How to Set Your Tuition

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In 1974, the tuition at the Florida Karate Academy in Largo, Florida, was a 12-month contract at $25 per month. If you just raised tuition three percent per year from that point, you would have tuition of about $60 per month in 2004. When I opened my school in 1986, my tuition averaged $75 per month. At three percent inflation, this would total $127 per month today. What other service has only increased three percent per year? Not many that I can think of.

While many schools are more in the $60 range, others are north of $200 per month. What is the difference? The most successful martial arts school owners highly value what they do. Tiger Shulmann said this in an interview in my Martial Arts Professional magazine in 2001: “I’ll give you an idea of what I think about the amount of money that we charge for our classes. $1,500 doesn’t scare me at all to charge for martial arts training. I think it’s too little, actually. But we have to stay somewhat within the industry’s standard.”

His implication is that he would charge more, but the industry is holding him back. Tiger clearly values what he does. All the top school owners do. Notice that the first thing he said was he was not scared at all to charge $1,500 for training. Was he also saying other people might be scared to charge that amount? Would you be scared? This is a guy who told me he had more than 20,000 students in over 35 schools at the time. I visited his headquarters and saw the August revenue gross numbers from all the schools on the computer. It was only the third week of what is typically the slowest month of the year, but the lowest gross was in the mid-$30,000s, and the highest was the mid-$90,000s.

Not only was Tiger not scared to charge higher than the competition, the market was not afraid to pay for it either.

Your tuition rate and how it is presented will play a fundamental part in your school’s image. Price is the main factor in a prospect’s decision to join if you make it the main factor. If the most compelling reason for someone to join your school is that you are cheaper than the next guy, you are putting all of your eggs in the wrong basket.

Price is a factor, but not the factor in whether the prospect moves forward to join your school. If a prospect has shopped other schools, then your tuition will naturally be compared to the other schools. That doesn’t mean the lower price wins. It’s just another point of comparison. If the prospect has not shopped other schools, and most do not, your tuition indicates the value you and your current student body place on the training. It also begins to establish in the prospect’s mind what to expect in the school.