I still remember the day when one of the gyms I admired closed its doors for good.
From the outside looking in, Lift Performance Centre was the pinnacle of performance training. It was the Mecca. It had it all.
Oly-lifting, powerlifting, gymnastics, the most epic Watson equipment floor to ceiling…
It was fuck*ng wild.
Plus, it had the coolest, smartest and most switched-on coaches of anywhere in Australia.
But one day, as dozens of members and trainers turned up to train at 5 am on the morning, the door was locked, and a notice read:
LIFT IS PERMANENTLY CLOSED.
It was a shock to the whole gym and coaching community in Sydney.
How could something so great, be going so badly?
Over the coming weeks, it would all be revealed that the business became the host for something I’d liken to a parasite.
For the purposes of this conversation, let’s call this parasitic disease necrotizing cashitis.
The parasite invades a healthy host and begins to starve the business of its most important resource…
Once the parasite has drained the host of everything it had, it abandons the gym and leaves a useless asset in its wake. A “shell”.
This is precisely what happened to Lift Performance Centre.
Just like that, a thriving mecca for performance training in Sydney was abandoned after it had nothing more left to give, and hundreds of members were left stranded.
Dozens of coaches were left without a place to work.
And the “Mecca”, was no more.
What is left of its legacy? Just a permanently closed sign on their Google My Business profile.
What happened to Lift Performance is a cautionary tale for all of us.
Just because a gym is well positioned and popular…
Just because it has a loyal membership base of 600+ members…
And just because it has a great team that was arguably, the best in the country…
If the gym can’t manage its cash flow…
Then no team can outwork it…
No marketing can outmuscle it…
And no loyal member base can outrun it.
Poor cash flow management is a death sentence.
It would be easy to think that LIFT is an outlier example.
But for the vast majority of gym owners who shut their doors, they too, also end up running out of cash.
Their bank accounts also run dry.
Their debts can’t be pushed back any further.
And their creditors start knocking down the doors demanding they get their piece while they still can.
And you know the irony of this situation?
Nine out of ten business owners suffer this fate of complete and utter cash depletion when they go belly up, but zero out of ten think it will happen to them.
It’s blind ignorance, but alas, it’s the human condition.
The antidote is quite simple.
Every business owner needs a system for measuring, tracking and maximising the operating cash flow.
Think about it… how many gyms do you know who were forced to close down did so with stacks of cash in their bank accounts, a clean sheet of liabilities, and no disgruntled creditors??
But you know what is perhaps most strange about all this?
If I were a betting man, I’d bet you’re not tracking your operating cash flow (OCF) right now. And I say that because up until recently, even I wasn’t, and I’ve got some of the best accountants for gyms that money can buy.
So while you’re almost certainly tracking revenue…
And potentially tracking profits…
Your OCF is probably neglected… (but as I said, that’s not your fault).
So in this month’s edition of the Alley-Oop, I’m teaching the exact system where implementing right now that is already giving me a tonne more certainty, clarity and control across our gym portfolio.
And it’s doing it by spotlighting not just our numbers…
But the numbers that matter (and for what it’s worth, it ain’t revenue or profit).
To subscribe is $97 a month ($3.23 a day, or less than a single session you do each week).
I’ve written 20 pages already, and I’m confident this will be the greatest return on investment newsletter ever written.
Want to find out more?
Flick me a reply, and we can have a back-and-forth on whether it makes sense to subscribe for this home-run edition.
– Karl Goodman