The Biggest Mistake in the Industry

by Carl Raghavan, SSC | March 24, 2020

One of the biggest mistakes in the fitness industry – and it’s one I’ve seen time and time again – is over-expansion. If a gym is successful, opening more locations may seem a logical next step, but too often expansion robs the gym of the elusive original quality that made it successful in the first place. 

I’ve seen this mistake in all areas of the industry. I’ve seen it drain a once-thriving company of all its key trainers and coaches. I’ve seen this brain-drain (or should that be brawn-drain?) snowball into a loss of regular, consistent clients, and eventually into loss of earnings, to the point that the gym closes down. Once its reputation goes, it’s finished. Nor is this process restricted to any particular sector: I’ve witnessed it happening to boutique gyms in fancy parts of  London and gritty CrossFit gyms in outer suburbs, as well as to individual trainers who don’t realize why they’re struggling to stay afloat. 

Passion is the secret ingredient behind a successful gym, but no one at personal-training school tells you that. It needs to be protected and nurtured. Passion – the drive to be a better coach, teacher, lifter, and student – is the crucial ingredient required if you’re going to keep persisting day by day in an uncertain industry where it feels like you’re constantly at the mercy of a chaotic jumble of different variables, any one of which might shut your business down for good. 

In my experience, commitment to what I do is what keeps my clients (well, most of them) coming back. People can tell when you’re teaching something you love. You radiate that passion like a light bulb. If something is important, you will make time to explain it. If you want a client to perform a lift a certain way, you’ll have valid reasons, and you’ll be able to make those clear. When a client realizes that he or she is doing something important, it makes the whole process feel more purposeful, which in turn leads to greater accountability. 

The fitness industry has always attracted big, compelling personalities. It’s also a very tough place for a freelancer trying to make it by themselves, so when large companies or lucky smaller ones manage to land some of these passionate, big-personality trainers, it seems like a natural fit. Sadly, as they grow, these companies often forget how important their staff are to their business. In the drive to expand, they forget to nurture their new employees, and they begin hiring drones instead of interesting, passionate individuals. After all, clients don’t deal with a faceless company – they deal with their trainers. They develop working relationships with their trainers. They don’t view them as replaceable parts in a corporate machine. Yet, too often, gyms do. They don’t realize how lucky they were to hire such great worker bees, and they don’t realise that if those bees don’t get any honey, they’ll fly off to another hive. I’m sounding flippant here, but it’s true. It’s human nature. But when it happens to a gym, the owners are still left wondering why. 

This is why! 

You have got to take care of your people. They are the ones who make your company run successfully, so you need to reward them accordingly and make them feel valued. If you treat them with disrespect and pay them peanuts, eventually they’ll stick their middle fingers up and stop performing at their best. It may not happen immediately, but, like leaving a tap to drip, eventually you’ll flood the bathroom and get evicted. 

If you’re not careful, this steep decline will happen and it will undermine your business. So don’t be the guy left scratching his head and wondering where it all went so wrong. Take care of your people, keep the quality of your product high, and your company will take care of itself. I know this from experience: I’ve been part of some great companies and some not-so-great ones, and I could always tell when the boat was sinking. 

What I’m saying here is hardly the latest breakthrough in business strategy – it’s simple logic. And it applies well beyond the fitness industry. Take Starbucks, for instance. In 2008, the company was in trouble. It had expanded massively, peaking at around 15,000 stores, but recently its stock price had tanked. So the company decided to bring back its original CEO, Howard Schultz. Schultz made some sweeping changes: he provided better incentives and benefits to his employees, scaled back on the additional merchandise in stores, and focused on making better coffee. “If we take an honest look at Starbucks today,” said Schultz, “then we know that we are emerging from a period in which we invested in infrastructure ahead of the growth curve. We will now shift our emphasis back onto customer-facing initiatives.” In other words, over-expansion had distracted them from what really mattered: happier employees and a higher-quality product. There is no substitute for those two things, and customers do respond to them. As soon as you stop caring about quality and shift all of your focus onto your bottom line, that’s when a company – fitness-related or otherwise – plummets into the abyss. 

Not, of course, that expansion is inherently a bad thing. Today, Starbucks has more than 8,000 stores in the US and an annual turnover of billions of dollars, which clearly it would not have achieved without expansion. Expansion is a crucial part of growing a business and can be accomplished very successfully – but it can’t be done recklessly. The quality of the product must remain paramount. A company with staying power knows this, and customers do too. The cream always rises to the top.