Fitness Acquisitions EXPERT Reveals His Top Cold Calling Secrets

 Summary

In this conversation, Jon Stoddard interviews Matt Fisher, a serial entrepreneur with extensive experience in acquisitions within the fitness industry. Matt shares insights into his journey, including the challenges and lessons learned from his early partnerships, the importance of building a business model that doesn't rely on him, and the strategies he employs for marketing and financial management. He discusses the impact of COVID-19 on the fitness industry and explores potential adjacent business opportunities. Matt emphasizes the rewards of entrepreneurship and offers advice for aspiring business owners.

Takeaways

Matt Fisher has completed eight acquisitions in the fitness industry.
He believes in acquiring existing businesses rather than starting from scratch.
The importance of building a business that doesn't rely on the owner's presence.
Marketing strategies should focus on relevant content and member engagement.
Financial management is crucial for growth and sustainability.
COVID-19 has changed the landscape of the fitness industry, but opportunities remain.
Adjacent business opportunities can enhance growth potential.
Building a strong operations team is essential for success.
Entrepreneurship offers rewarding experiences despite its challenges.
Young entrepreneurs should pursue their business ideas without hesitation.

 Watch the Interview

Transcript

Jon Stoddard (00:02.7)
Welcome to the top &A entrepreneurs. guest today is Matt Fisher. I met Matt on a Mastermind call, Patch Baker's Mastermind call. So welcome, Matt. Thanks for joining us today. Yeah, it's great to be here. Thanks for having me. Yeah, so on that Patch Baker call, I heard that you have done eight acquisitions and you're on your 10th location. So can you tell me exactly what that is and tell me a little bit more about that?

Yeah. So it's the eighth acquisition we've done in the fitness space, kind of the gym health club space. I've done other acquisitions in other industries before. I've been kind of a serial entrepreneur since I was a kid. And then, you know, as I got older, got more sophisticated and actually, I think I probably got more stubborn with how I wanted to approach life.

You know, several years ago, we got involved in the fitness business through a retail company that we had that was selling, you know, the actual equipment to homes and to commercial places. And then as part of that, we started a small gym in a small city in the Midwest where we're located. And it kind of took off pretty fast. And I had this idea that, you know, it's almost like a SaaS based model to have a fitness facility. you deliver the right customer service and the money keeps coming back every month.

So I had this idea that, you know, to scale this, probably need to have 10 of these clubs. And I started the process of going out and looking for, you know, and taking advantage of some advice my uncle gave me a long time ago, which was, you know, it's always easier to build a business that started versus trying to start it from scratch. So I went out looking for gyms and gym owners that want to sell that I had this hypothesis that they were a lot like.

bar gyms and bars for guys. They all want to own one until they get involved. They figure out how much work it really is. That's true. So they want to get out. And I found it. I found people that were, you know, groups of folks and people that were motivated. And we just started acquiring clubs at a pretty rapid pace over the last several years. Yeah. So let me, let me go back to the, said you've done acquisitions before.

Jon Stoddard (02:21.642)
in this space. were the, let me go even further back. Now, is it your dad that suggested this just like instead of starting a business? was my uncle. it was your uncle. Okay. Well, he was a pretty successful entrepreneur in Northern Wisconsin. He had a construction company and a software company and he honestly made his money in waste management, picking up trash. Construction.

software waste management. Yeah. Okay, so it didn't matter what industry to him. was just the financials had to look good. Yeah. Yeah. Yeah. Yeah. And he he understood I mean, he had some restaurants and stuff. But honestly, those were more passion projects for him that didn't do real well. But he made his money when he sold, you he sold his waste management company. And then he had this idea for a software software product that would help

companies optimize their routes for picking up trash and ended up selling both of those for, you know, tons of money. And then got into a couple other businesses. Yeah. So he had this big influence on you to say, Hey, you know, you can go work for a company nine to five, whatever that was, or you can buy, you know, start a company. It'll fail or you can buy a company that's already flying in there and then just improve it for there. Yeah, you bet.

Yeah, it was something that's kind of stuck in my stuck in my head ever since I was a child. I mean, he was he probably gave me that advice when I was up there spending summers with my grandfather playing golf at 1314 years old. And that's what you know, it's kind of what he was doing as an individual. You know, and I did the nine to five job and I've had consulting gigs and my career was basically focused in helping health care organizations, the largest providers in the country, look at.

their business and help them increase margins and productivity and efficiencies, whether it was in the front office side or in the back office ERP side. Yeah. So what did, I mean, what was the first, let me go back to your uncle because this is always good. mean, I don't know if you've ever read this Joseph Campbell, that hero at the thousand faces. There's always an art to a story where ordinary world and you have this call to adventure. And then you have

Jon Stoddard (04:40.334)
you know, this meeting the mentor and obviously your uncle's the mentor. I mean, did you spend a lot of time with him just to ask him questions like how to do this, what to do, or did you just say, hey, just like, you know, don't do this, do this. No, did. Honestly, he didn't. He wasn't much of a sharer. He was a wonderful human being. mean, he was a great guy. You know, we weren't super close.

but I always kind of watched from kind of behind the scenes and how he was approaching his different business challenges and the way he approached life and said, someday I want to be in a spot where I can go do what I want to do when I want to do it. And the only way, if I looked at the people that I was surrounding myself, the only way I was going to do that was to go build a business and buy real estate or do both or go be independent.

you know, try and try to be that try to that life. Yeah. And did you have your very first acquisition? Did you have a partner with you a couple partners? just do them by yourself? No. So I had a I had a longtime friend that was a partner when we made our first acquisition, which was a a foreclosure company that went out and managed managed real estate for

the large banks that had foreclosures and our job was to go make sure that they were being properly taken care of. we had a crew of people, we had about five or six different banks and our responsibility was to go out, make sure they weren't becoming dilapidated, know, taking the, cleaning them out, getting them ready for resale. And then eventually we got into, you know, actually property management required another company as part of that to do property management, along with our own real estate of managing other people's rental properties, whether it be commercial or residential rental properties.

Yeah, then that that we we like any partnership once in a while you get two different directions you want to go in my he's a longtime friend decided that he wanted to go into into the restaurant business, which I've never wanted to be involved in the restaurant business. The failure rate is so high. Yeah, yeah, and he. He was part of the first gym that we opened and then he decided he just wanted out so. The we he left and went took his money and went.

Jon Stoddard (07:04.494)
and started a restaurant with somebody else. And I'm still in the entrepreneur game and he's a full-time electrician again. Yeah. Does he own still own part of that first one or did you? No. No. He walked away completely. Completely? Yep. Out of that first acquisition, what did it look like? Was it a money-making, profitable operation? Yeah, it was. We actually made money.

We didn't, you it was enough for him because he was working full time. I was still working kind of a consulting gig. It was enough for him to step away and I could manage it on the side. That's kind of a side hustle for me. It grew pretty fast. We had a number of properties and the property management thing came along. Yeah, I mean, it made money. It's just not, you know, when we looked at the business and he looked at the business because he had this very clear set of Hollywood.

Like he said to me at one point, I said, listen, if I could do this, it would make me so happy. And so we went out and tried to do that. And we did that. And then he got there and we were like, holy shit. This is not what we thought it was. Yeah. Yeah. This is not fun. It's a difficult game. It's hard. And it required us to really work in the business. And you know, not above the bottom. All right. And you really had to be in it.

And by it, I mean, we were in it. So how did you solve that? Because you can't acquire eight other seven other stops working in the business. No. Well, ultimately, ended up selling it off. we, you he left and then I sold I sold it off to somebody else. Okay, so that was a pretty good first, you know, lesson that you bought with a partner partnership didn't work out. Yeah, in the business, not what you want to do.

sell it off and you go, okay, how do I recreate this story for the next time? What does it look like? Yeah. You know, at the same time as I was, as we had that business, we had a reach out that retail fitness business kind of as well that we, that I was running and managing along with my wife. And, know, one of the things that became very clear very quickly for us was if I wasn't there or she wasn't there in the actual physical business of the brick and mortar store, we didn't make any money. I mean,

Jon Stoddard (09:29.058)
RM, we could hire all the employees in the world. They could be great employees and they would show up for work. But at end of the day, their paycheck was only dependent upon them showing up. I mean, they would get commissions, but they didn't care whether or not we paid the bills. And so I needed to find a way, or I wanted to find a way to build a business that did not depend upon me. And in fact, when we tried to sell the retail fitness business, the first question everybody asked me was, if you leave and you're out of here, does it make money? And I had to answer that, honestly, no.

It doesn't mean I'm not here. My wife not here. You need to be here. Nobody wants to buy a job. mean the beyond. There are people that want to do that, but there's another part. You just said I just don't want to buy a job. Yeah, a job that you know you can't get fired from. You can't quit from. You know you gotta do it. It was a great business. It was fun, but it you know we were working weekends. We working nights. We were working holidays. I can't tell you how many.

family holiday events I missed because I had to work the day at Thanksgiving for Black Friday. Because somebody didn't show up because I got to go into a concert or something. Yeah. Yeah. So never sick days. it just needed to be. wanted to find something where I didn't need to be there and the business didn't really rely on me. And it became quickly apparent at the first gym that we built and owned. I didn't need to be there.

I mean, the only reason I needed to be there, somebody needed to be there was to sign people up. And if I could solve that problem, I needed to hire somebody to clean the business and my job was just to go out and grow. Was it like a fitness business where you just have a pass card and you open the door? okay. Yeah. Yeah. We only have one location that's not 24 seven. We just logistically couldn't do it because it's 40,000 square feet and it's got multiple entrances into a pool.

and we couldn't figure out a way to lock the pool down after hours to keep people in there at two o'clock in the morning, you know, drinking and smoking and doing what they do in a college town. Yeah. How did you tune into that business model? I mean, is it just a process of elimination that didn't work and just say, go ahead. The only way we're going to get this SaaS type, I'm not in the business type, you know, business model. No, I tried to buy a bunch of anytime businesses first.

Jon Stoddard (11:56.782)
And I quickly got underneath the covers of the Anytime Fitnesses and just figured out, man, this is a, they really want you for everything. I mean, there's a fee for waking up in the morning, it seemed like, and, you know, they had tons of revenue, but at the end of the day, they weren't making a lot of money and they weren't hard things. You know, charge you for cameras, they charge you for access fee, they charge you for using their billing system. And I just felt like,

It can't be that complicated to go do this on my own and put the pieces of the technology together because that was kind of my background to put it together and create it. you know, I figured it out from the first one and then slowly over the last, it was 2020, almost 22, so the last seven or eight years, we've kind of perfected how we do that now and what that model looks like. So, you know, I have a...

I don't need a lot of staff and keep it clean. We have a lot of trainers, but the anytime is a sorry. The anytime is a that's a franchise, right? Yeah, that's a franchise. Yeah, I don't think you're not out here in Arizona, but there's choose fitness. CHUZE. Yeah, so they're like anytime snap fitness. There's a couple other ones, but they're basically small footprint, smaller footprint. No hardly any staff and you can be there 20247. You can be there anytime, right?

They're based out of Minneapolis. They used to have thousands of locations, but they're slowly, that curve is coming down. So that acquisition didn't work out because I didn't really like the franchise model. It just didn't feel right to me. So I went out and started our own brand, created our own kind of back office operations, and then just started acquiring facilities. And then in last few years, and I wouldn't say we've perfected, but if we find a target,

You know, we really know we really not have a process of bringing those people into our into our business model. Yeah. So were you acquiring locations that were already gyms that you know, lot of the info. Yeah, so I think the advice. Yeah, I took the advice from my uncle when I was I was I mean, I literally was out there cold calling, cold calling gyms. I mean, was odd. Coco, hey, where's your can I talk to your owner and get the owner on the phone and say,

Jon Stoddard (14:14.99)
This is what I'm doing. I'm trying to get to 10. I'd like to buy a gym. do you It was just as simple as that. And I would say out of every 10 clubs I call, I get one person that I want to have the conversation. One out of 10, 10%. Yep. And sometimes you fall into things. We fell into a couple of them. This latest acquisition, that's not really even an acquisition because we didn't spend any money getting it.

We networked our way into the landowner who had an, oddly it was an Anytime Fitness that closed and it was sitting there empty and he needed somebody in there to rent the space. And he basically gave me the equipment if I agreed to a certain rent price and committed to a three-year deal. we're walking in, open a tent location and got the rent, our fixed expenses to the point where we don't need a ton of members to be successful there.

and it's a satellite location for one of our larger gyms on the Illinois side. So you're out, you're you're expanded from Iowa to Illinois. Yep. Yeah, we have about half of our businesses in Illinois and half of it's in Iowa. Wow. And do you have to when you first get out there, you look at it and you say, hey, what you you, how do you tell me about the there's KPIs, and there's critical drivers, right? So how many people

Is it per square foot that you need to get in there or what? It's simple math. mean, it's here's our fixed expenses. I don't really count variable because we can control that. Excuse me, my fixed, honestly, it's That's its rent. And if we have equipment payments divided by our purchase price or our membership price, then that's my target. So the price is it normally?

you look in there and you say, this is, you know, I got a bench here. got a lat machine here. I got pull-up machine. I got a squat machine. I got all this stuff here. Right. But I need this to fill out that I got to go buy it or, Yeah. Yeah. I mean, there's sometimes we augment, have to augment a few pieces here and there. But if I, know, if I'm or to build from scratch, you know, I was going to spend a half million dollars on equipment to outfit a large facility. would take that lease payment plus our rent payment.

Jon Stoddard (16:39.222)
or our mortgage payment in some cases and divide that by our membership costs and go, is how many members I need to break even. And this is our goal. need this many members to make it worthwhile. And can we achieve that based on the population that's around us? Yeah. When you go back to negotiate the lease with the landlord, do you have a lot of power in that sometimes when you go, hey, look, there's nobody in here. I want this. Or do they just say, here's the

The bottom price. Yeah, it's a motivated. Certainly have to have a motivated landowner for sure. Yeah, we have. You know, and I'm very transparent up front with the landowner when we are negotiating the lease and I this has to make money for me, not just for you as a landowner. I don't want you to lose money, but it has to make money for me. And you know, the fitness business obviously has been challenged. All I think it's going to continue to grow going forward at a.

pretty decent rate, probably more than people expect, but it has to make money for me from day one. And I'm super transparent about that. And I'm very clear about this is my, break down the numbers just like I did for you. I need this many members to break even based on this rent price. And if I can achieve that, we'll both live, you be happy campers. Does that work for you? If it does, then let's continue the conversation. If it doesn't, no harm, no foul. I'll go find a different place.

So you, mean, you pretty much open the books and show them here's, you know, what I've done in these other locations. What happens if you don't get to the, like you say, this is what I need to break even. But if I don't get there, this what happens because before the lease or after, well, guess before and after, cause they kind of want to know what's happening, right? Well, I won't sign a lease if I don't think I can get the break even. I just, I just, I'll walk away and we've done that. We've walked away.

We've entered negotiations thinking super excited about adding a location and the landlord is at $30 a square foot and I need to be at 10. And it doesn't work. it's just business. But we get there pretty fast because I don't want to lease. I don't want to drag out and order a bunch of equipment and have a lease and not be happy about it. So I always solve the lease issue first and then worry about equipment and stuff like that afterwards.

Jon Stoddard (19:04.268)
So when you do, I gotta believe at this point in any, know, renting some, you know, property out there has got to be in your favor at the moment, the leverage. Yeah. Yeah. I mean, you know, it, it's also the bigger the space and the more it's built out to be a gym, the more it is, the better it is for me. It's difficult.

You know, like we're in a situation in our largest club in Iowa where the owner is a capital investment group and they want to sell the space to us and they want this ridiculous price. this process has started a year ago and it would be hugely advantageous for us to purchase the building.

It lowers our overall commitment. We get some, obviously, some equity in the property. We got pick outs of partners. they are, they're in love with this page because I'm a great runner. So they talk about this cap rate and how great of an investment it is for me because I'll get all the right offs and appreciation. I just candidly said, it's single-use building at this point. But your lease is static, right? Yeah.

Well, it goes up every year. if you go to a mall, they'll charge you a percentage of revenue. No, no, we don't have any of that. Yeah. We get some escalators in there annually, you know, to cover costs. get that. But, you know, I just, with single use building buddy, if if somebody, if I were to leave and default on my lease, this building is going to sit empty for a very long time because who wants to come in and plow over a pool and.

take all the fitness equipment. It's going to cost somebody a couple million bucks to retrofit this place. And I'm the perfect buyer. So we're just, you they've gone from an extraordinarily high number to something where they're being a little bit more reasonable. And I'm just waiting for them to get to the right number so I can, you know, we can acquire it. So you have a lap pool, you put a lap pool on your? Well, it's got, it was when we acquired it, it had a full, it had a full size pool in it. that's cool. Yeah. 25 meter pool. Yeah.

Jon Stoddard (21:23.82)
Yeah. When you get it and you get the space, you get all the equipment in, I mean, how much work marketing do you have to do to drive people there?

Jon Stoddard (21:41.486)
It depends. So if the business is really in bad shape, then we look at it in phases. And before I spent a ton of money on marketing on a location, I really go in and we try to operationalize and make it very efficient, get the staffing right, get all the equipment working right, clean it up.

You know, just just show it probably the the the tenderness and caring. It's probably not been shown for quite some time and do some, you know, superficial things to make it look like we're not make it, but we're investing into the clubs. And sometimes. That word of mouth will blow it up right there and they'll say, holy crap, somebody is coming here investing into this club and it's going back to where it was before it fell. And so we'll get a rush from that. We usually see just from doing that.

About a 10 % bump in revenue right there. That is just from traffic just driving by and saying, Hey man, I used to go here. I have nowhere to go now. Yeah. Yeah. and then when we get to the point where we, where we want to market something, it's, we don't, probably don't market as well as we should because I have a hard time. I have a hard time connecting and I'm marketing guys would kill me if I said this.

it's like voodoo for me, you know, if I, like, if I do print mailing and I spent $10,000 on print mailing and holy shit, I didn't get $10,000 of memberships out of that. Or did I? Cause nobody can, I can't have any, and we, know, they don't bring in the flyers, but you don't know whether or not they saw the flyer. And that's why they're there. we asked, know, so it's kind of traditional, traditional marketing is I just haven't been able to wrap my arms around that. You know, when we start looking at Facebook and Instagram and now Tik TOK and all those things.

We can, we can measure that and we can see the success of that, but it's, it's not, it's not our marketing. Isn't just about, Hey, you know, we're top shape. Jim come see us. It's trying to put relevant content out in the marketplace that positions us as experts in what we do. And you should come see it because of that. Yeah. I got a buddy that owns Tucson strength there. He doesn't do any, he doesn't spend money on marketing. He just tells his story on Facebook. Yeah.

Jon Stoddard (24:07.862)
And he's you know, he charges it's 50 and up a month versus $9 at Choose Fitness where it's.

That's certainly the drain right there. Nine bucks a month. my God, that's a I can't. I can't imagine how many people you have to bring in and what the turnover is to get the break even on that. And it's 10 times the amount of work because if you because you have 3000 members, you know, paying you $9 a month versus, you know, 1000 members paying $40 a month. It's it's one third of the traffic and harshness on your equipment. It's one third of the work.

And honestly, what we found is the people that pay nine or $10 a month, because when we, there's a couple of clubs that we took over that or had $10 memberships, they bitched the most. They complained the loudest. You know, membership January 1st goes like this and attendance goes like that. All I do is all I would do is complain. Yeah. So we got, got rid of the $10 membership and we saw a spike in revenue once, that crowd left.

I mean, let, let, as a planet fitness, you know, planet fatness, let them have them. don't, can have them and I don't see them as a competitor. see them as training wheels for when they want to get serious about their fitness. They'll come see us. So how many locations do you have currently running and open now? Nine. We have nine. We'll have, we'll have, 10.

starting November 1st. And what, does it, how do you roll up all the, financials? Is it, know, do you have a CPA running that and they show you daily or does he just send you reports or do you have access to QuickBooks or white planes or whatever it is? Yeah, it's QuickBooks. fortunately my wife is a, is a accountant by trade and she's our CFO. So she's, she runs the book. So I, I, I,

Jon Stoddard (26:15.566)
We grew pretty quickly and, you know, two years ago, I started down the path of trying to get P &Ls to our, to our managers so that they could see, you know, how we, how I wanted to approach the business from a P &L perspective on a quarterly basis and by giving them targets and compensation associated that, but then, you know, COVID hit and I really couldn't, I really couldn't, it wasn't fair to our managers to say, Hey, I want you to increase profit and reduce expenses when I don't know what's going to happen tomorrow, right?

Yeah, so I look at and we had traditionally been looking bi-weekly at a very simple metric and it was almost scary simple to see if we were being successful. Every two weeks, I would have the managers, we all get on the phone call, we talk about three things. Number of new memberships versus the number of cancellations and what equipment wasn't working. And as long as the number of cancellations didn't exceed the number of new memberships.

I knew we were headed in the right direction. Yeah. And I think it's only happened once in one club. Yeah. I mean, that's almost like a SAS reoccurring billing. And they have to give you notice and they'll cancel. Yeah. Yeah. They have to give us 30 days notice. So if they bill on the first and they tell them they're to cancel on the second, they get billed the next month. Then they cancel.

have nine locations now and each one's a separate LLC under a holding company? No, we have a few different LLCs. Not all of them are under their own LLC. We're working on moving the real estate out of them into their own LLCs and all that fun stuff. So going forward, well, probably each location will now be its own LLC.

when we were starting out, one of the challenges we had was this whole personal guarantee or corporate guarantee on leases. And because they didn't know who we were. So now we have some credibility and now I can negotiate because I've got some strength. I can negotiate in. Yeah, here's a separate LLC, no personal guarantee. You can work corporate will corporately guaranteed underneath this LLC. But, you know, that LLC goes away. You can't come after the rest of us. Yeah.

Jon Stoddard (28:39.544)
Did you ever get a somebody co-signer do that like your uncle come back for that or no, no, no, no, but I, have, I have a pretty strong operations team and, and, she's also a partner. She's our VP of operations. I gave her some equity in the business to them. She bought in, then I gave her some equity in the business to make sure she's whole. and she's really, she's very good at what she does.

But she's the exact opposite of me, which is probably a good thing if you were to think about it from a high level, because she fills in my gaps from an operational standpoint. Because if I had to go manage staff every day, I'd probably lose my mind. You don't have to find that. That's something that's her strength. Yeah, that's her strength. And we don't see eye to eye on many things. We clash quite a bit.

You know, I've gotten some pretty good mentoring that was. It's your business, man, you just you stay above the business and let her run it. She's what she's getting paid to do. You don't grow it, let her run it. You feel like you know talking about your uncle again where he was in so many different industries that do you feel like that? You know fitness is great. I love it. You know I understand what the KPIs critical drivers are and.

and then get to a size that's valuable to a bigger fish that you're kind of just duplicating what your uncle did to. Yeah, yeah, I think so. I mean, that was I love fitness. But I really like money too. So it would be really fun to I mean, I think it'd be really fun to see this get to. You know, we're approaching 10 million in revenue, but I'd like to see it get to 30 million in revenue.

And I think the EBIT, they'll start to get pretty fun from a multiple perspective when you cross that $10 million mark. But we're also challenged with all of a sudden there's not a lot of gyms for sale, right? So I'm back on the phone cold calling people and I got involved in Roland's classes. I needed some insight and some perspective on how else can I grow this business?

Jon Stoddard (31:04.718)
And so I've kind of taken the approach over the last couple of months is looking at our sphere of influence or the places that we do business and doesn't or are there 10 gentle opportunities that maybe aren't totally fitness related, but they aren't gyms that we can bring in and grow. Yeah. The adjacency acquisitions. Yeah. So we're looking at, you know, an apparel company, which is pretty exciting. Right. What's the brand? It's top fitness, right? That top shape gym.

Top change him. Yeah. Yep. Yep. So we're looking at an apparel company that I'm pretty excited about. It's in the UK. So I have to figure that one out. Apparel company in United States. This one is pretty exciting. I don't I don't it's a huge Instagram and Facebook following. have great numbers and he just wants out. He's got another technology business that he's involved in his VC group said, Listen, you got to get rid of this. Otherwise, we're not going to give you any money.

And he's pretty motivated, think. I just, I have to solve the, I have to solve the six hour time difference and figure that out, which I think we could do. And then we're also looking at, you know, a couple other things like corporate wellness, corporate wellness company that has some technology that, you know, we can enable a sales team to go out and do corporate wellness in the area as well as, you know, throughout the United States. And what do you refer to that?

I mean, is it corporate wellness? Like you go to corporations and teach them wellness? Wellness, yeah. Mental, physical, financial, all the wellness type of programs. And that's important because businesses are now figuring out that if they can educate their employees to take care of themselves, that lowers their insurance costs. yeah.

You know, people say COVID was bad for gyms. It got it got and don't get me wrong, it got rid of a lot of players in the health care in the in the gym business and it's sad to see that. But the strong survive and it also probably. You know the bright side of this is if there's any bright side to COVID. People are now more aware of their health and they're now looking at themselves saying I probably need to do something because the first comorbidity.

Jon Stoddard (33:24.974)
And it doesn't matter what doctor you talk to is if you're overweight, obese, and you had COVID, they stuck you right on a ventilator. They stuck you right in the ER, and you just stayed there. Yeah. Yeah, that's the core morbidity rates of people that are healthy versus the ones that are overweight. It was just so much higher, and you've got to take that into account. Yeah, I have a friend that's heavily involved in the Navy SEAL program.

And you know they were forced or they were they were attempting to force all the Navy SEALs. You how many COVID cases they had amongst? How many fatalities they had against all the Navy SEALs? zero. They're all great shape, What's the correlation? It's not hard. Stay in better shape. Take care of yourself. Your body can fight near immune systems. Healthy fight diseases better, right? If you do get COVID.

you'll recover a lot faster and you'll have your immunity system. Yeah. You bet. So you were looking for agency type acquisitions, you know, aside from, you know, this is, this is the beauty of Roland's Epic Pro program is looking at your platform company and all the other stuff you can bring in. I mean, are you looking at any kind of like Facebook groups, Instagram groups, anything like that to drive or would that even help?

I don't know locally if that would help us because you know, we're we're only in about a maybe a 90 mile radius. Draw a picture around us where I live, which is down in Port Isle. You know, to draw that radius, I don't know if there's a big enough face group that would make sense for us. Yeah, if we get into like an apparel brand, hell yeah. I mean, that makes you know, that makes total sense. He's got that brand has probably 150,000 Facebook followers, which is super attractive for us.

So I see that as kind of step. If I could find something that has those things, it would be huge for us. I mean, I, you know, I, toyed around with, trying to find a business that was completely, you know, not even gym related, but because we have properties, I actually made an offer to a company that was window cleaning, power washing, parking lot, line striping, parking lot maintenance.

Jon Stoddard (35:53.07)
What else did they do? They carpet cleaning. So this was kind of like turning your cost into a profit center? Yeah, yeah, yeah. Yeah, I mean, like, we have we own 50 % of our real estate that we're in. I'm like, I have that. I have those expenses all the time. So why not just own the business? you know, and I actually made the offer to the guy that he got a competing offer. And he just couldn't, couldn't pull it off, which is, know, you got a competing offer right around when you put your put your offer in. Yep. Yep. And you know,

I think my offer was a little opportunistic. I wasn't trying to low bomb, but I was, made a very creative offer, let's say, and he, he didn't like it. He didn't like it. He didn't want to talk about it. So what, okay. And it's like, Hey, I was just trying to open the conversation. Yeah. So how do you have an offer LOI on this apparel business? No, we're getting close. I probably will. I probably will put an LOI.

in soon. I want to buy both of them. I actually want to buy both companies. I have to answer some questions about our team, you know, who can, because the last thing I want to do is buy something that I got to go run. Although I probably would get involved short term. But I need to be able to make sure I've got the people here that can help me. Yeah, that's an e-comm type, critical driver type business. Yeah. Yeah. Expertise.

so yeah, I've had, we've, I have owned a supplement website. That was another acquisition I did. had back in five or six years ago, I had a, and it was actually had the websites before I had a top shape gym. had top shape supplements and it had five different websites. And you know, we did, we did about a half a million dollars a year in fitness supplements. And I bought that business off somebody, grew it and then almost overnight got killed by Google.

yeah, yeah, yeah. I mean, that that business went from doing, you know, $50,000 a month in revenue, that, you know, 15 to 20 % margin stuff, doing $5,000 a month, I mean, literally overnight. Was that Google SEO or Google PPC to change? So Google we had, we were running basically five different website stores. And all five had different domains, different brands. But

Jon Stoddard (38:18.978)
Google at the time would let you have data feed and they would upload it. You could upload your data feed into their, into their world. So they did a search on protein powder, you know, the top websites would come up. Well, I had, I had one data feed for five websites. So the first four websites would be my website, but it was the same store, same product with different, just basically different branding. And they caught that shit and excuse my French and they didn't like that. And then they said, I, they said, because

of the data feed I was getting from my warehouse or my distributors, there was some stuff in there that qualified me to be a pharmacist and that I didn't have the appropriate licensing. So they kicked me off and kicked me off of the Google feed for about 90 days until I could get, know, actually I had to appeal their decision, you know, do a bunch of different things, shut a couple of stores down. And then by the time they got back up and running, that traffic was gone. That was gone. That's like,

somebody referred to it is this Google snap and you take half your population or more than your population and you're dead. Yeah, mean, Google, they didn't care. just whatever. Yeah. What did that teach you about that? You know, aside from not relying on one source of traffic.

you know, I think that business is folly. You have to expect the unexpected. Yeah. Would that be a business that you could now be an adjacent business for your? yeah. Yeah. Yeah. I looked at firing it back up, firing it back up about once a year. I look at firing it back up and, and putting the code back out there, which we know, which we may or may not do.

But I thought about, you know, one of the challenges we had with that business was just fraud. You know, people would order stuff with stolen credit card information, get it delivered, and then you would, you know, then the person who actually had the credit card would fight it. Not only did you lose the money, but you also lost the product. So you get landing on both sides. my God. Yeah, so the 20 % margin, that's just not a lot of room for mistakes. No, and it was all volume based, right? So we were trying to kill the volume, but it makes sense when you can.

Jon Stoddard (40:38.35)
you drop ship and they'll set it out for you. And you don't have to have you don't have to warehouse it. It was pretty, it was pretty interesting. But when fraud starts to set in, that was also really challenging for us because we didn't have any way at the time. And now I think they've solved that problem is to authenticate somebody as a user, right? With two way authentication, you can do that, that's automatic. But we also have been because we have now nine or 10 locations we thought

you know, it'd be great service for our members to add a subscription fee to their membership that allowed them to buy supplements at a wholesale cost. And then they would buy them as almost like a Sam's Club membership fee, and they would just drop ship to our location, which if we spend over 200 bucks, it ships for free.

and they would just pick it up the next time they come to the gym. Yeah, got it. I have a protein sent to me from Amazon and guess who's the number one position in Amazon? It's Amazon's protein. Yeah, yeah. And so we wouldn't, you we wouldn't, I wouldn't worry about necessarily the margins on the protein of other supplements. It'd be more about, you know, can I get them in a recurring revenue model again that says they're going to pay an extra, pay me an extra $10 a month.

that's going to save them $50 a month because they can buy stuff at wholesale cost. Take advantage of my price. Well, as long as, mean, if it adds to your, you know, an upsell, but it adds, to add to your profit margin too. So. Doesn't cost me anything, right? I mean, it's an extra 10 or 20 bucks a month off that member. And it really doesn't cost me anything because it's going to ship for free. they pick it up at the, might be some, I guess you could say there's some labor costs to count it out and set it aside for somebody to make sure they get it. But I mean, those.

Those are fixed costs for me anyways, because those people pay to be there anyways. Very cool. Great story, man. So what have you learned from all this, where you're at now versus where you were at when you started this journey? So I wish I could have taken some of the hesitancy to dive into this entrepreneurial space much sooner. It seems like as I've gotten older, and that could just come with time and success.

Jon Stoddard (42:57.39)
And obviously, knowing that if you fail, could be failed. It's not going to hurt you. I mean, this could always recover. So I wish I would have gone. If I were to give advice to my, and I've told my 20, soon to be 21 year old son in college, go Hawks.

Jon Stoddard (43:19.158)
If you can find a business and you can start a business, go do it. Go start a business, go find a business, get involved. Do it now. mean, do it and go hard and chase it. Cause there's nothing, there's nothing more rewarding than building a business and seeing it succeed. There's also nothing more depressing than failing, but you you can learn from that, punching the clock, you don't need to do it. So many ways in world to make money and there's nothing wrong.

with Punching the Clock. did it. I loved my career. I don't know anybody who had. I mean, there's a lot of people that most people have done that first. Yeah, I love my career and I you know I get offers all the time for. You know multiple six figure salaries and you know good compliance to go help build build businesses and. I don't know if I do it again just yet, because this is fun. It's scary, it's fun, but I think people like me enjoy that and they enjoy my other uncle who was.

You know he was younger than my uncle. I learned from also shared a great piece of advice with me. He's like life's no fun unless you're staring over the edge. That's true, right? I mean, it's like an older guy as you go. Sometimes you gotta go play some football and rough up just like feel what pain feels like so you could be feel alive again like yeah yeah and I you know and I think Gary Vannerchuk said something a couple of years ago that really.

really stuck with me also. You want big problems. Yeah, problems. Now you get paid rewarded for solving big problems. yeah, You want little you want little problems just live little. So true. So true. Yeah, I think I really appreciate the time you spent with me, Matt. And yeah, how does somebody reach out to you if they've got an apparel company in the United States and they want to sell it to you because you've already got nine locations?

Yeah, I mean, that's how you can reach me at mattmatt at TopShapedGym.com. My cell phone number is 563-940-9981. All right. Well, I hope that helps. I I really appreciate the time you spent with me. And I guess we'll see you today with Patch Baker's Yeah, I'll be there for the first hour for sure. All right. Man, thank you so much, Have a great night. Have a great day. Cheers.