need and the locations, they promise people solutions and they also have lots and lots of endorsers potential customers can relate to. Apply this to any business plan and you’ll definitely get the same results.

    1. Nicole Burns

      Point taken. To add my own insight, advertising a gym is just like getting off a new soap or a shampoo brand off the ground. Get some ruggedly handsome/ravishingly beautiful celebrity to endorse it and you’re certainly good to go. It works because people think they will experience the same effect. When you get Randy Couture (who, by the way, is one of the fittest men on Earth) to give the nod to a gym, people who want to be like him will definitely enroll for sessions in no time at all.

    2. GQmeansGeek

      Gyms have evolved to be prime advertisement spots these days, too. Women wearing skimpy clothing with the name of the gym they are endorsing emblazoned in front, men with massive biceps using armbands with gym logos. That’s what primarily attracts people to fitness clubs, the promise of beauty, hardcore manliness/womanliness and possibly sexual overtones just like your run-of-the-mill beer ad. Even of they charge a fortune, people will still be lining up daily.

  29. Marnie Sho

    I am a fitness buff but I am no gym fan either. So I won’t be taking sides yet. Total health is a privilege but ruining your finances just to be fit?

  30. WhoSaysWhat01

    Why go to a gym when you already have Central Park? While gyms are popular choices to combat weight issues, there is nothing more relaxing than going to bed at night knowing that you weren’t ripped off in any way.

  31. Creative Marketer

    It is unfair to label gyms as cashing in on laziness. It’s just like saying that dentists and candy factories are in cahoots with each other for the money. The best way of explaining this? Gyms have evolved into more than fitness havens. They have progressed into places where people congregate to take their physiques to a whole new level, where advertising abounds and marketing is king. Give gyms some slack and learn from their best practices instead.

    1. Lola Dee

      Here’s a situation. There’s suddenly an unannounced holiday and all gym members collectively thought about working out at the same time. Sounds too impossible? That’s I want to emphasize. It’s never happened and will never be. Give gyms some credit. Admit it. They’ve come up with some serious marketing skills!

  32. Butputitoutthere

    Maybe when I’m making as much money as you do, Shoe, I would pay 90 dollars for a chance to work out. But not now, definitely. That price is almost ridiculous. Especially when you consider that you can go outdoors to do your workout.

    1. Hollaback Will

      You forget that some places have very severe weather conditions. For one thing, who jogs when it’s snowing?

      1. Kyle

        Right, the outdoors aren’t always an option, but not so much because of the weather. I know a few serious runners who run when it’s snowing, and quite a few more not so serious runners who run even when it’s pouring out.

        It’s more a problem of space. If you live in a crowded city, you can’t always find parks or running trails to go to. The convenience of a treadmill is vastly understated.

        That said, people will drop their workouts for trivial reasons – they can’t take the time to commit to a workout regimen, they are too tired at the end of the day, and many other reasons that don’t seem to stop all the other people who are really committed to working out who find ways and means to do so.

  33. joonlee97

    Well, leave it to a UFC fighter to have the balls to believe that his name has earned him the right to charge that for the chance to see him work out.

  34. ExclaimedIdeas

    I wouldn’t pay 90 dollars for a gym membership – it doesn’t matter who established it. He’s not the one teaching, or handing me towels, or rubbing me down after a hard workout. That much cash is just too high a price to pay for the off chance of meeting a reknown fighter in his gym.

  35. H delacruz

    Really, people are saying that price isn’t reasonable? The guy’s an actor, a fighter first and foremost, too. He just fought Mark Coleman and won, and he’s set to fight the UFC champ Mauricio “Shogun” Rua in October. Not before duking it out with James Toney first this coming August. Imagine, he’s 46 and fighting. I doubt he’d be lax with his gym personnel, and will be dedicated to giving his customers the best possible workout – just because his reputation is on the line.

  36. Laney Pitt

    I agree with you completey, Shoe, on the fact that gyms are money-making machines. Get people to sign up, they hardly come in, and eventually, they just disappear, and it’s not your fault. All you have to do is keep getting more people in.

    1. California Dreamin

      In the first place, it’s not the gym who comes to the people. it’s the other way around. Now, let me ask you: who has the money to pay for sessions, the people or the gym?

  37. AurorMine

    Gym or no gym, I think what these fitness clubs have done is really impressive. It’s not their fault people are flocking to them. it’s not their fault people are spending excessively. It’s not their fault some people are angry. It’s pure marketing genius, I say.

  38. Fields of Clover

    You can’t please everyone and that’s what some people are angry why gyms are so successful (and lucrative, too). In reality, you can lose weight and buff yourself up just by jogging daily but people nowadays are always looking for an easy way out. We have convenience stores and fastfood chains. Gyms are there to remind people that they can still change physically and it’s this mental convenience that people are paying good money for.

  39. Vince

    I wouldn’t mind paying $90 to look as buff and tough like Randy Couture. Some people would even gladly give an arm and leg for that kind of body. I’d join his gym anytime!

  40. David R

    It’s always raining here in Seattle and you can’t jog as much as you want. The perfect solution? Joining a gym. Heck, if some gym has Randy Couture for an owner/endorser, I would gladly enroll in a jiffy. He has the looks, power and track record to back it up. As for the $90 fee? No problem. Some people spend more than that amount on commercialized coffee!

    1. BearPile

      I have no qualms about expensive coffees and costly gym membership rates. Just remember this simple logic: If you have the money, then go ahead and spend it. It’s all there is to it.

  41. B.Logan

    It has been said that we have always feared what we don’t completely understand and hated what has made us always feel inferior. If you despise gyms because you think they’re ripping you off, then why aren’t people complaining about Botox, breast augmentations and other seemingly useless things available today?

  42. OWillWritesWell

    $90 for a gym membership? I’d rather spend it on fabulous steaks for my family. Or how about a new gaming console perhaps? Nevertheless, there will still be people who will dish out a lot of bucks for fitness classes even if they will eventually empty their bank accounts.

  43. Not The Real Shoe

    In this modern age, people like to spend a lot of moolah on gadgets, vanities and basically a lot of things that make them feel good. Gyms belong in this category because they make people feel good since they promise a sweeter, more attractive kind of life. $90 isn’t that bad to spend at all when you desperately need a bit of elation.

  44. Big Al

    The general objective when operating a business is earning profit all the while giving superb service. If your gym can give you excellent service, they deserve to charge expensive rates. Quite simple, isn’t it?

    1. James Is (Not Working)

      I definitely agree. If you’re paying good money for below average equipment and amenities, forget it. There are lots of fitness clubs you can join without emptying your bank account for the wrong reasons.

  45. PokeYerFace

    Going to a gym is like playing a hand of poker. You’re never going to know what you’re gonna get until the cards are dealt. Getting pocket rockets isn’t a guarantee you will win. Unless you consistently attend your fitness classes and exert effort in weight training, you’ll never get the body you’re aiming for.

  46. E. Langdon

    Perfect business? Or just a lucky break in the vicious cycle that is business? We never know when other businesses will take the cake, Shoe. Maybe gyms are in the limelight these days and move off to another phase in the next few years.

    1. SmallBiz Sue

      I guess you’re right. However, I believe gyms should take their business up a notch to remain a dominating factor in the industry. More amenities, comfort and privileges easily mean more patrons and income.

  47. Screechy Rich

    I can’t even afford to buy those trendy apparel most gym buffs are wearing, how much more for a $90 enrollment fee? I’d go for a nice walk in the woods anytime than sweating it out in a crowded room full of strangers.

  48. sasha_482

    As long as gyms remain as income goldmines, there will always be another fitness club soon to be opened in your neighborhood. Once this exaggerated health trend is over, even heavyweights like Randy Couture can’t convince people to join even the swankiest gym.

    1. Undercover Affiliate

      Partly true, I guess. How do you explain brands and businesses that have been in operation for so long? I believe it’s in the way they adapt to the masses not in this cycle you emphasize. Innovation is still the best formula.

    2. Gabby Dell from SC

      Fitness clubs can be interesting examples of how people can adapt to turbulent economic crises. Anything higher than 50 bucks during a recession can be a big deal.

  49. Andrew Says So

    Going to the gym? I’d rather go wild on my bike. Can you do a 360 flip on a treadmill? Definitely not!

  50. Farzad H.

    You can’t blame a person if he or she wants to blow $100 or more on fitness club membership. We just don’t care how much money we use up if we love what we spend the cash on.

  51. Ethan

    Working out in a gym isn’t that bad. Unless you invest in top-shelf gear (e.g. sweat suits, shoes and gloves) just to stand out among the other patrons, there is absolutely nothing to fear where your money goes.

  52. Sanjay

    Spending lots of cash for health, like going to the gym, is excusable. Spending lots of cash to be like Randy Couture, by blowing off cash on multivitamins and clothing endorsed by the former UFC heavyweight champ, is plain stupid.

  53. Fiona Wong

    You have to earn it before you wear it. Before you wear that hot bod, you have to sweat off those extra pounds first. Gyms are just bridges to your goal.

  54. Alan Alan

    I am originally from Chicago but due to a job assignment, I moved to New York last year. And you know what I really love here? The gym amenities. Anything from delightful snack bars to hip-shaking music playlists, everything is just perfect. If all gyms in the country were like the ones in New York, their detractors will definitely have an instant change of heart!

  55. ara600_m1

    I loved this guy when he was still competing, especially after his comeback from retirement. Shoe, you meet the most interesting people.

  56. BigMoneyBrooklyn

    Gyms like these aren’t really for getting fit – they’re for showing off. The latest designer gear, the best sportswear money can buy, and so on and so forth. These places aren’t for health, they’re meat markets.

  57. Guy Cleve Land

    Shoe, are you upping your workout regimen just because you turned 36? Keep on truckin’!

  58. Dandundun

    I never got the attraction of gyms – sure, you get the equipment all ready for you in one aesthetically pleasing setting, but is it worth the price? And is it worth seeing the gorgeous bodies all around you and comparing them to your own, flabby self? A lot of friends of mine quit the gym just because they couldn’t take the pressure anymore.

  59. Tammyexperiments

    Gyms aren’t for the weak of heart – but the weak of heart make the moolah just literally pour into the place. They get enticed by all the weight loss promises and the promises of getting healthy in no time flat, without realizing that nothing comes without hard work.

    You can’t make weight loss happen just by throwing money at it – at least there’s one thing money can’t always get you.

    1. Dandundun

      Oh drat. I meant to send the link to a friend. I mean, DUDE, look at this!!! That much money in making people work for their own health?

      I knew these places grossly oversell because there is no way that all the members will keep to their schedules. And beginners who miss a few sessions decide that it’s okay to miss more, until eventually they just end up quitting. But seriously, they oversell that much?! They must be making a killing.

  60. socialanim00

    No kidding. I’m not sure that this is what people need, though. I mean, who really needs to see all the beautiful people so that you get so insecure you just want to hang yourself? If they wanted to promote fitness, they should do it with athletes and fighters, not cosmetically enhanched models and actors.

  61. Darren

    I have a membership with Planet Fitness and it’s only $10 a month! If I skip a few days/weeks…I don’t feel ripped off πŸ˜‰

  62. Justin Dupre

    Wow! 2,800% is a good figure. People are eventually going to stop and be lazy about going to gym. Jeremy is spending $90/month because he can do so :)

    1. Dave

      Wow, ur so smart. By the way, since when do SEO’s get lumped in with CEO’s and business owners?

  63. Hour A Day Fitness

    I’m sure you will be able to find a business model that works (being profitable), plus still be around a market you enjoy. Instead of UFC, I think I want to be around supermodels though when I have the chance to start my second business =o).

  64. steve

    Another rebill scam. :)
    But I am one of the people that goes 3-4 times a week. I started nicknaming all the regulars. The guy that looks like my grandpa, the guy that looks like cheat, and the girl that should be dating my cousin.

  65. Adam Bunch

    Jeeeeezus that’s an expensive gym! Yeah it’s a damn good model for sure – it never fails to amaze me just how many people will get a gym membership and then not go. Insane.

  66. Mike

    I’ve looked into this in the past as well and have found that it just didn’t seem worth the risk. The vast majority of gyms fail within the first 2 years of operation. Starting a big name chain like Gold’s or Worlds, will cost you a lot of upfront capital; so what most people do is start their own mom and pop gym instead. Their fee’s typically are higher because they need to be to cover their overhead, and since they don’t have the name recognition, its harder to get new members.

    Then 24 hr fitness opens a few miles from your establishment and puts you out of business because they are open 24/7 and their monthly fee’s are much lower then yours. I’ve seen this happen countless times in the 15 yrs i’ve been lifting weights.

    one of the gyms i was a personal trainer at back east was owned by a guy who owned 5 other gyms in neighboring towns/areas and he was excellent and locating gyms that were about to go out of business and buying them for pennies on the dollar. He then would revamp the gym and spend some money on marketing to get an influx of new members, while continuing to service the existing clients that already had memberships when he bought the establishment. He was very good at what he did.

    and your absolutely right – the gym makes no money of off the regulars, they make money off of the people that buy memberships and workout for two weeks before quitting.

    However it really is a tough business to do well in. The gold’s i train at now is within 5 miles of 10 other gyms. Location is key.

    btw, i read your “about” section and i just wanted to say congrats on everything you’ve accomplished thus far in your life. Reading it, sounded exactly like what i’m going through at this very moment.

    i wish you success and nothing less my friend.

    best wishes.

  67. ZK@Web Marketing

    Gyms work on the principle or creating an aspiration value for the users…they aspire to lose weight and get attracted to the schemes…little do they know that there is hard work involved in loosing weight….

  68. Payday Loan Savvy

    I resemble those remarks. You are right about all of the above. It is a shame that business models are like that. I have used all these services once.

    As for the gym thingy, I joined and did not go, it was not until I was running my own Karate studio like business, was when I started showing up everyday

  69. Najoh

    The same business as golf courses, they expect you to pay for a membership and go 3 times a year. But in fact i went to my golf course every single day of that year, they really asked me to not come anymore.

  70. Darren L Carter


    Really interesting to see but it really makes sense. THere is a lot of value out there with programs businesses offer but the fact is most people don’t expect to have to do the work themselves and then never get any results. They just expect results to happen as a result of using the product (or having a gym membership). Great post!

    Darren L Carter

  71. max

    Oh man, I did a blog post on this couple years back on how bad my gym was, dont even go there, most gyms are #scams.

  72. purposeinc

    By the way, if anything in this article makes Randy out to be anything other than a straight shooting honest guy, ignore it. Randy is one of the most down to earth, honest, straight forward, people I have ever met.

    He treats the most unknown, nobody standing in front of him with the utmost of grace, and warmth. You will never see him say no to a picture or a handshake. In fact within minutes after Brock Lesner knocking him out, he was up warmly thanking all of the fans for coming, and graciously acknowledging the fact that Brock had beaten him.

    On a night most people would have gone to bed, he went to Studio 54 where his family, and friends were waiting, and hung out humbly, smiling, just being the world champ that he will always be.

  73. Earl Grey

    Even better to give a huge discount for a full years subscription on one go with a no refunds because of the bargain price clause.
    Get then in Jan and sign them for the full year.

  74. Ben

    I signed up for to learn some new things. I think they subscribe to a similar business model and don’t have nearly enough bandwidth to handle any amount of traffic. Every movie/class took FOREVER to load. I finally canceled out of frustration. Guess that’s what I get for being motivated πŸ˜‰

  75. Scorpiono

    Looking at the model:

    Sell the user on a dream.
    Deliver a quality product.
    Know only 10% of users will actually do the work required to get the results.


    This reflects pretty much in all the ebooks out there and programs sadly.

  76. tobias

    I wonder if this is just an american phenomenon or if the numbers are like this worldwide. Perhaps I’ll see if the numbers are the same in Sweden and make a blogpost about it.

  77. John Carraway

    Why did you decide that getting involved as a gym owner was not for you? I would also like to point out that some gyms get around the overselling to a large group by overpricing to a smaller group–I’ve seen this with several smaller gyms in my area who charge exorbitant fees ($175 a month) for a standard gym membership.

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  79. First Aid Classes

    Great business model. Too bad it really depends on the failure of others. Kinda like health care. Preaches a healthy message but makes it’s money off sick people.

    By the way, I am totally comfortable with Liddel retiring….

  80. Dan Lew

    I got a lifetime membership in a 5 star gym when the economic situation was bad at a dirt cheap price, and includes yoga, I know how to wheel and deal, so im happy!

  81. Nathan Hangen - Digital Emperor

    This reminds me a lot about the blogging and IM niche and associated training programs.

    We’ve had to keep re-opening ours in the same way because people just don’t show up and use the “gym.”

    I don’t like it, and as an entrepreneur, struggle to understand it, but I guess we just have to make the most of it.

  82. Estate Yard

    This doesn’t surprise me at all, but it’s interesting to see how much over a typical gym sells it memberships. I’m proud to say I’m one of the minority who’s upping that LTV by going for years =)

  83. Forest Plansinis

    I found your blog in the “Trackback” section of another blog. You write excellent content. I subscribed to your rss feed so I’ll definitely come back later. Keep up the great work!

  84. John

    My question is: I am 65, retired, living on a small pension, how do I go about getting money and a vacant building so I can get a Fitness Gym?

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  86. Mongolia Jobs

    Gym membership here in Mongolia ranges from about 20 USD per month on the lower end to about 1000 USD per month on the very high end. Only the ones that cost above 100-200 USD per month MAY have a swimming pool. The rest, even if they cost 50-60 USD, don’t have swimming pool and are usually just a very small center without the full range of equipment.

    Having something something like 24 Hour Fitness membership in US is definitely a privilege!

  87. Manesh @ Pine Red

    50% of newbies, who goes to gym, quits with in first 6months. Me too. Just like blogging… Many quit from blogs too, as they are not getting fast money. :) But you are only a Gym quitter but a blog topper, BIG Shoe!

  88. Fred M.

    Agree on the gym membership examples. Don’t forget a great part of any membership model is the “breakage”. The people that pay and actually never use the service. Even retailers use this strategy with Gift Cards. I think it’s somewhere around 20% that never get used.

  89. Baldy

    I can tell you know that there are many reasons for people to join a gym. Let’s have a look at myself. I joined a gym to force myself to get regular exercise. Why? Well, I had read somewhere that in order to combat a receding hairline plenty of exercise would ensure better circulation of the blood in your body and therefore to the hairfollicles in your head as well. Did it work? To have a good reason to go to the gym certainly helped in getting me there every week. But after three months of slogging it out on the treadmill and seeing no visible improvement to my diminishing hairline, I finally decided to call it a day. Eventhough I had paid one year upfront!

  90. Jovan

    With that information, does the idea of having a business setting up small fitness rooms in peoples homes sound like a viable business opportunity?

  91. Cate

    OMG – what an eye opener. I remember the fitness trend of the ’80’s and how absolutely massive it was, but I though that had pretty much died. Duh, of course its still relevant – people are always trying to look better and stay in shape and rarely have the time or motivation to follow through.

    And gee wiz, reading your post – $540 per workout – OUCH. But alas, I am the same. Paid for a membership for 2 years and used it 6 times. I am terrified to do the math and figure out what I paid per workout.

    Anyway thx for the info.

  92. steve

    A gym membership is like anything else. It has to become a habit to be worthwhile. I have owned tons of home equipment, but it is to easy to get distracted at home……especially since I am an online marketer and work at home. I have had a gym membership for years and have gone at least 6 times per week for the past 4 years. I am almost 49 and am in better shape than I was when I was 30 and still in the USMC. I find it a great place to clear my head, listen to podcasts or watch videos while on the cardio machine, and relieve stress. I start every day at the gym after going through my emails on my phone in the car. It is almost my most important expense, and I also get my kids there at least three times per week……..helping them develop good life habits.

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