EDITORIAL Is the Long-Promised Recession Now Near, and What to Do to Prepare It seems like we’ve been hearing about the ‘imminent’ recession for more than a year now. The Dow Jones is down about 8% and the S&P 500 is down about 13% from their peaks in 2021. Energy prices spiked to record breaking levels. Inflation rates have escalated beyond what we saw in the 80’s, even approaching what we saw in the 70’s, yikes. The Fed has raised interest rates faster than any time since the 1980’s where they reached 20%. Our representatives in DC are digging in as the debate over the debt limit looms. And now, we’ve seen a string of bank failures that give even the most conservative ‘saver’ serious concern about their future. Are we in the midst of another “stagflation” repeat of the 1970’s, or are we facing an even more sinister economic disruption? Well, I don’t have a crystal ball, but it sure ‘feels’ like we’re on the precipice of a significant change in the market. If you’ve been in the industry for a while, much of this will be ‘nothing new’ to you. We’ve seen booms and bust cycles come and go over the years and decades. We’ve seen recessions, housing market crashes, stock market bubbles burst, terrorist attacks, natural disasters, riots, pandemics, and more. Through ALL these disruptions, one thing rings true. Some schools will THRIVE, while others will suffer. If the COVID crisis taught us anything, it’s that there are times when we have to be nimble! Times where we have to change our approach, and align with the situation at hand. It ALSO taught us that the PRINCIPLES of running a successful school don’t really change much, if at all! Human behavior, human psychology, and how humans fundamentally make decisions hasn’t changed much in the last 100,000 years or more, so it’s not likely to change much because of an economic disruption. School owners whose business model, systems, programs, curriculum structure and marketing strategies align with the human decision making process, and basic influence science will be the ones who stand out from the crowd, and will prosper while others struggle. For example, if you’re marketing your program’s outcomes and benefits rather than your ‘style’ or some other technical detail about your system, you’ll find the market will have a far higher perception of your value. “Activities” become commoditized, and find themselves in a ‘race to the bottom’ on pricing, while high level educational experiences command far greater prices and profits. As another example, schools that solve a ‘need’ for families and not just a ‘want’, find their businesses more stable, and in some circumstances even grow FASTER when the economy tightens. Schools who provide the ‘transported after school’ program often GROW through recessionary times, as some households have the 2nd parent go ‘back to work’ and need a solution to their child’s care after school hours. In summary, when things get ‘tough’, your business model, program structure, marketing systems (and more) will be tested. NOW is the time to make sure your systems are in order, so that WHEN (not if) the next disruption comes, you’ll be ready. If you’re not sure about how ‘optimized’ your systems are, or if you need any help gaining more clarity on this topic, my team will be happy to help you - give us a call here at HQ – 1-800-275-1600! 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 <strong>23</strong> | ISSUE 3 Photo by Pheelings Media
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