Chapter 3 - Ownership and 1450 Capitol Trail

 

    So as I said last week, ole Zach came back into the picture looking for a job while we were at the 1908 Capitol Trail Location. He was a decent enough coach, although he was a lying sack of shit (I didn't know it then). Zach had never competed in a an actual sanctioned fight. He trained around, and according to him, did lots of training and fighting at other gyms. He had a strong LAX background, which I find myself questioning now but, whatever. He had history with Ted, Tim and myself so it appeared to be a good fit. He hopped in and started teaching the cardio classes without a hitch. He could fill a room and was charismatic two of the most important things as a trainer. While he was working there, Brandon (from the failed Nottingham experiment) was also still training. He hadnt screwed us over yet and there was some overlap there between the two of them. A year or so later, we did the Nottingham venture and Brandon was out of the picture. I ended up stepping up and filling the void of skilled instructor while still managing my own personal training schedule (15-20 clients) the advertising, and I was slowly cutting my teeth on the back side of the business. There was a guy named Tim, a real good dude who I learned a lot about exercise science, even though he was a bit strange. He was reliable and never called out. He was very religious and that would sometimes cross over into work which we had to shut down a few times. There are 3 rules in the work place, no politics, no religion, and don't fuck your clientele. He unfortunately had issues with the second one. Cant be leading prayer circles as a Christian before workouts when you have no idea what beliefs other people have. That was a headache. 

The business flourished at the 1908 location. I was making more money then before (still not a lot but, again, I loved what I was doing). But I had ambitions, I wanted more and I figured that more should come in the form of more gyms. Ted agreed however, as a far wiser man then I was at the time, he saw the risk and smartly kept me on track building Newark up. By the time we were nearing our end of lease (3 years after initially moving), Ted told me he was done with Knockout and I needed to buy it. I had no idea how anything of that worked, but I started going around trying to get a bank to give me 100,000. No surprise, no one would even entertain me. I had to dig back into what I learned at school, and put together an actual business plan. So armed with my new "plan" I went back to the banks...and I failed again. This time, strength of credit....I had a good score, 740+ but no real history. All this time, we are inching closer and closer to the end of the lease. I'm frantically searching for new spaces, none of which were in my price range (4-5k/month) that also offered what I was looking for. I finally connected with Alicia Fox from DSM and she opened my eyes, started taking me to some spots to show and advising on how best to approach this. 

Now this entire time Id been driving by this tiny little retail space in "The shoppes of Redmill" center. I knew it was there but there was no way it would work. Too small, too low of ceilings. But as Alicia and I continued to strike out I was left with that tiny little retail space as my final option. Alicia reached out to the opposing agent and talks started...and continued and...finally...someone took a chance on me. They didn't want to lock me into a long term lease (5+) and that was fine, but they gave me a 3 plus 1 year option to renew. I agreed, and worked with Alicia on how a lease actually worked. She knew that I was after the lowest monthly rate possible. She was great, I got 3 months of rent abatement on top of a limited responsibility for HVAC issues ($500 deductible) and we had a good strategy for securing the lowest rate possible. At this point I had 90 days to get out of the 1908 spot. Redds Ferris had bought the spot and made it very clear that he had no interest in having us there. He even screwed Ted and I out of the security deposit once I had vacated the spot claiming that It wasn't left as I had found it (it was. It was just your typical big guy shitting on the smaller guy thing, he's an asshole, whatever).

The final 60 days of the 1908 gym and transition to the 1450 location were, up to that point, the busiest and hardest I had ever worked. I was spending 6am - 9 am at 1450 building the space which included demo of all the walls, removal of tile flooring, installation of 2800/sq/ft of LVP flooring, installation of a shower, new equipment, signage (which is very expensive). Then I'd spend all day at 1908 training my clientele and when we finished for the night I'd go back to 1450 to continue working. My GF (now wife) was there, with her father and family members helping me get that place together in time. The support I got from our families enabled me to get it all done in time and come 1/1/2017, I had managed to pull it off. Ted had realized I wasn't going to be able to secure the $100,000 he was asking for so, he ended up just handing the keys over, we came to a gentlemen's agreement for future endeavors and then I was off on my own. A new business owner, a fledgling entrepreneur...full of ideas and motivation. I finally owned something, I had something to talk about. It was a proud moment indeed...And I had no idea what I was in for. 

Chapter 2 - 1908 Capitol Trail and Expansion Try Number 1

 

        So we moved the whole gym down from McKennans Church Road to 1908 Capitol Trail. The space as a whole was much better. Higher ceiling with an open concept so we could pretty much set it up however wed like. Teds construction crew, who I used to work with did most of the work moving everything over, and I did most of the set up. We had some turnover with the move as it was no longer convenient for everyone but, we replaced those with new faces. I started working on expanding our online presence, back when google ad words and Facebook targeted advertising was actually worth a damn. I messed around with radio ads, Mall advertising, and even billboards. I worked on refining the business model as we started gaining some traction and eventually made the decision to higher my previous striking instructor. His name was Brandon and this was someone that taught me everything I knew as far as fighting and coaching. Its one thing to be a personal trainer, it's another to become a coach. Brandon was the latter, and he was great. He was a personality, charismatic, fun but effective and he could fill a room. It was easy to nail sign ups when he was teaching. We (Ted and I) paid him well for his time and his expertise and personality and the skilled boxing programs grew monthly to numbers we hadn't seen before despite raising our prices (originally $39/month up to $59-79/month for classes).

    I had also raised our private training memberships from $150/month up to $199/month to start going up as high as $299/month. People didnt seem to mind the prices, and I saw our clientele quality significantly improve. We started seeing more higher net worth individuals and families. This was my first experience with the notion of "the more you charge, the better the customer". Up to that point, discounts and cheap services were the way to attract more people. Make our programs so cheap that it was almost a no brainer to sign up. Looking back now, I laugh at how much we charged back then. Cheap people are just that...cheap. And 9 times out of 10 they also expect the most. Often times, far more then people that were paying 2-3x the monthly rate. 

    As I spent more time in the business, I made tweaks here and there, learned the seasonality of the business and when it was worth it to spend more or less on advertising. I learned that word of mouth beats paid advertising 9 out of 10 times. I developed a community within the business, where I knew everyone's name, the name of their kids and the struggles they were experiencing with work. I always joke with clientele that as a trainer/coach, I'm actually more of a therapist then a trainer. I was too young to really understand why people would vent to me but I did realize that it helped create a core group of members that were very loyal to the brand. I started these gym outings that were held 1x per month called Knockout Nights. I would pick a local bar/restaurant and the members would come out for a evening. It was as much of a social gathering as it was a networking event. I would hand out membership cards and garments to patrons of that weren't already members. It was a win win all the way around. Every time I held one, I had 20-40 clients coming and hanging out. It was some of the most effective advertising I did not to mention some of the most fun. I have people still members of my Newark spot that signed up after Knockout Nights and that was over 10 years ago. 

It was around this time that Brandon, having seen the success I was enjoying, started talking about partnering with Ted and I for a gym in Nottingham/Oxford PA. He had a his original fight gym that I had attended, and a core group of females (15-20) that had followed him around for a few years as he moved his operation around looking for the secret of success. To his credit, he realized that he didnt have the business savy to have an operation like Knockout. Eventually these short conversations and little comments led to Ted and I pulling the trigger and partnering with brandon on a new gym venture up in Nottingham, PA. The first ever Expansion of Knockout. Brandon sourced a spot that was adequate and I set up the infrastructure to get all of Brandons existing clientele on a new membership platform. We invested in about $10,000 into new equipment and I copied and pasted our existing google adwords and facebook advertising. 

When we started, brandon told ted and I that he had no problem with not getting paid for however long it took to get this venture off the ground. He was the primary instructor but this was mostly his deal so Ted and I agreed. I would do a little instructing here and there but mostly it was just member management and advertising. We starting picking up new people here and there. My follow up strategy was solid and the business was growing slowly but steadily. Until one day...

After roughly 5-6 months, Brandon had done a complete 180 on what he was willing to do for the new venture. I remember checking our billing system one day and all the members had turned their cards off. All of them simultaneously. I hadn't seen anything like that before, so I notified Brandon and Ted. After a bit of time, Brandon texted or called, I don't remember which, but he let us know that he no longer was going to be working with us, and that he was going to go back to doing what he was doing before leaving Ted and I out the fit-out money etc. Sure, Ted and I could have sued his face off, enforced all the contracts with the members but Ted thought it better to cut our losses and get out. I didn't understand the move, as there was a ton of money Brandon had screwed us out of, not to mention the fact that he said one thing and turned around and screwed his partners over within 6 months of a new venture. I was obviously pissed and extremely upset at the betrayal. This was my friend and coach, how could he do this to me? I would never do that to someone I was close with. Turned out to be for the best as Brandon was discovered to be fucking every single one of the female cardio members in his classes, even as his own wife (whom I liked very much and treated me like one of her own sons) attended those very classes. Can you imagine her, when she discovered that all the women in the class that she would consistently train with (15-20 people 2-3x per week) had all banged her husband. Needless to say, things didn't improve for old Brandon, and his prized son ended up getting hit with a criminal charge (that was later dropped) of the variety that...gives defendant a certain nasty public image. To this day, I don't know what ever happened to him. I know he tried to copy Knockout but do it up in Kennet Square which of course failed but the irony was that....the business was taken from him...by someone he trusted...just like our own shit-uation. 

Little did I know, this was the first of many, many....many lessons. I understood sweat equity, as did Ted. But it turned out that, most people don't get what that means. It took a long time for me to understand why and I even still to this day, cant completely wrap my head around it all. 

I looked for the silver linings in the whole experience, and tried to put it behind me. I worked and refined the process and the model day in and day out....For 3 years I worked at. Eventually, The guy from my very first day at Knockout, Zach, came looking for a job...

More next week...