You Don't Need Money to Start a Business

0:00I was a gym owner in Southern California. So, I had a consulting job. I did defense contracting, space cyber intelligence um through a sub under Booz Allen. Uh hated that job, actually. Uh hated it so much that I ended up quitting and driving across the country, not telling anyone until I was halfway there cuz my dad was going to talk me out of it and be like, "Hey, you don't need to you know, like let's just follow the path we have." >> Um and he was doing it cuz he just wanted to look out for my best, but I didn't want to do that. And so, I showed up in California with no plan, showed up at a gym owner's gym and was like, "Hey, man, can you teach me?" And he was like, "I don't know like why are you here? I got [ __ ] to do."

0:34>> Yeah, yeah, yeah. >> Slept at his place. >> were you at this time? >> I was 20 two. >> Okay. >> Yeah, so I I I graduated a year early um from a school in Tennessee. Um and then that that way I kind of got a jump start on my career, saved my extra, you know, money. And then I had about $50,000 saved up when I was 22 uh to start a business and I wanted to start a gym. And so, that was cuz I was into fitness and I hated everything else. And so, that was like, I guess I'll just do this. Um From there, I I spent 12 weeks with that guy. He started work at 4:00 a.m. and work until 4:00 p.m. 4:00 to 4:00 was his shift. And so, I did that and then I also stay at the gym after that, learned a little bit of the ropes, started gym in Huntington Beach, didn't have enough money for both, slept on the floor there cuz, you know, I could only pay one rent.

1:15>> Yeah, I get it. It's very similar how I got started, dude. Very similar. >> Yeah. And it was uh by chance, I went to a weekend workshop two weeks before I started the gym and it was this guy who was teaching something called Facebook ads. This is 2013. So, I was like, I mean, I'm talking about like stroke of luck, crazy, you know, coincidence. And I was able to run Facebook ads to get like my first 25 members uh in the gym and we were able to grow by 5,000 a month every month for the first, you know, seven or eight months. Um and at that point, I you know, started bringing people in and getting a manager and all that stuff.

1:49And then it pretty much started working out. Um opened a new location every six months after that until I had uh five locations. At that point I met Leila. And uh I I got asked to speak at this event and like I was not in that world. You know what I mean? I was like, I'm a gym owner. He's like, "No, I want you to talk about how you're marketing for like brick and mortar." And I was like "All right, man." >> Dude. >> So I went up there and I was like, this is what I do. This is how So I was able to open all my gyms at full capacity on the first day. That was kind of like the unique thing. So what I would do is I would sign the lease, put the deposit down, and then I'd start running ads immediately, and it would take me 30 days to open the gym. And so like I would spend uh 300 bucks a day ish, and we were getting like 30 to one back on our ad spend. So we were making 100 grand in our first month. And so like, you know, as the cash is coming in I'm like, "Buy flooring." And then I'm like, "Painting the walls." And then like getting the equipment in. And like I had this whole order cuz I knew that like by the time the equipment got there like I had to have the paint that like, you know, all that kind of stuff. And so we'd open at full capacity only using the cash that I got.

2:52>> on. That's those stories are the [ __ ] ones that people love. Like you we got plenty of time here. We got plenty of time. Just cuz I talked fast in the intro like >> [laughter] >> like dude, I love that. So you pre you So you pre-sold the memberships and then used the money to actually build the gym out. >> So what I would do is we would do these challenges. We do these six-week weight loss challenges. Um and the whole stick was that it was free if they lost the weight. And so people would like basically bet on themselves. They'd bet 500, 600 bucks that they would hit. I think I had I think it was 10% body. I changed the challenge but it was like 10% of your body weight. So if you were 200 you lose 20 lbs etc. Um and they had six weeks to do it. And we you know, they would work out as many times they wanted. Uh we'd give them meal plans, grocery lists, food preparation instructions, eating out guides, all that kind of stuff. Um and so every week I'd sign up, you know, 25, 30, 40 people. Uh and this is all one-on-one consultations. So like I would do 20 to 25 consults a day every day, and I did that for years.

3:49Um even when I had my my gyms like I still sold better cuz I just had more reps than the other guys. So, my guys would like set appointments for me at So, I'd like every day I'd go, they'd have set like three days worth of appointments. So, it's just like stack, stack, stack, stack, stack. And so, you just get, you know, just get the reps in. And that was I was referred to as like my Rocky cutscene, like, no one knew where I was and I was just hitting the meat in the basement and just just getting those repetitions in. And um so, anyways, I I'd put the just have $5,000 to put down for the for the lease and just enough money to start the ads.

4:19And for us to get get ads uh we'd get leads for like five bucks. And we'd sell one out of four leads into a $600 thing. So, it's like it would cost me 20 25 bucks to get a customer and I'd make $600 up front. >> Yeah. >> And then two days later, I'd sell them supplements. Uh you know, 200 300 dollars for the supplements to go with the program that they just bought. And then the stick was three three weeks in of their six weeks, I'd be like, "Hey, Dorothy, you know, uh let's be honest, you have more than 20 pounds to lose.

4:50Uh what's your plan after this? You know, things are over." She's like, "Well, you know, what's your ultimate goal?" She's like, "I just want to get to my high school weight." I was like, "Okay, so you just so we're clear, you know that in the next 21 days we're not going to do that, right?" And she's like, "No, I understand that." I was like, "Okay, so but long term's the goal?" And she'd say yes, and I was like, "All right, then you won the challenge." And she was like, "What do you mean?" I was like, "Because you realize it's not about six weeks." And so, I was like, "So, this is what I want to do for you. You have the 600 bucks." I was like, "I want to credit towards the goal that you really have, which is the high school weight." I was like, "I'm just going to put it towards the year."

5:20And that way, like, you win today, you're in, you're one of us, here's the T-shirt, you know, like, you're you're part of the family now. Um and so, I just set my membership at 50 bucks higher than it was supposed than I I usually ended up selling it for. Uh so, it was like 250 a month got dropped down to 200 a month cuz I take the 600 divided by 12 and so, that credited 50 bucks a month off and just like that, we were able to go 600, you know, 250 in subs and then I'd be able to get the membership all in the first month. Compare that to the business model where someone's going like free month up front and then converts one out of three into a $99 month membership.

5:54>> Yeah. >> My ability to convert cash so much faster uh was front-loaded. So, I could outspend everybody in my market, which is also why I could launch them all for no money out of pocket cuz every day I'd spend a hundred, I'd get 2,000 back. >> Mhm. >> And so, that cash is what allowed me to open so quickly without having capital of my own as a young guy. And that's how I was able to scale. >> That's awesome, dude. How How the hell did you think of that? Like like how like what >> It's a long So, >> [laughter]

6:19>> I'll tell you the story. So, that gym owner that I that I went out to, right? So, I Googled like successful I mean, you know, when it was whatever it was 10 11 12 years ago. Googled like successful gym owner and this guy had this like crappy HTML site and it said seven-figure Sam. All right? And I was like, "Cool. Seven-figure Sam. I'm going to go talk to this guy." And so, I get to California and he's got like a a little group of gym owners that like all just share their, you know, share their stuff. It was just gym owners.

6:46And I didn't have a gym at the time and I was like, "Is it is it even okay for me to be here?" Um he was like, "Yeah, sure." >> [laughter] >> And so, that way I actually got to learn all the stuff that they had done wrong before I started my first gym. So, I was like, "Oh, don't go too small because of this." I'm like, "Oh, don't go too big cuz the rent." Like, "Hey, keep it under this per square foot." Like, all these things that like I would have no idea like I would have known that. And so, um one guy was there and was like, "Hey, I got this this promotion that's" He was in Wilmington, so like south of LA. Um he was like, "I've got this promotion that's like doing really well." And so, he was doing this like eight-week thing and what happened is some rich guy some rich entrepreneur apparently was like, "I won't pay for it." He's like, "But if I hit my goal, you give me my money back and you can use my testimonial and I'll like promote the [ __ ] out of you."

7:28And he's like, "And the thing is is like he did that and like all these other people like, 'Yeah, I want that thing.'" And so, he was doing an eight-week thing and so, Sam started doing it at his place for his personal training side. And I was like apprenticing under Sam. Um and the thing is like just saw like the ratio of how many we could sell versus how many trainers we need. I was like this doesn't like make sense. I was like what if we put it in the boot camp cuz then we could just put as many people as we want in there uh, to get people going. He's like you think people will pay 500 bucks? I was like they care about the weight, they don't care about like what the the experience was. Um, and so uh, I ran an ad with that. Um, first was technically for Sam's spot. I ran the ad before we even knew that Facebook ads even worked. So the first ad I ran for Sam. Uh, and I think I can't remember what we spent, but we made money on it.

8:12Uh, and uh, it was like holy [ __ ] this works. And so I sold the first 10 or 12 people or whatever at his gym and then that's what I when I went to go plant my Huntington Beach spot. >> That's awesome. >> But it was like an iterative like he did the first guy did eight weeks and it was like it was all about the testimonial thing. Uh, Sam cut it to six weeks and it was all about personal training. And then I added in like a nutrition template thing. So I templated so it was like faster to move through people and made it one to many rather than one-on-one and that was kind of like the and added Facebook ads to it. So like that's what when those when those came together is when it just like blew up.

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