How Much, How Many, How Easy

Many folks are scared of models.  But as I’ve started working more with non-financial folks, I’ve been explaining what any model comes down to: 

How much, how many, how easy. 

The below example talks about a particular training gym I’m working with. 

How much: 

If you do a certain thing, how much will it get you. 

That is – sign up a new member for a small group training program. 

Or for a regular gym membership. 

Of for personal training. 

Or even renting out your gym to an independent instructor for their own classes. 

Each of these activities will get you more money. Each one will give you a certain amount of money.  

You might think that you should immediately pick the option that gives you the most money.   Maybe. 

How many: 

Daffy Duck was the extreme example of the one off performance.   some things can only be done once, no matter how impressive (or sick). 

But seriously, if he rented out the gym regularly, he could make money. But he would also limit access to the gym.   So, the how many just isn’t there. 

So, you want to balance how much with how many.    

How easy. 

Getting new members to sign up is profitable – if you’re not overcrowded, someone signs up just to use the space there’s no additional work involved. 

But, marketing to someone new is harder than selling to an existing member. So, he wants to be sure to make the most from his current members before he focuses too much on getting new members. 

This is really all modeling is.  How much, how many, how hard.