Ryan Vaughn, owner of GSL Fitness, explains why cutting expenses alone won't save a struggling gym. Fixed costs like rent and coach salaries eat up most revenue, and without stronger sales, expense cuts hit a ceiling. He uses his own nutrition deficit analogy to show the limits of cost-cutting as a growth strategy.
Hey everyone, um, I want to talk about this question about cutting expenses. Um, I was meeting with my nutritionist yesterday and she has had me at a deficit for the last 4 months from a calorie standpoint. And we're going off of the InBody machine, love it. Apparently my resting coma calorie burn is just under 2,200 calories. And I've been eating around 1,800 to 1,900 on average, uh, since January. And she said, uh, she wants me to go back to, uh, getting closer to 2,200. Ultimately, the goal is, she said, to probably be around 2,400, but we don't want to do that big of a jump. So we're starting to go back to maybe a 2,000 to 2,100 average. And I was thinking about this in context of money because I was like, well, how does that relate? Because I'm thinking to myself, well, if I want to lose weight, um, I should have a deficit. But, uh, she said with your body being able to get used to working off the deficit, it potentially is not burning calories the way it's supposed to. Also from a muscle standpoint of not losing any muscle stuff. I know it doesn't look like it, but I am trying to be fit. Um, And, uh, I don't want to lose muscle, um, either, because then— anyways, that's why I have a nutritionist. I don't quite understand all of how that works, but what I do know is how this relates to money. Um, so a lot of times when we are bleeding cash or our gym isn't financially healthy, we go to cutting expenses. And look, just like January through April, I've been at a deficit, or May, January through May. That was good and it was worthwhile. Cutting expenses can work. However, cutting expenses is not always the solution, and cutting expenses isn't always going to get you to that financial healthy outcome. And I can tell you from experience, this is exactly what GSL Fitness, the gym that I'm an owner in, goes through. When I came in, yeah, we had some unnecessary expenses, we had some unproductive expenses, so we cut those. But I can't cut my rent expense because I'm under a freaking lease obligation that the previous owners that we bought from saddled us with. Is the space too big for the number of, number of members that we have? Absolutely. We don't want to pay our coaches less per class. But we were able to cut some classes that didn't have high attendance. So like in our gym now, the classes have good attendance, um, really good attendance Monday, Wednesday through Friday. Tuesday, Thursday, not always so great. Maybe you— anyways, I digress. The point being, we have cut back as many expenses as we can, but between rent and paying our coaches, even with reducing classes and getting rid of the not profitable classes from a margin standpoint, we're still not making money. We're still needing to put money in every month. So in this case, cutting expenses only took us so far. We legit need more sales. And just so you guys know, 'cause you guys who listen have such big hearts and I know you guys wanna help us, We have tried everything. I mean, most of you follow some of the same mentors that we do. And we've tried affinity marketing, we've tried member referrals, another name for affinity marketing. We're doing all the steps that we need to. We're putting money into Facebook ads. We're getting help on that. Anyways, it's the biggest anomaly ever. I don't know the solution, but that's not the point. The point is when you think about your gym and where you're at. Cutting expenses is awesome. I just went through a client yesterday in one of our meetings, and we went through, and usually business owners don't often go through their transactions to see what's going on, but there was a ton. And by ton, that's an accounting term. But yesterday, that ton, there was about 8 or 9 expenses totaling You know, around $3,000 a month that the gym owner was just like, whoa, um, I didn't know I still had that expense. I thought I canceled that. Um, you gotta check. Um, even if you think you canceled it, you want to make sure that it actually is canceled. Cutting expenses can get you so far, but there may become a point that you just legit need more income. And now I'm not I— there would be— it'd be psychotic for me to say that I'm a marketing expert. Um, I am really— we know how to communicate well with tax clients. Um, we have that figured out. But as far as getting gym potential gym members interested, I'm not the solution. But if you are looking for a solution, reach out to someone who has done it. Um, get help with it because that could be what the next step is. Again, more sales is usually not the solution, but there are circumstances where it is. So I just wanted to share that with you as just a realistic explanation that it is possible. And so even as someone with Profit First cash flow management wanting to cut back on expenses to be as lean as possible, cutting expenses— coming from me, I'm letting you know— is not always the solution. Thanks for listening, guys. Remember, profit is a choice. Have the courage and wisdom to choose it.
