One rule of design that most guys don’t know is that, when you hang a picture, you want the picture to complement the frame and the frame to complement the room.

Though this article is not about school design, this example illustrates the three elements that must work together to make a picture work.

The three parallel dynamics that must work together for a martial arts school to have a chance in any location are the area, the rent, and the space. 

If you are in the wrong area or in the wrong part of a good area, you will not generate the traffic you need regardless of your space. If you are paying way too much rent, you will start each month scrambling to survive the next one. This kills cash flow. 

Too often, new owners build their school as the over-large and over-built Fantasy School they’ve always dreamed of. This is a classic case of Black Belt Eyes. We are building the school for our black belt buddies and ourselves, instead of our target market. 

The area you choose for your martial arts business must match the market you want to reach. There is a big difference between the most appropriate areas for an adult kickboxing school, a kids’ school, and a school that caters to wealthy executives. The kickboxing school would do best surrounded by condos and apartments. 

The kids’ school wants to be triangulated by public schools in single-family home neighborhoods. The guy teaching wealthy executives might need only a room in a health club in the downtown business district, provided there are enough potential executives to support the idea. 

Let’s look at some markets and what kind of school best matches that market. Keep in mind that there are exceptions to every rule, and these are general rules of thumb. 

The Small Town 

Small towns are about 50,000 in population or less. If you are good at developing a name, it’s much easier to do so in a smaller town like these than in larger, more competitive areas. In some rural areas, there is not as much for kids, families, and adults to do as in larger cities, so your school can become a recreational and social center of the town. 

Also, martial arts schools in smaller towns don’t have much competition. There may be a class at the YMCA or a part-time school, but often these are run like hobbies by black belts who enjoy teaching but have no immediate prospect as a full-time professional. 

Some areas, like the town where I live in Florida, are small towns as defined here, but they are surrounded by more densely populated small cities, which expand the potential market considerably. In these areas, the rent is usually affordable – even in more affluent towns, which is great news for your cash flow. 

Cost of living tends to be significantly less too, so you can live comfortably on far less. In fact, in comparison to large cities, what might buy you a high standard of living in a small town might not even get you a small apartment in a large city. 

The Small City 

The city with a 50,000-100,000 population range is a sweet spot for many schools. These areas can be gold mines for a well-positioned school. These are often predominately middle-income areas with pockets of high and low income. 

Because they share many of the advantages of the smaller town, it’s easier to build your name and less expensive to market to, and rents are lower than those in the bigger cities. Also, because the area is larger, you will have more potential locations from which to choose. 

The Medium City 

The city with a 100,000-250,000 population may be more expensive and not as easy to penetrate as the smaller markets. But the increased population density and the larger number of potential locations make these great markets for an organized school. 

Competition will be more plentiful but, odds are, if you are a MATA member, you will have what it takes to be top dog within a couple of years. Even if you don’t make it to number one, there is plenty of business to go around. 

The Large City 

To paraphrase the song, “If you can make it there, you’ll make it anywhere….” Large cities have their own set of advantages and disadvantages. Competition will be stiff and rent high. If you can find the right space at the right rent, and you are a good teacher with a strong business system, the high population density can work as an advantage to get you profitable. 

The biggest I’ve seen is the Tiger Shulmann school in downtown Manhattan. It is a 20,000¬square-foot prime location with three training floors and a café. Neither Billy Blanks’ school in Ventura, California nor the main Krav Maga school in Los Angeles, California, are nearly as big as Tiger’s, but both have great locations and are packed with students. 

Billy has to have a valet parking system because he is busy all day. A couple of years ago, I took a Tae Bo class there at 10 a.m. with 67 other people, mostly women. The class after ours was taught by Billy and had more than 100 students lined up for it. This was all before lunch! 

I use these examples not to imply that you have to have a location and school like any of them. I just want you to know what the highest level of competition is in the biggest metro areas, Los Angeles and New York City.