What’s Your Exit Plan? with Trent Luecke from Teambuildr

Speaker 1 0:02
Mike, welcome to the business for unicorns podcast, where we help gym and studio owners create a business and a life they love. I’m your host. Michael Keeler, join me and the business unicorns team each week for actionable advice, expert insights and the inside scoop on what it really takes to level up your gym. Get ready to unlock your potential and become a real unicorn in the fitness industry.

Speaker 1 0:37
Hello, fitness business nerds. What’s up? Welcome to another episode of the business unicorns Podcast. I’m happy to have a repeat guest back on the podcast again previously on the podcast. I double checked episode 457. Was almost a year ago. So welcome back to the episode. Mr. Trent Lukey, who is a former gym owner, gm of team builder OS, which we’ll talk a little bit about today. And I just want to say, welcome back to the podcast.

Unknown Speaker 1:00
Trent, of course, glad to be back.

Speaker 1 1:02
So happy to have you again. I was preparing for today, and I listened back to our previous podcast again, Episode 457, for everyone who wants to go jump back. And it was such a great conversation that was Scott so excited to have you back on today, because I remember just enjoying the conversation being really valuable, and lots of our listeners really engaged with that one. So I’m so excited to have you back. How’s life been for the last year?

Speaker 2 1:22
Been good. I’ve kept both of my children alive for another year. That’s always

Unknown Speaker 1:27
a plus, important milestones.

Speaker 2 1:28
Yeah, exactly. Check those two off the box. And then I’m sure, like everybody else, just riding the wave of all this, the new AI tech that’s coming out every single day, it feels like so, yeah, it’s been, been fun, busy, and everyone’s alive.

Speaker 1 1:45
Yeah, that’s great. I’m glad you’re family and as well. Speaking of technology, team builder has been growing and expanding and always been developing its technology more and more. And some of you listeners may know team builder. It’s an app that we’ve used it. We used to Mark Fisher fitness for years, and loved many of our unicorn Saudi members love it, and you’re really the general manager of the team builder OS portion of the of the suite. And so you just want to talk a little bit about what the heck that is and what you do on a daily basis. What would you say you do here?

Speaker 2 2:13
You can send the team builder OS is, like, the, I don’t know, the matchmaker, or like the other end of the spectrum when it comes to gyms. Team builder strength is like your workout delivery, Workout Tracking, a little bit of communication in there. So that’s where the X’s and O’s of the service you provide, whereas OS is the like brains, if you will. It’s running, your scheduling, your billing, your reporting, analytics, all that stuff. So my role is to the General Manager, which is a fancy way of saying, I’m not really good at anything, but I’m pretty good at everything.

Speaker 1 2:53
To be an expert in everything that everyone else does.

Speaker 2 2:56
Yeah, exactly. And like, you’re probably not action expert, you’re just passable, exactly. So luckily for me, having run a gym for eight and a half nine years, I know exactly how to not do things, and then also used pretty much every software that was out there at the time. And yeah, I’m sure you would agree with me. They’re all kind of meh. So doing my darndest to create one and help create one that’s good, like it actually is worth using and doing that through the lens of someone who’s walked the walk.

Speaker 1 3:30
Yeah, good. I’m glad to have people like you at team builder who really understand what listeners, like our listeners, are going through on a daily basis. That’s amazing. And I know we’ve seen over the last five plus years this proliferation of these, of platforms trying to be this kind of all in one solution for gym owners and integrating things, how, much to your chagrin, you have a lot of competition. But just in a nutshell, I’m curious these days, and this is a genuine question for me, because I haven’t, haven’t looked at your software in a minute. What do you think makes team builder stand out these days? Who is it really right for? That’s a

Speaker 2 3:58
great question. It’s, I think our bread and butter niche, when it comes to just a quote, unquote ICP would be like a sport. Performance is like our bread and butter, especially since team builder strength is like the backbone of the business. We’re in a bunch of high schools, a bunch of colleges, a bunch of, like, private facilities, like a Cressy, except Cressy doesn’t use team builder. I’ll get with Pete about that, but work on him exactly. But so that’s our bread and butter at the moment. But on a larger scale, it’s more it’s for people who, like me, are, like, dissatisfied with the current state of like, member management platforms, and are more keen on having a lean system that is very stable, but maybe lacks bells and whistles. Sure, because they’re either willing to do some of the bells and whistle work on their own, or they’re like, I’m savvy enough to like, have a minimalist, quote, unquote member management platform, but I use tools like Zapier and things like. That where I can do a little bit of custom work on my own, that

Speaker 1 5:02
makes sense. I think the fact that you all really started with the programming part of delivering the actual workout is unique, because most of the other platforms start at the other end and have to try, and are trying to make up for that part at this point. And so I think that’s really for anyone listening who really values having that program design delivery central to your software. I think you all are totally worth looking at. That’s awesome. We can talk about team builder all day, and I’m sure it’ll come up later. But what the topic we actually want to talk about today is because we’re both people who’ve no longer own a gym. We both are people who have sold our gym, really, in the last both of us last three years. I think you said yours was three years ago. And so we wanted to talk a little bit about building and running your business with the end in mind, right? The idea of when you’re clear about how you might want to exit, you don’t have a definitive idea, but when you’re clear about how you might want to exit, it might inform, or should inform, how you choose to run your business on a daily basis. And I know you said you have a little bit of a cautionary tale in that you’re looking back at yours you might have you wanted to consider that earlier. So let’s start with your story. Just let’s walk through, when did you first think about exiting from your gym every day since it started

Speaker 2 6:14
the opposite. It was like, Oh no, I didn’t think about this. So I think to not to do the whole Trent was born in 1992 but like I opened my gym when I was 24 so I had, I’m only 33 now. I have no idea. I still don’t have any idea what I’m doing. I absolutely had no idea what I was doing at 24 so there was no What am I going to do after it was I was naive enough to think that I could do this for 40 years, or whatever, that’s where it would start. And then the cautionary tier for lead really actually kicks off when I’ve had my first child in 2020, about a month before the pandemic shut the world down during perfect timing. So, yeah, at that point it was, I don’t know, I don’t know if this isn’t the cards anymore, because, like, I’m pretty much gone whenever he’s either awake and around the house, and then when I am home, when he’s awake and around the house, I’m basically a shell of a human being, because I’ve been probably on my feet for eight hours, and the other four that I was working, I was on a computer. Yeah, that is when it became all too clear. I was like, I didn’t really think through how this was gonna, like, who’s gonna be the next custodian, if there is gonna be one? Yeah. And so what ended up happening do the speed of which I needed to get out, and then also the fact that, like, my business was absolutely not in a place to be sellable. Someone was going to be buying a job, is what they’re all over, full time job.

Speaker 1 7:45
Yeah. And we know it’s hard to sell. It’s hard to sell. Want to buy a gym. Wanted something that comes a little more turnkey, maybe doesn’t need them as much.

Speaker 2 7:52
Yeah, yeah. So it quickly turned into a liquidation event. Of here’s all the equipment, come get a barbell, come get some bumpers.

Unknown Speaker 8:00
Yeah, sure. So you sold it for

Speaker 2 8:02
parts, exactly, right? And I still have a really nice garage gym because of it.

Speaker 1 8:08
Trent, you’re not alone, I think one. I’m sure our listeners who are parents, really resonate with this, with your story, right? Because it is so hard, especially during covid, when you having kids, and balancing being an entrepreneur and small business owner is really tough, and so that being part of your trigger for wanting to move on makes perfect sense, right? Because our kids are only kids for so long, and you need quality time with them, and then also you’re not alone, because so I think we’ve talked about before the podcast started, is what happened to you, is what most gym owners wind up doing. Most gym owners don’t have some sort of big exit where they sell to private equity, or they sell to another gym owner, or even sell to our employees. Though, those things happen, and they’re possible, but most wind up settling for parts like huge and so let’s just talk about looking back. Is there anything you wish you would have had done differently

Speaker 2 8:56
so like when it came with the exit itself? No, because it’s the cleanest possible break you can have. Sure there is no Hey, all right, I got a buyer. Now I need to, like, nurture this relationship until, like, I’m completely out of the picture, and then also, like, I don’t regret selling it for parts. Like, I want to make that abundantly clear to anybody who’s listening, it’s a cautionary tale, not because of what happened. It’s more because I didn’t. I wasn’t ready for it. So it was, oh God, talk about we could do another podcast. We’ll set up one for a year. The identity crisis I had, because it was so rapid, like, Sure, your whole identity is wrapped up in being the face of your business. I’m a gym owner. I coach people now. What am I like? Am I just a guy who likes to work out a lot?

Speaker 1 9:48
So anyways, but it’s real. That’s on the podcast before in that when Mark and I sold, we did a few podcasts about our process selling. MFF and I had a little bit of more runway because we started business. Funicards in 2016 and we only sold MFF last year. And so I had a bunch of years of kind of investing in another identity, my next identity, the next chapter. And Mark did too. He was obviously building business unicorns with me, but he was more involved in the gym day to day. So we sold, I think he had a little bit longer of a period of figuring out that identity shift. But that happens to all of us, right? We often. We talk about our small business owners in general. We talk about our businesses. We refer to them as our babies. We think about this thing that we built and nurtured and be. It’s like when your kids go off to school, you’re like, Am I not a parent anymore? That’s it’s a whole nother way looking at it.

Speaker 2 10:35
Yeah. It’s like the classic thing, like, your kids see your teachers more through the day than they do. You. It’s like that I see my business more than my family, but yeah, so the as far as what I would change such that the exit wouldn’t be as painful or as unexpected, would be like what we talked about the very top what like? How do I want to exit? Just have a rough idea. And do I want to do the song and dance of actually selling this and negotiating a buying price and doing the appraisal and all that cool? If you want to do that awesome, start thinking about it like ideally from day one. Or do you want to be like, Man, when I’m done, I’m either going to sell it to a coach, so it’s a pretty easy process, relatively easy, or I’m just gonna sell it like, I’ll close it if someone else wants to open a gym here. Cool, fine, but I’m not going to be the one handling the trade off.

Speaker 1 11:30
So, yeah, that’s what I would do. Let’s go through, maybe this would be fun exercise. Let’s go through, like, kind of the most common scenarios we see, and maybe talk a little bit about how we might operate our gym differently if that was the outcome we intended? Yeah. So let’s start with the most kind of pie in the sky, right, which is everyone thinks they’re gonna sell their gym to some like private equity firm for top dollar. And I’ll start here and say this is like winning the lottery. First of all, for most gym owners. And my hot take here is that, if that’s really what you want, you need to have tremendous scale. You need to have multiple locations, most likely, or one really big, impressive location in often, probably a big city, or something that’s really crushing it a multi millions. It needs to have a strong profit margin. And you need to be not needed in the business as all, as an owner. And there needs to be really great SOPs that make that business run without the owner present at all. Those are just the starting things I would think about anything else. What would you add to that?

Speaker 2 12:27
Yeah, like you almost have to have, you have to have your what I think of is the honestly, more like the groundwork of there needs to be ready made careers available for people to enter your business? Like, as an employee? Sure. Like, obviously, that goes all that stuff that you talk about. Like, those wouldn’t be there without that. I think that is, like, arguably the hardest part. Like, you can’t get there without it being like, cool. This is a place where people can come and work forever, not, all right, I got an 18 year old who will take 20 bucks an hour to run a class when they graduate. I’m screwed back to square one type of thing. Yeah, totally, yeah.

Speaker 1 13:09
100% and that’s, I think it’s a barrier for the industry as at large, and there’s a lot of folks, including us at this unicorns, trying to work on this is helping gym owners create careers at their gyms and paying well and creating a ladder for them to climb. And it’s hard when you have a small operation, but I think if you’re really interested in long term, like VC exit, you’re going to have to have some scale, and you’re going to have to have created some careers so that some staff are going to stay long term. There’s a ladder you can climb. You can attract talent well, and then there’s a real funnel. There’s a real funnel for you attracting positive talent, and that’s pretty pie in the sky for most people. I think right, I can barely count on my I can barely fill up single hand of people I know who’ve gone in that direction, like my hands empty.

Speaker 2 13:51
I think so. The average gym owner is not actually interested in that, like they might think they are. Well, I don’t think you are.

Speaker 1 13:58
I think that’s what at least, the very least, this is my own data about this, but I think when people think about selling, that’s like the picture we’re all sold, of what selling looks like. Some guy comes in this firm with bottomless pockets and some buying your business. Here’s a big fat check, yeah, but that’s just not gyms. So let’s talk about what’s more realistic. Yeah. The next level down is often selling to another gym owner, so someone else in your area, a competitor, who’s going to take over your space and kind of buy the whole business, including your maybe even your brand, but at the very least your client base, etc, really take over. And so maybe, if you want to kick this one off, what me, how do you operate your gym? If that’s your intended exit?

Speaker 2 14:36
Yep. So that’s, I think, the only thing that makes that possible, and this is where it still is going to be similar to private equity or VC exit is it needs to operate without you the and even more so like less on a hey, you’re the person that greets everybody at the front door. You’re the person calling the leads that’s assumed it’s more you. That you are not the only face that people want to see. That is the hardest thing, because right when it’s you, and like I talked about the three part time coaches that are 1920 or even if you have a 40 year old coach is really good. Everybody wants to take the class that Trent runs, or that Mark runs, or that Michael runs like they’re excited to work with another coach, sure, but you are the person that they came and stay for. That is a problem. So setting up the business such that, yeah, you’re absolutely in charge, but you’re not the one that everybody immediately associates with when Trent leaves, I’m leaving. Yeah, 100%

Speaker 1 15:36
and many of those leaders will probably have heard of the phrase key man risk, right? It’s the idea that any business that’s being sold has, there’s a key person who is critical to success, a mark and a Mark Fisher fitness, right? That’s that’s a risk, right? And the reason, only reason, we were able to overcome that risk is because we sold to a former employee, which is a scenario we’ll talk about again more in a second. So I’ll put that on the back burner. But I think that if you are a key person, you’re a key figure, and you’re still training sessions, and if you leave, you think maybe your clients of your team would leave. No one want to buy that business. They want one that where, where the business is running on its own, without the need for someone like that to be so critical every day. And so I think that’s a great place to start. I also say this that I don’t know any gym owner who wants to buy someone else’s gym that doesn’t have clear systems and processes in place. I don’t want to buy a mess place where everyone’s winging it every day. I want there to be clear systems for onboarding, clear systems for all the things. I can list, all of them, but all of them, and that’s not to be buttoned up to the point of being a franchise, but has to be buttoned up to enough or I come in I’m not buying a headache. Needs to be some some smoothness and also and a decent, decent retention numbers, decent average revenue per member per month numbers, those kind of things. I think, decent reputation, good Google reviews. I want to buy a business that, again, is not a headache.

Speaker 2 16:57
I think that the systems and processes thing is like, God, I remember the amount of podcasts, like, business podcasts I listened to back in the day about, like, systems and processes are the key to it. All right? Sweet. But then I think people don’t understand, like, how deep that actually has to go. Yeah. Like, I think people have a very they think they’re thorough. But the litmus test would be like, cool, some Bozo could walk in off the street, maybe with a coaching experience at a minimum. You could hand them your big binder and say, I’m going to be gone for a week when I come back. Ideally, the building is standing and

Speaker 3 17:36
we’re fine. Yeah, I think maybe grown a little bit, maybe fingers

Speaker 2 17:41
crossed, yeah? If that’s not the case, if you don’t feel comfortable doing that, it’s not documented enough.

Speaker 1 17:46
Yeah, yeah. And I’m happy to say we’ve done at least a million podcasts on the topic of standard operating procedures. I know it’s not sexiest podcast topic, but y’all go back and listen to some because there’s a real art and science to creating SOPs. Technology makes it easier, never these days, and writing down a few steps on a dock on a piece of paper is usually not enough. You need to have some videos. You need to that’s another topic for another day, but I think the point stands is that no gym wants to own buy another gym that’s just riddled with confusion and chaos. And so let’s go through the last option. This is the option I feel like I see the most, but also this is what I did. So I feel like I maybe have a bias here, but I think the exit I see that seems most frequent to me is actually selling to an employee and selling to someone who’s already worked in the business, who maybe you’ve groomed to take over the business at some point, or they’ve been a strong number two for you, or just a really great lead trainer. And so there’s lots of perks here, but how would you run your business trend? If this was your end goal?

Speaker 2 18:44
I still think the first two things we talked about, like, there has to be a sustained there needs to be a sustainable employment path, and everything needs to be very documented. But, man, the perk there is that you ideally have time with that person, so you can maybe get away with a little, I don’t want to say sloppiness, but you definitely have more leeway than a total stranger. Here’s the binder smell. Yeah, they

Speaker 1 19:09
already know how to fill in the gaps, because they probably have been every day.

Speaker 2 19:13
And it can be even iterative, where it’s like, Hey, here’s how I do it. How would you do it? And then it’s cool. That’s now the thing, when you inevitably take over.

Speaker 1 19:20
We’re done. Yeah, 100% I think you’re right. Yeah, I think you’re right. That’s it’s so many great perks. And frankly, just going back to my story, MFF, that’s what happened with us. We sold to someone who had been a former employee left MFF, opened their own gym in Brooklyn, and I was like, I want another location. We’re like, how about the place you used to work? Come back. Take this over. Some of our clients already knew him, and by that point mark was not really hadn’t been training in the gym for many years, and so there’s no clients who are attached to him. And he knew that. And so he knew our systems and SOPs, but they’ve evolved a lot since he left. But he knew the DNA of the place. And so that made such a made such an easy transition. And so I think for us, team that up was really a lot of the same things, good systems in place, etc. And. Then in that transition, some of the most important things are really just communication, right when you’re teeing up someone else to take over, and at some point you want to tell people about that, you have to be thoughtful about telling that story and the timing of that. And maybe that’s maybe fodder for another podcast, because I think I could go, we can go into a lot of depth about that, but let’s just say this for all of our listeners out there, or, I think, who maybe don’t have an exit plan in mind yet. Trent, what do you recommend? Where do they start? How do they how do you recommend they think about this

Speaker 2 20:31
man, talk to someone who, even if it’s not in a gym, honestly, it might be better to talk to someone who’s not in the gym business that has gone through some kind of exit and just ask questions like you don’t necessarily need them to guide you where you want to go, but I would venture to say you probably don’t know enough. To say you don’t know like even makes sense, you would just be grasping at straws trying to think of an exit strategy. Go talk to a couple people who have done it. If you’re fortunate to have people in your circle like that. Just let them illuminate you what goes into it, and then figure out where you want to be on, whether you liquidate like I did, or you want to go for the gold. Goldman Sachs comes a knocking. Yeah, 100%

Speaker 1 21:13
I think that’s a really smart move. Just go talk to folks, talk to folks who have done it, talk to folks who you trust. Talk to folks who know you and your life and what you want from it, like any sort of trusted friend, professional peer, colleague, is great. Obviously, if you’re part of a group like our unicorn society, you have that kind of built in help. And there’s plenty people in our group who we’ve worked with through their sale, through their exit and their membership ended just because they ended, and in some cases, actually, I can think of a handful where they actually passed off their unicorns on a membership to the next gym owner, and we helped through the transition, which has been so fun. That’s a cool person. Yeah, really, it’s been really fun. When that can happen. This has been a ton, but I can think of a few. Yeah, this has been fun. We could keep having this conversation all day, but maybe let’s wrap up.

Unknown Speaker 21:53
I was like, oh my god, it’s been 20 minutes.

Speaker 1 21:55
It’s time. It’s time. Yeah, so for folks who want to learn more about team builder, OS and what you all are up to a team builder these days. Where do they go find more information

Speaker 2 22:03
and then go to our website. It’s team builder.com/platform-os I expect everybody listening to write that down

Unknown Speaker 22:13
show notes below, yeah. We’ll put it down below, yeah.

Speaker 2 22:15
We also have two new things that we just launched that are free. They have zero to do with team builder OS, that’s more just, Hey, man, we want to make stuff for gym owners, very much like BFU. We have our own little AI, course, that’s just, man, if you’ve never dipped your toe in, go try it. And then we have a profit calculator, which essentially just helps you get a snapshot of what it’s actually going on in your business. Go check those out. Like I said, totally free. Yeah, you might get some emails from me, but sure.

Speaker 1 22:42
Yeah, that’s fantastic. All right, we’ll get the links from you and put them all down in the show notes below so people can easily go find those resources. That sounds awesome. Thanks again for being on the podcast. What a treat. I’m sure we’ll have you back again soon, hopefully not a year. Maybe you’ll be able to earlier this time. But yeah, thanks for being here and all you listeners. Thanks for listening. I’ll see you on the next one. Have A kick ass week. Bye, bye. Thank you. You.

Transcribed by https://otter.ai