A lot has been written about which demographics are best for a martial arts school. In virtually every case, the answer has been presented as though all schools are the same, so the answer has been a “one size fits all” answer. If you know anything about me, it’s that I don’t believe in “one size fits all.”

The truth is that the best demographics for your school depend on what kind of school you are planning. You have to think through who your students are going to be, then study every resource in your area to find out their income, where they live, and how often they move.

Single-Family Homes 

These have always been touted as the best location for a school, and that may be correct, depending on the school. For kids-oriented, family-type martial arts schools, being nestled within a community of single-family homes with a few elementary schools may be ideal.

Elementary schools are packed (overpacked usually) with your target market, and they attract additional families to the area.

Multi-Family Homes 

Multi-family homes are condos, townhouses, and apartments. Who typically lives there? Young adults, that’s who. If your school offers adult-oriented mixed martial arts, self defense, kickboxing, fitness martial arts, sport, or just wants to pull more adults than kids, then you want to be in this kind of area. Bonus! What do multi-family home renters tend to do more

than single-family home owners? Move! This means there is always a stream of new potential students unloading their moving vans everyday.

Large High-Income Homes 

Because high-income families have large homes, there are far less of them in a given pull radius than single family or multi-family homes. Plus, wealthy kids have the resources to do almost any activity and often do. Your school may or may not be at the top of their list, even if they do join. Middle-and upper-middle-class students tend to focus on one activity.

Determining a good size for your school depends on the area and the rent. Remember, you want to build a profitable school, not your ego. Other considerations for the size of your school are: What segment of the market are you going for?

Will you be able to schedule and support two classes per night, or five? If you only have two, you may need more room to fit all the stu¬dents into just two classes.

If you can support five classes a night, you will have smaller classes, which allows you to make a smaller space profitable much faster.

Kids take up less space than adults. It’s better to lease a smaller space that offers the opportunity to expand than take a double space and regret it later. Always look for a space that has an empty space next to it, which gives you two benefits:

1) It makes your space more negotiable. Empty spaces mean lost money to a landlord. Also, it’s harder to rent a strip of stores if some are empty. Traffic is the key, and empty spaces don’t create traffic.

Landlords are highly receptive to negotiation just to start filling some spaces. Keep in mind that the spaces may be empty for a reason. Make sure the space is in the right area and talk to all of the other stores in the plaza to see how the landlord is to work with and “how business is” at this site.

Also, if you can, track down who was in the space before. Ask them why they left and if they would rent there again.

2) It may provide you with a good expansion space when you are ready. The key is to include a clause that requires the landlord to give you first right of refusal at the same rent rate or lower as your current space. This way, if someone wants to rent the space, the landlord has to give you the chance to rent it first.

Sometimes, the landlord will receive an offer that is significantly higher than your rent, and he will be motivated to rent it to the new client rather than you despite the agreement.

In that case, you may be able to negotiate that you will allow him to rent the space, but only if he lowers your rent. If the numbers are right, he may be able to rent the space, lower your rent, and still come out ahead. Just make sure you won’t need to expand before your current lease expires.

At the top of the size for new schools, my experience indicates about 4,000 square feet gives a new school plenty of room for a large training area, an office, and some changing rooms.

On the other end of the spectrum, there are schools that do very well that have never expanded beyond 1,500 square feet. Any smaller than 1,500 square feet, and you may have to support a schedule with so many classes each day you will burn out quickly. Any larger than 4,000 square feet, your rent may strangle your cash flow.

The basic rule of thumb is that, if you can buy for the same monthly price as your rent, it makes sense to buy.

Even if the mortgage payment is a little higher (less than 25 percent higher), the additional expense is offset by the tax advantages and wealth building that owning the building gives you. Even if you are leasing, it’s often a good idea to include an option to purchase the property.

Personally, I am debt adverse so entering into a mortgage for my business would be very uncomfortable for me. I would probably try to save as much as I could so I could purchase a building in full and then run the business rent free.

In the process of planning and starting up your school, few decisions will have as much impact on your prospects for success as choosing a good location and negotiating a favorable lease. Be careful not to get emotionally tied to any one location.

Keep running the numbers to keep you focused on the potential upside and downside throughout the process. Stay cool, and most of all, don’t forget to just ask.

If you end up selling your school, be sure you are not restricted from assigning that lease to the new owners at the same terms.

Also, you may want to sub-let the space for certain classes during off hours. For instance, you may want to sub-let the space to a yoga instructor from 9 a.m. to 2 p.m., Monday to Friday, to offset your expenses and keep money flowing during down hours.

Make sure your lease allows you to assign and sub-let the lease if needed. This usually requires landlord approval, but make sure your lease allows the possibility and specifies it will not be at a higher rate.

Audio Interviews with The Lease Coach on How to Negotiate a Lease.

Negotiation Tactics

Prepare for the Negotiations

Unless you know the current leasing conditions in your area, it’s a good idea to get some expert help. Invest $100 for a commercial real estate attorney and/or commercial real estate broker known as a tenant rep. Their job is to help you get the best deal possible.

Landlords typically have their own attorneys, so it’s smart to put your own team together. Tenant brokers can help you find a good location as well as offer ideas, insights, and experience on the current market, rental rates, and other conditions that may work in your favor.

Once a potential location is found, the rep can help you and the landlord come to terms on the key points of the lease.

Defer to Higher Authority

This charade has been done to death in the car business. You make an offer to the salesman, and he says, “OK. I’ll take it to my manager.” The manager is the higher authority. It’s the good cop, bad cop scenario.

The salesman role is the good cop. He wants to find out what you like and see how emotionally attached you or your spouse are to the car. He will take that information back to the manager, the bad cop.

You can be sure the salesman is not saying, “They are a nice couple, and this is a fair price offer.” What he and the manager are doing is figuring how to get the highest price possible. The salesman comes back with a smile and a counter offer.

When you are negotiating a lease, be the good cop. Tell the seller you have to run everything by your people or your association. This gives you time to figure out your next move and keeps any emotional attachment out of the game.

It also works to remind the salesperson that you are not the final decision maker and that the deal could get shot down at any moment by the association or your business partners.

The Flinch

Learn to physically react to any price. It takes some acting and some practice, but it’s actually kind of fun and boy, does it pay well.

Ask someone what the widget costs. Whatever they say, your response is, “What? You’re kidding me! That’s twice as much as I expected.” Often, that’s all it takes.

The guy will drop his price or throw in something extra. At the worst, he knows you are “sensitive” to price.

Warning: Tell your spouse what is going to happen. Once I flinched at a price, and my girlfriend at the time said, “I got so nervous when you did that. I could never do that.” I had to explain it was all an act. Practice your flinch.

Be Negative

It’s never a good idea to walk into a space and say out loud, “This is perfect! We can put the changing rooms here, the pro shop here. This is ideal for my office….” By doing so, you expose your emotional attachment to the property. I am a very positive person, so let me say this: I am positive you want to be negative, or at least neutral, when negotiating a lease or even viewing a space.

Simply walk around, take some notes, do a rough floor plan of the shape, and tell the salesperson, “Gee, I don’t know. This could be a lot of work.” A good salesperson will start asking you questions then.

Be sure to convey a very neutral position. “I guess I could make it work, but it’s not going to be easy.”

I said don’t show emotion while looking at a space. Actually, you can do a little play-acting and show some negative emotion. It’s an extended flinch.

Communicate to the salesperson that if she wants you to go ahead with this, it’s going to take some work on her part, starting with price and terms. Don’t make it easy for her and hard for yourself; you’re the one who has to make the monthly rent payments.

The martial arts industry is haunted with the ghosts of good schools that had everything going for them but ended up posting a “For Lease” sign in their window and closing their doors.

One of the most common failures is a poorly negotiated lease that straps the owner with an exorbitant rent. A bad lease deal is not just high rent, either. Your start-up costs and your ability to expand can be drastically affected when you have a bad lease.

Signing a lease is like going into business partnership with a location and landlord for a period of time. Partnerships are seldom easy. Our goal is to help you turn this partner into a friend and not a foe of your future.

All leases have a basic framework that outlines how long you will occupy the space and how much it will cost you to stay there.

Beyond that, there is a wide spectrum of lease structure. Don’t think just because a term or condition is in the landlord’s lease that it is carved in stone.

Virtually every aspect of that lease is negotiable, and we’ve talked to many school owners who have received concessions they never thought possible by using our strategies. But they would never have received them – and you won’t either – unless you just ask.

Walk Away Power

This is the most important aspect of negotiation. You must convey to the salesperson that you are perfectly willing not to purchase, and you will walk out unless you get a good deal.

Without this, any decent negotiator will hold his position, because it’s clear you are going to buy anyway. In the car business, if the frustrated buyer storms out of the sales office to get in his car and go home, the salesman will chase him down.

I even had one salesman step between my car and me to keep me from opening the door. I had to either laugh or choke him out.

Either way, the deal always gets better at that point. If they let you go, the deal was as good as it was going to get that day.

Either way, never get emotionally attached to a potential purchase. Even if you do, don’t show it.

For a hard-core kickboxing gym, it would not make sense to rent a space in the middle of a neighborhood of kids and elementary schools.

Conversely, for a family-oriented martial arts program with an emphasis on children, you wouldn’t want to be in the downtown district.

Match your school with the demographics of the area. Before signing a lease, learn as much as possible about tenant history and why the other operations failed or moved.

Speak with the current tenants about their experience with the landlord and the area. What is the make-up of the typical customer?

Find out if any new building or road construction is planned that might affect your school’s growth.

When researching a location, get demographic information on the area from your broker or the Chamber of Commerce.

Know your Pull Radius and your Potential Ratio. Schools typically draw from a 15-minute driving radius, so start with that but don’t limit yourself. You need to know the demographics for your immediate area as well.

The farther away the demographic group, the less potential they have as students. Make sure you are surrounded with the right potential student base.

Finally, be sure the zoning in the area allows for a martial arts school. Know what limits you have on signage, parking, fire codes, etc.

Circle the answer that applies to your situation, and then add your total score at the end.

1) Do you have a Best Buy, Sears, or well-known food or drug store in the same center as your studio? 

a) Yes –10

b) No – 0

2) Is your studio in the main body of the center? 

a) Close to the busiest store in the center. – 10

b) On the same side, but not close. – 5

c) Not on the same side. – 2

d) Not applicable, or no store that is busy. – 0

3) Does your studio face a street?

a) Major street. – 10

b) Minor street. – 5

c) Does not face street. – 0

4) Can your window be seen from the street?

a) Easy to see all of it. – 10

b) Can see some of it. – 5

c) Can see none of it. – 0

5) Is there another business that draws a large amount of parents and other people from your main target markets into your center, such as a dance studio, bank, or deli? 

a) Yes – 10

b) No – 5

6) Does the center have access from both sides of the street? 

a) Yes – 10

b) No – 0

7) Is there always lots of parking available? 

a) Always lots. – 10

b) Usually lots. – 5

c) Sometimes not much. – 2

d) Very little. – 0

8) Is there a major fast food chain in your center? 

a) McDonalds, Burger King, KFC, etc. – 10

b) Denny’s, Perkins, Shoney’s. – 5

c) Local chain, not national. – 2

d) None. – 0

9) Are there any other full-time commercial martial arts studios with in a two-mile circle from your location? 

a) None. – 10

b) One. – 5

c) Two. – 2

d) Three. – 0

10) Do you have a large marquee-type sign on the street? 

a) Large marquee sign with great visibility. – 10

b) Good-sized sign with good visibility. – 5

c) OK sign and visibility. – 2

d) No sign, or very poor visibility. – 0

11) Are there lots of people within a three-mile radius of your studio? (Go – 5-7 miles if your area is very rural.) 

a) 40,000+ – 10

b) 30,000 – 5

c) 20,000 – 2

d) Less than – 10,000 – 0

12) Is your studio location surrounded by houses? 

a) Houses on all four sides. – 10

b) Houses on three sides. – 5

c) Houses on two sides. – 2

d) No houses around the studio. – 0

13) Is there a major draw directly opposite your studio that would be a benefit to you in terms of visibility? 

a) Yes – they must see my studio as they leave. – 10

b) Yes – they may see my studio. – 5

c) No – 0

14) Is there a school close to your studio?

a) Half a mile to a mile. – 10

b) A mile to two miles. – 5

c) No – 2

15) What is the makeup of your center? 

a) Retail only. – 10

b) Retail plus offices. – 5

c) Industrial area. – 2

16) What is the income of your market area? 

a) Middle income. – 10

b) High income. – 5

c) Low income. – 2

d) Poor. – 0

17) What is the average age of adults in your area? 

a) Young adults 20-35. – 10

b) Middle aged adults 36- 55. – 5

c) Older adults – 56+. – 2

18) What is your total rent amount per sq. foot? 

a) Under one dollar per sq. foot. – 10

b) Under two dollars per sq. foot. – 5

c) Under three dollars per sq. foot. – 2

d) Over three dollars per sq. foot. – 0

Your total score:

140+. Your location is excellent. You can spend much less on advertising, because so much traffic comes by each day.

Score 120-139. Your location is good. You may have to spend an average amount of money on advertising. That is typically 10% of gross.

Score 95-119. Your location is average. You must spend a little extra on advertising to attract more students to your studio. Keep on the lookout for a better location, should one become available.

Score 89 or less. Your location is poor. Start looking for another location now.

This is an excellent evaluation of a location’s potential. However, there some schools that fail this test miserably still do well. That is the X Factor, and the X factor is you and your teaching skills. Besides, entrepreneurship exists in varying shades of gray.

If it were just black and white, we’d all be on Easy Street. Still, there is no doubt that having a school in a densely populated area will give you more potential students than in a sparsely populated area.

Business Plan Sample 1

Business Plan Sample 2

The martial arts school, provided it’s not a Fantasy School, has a great advantage over health clubs in that we have very few and relatively inexpensive needs for equipment. W

hat equipment you need depends on your type of school. If you are a family-oriented kids’ school, a heavy bag will use up valuable space that could be used for students in class.

On the other hand, if you are a kickboxing school, heavy bags are an important element of the school. In fact, one bag is usually not enough. There are companies you can hire to build multi-bag systems on frames that can be raised to the ceiling when not in use.

Here are some basic equipment needs for various schools:

Kids/Family:  body shields Hand-held kicking/punching pads Obstacle course elements (triangles, pads, tunnels, etc.) Blocker pads (handle with padded shaft for striking), cones and obstacle pads for obstacle courses and races and tape on the floor to show students how and where to line up.

Kickboxing: body shields, hand-held kicking/punching pads, heavy bags, upper-cut bags, jump ropes, double-end bag, speed bag, body pads for partner to wear for striking.

Self defense:  body shields, hand-held kicking/punching pads, fake guns and knives, human-shaped freestanding bags, padded mats for take-downs and throws

A classic branding story involves a letter being mailed and successfully delivered to the Playboy mansion in Chicago in the early 1960s. The envelope had no address on it; the only thing on the envelope was the iconic Playboy bunny logo. That is branding.

Hugh Hefner is a master of branding personally and professionally. While Donald Trump, Steve Jobs, and Richard Branson all have powerful professional brands, Hefner effectively wove his personal and professional brands together.

Professional branding is the communication of what a client or customer will experience when interacting and, hopefully, doing business with your company.

Branding is not about pleasing everyone in every case. Wal-Mart has a brand that is totally different than Nordstrom’s. They sell plenty of the same items, but the experience in each is totally different. Apple’s OS X and Microsoft’s Windows operating systems are both successful, but they have completely different brands and fans.

• Professionally designed marketing materials (logo, stationery, ads, etc.)

• Professional Website with Mobile
• Cleanliness of your facility
• Level of client or customer service
• Consistency of your marketing on and offline
• Consistency of colors and look on and offline
• Consistency in how your staff treats clients
• Updated bio

• Updated professionally shot headshot

As with personal branding, your professional brand is loud and clear every day. Take control of that message and build a brand you can be proud of.

Reporting keeps score on your performance. Your reports let you know how well you and your team are performing in every area. They also helps you to see any problem areas that may be developing well in advance. It will then be easy to take corrective action early when, through your tracking efforts, you find areas of your team’s performance that are not operating optimally.

Although it is vital to take the numbers down, in our business it’s better to analyze your numbers at the end of the week, unless you can see that something is way off course. For example, you see that you’ve had six phone calls today and no appointments. You’d better check the phone skills of your Team members immediately.

Note: It is vitally important that this information be documented accurately every day. Not documenting this data accurately every day will be cause for dismissal from the team. If you don’t care about your business, who will?

Basic Admission Statistics
Every day, you need to know the admission statistics, what’s happening with your school’s growth.

The first statistic you need is the number of Phone Calls Received. This lets you know how well your advertising and marketing efforts are performing and what changes, if any, need to be made.

The next statistic is Walk-ins. How many people are walking into your school? This let’s you know how attractive an appearance you have to the outside world.

Now we need to look at the number of guests your students are inviting to the school. This let’s you know how well you’re doing with your internal marketing and referral efforts.

After we have these three numbers you add them up to give you the number of inquiries for the day. If, for example, you had thee phone calls, I walk-in and two guests you would have six inquires (3 + I + 2). You would then add this number to the total inquires to date on yesterday’s statistics report. If the total to date as of yesterday was 10, you would add 10 + 6 to give you 16, which would go in the total number of inquires to date box.

The next statistic is the number of appointments made that day. At the end of the week the total number of your phone calls, walk-ins and guests statistics are totaled and checked against the total number of appointments. To find out how well your staff s sales skills are you simply divide the number of appointments by the number of inquiries. For example, if you have 12-inquires and you make 10-appointments, then you have 10/12= 83%. This means you have an 83% efficiency rate for making appointments.

80% is the goal we recommend everyone set for his or her operation.

The next number you’ll need is that of trial lessons performed. After the future student comes in for their appointment, how many take the trial lesson? Lets say out of the eight students who actually showed up, six took a trial lesson. This would give us 6 / 8 = 75%.

We recommend a goal of 80% for trial lessons made from actual appointments.

The final basic admissions number you’ll need is that of new students enrolled. You need to know how many new students do you enroll in comparison to trial lessons. If you had 12 trial lessons and you sign up 9 new students, this gives you 9 / 12 = 75%. This tells you for every 10 students you get in the door and take a trial lesson, 7.5 sign up. This is your closing percentage. It helps you determine if the person doing the trial lessons and enrolling the students are doing their job correctly. We would recommend a closing goal of 80%.

Other Enrollment Statistics
Other statistics that are related to enrollment are the number of student/parent conferences. In order to upgrade your students you need to have conferences. After you have the conferences, how many of these students are you upgrading? If you have 20-student conferences in a month and you upgrade 16, your upgrade percentage for the month is 80%, exactly where you need to be.

Our goals are based on (average) contract amount per new student. Working off of our current price schedule, the low-average that a new student enrolling in a martial arts program will be paying $99 per month. The average kickboxing student will pay $49 per month. To reach our goal of $15,000 in monthly tuition collections off of our evening classes, we need to hit the following numbers every month:

• 12 new martial arts students each month (12 students x $79 = $1,188 in monthly tuition payments; $1,188 x 12 months = $14,256)
• 8 new fitness boxers each month (8 x $49 = $392 in monthly tuition payments; $392 x 12 months = $4,704)
• In order to make these numbers, we will have to generate 35 information calls and other inquiries each month, setting appointments for 28 of them, making sure 25 make their first intro, 24 make their second intro, and enroll 21 onto a program.

If we meet these goals consistently over the course of a year, we will end up with a potential monthly tuition collection check of $18,960. Subtracting 10% for attrition and late payments, this leaves us with about $17,064 in tuition collections each month, which will put us well over our goal.