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135. Eric Malzone | Future of Fitness

135. Eric Malzone | Future of Fitness

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So it begins

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On today’s podcast, Ackerman sits down with Eric Malzone, who’s been involved in fitness for over 20 years. Originally, a CrossFit affiliate owner Eric now runs a consultant company that Ackerman personally used to help with Own Your Eating. Eric and Ackerman first met on one of Eric’s podcasts, Fitness Blitz Radio,  where Eric interviewed him about Owning Your Eating. Fun fact it’s still Fitness Blitz Radio most listened to episode even two years on.   

Eric owned his affiliate for about eight and a half years before ultimately selling. During the episode, Eric describes how he sold his box successfully, with tangible advice to help you do the same. Even if you’re not looking to sell this advice is invaluable, it will highlight the pitfalls within your business that are not allowing you to make a profit or be able to take a step back and everything not fall apart.

Time Stamps:

(3:00) Eric’s box 
(6:02) Deciding to want to sell – How to take the emotion out of it. 
(13:18) Creating a sellable asset
(19:34) The most common mistakes owning a box 
(22:28) Snowball debt – using this principle but with your time.
(26:59) Robert Linkul – picking a demographic to sever/
(31:24) Money Midset – Jen Sincero
(35:13) Take your member out for coffee regularly
(42:15) How Eric made it to the Best Hour of Their Day.

How to Sell your gym E-Book. 

Recommend books –

Outwitting The Devil – Napoleon Hill

The Alchemist 

Where you can find Eric:

Elite Gym Insider – The Stack Group for gym owners.

Certifiedcoursecreation.com

Future of Fitness Podcast

Fitness Blitz Radio Podcast

Fitness Professional Online

Ackerman’s episode

We value your feedback. After listening, please hit me up with any questions, comments, or thoughts on how we can make this show even better, and if you enjoyed it, please share it!

Instagram; @besthouroftheirday

Support this podcast: https://anchor.fm/jason-ackerman

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Check out our website – besthouroftheirday.com – to learn more about our private coaches development group.

Eric Malzone.mp4 transcript powered by Sonix—the best audio to text transcription service

Eric Malzone.mp4 was automatically transcribed by Sonix with the latest audio-to-text algorithms. This transcript may contain errors. Sonix is the best way to convert your audio to text in 2019.

Ackerman:
All right, we have another very special guest on best hour of their day. We have Eric Malzone and ironically, we met on your podcast.

Eric Malzone:
Yeah, that’s right. Yeah. Full circle, man. Full circle.

Ackerman:
Full circle. So if you don’t know, Eric, because, you know, we have a lot of, you know, CrossFit games athletes on here. Eric actually did. You can be at the Crossfit Games,.

Eric Malzone:
No, no, no, no, no. I was. I was like top five hundred open athlete kind of guy, but no man.

Ackerman:
Well, let me give you the best. I was trying to give a nice introduction to people. You are a podcast host yourself the future of fitness. So I highly recommend listeners check that out. But, you know, the big thing that you do these days is you’re a consultant and a business guy. And I used you and your company in the past to help with our own your eating Web site and design and honestly, just advice. You are one of the most. How can I say this?

Ackerman:
You just steady your steady and you don’t let emotion get too much in the way and I’m the opposite. So I need good advice. You’re a good person to go to. And I’ve I’ve set numerous box owners your way and I think you continue that to help me grow I appreciate that.

Eric Malzone:
Yeah, I appreciate you, man. And it’s every time I get on a conversation with you, I enjoy it. And, you know, I think it’s you you ask me what I do and how to. You know, explain to people what is I do and I have a hard time doing because I’m just a serial entrepreneur. I try a lot of different things. And, you know, every you talk to me six months later, probably something may have failed and I’ve tried something new or there’s a new evolution thereof. So I guess what I can just say is people ask I’m a multi potential. I always like to have multiple things going on. So I have a lot of fingers within the fitness industry innovating and trying new things. So that’s kind of what I’m up to now.

Ackerman:
You know, you’re like a more focused version of me. I think I got a.

Eric Malzone:
With Higher body fat. Yeah.

Ackerman:
So anyway, you know, when you travel a lot. Currently, you’re in Whitefish, Montana. You’ve been all over the country, you know, traveling. And I can appreciate that. The big topic, you and I were kind of like, hey, what are we going to talk about? Because we can do a lot of things like myself. You sold Crossfit, affiliates. Mm hmm. Yes. I’d like to really make that a topic of our discussion today. I get asked all the time about selling a box, and it usually requires me to get on a phone call or answer a bunch of emails. But I figured what better way to, you know, answer everyone’s questions and by having a conversation and talking about it so I can direct them here going forward.

Eric Malzone:
Yeah awesome.

Eric Malzone:
So I sold three affiliates. You sold why? You sold what was originally Crossfit, Pacific Coast, but then rebranded as gravitas fitness. You want to it? When did you open that box?

Eric Malzone:
Yes. So that business, you know, my my Crossfit, background started, I believe in late uhhmm, early 2008. I walked into Crystal Lane’s gym in San Francisco, which was Lane Fitness. And people don’t know who that is. That’s Jacqueline’s family member. And I got hooked on it. You know, I saw this massive growth. I think the time I may have been client number 30 by the time I left to go on my own, I was client 1 60 or there was 150, 160 clients. I mean, so I saw this massive growth and I was like, wow, I can I can do this right. And so I formulated the business. I was actually working in a corporate job at the time. And I got a text message from a college teammate of mine, Schriever Bowen, during Happy Hour and a Friday. And he’s like, you want open a gym? What? Right. And then I thought about it. And one beer later I texted him back. And this is back when I was like texting was like 4, 4, 4, 3, 3. Yeah. So I sound like. Yeah, yeah I do. So we we got on the horn a week later and you know, kind of fast forward the story is six months later we had formed the business, got the affiliate and I had all my earthly bahat longings packed in a car driving from San Francisco to Santa Barbara, which was a town I’d never been to, nor did I know anybody to open a gym and live the dream. And it, you know, through many pitfalls and ups and downs.

Eric Malzone:
Of course, it was a successful gym. And over that span, which is about eight and a half years. You know, I rebranded it, bought out a business partner, gone through just about every trial and tribulation you can do with with a gym landlord issues, you name it, you know, upgraded to a five thousand foot, you know, facility after starting an eight hundred feet multiple times. But the choice to sell was, you know, more of a personal issue. You know, we wanted to you know, we had some some personal things happen in life over 2016, just like bam, bam, bam, bam, which just made me think. And my wife and I think that, hey, you know, let’s all those things that we always talk about that we want to do, you know, live in a mountain town. She want to learn how to ski. And, you know, a lot of things we want to travel, see more places. And the only thing holding us back was owning a gym and being anchored in that town in Santa Barbara is amazing place. Don’t get me wrong. Beautiful community of people. I was so blessed to know everybody in the town, but I just knew it was time to to move on. And, you know, ultimately, when it comes to initiating change of any kind. You know what you want to do and then you find the tiniest first step and you take it and then you see where that leads you and then you take the next one. Right. So go ahead.

Ackerman:
I think that’s important to note. A lot of people think about selling a gym and it’s not often and I should say it’s not always simply, you know, you made this lucrative offer or you’re having a fall out with your business partner. Jason, might be you want some sort of life change.

Eric Malzone:
Yeah, and that’s right.

Ackerman:
So. The question then becomes for people. And I think it’s always different. I sold three gyms for three different reasons and really three different outcomes. What was that like? You had a partner. What did it become when you decided when you made that decision with your wife that you wanted to sell?

Eric Malzone:
Yeah. So when I came home and I told her one, I am like, hey, I think I’m ready. I’m ready to sell the gym. First of all, she was like, don’t mess with me. Don’t don’t say that unless you’re serious. I’m like, no, I’m serious. You know, we talk about moving to a mountain town and living that lifestyle because we’re extremely outdoorsy. And every time we had the opportunity, we are escaping from the beach to the mountains. And so that that was that was actually quite easy. I’m like, no, I’m not kidding. I’m dead serious. And I’m going to start start this thing. And generally, I takes a long time to make decisions. But once I do, they’re set in stone and I move forward. And I think, you know, for people listening who are thinking, well, can it be that simple? Well, everything is simple, but not always easy. Right. And understand, like selling a gym if you ever bought a home or anything like that. I’ve been part of that process. Everything is laid out simply. But there’s always something that happens, right. Whether it’s something in escrow, you know, to come in with more money or, you know, something along the lines of that, there’s always a surprise.

Eric Malzone:
And you have to be ready for that surprise. But the biggest thing when I talk to gym owners who who want to sell their gym is you have to take the emotion out of it, because we tend to get so attached to the community, to the thing we built and the pride behind it. And that, you know, you have to understand what what value really means to a buyer. And depending on who the buyer is, what role you play in the gym, the value can shift significantly because it is very subjective. Right. And that’s the thing about value. So, you know, for me, the first step was reaching out to people they trusted and knew. I reached out to my, you know, a couple of my mentors at the time. James Fitzgerald was one of them. I had a business coach at the time to Chris Cooper and people who were just other otherwise outside of fitness , great business people. I asked him, hey, what is this process look like? So the first thing to do is come up with some kind of valuation. And then that was my step one.

Ackerman:
You mentioned Chris Cooper. I was on his podcast and I sold mine. And that’s why I still continue to get hit up. And I agree. One piece of advice I always give is, you know, ultimately it’s worth what someone is willing to pay.

Eric Malzone:
Yes, exactly.

Ackerman:
We have so much emotion behind it. And it’s like just because you care about it, it’s your baby doesn’t mean it’s worth a million dollars.

Eric Malzone:
Yeah, well, let’s let’s give an example like a really good place to start. A valuation is is take your net profit from the previous year and multiply that times two and a half. OK, that’s a good place to start. Now you have to look at the factors behind that of if it is truly owner operated, if you’re coaching the classes, if you’re doing the programming, if you’re doing all these things, what happens if you get pulled out of that business? The business value greatly decreases. I had worked over an 8 1/2 year span to build a business that I could walk away from at any point, and the things still runs right. The only thing I did was marketing.

Ackerman:
Not many boxes these days are set up that way. Almost all are owner operated. And yes, you can have 200 members, but as soon as I pull you out of it, it falls apart. You know, I think the one thing I tell people is like, hey, the cost of entry to Crossfitters million is not very high. You’re limited by whatever the rent will be but the equipment and whatnot, 30, 40 thousand, which is a lot of money. But to start a business is not for me to want to buy your business. There has to be a tremendous amount of value there or I’ll just open my own.

Eric Malzone:
Yes. And that’s I I’ve been approached about buying other gyms in the area and they would come to me with some evaluation that I could tell. They just scribbled on a piece of paper with little thought. And I was like, well, where did you get this number? Where did you get one hundred thousand? I’m like, well, this is that’s you know, I talked to a consultant. That’s what they said, first you you didn’t talk to anybody, but you just came up with a number that you want and good for you for asking. But, you know, the fact matter is, just like you said, as I can easily just wait for you to go out of business potentially. Right. This sounds ruthless, but this is business. You know, I could go await and just buy your equipment, you know, at 50 cents on the dollar or less and then rent another space and start take your spot in that area. And that’s that’s I say you’re going to take the emotion out of it and realize what the situation is that you’re actually in. Now, if you are an owner operator. Right. And you have a lot of passion for what you do and you can find somebody who shares that passion. Right. Who wants to step into your role, then that’s probably your best bet. Because what you can do is come up with some kind of equity share or a long term payout plan.

Eric Malzone:
Unless they have cash, which maybe they don’t. Right. So it’s very. Because if they did have cash, they’d probably their opened. Right. So it’s very individualized on the case. But there’s a lot of different scenarios. And if people actually want to email me, I have a whole e-book on this. Or I could give it to you, Jason, that I wrote on all the different parameters and different examples. And it was written by mostly written by a gentleman named John Eagle, who I’d like to give respect to because you actually passed away this year. Great guy. I’ve been in the gym business for years and years and years and we laid out four different scenarios of what it is. And we have a really nice checklist of things you need to have in place before you go approach, you know, potential buyers. So I can give that to you, Jason, if you want. You can distribute it to people. It’s free, but it’s a really good asset on how to on how to look at each scenario from a buyer perspective. Right. And then the seller perspective and then kind of the truth. Right. Because there’s three sides to every story. He should. He said she said. And then what really happened? Kind of same in business sales.

Ackerman:
Yeah. We’ll definitely share that with all the notes and put information by you and we’ll make that available to everybody. Because if whether we I think would be a great read, even if you’re just thinking about opening an affiliate to be compared, you know, have a really successful friend outside of the fitness world, and he always says if you’re starting a business, the goal should be to sell it.

Ackerman:
Yes. I think we.

Eric Malzone:
You should always be working towards your business as a sellable asset because that just means it’s healthy.

Ackerman:
Great, a great point, and I think so many I just said Chris Cooper on it. He has a new book out. Founder, Farmer, Tinker Thief and so many people are in that founder phase where it’s like you basically bought yourself a job and.

Ackerman:
I think for a lot of box owners would be. Real with themselves and take it. Take a look at psych art, could you make more money coaching for someone else and remove this headache from your life? Yeah. So what were some of the things you did? Well, to create a sellable asset. So box owners listening and they think to themselves, this guy’s right. I listened to a previous episode. They’re making sense. What what are some tangible steps they can make to make their box not just more successful with sellable?

Eric Malzone:
This is going to sound a little out of left field, but right now, go put a four week vacation on your calendar.

Ackerman:
Four weeks?

Eric Malzone:
Four weeks, one month.

Ackerman:
In a row?

Eric Malzone:
In a row, at least put it on the calendar. Right. Maybe you don’t have to take it. Or maybe you do. Maybe it’s just a staycation. Maybe you go somewhere and you go like my wife and I. You go camping for the outdoors for a long time. Right. But the point is, you want to have something in there where you’re like, okay, I got to sit up every single system so this thing runs perfectly while I’m gone. Have to get the right staff to communicate. I have to have the right procedures, you know? Everything has to be systematized so that you are no longer the thing that’s holding it back. Doesn’t have to four weeks you provided two weeks get just by just fine. But I want to impress upon people that, you know, you should be a step away from the business for a long period of time and that it’s going to be and that’s going to force you to look at all the different weak spots of your business and and address them quickly.

Ackerman:
I’ve heard that from some of the best coaches out there. I know Ben Bertran talks about it. If you can’t take a you can’t take a one week vacation. I mean, I love the idea of a four week one because that really sets you up. You can get by for a week. The gym all run by, you know, in four weeks. Memberships are coming due again. You know, bills are bills or due new members are going to come in where you have to sell them on? I’m buying a membership. Yeah, I think just having that on there, I think that’s a great idea. And actually maybe even two weeks pay for the vacation. So you’re going. Yeah, you don’t want to lose that deposit you put down and you know, whether it’s camping or just you’re going somewhere. And I think that’s a great idea. So put that on his schedule with us.

Eric Malzone:
Get your numbers together. I think that’s a big thing. I mean, if you don’t have if you haven’t been in business for like three years and you may have a problem selling the business as it is. But through three years, PNL, airtight numbers, a really solid lease that’s a big part of it is like what is the status of your lease? That’s a big red flag. If it’s not secure for at least two years at the current rate, a lot of buyers, if they’re savvy, will see that as a huge red flag and want that addresses that actually came back to me in my situation when I sold and almost blew the whole thing up because I didn’t realize that I had acquired another space and that the lease dates had actually shifted. So that when I was about to sell and this is, you know, landlords in Santa Barbara, California, are the worst. You know, they’re like, oh, yeah. Oh, congratulations. That’s great. I’m excited for you. So that other spot that you took over. Yeah, we’re gonna double that rent. What? Right. And luckily, I had a good attorney. Right. We we found a way to get over that hurdle and it went through well, but that almost blew the whole thing up. And that’s the importance of getting a good lease and making sure that, you know, ultimately, if you can buy if you can buy the property, that’s best but making sure that your lease is airtight. You have all your documentation in place for profit and loss for three years. There’s no questions about that. I would also make sure that if it’s possible. Don’t accrue debt on the business. Right. Because I had debt like I had a buyout, my business partner in twenty sixteen Traver. He was moving on in life and I took on the debt. From a personal standpoint, through a bank, so that I knew if I want to sell some day, I want to be attached to the business. Right. So that’s another thing that’s going to happen. Right. But just make sure there’s a way that the debt is not attached. The business when you leave.

Ackerman:
So those are really three tangible pieces of advice. Your numbers, you know, two or three years of your PNL. Check out your lease, because I’ve seen I’ve seen sales fall through for that same reason. This is even if it’s like, hey, this is your last year on the lease. Now, my fear is, well, if I come in and the landlord doesn’t want to resign me. You know, what have you sold me? Yeah. And then and then lastly, not have debt. Easier said than done. Like if someone’s looking from a buying perspective, they’re buying your business and then also potentially taking over your debt.

Eric Malzone:
You just you don’t want the debt permanently attached to the business. Like, you know, maybe if it’s in the business name, but it’s underwritten for, you know, something something like that. And I think number one through all of this is get a great business attorney or a solid one. Yeah. They’re our lives can be shocking. You know, I think the whole process I probably had had to spend about six thousand dollars with my business attorney. And it was they did a great job in it. And the day I would I would have paid double, you know, to get that sale done, because they they handled things extremely well. Because once you start getting legal letters from a landlord or something like that, there’s nothing more horrifying than getting a threatening legal letter. And then you start to realize, oh, that’s just the way they talk. Right. You still hear attorneys talk. They’re always threatening.

Ackerman:
So it’s true, though, in you know, even in my book, I passed out their day. I’m writing all about this advice and these lessons. And I’m like, OK, you guys want something tangible. I always say, get a good accountant. You know, an attorney is right there. You got a good accountant. And a good attorney are invaluable because What you don’t spend there will come back to bite you in the ass.

Eric Malzone:
Yes.

Ackerman:
So.

Eric Malzone:
A thousand times.

Ackerman:
Well, let’s let’s take a step back. Whatever. Even if I wasn’t going to sell. But I just am running a box. What are the three most common mistakes you’ve seen? You mentor a lot of people in all of businesses. But let’s make it specific towards Crossfit,. What are three of the most common mistakes you’ve seen in box ownership?

Eric Malzone:
I I think no one is paying attention to the wrong metrics, but it’s very easy to get wound up in and I don’t know if it’s much of an issue anymore because there are a lot of good business mentors who have come about within the industry now. But when I started, you know, Andy Petranek was and and John Birch were like the first business coaches within within Crossfit,. Remember the biz? You remember that?

Ackerman:
Oh, yeah. I know the bizz, yas pretty well. yeah.

Eric Malzone:
I’m still buddies with Andy. And I talked to John and once while two great, great guys. But back then, it was always about like, well, how many members do you have? Right. How big is your gym? Right. These are all vanity metrics. But now we’re starting to see, like, you know, and this is real business is making its way into Crossfit, has for years now as well. What’s what’s the most important metric? Well, number one, what’s your profit? Right. And a lot of people know what your profit is, what’s your retention rate and what your average client value. So knowing those numbers and really paying attention and focusing on the metrics that matter to you and your sanity and your bottom line, that’s that’s the biggest thing. Number two is not taking time to create the systems and. Here’s the thing is it takes time. Take the time to make the metrics, so you got to start making time for yourself where you’re not just doing the operations of a gym, so business owners I work with or gym owners, the first thing we start doing is identifying, okay, at what point are you actually gonna do the work that I’m assigning you right now? Like, well, and it’s tough because, you know. One thing that will frustrate a business mentor is going week to week talking about the same topic when none of the homework gets done.

Eric Malzone:
So the first thing I have to do is actually make the time. And, you know, whatever that is, if it’s just an hour on Monday morning to start figuring out, OK, how can I start handing things off? What are the what are the things actually take place in my gym to keep it running every day from, you know, obviously onboarding new clients, you know, programming the workouts, coaching classes. Those are obvious. But what about the little things like who goes and gets the toilet paper when they’re out? Right. Who you know, who’s cleaning, you know, who’s mopping the floor. Who was doing these little things that you don’t necessarily think about until you’re actual business owner. So listening out this things is starting to take those lowest the lowest priority tasks or the lowest skill tasks starting in those off immediately. And it’s kind of like you give her the debt snowball.

Ackerman:
No example that.

Eric Malzone:
So if you have a massive amount of debt, OK. So you have like, you know, a mortgage and you have a car payment, you have multiple credit card bills and you have a bunch of stuff you’ve got to pay every month.

Eric Malzone:
You take whatever the smallest balances and the smallest payment, you pay that off first, right. Then you take that money that you’re paying towards that. You put it towards the next. One right. The one that’s up the scale. So the highest one eventually gets to the mortgage. But you keep you using that money and you keep pinching and then you get the whole thing snowballs until eventually you’re starting to pay off more debt quicker and faster. And the same thing goes with your time in the gym and the things that you’re doing. Take the smallest tasks. Right. Take your time. Repetitive things. Right. And you have to this takes awareness to hand that off to somebody else. Hire an ad man for $10 an hour, a virtual assistant to do some email stuff, whatever it is. Take your time. Now you take that extra time. Now you developing systems that will take over, things that are taking up a significant amount of time and it keeps going until eventually you’re doing the things that a business owner should be doing, which is managing and developing staff. Figure out new ways to market, new opening up, new revenue streams, things like that. So that would be number two.

Ackerman:
Funny. And before you go on in number three. Couple of things you said, you know, from a business perspective, business coaching. It’s frustrating. It’s no different than coaching. Right. So if you’re listening, you don’t want to be that athlete, if you will, and doesn’t do what you’re telling them. And then getting frustrated, you’re not getting the results you want.

Eric Malzone:
Yeah. And it’s it’s it’s out of love. Right. Like you want to see these people progress. And it’s hard to let go of some things. Right. Sometimes people like being busy because it helps them feel productive. But, you know, if you’re doing it like, well, I like being you know, I like being the business owner who’s the hustler, right. Who’s working 60 hours a week because, you know, I’m going to make it happen or just take a step back.

Ackerman:
Gary V made that sexy.

Eric Malzone:
Yeah, yeah, yeah, yeah. Well, that’s a whole another topic, but I guarantee Gary V doesn’t change the toilet paper.

Ackerman:
Yeah, I agree.

Eric Malzone:
Right. So I think taking those tasks, don’t be afraid to start hiring help. And you know, it can be as simple as like, hey, find an intern at a college. Right. Who will trade you for a membership? And she’ll do or he’ll do four hours of work every week.

Ackerman:
That’s one of the first things I did. I mean, I had free coaches free years before I realized, OK, I need to pay these people. And, you know, definitely something to look at you.

Ackerman:
Every box has that person goes to school or that struggles to afford a membership that you can certainly create a relationship with. Say, you know, something else you mentioned in that systems area is something you guys preach to me for a long time and that’s eliminate automate delegate. Really? Yes. You know, that’s a lot of what you’re saying. And I and I agree with you. Make a list of everything you have to do from, you know, coaching a class to buying toilet paper. What can be eliminated, what can be automated and what can be delegated and don’t? You now don’t delegate what can be eliminated.

Eric Malzone:
Yes. Yes. What’s number three? You know, I think from a broader perspective and there’s so many things it’s to put him in a three is tough. But I would think really understanding who you’re having a clear vision of for your ideal client is what they want and then creating the experience around that person. You can’t you can add on a local. Now I’m in the online space. Right. You have to have a very specific niche when you’re in the online space, in the brick and water local area. You can you can afford to be a little broader. Right. And who you serve. But you can’t serve everybody. Right. I mean, if you’re if you’re a and I know this from from personal experience, you can’t be the gym that handles the thirty five to fifty five year old busy, you know, a fluence. You know, kids mortgage. Right. That’s one specific demographic or avatar. And then you can’t also serve the Crossfit, athlete. Right. That’s a whole another ball. Right. They’re just completely different. And I think the people that I see most who are most successful have taken time to figure out who they like to work with. Right. Who tends to be attracted to their style of coaching and business. And it takes a little time to figure that out.

Eric Malzone:
But then fully committing to that. Right. So creating a whole user experience. So there’s a great example of a gentleman sent across the gym, but he’s out of Sacramento, California. His name’s Robert Linkul, and he has completely built his business and very successful gym business around the 55 and over. Right. That’s all he serves. That’s who he serves and everything from how he markets. Right. Like he’s not doing Instagram ads for 55 and over. Right. He’s doing a little bit of Facebook and he’s doing door hangers. Right. Because that’s the marketing that works down to how he assesses people and how they’re on ramp happens. It’s completely different. Right. And then the whole story know what happens. He has a very fluid market. Right. People over 55 can afford small group training. He has he isn’t. He does very little marketing. He does referral generation, not lead generation, because they’re so happy that they’re referring people because they know exactly who fits into their tribe. Right. And then it just becomes easier. It doesn’t have to have multiple lines of programming. Right. It’s just this one thing. So I think finding out who your ideal client is, who your target market is completely committing to it, which is the scary part.

Ackerman:
Well, I think that’s a valid point because, you know, granted, this is geared primarily towards Crossfitters. And if a box owner is listening, they’re going to say, I don’t have an ideal client is anybody can do Crossfit,, which is true, but you start to be able to afford it. Right. You also have to most likely live in a certain radius to the gym.

Ackerman:
You know, you have to be able to attend to class times that we have. So there are some parameters you should be thinking about. You may be trying to get everybody then realize, OK, I. Turns out most college kids can’t afford our rate in Naples, Florida, or wherever you live. So you need to think about that demographic, not just, you know, age group. And again, if you’re trying to be that box that sends a team to the games, which is clearly changed these days, you know, you’re you’re not trying to be the box and might get a seven year old woman to come into class.

Eric Malzone:
Yeah. Well, you know, back when I started and back when you started just being Crossfit, was a differentiator.

Ackerman:
All Yeah. I mean I in the book I talk about like for the first two years it was former athletes or people that just wanted to change in the gym. It wasn’t middle aged men and women coming in because they couldn’t, you know, quote unquote couldn’t do Crossfit,.

Eric Malzone:
Yeah. Yeah. And now it’s like, well, by the time I sold there was. 5 Crossfit, affiliates within three square miles.

Ackerman:
Right gratued, SCANA Barbella a little different than me. Yeah. We’re like Starbucks these days. Yeah.

Eric Malzone:
Different, but the same. And maybe that was you know, California is just a very they’re kind of on the cutting edge of anything fitness related. So maybe, you know, the trends trickled back through, you know, more of middle America over the three year span. But the point is, it’s like that was a differentiator. Now, if you don’t have a differentiated in the market, what’s what separates me. If I see if I don’t know anything about Crossfit,, like I want to try this Crossfit, thing. Right. There’s three other gyms that I can go to. What separates you from them and what makes you a non-commodity? They don’t know. They don’t know the people that the average people, they don’t know a Crossfitters, not, you know, a franchise, right. They don’t know that it’s not one big chain. So how do you differentiate? And that’s usually by finding it, you know, one to three very specific avatars and serving them extremely well. You know what else happens at that point to. You can charge more.

Ackerman:
Yeah, I think, you know, when you get the right avatar and they realize they they will pick up on the fact that you are the box for them. They’ll be willing to pay more, especially if your avatar happens to be, you know, a higher socio economic level. In reality, most most Crossfitters are you know, I don’t like to think that it’s dispensable because I think everyone needs to focus on their health and fitness. One hundred and fifty dollars on average a month is is expensive compared to a standard gym rate, which I’ve said over and over. That’s our competition. Your boss, you know, your global gyms had bumper plates. That’s who you’re competing against these days.

Eric Malzone:
So, yeah, well, I would say that $150 is not that expensive. And I think that’s you know, I think it’s a my a money mindset that seems to be pervasive within the Crossfit, community as well, which I know a lot of business coaches within the realm are always trying to change is like by the time granted we can say I was in Santa Barbara. It’s a very affluent area. By the time I sold, my unlimited was to sixty five per month and I felt very confident asking for that. So I think if there’s a number for that we can talk about is changing your money mindset and working very hard around that. And if you don’t know what that means and just move out with a money mindset and I think one of the best ones I know. Have you heard of Jen Sincero books.

Ackerman:
Yeah, you are badass at making money, that one.

Eric Malzone:
Yeah. Yeah, it’s great. You know, it really starts a shift. I understand that your beliefs. Right. Because the chances are if you’re a gym owner, a lot of your clients probably make more money than you do. Okay. Just gonna I’m gonna be honest now,.

Ackerman:
I think, you know, and I’ve heard people saying in private that to say it’s like we try to charge people based on what we can afford. Not what they can afford.

Yeah, exactly. And I would take a look like, you know, money’s not dirty thing, right. It’s OK to make money and serve a population. You don’t have to be a martyr. You don’t have to have a second job to do this. So reverse engineer, how much money do you want to make that empowers you to be the best version of yourself? And that means, you know, does it mean you have to take it on you off to drive a JAG? Right. You don’t have to be a rich asshole. I swear. I just did.

Ackerman:
I don’t think assholes swear anymore.

Eric Malzone:
Okay good. But if it allows you to provide a better service and allows you to if you make more money to deliver better service, be a better part of your community, then you should have that. So take a number that you want to make. Reverse engineer it right through how much you need to be charging per client. And don’t be scared to ask for it. You know, because once you start doing that, you’re going to start attracting what you’re do is you’re gonna automatically figure out what kind of value do I need to deliver to ask for a price like that. And you’ll you’ll do it. You’ll create it. Right. And then you’ll start to attract the people that you want because you’ve created the value that they’re looking for. And then you have a business that, you know, eventually you can probably sell.

Ackerman:
That’s huge. I mean, I think so many. Again, I think really any any business specifically in Crossfit, think we get into it because we love it. We’re good at it. We’ll be right. It’s like the Imus. And we talk it’s you are good at your craft. So you think you should open a business and we don’t think about any of those things you just said.

Ackerman:
I know I didn’t I was very lucky in that I got into Crossfit, at the right time. Did things the right way and grew to this huge, huge sell but for a lot of people it’s like, oh, we don’t think about all these things. We were limited by our financial beliefs. I know I was I was like, I can’t charge one hundred dollars a month. I wouldn’t be able to afford that. People kept paying. And I I remember having this conversation with one of my members when we were we went from like one hundred to one twenty five. And the member is like, what do you want to lose all your members? And this was after I was like a little more confident. And I was I will see everyone paid. Yeah. And, you know, maybe pat myself a little bit on the back. I was doing things well. So they were like, I don’t want to give that up. And I think a lot of box owners need to realize that. You know, I talked about increasing rates with Chris Cooper last week, but I think don’t be afraid to change that mindset. I love those jeans and Sharon books both. I read her new one. Have you read the new one yet?

Eric Malzone:
No, no. I know she had a new one. Yeah, it’s it’s really it’s powerful because here’s the thing. And it’s a lot of perception. Right. Perceived value. If I have two pens. OK. Let’s just say, like, I don’t know, people are watching video, but I have two pens here. They’re obviously different. But if they’re the same pens. Same exact pens, man. Same exact place by the same exact factory. Right. And when it costs ninety nine cents, the other one costs $4. You’re like, whoa, what’s up with that $4 one. That must be a nice pen. Must be something to it. Right. I’m interested and I want to try that one. Right. That’s the way we work. And you know, if you’re thinking, well, my market won’t allow for it or, you know, people here will pay for that. Well, then figure out ways to increase the value. Right. If you’re not confident in it that how do you increase value? And that’s that’s the thing. If you’re constantly looking for ways to increase value, you’ll be able to consistently raise your rates to meet the demand on that value. And you just have to be confident in it. And it’s it’s not like, Eric, I hear you, but it’s hard. It. Well, it is, but it isn’t. Right. It’s your mental outlook on how the whole thing is going down. If you don’t think that you’re delivering the value to your clients that you you should be. Then ask your clients.

Ackerman:
That’s a on a stop in for because that’s a great piece of advice that people don’t do. I always whenever I talk to boxes and I tell them all the time, they take out your best clients for coffee time and find out like we think about the people that we’ve talked to, the ones that stay and ask why they stay. Because one of the worst things you can do is do things well and not know it and not and not know to try to continue to do it.

Eric Malzone:
Yeah, that was a regular thing. I took my clients out to coffee or lunch all the time. You know what? I would always joke, but it’s not a joke because it’s true. I sold more products or services over coffee than I did through any Facebook ad.

Ackerman:
You know what I mean, 3 dollars for3 dollars. Stations.

Eric Malzone:
And if you’re gonna do it, here’s the thing, is create that that crazy product or that crazy service, right. I had a thousand dollar private training nutrition package, so I would go have coffee with my clients. And at the end, in a very nice way, I would be like, hey, want to get your thoughts on this? You know, think about putting together this this personal training nutrition package. And, you know, this this this cost a thousand dollars. What do you think, Michael? I think it’s great. Do you know anybody who’d be interested in that? Yeah, I want to get my husband in this. Hey, you need to lose 10 pounds. Cool. Okay, great. Now that happen a lot. You know, because you’re building rapport and then you start to understand like because you get to ask questions of people. And a lot of times you take amounts of that coffee scenario and they’re gonna be. They’re not going to give you the hard truth because they probably like you, right. But you will start to understand where if you’re asking the questions. Right. Which is a whole another podcast, right. Where the value is that they see and how you’re delivering that value to them and how you can take that knowledge and really put the gas on the pedal and blow the doors off the value.

Ackerman:
And, you know, working with you in the past, you guys taught me two valuable lessons. One was even to this day when I would do something new with, say, own your eating or another company, I would still continue to undervalue myself. And you guys would always give me charged more, charge more. And every single time worked out. And then the second thing, which you’ve kind of I don’t think you realize you touched upon, was like the Cadillac. That was what you were talking about with pens somewhat. You know, maybe you have that Cadillac product or membership at your box. And it’s a thousand dollars, like Eric just said. And not everybody does it. But they see that. And like, okay, well, I’ll take the unlimited membership still $200 a month. But, you know, by having that super high ticket item, then default to the medium one versus going to the lowest one all the time.

Eric Malzone:
Yeah. Like 90 percent of the time. Right in that undervaluing thing is something that’s so universal. I I do it to myself all the time. You know, Kate here, Omiyo and I have this great service where recreate online accredited certifications for people. And we’re just starting to realize like how much value that is really there and how much we’ve been undervaluing a service because we actually create, you know, quarter million dollar revenue streams for people. And so I think what it takes, Jason, is is outside perspective, somebody who can look at your situation and say, no, you should charge more or maybe you should shift the way you do this. And that’s that’s really that’s the value of the mentor is mostly outside perspective.

Ackerman:
And we could probably have a no another podcast on that. But e.g. you mentioned Keto, which we should kind of touch on real quick. You guys build sort of cert courses, certifications for people.

Ackerman:
Are you guys built the Own Your Eating CERT Corps? So if you’ve taken our course or you want to, you can take it online. You get Crossfit, CEO use for your level three and level four credential. You guys do that. So maybe you want to do a fitness one or maybe you want to do one on the trumpet, right? You can do that.

Eric Malzone:
Yeah. Yeah, it’s a great way. I mean, and the way I see the future of education is certainly becoming online. And if you want to get out ahead of things is create if you have a spare specific area of knowledge, write something that like Jason does, write in Own Your Eating nutrition, something he’s done. You can take, you know, a certification, online certification like Jason’s and walk out of with everything you need to actually start an online business. And that’s that’s the type of certifications and accreditation that we look for for partners where we do things like that. And it’s an amazing opportunity. And, you know, you know, for someone like you, Jason, you’re obviously an author. But, you know, getting your knowledge out there and that type of in that online space is a whole nother, you know, leg to your business, which is really powerful, too.

Ackerman:
Well, and I agree with you on kind of the direction the world is going. You know, I talked about going to college and, you know, master’s degrees and all that stuff. But I mean, it’s online these days, whether it’s ours or, you know, I see Seth Godin as like his all MBA. There’s so many cool things out there. And for a lot of them, you’re right. Like our goal with our program is you take it and you have a new business just from learning from us. That’s really, really cool. But you could reach out to Eric if you have an interest in that. You know, all of what we’ve discussed is important, but the topic of this show is best hour of their day. So you can do all these things we’re saying. But at the end of the day, if you’re not providing the best hour, probably doesn’t matter. What were some of your. Tamps, what did you do as a coach to cultivate that at your box? How did you provide the best hour of your members day, man?

Eric Malzone:
That was the fun, right? I mean, and when you get all the business things aside, the marketing, the systems, when you get to coach and get on the floor, I think the biggest thing is make sure you bring the best of you with you and leave all the other shit behind. You know, it was it was really easy to, you know, maybe you just read an email right before you get on the floor and you’re like, oh, man, I got a cancellation or something like that. Leave that behind. Go enjoy it. Put yourself at a high level of energy and resonate with your clients and make sure that. You know. Not only are you giving to them right in the form of the energy and the excitement and the experience, but allow yourself to take it back in, right. That’s part of the exchange of energy that goes on in a 60 minute class. You know, allow them to elevate you, ride, share things with them. You know, don’t be a downer, but allow yourself to take that energy back because it’s just going to completely circle around in the room. And I think that’s that’s the biggest thing is leave all the other shit behind. When you’re out there coaching, be present. Right. Look at people and understand that you are the best hour of their day. And if you believe that, you will resonate that throughout the class and you should have a ton of fun doing it. So it’s just a state of mind. I think that’s the biggest thing is we can get a little tactics like, OK, what happens if someone walks in the class? Of course, they need to be greeted, right? You ask him the question, you do the name game. Hey, let’s go go around and say, hey, what’s your name, your first name, your favorite type of food. Right. And you know, that starts conversations and all that. And you can play games for warm up. All are great tactics. But the biggest thing is be present because that’s the thing that people feel the most.

Ackerman:
That’s solid advice, be present. And I think this day and age. I had a conversation with Bill Andthese also on the podcast and we talked about how hard that is in today’s day and age with the phone.

Ackerman:
Put your phone down. Don’t bring it into the classroom and be present with your members. Have some questions that I think you’re going to give some great answers. I’m excited for these questions. One, what book would you recommend these listeners read? And I’ve read a lot of books. I know it. I know what book you’re going to recommend. I want to wait. I not advise you bragging. I’ll tell you, I’ll be honest. You’ve run out of anyone. You’ve probably recommended the most books and I’ve actually read. So I want to hear what you’re going to say. So I know what you’re going to say.

Eric Malzone:
Well, I read a lot. I do think that you can be mentored by anybody in the world for almost free. Right. If you just pick up the right book. So can I do, too? Because it’s hard for me. I read a lot of books in twenty eighteen. I always pick one or two that I reread throughout the next year in this year’s books or two. Number one is essentialism which is put them on the earth. You’re thinking about.

Ackerman:
No, I have another one. Essentialism is when you recommend it. And it was Greg McCowen. Yeah. It was my favorite of twenty eighteen as well.

Eric Malzone:
Excellent. Excellent book. It really for me, especially because I describe myself as a multi potential. I really need to rein myself in sometimes. Number two is. Oh God. Outwitting the devil. So if you know this. Napoleon Hill, if you know him, so he obviously can grow rich. Right. That was his pride. The first self-help development book back in like the 1930s. I think there is this. He wrote a second book. Right. And it didn’t actually get published until, I think the last decade. And because the family held on to the rights anyway. It’s this really incredible thing where he just makes up an entire conversation that he has with the devil and how to essentially overcome all of the things that we deal with as humans that block us from success. The devil is essentially representative of our own egos and how our society is put mechanisms into to break us down or not allow us to reach our full potential. So that one, if you’re ready. And I will get the audio book as it’ll blow your mind. Right. So outwitting the devil and essentialism bigram account.

Ackerman:
Right. We’ll have that one. But I am surprised you didn’t mention the alchemist.

Eric Malzone:
Oh, yeah, yeah. Well, god, I feel like that’s just basic reading. Right. Isn’t that just something that people should read all the time?

Ackerman:
It’s not.

Eric Malzone:
Yeah. It’s amazing. That book was my I didn’t read a lot. And so my mid until my late 20s and a girlfriend of my own time. She’s like, you should read. I was like, I don’t want to read. She’s like, oh, no, you should read. Read this book. And I read. And that’s what got me it. I realize that there is more to reading than the stuff I had to read in school. And that was that was the Alchemist. That one, if you’re like, I’d really like to read it. Go read The Alchemist.

Ackerman:
That’s probably been the most commonly recommended book so far from our guests.

Eric Malzone:
Rightfully so.

Ackerman:
All right, Eric. Where can people reach you for all things? I know you have your new company, elite gym insiders. And if someone wants to learn more from you, what can they do?

Eric Malzone:
Yeah. So a legion of insiders is is a slack community of gym owners. Or you can just go and there’s an application for it. It doesn’t cost anything, but you can find me there. Certified course creation dot com is pulling with the best places to find me right now. And then I’m all over. I’m on Facebook and LinkedIn quite often, so you can find me there really easily. Last names Malzahn, MHL, Zio and E! It’s like a Killzone with an M.

Eric Malzone:
It’ll be in the notes. Don’t worry, they’ll know to spell your name. And then of course, on your own podcast, The Future of Fitness.

Eric Malzone:
Yep. The future of fitness. And I have the fitness blitz radio as well done about 500 interviews with people in the fitness industry over the last year and a half. So there is a tremendous amount of insights and knowledge and probably some that people listening have been on one of the shows. So am I still the most downloaded episode?

Eric Malzone:
On the Finniss Blitz radio? I do believe you are.

Ackerman:
Yeah, I am. I will take that to my grave. I’m excited. Eric, we could talk for hours, but I appreciate your time. Thank you so much. I’m about to go download Outwitting the Devil and appreciate it. Thanks for coming on.

Eric Malzone:
Yeah. This is a lot of fun. Man, keep up the great work.

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