Edgard Corona, CEO of Smartfit, is the leading name in the fitness segment in the country. And not only that, he’s the group commander Bio Rhythm & Smartfit, which with 480 gyms, had revenues of around R$1 billion in 2017.
Edgard founded the Bio Ritmo chain in 1996, in Santo Amaro (São Paulo) with a single unit and without knowing anything about the sector. Since then, he is the CEO and main name of the group. Before that, the entrepreneur was a trained chemical engineer who ran the Corona family’s sugar mills. It also had a chemical laboratory.
“We killed our own business to create another one” – Edgard Corona citing the creation of Smartfit within the Bio Ritmo Group. With a presence in countries such as Mexico, Chile, Colombia, Peru, Ecuador and the Dominican Republic, Smartfit has consolidated the market in Latin America, with the mark of 1.6 million students. To get an idea of the number: Estonia has fewer people than the gyms in the Corona network.“Smart” reshaped the way people exercise in the country, even putting pressure on the entire market to change. With technology, an infallible (recurring) scale model and adequate service, it is one of the biggest cases of Recurrence Economy.
ambassador of endeavor, Edgard, who is 61, is the “head” of the 4th largest fitness conglomerate in the world.
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This episode was transcribed and edited with support from Simple Account, corporate digital account and the best Brazilian platform focused on corporate cards. I would like to know a little about the birth of Bio Ritmo, a well-known academy in São Paulo and in other regions of the country. If you can tell a little bit of the story and why you started to be an entrepreneur.
CEO of Smartfit: Actually, it’s the following. My characteristic has always been to be an entrepreneur, in college I had a materials analysis laboratory, then I set up a confection with its own stores. I sold these two businesses and went to work in a family sugar mill in the interior of São Paulo. I joined a gym that was going to be built as a partner, I found it to be a good investment and joined it while I was at the plant. It was the first Bio Ritmo academy, Santo Amaro.
While building the academy, I decided to leave the company. I had a skiing accident and had to undergo physical therapy all day, so I chose to leave the company. I went to do physiotherapy at my gym and, as I was out of a job, I took care of this business.
That was in 1995, 1996 the accident. And I went to the gym to see how much nonsense we had done. At that time, Brazil had just had the Real Plan, with Fernando Henrique Cardoso. So, the economy was doing well. Even with design errors, the company was doing well because the economy was doing well. The Santo Amaro gym was a succession of mistakes, for 12 years we lost money and when we managed to adapt, and we started to make money, the subway expropriated the place, and we lost the gym. And after that there were other units, from Bio Ritmo itself?
CEO of Smartfit: The first good conversation, you can never get enough money into the business. Every business he apparently is very good, then he apparently gets very bad and then it turns into a normal business. It’s a curve.
Every business you think is brilliant until you start putting it on the air. When you put it on the air, you find that there are a lot of things you didn’t imagine. It’s the learning curve. You go into the business thinking you understandthat it’s easy and the business has very complicated features.
Curious that at the time, owning a gym was not a big deal. Very few people went to the gym. CEO of Smartfit It wasn’t like that. I had athletic company, athletic fashion. And the great advent came, with Forma as the first major gym in Brazil, in a shopping mall. And the city of São Paulo had a characteristic. Leaving the Alpes da Cantareira to go to Shopping Eldorado, where the gym was, took 15 minutes. Here it was once a city that circulated as in the USA.
It had a very fluid traffic. So, the academies attracted many students, from all regions. It seemed like a great deal. In 1994, the exchange rate was being managed from 1 to 1, in 2002 it exploded and went from 1 to 2.20. So, what could be invested was service and setting up a gym seemed like a great deal. But we did a lot of things wrong, but it is with mistakes that we learn. What you cannot do is jump from branch to branch. If you are going to work with software, study and learn, make mistakes and learn but focus on what you want to do. Making mistakes is pedagogical.
Still in Bio Ritmo, what was the moment, or type of opening, that you realized you were getting it right?
We decided to look at the Brazilian market. At first, we were doing it here, but looking at the USA. So, the first thing we did was to hire an architect who wasn’t from an academy.
We decided to build something more sophisticated. Creating a different experience. Then we realized that the selling issue was not consistent. It didn’t have a database of who was interested or anything.And with an American we brought in to help, we increased the conversion rate from 10% to 35%. We started to present plans, talk and even ask for recommendations from friends, so that the person does not train alone. Getting the sales part right, we sought training from an Australian, who with 30 minutes had a guaranteed result. People don’t like going to the gym. So, the biggest challenge in the field is that there is no second chance to get right with students/clients to know more click here
So, we settled on the structure part, then sales, then delivery, and finally we started to deal with the experience part. As we walked, we realized that those who were growing were little by little, in smaller units, and it made perfect sense in Brazil. And, how long after the foundation that you realized it had the right model? In 2003 we realized that it was starting to get difficult to manage. As the model was centralized and hierarchical, everything fell into the central office. With 7, 8 gyms, which was what we had at the time, it was getting very difficult, and the situation repeated every day.
And so, we decided to make the methanoia. We horizontalized and streamlined the administration, we needed to challenge our team. We needed to delegate and have clear indicators. And understanding that making mistakes is part of the process. By doing this, we allowed our enterprise to grow. This is the belief in the capacity of the human being and in group work. And it’s important to know that the boss never speaks. The boss challenges the team to work. And it makes everyone discover the mistake and the best way to improve together. This generates commitment from the team.Group work makes teams with very good people form. It means transforming the company as if it belonged to everyone and providing internal growth for its employees. It is important that the entire company offers high standard services. Whether in reception, locker room, equipment. Everything must be of a high standard, from the receptionist to the director.
How was this business idea of Smart, that Bio Ritmo was already a consolidated brand and opted for a low cost?
We noticed that there was a desire of the more peripheral population for gyms with better structure in their regions, as those that were installed offered terrible conditions of use, but what this public could offer would be an average of R$79.00 and the monthly fee at Bio Pace was around R$250. In 2008 I went to the United States and got to know the Planet Fitness business model, which was the largest gym chain and operated at popular prices, we brought these ideas to Brazil and launched the first in this model, in the Morumbi region, as they existed their competitors that brought a concept of sophistication we couldn’t go head-to-head, so we opted to serve the most popular tracks.
We initially opened, in addition to Morumbi in São Paulo, units in Rio de Janeiro, Brasília and Rio Grande do Sul in this low cost model, and even in the history of inflation that Brazil went through, we managed to hold monthly fees from 2009 to 2014 at the same value, and it was a success, because we started to serve a portion of the population that did not have access to a more sophisticated model of gyms And by serving this audience with quality, we contribute to society, as a very expressive number have never had access to a gym and now there are 500,000 people in Latin America who started attending for the first time. And with that in mind, we offer them the very best in professionals, equipment and treatment, that is, we deliver to them an experience that they thought they could never afford. In this way, we serve not only the most popular portion, but also, for example, the financial investor who does not want to spend R$500 on a gym, with a R$89 gym going to meet all their needs. Edgard, thinking about your entire trajectory, what would you do differently that would have accelerated the growth of your group?
It is interesting to acquire an initial financial discipline, and learning from other experiences, such as when you go abroad, increases your level of information.
And in an organization where there are many people who have had these experiences in other realities, they will not be able to reproduce everything they experienced as soon as they return, but when a project or a problem arises, they will have information that was acquired previously and that they will bring the resolution the group needs. All of this ended up resulting in this speed of transformation of the group, Smart 2009, the 2014 Bio are no longer the same, because every year we reinvent ourselves. The world changes at every moment, so all the information, experiences, technology come together to improve our customer’s experience. Now in this second part of the conversation we want to know a little about you. How do you work? what is your background? what did you do? Where did you study? Where are you from?
Edgard corona Smartfit: I went to a very good school in São Paulo, which is Santo Américo and then I studied Chemical Engineering at FAAP, at the same time I set up a materials analysis laboratory and then with some friends we opened a factory. When I graduated, I went to work at the sugar mill, where I took care of several processes and from there, I left to join the academy, where we now form a group of 6,000 employees to take care of 490 units.
Define your role from the founder of Bio Ritmo to the president of a group that is about to reach another level?
Edgard corona Smartfit: What makes the difference is having the certainty and guarantee that everyone who works with us today has knowledge and a better person than they were yesterday. Because we can only perpetuate the business if we seek the development of the entire team, thus creating a culture of collaboration. Most of the directors came from below, people who grew and evolved within the organization, we have many examples of employees who started serving clients and now coordinate entire regional operations outside the country.
Do you have a fixed routine within the company, or is your work fluid and changes in response to demands?
I managed to develop a model that the company does not depend on me to function on a day-to-day basis, I enter into specific interventions, proposing challenges so that everyone can grow. For example, in 2014 I had to intervene at Bio Ritmo, as it came at a time when there were so many processes that were stagnating the business’s growth. Thus, we created a new model, inserted structured programs, which achieved the highest scores and retention in our history in a year marked by the economic crisis, that is, the change showed the client that we were consistent in the delivery of our services, and so we redesigned our processes for the company not to die. How do you see the future of fitness, the future of Smart Fit, the future of the group, what do you see for the next few years?
Looking at the market, as it is today, we have the potential to reach 1200, 1300 units in Latin America, today we are 480, considering a period of 4 to 5 years of hard work, with prospects of having a future scenario with 20% of the population practicing physical activity within the gym, so we will be able to take on a very big challenge to serve these consumers in Latin America, always with innovation. The gym model consists of the daily attendance of your audience, so you need to present a daily service, structure, quality service to ensure customer satisfaction, that is, we have a constant challenge, and we are showing the ability to manage and take care of the client.