Joined: 09 Nov 2004
Location: NE Ohio
Styles: Chuan Fa, Shotokan, JJJ, BJJ
|Posted: Fri Sep 12, 2014 12:30 pm Post subject: So You Want to Open Your Own Martial Arts School?
|It was a dream that started when I was about 15 years old. I wanted to operate my own martial arts academy as my primary job. So I did what most 15 year olds do. I modeled my design after what I knew. For the next several years, I watched everything that my instructors did. I came back from Iraq in 2004 and started training jiu-jitsu. By 2010, I felt I was ready. I had been instructing and assistant instructing for over 11 years, training martial arts since 1985. I've seen it all, right? No, I hadn't. What I had learned was only a small part of running a martial arts business. In the last 4 and a half years, I have learned much more. I would like to share, with you, some of the things you will need to know in order to run a successful martial arts academy as your full time job.
Please note I'm talking about making it your full time job. Not just a side thing. Side gigs are far easier to run.
You need to know how to define a "successful" martial arts academy. It's easy to decide you want to do it, and many people think they are in one. But if you want to be in a successful academy, you're going to need around 150 or more students. This number will make it possible to earn a decent wage, pay the academy utilities and rent, pay your staff and maintain the facilities you have.
Understand Your Market
You need to know your market. Because I focus my academy on Brazilian jiu-jitsu, I always felt my market would be primarily adults. However, over time I realized I was way off on that assumption. Retention is the key to running a school (more on that later) and, usually, adults are only willing to train for a few years. Kids, however, tend to pick up an activity and stick with it longer. On average, you will need each student to train for at least 5 or 6 years, preferably longer. If you don't properly target the kids market, you will probably not last very long or just have a small school that can't sustain your personal needs. Keep in mind, too, that parents often join after they see how much their kids love it.
Marketing Your Academy
You need to understand the big 3 of academy marketing. Word of mouth, internet and direct-to-door marketing. These three things are what drives successful academies.
Word of Mouth
You really want this to be your biggest draw. The people who come in or contact you, that already know one or more of your students, are far more likely to join your academy than those who don't. Some students will talk about your academy constantly. Others will only do it when you remind them (such as asking them to hand out cards). Others will just never do it for their own reasons. There's a snowball effect to this, however. The more students you have, the better your word of mouth. The next two methods are of equal importance, but a successful school will have 5 to 10 new leads per month from word of mouth.
Whether it's social media or your academy website, the internet plays a huge part in marketing these days. The great news is that a lot of it is very inexpensive. It can be costly to start a website, but once it's there, all you need to do is point people to it. Between posts and paid advertisements on Facebook and Google AdWords, this can be done fairly cheaply. The biggest thing is to get over the learning curve and not be afraid to play with it a little. There are companies available to help you with this. My recommendation is to not go with one that builds the website without giving you control over it. This will create an ongoing expense and tends to generate so-so results over time.
Also, pick someone to build your site that has a track record of building successful sites in the martial arts industry. I started with a graphic designer buddy of mine. He built a great looking site, but that's all it was. The copywriting (more later) was poor and the search engine optimization (SEO) wasn't that great, either. Plus, there were no lead capture contact forms. In other words, if someone didn't feel like picking up the phone to call me, I missed out.
The most effective method of this is door hangers that you put right on the front door handle of each resident in your town. This is a time consuming process, but will pay huge dividends. You can reasonably expect a 0.5% to 1% return on these. If you put out 1,000 each month, that's 10 responses each month. If even half sign up, you should be making your money back easily. A lot of people will tell you that this doesn't work. Chances are good that they didn't do it right. They only did it once or twice or they used a coupon book (big waste).
That said, when it comes to distributing door hangers or fliers, there are laws that come into play. Before you distribute anything, you should ensure that what you are doing falls in line with the laws in your area. If you are unsure or don't have the time to do door hangers, use the USPS Every Door Direct Mail service. It lets you do some great targeting and you can expect a 0.5 to 0.75% response rate. Prepare to do this each month. Build a map and be strategic with it.
Know Your Worth
Understand the value in what you teach. This is often the hardest thing for most academies and the reason why many fail. You undervalue what you do. It has taken me three years to truly value what I do. I always thought of it as a luxury for people. In some ways it is, but that does not make it less valuable. It took several parents coming to me to tell me how what I do has changed their child's life; how it changed their behaviors and their focus. You have all heard the stories. Now it's time you understand you deserve to get paid for them. I used to charge $60/month. I was driving myself bankrupt. Now I charge $109/month and no one bats an eye. In September, the cost will go up to $119/month and that's where I'll keep it for a while.
The price you charge tells people what you feel you're worth. Again, if you only want a part time place, then $60/month is fine. But if you want to run a full time school and dedicate your life to it, you need to charge what you're worth. This is something you need to become comfortable with. You can't let others tell you anything about it because they won't pay your bills, and they certainly aren't the ones feeding your children. The same goes for your instructors, who often shun the idea of making money in the martial arts. Making money is not evil, as long as you do so in an ethical manner (more later).
With that said, of course you want to be competitive in your area. If you are charging $200/month and the rest of your competitors are in the $100 range, you may find it difficult. But if you're charging something more competitive, say $120 and your quality is very high, you'd be shocked at how many people will choose you. Read about the quality, speed and price triangle. Chose quality and price!
Retention is the key. Let's do some math. Let's say you gain an average of 10 students per month. You have a 90% retention rate (you lose 10% of your students each month). If you start in month 1 and have 50 students, you will gain 5, and lose 10 for a total overall gain of 5 students. If you have 101 students, you will lose 10.1 students and gain only 5, this means you have an overall loss of 10 students. It doesn't take rocket science to see this is not good. This leads to two big questions. What's a good retention rate and how do you increase retention?
Your Retention Rate
What's a good retention rate? First, you should be shooting for more than just 5 new students per month. In fact, your goal should be 15! That's not that hard if you're getting 20 to 30 leads per month. But a good retention rate is around 95%. This number will keep you in great shape. Especially when you consider that, as the number of students in your academy rises, so will the number of leads you get.
Improving Your Retention Rate
How do I ensure I have great retention? Earlier I said something about running an ethical business: here's where that comes in. If you make a claim, back it up with action! If I tell parents their children's grades will improve with martial arts training, I sure as heck better have a system in place to monitor that so I can back it up! The same goes with any claim you make. This is called "being a trustworthy and honorable person!" Do what you say you will do!
Create a community at your academy. Along with being a place of learning, it should be a place your students like to come to for social interaction as well. The stronger this sense of community, the better your retention will be. Social gatherings such as parties and picnics are great ways to assist with this.
Use enrollment agreements. Contracts, yes. Again, if you're an ethical person, no one will think twice about going into an agreement with you. But you need to be upfront about what the purpose of an agreement is. There are two: create a culture of commitment and help the business. The culture of commitment is great. I've had so many people come in and say, "Will you be here in a year?" With enrollment agreements you can say, "Yes, without a doubt." This makes a big difference.
Be exceptionally organized. When you think things are perfect, start at the beginning and look again. I highly recommend a rotating curriculum. It changed my whole school for the better. Your instructor won't like it at first, but when they see that the black belts are still learning the right stuff, the quality is still there and you're succeeding at the same time, they just may do it, too.
Learn to Create Your Own Advertisements
Learn about effective copywriting. Educate yourself on how to use a good graphic design program. Advertising can be expensive. If you learn to make your own quality ads, you'll go a long way and save thousands per year.
You should research building equity, especially in a business that doesn't have much equipment. This is another huge reason to use enrollment agreements.
Black Belt Shouldn't Be Easy
A lot of experts would disagree with me on this. But the recent trends demonstrate I'm right. BJJ, Muay Thai, JKD and Krav Maga have shown huge gains recently. Many schools have started up programs with them. Three of those arts don't even have ranks. People aren't concerned about rank, they're concerned about authenticity and effectiveness. In other words, don't be afraid to make your students wait an extra year or two for black belt. Of course, you should be organized and ready to deliver on any promises.
Pay Your Staff
For one, it may be illegal not to pay them. It's also the right thing to do. Think about it: if you're charging $130 per month, with 150 students, you're pulling a yearly revenue of $234,000. Figure into that about $4000/month in expenses and you're making $186,000. The ethical thing to do here is pay your staff. This won't likely cost you much more than $40,000/year, anyway.
Track Your Business Stats
At a minimum, you should track leads, lead source, lead Conversions, attendance and retention at a minimum. There are tons of programs out there that will do it for you if you aren't good at this type of thing.
Have weekly or monthly staff meetings: be sure you train them, inform them on upcoming events and ensure they are meeting your expectations. Also, get some training in human resources (HR) so you have a good idea on how to handle HR issues such as dating clients and ethical hiring and firing policies.
Everything you do, from beginning to end, should be repeatable. This is the only way you can track the effectiveness of what you did. In the end, that's the measure you care about the most.
Hire an Accountant
Hire an accountant for consulting. You want to be sure you're paying people, including yourself, and dealing with the money in a legal manner. This is a no-brainer.
Finally, have fun with it! If you manage to run an academy for the rest of your life, you're a lot like a professional ball player or other celebrity. You are getting paid to do something you absolutely love. Never see it as a job. You'll spend far more than 40 hours a week at the academy or at events associated with it. Be sure you're having fun. When you're not, take a vacation.
Hope this was helpful! Feel free to ask me any questions you wish!
"It is impossible to make anything foolproof because fools are so ingenius."