Most gym owners eventually ask what they are building it all for. Mike “Jits” Tracey has already answered that, and his answer is changing how his business is set up. Tracey is a Texas Brazilian Jiu-Jitsu gym owner, a former offshore commercial diver, a one-time fence builder, and the man behind a mat business that outfitted close to 300 gyms. He is now moving his academy away from an LLC and into a nonprofit called the Third Coast Jiu-Jitsu Project.
His path isn't typical, but his conversation with Red Belt Podcast host Brian "Barn Cat" Debes covers questions every owner faces: who you serve, how to fund programs your community can't afford, and why business systems decide whether a gym survives.
Why a Nonprofit Structure Appealed to Him
Tracey's reasons are partly practical and partly about legacy. On the practical side, he sees a nonprofit as a way to reach grant money and outside funding that a for-profit gym can't easily get. He wants that money for programs that matter to him: a "Special Forces" Jiu-Jitsu program for children with special needs, including kids with Down syndrome and autism, plus sponsored training for survivors of domestic violence, families affected by fentanyl overdoses, and at-risk youth.
On the legacy side, he talks about watching his family's cattle ranch get divided up in probate. He wants the gym to outlast him, with his sons involved. One of them is a brown belt who already teaches most classes, and Tracey plans to open a second academy under the nonprofit for his other son to run. A board-governed nonprofit keeps the mission going without the business being sold off. Debes compared this to Jigoro Kano's Kodokan, which has thrived as a nonprofit for generations.
Debes also gave the counterpoint. A nonprofit can't be sold, so an exit is off the table, although few BJJ owners ever sell anyway. Staff, including the founder, can still be paid salaries. Tracey's view is that the structure lets the organization support its people, for example by helping coaches with housing. He is open about the tax side being one of his motives. Both men said clearly that anyone considering this should talk to an attorney and an accountant first. The same applies to Tracey's own unconventional decision to drop his liability insurance and keep a lawyer on retainer instead.
Funding Programs Without Watering Down Quality
Tracey doesn't want to discount his way into community impact. "I'm not cheap. We teach good Jiu-Jitsu," he says. He doesn't want to lower the quality of instruction or pay coaches less than they deserve. Outside funding is what lets him do both.
His long-term plan is an affiliate-style setup, similar in spirit to programs like WeDefy. A gym owner with a student in need, such as a child whose father died of an overdose, could ask the Third Coast Jiu-Jitsu Project to sponsor that student. The nonprofit would then pay the gym directly, often in three-month blocks, since sponsored students tend to come and go. Tracey admits this model is still being built. For now the project quietly sponsors a few students at partner gyms in the Corpus Christi and Houston areas.
For-profit owners can still use sponsorship partnerships and fundraisers. Grant funding itself generally requires a nonprofit.
Building 300 High-Ticket Sales With Organic Content
Before the gym, Tracey started selling mats when Hurricane Harvey destroyed equipment at gyms around Houston. Working with a manufacturer, he outfitted close to 300 gyms over about three years. Typical orders ran from about $5,000 to $25,000. Debes noted that this is an impressive run of big-ticket sales to an audience that is usually cautious about spending.
His marketing was almost all organic social media, built on the Combat Business program from Alan Belcher, where Tracey was one of the earliest clients. He didn't even have a website. Instead he posted:
- ✓Live videos and posts from installs, documenting the work as it happened
- ✓Shipping updates showing mats on the way
- ✓Customer photos of gyms receiving their orders, which worked as social proof inside a tight-knit community
A few well-known coaches bought from him, and referrals did the rest. He left after COVID disrupted shipping and quality and the manufacturer cut his margin sharply. His lesson: lock down your agreements early. He and Debes also agreed that AI copywriting is now strong, but it can't replace a real person going live.
Culture, Systems, and Knowing When to Stop Advertising
Tracey opened his current gym about two years before the recording. It has about 124 members, with a cap of 150 before he starts a waiting list. Women make up roughly 60% of the membership or more. He credits that to a family culture built on hiring the right people and a mission of giving back. Because he is near capacity, he has pulled his paid ads from Google and Facebook and moved to organic content and grassroots tactics like billboards.
He is just as clear that a good mission doesn't fill a gym by itself. "Open the doors, everybody's going to come... except that doesn't work," he says. His earlier gym near Houston, which he opened as a purple belt, grew to almost 160 members before COVID only because he followed a structured business system closely. Today he runs without staff and relies on a CRM and automation so every lead gets a fast reply and a follow-up.
Debes added a point every owner should take in. Your gym's size is set by the math of enrollments against churn. At 10% monthly churn and 10 new students a month, a school levels off around 100 students no matter how good the coaching is. Coaches who leave believing they were the business often learn that the systems were what kept the place running.
Key Takeaways
- ✓Decide what you're building for. Tracey's nonprofit shift comes from a clear view of legacy, family, and community impact. Know your own answer before you choose a structure.
- ✓Outside funding can pay for students who can't afford training. Grants usually require a nonprofit, but sponsorship partnerships can help for-profit gyms too.
- ✓Organic social proof sells. Documenting real work like installs, deliveries, and happy customers produced close to 300 big-ticket sales with no website.
- ✓Don't discount your quality. Find other ways to fund access instead of lowering prices or coach pay.
- ✓Systems beat talent. Retention math and business processes decide a gym's size more than the head coach's skill.
- ✓Get professional advice. Nonprofit conversion, taxes, and insurance decisions need an attorney and an accountant.
Listen to the Full Episode
The full conversation with Mike “Jits” Tracey has more of his story and how he thinks about giving back through Jiu-Jitsu. Listen on Spotify or watch on YouTube.
Whether your school runs as a business, a mission, or both, you need reliable systems for lead follow-up, retention, and billing. Red Belt Software helps martial arts gym owners keep students longer and grow with less manual work.