# Selling Martial Arts

## How Much is Your Tuition?

This is a little drill that can make grown black belts cry. Here is an audit you can do to help you understand how much tuition you are really collecting each month per student.

**1. Total Tuition Collected**: Take last year’s total tuition collections. This is the sum of paid-in-fulls (PIFs), registration fees (uniform or any other hard costs deducted), and monthly billing received (after deducting refunds and any billing and credit card charges).

**2. Total Student Count**: Add all the students you had last year on January 1st to the number of students you enrolled over the next 12 months. If you started the year with 100 students plus you enrolled 10 new students per month (10 x 12 months = 120), you have a grand total of 220 students. Of course, unless you have 100-percent retention, you don’t have 220 students in your school right now, but that’s a different chapter.

**3. **Divide last year’s total tuition collected (1) by the total student count (2). This is the annual tuition value of your students

4Take that number and divide it by 12. This is the average monthly value of your students. To be more accurate, you would do a month-by-month analysis that removes the dropouts as they stop paying. That would make the average monthly value higher, but this example is designed to be easier to understand and follow.

Let’s use real numbers. I’ll keep the money high and the expenses low to soften the blow.

1. Last year you averaged 80 students paying $133 per month in your school. You also have 30 students who cashed out last year or “shorted out” their contract.

80 x $133 = $10,640 per month gross.

Billing fees, refunds, etc. = approximately 10% in expenses

Net monthly billing: $9,576

$9,576 x 12 = $114,912 total monthly billing

+ Total “shorts:” 30 @ average $600 each = $18,000

Registration fees: 105 x $199 = $22,885

Paid In Fulls for annual: 15 @ $999 each = $14,985

= Tuition total: $170,782

2. Students taking class last year

100 students to start with

Enrolled 10 per month = 120

100 + 120 = 220 students who took classes last year

3. Last year’s tuition per student per year

a. $170,782 220 = $776.28 per student per year

4. Last year’s tuition per student per month

a. $776.28 12 = $64.69 per student per month

It’s kind of scary when you realize how much of a hit your tuition takes. Keep in mind these are pretty simple numbers with a too simple formula. The real truth is that often the numbers are worse. Family discounts, cancellations, barters, and students who slipped through the cracks all bring the average tuition per student number down.

What can we do to pump these numbers up? You may have noticed that we didn’t include any renewals. The reason is simple. Most schools still don’t have a solid renewal plan. The best renewal plan I know of is also the most important to your school’s energy and atmosphere, and that is the Black Belt Club or the Black Sash Club or whatever you want to call a program where the students set black belt as their goal (and you don’t guarantee it).

1. Let’s take the same example as above, but add in the revenue from renewals.

Tuition total from above = $170,782

+ Renewal registrations: 24 x $299 = $7,176

+ Renewal PIF: 5 @ $2,999 = $14,995

= Tuition total: $192,953

2. Students taking class last year

100 students to start with

Enrolled 10 per month = 120

100 + 120 = 220 students who took classes last year

3. Last year’s tuition per student per year

a. $192,953 220 = $877.05 per student per year

4. Last year’s tuition per student per month

a. $73.08 per student per month

Total difference in net tuition collected = $22,171! Still, the number is far less than the average monthly tuition you are charging.

Still, if you have been procrastinating about launching a Black Belt Club, I have 22,171 good reasons for you to do it now. Many schools have gone from an agreement-based renewal program to offering the Black Belt Club membership for an annual one-time payment of $500. Regardless of how you charge for Black Belt Club, it will add a significant amount of revenue to your school.