Joe Cirulli, Founder and CEO of Gainesville Health and Fitness Centers located in Gainesville, Florida, truly understands the value of hard work. He also understands the power of personal beliefs, and the role they play in success. Cirulli’s many achievements, including his recent cover story in Inc. magazine, confirm that we really do have control over much of our own destiny, and his philosophies suggest that we would all be better off if we focused more energy on making the things that are most important to us the very best they can be. Text: Kirsten E. Silven, Photography: Aaron Bailey, Brian Russell and David Johnston of Johnston Photography
Joe Cirulli is quick to credit his parents for the development of his incredible work ethic, and there’s no doubt that his hardscrabble upbringing in Elmira, New York was formative. As one of seven children, Cirulli grew up watching his father serve in the military as a young man, and later saw him log long hours at the post office. Meanwhile, his mother worked second shift as a nurse to help make ends meet for the family. As early as age nine, Cirulli spent time teaching other kids how to work out – a passion he developed when he found himself the target of local bullies.
Cirulli’s passion for lifting weights and working out had an unexpected payoff early in life when he was named the captain of his high school football team – a surprise even to him – at a pep rally. Cirulli had spent his high school years playing football and helping the other football players work out. Because of his demonstrated leadership ability, hard work, and determination, the coach chose him to lead the team for his senior year. This early experience taught Cirulli the value of helping others to help yourself – a concept that he would expand on later in life and that would prove critical to his success.
In October of 1973, Cirulli made the fateful decision to take a break from school and spend some time with his girlfriend in Gainesville, Florida. Although the visit was not intended to be a permanent move, Cirulli fell in love with the town, and before he knew it he was living there and working full time selling memberships for local health clubs. Cirulli began to form strong relationships with members that would eventually be the foundation of the Gainesville Health and Fitness Center (GHFC), and he began to read every book about the principles of success that he could get his hands on. “When I was 21, I read Think and Grow Rich by Napoleon Hill, and I learned that in order to be successful, you first have to know what you want,” he shares. For Cirulli, defining what he wanted was easy. “I really liked working in the health clubs, and I had always loved working out and helping others, so my first goal was to own a health club in Gainesville,” he says. His second goal – to make his club respected in the community – was conceived because of the terrible reputation health clubs had acquired in the community.
Why the bad rap? By the time Cirulli was 24, he had worked for six clubs in Gainesville and all six had gone out of business, leaving him broke, homeless, and unemployed. Instead of viewing this as a sign to pack his bags and head back to New York, Cirulli saw it as an opportunity. “I looked at it as a chance to do it right, and I felt like I had no choice – it was all I wanted to do,” he says of the decision to open his own club. His opportunity came when the owner of the sixth club he had worked for announced that the club was about to declare bankruptcy and was scheduled for eviction in 30 days. Cirulli acted fast, first persuading the bank to give him 60 days, then landing a fabulous space in a new shopping mall.
In spite of these triumphs, Cirulli wasn’t on easy street. Although he now had a place for his club, the space in the mall wasn’t equipped, so he had to find contractors to put in the plumbing, electricity, walls, showers, locker rooms – everything. To top it off he had no money and only three weeks to get it all done. At this point, one might wonder not only how he managed to accomplish all of this (which, by the way, he did) but also why he kept at it. What drove him to take on what many would perceive as such an enormous risk? According to Cirulli, he never considered the possibility of failure, not even for one second. “When a prospective new member would ask me, ‘What if you go bankrupt like all the other clubs?’ I would put their fears to rest by giving them 30 days to pay their first month’s membership and then let them make monthly payments after that. This way they were always ahead and had nothing to lose,” he says.
The ability to work hard, and a belief in the power of positive thinking, undoubtedly gave Cirulli the nerve to push forward against incredible odds, but perhaps fate played a small role in his undying optimism and confidence as well. Growing up in New York, Cirulli had always attended Catholic schools. In seventh grade, Sister Pierre – a very intimidating nun who had a reputation for being tough as nails – pointed at Cirulli in the hallway and barked, “Come here!” Stunned, he had no choice but to obey. Upon reaching her, she leaned down, looked him square in the eye, and said “I expect great things out of you!” before promptly dismissing him. Although Cirulli never learned what thinking was behind this remarkable encounter, he also never forgot it. “Many leaders don’t realize the enormous impact they have on other people, especially employees or students of theirs, who elevate them to a higher level,” he says.
As soon as Cirulli secured a location and found contractors who were willing to work on 30 day payment terms, He began advertising (which also allowed him 30 days to pay) for the “new fitness club in town” and started selling memberships. Cirulli already had a membership base, thanks to the relationships he had built while selling memberships for other clubs. These members were loyal to him above any club name because many of them had already moved several times with Cirulli when other clubs in town had closed. Today, he still has several members who have been with him since 1974.
From the beginning, Cirulli sold enough memberships to pay his debts on time. Early on, he decided not to follow the typical fitness club strategy of holding a new promotion every month. He felt most of these only said the same thing over and over in a different way. This revelation came to him one night as he sat in his favorite restaurant and contemplated why he chose to return there night after night. He perceived that his motivation stemmed from three simple things: it was clean, the food was good, and the service was excellent. It occurred to him that a health club should be able to succeed on these same basic principles – without gimmicks and deals that often amounted to nothing more than smoke and mirrors. “At this point, I stopped running special promotions and I have never done it since,” he confides.
Cirulli also believes in absolute price integrity. “Our price is THE price,” he says. “It is what it is – there’s no negotiating.” He reasoned that this would prevent members from looking around the gym and wondering who got a better deal than they did. “Even when people would look at me and say, ‘Come on Joe, you own the place, cut me a deal!’ I would tell them, ‘How would it look if we all agreed to do things a certain way, but I came in and did things differently just because I’m the boss?’ This usually made them come around to my way of thinking because they could see where I was coming from,” he says. According to Cirulli, the real question is ‘How can I make a mark on my community so people view my club as the best place to go?’ After all, he points out that there can only be one cheapest club, and that everyone else will be more expensive. Not to mention that prices can only go so low before they are stopped by practicality, and the price of even the cheapest membership will have to go up at some point. Cirulli prefers to focus instead on how he can differentiate himself from the competition, and competition is something he’s become very familiar with over the years.
While GHFC might have been the only place in town to work out when the doors opened in 1978, by 1984 Cirulli had opened a fitness center just for women after learning that many women wanted a private environment to work out in. The original location had gradually moved to being completely co-ed, which was the hot new trend at the time. Then, in 1985 Cirulli was forced to move and expand the original location in order to stay competitive in the marketplace when he learned of a big new club coming to Gainesville. It took him five months to convince the owner of a prime location to lease him the space he needed for the expansion because health clubs still had a reputation for being likely to go out of business. After countless visits to the property owner’s office, and a good word from some high-powered members (the only time Cirulli has ever ‘called in a favor’), he was finally granted access to the location. GHFC had already grown to fill an entire wing of the shopping mall where it started, growing from 2500 square feet to 11,000 square feet of space from 1978 to 1986. In another stroke of remarkable vision and a sense of destiny, Cirulli recalls a conversation with his electrician during the first weeks of construction – before the first location ever opened its doors. “I asked him how many sections of the mall I could take over before I had to combine the electric, and he said five – which was the exact number of spaces in the wing.” It’s no accident that by the time Cirulli moved out in 1986 he had expanded into all of them. “I was afraid of not getting big fast. I wanted to be the biggest and the best. My membership always grew to whatever size the fishbowl would allow,” he confides.
Cirulli’s membership not only grew to support GHFC’s growth – but his membership numbers actually drove it. So the question becomes, how did he manage to attract enough members to allow him to grow? “I learned the laws of success – that if you help enough people get what they want out of life, you’ll also get what you want out of life. When I put this into practice, I discovered that it really worked. I adopted this philosophy and integrated it into my sales approach. His entire staff was asked to wear uniforms to avoid intimidating members, and his sales staff was trained to spend the majority of their presentation listening to prospective members and asking questions like “Tell me more,” instead of just pushing the sale. According to Cirulli, it is essential to try to understand prospective new members before you try to sell them a membership – learn what their individual needs are – and to do this you have to hire salespeople who really care about others. This all comes back to his second goal of making his health club respected in the community. “I realized that if we were going to have a good company, the sales staff had to be good, and to be good they had to have confidence that the promises the company made would be kept,” he shares. This kind of thinking can be directly traced to the core values of GHFC – Integrity (defined as doing the right thing even when no one is looking), Hardworking, An Extraordinary Commitment to Helping People, and An Optimistic View of the Future.
Cirulli also stayed on top of the best new trends, and used them to figure out ways to differentiate himself from other clubs. For example, in 1979 he bought his first Nautilus line. There were seven machines with eleven exercises between them, and as he was trying to figure out how to set them up and introduce them to his members, he imagined how he would have to go about explaining the new workout concept to his parents. From this, he decided to line the equipment up and to place instructors on the floor between the machines to guide members so they would not feel intimidated by the new equipment. As we know, circuit training became wildly popular because it works the entire body, and when Cirulli expanded he added other lines but has always kept his floor instructors – a decision that has also become an important point of difference between GHFC and other clubs. “We don’t just sell memberships and then leave people to fend for themselves in an attempt to try to push personal training,” he says.
There are several other things that Cirulli did differently than much of his competition that were key to his success. For one thing, he tapped a market that other clubs had avoided – the college students of the University of Florida. Since avoiding this demographic hadn’t seemed to work out too well for the clubs that had gone bankrupt, Cirulli reasoned he had little to lose and everything to gain. After all, the college students were close to his age, and he believed they would pay him – and he turned out to be right. He began advertising in the student newspaper, and financed their memberships himself.
Secondly, he revolutionized his company’s hiring practices, drawing on a wealth of knowledge that came from years of reading material written by some of the greatest minds on how to achieve personal success. According to Shawn Stewart, the GHFC’s Operations Manager, “We create teams. It is more important that your company’s core values align with those of your employees than it is that they come to you with all the skills they will need. It is much easier to train skills than it is to instill core values.” Another piece of advice? Don’t hire the first person you interview. Stewart recommends interviewing ten people for every position, but anything is better than only interviewing one per position. If you find yourself lacking in applications, ask your best staff members to hand out applications to anyone they think would fit in, and network with local universities to generate volume. Most importantly, Cirulli and his entire staff remain focused on being the best fitness club in Gainesville. In fact, he never had a desire to expand outside of the area, mainly because he prefers to service the needs of his community, and he is firmly grounded in Gainesville.
Other smart moves Cirulli made early on helped him gain financial freedom. After reading The Richest Man in Babylon by George S. Clason in 1978, he started saving 10% of what he made. “When you are growing a business, you have to think of it as your baby and devote all day every day to its development,” he shares. In addition, by figuring out his monthly expenditures and only taking the number of contracts to finance companies that he absolutely had to in order to stay afloat, Cirulli was able to gain financial independence from the finance companies. To do this, he also had to start his own in-house collection agency, but by doing so he was eventually able to finance all of his memberships in-house. “$300 became $210 if you took your contract to a finance company,” he says, adding “It just made good sense to avoid having to do that if at all possible.” These savvy moves have allowed GHFC to finance 100% of its own growth – mainly thanks to Cirulli’s mantra of saving and being responsible.
The Gainesville Health and Fitness Center grew mainly from student memberships until 1987. Up to that point, their memberships had been 90% from college students, but one day Cirulli awoke to a front page story in the local paper that read “University of Florida To Build Fitness Center To Rival Commercial Location,” and he knew things were about to change. He immediately began to revise his approach, and spent the next few years marketing to the year round residents of Gainesville. The people in his ads were no longer students, they were just regular people in good shape. Cirulli always shied away from pushing an image that was too sexy, because he felt that it was important to present an image that regular people could relate to. When adult residents of Gainesville joined the club, he made sure they were taken care of by his staff. During an interview with a University of Florida college radio station, Cirulli was asked if he intended to lower the cost of memberships to compete with the university’s new fitness center, and he replied that he would actually be raising the cost of membership. This made it less attractive for college students who were typically strapped for cash to join, and also kept revenues where they needed to be, which allowed him to weather the drop in sales he experienced for a short time as his membership demographic shifted.
Cirulli also joined the local Chamber of Commerce and became more visible and involved with the local business community. For example, much has already been written about the important role that GHFC played in making Gainesville the first and only city to receive the Gold Well City, USA Award from the Wellness Councils of America in April of 2003, naming it the “Healthiest Community in America.” While such moves are undoubtedly brilliant PR moves, they also come from a genuine desire within the company to improve the quality of health – and life – of Gainesville residents.
In 1994, Cirulli again found himself facing the onslaught of competition, when he received notice of a bigger facility coming to town. When people asked him what he planned to do, he responded that he was going to build a bigger, better facility – which he promptly did, in the direction that Gainesville was growing – and financed himself. “You always have to focus on how to make your company better – you can never think you’ve made it,” he says.
Today, Cirulli has also expanded on an early interest in physical therapy that dates back to when he was just 18 years old and still trying to decide what to do with his life. After working with Arthur Jones and helping the University of Florida collect research data on the effectiveness of physical therapy, Cirulli entered into a joint partnership with a local hospital, and currently operates two rehab centers that are located in his clubs, and two that are freestanding. As a provider for insurance companies, these rehab centers function as a separate corporation dedicated to physical therapy, but also help to increase regular club memberships, since all patients receive a free month of membership at GHFC.
When asked to share what he sees as the next big opportunities in the industry, Cirulli mentions the success he’s experienced more recently with small group personal training, adding that it’s where GHFC gets the most hits on their website. He is also anticipating continued growth in sports training programs, and has launched and will continue to develop an athletic academy that is tailored to the needs of athletes. Finally, he would like to see the entire health and fitness community work to forge a stronger link between the medical and fitness fields.
As for Cirulli’s goals these days, he says he’s simply focused on making GHFC the best it can be. After all, he observes, that’s really what made it possible for him to reach his many other goals, like becoming a pilot, owning a plane., and traveling the world. One of the things Cirulli remembers his mother telling him over and over as a child is “With your health you have everything.” These words of wisdom must have made a huge impression on Cirulli, because he’s gotten everything from bringing health and fitness to his community.
Keys To Success:
• RECOGNIZE
Opportunity when it presents itself. Turn a negative into a positive by using mistakes and oversights as a chance to learn and improve your business
• IGNORE
Those who ask you to contemplate failure. Once you’ve set your sights on a goal, don’t settle for less.
• UNDERSTAND
The role you play in the lives of your members and employees. Leadership positions should not be taken lightly.
• KEEP
Your promises. Think before enacting new policies or making a promise. Going back on your word causes others to lose faith in what you say.
• FOCUS
On establishing points of difference from your competition. Add value for members by providing services they really need.
• LEARN
That helping others reach their goals will help you to reach your own.
• DEVELOP
Your core values and apply them to everything you do.
• ESTABLISH
Financial independence as soon as possible by systematically paying off debt and freeing yourself from reliance on finance companies.
