After listening to Assistant Xin’s explanation, Pei Qian became even happier.

Indeed, I knew that entering the fitness industry was a promising decision!

With so many successful experiences from failed gyms all combined, how could this venture not succeed?

Pei Qian nodded. “Hmm, I’ll think about it some more.”

“By the way, are there any newly opened gyms nearby? Or ready-made venues where we could just add some equipment and put them directly into use? Go look around and see if we can secure one by adding some money, to save on renovation time.”

Pei Qian was considering opening the first gym as quickly as possible to see how things went.

If everything proceeded smoothly, he would rush to open several more, losing as much money as possible during this cycle.

If he accidentally made money, he could also cut his losses in time and think of other methods.

Assistant Xin considered for a moment. “High-end gyms nearby… I know of several, but they may not be willing to transfer ownership. I’ll have someone ask around.”

After Assistant Xin left, Pei Qian began to consider the specific plan for his gym.

According to the content in this investigation report, he would integrate the “gym failure experiences” summarized by Assistant Xin, digest and absorb them as much as possible, and combine the characteristics of all failed gyms into one!

Pei Qian understood clearly that as Tenda Group grew larger and funds became more abundant, and since his goal was to lose money, no matter which industry he entered, he would invest heavily.

While large initial investments increased revenue pressure, they also more easily attracted customers, especially high-asset quality clients.

The difficulty of losing money was increasing.

So, to lose money, one must have the right attitude and not be perfunctory!

He couldn’t think, “Others lose money doing this, so I can too.” If he thought this way, he would mostly be committing the error of dogmatism.

According to the report’s analysis, the fundamental reason many gyms don’t make money is that gyms themselves require relatively large investments, whether for venues, equipment, labor, or other expenses, none of which are small amounts.

In some developed countries where people generally have fitness habits, selling memberships alone could generate good returns, creating a virtuous cycle.

But in China, due to the level of economic development and people’s mindsets, most people don’t have fitness habits and aren’t willing to spend much money. Relying solely on selling memberships makes it difficult to make money, so they must sell personal training sessions.

This approach was like domestic pay-to-win online games: first, attract as many people as possible to the gym with low prices, then pick out the relatively fat leeks to cut.

Simply put, there were three types of people in gyms:

Novices who impulsively signed up for gym cards but stopped coming after their initial enthusiasm faded;

People with money who wanted a good body but feared losing motivation, so they bought personal training sessions to keep themselves accountable.

Masters who could persist on their own.

Gyms preferred the first two types, but only the third type could avoid being exploited.

However, the third type was too rare.

Gyms mainly earned money from membership fees from the first type and personal training fees from the second type, fleecing both the poor and the rich.

So after thinking about it, Pei Qian decided to do the opposite.

Still following his previous logic, he would increase expenditures while minimizing revenue: on one hand, increase daily expenses as much as possible; on the other hand, shrink his target user group as much as possible to earn less money.

First, not a penny more from novices!

Other gyms sold half-year or annual cards, with longer durations offering bigger discounts, taking advantage of novices’ impulsive tendencies to encourage them to sign up for longer memberships.

These novices often couldn’t persist, so the longer they signed up for, the more they lost.

Pei Qian decided to price down to the day!

Other gyms sold memberships for half a year or a year, charging regardless of attendance, but Pei Qian’s gym would charge only for days when members came, with no charges for days they didn’t come.

At other gyms, cancelling a membership was impossible—members could only find someone else to take over their card, which was very troublesome. But at Pei Qian’s gym, members could withdraw their account balance at any time.

This way, even if novices acted on impulse, they couldn’t give the gym too much extra money!

Second, not a penny more from the wealthy either!

Other gyms frantically sold personal training sessions, providing better service to high-asset users for greater profits.

Pei Qian decided not to sell any personal training sessions at all.

All trainers would have the same benefits and wages, without commissions.

The trainers would be on standby like internet cafe attendants, answering questions when clients had them, and giving a reminder if they saw clients exercising incorrectly, never saying more, much less promoting any courses.

Want a dedicated personal trainer? Want to pay for personal training sessions?

Sorry, we don’t offer that kind of one-on-one service.

Pei Qian became increasingly satisfied as he thought about it.

This plan rejected money from most clients.

Novices would first be deterred by the high price, and even if they impulsively signed up, they could withdraw their balance at any time.

The wealthy who wanted one-on-one personal training wouldn’t be provided with that service;

True fitness masters who only needed equipment to work out would certainly choose cheaper gyms—there was no need to pay extra to come here.

The only people interested in this model would be those who were slightly more affluent, wanted to exercise, but didn’t want to be exploited by personal trainers.

However, because China’s economic development hadn’t reached that level yet, and Jingzhou was a less developed second-tier city, this demographic was very small and unlikely to make the gym profitable.

This way, the gym would be in a pure loss state, and the more locations they opened, the more money they would lose!

Of course, the system wasn’t so easily fooled.

The system’s requirement was that industries must have theoretical profit potential; if they could earn a lot of goodwill, the profit requirement could be reduced to some extent.

Pei Qian provided a better fitness environment, so naturally, he would set higher prices.

After consideration, Pei Qian decided to set the price much higher than the minimum price allowed by the system.

Because pricing at the system’s minimum allowed price might leave players with the impression of good value, resulting in high-volume, low-margin sales.

Increasing the price further, to a level most ordinary people could not afford, would discourage the target demographic from the price alone!

Currently, annual gym cards in Jingzhou cost about 2,000 yuan, and all Tenda employees have them.

This was already for a more upscale gym; cheaper ones cost less than a thousand yuan.

Converting the mid-to-high-end standard of a 2,000 yuan annual card, it came to just over five yuan per day.

But going to the gym every day was obviously impossible; most people would go twice a week at most.

At this frequency, the actual daily price was about 20 yuan per day.

The more frequently you went, the more you saved.

Since Pei Qian had decided to use better equipment, create a better environment, hire better trainers, and further discourage consumers with the price, he set the daily price at 40 yuan!

Considering that the personal guidance that would cost extra at other gyms could be enjoyed for free here, the price should be increased even further.

Of course, at other places, personal trainers provided one-on-one guidance, while at this gym, trainers would help multiple people, teaching whoever needed help. The pricing certainly couldn’t be that high.

Pei Qian considered and decided to raise the price to 50 yuan per visit!

This price should deter most people, right?

At this rate, coming to the gym twice a week would cost 400 yuan per month, or 4,800 yuan per year.

Taking it to the extreme, going to the gym four times a week would double this cost to 9,600 yuan per year.

For Jingzhou’s local consumption level in 2011, this was already ridiculous.

Compared to other gym prices, this should be a fairly unbearable amount.

“Hmm… it still seems not enough.”

“Is this all I can do to lose money?”

“Let me think more.”

Pei Qian felt that with just the current setup, although he was doing the opposite of profitable gyms and had some chance of failure, it still wasn’t certain.

What if some people thought this gym was a good value and bought membership cards as “per-visit cards” for the experience?

Or what if fitness masters temporarily visiting Jingzhou, not wanting a long-term membership, came to get a short-term card?

If enough occasional visitors came and daily foot traffic was guaranteed, it seemed the gym might still be profitable…

So he needed to find another way to discourage these one-time experience seekers as much as possible!

Forcing long-term cards obviously wouldn’t work because it contradicted his previous rules, so he needed to think of something else.

After consideration, Pei Qian decided to implement a “check-in system” to achieve this deterrent effect!

When registering as a member, different training plans would be created based on each person’s physical condition, work, and life status.

For example, requiring members to come at least three times per week, follow specified diets, and only eat healthy meals from Slackin’ Takeout, and enforcing this strictly.

This way, consumers would not only pay to use the gym but also be forced to pay for healthy meals!

Even fewer people would be willing to spend so much money!

Failing to meet check-in goals would result in penalties: first warnings, then refunds, and finally a period during which they couldn’t re-register.

This way, those “experience seekers” who only wanted to come occasionally would also be filtered out, further reducing income.

Perfect!

After much consideration, Pei Qian finally determined the specific rules for the gym:

After becoming a member, users could deposit any amount they wished, with no discounts whatsoever.

They would immediately undergo physical testing and have a training plan created, including how many times per week to visit the gym, what exercises to do, and what to eat. All content would be negotiated with the customer, but once established, it would become mandatory.

Overall, each gym visit would cost 50 yuan, with mandatory purchase of healthy meals from Slackin’ Takeout priced separately. The takeout order system and the gym’s app data would be interconnected.

Of course, Slackin’ Takeout still needed to lose money, so healthy meals would be priced at cost, but this forced purchase itself was a deterrent to consumers.

Both losing money and adding barriers for customers—a win-win situation.

Not eating healthy meals or not coming to the gym enough times per week would result in intervention: the first two instances would receive warnings, and the third would result in an immediate refund and a one-month rejection period.

However, if someone immediately corrected their behavior after the first warning, two weeks of compliance would clear that warning.

Pei Qian thought about it and decided to name this gym “Managed Fitness.”

The surface meaning was that you just needed to entrust your body to the gym!

While the actual meaning was that after entrusting it, a dumb AI would play a terrible hand!

Wouldn’t only the wealthy be willing to come to such an insane gym?

But Jingzhou didn’t have many wealthy people, and true wealthy individuals would go to gyms with personal trainers anyway. Managed Fitness didn’t seem to have any obvious competitive advantage.

When they opened many locations with no customers, they could just use them all as employee benefits—absolutely wonderful!

Of course, Pei Qian thought of some other methods, like offering discounts for successful weight loss, but after careful consideration, he rejected all of them.

Although these approaches seemed like they would lose more money on the surface, they might also motivate users to promote the gym voluntarily, easily backfiring.

So after careful thought, Pei Qian decided to abandon these seemingly attractive approaches and play it safe.

After all, losing money required a steady, long-term approach.

Afterward, Pei Qian briefly considered the equipment for the gym.

All fitness equipment would be top-of-the-line.

Each piece of cardio equipment, including treadmills and ellipticals, would have a small TV in front that users could adjust to watch whatever they wanted.

Showers, locker rooms, rest areas, and so on would all be built to the highest standards. Money would be spent liberally on high-end shampoo, shower gel, hair dryers, and similar amenities.

Moreover, the gym would provide fitness trackers. Members would wear them upon entering the gym and remove them when leaving to upload their exercise data. Only when their exercise volume met the standard would they be considered to have completed their check-in.

…

After finalizing everything, Pei Qian looked at the plan and nodded with satisfaction.

He would strive to make this gym exclusive to Tenda employees, so that no one else would be interested!

The gym would lose money daily, and providing benefits to employees would also cost money, double the happiness.

When the time came, fitness plans would be created for all Tenda employees, making them too exhausted from exercise to work, while Mr. Pei happily lost money—a perfect solution!