Transcription
We're in the gym space. Uh, we sell a best way to describe this, assessable growth platform for gyms. We do $4 million revenue. Uh, we'd like to be at 10 in two years. I think it's pretty, what's stopping me? I don't think anything's really stopping us. I guess the question is more like, uh, if you could help me identify the right question to ask to, uh, kind of ease the path, I guess, because there's a lot of ways to skin the cat, and there's, there's ops, there's fulfillment, there's, you know, acquisition.
Give me the metrics real quick. So it's 4 million top line, right? What's profit? 2.2. Okay. I'm just saying two, whatever. Okay. So you got 50%. Um, what's CAC? CAC is, uh, about a thousand bucks. Okay. And are you, what's primary method? Prim, uh, right now Meta. What percentage is meta? Probably 70% right now. Okay. So it's mostly ads. Got it. You get some referrals or whatever, right? Yeah. We, when I was doing more organic, more content, organic was pulling for a long time, but we started to, the growth rate wasn't keeping up. It started to hit like zero return. So, we started to add ads on. That was the plan all along is go organic as long as we could and then start to add ads in. And that's, we're scaling now.
Okay. What's lifetime gross profit? Uh, total rev top line for each client is about 12. I actually need to do some math to figure out bottom line, but it's pretty high. Okay. Cost like 20%. What's monthly? Uh, monthly and then what's churn? Uh, monthly average clients paying 500. Um, we have a lot of annuals too, and then churn. So you get two years of stick? We have, we have some data risk right now that we need to tighten up our churn numbers. Stripe sucks for data. So we need to get better systems for that, but I think we're like three and a half percent. Okay. Or three, whatever. Okay. Got it. That tracks. Okay. Um, all right. And so, uh, sales velocity right now, how you sell in a month? 35. Okay. So you sell 35 units a month times 12K. So you're, you're very, very, you're like, you're a little bit growing, but you're doing this right now. Does that sound right? Yeah. We have a lot of room to scale. Yeah. That's relatively new. I mean, really just five months ago, we figured those out and, uh, you know, topline ROR on that is pretty solid. Yeah. Yeah. No, no, I mean, I can see the math. Yeah.
Um, okay. So, no, I'm looking at just for everybody, I'm looking at hypothetical max, which is if you look at sales velocity times lifetime gross profit or lifetime value rather in the situation because you said you didn't know what that was. Um, not that you don't know what, you know what I'm saying. Um, uh, so 35 times 12K, so 35 times 10 is, is, uh, is 350 plus 7420. Um, so basically if he kept his existing thing, he'd be at 4.8 million. Um, four times. Yeah, he'd be at 4.8 million instead of four. That's given, like, we changed nothing about the business. So you have a little bit of growth left with the existing sales velocity, right? Um, and so you already have a lot of the hard stuff solved, which is that you have, I mean, basically as long as retention is what it is and it stays at those numbers, you're at 12 to 1, which is pretty good. Um, yeah, I mean, it's a valuable business. Uh, you just need to make it bigger.
And so, I mean, we just need to make sure that the, that the CAC, CAC scales. Sure. And you're spending, you're spending 35,000 a month in ads. Oh, 30k. Yeah. Okay. Yeah. I mean, it's just like you have to get to like, you know, 300,000 a month in ads. Right. You have to scale up the volume. Yeah. So what breaks when you, when you scale up the volume? Why can't we do more? We don't know what breaks. We haven't hit that yet. Um, if anything, uh, I would say there's a little bit of murmuring on like some of the fulfillment side with part of our offer includes like building websites for them. You know, there's some agency components and coaching components, things like that. Um, and the web team starting to kind of scream a little bit. Okay. You know, so probably just some bandwidth there. So yeah. Yeah.
So, um, you couldn't double your sales velocity right now? I made a mess with like my ops manager earlier and he said probably some people could, but some people on the team couldn't. So, okay. Yeah, we probably could. We definitely have room to go, but I think we're up against the wall here soon. So, one of my questions was going to be that follow-up of like, do I stop and fix that now, or do we just build the plane as we fly and just keep charging? I'd build capacity. You're, you're profitable. Yeah. And I have found in a business that's like yours. As soon as I have, cuz like you're, you're pulling off the gas right now, I'm feeling it, right? Is that you're not, like, I'm going to go balls to the wall right now. Um, you're hesitating. You're pulling your punches. Definitely. Right. And so rather than you always being pulling your punches, I think this kind of goes for everybody, like how can I, you know, make this applicable. Um, I would say that I, like building capacity will keep your ethics high.
And so one of the, one of the interesting things is that like, we, we have to either choose to sacrifice profit or reputation. And so if you're at a capacity constraint, you either have to reach into your bottom line and build capacity or you add to your bottom line by increasing demand and having something take a hit. And so it's likely going to be your metrics, your reputation. If you're not in a rush, which doesn't seem like you are. Um, then I would build the capacity for you to get three more reps that can build. Um, how many people are building the sites right now? It's one and then a couple of like VA, you know, VAs that are supporting him. Yeah. Yeah. So, it's like you're getting double the VAs is not a hard task to do, right? So, I would just do that now. That'll cost you 17 cents. And then, um, and then once you had that and then it's like, now everything's super, you know, tuned, everyone's really happy, then it's like, then you're going to feel really bullish and you'll feel really good about spending. That would be the approach that I would have.
Yeah. I, I got another question from the hip. Yeah. More, more of a personal, because you obviously worked at my space, worked with gym owners for a long, long time and I've heard you talk about, and I've heard, you know, and I share some of your pain when I hear you talk sometimes in some of the podcasts about like, why you, having me at the time, wanted to move on from that because of the, there's very talented gym owners out there that are like some of my best friends that are like, you've hired some of the ones that were your clients, right, because they aren't there as talent in there, but most of them are very low-level sophistication. And, you know, it's one of those things you feel like, okay, level 10 skill set, like three opportunity, you know, at what point did you cross that bridge of like, screw this, we're just, we're going to move on? Like, you know, obviously I'm not there yet. We have goals with this business. Yeah. But like, I've got like this seven-year edge, even though it hasn't been seven years yet. Yeah. Yeah.
I think that when you are no longer in love with your avatar, and that's what I said when I started the business was like, I will, like when people asked me the first two, three years of Gym Launch, like I was like, hell no. I was like, I, I want to, you know, take gyms, like take gyms from the knees to their feet and like really fix the industry to the best degree I can. Um, uh, there was a turning point. It might have been because I was also like younger and probably more immature than I am now. Who knows? Um, where I grew disenfranchised with it. Um, and it wasn't, if I'm being honest, it wasn't a boredom. I, I grew resentful of, you know, what have you done for me lately? Um, and I think that part, again, I was like 20, I got in the business 20, 26. I was like, I was much, I mean, I was 10 years, you know, 10 years younger than I am now. Um, I, like I made some massive mistakes in that business and I didn't see how big it could have been. Like Gym Launch for sure, if I were, if I could like scoop my brain and put it back in time, like we could have exited for 400 million with changing very little about the business. Um, and so there's for sure massive opportunity there. Um, so I wouldn't, I wouldn't like, I wouldn't consider, I couldn't see at the time a way to make Gym Launch bigger and that's why I sold it. I didn't know what else I could do. I now know a lot of things I could have done to make a half a billion or a billion dollar exit. I just didn't have the, and some of this is like, I wish I knew then what I know now, but like, I only know what I know now because I went through what I didn't know, right? And so, um, you know, the most expensive things in life are the things that we don't know, but should.
I try to focus on the bright spots. Like, you know, because obviously, you know, we've actually probably shared some clients. I've had former gym clients come to my cl, my company, and of course, when they come clients come to. Oh yes, of course, yeah. We hear about those too, you know, and where they're coming from, they always, they always badmouth the other guy, right? They always say that guy sucked, right? You know, and it's like, that's exactly, you get resentful about where you're like, but you didn't show up to any of the calls, you didn't do any of the work, right? And like, and then like, you know, early on we were like, yeah, we're better at the gym launch because we don't burn people. And then like, we realized later, like, oh, half the clients still do the work. And it's like, oh, it's not anyone else doing wrong or taking advantage, and it's the same feel, that same resentment. Based on the numbers that you demonstrated, you have a good business. The metrics are strong. Um, you have all the making of something that could become significantly more valuable than it currently is. There's obviously a couple moves off the board that probably beyond discover right now. Um, but you have all the fundamentals. I'll say that there is for sure a nine-figure plus opportunity with the business as it currently stands. Um, just need to put some pieces in place and there's probably a couple of strategic investments that we could make that would make it like really attractive because I know that you got approached about acquisition at some point, a couple times now. Yeah. And, uh, it really was the things on your worksheet that, you know, it was kind of mutual on one hand, like when they talked about potential, uh, amount, I was like, well, I can make, I can collapse that time frame and make the same money in three years instead of the 7x you're offering potentially. And then also they were like, well, you're kind of really too, you know, so, you know, I see it too. It's just a want. Yeah. Appreciate you. Thanks.
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