Message from the CEO

How COVID-19 Shifted Our Company

Hello Financial Gym Family,

Frequently I write these messages and they go to members and non-members of The Financial Gym; however, this one is just meant for our members, aka “our family.”

If you’ve heard me on my podcast or seen me on our Instagram Lives the last few weeks, you know that I’ve been hinting at the problems that Covid-19 is presenting for our business. We closed our gym locations as of March 13th; and it’s not only unclear when they will reopen, but  it’s also unclear about how much our community will grow when they do reopen. The irony is that we’d finally gotten to a place where our growth was very formulaic and we could rely on our new client numbers every month and now we’re running a business in the fog. Not only is our growth unclear, but we are waiving more and more membership fees for clients who have lost their income due to Covid-19. 

A bigger problem than unknown growth, though, is the fact that Financial Gym is a start up and ultimately we rely on investors to continue to help us fuel our growth; and what has become very clear to us is that all venture capital investors are on hold with new investments and when they do invest again, they’ll be looking for different financial results than they were just a month ago. 

Previous to this global pandemic, venture capital investors were very comfortable funding companies that were losing money, in fact, many of them have gone public (i.e. Uber, Slack, Peloton, etc) and they’re still losing money. Losing money for a startup was not only normal, it was expected; however, we believe that start ups will need to show a more clear path to profitability rather than just large revenue growth to receive funding in the post-Covid-19 world.

Therefore, the leadership team at The Financial Gym has put together our path to profitability with the four gyms we planned to operate in 2020, HQ, DC, Brooklyn and LA; and this plan involves expense cuts and very conservative growth since our future is so unpredictable. The largest expense by far for the Gym is payroll. So, the first step we took was to ask our highest paid employees if they would take a voluntary pay reduction for a period of time. I was personally making a salary of $100,000 and as of April 1st, my salary is $60,000. It was to my great joy, that every single person offered a pay reduction and even teammates we didn’t ask. I always say that our team feels like family and there’s no time where we’ve felt more like a family than now when we’ve had to rally around the home to keep the lights on. 

The next step we’ve worked on is determining the team that we can support full-time, a portion of the team that we will switch to part-time and the rest of the team that we will permanently let go. This process of evaluating the team has been extensive and truly gut-wrenching for the leadership team. Many of you will lose your BFF, but we’ll be losing a family member, and it’s honestly making me lose sleep at night about making these decisions when this was never in our plans for 2020. 

I have made it a point of being honest with the team; and they all know that this is coming. On Monday April 20, every team member of Financial Gym will meet with a member of our executive team to determine their future here; and I’m sending you this email to give you the heads up that one way or another, you will hear from a member of our team about your trainer. For those of you whose trainer is one that we can’t keep, I want you to know how much empathy I have for you; and I ask for your empathy in return. The people who will stay on, will not only have more work with less resources, but they’re also losing friends and family. And as much as it’s our company’s mission for you to have a BFF for life, I promise you that you will love working with another trainer. I think about it similar to instructors of workout classes you’ve taken, while you love one instructor, there are others you can get to know for an equally great workout experience. 

When I think about my responsibility as the leader of this company, my first priority is to you, our clients. I believe it’s important to keep this business running to ensure that financial health is available for all and that we’re here to change your lives and our future client’s lives for the better. The next priority I have is to the team and making sure that they have jobs and can support their families and fund their hopes and dreams. Finally, I have a responsibility to our investors to make sure that the faith and financial resources they put into our team and our mission was not misplaced. 

I believe that with the plan we are going to enact, we will fulfill our responsibilities to as many people as possible. This is not the plan we had for 2020, but I think we can all agree that most of us are not living the plan we had for 2020. What I do know is that great challenges bring great opportunities and I’m looking forward to the positive ways these challenges will mold us all. 

If any of you want to speak with me directly about our decisions, please let your trainer know, and I’ll make time for every single one of you. Thank you for your trust in us, thank you for supporting us and thank you for your patience as we work through the greatest challenge this business has seen to date. 

Warmest Regards,

Shannon McLay

Founder and CEO of The Financial Gym