BONUS: The Economics of Jiu-Jitsu Gyms in 2026, feat. David Bayarena

Speaker 1: Hey everybody. Steve from BJJ Mental Models here. I've got a bonus episode for you. There's obviously been a lot of volatility in the world today, and I'm really committed to making sure that those of us who make a living in Jiu-Jitsu have the tools that we need to survive and thrive. I want to start creating content to help people in that boat. So with that in mind, this is a conversation with David Bay Arena. He's a Jiu-Jitsu black belt and runs multiple wealth management firms. He's been on the podcast before. I wanted to have an objective chat with him about what Jiu-Jitsu business owners can do during challenging and unpredictable times. This episode is really for the business owners, so if you're just a casual practitioner, you might want to skip past it. That's why we are calling this one a bonus episode. So anyway, here you go. Let me know what you think. Hey, welcome to BJJ Mental Models. I'm Steve Kwan. BJJ Mental Models is your guide to a conceptual and intelligent Jiu-Jitsu approach. And I'm back again in this special episode with the returning champion. I've got David Bay Arena on the line. David, how's it going, my friend? Speaker 2: Hey, pretty good, Steve. Thanks for having me on again. Speaker 1: Happy to have you back. Um, you've been on here before. I will put a link in the show notes to people who want to hear our previous chat, but for those who missed it, want to give yourself a quick intro so people just kind of know what we're talking about here today and who's on the line? Speaker 2: Sure thing, sure thing. Yeah, my name's David Bay Arena. Uh, black belt in Brazilian Jiu-Jitsu. I work out, um, and train out of the Holy Grail here in Victoria, Texas, and I tend to have a, um, an affinity towards finance. I have two financial planning companies, Kaizen Wealth and Tax Planning for my traditional clients that I've been doing advice for the last 25 years. And I also have Ronin Wealth, which is our financial planning firm that's specifically working with gym owners and students, uh, within the martial arts. Speaker 1: Nice. And I specifically wanted to talk to you about this because, you know, we've got a lot of gym owners in our network. You and I have talked many times in the past about how many Jiu-Jitsu gym owners aren't really equipped to deal with the financial end of their business. And given economic volatility in my lifetime anyway, um, I mean, I God, since I joined the workforce, I've been through three or four economic shakeups already. Uh, I thought it would be good to maybe have a quick chat about how people can help weather those storms. You know, we're in kind of an interesting, challenging time at the moment. It's kind of hard to know what's going to wind up happening a year or two years from now. And I just hate to see situations where gyms in the Jiu-Jitsu community have to close doors due to financial issues that they didn't foresee. Um, and of course, that's your area of expertise. Like you said, you're one of the only people I know of who has a financial firm specifically catering to martial artists. So I thought it would be good to maybe get you on the line and get your thoughts on those topics. Speaker 2: Yeah, absolutely. Uh, look forward to it. And, uh, yeah, we can get into it. Some of the things that I was looking to accomplish today on this conversation as we talk about economic volatility and whatnot is just some of the basic items. Um, one of which is, uh, just treating the business as a real asset and a real wealth accumulating asset for, for each one. And they're going to have the same core fundamentals at the business level as we do in personal finance, right? So it's just kind of segregating the business and the personal finances, diversifying between the two, uh, but definitely, since it's the bulk of our time within our businesses, we definitely need to be running it as such. So we're looking at core fundamentals that I want to maybe chat about, um, some cash flow, break even items, liquidity. Uh, also like the role separation, uh, we, we can chat about a little bit. I think a lot of people blur that distinction, uh, between instructor and profits from the business. And then having a true exit, um, transition, uh, how are we going to get out of the business? How are we going to monetize it? Um, through, through kind of these various risks that we're looking at. Can we even make it through? But ultimately, we're trying in all of our businesses to create some semblance of freedom, you know? So, yeah, that's what I was thinking about touching on. We can touch about anything else. Speaker 1: Amazing. Let's do it. Uh, but before we get started, of course, I wouldn't be doing my job unless I made sure everyone understood, you know, this is intended to be informative. It does not constitute financial advice. Um, so please do take all of this with that in mind. Um, we will also, of course, try to steer away from any sensitive topics. I mean, I think this is important to bring up because a lot of the time when we talk about economics, that runs hand in hand with politics. We're just talking about the economic side of things right now, not the political side. With that said, I mean, I'm old enough that I've lived through this several times. When I first got into the the workplace, I, man, right away was the dot-com bust of the 2000s. And around the time I started training Jiu-Jitsu was the Great Recession. And since then, you know, we've seen the pandemic and all manner of other economic volatility. And as we get deeper into the 21st century, it just seems like it's harder and harder to predict what's going to happen a year or two years from now. Um, I'd love to hear maybe your thoughts just around this, broad strokes. If if you are a Jiu-Jitsu gym owner, either new or established, what are kind of the big tentpole items that you need to be thinking about, which most gym owners don't really consider? Speaker 2: That's a great question. You know, um, like I said, the core fundamentals is what we have to focus on. And first off, as we're, as we're looking at the gyms and we're looking at their revenues, we have to be very specific about cash flow, I think, and, uh, identifying at the very least the break-even point, right? So this is consisting of looking at your fixed costs and your variable costs, and then actually flowing into like, well, what are our liquidity reserves, right? How much cash do we have in order to kind of weather these, uh, these panics that may come around or, or the volatilities that come around that are outside of our control. So, yeah, I would start with, with looking at our costs first and foremost, um, and then from that point, um, understanding that it's basically the emergency fund that we think of on personal finance, right? But at a business level, we call it our, our treasury, you know, treasury funds. And so, um, it's, it's the same basic idea that needs to be looked at in order to be, to have that, that discipline, right? That we have to have our cash position that is going to cover fixed costs for several months. How many? Uh, the more the merrier for sure. Um, but, uh, we're going to, we have to start out with two to three months for sure. And that's what you typically hear even on the personal side. But I think this is going to, this is a kind of an aha moment for business owners is that if you're running an emergency fund at the household level, now we're talking about doubling it, uh, because we have it for the business itself, right? Because the business itself has, uh, all of its, all of its mandates that need to continue to go on. So, uh, I would start with that, you know, uh, that's where I find that people are going to be the most sensitive, especially when they're, uh, taken off guard. Speaker 1: Good point, good point. Um, and, you know, this gets into an interesting topic of how much in cash reserves do I need to have before I even get started on this. There are some gyms who basically get the ball rolling without having anything in the bank. Um, then there's others, of course, who try to make sure that they've got those reserves in place, but it can be tricky if you don't have an income stream in advance. If you're starting from ground zero, how do you start putting that money away? I'd love to hear from your experience working with gyms both new and existing, how does that normally shake out in terms of like, should you even be doing this? Should you even be opening a gym if you don't have any money in the bank at all? Is there a way to do that safely or do you have some sort of formula that you would suggest for people? I 20 to 30% is a great milestone, but I'd love to hear you just expand upon that if there's any more info you can share. Speaker 2: Well, you're right about the percentages, right? So, like a, a common breakdown is, you know, typically 40% to run staff, and that would also include, um, um, your, uh, business owner compensation, which is a big item that I kind of wanted to also talk about that I alluded to, is that we have to add, uh, the owner compensation within salary expense. Even if it is, so, therefore, if you have no, uh, other staff and it's just you, then obviously we need to look at that as a separate component because otherwise you're just looking at it as a job as opposed to a business. So, our goal is to generate wealth, right? And to actually create financial freedom. And the only way we're going to do that is by looking at these, these, uh, tried and true numbers, so to speak, right? So it's kind of the 40, 30, 30 rule is what I would call it, where we see that 40% is going to be utilized for, um, salary expense, 30% for, uh, overhead expense and running the gym, and 30% profit is what you're trying to shoot for, right? So, if our fixed costs, which are predominantly going to be coming from salary expense and rental expense, uh, and that's a big item, right? We can talk a little bit about that as well, and how we might seek to get a better price point on rent, as well, and, and the main thing there is just looking at the difference between location. Tends to be, Jordan likes to say, my coach says often says it's, it's, it can be a destination business, right? So, it doesn't necessarily need to be in strip malls, right? But we can get into that. Essentially, though, is we're looking at the 40%, 30%, and the 30% profit margins that we're looking at. When I think about that, too, what, what's interesting when I look at the industry, um, I told you we have some research that we're, that we, uh, look at specifically for the Brazilian Jiu-Jitsu studios throughout the United States. You know, it's about two and a half billion in revenue, and the profit margin on that, uh, total revenue is about 10.4%. And when you look at the, the averages, you're, you're, you're right in saying that, you know, some of these, the majority of the gyms out there are, are just really on slim, slim margins, and they're barely turning a profit. For those that are doing, are existing and doing well, we should at least be looking at the hurdle rate of 10% and then striving, you know, uh, up to the 30% rule. Speaker 1: And this touches on what you mentioned earlier, I think, which was beautifully said, that your goal here is not just to create a job for yourself, um, or to create work for yourself. Your goal is to create an asset and to generate wealth. Um, and that's important to bring up because many people who work in the Jiu-Jitsu space basically have created a subsistence living for themselves, where they do get money coming in, but then it immediately pays the bills and goes out the door, and they're kind of just treading water financially. Whereas I think you wisely bring up that if you really want to treat your business as a business, which means making it more sustainable and more valuable over time, then you need to be making sure that your business is pulling in profit as well as just paying the bills, one of which is your salary or the expenses to keep you involved, right? Um, and that distinction between here's what I get paid versus here's the money my business makes is a super important shift for anyone who's starting off in this front. Speaker 2: Yeah, I think so. It's going to make all the difference in the world. Um, because otherwise, you know, we, we've already said it a few times, it's just that then it, it's either a side hustle, uh, which is fine and great and can become more through utilizing some of these metrics. The good thing about that is you don't have anything to lose when it's a side hustle, so to speak, and you can pursue these metrics right from the beginning, uh, and and incorporate the discipline. So I would highly encourage, you know, treating it in this respectful manner, if you will, right at the beginning as soon as possible, as opposed to, you know, a passion project where we all love to do Jiu-Jitsu, I'm sure. The gym owners are obsessed, and that's wonderful, and we want them in that manner. They put out great instruction for us all, and, uh, we want them to thrive. And so, they definitely need to stay focused on, on the metrics from the very beginning. And obviously, if they're an existing, uh, gym and they're, they're starting to really solidify themselves, then often times the next stage is, well, now they're happy with the money that they're making for themselves, or they're definitely making it, but if they're not paying attention to some of these core fundamental metrics at the business level, then they can go back towards it not being substantial for sure. And so, we're going, we're wanting to go from not being substantial to definitely earning a living to now, how are we building wealth? How is the gym going to survive the volatility that we spoke, we spoke about in the beginning, uh, which can be systemic, right? It could come from the world dynamics, it can come from the granular perspective of the area in which they're located, not to mention the money flow of, uh, you know, whether we're investing it in one way or or another, where the, the, you know, that usually they're not investing, right? At the very beginning, as they're starting with the, with the business and diversifying outside of the business. First, we have to get the business up and running. And so, that business advisory perspective is what, what gym owners should be thinking about continuously, which then brings in all the financial components of taxation, entity setup, and insurance considerations that really need to be looked at on a continuous basis and refined, too. Whether we have any exposure to it, or if we do have exposure to it, are we refining it over time? Speaker 1: Right, right, right. Now, you talked about cash flow and the importance of cash flow. Let's maybe dig into what you mean by that and and why that's important. I would venture to guess that many people starting off with a Jiu-Jitsu business, basically everything at that point is cash flow. They're probably not thinking that much about, um, you know, planning out their accounts receivable and payable and such. But maybe explain to people what you mean by cash flow and why this is so important to track. Speaker 2: Well, you're right about accounts receivable and all that stuff, and it does definitely comes into play when we're segmenting the aspect of the business that might be selling some product such as apparel and whatnot. But typically, from a membership perspective, we're looking at that top-line cash flow of of pure revenue and and student membership, or however the gym is, is, uh, positioning themselves with, with student income. So, cash flow, I'm typically thinking of the, the gym memberships as cash flow as top-line revenue. Speaker 1: Got it, got it. Now, when you're talking about, um, different ways that a a business can make money, this can affect how your projections work, right? You've really got to understand how much money you can expect to make and whether that's seasonal or subject to events. One of the nice things about a Jiu-Jitsu gym is because most gyms make their money off of memberships, it means that it's relatively straightforward to project what your monthly revenue is going to be if you've got any history. You know, if you're a brand new company, then not so easy. But if you've been operating for a while, then you know how many students you've got, and that makes it possible to kind of estimate out what you're going to, you're going to earn. It gets harder, though, if you're in a Jiu-Jitsu business that is more generated around one-time sales. So if you are running a gi company, or if you are, I don't know, selling instructionals online, with that type of business model, you tend to need to, you know, fight for every dollar. You need to sell for every dollar because you don't always have that recurring revenue. Whereas with a membership, you have that recurring revenue. I'm just wondering if you've got any thoughts on how a businesses both new and existing can kind of project into the future what their revenue numbers are going to look like. Speaker 2: So, um, so tell me again, so you're, you're, you're saying, you're asking the question about generate, forecasting future revenue on, on memberships. Speaker 1: Yeah, like let's think about this example, right? Maybe you're a new gym. You're planning to get started. Maybe you haven't gotten started yet, and you're trying to forecast out how this is going to work. Um, figuring out your expenses is relatively straightforward, I would say. But figuring out how much money you're going to make can be hard if you're a brand new business. It's a bit easier if you've got some operating history. But if you were just starting your Jiu-Jitsu gym today, I mean, it's easy to say, I, I expect to get 150 paying customers. But that doesn't mean that that's actually likely or that that will happen right away. I'm wondering if from your experience, you've got any guidance on how to kind of help people estimate as they get started what kind of revenue to expect, or if that's just something that can't really be done. Speaker 2: Well, I find that that's, that's a little difficult to answer outside of a marketing strategy. It's going to have your, so as long as you're treating the business in the manner of a, of a wealth generator, you're going to definitely segment your business where you have your main divisions. And the main division there is in order to get some forecasting is we have to treat our marketing very, very specific so that we can understand our expectations on the lead generation and then the conversion at the sales point. So, if you don't have that in place, a lead generation system that is, you, you are not going to be able to find out, you know, what assumptions we're going to, we're going to plug in if we're, we're, if we're absent of a marketing strategy. So I would think that that would be tied to marketing significantly. Speaker 1: Got it, got it. Now, when it comes to how businesses can actually plan all of this stuff out, maybe walk me through the aspects of what that looks like. So if someone wanted to start adding this kind of level of planning to their business and they wanted to work with you, what are the kind of the steps that you would take them through? Speaker 2: Yeah, so first off, we'd want to know what that type, top-line revenue is and how things are actually going for the individual. If the individual is actually providing for their family in, in this example, from there, we're able to kind of identify now where do the metrics stand as, as it relates to making the business tighter and more, uh, fundamental towards generating wealth. So, when we look at things such as, we're going to have to first get some transparency on the revenue and the break-even analysis based on fixed and variable costs. From that point, we're wanting to first step look at the liquidity of the cash reserves available to in order to weather the storm on, on various different circumstances as the, as the students are growing or not growing, or if we're not doing so well on retention. Those would be other issues that we have to be aware of, but that liquidity base is going to give us a, a starting point to, to know and have that, um, that level of insight. So on, from that point, after we see all the numbers from the particular business and we know where we need to start working towards, if it's marketing, generating more clients, or if it, depending on the situation, then we start looking at the entity setup, right? So, what we find is individuals will, will establish an LLC, and they will have that flow through directly onto their schedule C, uh, and it will be taxed accordingly as a self-employed individual. What we have found, uh, once we're at certain levels of, of, you know, maybe we're, we're getting to a point where we need to start saving. So these are gyms that might be successful now, but are really trying to get to the next level of, um, creating a path, just kind of like the forecasting bit that you were talking about. What we're going to need to do then at that point, we've found is look at the entity structure because at that point, self-employment tax is an item that we, we end up giving a lot away in the beginning years. Uh, all we've done with the LLC entity setup is mitigate risk. Now we want to mitigate taxes, and so, we found S-corps have been very, very good structurally from a tax perspective. It's not a good fit for everybody, and there's different variations that we can go about, but we typically see the entity moving from sole proprietor setup with a caveat of, you know, isolating the asset for liability purposes separate from the personal. And then the next step is moving maybe for to a taxation perspective of of an S-corporation. When you find that movement, we are able to then give the business owner his or her specific salary in addition, and save on self-employment taxes. The rest is retained earnings for the business, and it's, it's, it's a much more dynamic structure for the gym owners. So, at that point, now you're starting to look at being able to incorporate other benefits for the owner and the, the other employees that they may have with things such as 401k and retirement type strategies being built into the business that the business offers as a wealth generating mechanism. But you can only find that typically in a more, in a way in which is, is associated with reducing taxes, and we need to, and the entity setup is going to be the primary area where we save on taxes, if that makes any sense. I know it's a lot. Speaker 1: Definitely makes sense. I mean, this, of course, is something that's going to vary depending on your region because countries do have different laws for taxation. But, uh, I mean, I live in Canada. Our laws are quite similar to the states. They're not exactly the same, but there's enough in common there that, um, I would recommend, of course, if you live in a country like ours, you want to at least be thinking of, of these things. I know in Canada, for example, income tax rates are much higher than things like capital gains. So if there is a way that you can structure your taxation policies so that you're getting paid or you're making money through capital gains rather than directly as an employee, you can save a lot of money. Um, if you're doing anything cross-border, too, you can especially get into crazy situations. I mean, I remember I used to do business with Brazil, and they have some pretty, pretty wild withholding taxes when money is coming in or out from across other, other countries, right? And being able to to play around with that and to find an alternative way to to structure can significantly save on taxes. I think a lot of people don't understand exactly what a difference it can make. It's not like it's saving you 50 bucks a month or 100 bucks a month. I mean, you can be saving a huge chunk of money if your tax, if your taxation is structured properly. Speaker 2: Yeah, you know, and it goes full circle. Once you've gone into that entity evaluation, that typically aligns itself with the idea that we were saying paying yourself as an instructor or running the gym on whatever the salary is, that is going to also organize the numbers such that we're, we can actually evaluate the profit of the business because the business needs the head instructor. The business needs the CEO of the, of the gym, so to speak. So, we need to identify those profit margins and separate those two, and it, and it goes, and it's aligned with saving in taxes, which is quite nice. Speaker 1: Yeah, yeah. Now, you talked earlier about how we're not trying to create a job here for ourselves, we're trying to generate wealth. And I think that's that's really important for people to understand. I mean, when you are working for somebody else, then at the end of the day, you've got some degree of income predictability, but of course, the rug can be pulled out from under you. You can lose your job, the company could shut down. There's a lot of things that could happen that could take away that income stream. But there's generally not a lot of thought you have to put into that structure, right? You're an employee for someone else, they pay you, and then it's up to you to figure out how much of that money you need to save in order to have a nest egg and to be able to put something away. When you are running a business, it gets a little bit trickier to do that, and a lot of people kind of fail to do that. Because like you said, you need to be saving money for yourself, but also for the business as well. The business needs to accumulate its own wealth. Um, and it requires a lot more thought upfront. Also, even though you're self-employed, that doesn't necessarily mean that your income is entirely stable, because yes, it's true that your boss can't come in and fire you, but it's also the case that you are now more directly impacted by any sort of volatility in the business. So, um, I mean, if you work for a company, if they have a bad quarter, that may not impact you unless they have to do layoffs or something. You can kind of just weather it. But man, if you are running the company directly, then a bad quarter could be a real problem if you didn't plan for it, because that impacts all of the money coming in. That can even impact how much money you plan to take out for yourself. When you're getting into a market like Jiu-Jitsu, you need to understand the main areas of volatility and and not get caught with your pants down on that because you expected costs to be the same. Um, there's a lot of costs in the Jiu-Jitsu space that are extremely variable, or they're creeping up beyond what people may have anticipated for. I'm just wondering from your experience, if you've got some thoughts on what some of those areas of concern would be for a Jiu-Jitsu business. What are kind of the main areas of volatility that you think people need to watch out for? Speaker 2: No, that's a good question, you know, and I guess, you know, whenever you're, you're looking at some of these basic items that you need to start with, again, we're talking some of the basic metrics on cash flow and break-even analysis, flowing into liquidity reserves in order to weather the storm of, of uncertainty, and the role separation tied to the different entity that we're setting up so that we minimize taxes. Then we start looking further into probably the next layer of protection, which is often times insurance, right? There's different ways of looking at it. I think the volatility is going to come from things happening to the space, the gym itself. There's things that can happen to the students that the gym could be liable for. And then there's the income that we need to protect as well that can be volatile. So, you have protection concerns of the physical space, you have protection concerns for your students, and you have protection concerns of your sustainability of your income. And that's basically the way we would kind of, uh, organize the evaluation of proper insurance in the, in the, in the event that, you know, bad things happen, such as weather, such as accidents, or systemic items like a pandemic. Speaker 1: Yeah, yeah. Um, you bring up some great points there. I mean, the pandemic, of course, is a very relevant recent example. I know a lot of friends who, um, got really excited during the Jiu-Jitsu boom in the 2010s and started opening up gyms and taking on a lot more cost than probably could be reasonably sustained. I think they thought it would always be, you know, glory times. It would always be, uh, an easy ride. But then, of course, when the pandemic happened, they got stuck with these massive leases that they had taken on. Um, whereas the gyms that were maybe a little bit more frugal in terms of their commitments were able to weather that. There were a lot of gyms up here where I live, um, in Vancouver, right? Very expensive cost of property here, that had to close down because they had taken on these gigantic leases, and when, um, when income dried up for a while, they didn't have the ability to weather that. So, um, and of course, you know, the pandemic is one very specific example, which hopefully will not happen again. But there's a lot of other things that can throw you for a loop as well. I mean, of course, inflation is a huge one. The cost of insurance is getting higher and higher and higher. If the economy tanks, right? That can impact your customer's ability to maintain their membership. So there's a lot of big variable things that can just completely drop a grenade into your plans. Anything specifically from your experience that you would recommend people really keep an eye on? I mean, we already talked about some of the obvious ones like your cost of rent or property, your cost of insurance. Is there anything else that you've seen that gym owners need to have a tighter eye on? Speaker 2: Well, I mean, other than, for, for first off, just kind of finish up on the insurance items, you know, we need to look at the core policies for these gyms from general liability and property all the way to, you know, maybe even cyber security is an area that we can, we can get in trouble with as well. But we have found that the prudent gym owners typically spending around $300 to $400. I'm not, I don't sell any of the insurance, right? These are general lines insurance and specific for business interruption and overhead considerations. So, that's another component that we have to look at, and it helps us look at those, those metrics as we're, if we're taking it serious and not, and we don't want to get, be wiped away by some event, you know, we're, that's another expense that goes into, into play, uh, you know, that might be a, you know, around $5,000 a year at at $300 to $400 a month, right? But at that point, you're starting to, uh, cover the space and you're, you're starting to have, um, liability, uh, policies for, for student accidents. And then from an income generation perspective, if you have partners, it doesn't necessarily speak of you directly if you're by yourself, but, you know, you're going to have keyman insurance policies, right? So, these basic policies are pretty much important to if you're serious about, you know, transferring the risk, and that's what insurance does, is it transfers the risk of, of uncertainties that are pretty much outside of our marketing efforts and our ability to, to, to do good quality instruction and have a clean facility, right? These are things that are outside of our control, uh, which needs to be insured. Speaker 1: I want to talk about a bit about keyman insurance here. I believe on the last time you were on the podcast here with us, you brought this up, but it's important not just because of what it represents, but also because it really gets into a risk that a lot of Jiu-Jitsu instructors don't think about, which is their own ability to perform. When we think about disruptions, often we're thinking about big things like what if the economy tanks and I lose all of my customers? Well, okay, that, that can happen. But this is Jiu-Jitsu. I mean, what happens if if you as the coach suffer a neck injury and now you can't roll anymore, right? Or what if something happens and you're not available? What if you have a personal emergency and you have to take a month off of training for some reason? These things are very likely to happen. You know, we can't necessarily predict when a pandemic's going to happen, but one thing that we do know in Jiu-Jitsu is you as a practitioner are quite likely to have something happen at some point that's going to take you off the mats. And what happens to your business during that time? Um, many Jiu-Jitsu gym owners basically look at their gym as a front for themselves. It's like a a physical place where they go to sell access to their time. And the problem is if you're doing that, then you're not really building a business. You're just creating a job for yourself, and then it's completely dependent on you as the coach to be there. Um, so maybe talk about that. How can, in addition to keyman insurance and what that represents, how can a coach make the business less dependent on themselves? Speaker 2: Yeah, you know, and before that, I want to also say because you remind me, sure, keyman insurance is typically based on, you know, life insurance and losing your life or keyman passing away. But also there's, there's definitely disability insurance. So, often times it's probably not a surprise, but, uh, gym owners tend to utilize their higher ranked belts, right? The ones that are competent in, in the art and and instruction and whatnot. And so, if we don't, if we're not looking at these, going back to the business metrics and starting as soon as possible in a disciplined manner and running it as a business as best as we possibly can, then we're really not going to have much of, uh, of an opportunity to develop staff, right? And it's getting to a point where it seems like the gyms that are doing really well have the ability to, to create really good lifestyles for, for some individuals, those that are doing much better. And so, uh, when you're looking at that, you have, we're finding that gym owners are utilizing their, their, their top students and and identifying if they, you know, they're also kind of segmenting fundamentals instruction classes with advanced classes and having a spread of talent help, help the gym owners. So, once, once the gym owners are getting the student base acquainted with the top-line students, and that's typically where it comes from, the better they are in weathering the storm if they're, if they're incapacitated one way or another. Speaker 1: What are your thoughts on using leverage to get the business off the ground? So I've, I mean, I've got many people in my network who are always looking to start new Jiu-Jitsu gyms, and there's a few different approaches. One is you can just bootstrap the whole thing. Um, but this presumes that you've got enough money in the bank that you have kind of a nest egg to get things going. Then there's other people who will take on debt, right? To to get the business off the ground and cover some of those initial upfront costs. Of course, that's risky, but that can also allow you to get a head start quicker. Um, and I've seen both approaches in play, so I don't know if one is better than the other. But do you have any suggestions on how people can decide what works best for them? Um, and I bring this up because, of course, for a lot of the people wanting to start a Jiu-Jitsu business, you know, it's easy to say, well, you've got to have all of this stuff lined up and you've got to have this much money in the bank. But, you know, the in the Jiu-Jitsu space, you're probably not going to encounter that many young people who've got 100,000 bucks sitting in the bank that they can use as a kind of a slush fund to get the business off the ground. So, I'd I'd love to hear your thoughts maybe on bootstrapping versus leverage and what your thoughts are, are there pros or cons for each? Speaker 2: Well, definitely, I mean, if you can bootstrap it, then you're in a better financial situation. Uh, it doesn't necessarily mean that you're going to have a good financial outcome, but it's, it's definitely going to be less, uh, expense drag as you don't have, um, you don't have to service the debt. But to the extent that individuals can obtain financing, either through small business, uh, loan or, um, or a personal loan, and are using some type of credit, um, probably the best area, I would say, is since you can have a store of value within real estate, that might, that's a strategy that seems, uh, to be working well versus, versus when you look at, um, the expense of retail, uh, within these, within, within the cities, the, the rent expense is much higher. And if you can be somewhat of a destination gym or a gym in which can move towards, uh, not being in the nicest of places, I don't, I think the community seems to, uh, be fine with that. Securing financing for your own gym is probably the best place that you can get your, you, you utilize leverage because as a fallback, you're going to also be building equity. It's not just, you know, securing financing so that you can have salary expense. That's a, that's once that's gone, it's gone, right? So, I would say the safest place to start, if we're not going to bootstrap it, is to look for securing financing on real estate, and thereby building wealth and storing wealth. And, uh, if, if it does go bad, you know, you're probably going to have a salvage value, or you're going, you may be upside down if you're a terrible business person, but or you're unlucky, but it's still not going to be, there, there's still going to be an offset there because of that asset. Does that make sense? Speaker 1: 100%. And of course, a lot of that is geographical, right? Of course, if you live in an area where the property values are really expensive, you can wind up, should you choose to, you know, buy property for your gym, you can wind up taking on so much debt just to do that that you can shoot yourself in the foot in other ways. Um, so it it kind of depends on where you live and what the prices are like there. But that just gets down to the old rent versus buy discussion. Speaker 2: It does, and I think that's going to be much more important of a financing question than than possibly taking on debt for purchasing apparel and looking to sell that or obtaining financing for payroll, you know, you're going to have to probably bootstrap a portion of it or or finance it within the building, uh, the, the equipment that you're going to utilize, such as, you know, new mats or, or old mats or whatever you're rolling on. The main thing is you need that and you need a, you need a building, right? So, the, the renting is getting out of hand throughout, at least in the United States, that we've seen, you know, I think the average rent now is well over $2,000 a month, right? So, you can do a lot better than that in, in, in different areas, but, uh, anywhere from 1,700 to 2,000 is what, what we see, we seem to be seeing, uh, which is a significant amount. You add insurance in order to be properly insured, um, it starts to get pretty steep. So, the easiest place to obtain financing is through, through a building for sure. So, that's what I would concentrate on, on leverage if, if that's the, if that's an item that's wanting to be pursued, um, beyond bootstrapping if it can't be done. Speaker 1: Makes sense. I mean, the nice thing about Jiu-Jitsu businesses is there is a lot of ways to slash some of your initial costs down. Some things like insurance, you can't really get away from, or of course, paying yourself. Uh, but there's other costs that you can manage. So, a very common thing that I see people do when they start their own Jiu-Jitsu business is rather than even renting or leasing or buying a place for their gym, they will sublet from somebody else. So they will find say a Taekwondo gym that maybe is not using their gym for a few hours every day, and they'll pay them a fee to effectively use their mat space. Um, that can be handy if you're starting from zero because your revenue will probably be quite low for the first while. And if you're just subletting from somebody else, then that means that your expenses are also low. You can always move a gym, right? If you outgrow that space or you decide you the schedule doesn't work, you can always take on a lease somewhere else and get your own space. But keeping your initial costs of facilities down low is a huge game changer as you get further on. So, I always tell people be creative about that. I've even seen people who have started, you know, if their property permits it, they even run a gym out of their house or on their own property. You can do these things. So, that's always an option. And I know that everyone, you know, we see these photos online of these beautiful gyms like AOJ, and everyone thinks, man, I'd love to have a gym like that. Um, you don't start out like that, right? You might have to start off running your gym out of your basement or something to that effect. So, I always encourage people to be humble at the beginning and not overcommit just because they see these beautiful gyms online. Um, yes, it's great to have a nice facility, but it's possible to compensate for a lack of a nice facility if you've got good training and good word of mouth and other things in your favor. Speaker 2: Yeah, I totally agree. You know, often times, um, they are starting out with, with renting. That's a great idea that you, you brought up, and we do see that, um, by subleasing. But once we move towards financing, you're, you're definitely going to want to be financing probably the space. That's going to be an excellent place to look at, uh, and then insuring it specifically. Um, I totally agree. It reminds me of, uh, another business metric that we like to concentrate on and be true to, and that is, you know, we find healthy businesses and gyms specifically, because you could look across, uh, the fitness industry, uh, or the broader martial arts industry, even outside of, uh, Brazilian Jiu-Jitsu. Uh, interestingly enough, on the broader, uh, martial arts across all disciplines, what the, what the numbers seem to be indicating is the profit margin is a little bit higher than, than Jiu-Jitsu at about 11 and a half percent, uh, compared to about 10.4 on, and, and, uh, you know, and, and it's looking at it at the, at the aggregate. Um, the profit margins, uh, when we're looking at leases or rent, uh, we're talking about 25% not to exceed that, right? So, if we're exceeding that from a, a lease or rent perspective, um, you are increasing risk that's, um, you know, unnecessary. So, that could be, uh, an indicator of, of which way you want to go. If you can, uh, secure financing and have your mortgage within that rent space, then you're going to do a lot better owning, odds are. Speaker 1: Something that you'd mentioned earlier was the size of the Jiu-Jitsu market revenue-wise. And this is an interesting thing about our particular field here. The Jiu-Jitsu coaching economy is not that huge in the grand scheme of things. Most Jiu-Jitsu gyms are not rolling in the profits. There are some. I mean, like friend of the show Elliot Marshall, right? Runs an incredibly successful Jiu-Jitsu franchise, Easton Training Center out of Colorado. You know, they pull in millions of dollars in revenue a month. Most Jiu-Jitsu gyms struggle to even hit a whiff of that, right? They will, you know, if they got 100 students, that would they would consider that a success. Many don't even pull that many. Um, what are your thoughts on just the the size of the market? Like, is is this something where people can really expect that, hey, it's conceivably possible that one day this could be a seriously profitable business? Or do you think for most people they need to come to terms with the fact that maybe they need to be a a little bit less ambitious in terms of how big they think this thing can actually get? Speaker 2: Well, you know, that's a good question. When you look at the numbers in the industry, it is growing, especially after the pandemic and, uh, moving towards into 23 and 24, there's been growth and we're on an upward trend as an industry. But if you look at the broader market in martial arts, uh, like I said, they, they are doing a little bit better than, um, the subclass of Jiu-Jitsu. Uh, so there's space there, but Jiu-Jitsu's definitely growing and is in an upward trend. But it, I don't, I don't think that you can look at it from a macro perspective like that and get overly excited. Only time will tell as far as how that continues. Uh, we have great things such as UFC BJJ now, you know, so who knows how much greater it can get. But it, it would, it's hard to think that it's going to, you know, surpass that 11% in a, in a quick manner, right? And there's only a little room for, for, for gain there. So, we need to be thinking of being an outlier, right? Like the ones that you say like AOJ. You have to, I think you have to think like that. You have to be expecting and going into it that this is going to be extremely successful as opposed to going with the, the broader market because then if the broader market is any indication, if you're the average of the market on the macro side, uh, it doesn't look that exciting, you know? So, uh, you can be thinking about that. You need to be thinking about following a disciplined approach, keeping, like we've been talking about, utilizing the business as an asset and, uh, a wealth generator. And that's only going to be if you're really being serious about your marketing, uh, and trying to get that in play, and then really look at things such as your, your recruiting processes, your retaining, uh, how your retention within there, and then, and then the revenue, right? The revenue and the diversification, we talked once upon a time, Steve, I think, you and I were talking about the different, uh, diversifying elements of the revenue, uh, for a gym, and obviously the instruction is one item, but it seems like a lot of gyms do not necessarily take serious their private lesson type variation. If you're going and utilizing those different departments and your apparel, you're going to be able to diversify that, right? And after the pandemic, we found a big uptick in instructionals, right? So, I think adding this variation and, and, and in an anticipatory manner, uh, for the student base in the event that they're sidelined and and learning digitally through, through specifically their, their coach and their gym, speaks volumes for retention as well. So, that's what comes to mind to me. Speaker 1: I I think of the old phrase that if you use average methods, you should expect to see average results. Um, and you know, what, sometimes that's okay. If you are entering a field where the average salary is $300,000, then you know what, maybe using average methods is all right. But as you brought up in Jiu-Jitsu, um, in terms of profit margins, I mean, these businesses tend to lag behind other businesses in terms of how profitable they are. The ceiling for revenue is also relatively low compared to other different types of businesses. I mean, if you are selling online digital software for accountants, you know, there's there's a pretty high ceiling for that. There the possibility of making millions if not billions of dollars, it can be done. Whereas in Jiu-Jitsu, especially if you're running a gym, it's much harder to hit kind of those lofty numbers. So, I think you said that very wisely that if you are looking to make a living off of Jiu-Jitsu, you have to understand that if you perform at an average level, you're technically making below average revenue and profit compared to other people. So you have to start thinking about what can you do that's different and unique that makes it impossible for you to be considered average. If you're just doing the same things that everyone else is doing, then at best, you're probably going to hit that average level, maybe a little bit above. Um, but really thinking outside of what everyone is doing and trying something novel is how you can unlock a leap forward in terms of your potential. Speaker 2: Yeah, I think so, you know, and then you start getting into, uh, nuances of, you know, segmentation and, uh, evaluating your business and being obsessed in that manner, right? When, when you look at the industry and just trying to get a, a beat, you should, you, we should have an idea of what our student base looks like relative to the industry, uh, first off, and, uh, you know, like some of the numbers we, I've seen out there, uh, looking at the Ibis research is, you know, your, your over 35-year-olds, uh, can make up, it's, it's like almost like 30% in, in each, in each category. Over 35 is about 30% of the revenue. 30 to 30, uh, excuse me, 20 to 34 is about 30% of the revenue. And then under 20, your kids are part of that. So, you need to have, um, be concentrating on, uh, facilitating an experience for those different demographics, right? And, uh, when you're thinking along these lines, you're going to be very specific, and I like looking at segmentation for businesses so that you can do good refinement. Speaker 1: I think that's, that's very well said. And you again, you talked about diversification. One of the interesting things about all of these different possible revenue streams is some of them have more potential than others, both in terms of top-line revenue, but also in terms of profit margin. Part of the challenge of running a Jiu-Jitsu gym is there are a lot of costs that can drag your profit margins down. I mean, you talked about the cost of the facility, of course, that's big. The cost of insurance. You stack all of these things up, and it quickly becomes difficult to turn this into a big money maker. And the challenge with Jiu-Jitsu is that a lot of the common ways that people make money in the sport, um, they have low profit margins. Merchandise, for example. I mean, you have a pretty high cost of goods if you're selling merch. You know, gis and other stuff, it's not cheap, right? So even if you put a markup on there, it's hard to make a ton of money off of that. But you brought up a great example of something that has really high profit margins, and that is private lessons, right? There's really not that much in terms of cost of goods if you're providing private lessons. If you're providing them yourself, then you don't really have to pay much of anything to make those happen. If you're paying one of your coaches, then you have to pay the coach, but still everything left over goes to you. It's not like you have to provide merchandise or or or take on any additional, uh, costs to make that happen. Have you seen any other unique or novel ideas that you'd suggest for Jiu-Jitsu gyms, which might allow them to find a either a higher potential revenue or higher potential profit aspect of the business? Speaker 2: What comes to mind, and it's kind of a silly perspective, I suppose, but it's really just utilizing the dead space within, within these gym owners day-to-day. Uh, I think, um, you know, depending if, if their schedule's lined up and how they're advertising their actual schedule, if they're just doing, you know, evening classes, there's so much more potential, right? And so, when we talk about instructionals, there's time to do instructionals. When we're talking about privates, there's time to do privates that are, that these gym owners are, you know, they're probably watching instructionals all day long before they're, if they're, if they're, if this is 100% their job, right? Before class, right? So, it's really the dead space is where the, where the leverage lies. And, uh, and evaluating the business and then committing to to to increasing those components where, where, where they can improve. You know, when we talk about low profit margins, it always makes me think of kind of like on the personal finance side, or just finance in it, in and of itself. I like to think about it kind of simply like 0 to 5% is typically our cash reserves and, and our very safe assets, maybe, uh, money markets and, and bonds, right? Just not exposed high, high exposed risk stuff. So, your cash equivalents. When we start looking for returns above 5%, we start looking at passive investing, right? Such as the, the capital markets, the stock market, and putting together portfolios for our idle cash to, to be at work in our retirement accounts and so on. And we're starting to then, as we add equity, uh, to cash equivalents, we start creeping up to the 6, 7, 8, 9, and 10%. Let's say you're all, uh, 100% stock. So, when we look at the profit margin for the industry at about 10%, you have to think, well, I mean, I can get 10% in a passive manner. So, we call this the hurdle rate, right? In business. It's like, if you're going to treat yourself well and you're, and, and I keep harping on looking at all of these business metrics, they keep coming into play with all of the strategy of doing better and weathering the volatility and staying focused on these items in order to get the numbers better because it's like, if you have a, a profit margin that's 5% on your apparel and you're putting up a chunk of money into, uh, that, that segment of your business, and then, uh, you know, you have accounts receivable as you said, uh, and, and you're tracking this, uh, in a more complex way, all for 5% when you can get, you know, arguably 10% passively. It's like, you're, you're, you need to be searching for, for numbers, especially as a small business owner, uh, upwards of 10%. Uh, you know, why are we in business? A, a business owner is, is definitely looking for 15 plus, 20%. I don't know if you would agree with that, but typically, tell me what your thoughts are. If you're running a business, we want to be making in the teens so that we can get better than market rates. Speaker 1: Yeah, yeah, absolutely. I mean, at some point, if you are, if you are making below market rates, it's always going to be hard for you to sustain your passion as a Jiu-Jitsu business owner because if you know that you could just quit this any day and take on an average job somewhere else and make more money, it's going to be really hard to maintain the motivation and the passion to do Jiu-Jitsu as a business over the long term, even if you absolutely love it. If it is causing you financial hardship, it's always going to be a challenge. So I think that at the bare minimum, you should, you should hope to try to achieve parity with what you would get in other walks of life. And as we talk about rates, David, that makes me realize there's one important thing I want to ask you about, and that is inflation. I think everyone knows that inflation is kind of the silent killer of wealth and of a lot of businesses. It is also though a fact of life. I mean, in a in a growing economy, you're probably going to have inflation no matter what. It's not necessarily a bad thing. But it's also easy for people to ignore it or lose track of it because it tends not to hit you all at once. You know, human beings are biased towards big, memorable events. So we remember things like plane crashes and earthquakes, but often the little things that bleed us dry over a long period of time, we don't think about. Um, the example I bring up is if you are an American, in the last five years as of this recording, there has been an over 25% inflation rate in the states. So, if you have not as a business owner raised your prices accordingly by at least 25% over the last five years, then you're actually devaluing your services, right? You're actually losing money compared to where you were five years ago. I'd love to hear you maybe talk about that and explain what inflation is and and why it's so important. Speaker 2: Well, that's a, that's a, a wonderful topic, obviously, and it kind of starts with, you know, the core of everything that we do, uh, at Ronin Wealth and, and as business owners and individual investors for sure, because inflation, as we all know, is our purchasing power. Uh, if we have $100 today, whatever we can buy today for 100 bucks, we would like to, uh, possibly, it's our prerogative to maybe have that $100 bill in our pocket for a period of time. We're saving it, but we want to buy the same amount of goods that we could have bought yesterday or two years ago or three years ago. Inflation, we're all kind of have grown up with this idea of inflation. It's a real thing, uh, especially for the, for modern man. And so, it really brings into, uh, a whole can of worms, right? That's traditional finance and maybe even the new age decentralized finance, right? Uh, really speaks towards that, especially, uh, and I know we said at the onset that there's this is not financial advice, and I'm, I'm not going there, but it, it's important to say that we have other new assets that are seeking to pursue that, right? The old assets, we have inflation bonds, right? That actually move with, with CPI numbers in order to help investors keep their purchasing power. We know that businesses tend to innovate and create wonderful value for society. And so, businesses outperform and outpace inflation on the whole, right? So, that's why we're investors essentially at the end of the day. But our dollar certainly, speaking in the United States, and, and we see the same type of behavior, and it's not political, it's just a fact that governments, uh, tend to print money, and, and that's the main cause of inflation. We know that technology tends to be deflationary. The, the, the great example I always think of on technological deflationary examples is like televisions, right? Now you can buy like a 100-inch television for $500 at Sam's or, or Costco or Walmart, uh, and have a pretty decent television. So, technology reduces prices over time. Increasing our monetary policy, which is happening globally all the time, is decreasing, and we can look at history, right? And, and see that. So, uh, it's interesting to know that we are having new innovation, uh, through decentralized finance that gets kind of, um, rid of the middleman, so to speak. Uh, of course, there's Bitcoin, and, uh, and it doesn't have necessarily, um, the inflationary pressures of, of printing. It actually has the opposite of that, right? So, we're in a time where financial science is evolving, and, um, but the traditional approach is that you have to live within the metrics, and you have to be investing in a way in which is going to preserve that purchasing power. Otherwise, cash, you know, it's funny, we, we've heard that cash is king. And, you know, it's like, how, how is cash king? It's kind of an odd thing to conceptualize because at the, at the one, at one, in one instance, cash is great because it acquires the things that we need immediately, but it's not really king if you're holding it for a very long time. You want to be holding assets that appreciate because of inflation, right? So, it's a long-winded, uh, way of saying that inflation, uh, really pisses me off, and there's a lot of strategies that we need to do in order to combat it. So, uh, it, it's going to be tied towards our monetary policies, and we actually have to be, you know, we're, we're basically forced to be investors in a way. So, we don't want to have a victimized mindset. We definitely have to take the bull by the horns, and we have to own these businesses and seek the metrics, right? In order for them to, for, for all of us to withstand inflation. I love the idea that you're talking about, uh, being fair to oneself and increasing, uh, the price, right? Because I think in the community, uh, here locally, it seems that, uh, businesses are, uh, the Jiu-Jitsu companies and martial arts and Muay Thai and MMA and boxing that we see here locally, everybody's trying to be the lowest cost provider, you know? And this is a service business, instruction, it's high quality. I think you bring up a really good point in saying that business owners need to look at increasing prices for sure. Speaker 1: Yeah, yeah. I mean, again, inflation's gone up by over 25% in the states in the last five years. So, if you are a Jiu-Jitsu business owner and you have not raised your your membership fees by at least that much over the last five years, then your services are becoming less valuable, and it's getting harder for you to make money. And I know that's a hard thing for a lot of gym owners to to do. It's it feels easier to raise prices for new people and to go and pursue new people than it is to retroactively talk to your existing customers and tell them, hey, I I got to raise your rates. Nobody wants to have that conversation. Um, and there's ways you can get around it. You know, there's strategies that I often suggest where, okay, maybe, maybe you do grandfather your old customers at the price they signed up at, um, and you raise the rates for new people, right? If you do that, if you, if you hold a grandfathered rate, then that encourages your original customers to stay with you because they've got a rate they can't match anywhere else. Um, and that can be effective as long as you're still growing and still making money. But if you've kind of hit peak saturation in the market and you don't think it's likely that you're going to, you know, double your customer base again and again and again, then at some point, you probably have to start raising the rates on your existing customers because otherwise, again, you're just going to get bled dry over a period of years as the, the value of money goes down, but you're still charging the same rates that you were years ago. Speaker 2: Exactly, right. It's just being fair to yourself, and, and I like that idea. We've seen that employed often is you have your legacy, uh, students. You can certainly grandfather them in, and, and, and you can look at different strategies like you said, and, and marketing ideas that, uh, your, your seeking always improvement on your offer, classes, uh, different structures that you're offering and amenities, uh, in order to justify increased rates as well, you know? So, often times it could be just giving them more attention and having, uh, better processes in, in, you know, being in communication, uh, and working the culture of the gym, right? That's going to go far for retention and, uh, and it's going to be understood that, you know, if you're getting new client, or new clients, or new students, they're already seeing the increase in price. So, it's not as hard as you think for, for, for new acquired students that are coming into the gym. Speaker 1: Yeah, yeah. I'm inclined to think that, look, for existing customers, you can play a lot of different policies with grandfathering rates or increasing them. Um, but with new customers, you should almost always make sure that your rates are going up over time. Um, just to match inflation if nothing else. Because like you said, if someone is a new customer, when they're shopping around, the prices that they're checking are going to be probably comparable, right? So, if you raise your rates to match what everyone else has already raised, then that's not a problem. I can understand it being controversial if you're talking about existing customers. But again, that gets into a weird human bias where sometimes people feel like, well, I signed up for $100 a month. The rate should never go up because that's what we agreed to. But that's not how money works, right? Money doesn't agree to hold its value fixed forever. Um, money in an inflationary economy loses its value over time. So, there should not be this presumption that just because you signed up five years ago at 100 bucks a month, means it will always be fixed at that rate. Um, and a lot of this can be expectations management on behalf of the business. If you give people a heads up about something rather than blindsiding them, they're a lot more likely to be accepting of those future changes. So, I mean, if you never have this conversation with your customers, and then one day you tell them, hey, we're raising our rates by 25%. Yeah, you can probably expect to get some pushback. But if you tell them from day one that every year we adjust our rates based on inflation, and it might go up by two or three percent or whatever, and it's not a surprise, then it's less controversial. So, a lot of this is just managing expectations in advance. Understandably, if you hit people with a, I mean, just like as a business owner, right? No business owner wants to be hit with a giant cost out of nowhere. If you are a Jiu-Jitsu customer, a student, and your instructor comes to you one day and says, rates are going up by 25% starting tomorrow, of course, you probably won't receive that well, even if the justification is solid. But if you manage that in advance by telling them that, hey, this is just something we do every year. We raise rates to match inflation, then it's much less likely to cause a headache. Speaker 2: Yeah, you know, and it makes me think, too, it's a, it, it might be a small consolation, but it goes back to tying this into some disciplined actions, such as segmentation that I alluded to, and that is just, you know, segmenting your clients, your students, in such a way that you, you understand the type of students and the, and the, and the amount of revenue that they're bringing, whether they're legacy or newly acquired. When you have that segmentation in place, you're able to evaluate where the revenue's coming from from legacy and new, new acquisition of students. And, uh, allows you to plan accordingly, right? So, just like we're saying, it's obvious that the rates are not going to stay like this forever, but legacy clients may very well, uh, I keep calling them clients, forgive me. In my business, they're called clients. Students. You know, it's, it's, it's normal to be thinking that, but if it makes sense for, for, for the beginning in, in grandfathering them, we, it's a placeholder. And we understand how many students are, are actually in that segment, and over time, we can, we can think of, uh, making improvements within the gym. I, I think you bring up a good point with regard to raising your rates over time, and I think it ties into, it's a good idea to tie it into the business discipline of looking at the metrics, and, and, uh, best practices such as segmentation, because what it allows, uh, gym owners to do is if you, if you grandfather your, your existing client base, uh, student base, uh, into the old rates, and bringing on new pricing for the new acquisition of students. As you have that segmented and you're analyzing it over time, as we refine the gym, different, different time slots, different amenities, whatever, whatever the new refinements are towards getting better, uh, can be associated with going back to the legacy clients because you have it segmented. You have it mentioned, you have it earmarked in your mind that this is a continuous, uh, item that we're going to be analyzing. And, and for that, we need to be looking at the metrics that we can get above and beyond the capital markets, right? So, we have to treat it as a serious business if, if, and we have to, and I love what you said about, you know, being average, you know, we really can't be thinking like that whatsoever because that's not playing to win within this space, as the average numbers are, are, are not compelling whatsoever. So, you have to think of yourself as a serious business owner, running a serious business, trying to build, build wealth for financial freedom. And that's what Ronin Wealth is trying to do, bring clarity to that. Speaker 1: Well, that's a good transition, man. One of the challenges with this particular industry is many of us who do Jiu-Jitsu because we love Jiu-Jitsu, we feel overwhelmed when it gets to things like the financial side of the equation. And this is your area, so I want to make sure we get a chance to plug that. If people are looking for someone to work with to help them on their journey to growing their gym or their Jiu-Jitsu business, how can they find you? Speaker 2: Yeah, sure. You can, uh, email me at david@roninwealth.com. Uh, you can visit roninwealth.com and get in touch with us. Definitely. Uh, like I said, we do have our traditional practice here locally in Victoria, Kaizen Wealth and Tax Planning, uh, where we have all the traditional mechanisms of investment planning, financial planning, estate planning, document creation. We have our CPAs here, and Ronin Wealth has access to that entire suite of services. And we tried to set it up such that it's very, uh, competitive since many of our Ronin Wealth clients are digital, you know? So, it's super exciting to be in, in this space. I'm really happy to be working with everybody. It's my, it's a dream come true for me and our team. So, I look forward to working with anybody who needs it. Speaker 1: Well, thanks, man. I'll put links to all of that in the show notes. I'll also put a link to all of our stuff. It's all at BJJmentalmodels.com. Um, if you like this type of stuff, we are increasingly doing more and more on the business side of things and and producing content to help Jiu-Jitsu business owners on BJJ Mental Models Premium. So, if you are a Jiu-Jitsu professional, I recommend you check that out. There's a great suite of material there to help you. So, BJJmentalmodels.com is where you go to learn more about BJJ Mental Models Premium and everything else we make. So, I'll put links to all of that in the show notes as well. But David, thanks so much for doing this. I really appreciate this. Speaker 2: Oh, it's been a pleasure. Thanks for having me again. Speaker 1: You're always welcome, David, and thanks to the listeners, too. We will talk to you soon.