How To Battle Covid 19 - Business Tips From Artem Sharoshkin
Posted on April 27 2020
The world has gone tipsy turvy and staying afloat in these times is difficult. There is little doubt that the world economy will go into a recession and the Muay Thai industry will get hit hard. Our thriving sport is made of fighters though and there are always ways to protect oneself and still come out of the fight on top.
Successful business gym owner Artem Sharoshkin has punched his way to the top, going from custodian to owner in his time at San Diego’s The Boxing Club. Coming through the hard knocks he’s equipped to handle the new challenges.
For gym owners, there are four basic challenges to overcome right now, rent, fixing revenue, staffing, and what do when the doors reopen.
“You go down the list of expenses,” Sharoshkin said, “and rent is the big one. We have to negotiate with our landlords. When we do that we have to treat it like a normal sale, and have goals.”
Sharoshkin recommended first and foremost to ask for free rent. Many landlords will not have people clamoring to their door to rent their spaces in the future because of budgetary expenses and if clear basic business projections are presented landlords may well see the light.
A clear business projection would have statistics based on clientele. For example, if the membership is heavily restaurant, bar, and service industry people, the gym will have a heavy loss.
Furthering the projection will have the owner predict how long it will take to get that membership base back up.
Understanding the building of the membership base is important especially if rent is deferred. If full rent is deferred for six months, then the gym will have to ramp up to over 100% in order to pay both the rent and the deferred rent.
“If the lease will end soon there are potential options for gym owners,” Sharoshkin explained. “You can get rent lowered based on revenue projections.”
The next issue, of course, is the revenue problem. While gyms are closed there are several options for business owners.
The first is savings. Many gym owners will have some semblance of savings behind them but that might not last that long.
There are federal loan programs, which some may or may not be eligible for.
The final option is tapping into family and gym members to either take on additional business partners or tap private individuals for loans to help through the hard times.
“When you decide to approach close friends, families, or members you need to treat it like any other business plan,” Sharoshkin said. “Again put together some basic projections.
Also, you may very well have gym members that love the gym and would be financially interested in investing. Of course, you should stay as the majority owner, to stay in control of operations.”
There are options to retain revenue in asking members to continue with membership, continue at a discounted rate, and or continue to offer online classes. Online classes, while they might not draw a lot of attention will retain the community especially if coupled with accountability calls.
For example, if Andrew signed up for the beginner’s Muay Thai class, Jessie will make sure to give him a phone call or text to make sure that he’s attending, ready, and if he has any questions. This is important as people can easily get lost in the Coronavirus shuffle. It retains the connection to the gym and also shows Andrew that the gym is investing in him. Membership is always a two way street.
Another point of contention is staffing as payroll is the second largest expense for a business.
“It is a tricky one. You should stay in communication with your employees as to who will come back and who won’t,” Sharoshkin said.
There may be some workers who will opt to receive unemployment, or have rearranged their living situations and aren’t interested in employment again. By maintaining an open channel, business owners will know what their options are.
“You have to be careful when you are slimming down on staff or cutting hours as you don’t want to jeopardize the product. It’s a slippery slope,” Sharoshkin was quick to say. “For us, staff comes first.”
The higher up at the Boxing Club didn’t take wages in order to make sure their staff was covered.
The upcoming mass of unemployment will open things new opportunities for new hires as well. Many talented people will be looking for new jobs as the economy takes a dramatic swing. However, Muay Thai coaches and other specialists, considering their limited number, will still be in high demand and that needs to be weighed with careful consideration.
What Is To Be Done
This period will end. Eventually, vaccines will be developed, guidelines will be put in place, and life will go on. The important question then is what will gym owners do in the future?
“There will be some universal guidelines that the government will implement,” Sharoshkin said. “Some sort of capacity rules based on square footage, mandatory temperature checks, and mandatory masks wearing by staff.”
In lieu of these upcoming regulations, it's important for gyms to plan ahead. Obviously, social distancing can be tough as a lot of workouts are based on partner work and many gyms don’t have the necessary amount of bags.
It is important for gym owners to petition and remain in contact with their local government and cities in regards to upcoming regulations. Some guidelines will be manageable while others will not allow gyms to operate profitability.
“The fitness industry has been contacting the federal levels. It’s a massive industry and it’s helped move gyms into Phase 1 of opening,” Sharoshkin said.
Constant contact and working with local government is vital, especially as the government doesn’t know and understand the industry. The industry knows what it needs to work best and must leverage the government into being able to work.
The other issue is combating revenue loss in the future. There is of course online training and personal training programs that can be developed.
“It’s important to think about what marketing efforts don’t cost big dollars. It’s time to triple down on content. From small tips to long breakdowns, content on blogs, Youtube, Instagram, etc. cost nothing except your time,” Sharoshkin said.
Advertising will retain a presence on social media, where everyone lives right now, and will be supplemental content for members in the future. Taking the extra time to explain the base of the gym, it’s history, and highlighting staff will pay off in brand building in the future.
Getting in front of revenue can also mean partnerships with other businesses. Contacting other establishments like apartment complexes, bars, restaurants can help.
“It is vital for businesses to stick together,” Sharoshkin said. “Especially local ones.”
Having a list of local establishments can be helpful as businesses can aid each other and often patrons will overlap. These lists can be handy in the future as well as patrons will change over time and a long standing relationship with an apartment complex now can pay off with new members in the future.
The Muay Thai business is alive and it’s thriving. It’s hurting right now but the growth of the sport has come because people have taken on the courage to step up to the challenge. This period is another bout and another test. Fighting smart, training hard, and being prepared for the future will have the Muay Thai community come out on top.
Lead photo: Marisa Thrasher and Locale Magazine
All other photos courtesy of Boxing Club and Artem Sharoshkin