Author: Unrealistic Expectations…
I often receive emails or field messages on the forums asking me how long it takes to grow a martial arts school to “x” number of students.
In addition, I sometimes receive similar messages from new and would-be school owners who are ready to quit because they think their school isn’t growing fast enough…
Sadly, this is an all-too-common occurrence which I blame in part on the mainstream industry magazines, who are more than willing to print story after story about Master XYZ’s overnight martial arts school successes.
Unfortunately, this sort of irresponsible journalism creates unrealistic expectations in the minds of those who are unfamiliar with the way business growth typically works in the real world.
Reality Versus Confabulation
Certainly, such wild stories sell consulting packages… but what you’re not reading in those articles is how Master XYZ already had a substantial business in place in a neighboring community, or how they had an extensive marketing budget and experience in martial arts school promotion to help them get off the ground fast.
Granted, I’ve personally coached school owners and showed them how to enroll large amounts of students in a relatively short period of time. But, they were, more often than not, working with existing schools that already had at least 50 or more students. That may not seem like it should make a difference, but it does – and that’s because those students can be a valuable resource in getting the word out about your programs.
Starting From Scratch Is The Hardest Part
The truth is, starting from scratch with zero students is often the hardest part about launching a school. That’s because we’re in an industry that relies on a relatively lower number of recurring transactions (sales) each month for the bulk of our income. In addition, we don’t sell necessities; instead, we sell what is essentially a luxury.
This is much, much different from businesses like retail (think convenience stores) or food service (fast food) where the market is broader and the transactions, while smaller, happen much more frequently.
Experienced business owners in the services industries that rely on recurring transactions (martial arts, dance, gymnastics, fitness, etc) know that building up a clientele large enough to cover the overhead on a storefront location can take months or even years, depending on many factors (marketing skills of the owner, marketing budget, starting capital, area demographics, etc).
How Long Should It Take To Grow Your School?
In my experience (personal and observational), it should take the average martial art school owner approximately 12 to 24 months to be breaking even on their monthly overhead and the owner’s salary (what most school owners consider as “profit”). I’ve started, run, and sold two successful schools, so I know what I’m talking about with regards to this topic.
In the first school, I followed the same business plan that I outline in Small Dojo Big Profits. From starting a part-time program with zero students in a new town where I knew no one, to being in my facility and profiting enough to pay myself a decent salary, it took approximately 18 months.
In the second school, I was experimenting and decided to break from the methods I teach in Small Dojo Big Profits. So, I used cash on hand and took out some loans to start out in a storefront location from the beginning. While I was in profit within a few months, I wasn’t able to pay myself a real salary for another year or so.
Incidentally, taking the faster route, in hindsight, was a big mistake, as I could have never anticipated the coming recession. Had I gone the old familiar route and not taken out any loans, I would have been in a much, much better position to weather the recession.
Although I was able to build the enrollment up to over 100 students in the middle of a recession in an area that was hard hit by the mortgage crisis, if I could go back I’d have done it the SDBP way. I’ll write more on this in future articles, but for now take my advice – the methods I outline in Small Dojo Big Profits are low-risk and high-yield; in short, they work. Follow the Small Dojo Big Profits method and you almost can’t go wrong…
Patience And Persistence Are Key
I know that it may seem like you need to take out huge loans in order to pay your bills and do a major advertising blitz to fill your school right out of the gate. But, the fact is you really don’t, and moreover the risks increase exponentially for failure the more money you borrow.
Think about it… if you do it the Small Dojo Big Profits way (no loans, self-funding, building your school slow and steady wins the race) and you make a mistake, what have you lost? Nothing! Well, nothing except a little time, with experience gained for your troubles.
However, what if you mess up and you’ve taken out a bunch of loans? You’re sunk! Say for instance that your big advertising push falls flat and you don’t get enough clients to cover the overhead and loan payments. What are you going to do?
And, what if your school fails and you have to close your doors? Who is going to pay those loans? Are you going to pay them out of the salary you were earning before you started your school?
Bottom line is, being risk averse is the wisest choice in growing your school… especially in today’s economic climate.
For More On This Subject…
For more on this topic, I suggest you read my article series titled The Importance of Retention Strategies, and “Treading Water” in the Martial Arts Industry. In it, I go into great detail regarding the rate at which a school can be expected to grow when everything is hitting on all eight cylinders. In addition, the articles also discuss at great length the importance of retention strategies in growing your school.
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9 Responses to “Being Risk Averse in Growing Your Martial Art School”
"Small Dojo Big Profits" way!
Hi Mike, i like the fact that you do not have to start out with huge loans and huges store front to build a buisness, i started a program at my church 3 years ago with no budget at all for advertising at all. Now from my history i have ran many different YMCA programs a city rec programs (including a huge program over in Germany) but this was as apart of a larger school. My church program was my first attempt at a real school of my own. It has taken my almost 3 years and simply word of mouth but we have gone from 0 students to over 40 students and we are starting to grow. I have had a few of my senior students stating to ask me about opening a commertial location which has been one of my dreams, i have looked at my finances and i could do this and still make a small profite at 60-70 students, but my biggest fear is i do not want to get my self in overhead with loans. I do believe in your approach about letting the school grow before you go for the big commertial school. I have seen many start up and within a few months close down. I believe that is my school continues to grow we will need a commertial location, but for now are church is serving our purpose. Untill next time
Sincerely Steven Murray
Steven,
It sounds like you’re building your school the smart way. If you haven’t read the manual yet, pick up a copy when you get a chance. It’ll fill in the gaps for you as far as making the transition from part-time to full-time/full-service.
Thanks for the positive feedback, by the way.
- Mike Massie
Once again I’mvery impressed with your sharing. You tried going outside your proven methods thus doing the leg work for other school owners.
Rick
I think one of the biggest mistakes new school owners make is to try and start with 0 students. That’s a tough uphill battle. I would try to have between 25-50 students, savings, and solid cash flow before entering into a retail lease. With the new creative methods of marketing, you don’t need huge marketing budgets so loans shouldn’t be an issue. The issue that leaves people teetering on the edge of success and disaster is the decision to lease/buy before they’re in a solid position to do so.
Hi Mike,
I started with nothing in January 2003. I’d just moved to the States, so I had no credit, no students, no reputation and no place to train. I became involved in the local community and built my student base the SDBP way (though I didn’t know what that was back then!).
I didn’t take any loans, or spend anything on advertising. Instead I struck a deal with the community center, where they provided the venue, paid for the advertising and the bills, etc. They took a percentage to cover the costs and I took a greater percentage as my payment for services rendered.
When I could afford it, 18 months later I had 90 students (paying community center discount prices), but was able to find a small dungeon dojo in a back street of town. It wasn’t ideal (far from it) but it allowed us to grow again until we moved 18 months after that into retail location close to a supermarket.
Within another year or so without really marketing too heavily we were up to about 140 students or so.
So basically I built a school from scratch to 140 students within about 3 years, without poaching students or instructors from anyone else.
In hindsight, if I was just starting out and somebody in my position (now) told me to go read SDBP I would do it in a heartbeat. There are things you talk about in the book Mike that I stumbled and bumbled my way through, but I wish I had have known them ahead of time so I didn’t make all those mistakes!
Hope this is helpful…
- Jason
Nearly spot on, Kevin. But, the number of students you’ll need to have in your base before you go out and get a retail location (even a dungeon dojo location) is going to vary based on many factors… I go over those factors and provide a system to follow in the Small Dojo Big Profits manual.
But, the gist of what you’ve said is absolutely correct. Thanks for visiting!
Jason, I find it interesting that you did so well, so quickly… and you couldn’t even speak the language!
Seriously, it just goes to show that it’s possible. So many people I hear from give up too soon, or they refuse to follow a system because they think they can figure it out on their own.
Sure you can… and you can have the wonderful experience of making those same stupid mistakes we made when we did it. I wrote the Small Dojo Big Profits manual to help new and would-be school owners to avoid those hassles.
By the way, thanks for the kind words about the book Jason. I respect your opinion, so it’s very much appreciated.
Mr. Massie, I have read most of your book and really enjoyed it. My father has owned many businesses and your advise follows most if all of the pactices to which my dad has adhered.
I opened a school in Sept. I did, however, use a line of credit for which I have the cash to repay but want to hold onto until I have cash flow. By the end of this month I should be breaking even on my overhead but can’t pay my salary yet! I opened behind an In & Out burger of a freeway exit. An In & Out is one of California’s busiest hamburger chains for those of you not in CA. I’m not sure if this is fast or average growth. It is definetly a psych job to stick to it I’m used to making $12-14K a month but this recession changed my thinking.
As far as advertising I walk around town wearing my Kung Fu San Soo shirt and when someone makes a comment I drag them in or trade phone numbers. I also passed out 2500 door hangers, that sucked, but it did pay for it self after the second month. Wow, this is exciting, scary and the most fun I have had working/playing ever!
Any advise from you all I would love to hear it!!
Sean, you’ve obviously seen your dad work hard in his businesses. My chief bit of advice to you would be to work just as hard in yours… especially where marketing is concerned.
There are many different ways you can market your business, and a lot of them are low-cost or no-cost – they only take time and effort to do. So, keep investing that sweat equity and you’ll get where you want to be.
By the way, that sounds like a great location!