Martial Arts World News Magazine - Volume 22 | Special Edition

EDITORIAL
What if There Were a Recession,
But You Chose Not to Participate?
by Master Toby Milroy
First, are we ‘in’ a recession or not?
It’s somewhat nuanced, and I don’t profess to be an economist,
but the ‘non technical’ definition of recession for about the last
50ish years has been 2 consecutive quarters of negative GDP.
In the first quarter US GDP contracted by 1.6%, and in the second
quarter by .9%. Since the total US GDP is roughly $22.8 trillion,
that in real dollars, in the first quarter we shrunk by $364 billion,
and in the second quarter by $205 billion.
Now, “technically” there are other considerations and factors,
but in general terms, we’re ‘in’ a recession already.
We’ve seen recessions and disruptions before
in our industry, and we’ve learned over time how
to respond. We’ve learned what works ‘better’
in recessionary times, and what works ‘worse’.
We’ve seen some models do even better in tough
times than in ‘boom’ times.
We’ll either learn the lessons of the past or be
doomed to repeat them.
Second, how do we build our business to
be more recession ‘resistant’?
In general terms, economic
downturns tend to affect the market
unevenly. The more financially
stable, higher skilled sector
of the economy tend not to feel
much disruption, while the less
financially secure, less skilled,
tend to feel the pinch more
than others. This might help
us consider what segment
of the market you’d choose
to serve in your community.
Do you choose to build your
livelihood and business, relying on
clients that are
more at risk
of economic
disruption, or
less at risk?
I’m not suggesting
that
we shouldn’t
have systems in place to help serve people on the lower end of
the income scale, in fact quite the opposite. I think it’s important
to be financially stable enough that you CAN offer scholarship
programs and have the flexibility to assist families in need, but it’s
virtually impossible to do this if your business is barely ‘getting by’.
In my view, with abundance you can make a far bigger impact on
your community than you can with a lack of abundance.
So, we try to choose a market segment that is best able to fund
the business, in good times and tough times, what else can we do
to make our business more recession resistant?
Schools that build a business model more like a ‘health club’,
with month-to-month agreements, lower tuition, less ‘program’
structure, and less relationship with their students tend to get hit
far harder by difficult economic conditions. When times get tough,
these schools see their attrition rate skyrocket, and students simply
‘disappear’ without a trace.
Schools that provide ‘program’ based memberships, focus
on outcomes not just ‘lessons’, have higher tuition, and deeper
relationships tend to feel economic disruptions less, and in some
cases FAR less than the previous model. We saw this play out during
the COVID crisis in spades.
It’s your choice to build the business you want. If you need
help building a business that’s more resistant, and will allow you to
virtually ignore most economic disruptions, give my team a call at
1-800-275-1600 and we can help!
MASTER TOBY MILROY is a 5th degree black belt. Known as “The Master Systemizer,” Master Toby Milroy
has positively influenced more martial arts schools than anyone in our industry. He has built a successful multi-school
organization, lead the national trade association for the martial arts industry, and coached some of the most successful
martial arts school operators in the world.
6 MARTIAL ARTS WORLD NEWS VOLUME 22 | SPECIAL EDITION
Image by Makhbubakhon Ismatova