Martial Arts School Insurance

Martial arts school
insurance Coverage

“Insurance is like self-defense.
When you need it, nothing else will do.”
–John Graden

Send a request to SFIC to set up a quick review of your insurance needs and current coverage. The call and consultation are free.

  • MATA Members get $25 credit.
  • MATA Certification Graduates get a $100 credit.

The Best Rates and Coverage

Any training accident or disgruntled student can turn into an expensive and highly stressful lawsuit. Get the liability coverage you need from a company that’s been protecting martial arts professionals like you for over 30 years.

 

MATA Discounts

You may be overpaying or under covered. Get a free quote today and thanks to your MATA membership – save $25.

SFIC will also extend a $100 Insurance Policy Credit for schools with MATA Certified Master Instructor

30+ Years of Martial Arts Insurance Experience

Sports Fitness Insurance Corporation (SFIC) has over 30 years of experience in the Martial Arts industry. SFIC knows the best coverage for schools like yours.  Pay only for what you really need.

Every martial arts school needs insurance.

Few things in life are as stressful and expensive as a liability lawsuit against you and your school.

Get the protection you need from experts who understand our world.

SFIC is one of the largest fitness underwriting companies in the nation serving clients throughout the US and is a preferred provider of many major fitness franchises including Curves for Women, Gold’s Gym, Brickhouse Cardio and others.

“Our SFIC representative always has our best interests at the top of her mind and is very patient and understanding that with all the day-to-day pressing responsibilities of running a martial arts business, insurance isn’t always at the top of mine.

Chris Rappold

Personal Best Karate-3 Locations

Insurance For Martial Arts Schools

For Martial Arts schools serving both youth and adults. Most martial arts styles are covered. This program offers both professional and general liability.

Martial Arts School Liability Coverage is Designed for:

  • Traditional Martial Arts Styles with Light Strikes and Holds
  • Non-contact Kickboxing or Cardio Kickboxing
  • Non-contact Boxing
  • Boxing & Kickboxing Aerobics
  • Weapons Training with Fake or Padded Weapons

Unacceptable Risks include:

  • Live Bladed Weapons
  • Firearms
  • Full Contact Boxing
  • Full Contact Kickboxing
  • Full Contact Mixed Martial Arts

Get Your Martial Arts Insurance review Today

Sample Martial Arts School Business Plan

Martial Arts School Sample Business Plan

 

Martial Arts  School Business Plan Example

Table of Contents

Executive Summary

  1. Present Situation
  2. Objectives
  3. Management
  4. Product / Service Description
  5. Market Analysis

               Customers

               Competition

               Risk

  1. Marketing Strategy

               Pricing & Profitability

               Selling Tactics

               Advertising & Promotion

               Public Relations

               Business Relationships

  1.   Conclusions and Summary
  2.   Appendix

              Financial Projections

              Six-Year Income Statement

              Pro Forma Balance Sheet

              Start-Up Requirements

Executive Summary

In 2019, the MATA School, a Your State Corporation,was created to open a martial art school in Your city, Your State. Currently, the “your style” Association, a non-profit organization has taken over running the operation for the local community. 

 

MATA School willoffer full time quality lessons in traditional karate, self-defense and the sale of martial art merchandise.

 

MATA School is at a point where we are taking advantage of a lack of marketing in Your State.

 

Our operation will produce $300,000 in annual sales by 2020. Expected revenue for fiscal year 2004 is $250,000. (One school, three clubs, and high school program) Projected average annual growth is 30% per year through 2030.

Background

For many years people have encouraged the formation of an elite full service martial art operation and a quality organization like the “your association.”

 

The condition of the industry today is such that, through quality marketing and an understanding of the needs of the community MATA School willbe a profitable business.

All of the managers of the MATA School have been trained personally by “your teacher” “your teacher” and have a great team spirit. 

 

The current program offered by the main dojo was founded in 1990. Within three years of operation, the company ran four schools and was grossing nearly $1,000,000.00 in annual sales. A divorce and the sell of several dojo’s to students set the company back to its current two locations but still affiliated with 4 other locations through the association that pay licensing fees.

Concept

We have just completed an organized market plan and started the development of a detailed instruction outline for a novel and proprietary martial art organization. The change in emphasis on sales and sales training, combined with a new finance procedure will enable us to increase profits dramatically.

 

Compared to competitive products, our schools will provide daily classes in traditional karate, self-defense and use the latest in marketing strategies, sales techniques, and financing for martial art schools.

 

The ability to analyze the market and capitalize on the weakness of the competition’s lack of marketing is a capability unique to “your association”services.

 

Our strategy for dominating the competition is marketing our services through a unique selling proposition.

 

MATA School target market includes males and females between the ages of 4 and 55. Children and preteens under the age of 18 will comprise over 60% of our customers.

 

MATA School is rapidly moving into its unique marketing approach. This approach is based on using the economies of scale of a multiple school operation by co-op expenses while at the same time capitalizing on the inherent advantages of concentrating on one or two locations. Being a non-profit organization allows us to concentrate on marketing for free in many community forms of media including cable, and newspaper.

In addition to our outlined products and services, we plan to introduce an expanded variety of classes that will be especially useful to professionals and parents, including the National acclaimed Streetwise self-defense program and the Child Abduction Protection Program. 

 

Revenues from the self-defense programs will help fund our High School Karate Program, which is now booming. (Currently around 300 students per semester)

 

Other products and services include: seminars, consulting, rank recognition, tournaments, community events, and instructional videos.

 

Responses from customers and even our competitors show that our current program is enjoying an excellent reputation. Relationships with leading schools, manufacturers and distributors substantiate the fitness of MATA School for considerable growth and accomplishment in our area.

Objectives

At this time, our objective is to propel the company into a prominent market position. We feel that within two years MATA School willbe in a suitable condition for further expansion. To accomplish this goal, we have developed a comprehensive plan to intensify and accelerate our marketing and sales activities, product development, services expansion, engineering, distribution, and customer service.

 Management

Our management team at the main dojo consists of three men and two women whose backgrounds consist of over 100 years of martial art and fitness instruction. Our affiliation with the “your association” allows us to brainstorm, network and plan with 5 other school owners locally and almost 100 clubs nation wide. They have experience in management with several companies. By sharing information via the web, we can stay on top of any changes in the market nation wide instantly.

Additionally, our outside management advisors provide tremendous support for management decisions and creativity.

In-House Management

            “Your teacher”President, Head instructor

        Next Person            Vice President,

        Another Person       Secretary/Treasurer, Facility Manager.

 

Outside Management Support (hourly/project basis)

             CPAAccountant (hourly)

        MATAConsultants

        LawyerAttorney

 

Marketing

The Sporting Goods Manufacturers Association industry report projects a nationwide market for martial art instruction to be approximately 1 to 2 1/2 % of the population by the end of YEAR. Conservative estimates suggest “your association’s market share would be about 40% of our market area population, generating $1,000,000.00 in sales by the end of fiscal year 2025.

 

The fundamental thrust of our marketing strategy consists of demonstrating our product through promotional strategies.

 

We intend to reach males and females between the ages of 4 and 55 through email marketing, social media marketing, web marketing, video marketing, referrals, open houses, gift cards, promotional giveaways, lead boxes, exhibitions and demonstrations, flyers, word of mouth, and media advertising.

 

Our main thrust is to excite potential customers through self-protection/self-defense workshops, public speaking, public announcements, word of mouth and introductory lessons.

Overall, our company can be characterized as a high-profile retail instruction merchant.

 

Finance

We currently have a positive cash flow position. In five years, we will have begun investing to insure security for all employees and should have over $500,000 invested generating over $50,000 annually in interest. As long as we keep a three month reserve, we find that investing cash outs in mutual funds and individual securities as the best security for the organization.

 

Conclusion

MATA School enjoys an established track record of excellent instruction for our customers. Team members from our school have won numerous national championships and international awards, as well as, becoming excellent role models in their community. Their expressions of satisfaction and encouragement are numerous; we intend to continue our advances in the retail marketplace with unique and instrumental marketing plans.

Present Situation

Market Environment

The marketplace is undergoing rapid changes and locally has been stagnant locally for a couple of years. MATA School is poised to take martial art instruction to a new level in Your State Springs. By falling under the non-profit status, we are now able to obtain state and federal money for our self-defense and high school programs.

 

Products And Services

MATA School is currently in the development stage.

 

Pricing And Profitability

Current prices are increasing and profits are increasing.

 

Customers

Future customers are requesting that we offer a variety of martial art instruction.

 

Distribution

Our goal is to increase the amount of the population that is enjoying the martial arts to 5% in the next 4 years. We will be offering this through our existing schools as well as the public school system.

 

Management

Management is in place.

 

Financial Resources

Current cash available is $10,000.00

Our Current Ratio is: N/A

 

Objectives

The primary objectives of our organization are to:

  1. Provide the finest martial art instruction in Your State Springs.
    B. Have the largest martial arts organization in Your State Springs.
            C. Provide stable personal income over $50,000.00 by the third year.

Business Goals

            Profits: Profits exceeding $30,000 monthly per school this year.

        Products: Including videotapes, specialty items, consulting, and national ranking   Customers: 250 students per school within 12 months.

        People: Hire 3 part time instructors this year

        Growth: Open additional clubs this year, and control all district high schools.

        Management: promote full time administration personnel this year

        Community: become well known as a community oriented school 

 

Rationale

Based on our experience with martial art schools, we feel that there is a void in the local area. Through an initial investment into marketing material and an early association with consulting firms, MATA School has had an aggressive jump on the competition since our doors opened. MATA School has established an association with 5 other martial art schools locally and many more nationwide to help cut operational and training expenses. Through this association we have a reference of over 100 years of managing profitable schools at our disposal.

 

 

(Sample) Our President has an 8th degree black belt with over 34 years martial arts experience. Master Bryan is the former General Secretary of the USA National Karate-Do Federation; the official governing body for the sport of karate through the US Olympic Committee. Hard work and quick correct decision making provide MATA School with a valuable leader. His martial art background of over 34 years and his ability to lead will put MATA School ahead of the competition and allow them to market as the elite school with no competition.

 

Financial Objectives

(Note: The policy of this company is to not cash out more than 25% of the students but to indeed work on monthly cash flow. The following scenario is for your thinking process only)

 

We currently offer monthly tuition at $100 per month for one person with no contracts for a basic program and $150 per month for Masters club. We do offer a discount if the customer wants to sign an agreement to train with us longer and we use a billing company to track all students and payments. We currently employ a billing company to do our collections for us and they charge around $.25 per student for their services. Our monthly overhead for all programs is around $10,000. 

 

Three main avenues – monthly tuition, special events and cash outs, generate our income stream. We must maintain our monthly tuition income above $10,000 with a 3-month reserve of cash in savings.

 

 Additional income streams – cash outs and special events will be invested in the market since our President is a financial planner and stockbroker. We are currently exploring the option for using a bank to give us cash up front for these contracts (80cents on a dollar). This would be more effective due to the collection rate of bank loans under $5000 are over 90%. We are currently averaging 10 Black Belt Contracts per month at a base price of $3000. That would be on average $60,000 per month contract amount and leave $48,000 after the bank takes its cut. By investing the money in real estate and other businesses, we will be able to make up the 20% discount by floating the money and paying the school over the course of 30 months. 

 

On those contracts that we don’t send to the bank we will charge a high finance fee to entice 90 days same as cash:                                       

Tuition 20 new students per month @ $350 x 4 Months

                                Month 1      $7000

                                Month 2      $14000

                                Month 3      $21000

                                Month 4      $28000

At high Orange belt, about 4 months we will entice them into black belt or masters club at an average of $3500. Although we are anticipating a 75% renewal rate, we will conservatively figure 50%.

 

We will offer 6 months same as cash for BBC and MC. Average of $3500 divided by 6 payments at no interest would be $580 for six months.

 

                                Month1       $5800

                                Month 2      $11,600

                                Month 3      $17,400

                                Month 4      $23,200

                                Month 5      $29,000

                                Month 6      $34,800

 

By combining the renewals with the 90-day intro program we would generate approximately $63,000 per month. Retail sales, special events, belt test fees will grow as the student base grows to approximately $7000 per month which would take total gross to around $70,000 per month or $840,000 per year. 

 

We recognize that we have about a 50% drop out rate, but will attempt to collect as much as we can before they lose interest. Worst-case scenario would still equate to over $500,000 per year with the above scenario. With our investment strategy, we should be having enough resources to plan for retirement income for all our senior instructors.

 

Position for Growth

Other objectives we have set for ourselves include:

  1. Understand customers, competition and industry.
  2. Product/service/channel/customer congruence top in the area.
  3. Adjust for the growth by fields of interest.
  4. Balance people/management/business goals.
  5. Develop values and culture.
    6. Hire the best people.

 

We plan to add one club by fall of 200 and several more high schools this fall (2000) Through corporate funding and grants we will be able to offer some students scholarships at no expense to the students karate in the school system this year. 

 

Through our affiliations, we are now able to offer evening classes in specific areas using school gyms at a discounted rate. As the program grows we would like to see over 100 students in each club or over 300 students total. This should generate over $50,000 additional annual income plus belt test fees and seminars.

 

Management

How We Started

“Your teacher” founded MATA School in 1973. Instructor determined through market surveys that your town martial art schools were not marketing their product properly. He also determined there was a lack of dedicated self-protection/self-defense classes. Mr. Bryan learned that a well-marketed product with the proper management and consulting team would allow for a very profitable business.

The legal form of MATA School is a Your State Corporation being run by the “your style” Association, a ___ entity.

 

Management Team

Of the 5 people who make up the staff, there is the founder who holds the following positions:

            “Your teacher”, President

        XXXXXX, Vice President

        XXXXXX, Secretary/Treasurer,

XXXXXX, Instructor

XXXXXX, Instructor

 

The MATA School owns the national trademark and licenses it to the “your style” Association – a non-profit organization.

 

The founder and key managers of MATA School have combined experience exceeding 100 years in the martial art industry.

 

The strength of the MATA School management team stems from the combined expertise in both management and technical areas. This has produced outstanding results over the past 6 years.

 

The leadership and alignment characteristics of MATA School management team have resulted in broad and flexible goal setting. This will allow us to meet the ever-changing demands of the quickly moving marketplace requiring our services. This is evident when the team responds to situations requiring new and innovative capabilities.

 

Responsibilities

President

Oversees and manages operations

 

Marketing

Manage market planning, advertising, public relations, sales promotion, merchandising, and facilitating staff services.

 

Identify new markets, corporate scope and market research.

 

Sales

Manage field sales organization. Manage sales office activities including customer/product support/service.

 

Finance

Manage working capital, including receivable, inventory cash and marketable securities. Perform financial forecasting, including capital budget, cash budget, pro forma financial statements, external financing requirements, and financial condition requirements.

 

Research and development.

Staying up with new trends, developing better teaching methods, attending seminars, and searching out ways to improve the business.

 

Operations

Perform service, manufacturing, and raw materials’ management and allocation functions.

 

Outside Support

Outside consultants, including highly qualified business and industry professionals/experts, will help our management team to make appropriate decisions and take the most effective action; however, they will not be responsible for management decisions. They include International Martial Arts Management Systems.

 

Board of Directors

 

“Your teacher”:                   President

XXXXXX              Vice President

XXXXXX: Secretary/treasurer

 

Management Team

 

“Your teacher”, President

“your teacher”

 

“Your teacher’s professional experience includes many different areas in the martial art industry including business consulting for the past 6 years.

 

He has been involved in the instruction, financial management, and marketing aspects of the martial arts. “Your teacher’s personal experiences cover many diverse areas including a financial planner and stock broker.

 

People/Talent We Require

MATA School development team recognizes that additional staff is required to properly support marketing, sales, research, and support functions.

 

Currently, the MATA School is composed of 10 people; within the next couple of years that number will increase to 20 people to meet the demands of the projected market. We currently provide instructors and sales staff to other schools in the association.

 

Management: We will evaluate an increase in management personnel when we open another commercial location.

 

Sales: We are currently trying to hire and train additional sales staff for our affiliated locations. We will be compensated 5% of the gross sales for this service.

 

Marketing: Additional marketing staff may be hired in the future but currently the program directors are handling all marketing in conjunction with the school owners.

 

Instruction: We have added 2 part time instructors to handle increased student load. When we open another club we will hire another part time instructor and a full time administration person.

 

Government Regulations

 

MATA School is operating in the martial art industry under no regulation.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Product and Service Description

Proprietary information is available to investors upon signing of Non-disclosure Agreement.

 

Martial art instruction, our principal service, consists of daily classes in Karate and self-defense/self-protection. These classes will take place in our school at a variety of times. MATA School will offer monthly seminars to discuss topics related to martial arts. We will also utilize local daycare centers to instruct Karate to children on site. This is an untapped resource in the Your State Springs area. 

 

We are also currently teaching in the local high schools during PE classes. This unique approach to instructing martial arts will give our customers every opportunity to participate.

 

MATA School will offer martial art instruction and martial art equipment. Development of other services is in progress. All services from MATA School have personal care and dedication to students.

 

This capability for personal care and dedication is a unique feature enjoyed by MATA School and our customers.

 

Current Products and Services

 Traditional Karate instruction

  1. Other instruction
  2. Self-defense instruction
  3. Instructional videotapes
  4. Martial art equipment
  5. Day care center Karate instruction
  6. Monthly seminars

 

Through advanced marketing features including a wide variety of class times and monthly seminars, MATA School will provide instruction to fit into all of our customers’ schedules. A unique approach in daycare instruction will provide an added advantage over our competition and an increased convenience for our customers. Self-defense/self-protection classes will also be unique to MATA School.

 

Proprietary Technology

 Our products that are locally produced (e.g., video tapes) are protected under the general copyright laws. The name MATA School is a national trademarked name.

 

Pay Back

For most customers, martial art instruction will pay for itself in terms of increased confidence, increased stamina and flexibility, reduced stress and tension, improved coordination and balance, and the ability to develop self-discipline to achieve their goals in every aspect of life within six months.

 

 

 

 

Regarding cost savings, MATA School instruction will save our customer’s money in terms of availability of classes and improved convenience by establishing our dominance on the north side of town. Some non-monetary benefits of our product and service include: entertainment, improved appearance, betters health, overload reduction, self-confidence, and self-esteem and stress relief.

 

Useful Purpose and Benefits

 

Martial art instruction provides physical benefits: improved reflexes and coordination, increased energy level, improved appearance and muscle tone, increased strength and stamina, better balance and body awareness, weight loss and control, and better health and longevity.

 

Martial art instruction provides mental benefits: improved self-image and self-esteem, increased self-confidence and positive attitude, greater self-discipline and a “can do” attitude, improved concentration, work and study habits, reduced stress and increased levels of relaxation.

 

These combined capabilities provide the student with the most well rounded approach to physical activity known.

 

In addition to the benefits stated above, MATA School instructors have a proven instruction background brought from around the world. This will allow us to display a proven track record to our customers. Our commitment to our community and students will display an ethical and moral martial art school.

 

Features Highlights

 

Martial art instruction is an extremely beneficial fitness program, requiring dedication to master. For example:

 

One of the features of martial arts is the ability to defend oneself and family.

 

Martial art instruction allows students to reduce stress.

 

Flexibility is another powerful advantage. This includes the ability to reduce injuries.

 

One very strong capability is martial art instruction’s ability to increase one’s self-confidence.

 

Compared to traditional fitness programs, martial art instruction will develop a skill along with better fitness.

 

In addition, martial art instruction does not require expensive equipment or a long period to gain benefits.

 

 

Key Benefits of All Products and Services

 

The major benefits of the combination of all products and services are improved self worth in the ability to control all situations personal and professional.

  

Planned Products and Services

 

MATA School plans to continually develop new products and enhance existing ones. New products and services to be developed in the future include: organized martial art camp outs, nationally recognized seminars, and the manufacturing of martial art equipment.

 

 

Market Analysis

 

Market Definition

 

Key points in defining the market segment for martial art instruction are: who will be students, what percentage are women, what percentage are children, what percentage are adult men, what types of jobs do they have, what do they read, what percentage are teenagers, where do they live, are the majority of students coming from one, three, six or more miles away?

 

MATA School’s market area is the entire city of Your State Springs but will concentrate on the north side of town as its immediate concern but through its association work on the market share of the entire area. The current population of this market area is around 500,000. Of the total population 1 to 2 1/2 % will be involved in the martial arts. This equates to around 5000 current potential customers. 

 

Our goal is to increase the potential customers to 5% in 5 years. This would mean over 30,000 students. If each of the existing schools double to two commercial locations and control all of the public schools within a three mile radius of these locations, we should be able to control over 50% of that market or 15,000 students. With the student value of about $1000 per student, this would mean a gross potential of $75,000,000.

 

Martial Arts Market

 The future of the martial art business throughout the nineties and into the twenty-first century is excellent. Martial arts clubs have increased from 4,665 in 1987 to more than 7,000 in 1992 to over 20,000 in 2003. The martial arts industry is over $3.1 billion a year.

 

Students of martial arts are looking for quality, personal improvements, convenience, and high value.

 

Current development and marketing of martial art instruction has resulted in the need to advance marketing skills to reach the potential students.

 

The abilities to reach daycare’s/ public schools and provide dedicated self-defense/self-protection classes is unique to MATA School products and services.

 

Market research suggests that there are currently only 1% of the potential customers in the local area involved in the martial arts. The martial art industry, as a whole, is looking toward 2 1/2% of the population for the expansion of existing products and services.

 

The stability of this market segment is certain, based on competition’s product category performance over the past two years.

 

Referenced sources agree that the major trend is for advanced marketing. The trend has been toward the development of passive marketing. Therefore, the latest development of advanced martial art marketing drastically increases the enrollment of martial art schools.

The area of greatest growth in the martial art market is in the area of youth instruction.

 

The major market segments are:

 

        Males and Females between the ages of 3 – 55

        living on the area ofYour State Springs.

 

This segment of the market is generally based on martial art instruction as averaged from the United States. Retail prices average between $40.00 to $100.00 per month. MATA School representatives will handle the vast majority of sales in this category. The minority of sales will be through outside sales channels.

 

Of the total population of Your State Springs(500,000 potential customers), approximately 1 to 2 1/2% will participate in martial art classes, of which 44% to 60% will drop out.

 

The market potential for a martial art school in these quantities, we find that most people are willing to spend around $5000 for lessons. We will offer an introductory program for $1600 and a Black Belt Club for $3000 and a Masters Club for $4200.

 

Strengths

 

In terms of product and services strength, MATA School has several distinct advantages over the competition.

 

First, is its marked advancement in marketing over all other competition.

 

MATA School will provide a wide range of classes six days a week. This will be one of the only schools that are open full time in the area.

 

Daycare programs offer added convenience to the parents and start an early association with customers. Our high school programs will offer additional income steams during the day and will be a great marketing stream for the rest of the family.

 

MATA School dedicated self-defense/self-protection class allows for the introduction to martial arts at an inexpensive level.

 

Through our association with the leading marketing and consulting companies, which other schools do not use, we will be able to dominate the market within two years.

 

Our most powerful assets are value and service. MATA School will aggressively recruit students by our unique advertising approach utilizing its unique advertising and marketing concepts.

 

The corporate strengths are personal resources. We have established our financial resources so that we will be able to provide a sound product and quality marketing.

MATA School instructors enjoy an excellent reputation in the community, having been involved with the association for over 6 years.

 

Weaknesses

 

There are martial arts schools in the area that don’t teach the same values and ethics that we do. This could indeed give the martial arts a bad name and hurt the industry in general. In addition, there are many activities and events that don’t always display the martial arts in a positive light. We need to compensate by reaching more people than are touched by negative ideology. Your State Springs is a highly conservative and heavily Christian oriented community and we will need to make sure that we don’t unintentionally offend any groups with our Japanese/Okinawan karate. By emphasizing our American karate style and not mediating in class should help.

 

  

Opportunities

 

The upside potential for martial art instruction and self-defense training in Your State Springsis increasing.

 

Based on existing conditions introduced in the Present Situation and Strengths/Weaknesses analysis, apparently over 1000 active students per school will be available within the next five years.

 

 

 

Unexplored Opportunities

 

An altogether new application for this product and service would be tapping the daycare markets.

 

Further opportunity for our product exists in the business markets by providing self-protection workshops and teaching in the school systems.

 

The estimated cost of entry into these two fields is small and only involves time.

 

Still another possibility for development involves the production of self-protection and martial arts videotapes.

 

Lastly will be having special events twice a year in a resort area. (Seminar, tournament, act) and use our existing travel agency to get great group discounts. This will enable us to charge an extra $50 per person and still be able to be way below what an individual could get the same package for. Imagine a 4-day all-inclusive trip to a great resort for a couple of hundred dollars. With our existing student base we could take over 100 students to an event like that from Your State Springs alone.

 

 

 

Customers

 

With few exceptions, the basic martial art population falls into one of the following groups:

  1 Fitness Seekers

  2 Fear Motivated

  3 Fun Seekers

  4 Friends

  5 Fad Seekers

  6 Fanatics

 

Each of these personality groups will comprise the student make-up of our school.

 

FITNESS

 

The fitness industry is growing rapidly and martial arts offers nationwide appeal. This is by far the largest percent of students. People are always looking for an activity to lose weight and increase their fitness level.

 

Our research suggests that adult’s are looking for an intensive cardiovascular workout by way of kicking and punching.

 

 

FEAR

 

The students who sign up due to fear include men and women who have been the victims of assault. Some might know a family member or friend who was recently attacked. A rise in crime or a widely covered news story could contribute to an increase in the interest for self-defense training.

 

A solid self-defense program will put these students at ease. Delivering quality training will earn us a reputation that will carry on long after the students acquire the basic knowledge of self-defense.

 

FUN SEEKERS

 

MATA School has taken a position that students do take martial arts for fun. Children make up the largest percent of fun seekers. However, adults will need to enjoy the program to stay active. Adults that want to have fun are difficult to spot at times. They are often not willing to admit that they are in the program for enjoyment

 

FRIENDS

 

Friends that sign up for the martial arts might not have any idea of the benefits gained through the martial arts. They are here because a friend joined, and they just want to go along for the ride. The friend is a perfect way to increase student numbers. If one student is having fun, it is easy to have them bring in another friend to experience martial arts.

 

THE FAD MARKET

 

The fad markets are very hit and miss. Certain years this can be a large market. This market will follow in line with the current trends in the movies or on TV. The movies seem to raise the most interest in the martial arts. Other large and noteworthy events in can cause an influx of students. For example, when the martial arts were introduced into the Olympic games there was a dramatic increase into the martial arts arena. It is important to recognize the potential and target market to this group.  

 

They demand to be seen as special, to feed an appetite for prominence and social recognition. Once the realities of training are realized, they often leave. However, fad seekers are very welcome in the school, and they will provide a school with a wealth of friends and acquaintances, of which some will become dedicated martial artists.

 

THE FANATIC

 

The fanatic martial artist is eager to train in any type of martial arts. Most will be aware of karate of martial arts and have knowledge of other types. There are many reasons why the fanatic is attracted to your school. They might have heard that your school produces top tournament fighters. There might have been a recent encounter that your student performed well.

 

The fanatic becomes enthralled into the martial arts. Living and training continuously in the martial arts. It is important to handle these students with an understanding that they are not dedicated to the instructor but to the art. The instructor must work hard to keep these students very happy and challenged.

 

 

 

SUMMARY

 

The statements made about the various personalities outlined in the preceding six target groups are the main group of customers. The goal is to know what each customer wants and what motivates them to study. In this way MATA School will know in which direction to take each student.

 

MATA School will attract the majority of students from a six-mile area, ages between 3-55. Most of our students, 50%, will be under the age of 14 both male and female. The students will enjoy sporting activity and parents will have discretionary income.

Most will be first time buyers of martial art instruction.

Competition

 

Competitive threats today come from outside the martial arts industry. Indeed if a potential customer joins a non-affiliated school it is lost revenue, but with only 1% of the population currently involved in the martial arts, anyone joining a good school should work towards building the industry. The only time we look at another school, as competition is when they are performing less than appropriate standards, which will bring about negative word of mouth. The MATA School will try and build upon its association to develop a business association where everyone can gain more through teamwork. The MATA School products and services perform in virtually all aspects that students are looking for.

 

By offering the opportunity to study martial arts full time and the unique daycare, high school programs and self-defense/self-protection classes, our research suggests that our performance will be superior to other schools in our area.

 

In all comparisons, MATA School products and services provide more features and have superior performance over the competition’s products and services. In most cases, the number of differences is substantial.

 

Martial Arts Products and Service

 

Companies that compete in this market are numerous but it is our opinion none have the same credentials and reputation that we do. Some of the best competitors are black belts that Your Teacher has personally trained. It is the intention of this company to try and work together with the other school owners so that we can all achieve more.

Competitive Roundup

 

The competitive schools in the area have fallen into the trap of going month to month in an industry where we have a 50% drop out rate. The leading martial art centers have found that you can get around $5000 out of a student the first year, either through incentive for cash or long term contracts. We now have the ability to take contracts to the bank and get cash, which helps our cash flow capability. Our Master Instructor is a legitimate 8th degree black belt, the only one in the region. A combination of outstanding customer service, great sales strategies and tactics, principle based leadership, and a quality product indicates there is really no competition for our product and services.

 

 

Competitive Pricing

 

Many of the schools charge around $70 a month for lessons. We intend to charge around $100 a month or better for our services. We will offer our services through the school systems for $189 per semester, which will include uniform, manual, and association fees. If we can get 30 students per class, it will generate over $4000 per school or around $20,000 per 4 schools per semester. (One instructor should be able to test for schools a day) The after school program and in school programs will be a constant stream of leads for new students at the mainschool.

Observations and Conclusions

 

From the above information, it appears that the competition has overlooked market niche opportunities on which MATA School willcapitalize.

 

 

 

 

Rationale

 

Industry: Company must stay competitive as business matures.

 

Maturity: In the mature stages there are likely to be competing companies.

 

Competitive Position: The market is open. Competitors have not taken the same approach, as MATA School will.

 

Strategy: Product/service, price distribution, promotion strategies are straightforward.

 

Assumptions: Sales forecasts for new products/services are difficult to predict. Product/service acceptance is good, and sales estimates are considered conservative.

 

Management: Careful planning and clear objectives will lower the risk.

 

Past Performance: NA

 

Marketing Strategy

MATA School marketing strategy is to enhance, promote and support the fact that our products and services will offer a full time opportunity for the study of martial arts.

 

The overall marketing plan for our product and services is based on the following fundamentals:

 

Martial art instruction is offered to all ages enhancing their personal and professional lives.

 

MATA School will reach both male and female customers from the ages 3-55.

 

Over a five-year period, we expect to capture 5% of the area population.

 

To prove the value of our martial art product and services we can inform our specific target market as to the benefits of the martial arts. MATA School will accomplish this through: media advertising, word of mouth, yellow page ads, referrals, open houses, gift cards, charity events, daycare programs, high school program, promotional giveaways, lead boxes, movie premieres, exhibitions and demonstrations, flyers, brochures, newsletters, press releases, direct mail, and telemarketing.

 

Product Strategy

 

Martial art instruction should be treated as a long-term product and service based business.

 

As such, the target market segments to focus on are six target groups. Because of martial art instruction’s special market characteristics, seasonal and geographic, our strategy includes timely promotions and capitalization on the change in activities associated with the seasons.

 

Positioning

 

Consumers see our martial art instruction as a punching and kicking type of self-defense.

 

Martial arts offer unique benefits other than self-defense and can be exploited to arrive at a winning position in the consumer’s mind.

 

In terms of market segmentation advantages, we can use marketing to attract customers to the school to inform them of the many advantages offered. With these strategies, MATA School willachieve a winning position.

 

Reposition martial art instruction as a way to escape from daily stress and better yourself and your children.

 

Equipment, instructional material, and monthly seminars depend on the presence of our daily instructional activities to be effective.

 

Reposition the Competition

 

We can reposition our competitors by capitalizing on their inability to provide full-time instruction, and a variety of training styles.

 

MATA School will offer a wide variety of class times each day of the week. MATA School will offer Karate lessons, as well as weapons and Jujitsu, and dedicated self-defense instruction, as well.

 

Our competitors’ schools hours are only part-time, 3-4 days a week. MATA School will offer class six days a week. The competition has also very limited activities for the students. MATA School will offer seminars and tournaments to increase students’ enjoyment. The lack of marketing and advertising is the largest weakness for the competition.

 

The resulting Selling Basis for our product, then, will be increasing services to the student by making them aware of the benefits that come from involvement in the martial arts.

 

Therefore, our fundamental strategy for all of the advertising is to increase the potential customers’ awareness of the benefits of the martial arts and offer one on one introductory lesson.

 

Outside Suppliers

 

Direct Mailers                                 To be determined

Mailing House                                To be determined

Sales Material Printers                    To be determined

Direct Response Firm                     To be determined

Marketing/Planning Consultant      IMAMS/ Program director

Telemarketer                                   Hired at 5% of Contract

 

Marketing Responsibilities

 

“Your teacher” as President will be responsible for the following. Within two years, these duties will be reassigned:

 

New business development                                          

Sales generation tools                                                   

Corporate graphics standard                                       

XXXXXX as Vice President will handle the following:

Direct response promotion                                          

Telemarketing – scripts/training                                    

Product position and identification                              

Sales and training

 

XXXXXX as Secretary/Treasurer will handle the following:

Accounts receivable

Investments

Financing and collecting contracts

 

Selling Tactics

 

We will offer an introductory course for around $1500 and will entice the customer to pay 90 days same as cash. (After monthly billing check is over the operational expense amount). After about 4 months, we will try and sell the Black Belt Club or Master Club for an average of $3500 additional tuition. We will again entice them to do 6 months same as cash but will also be able to cash these contract to the bank for financing or use IMAMS for monthly payments. All advance payments must be invested or put into savings for future expense.  

 

Advertising and Promotion

 

MATA School willposition the company as a full service martial art school within the market identified.

Promotional Tools

        Gift Certificates

Brochures

        Information folder

        Equipment Catalogs supplies by Century Martial Art Supply

        Student handbook

        Student rank pamphlets

        Calendars

 

Advertising

        Targeted Advertisements

        Media Selection and Strategy

 

Sales Support

        Distributor and Retailer Support Packages

        Representative support (sales tools)

Feedback Loops

        Lead Generation

        Lead Referral and Follow-up systems

        Information gathering & dissemination

 

By capitalizing on daycare operation and self-defense/self-protection

  

 Public Relations

 

Gain acceptance in the community as the only full service martial art school in the area. Increase the awareness and name recognition among customers located on the north side of Your State Springs. As a non-profit we will attend many events including Chamber of Commerce, better business lunches, and all non-profit events. We will offer public service announcements on TV and “your teacher” will attend public speaking engagements to obtain recognition for the Association.

 

Strategy Review

 

All strategies are held to the following tests.

  The strategies define means for achieving the objectives set.

  The strategies are consistent with the evaluation of the marketplace and our capabilities.

  The return on investment is sufficient to justify the risks.

  The chances of a competitor executing a similar strategy are nil.

  The strategies are consistent with the political environment within the company.

  The bases of our strategies are factual, and not assumptions.

  The overall strategy will not leave us critically vulnerable to a shift in market behavior.

  The appraisal of the competition is open-minded and honest.

  Our strategy is legal.

 

Next Steps

 

Decisions on the conception of the school will follow the basis of the strategic plan.

 

Key decisions to be made in the near term (next year) are the location of the second school.

 

The information needed to make both of these decisions with confidence include:

        Availability of retail space.

 

Pricing and Profitability

 

MATA School prices on lessons are determined by local established prices and by the relative cost of industry standard profitable schools. Prices on equipment are the suggested retail price as determined by our wholesale supplier Dragon International.

 

Sign up fees are $1500 per student and $750 for each additional family member. Standard market prices range from $60 to $80 per month.

 

Karate, lesson prices per student will be as follows:

        $1500 for brown belt, about $5000 all the way to second degree

        50% deduction in price for each additional family member

 

Private lessons will be $25 per 1/2 hour, “your teacher” will charge $50 Per 1/2 hour. .

 

High school Karate lessons will be $189 per student per semester.

 

Self-defense lessons are based on a 4-6 week course and will vary between $45 -$85.

 

Testing fees will be $30 per test, white belt through Black. Black belt testing will be $150. These prices will include a certificate and a belt of the appropriate rank.

 

Seminar prices will vary from $20 to $50 depending on the speaker and any equipment issued.

 

Our prices are above that of our competition. We feel that this will give us an advantage and gain popularity in the industry as being the elite quality organization. Our testing fees are average.

 

Once our student number increases to 300 we will begin to increase our prices to maintain a student number between 300 and 500. An increase in student numbers above 400 will require us to hire additional staff.

 

The prices for our products and services are determined primarily by what the market will bare, and the cost of supplies.

 

It is important to know that perceived value pricing is inherent to our market profile.

 

Compared to the competition, our prices are average. Furthermore, we plan to offer greater advantages to our customers.

 

Different seasonal aspects of our market will not affect our pricing. In the martial art market we do expect seasonal increases and decreases in sales. During the summer months we expect that the sales will be lower due to more outside activities and during the fall and winter months, sales will increase as the weather changes.

 

We feel that our customers will pay between $4000 – $5000 for training all the way to Black Belt. Since the student is the most motivated during the first few months, we will offer a discount if they sign up to Black Belt or Master Club before green belt. Extra added value services will be added to motivate the customers to make this commitment.

 

Retail

 

The average student spends between $50.00 and $200.00 on equipment each year. Retention will increase due to an increase in tuition being paid up front. This will make retail, belt test fees and seminars more lucrative.

 

Direct Sales

 

Each student will have a worth of:

 

        Tuition                                                        $4000

        Seminars (av. 2 yr.)                         $50.00

        Testing Fees (6 yr. $25.00)            $150.00

        Equipment purchases                     $100.00

        TOTAL                                          $4300

 

        Worth of each student (1 yr.)         $4300

        Time 200 new student/year            $860000

        Less 50% attrition rate                   $430000

        Total net worth for year                 $430000

        Divide by 200 total sign ups          $2150

 

        Adjusted worth of each new student per year       $2150

 

Each sign-up will provide the school with $2150 in sales.

 

 

 

 

 

Discounts

 

We can take advantage of volume purchases by reducing the amount of additional family members. Paying for lessons all up front will increase the savings to the customer. We will offer added discounts to local youth groups from time to time.

 

Cooperative advertising sponsor pays 2-10% of purchases toward your advertising of their product or working with their group.

 

MATA School plans to review our pricing, products, and services margin every three months.

 

Should a new pricing policy be investigated, our potential profits will be increased.

 

Costs

 

Estimated cost of manufacturing product (i.e., video tapes) will require rental of video equipment at a current rate of $50.00/hr plus the cost of editing.

 

Selling Tactics

 

Current Selling Methods

 

We currently offer an introductory course in order to establish the value of the program and then sign them up for brown belt at that time. Up grades to the Black Belt Club occurs at about four months.

 

Sales

 

MATA School marketing strategy incorporates plans to sell our line of products and services through several channels:

 

  Direct Sales Force

Telemarketing

Joint Marketing Relationships

Feedback Loops

 

Lead generation will be primarily from referrals and lead boxes.

 

Lead referral and follow-up systems are being designed.

 

Direct Sales

 

The majority of sales will be through direct sales by the MATA School sales staff. MATA School anticipates hiring 2 additional sales representatives to cover additional markets.

 

We have chosen to use a direct sales force because our products and services require considerable customer education and post sales support directly from the company. Our price point, pricing structure, and profits are such that our costs of sales warrants a sale to be handled on an individual basis.

 

Telemarketing

 

Outside sales support

        *      Literature mailing

        *      Follow-up calls

        *      Order entry

Inquiry Response

        *      Order entry

        *      Literature mailing

        *      Marketing research

 

New Business Development

        *      Contact distributors, retailers, customers

        *      Schedule appointments.

 

 

 

Advertising and Promotion

 

 

MATA School recognizes the key to success at this time requires extensive promotion. This must be done aggressively and on a wide scale. To accomplish our sales goals, we require an extremely capable advertising and public relations team. Upon funding, we will draft a comprehensive advertising and promotion plan. We will advertise independently and cooperatively with distributors, retailers, and companies with whom MATA School has joint marketing/sales relationships.

 

 

Advertising and Promotion Objectives

 

Position MATA School as the leading martial art school in the area.

 

Increase company awareness and name recognition among businesses, and customers.

 

Generate qualified sales leads for field sales organization action.

 

Develop, through market research, significant information for immediate and long-term marketing plans.

 

Create product-advertising programs supporting the “benefits” position.

 

Coordinate sales literature, demonstration materials, telemarketing programs, and direct response promotions to capitalize on all opportunities.

 

 

Media Objectives

 

Gain awareness of company among customers.

 

Establish an image of MATA School as a traditional and ethical martial art school; an organization that is very professional, completely reliable, and offers the highest quality training available for students.

 

Maximize efficiency in selection and scheduling of publications to cover 3 to 55 year old customers with discretionary income.

 

Media Strategy

 

Position MATA School in a quality editorial environment consistent with creative objectives.

 

Select primary business publications with high specific market penetration.

 

Schedule adequate frequency to impact market with corporate image and product and service messages.

 

Where possible, MATA School willposition advertising in or near health and sports related information and appropriate editorials.

 

Employ special high-interest issues of major publications when possible.

Maximize ad life with monthly and weekly publications.

 

To get the most out of our promotional budget, our media coverage will be to focus on an active audience.

 

We will develop an advertising campaign built around the many advantages of training in the martial arts. We will begin with a “who we are” position and support it with ads that reinforce the benefits of training with MATA School. Most importantly, we will develop a consistent reach and frequency throughout the year.

 

Due to the nature of our product and service, it is necessary to run varying sizes of black and white ads.

 

Advertising Campaign

 

The best way to reach our potential customers is to develop an intense advertising campaign promoting our basic premise “what the martial arts will do for you.”

 

To establish a professional company image, the delivery and tone of our statements will convey that anyone can do martial arts, that the benefits are lasting and will help in all facets of life.

 

Ads will convey the look and feel of a professional and enjoyable company.

 

Our primary focus will be on social media, email marketing, word of mouth and our website.

 

The consumer mindset, as described in “Marketing Strategies” is conservative.

 

Ideally, after becoming familiar with our product and service, the consumer will automatically think of MATA School when they think of martial arts. They will pick up the phone or stop by our school for a free lesson.

 

To eliminate the biggest objections to immediate action, our advertisements must address that there is nothing to lose and the services are available immediately.

 

Because martial arts are so unique, it is important to develop a promotional campaign that is consistent and easy to understand.

 

Accordingly, MATA School has created a system of research and response to insure the maximum benefit of our advertising dollars.

 

Preliminary Media Schedule

 

See appendix for media schedule.

 

 

 

 

 

Promotion

 

In addition to standard advertising practices, we will gain considerable recognition through flyers, ads before martial art movies, lead boxes at youth activity stores, movie theaters, and cooperative advertising with youth activities. MATA School willbecome very active in the local chamber of commerce, promote attractive brochures, and have professional student information packets and handbooks. We will issue press releases for our grand opening and when the school is involved with certain activities. We will produce a newsletter every month and send it to local media agencies, students, and prospective students.

 

MATA School willpublish reports and papers for trade journals and technical conferences.

 

Ideal consumer actions would be to call or stop by the school for a free introductory lesson concentrating on the benefits of the martial arts.

 

Incentives

 

MATA School will provide free information packets to prospective customers and will offer free uniforms as an incentive to sign up quickly for lessons. In addition, free private lessons are also available as incentives.

 

MATA School will also acquire advertising specialties like coffee mugs, T-shirts, imprinted gifts and gadgets.

 

 

Direct Mail

 

MATA School will employ the use of direct mail. We will also distribute flyers in the local neighborhoods to announce the grand opening. Distributions will also follow a special promotion.

 

Corporate Capabilities Brochure

 

Will portray MATA School as the leading martial art school.

 

Front panel will contain name, address, phone number, and a pleasing graphic or picture.

 

Inside flap will have testimonials by students and parents.

 

Main body will contain a brief description of Karate, a brief description of the instructors’ qualifications, and reasons to study at this school.

 

Back will have standard questions answered.

 

Schedules and prices will be an insert to the brochure.

 

 

Information Kit

 

Will be a more detailed brochure. Each specific market will be addressed: adults, parents, and children. They will include information for the Karatestudent, the Other Style student, and the self-defense student. We also are planning on a DVD info kit.

 

Sales Support Collateral Materials

 

Prepare a form to fill out when a potential customer calls.

 

An informative letter will be sent after contact with a potential customer.

 

Sales follow up matrix.

 

List items that will help the communications process                        

                    Ads                         Newsletters 

                    Brochures                Business Cards

                    Price Lists               Catalogs

                    Promotions             Questionnaires

                    Direct Mail             Stationery

                    Handouts                Telephone Scripts 

                    Invitations               Videos

                    Letters

 

Investment In Advertising And Promotion

 

For the first 12 months of our project, advertising and promotion required more but on an ongoing basis, we feel that we can budget our advertising investment as 10% of total sales. We will allocate 5% of gross sales to the telemarketing department of those people that join the school.

 

This figure is necessary because of the specific goals we have set.

 

Compared to the martial art industry, we are investing the average in promotion. As compared to our competition, we will invest above average. This is necessary to achieve a dominant position in the local area.

 

 

Public Relations

 

Objectives

 

Position MATA School at the leading edge in providing martial art instruction.

 

Increase MATA School awareness and name recognition among customers in the YourState Springsarea.

 

Strategies

 

Develop a sustaining public relations effort, with ongoing contact between key editors and top-level personnel.

 

Develop a regular and consistent product and services update program for major target media. Keep key editors abreast of martial arts enhancements and innovative products and services.

 

Develop a minimum of one technical article written by key instructors to be placed in martial art publications within the next 12 months.

 

Establish contact with editorial staffs for the purpose of being included in media fitness “round-ups,” or where competing products and services are compared. This exposure builds credibility and market acceptance.

 

Company Background

 

Produce a complete company background on MATA School to be used as the primary public relations tool for all target media editorial contact. This is also effective for inclusion in press kits, dealer kits and sales packages. The background would include sections on the following broad subjects:

Overview of the Market: size; characteristics.

 

The Market need in 1997, present & future.

 

The Company

History

Management Philosophy

Brief sketches of Top Executives

 

The Products and Services

Market niches

 

Press Releases

 

Develop a series of press releases on the entire product service area. Prepare press releases for each new product and service introduction, technical development, participation in a major event, awards and recognition for product and personnel excellence and performance, etc.

 

Editorial Visitations

 

Over the next 12 months, invite the most influential reporters and editors from the local area for a visit to MATA School. During the visit, each editor would receive a complete facility tour, product briefing, and an opportunity to interview the chairman, president, instructors, or students. If logistics or timing is a problem with the interviews, then these could possibly be arranged later.

 

Internal/External Newsletter

 

Produce a four-page, black-and-white newsletter to serve as an informational piece for internal personnel and customers. The newsletter would highlight major developments, such as key stories, successful students, significant events, and product development news. Internally, the newsletter would be targeted to all students and instructors. Externally, the piece would be targeted to key customers and prospects.

 

 

Business Relationships

 

MATA School has formed some very important relationships with major companies in the industry. The following is a list of existing relationships:

 

Supplier Relationships

 

MATA School has established a long relationship with the various supply companies.

 

Joint Development Efforts

 

MATA School has been involved with joint development efforts with several companies including International Martial Arts Management Systems.

 

 

 

Conclusions and Summary

 

MATA School’s approach to operation is aggressive. By attacking the market and applying the procedures outlined, we will launch MATA School into a very profitable position. Initial outlay in comparison to competition is large. However, MATA School will return a larger than average profit in long run.

 

Capital

 

Total Capital Required:

        1 Months expenses             $10,000

        Goal of 6 month safety       $60,000 in reserve

        Retirement Goals                $500,000

        Total                                   $560,000 in reserve

 

 

Profit

 

We expect profits this year and will attempt to put into savings 2000-3000 per month within 4 months.

 

Appendix

 

Financial Projections and Goals

 

Currently the schools are collecting dues on a monthly basis and with our new financing proposed we are going to be looking at $70,000 – $80,000 per month in contract amount. By giving the bank 20% discount off the top to collect the money, we will still have available $60,000 per month to invest. We will pay the schools $100 to $200 per month until the principle is paid in full but that will allow us to make up the difference by investing the money. Our overhead is around $20,000 per month and we would like to have over $200,000 invested at a rate over 10%, which would enable us to never touch the remainder of the principle as we make more deposits. (Current real estate investments are making over 50% annual ROI!) In addition, we have contacted several schools in town (over 6) that would be willing to finance their contracts, which could generate a nice cash flow for the investment company.

 

Notice: Currently our monthly billing check has dropped so until we get that back up to $30,000 per month, no cash outs will be solicited. Investments are doing great and growing.

 

Business Plan Structure and Content

Business Plan Structure and Content

 

Mission Statement

What business are you in now and what business do you want to be in? This may seem like a very strange question; it should be obvious what business you are in. However, this is not necessarily the case. Some studios start out teaching family self-defense and they start doing videos and end up being half in the video business and half in the studio business. Other studios may be a full-service studio; teaching groups, privates, putting on seminars for the community and selling martial arts supplies. Others may start out as a full-service studio and end up primarily as a tournament studio. The problem is that all their advertising and promotional literature says one thing but what they actually do is something else.

By clearly defining what business you are in when you open your studio or what business you are in now and what business that you would ultimately like to be in two or three years down the line, you will give yourself a clear path toward your goals. For instance, if you plan to open up a full-service studio now but your goal in two years is to develop assistant instructors and open three more studios under your direction, put that in your mission statement.

Note: The mission statement is often included in the overview when using the plan to attract outside funding.

The Overview 

Written in a narrative form, this section is an overview of your business. Keep it brief and to the point! The first few sentences are important and should capture the reader’s attention, making him want to read further. Tell the reader in plain language:

The opportunity that exists, what market it addresses and what your initial success has been or what your research has uncovered. Show why the martial arts is a growth industry on a national and local basis.

Why your studio concept is unique and what special benefits your studio will offer and provide to attract a steady flow of potential students.

What your market potential is and how you expect to gain it and maintain or increase your share. What promotional tools will you use?

How your studio will out-perform other martial arts studios. What your competitive advantage is.

Describe the main players, i.e. yourself, instructors and management personnel. Why are they immanently quali­fied to succeed? What is their experience?

How much money has been invested to date and how much additional funds are needed. What is the expected rate of return on investment and how will it be paid back.

Summarize your business strengths and advantages and how they will contribute to your success (ensure your success).

End with the fact sheet (See Appendix A)

 

Key Personnel

Describe your professional background and why you are you qualified to run a martial arts studio. List your training and teaching credentials. List your educational and business background. In­clude information on any civic involvement or award. Describe your personal affiliations with charitable, social and business associations. List some of your other interests and hobbies. De­scribe your personal and business objectives. Above all blend this information to form the clear conclusion that you are amply qualified to attain success in this studio venture.

You should also include the resumes of your assistant instructor, office manager, and any other key personnel that are an integral part of running a successful studio.

 

A Professional Team

If you employ the services of an accountant, lawyer or professional consultant on a regular basis, in­clude a paragraph on their individual capabilities and how they fit into your management plan. By expand­ing the scope of your management team to include such people, you’ll lend a far greater air of confidence to your operation and to any potential investor.

Having honestly reviewed the skills possessed by yourself and your staff, you should immediately take steps to improve performance and skills in any area that appears to be weak. For instance, if your assistant instructor is still lacking in teaching skills, make a definite time and commitment as to when you can upgrade his skills. Failing to make this commitment will result in procrastination and the missed opportunity to immediately improve your studio’s performance.

If you, yourself, are lacking in certain business skills, face the

problem and take immediate steps to rectify them. By investing in this manual you already have taken a giant step in this direc­tion. If you still need more help, seek it out. It may come in the form of part-time college classes, seminars or additional materi­als on sales and management, i.e. audio tapes and books. Do not be afraid to ask students who may be experts in their chosen field to give you advice on specific topics such as bookkeeping, computers or marketing.

When all else fails or time constraints restrict your quest for

knowledge, invest in professional help. Although this may seem expensive, five hours with a computer expert or sales trainer can often be far more effective and ultimately less expensive than hundreds of hours of trial and error.

 

Marketing

Who is your target market? This will depend largely on your personal philosophy and teach­ing methods. The most success­ful studios that we have found do not limit their market in any way. They target children, teen­agers and adults. They market not only to men but also to women, families and special interests groups. They segment the mar­ket to appeal individually to each of these groups and then design courses to specifically meet these individual needs. In this way, a successful studio can offer hard-core classes for some and still cater to kids, women and soft-core students by teaching classes at different times, different days and utilizing different teaching methods.

Over a period of time, you should observe, collect and record any data that you can to help build a picture of whom your typical student really is. This can be done by:

  1. Personal observation

If it is obvious that the great majority of students who attend your classes are children between the ages of five and nine, make a note of it. If students consistently talk about things that they read in a specific newspaper, make a note of it. In short, take note of anything that might be useful.

 

  1. Hard data

You can receive a wealth of information on which your market really is through your application process when you initially enroll each student. Your form should provide you with their address, age, and reasons for study. Other questions can be added to this form in order to obtain additional pertinent information. See Appen­dix B.

 

  1. Student surveys

Student surveys can be utilized at various times to obtain specific marketing information such as which publications people read, which radio stations they listen to and what other activities they participate in. See Appendix B.

 

  1. The point blank ask them method

When all else fails, gain market information from your students through casual conversation and questioning. By learning more about their personal habits and activ­ities, you can greatly increase your knowledge and marketing effectiveness.

 

Define Your Target Market

Define how large your target market is by drawing a three to five-mile radius around your location. (The actual size of the circle that you draw depends upon the density of your population. The circle will be larger in a rural area and smaller in a metropolitan area.) Next, find out how many potential students are encompassed within. You can obtain this information from maps, realtors, city hail, the census bureau or your local library.

Your target area should include at least twenty to thirty thousand people to ensure success. This figure should also include a healthy amount of 5 to 55-year-old people, your prime market.

 

Growth Potential Of Your Market

Are you located in an area where people are fleeing to the Sun Belt where the imminent closure of a military installation could have a devastating effect on the regional economy? If this is the case, consider relocating to a high growth area. Many areas of the United States such as Nevada, Florida, California, and Texas are enjoying unprecedented population growth. Examine your chosen area and plain in detail how the growth or continued stability can improve your chances of success. Factors of importance include the long in the commitment of major employers such as Campbell Soup Company, IBM or Xerox to the local economy. An area that offers this type of stable economic environment with a middle-income e will often produce the optimal balance of interest and ability to purchase martial arts lessons.

 

Seasonal Factors

Another major factor in considering your potential market is the availability of access to this market on a year-round basis. In places such as Arizona and Florida, the population swells dramatically during the winter months, thus creating an increased need for services. In the summer, when temperatures soar into the hundreds, the number of people that you will be able to attract will be far less. These factors must be considered and addressed in the business plan. Your business plan should discuss the methods by which you will optimize business in the winter and minimize your student loss during the summer. Identify any seasonal influences in your area and discuss how you will minimize or maximize the effects in your favor.

Major benefits of your service

In this section, you must list all of the benefits that you can think of as to why someone should study the martial arts. Do not just list reasons that appeal to you but try to cover every possible angle. Refer to the Sales section, for further insight into this topic.

Clearly define why your studio is unique and better than competing studios in your area. For instance, are your teaching credentials stronger? Does your style have a broader market appeal? Are your teaching methods sounder? Whatever reasons you come up with that make your studio unique will become your image state­ment. Be sure that it accurately reflects how you want people to perceive your studio, as you will be stuck with it for a long time.(see marketing quick tips on positioning and defining students)

 

Advertising And Marketing Strategy

 

Clearly, state your income goals and how each individual marketing tool that you use will help you attain them.

What advertising media will you use to attract people within your defined market area into your studio? Check out local papers, radio stations and magazines and match their market profiles with the customer profiles that you have developed. See which ones most closely resemble that of your market.

 Accurately define how much money you must spend on each advertising and promotional vehicle that you will use to reach your market. Specifically outline not only how you intend to gain Market share through advertising but also, how you intend to maintain this market share through newsletters, sales letters, and their promotional tools at your disposal.

Outline plans for your print display advertising; yellow pages, newspapers, coupon mailers, etc. Include an expense report to stimulate the cost of promotions, events, tournaments, public demo­nstrations and seminars that you plan to do to increase your studio income. Show in the different ways in which these promotions will benefit your business. Clearly outline the expected response from each marketing campaign that you plan to undertake.

Estimating Student Value

Estimate the amount of money that you expect to make from each initial sign up, how long you expect each student to stay and how much income you expect to gain from each. It is helpful to es­timate the lifetime val­ue of your average stu­dent because then you will clearly see how much money it is worth spending to get a new student. Take into ac­count average drop out rate, lessons, testing fees, seminars and equipment purchases. You could also limit this estimation to a one-year period or any other pe­riod of time that makes sense to you. Below is an example of a one-year period.

Your sign up fee is . ………………………………………………………………………………………………75.00

Lessons ($65/month x 12)………………………780.00
Seminars (average 1/yr.)………………………………35.00
Testing fees (3/yr. $25 ea.)……………………….75.00
Equipment purchase…………………………….190.00
Total for one year…………………………….$1155.00

This is the worth of each new student if he stays for one year. If you estimate that you will enroll 250 new students each year and determine that only 40% of those students will last the year (this results in a 60% attrition rate), your figures will look like this:

Worth of each student (1 yr.)………………….1155.00

Times 250 new students/year………………288,750.00

Less 60% attrition rate……………………..173,250.00

Total net worth for year……………………115,500.00
Divide by 250 total sign-ups………………115,500/250
The adjusted worth of each new student…………$ 462.00

The total adjusted worth of each new student after factoring in the drop out rate is $462.00, not the original figure of $1155.00. (This value could be further refined but should give you an idea on how to proceed.) You now have a figure from which you can determine the net gain if you boosted enrollment figures, how much you will spend to acquire new students, project sales, project what percent­age of your income will come from new student enrollment, determine the value of an ad campaign, etc. Note that you can also see how much more could be had if you could lower your attrition rate!

 

Competitive Analysis

Analyze your competitors carefully. Check out each and every studio in and around your market area. Look not only for weakness­es that you can capitalize on but also strengths that you can learn from. Write up a profile of the most successful of these studios and try to answer as accurately as possible the following questions:

 

  1. How long have they been in business? A long time would suggest stability and a strong market awareness. Is the location a good one? If the studio has been there a long time, the rents may be considerably lower than the market average, allowing him a competitive advantage in the crucial area of operating expenses.
  2. Determine how many students they have or least note if their classes appear full. Drive by at different times of the day and personally observe these things for yourself.
  1. Does the instructor have a good or poor reputation?
  2. Does the instructor carry high rank? Does he teach classes himself or assign duty to a lesser ranking stu­dent?
  3. What type of marketing and advertising do they em­ploy? Is it high quality and professional like the meth­ods and ads in this manual or are they poor and amateur­ish allowing you to capitalize on their ineffectiveness?
  4. What do they charge? Is it higher or lower than what you would charge?

Upon gathering as much data as you can, begin to develop a marketing plan which outlines ways in which you can capitalize on your competition’s weaknesses and combat his strengths. Armed with this manual, you already have an advantage in advertising, use it and any other tools at your disposal to further your studio’s position in the marketplace.

Note:   It is very easy when embarking on a new venture or revitalizing an old one to brush off your compet­itors with casual statements and false bravado. “I’m not worried about the guy up the street, he’s a phony.” It is imperative when performing these tasks that you be brutally honest and objective. If for emotional or personal reasons, you cannot perform this task objectively, find someone un­tainted by your bias that can. The results of this analysis are too important to your success to let your personal feelings influence the results.

 

Operations And Procedures

Before you begin to outline your operational procedures, you should first set some goals. What needs to be done in order to start or re-energize your studio. Set timelines for the completion of each task. Make sure that your goals are obtainable within the time frame that you set. Setup provisional measures for what you will do if you do riot reach these goals.

Outline in detail the physical, management, marketing, financial and other steps that will be necessary to actualize these goals. As you define each task, assign the duties of completion to a specific person.

If your studio employs more than one instructor or you plan to expand in the near future, set up a channel of command. Keep good accounting records and outline your procedures in your business plan. Clearly define your administrative policies. How you will handle billings, payments, banking, etc.

Clearly define your operational hours, prices, bad check policy, and day-to-day business activities. Spell out clearly how you want these to be handled. Do this in such a way that someone totally unfamiliar with your business could read them and follow them implicitly. Set up a discount schedule for students who want to pay three, six and twelve months in advance; there’s nothing worse than charging students different amounts. The key word in day-to-day operations is consistency. If the sign says you open at noon, open at noon; if you close at 9 pm, don’t go home at 8:45 pm.

How will you protect the business against lawsuits due to contract disputes or on-premise injuries? Do you plan to carry liability! accident coverage? Outline the cost of premiums, the amount of the coverage you will carry, terms and limitations, and the name of your insurance company and sales agent.

List items that you will carry in inventory to satisfy supplementary retail sales. Provide a list of the suppliers, persons to contact and the individual procedures for ordering and billing Decide now how you will cope with fifty extra students, what your personal requirements will be and how you will train such person­nel. The goal of this section is simple; cover every possible procedure now and it will save time, confusion and embarrassment later.

Financial Statements & Projections

This section is especially crucial if you are apply­ing for funding. How much money do you need to start up and operate your business? When will you need these funds? How will the money be used, over what time pe­riod and with what posi­tive effects? How do you pose to raise these funds; personal funds, investor capital, bank loan, etc? What will you offer as security? Detail an item-by-item cost of your new or revitalized studio’s startup costs.

List any existing investment in your business and the source. When and how do you propose to pay back the funds? What is the rate of return that you are offering? Why is it a good investment?

You must be realistic in your projections. Consider the amount of detail that you will want in your financial statements. These statements should allow you to clearly see the current financial state of your business and allow you to accurately predict future cash needs slow periods, busy periods and places where you could be more profitable. See Appendix A for the necessary forms.

As you do your financial projections, you must also provide an explanation of your data and any assumptions made.

Example:

If you make the projection in your pro forma Profit and loss statement that your second month will produce an income of $3600 dollars, you must explain how you arrived at that assumption. “Due to a strong advertising campaign, it is quite reasonable to expect a minimum of twenty people to sign up at $100 each, producing $2000 in income the first month. The following month sixteen of the original twenty will remain enrolled and twenty new people will sign up, producing a second-month income of $3600 dollars.

Financial information should start with past and a current profit and loss statements for your studio and in some cases your prior two years tax returns as well. If none exist you must create an estimated profit and loss based on your best estimates of income and expenses. This is called a pro forma. You accomplish this by detailing a month-by-month expense report and a month-by-month income report.

The Pro Forma Statements

The pro forma are estimated statements based on certain assump­tions that you make about your business, i.e. number of new sign-ups per month, estimated advertising and operating costs, the longevity of each enrollment, etc. It also may contain known facts, for instance, a lease payment that will remain constant for the next two years.

The pro forma can also provide you with a goal to shoot for. When making a pro forma, it is best to do three different ones showing a worst, best and probable scenario. Prepare statements for your immediate year and for your next two years. Your current year should be broken down by the month and the second and third year by the quarter. Pro forma are best handled by a personal computer if you have one. Several good programs are available on the market.

The pro forma statements that you will be interested in are found in Appendix A. They include:

Profit and loss statement

Measures how profitable you are now or expect to be. It is a detailed account of your various sources of income and expense categories. Your income minus your ex­penses gives you your pre-income tax profit. A pro forma profit and loss statement is simply a prediction of future sales and expenses and can be used to determine at what point in time a new business will break even. 

  1. What price will you charge for your programs, for your merchandise?
  2. How do you determine these prices?
  3. Is your price suited to the economic status of your target audience? (Hopefully, you chose your location based on accurate demographics.)
  4. Is your pricing in line with that of your competition or do you have unique circumstances that will allow you to charge more?….or less?
  5. Have you set your price too low? Example: It would take 200 students at $25 each to reach a break-even of $5000. It’s unlikely that such a low price would be made up for in volume
  6. How many students can be taught per class? How many classes will be needed? Will this require another in­structor, which would affect the expense figure?

By using the forms contained in Appendix A and playing with the figures back and forth, you should be able to arrive at a reasonable starting point.

However, whatever blend is needed to attain this figure is not important; achieving it fast is. Reaching your break-even point should command every once of effort that you can muster. Until this point is reached, you must put in longer hours, give out more flyers, push for more referrals and generally perform over and above the call of duty.

Careful planning in combination with your own teaching skills and the sales and advertising ideas in this manual should go a long way towards helping you succeed.

How to Create a Business Plan

How to Create a Martial Arts School Business Plan

Extensive Video Course

 

How to Create a Business Plan Video Course

Module 1 - Introduction

Module 2 - Getting Started

Module 3a - The Industry and the Company Part 1

Module 3b - The Industry and the Company Part 2

Module 3c - The Industry and the Company Part 3

Module 4a - Market Research and Analysis Part 1

Module 4b - Market Research and Analysis Part 2

Module 5a - The Economics of the Business Part 1

Module 5b - The Economics of the Business Part 2

Module 6 - Marketing Strategy

Module 7 - Product and Service Development

Module 8 - The Management Team

Module 9 - Critical Risks Assumptions and Problems

Module 10a - The Financial Plan Part 1

Module 10b - The Financial Plan Part 2

Module 10c - The Financial Plan Part 3

Module 11a - Proposed Company Offering Part 1

Module 11b - Proposed Company Offering Part 2

Module 12 - Conclusion

Sample Martial Arts School Business Plan

Sample Business Plan

Business Plan Structure and Content

Mission Statement

What business are you in now and what business do you want to be in? This may seem like a very strange question; it should be obvious what business you are in. However, this is not necessarily the case. Some studios start out teaching family self-defense and they start doing videos and end up being half in the video business and half in the studio business.

Other studios may be a full-service studio; teaching groups, privates, putting on seminars for the community and selling martial arts supplies. Others may start out as a full-service studio and end up primarily as a tournament studio. The problem is that all their advertising and promotional literature says one thing but what they actually do is something else.

By clearly defining what business you are in when you open your studio or what business you are in now and what business that you would ultimately like to be in two or three years down the line, you will give yourself a clear path toward your goals. For instance, if you plan to open up a full-service studio now but your goal in two years is to develop assistant instructors and open three more studios under your direction, put that in your mission statement.

Note: The mission statement is often included in the overview when using the plan to attract outside funding.

The Overview 

Written in a narrative form, this section is an overview of your business. Keep it brief and to the point! The first few sentences are important and should capture the reader’s attention, making him want to read further. Tell the reader in plain language:

The opportunity that exists, what market it addresses and what your initial success has been or what your research has uncovered. Show why the martial arts is a growth industry on a national and local basis.

Why your studio concept is unique and what special benefits your studio will offer and provide to attract a steady flow of potential students.

What your market potential is and how you expect to gain it and maintain or increase your share. What promotional tools will you use?

How your studio will out-perform other martial arts studios. What your competitive advantage is.

Describe the main players, i.e. yourself, instructors and management personnel. Why are they immanently quali­fied to succeed? What is their experience?

How much money has been invested to date and how much additional funds are needed. What is the expected rate of return on investment and how will it be paid back.

Summarize your business strengths and advantages and how they will contribute to your success (ensure your success).

End with the fact sheet (See Appendix A)

 

Key Personnel

Describe your professional background and why you are you qualified to run a martial arts studio. List your training and teaching credentials. List your educational and business background. In­clude information on any civic involvement or award. Describe your personal affiliations with charitable, social and business associations. List some of your other interests and hobbies. De­scribe your personal and business objectives. Above all blend this information to form the clear conclusion that you are amply qualified to attain success in this studio venture.

You should also include the resumes of your assistant instructor, office manager, and any other key personnel that are an integral part of running a successful studio.

 

A Professional Team

If you employ the services of an accountant, lawyer or professional consultant on a regular basis, in­clude a paragraph on their individual capabilities and how they fit into your management plan. By expand­ing the scope of your management team to include such people, you’ll lend a far greater air of confidence to your operation and to any potential investor.

Having honestly reviewed the skills possessed by yourself and your staff, you should immediately take steps to improve performance and skills in any area that appears to be weak. For instance, if your assistant instructor is still lacking in teaching skills, make a definite time and commitment as to when you can upgrade his skills. Failing to make this commitment will result in procrastination and the missed opportunity to immediately improve your studio’s performance.

 

If you, yourself, are lacking in certain business skills, face the problem and take immediate steps to rectify them. By investing in this manual you already have taken a giant step in this direc­tion. If you still need more help, seek it out. It may come in the form of part-time college classes, seminars or additional materi­als on sales and management, i.e. audio tapes and books.

Do not be afraid to ask students who may be experts in their chosen field to give you advice on specific topics such as bookkeeping, computers or marketing.

When all else fails or time constraints restrict your quest for

knowledge, invest in professional help. Although this may seem expensive, five hours with a computer expert or sales trainer can often be far more effective and ultimately less expensive than hundreds of hours of trial and error.

 

Marketing

Who is your target market? This will depend largely on your personal philosophy and teach­ing methods. The most success­ful studios that we have found do not limit their market in any way. They target children, teen­agers and adults. They market not only to men but also to women, families and special interests groups.

They segment the mar­ket to appeal individually to each of these groups and then design courses to specifically meet these individual needs. In this way, a successful studio can offer hard-core classes for some and still cater to kids, women and soft-core students by teaching classes at different times, different days and utilizing different teaching methods.

Over a period of time, you should observe, collect and record any data that you can to help build a picture of whom your typical student really is. This can be done by:

 

  1. Personal observation

If it is obvious that the great majority of students who attend your classes are children between the ages of five and nine, make a note of it. If students consistently talk about things that they read in a specific newspaper, make a note of it. In short, take note of anything that might be useful.

 

  1. Hard-core data

You can receive a wealth of information on which your market really is through your application process when you initially enroll each student. Your form should provide you with their address, age, and reasons for study. Other questions can be added to this form in order to obtain additional pertinent information. See Appen­dix B.

 

  1. Student surveys

Student surveys can be utilized at various times to obtain specific marketing information such as which publications people read, which radio stations they listen to and what other activities they participate in. See Appendix B.

 

  1. The point blank ask them the method

When all else fails, gain market information from your students through casual conversation and questioning. By learning more about their personal habits and activ­ities, you can greatly increase your knowledge and marketing effectiveness.

 

Define Your Target Market

Define how large your target market is by drawing a three to five-mile radius around your location. (The actual size of the circle that you draw depends upon the density of your population. The circle will be larger in a rural area and smaller in a metropolitan area.) Next, find out how many potential students are encompassed within. You can obtain this information from maps, realtors, city hail, the census bureau or your local library.

Your target area should include at least twenty to thirty thousand people to ensure success. This figure should also include a healthy amount of 5 to 55-year-old people, your prime market.

 

Growth Potential Of Your Market

Are you located in an area where people are fleeing to the Sun Belt where the imminent closure of a military installation could have a devastating effect on the regional economy? If this is the case, consider relocating to a high growth area. Many areas of the United States such as Nevada, Florida, California, and Texas are enjoying unprecedented population growth. Examine your chosen area and plain in detail how the growth or continued stability can improve your chances of success. Factors of importance include the long in the commitment of major employers such as Campbell Soup Company, IBM or Xerox to the local economy. An area that offers this type of stable economic environment with a middle-income e will often produce the optimal balance of interest and ability to purchase martial arts lessons.

 

Seasonal Factors

Another major factor in considering your potential market is the availability of access to this market on a year-round basis. In places such as Arizona and Florida, the population swells dramatically during the winter months, thus creating an increased need for services. In the summer, when temperatures soar into the hundreds, the number of people that you will be able to attract will be far less. These factors must be considered and addressed in the business plan. Your business plan should discuss the methods by which you will optimize business in the winter and minimize your student loss during the summer. Identify any seasonal influences in your area and discuss how you will minimize or maximize the effects in your favor.

Major benefits of your service

In this section, you must list all of the benefits that you can think of as to why someone should study the martial arts. Do not just list reasons that appeal to you but try to cover every possible angle. Refer to the Sales section, for further insight into this topic.

Clearly define why your studio is unique and better than competing studios in your area. For instance, are your teaching credentials stronger? Does your style have a broader market appeal? Are your teaching methods sounder? Whatever reasons you come up with that make your studio unique will become your image state­ment. Be sure that it accurately reflects how you want people to perceive your studio, as you will be stuck with it for a long time.(see marketing quick tips on positioning and defining students)

 

 

Advertising And Marketing Strategy

 

Clearly, state your income goals and how each individual marketing tool that you use will help you attain them.

 

What advertising media will you use to attract people within your defined market area into your studio? Check out local papers, radio stations and magazines and match their market profiles with the customer profiles that you have developed. See which ones most closely resemble that of your market.

 

Accurately define how much money you must spend on each advertising and promotional vehicle that you will use to reach your market. Specifically outline not only how you intend to gain Market share through advertising but also, how you intend to maintain this market share through newsletters, sales letters, and their promotional tools at your disposal.

 

Outline plans for your print display advertising; yellow pages, newspapers, coupon mailers, etc. Include an expense report to stimulate the cost of promotions, events, tournaments, public demo­nstrations and seminars that you plan to do to increase your studio income. Show in the different ways in which these promotions will benefit your business. Clearly outline the expected response from each marketing campaign that you plan to undertake.

Estimating Student Value

 

Estimate the amount of money that you expect to make from each initial sign up, how long you expect each student to stay and how much income you expect to gain from each. It is helpful to es­timate the lifetime val­ue of your average stu­dent because then you will clearly see how much money it is worth spending to get a new student. Take into ac­count average drop out rate, lessons, testing fees, seminars and equipment purchases. You could also limit this estimation to a one-year period or any other pe­riod of time that makes sense to you. Below is an example of a one-year period.

Your sign up fee is . ………………………………………………………………………………………………75.00

Lessons ($65/month x 12)………………………780.00
Seminars (average 1/yr.)………………………………35.00
Testing fees (3/yr. $25 ea.)……………………….75.00
Equipment purchase…………………………….190.00
Total for one year…………………………….$1155.00

 

This is the worth of each new student if he stays for one year. If you estimate that you will enroll 250 new students each year and determine that only 40% of those students will last the year (this results in a 60% attrition rate), your figures will look like this:

Worth of each student (1 yr.)………………….1155.00

Times 250 new students/year………………288,750.00

Less 60% attrition rate……………………..173,250.00

Total net worth for year……………………115,500.00
Divide by 250 total sign-ups………………115,500/250
The adjusted worth of each new student…………$ 462.00

The total adjusted worth of each new student after factoring in the drop out rate is $462.00, not the original figure of $1155.00. (This value could be further refined but should give you an idea on how to proceed.) You now have a figure from which you can determine the net gain if you boosted enrollment figures, how much you will spend to acquire new students, project sales, project what percent­age of your income will come from new student enrollment, determine the value of an ad campaign, etc. Note that you can also see how much more could be had if you could lower your attrition rate!

 

Competitive Analysis

Analyze your competitors carefully. Check out each and every studio in and around your market area. Look not only for weakness­es that you can capitalize on but also strengths that you can learn from. Write up a profile of the most successful of these studios and try to answer as accurately as possible the following questions:

 

  1. How long have they been in business? A long time would suggest stability and a strong market awareness. Is the location a good one? If the studio has been there a long time, the rents may be considerably lower than the market average, allowing him a competitive advantage in the crucial area of operating expenses.
  2. Determine how many students they have or least note if their classes appear full. Drive by at different times of the day and personally observe these things for yourself.
  1. Does the instructor have a good or poor reputation?
  2. Does the instructor carry high rank? Does he teach classes himself or assign duty to a lesser ranking stu­dent?
  3. What type of marketing and advertising do they em­ploy? Is it high quality and professional like the meth­ods and ads in this manual or are they poor and amateur­ish allowing you to capitalize on their ineffectiveness?
  4. What do they charge? Is it higher or lower than what you would charge?

Upon gathering as much data as you can, begin to develop a marketing plan which outlines ways in which you can capitalize on your competition’s weaknesses and combat his strengths. Armed with this manual, you already have an advantage in advertising, use it and any other tools at your disposal to further your studio’s position in the marketplace.

Note:   It is very easy when embarking on a new venture or revitalizing an old one to brush off your compet­itors with casual statements and false bravado. “I’m not worried about the guy up the street, he’s a phony.” It is imperative when performing these tasks that you be brutally honest and objective. If for emotional or personal reasons, you cannot perform this task objectively, find someone un­tainted by your bias that can. The results of this analysis are too important to your success to let your personal feelings influence the results.

 

Operations And Procedures

Before you begin to outline your operational procedures, you should first set some goals. What needs to be done in order to start or re-energize your studio. Set timelines for the completion of each task. Make sure that your goals are obtainable within the time frame that you set. Setup provisional measures for what you will do if you do riot reach these goals.

Outline in detail the physical, management, marketing, financial and other steps that will be necessary to actualize these goals. As you define each task, assign the duties of completion to a specific person.

If your studio employs more than one instructor or you plan to expand in the near future, set up a channel of command. Keep good accounting records and outline your procedures in your business plan. Clearly define your administrative policies. How you will handle billings, payments, banking, etc.

Clearly define your operational hours, prices, bad check policy, and day-to-day business activities. Spell out clearly how you want these to be handled. Do this in such a way that someone totally unfamiliar with your business could read them and follow them implicitly. Set up a discount schedule for students who want to pay three, six and twelve months in advance; there’s nothing worse than charging students different amounts. The key word in day-to-day operations is consistency. If the sign says you open at noon, open at noon; if you close at 9 pm, don’t go home at 8:45 pm.

How will you protect the business against lawsuits due to contract disputes or on-premise injuries? Do you plan to carry liability! accident coverage? Outline the cost of premiums, the amount of the coverage you will carry, terms and limitations, and the name of your insurance company and sales agent.

List items that you will carry in inventory to satisfy supplementary retail sales. Provide a list of the suppliers, persons to contact and the individual procedures for ordering and billing Decide now how you will cope with fifty extra students, what your personal requirements will be and how you will train such person­nel. The goal of this section is simple; cover every possible procedure now and it will save time, confusion and embarrassment later.

Financial Statements & Projections

This section is especially crucial if you are apply­ing for funding. How much money do you need to start up and operate your business? When will you need these funds? How will the money be used, over what time pe­riod and with what posi­tive effects? How do you pose to raise these funds; personal funds, investor capital, bank loan, etc? What will you offer as security? Detail an item-by-item cost of your new or revitalized studio’s startup costs.

List any existing investment in your business and the source. When and how do you propose to pay back the funds? What is the rate of return that you are offering? Why is it a good investment?

You must be realistic in your projections. Consider the amount of detail that you will want in your financial statements. These statements should allow you to clearly see the current financial state of your business and allow you to accurately predict future cash needs slow periods, busy periods and places where you could be more profitable. See Appendix A for the necessary forms.

As you do your financial projections, you must also provide an explanation of your data and any assumptions made.

Example:

If you make the projection in your pro forma Profit and loss statement that your second month will produce an income of $3600 dollars, you must explain how you arrived at that assumption. “Due to a strong advertising campaign, it is quite reasonable to expect a minimum of twenty people to sign up at $100 each, producing $2000 in income the first month. The following month sixteen of the original twenty will remain enrolled and twenty new people will sign up, producing a second-month income of $3600 dollars.

Financial information should start with past and a current profit and loss statements for your studio and in some cases your prior two years tax returns as well. If none exist you must create an estimated profit and loss based on your best estimates of income and expenses. This is called a pro forma. You accomplish this by detailing a month-by-month expense report and a month-by-month income report.

The Pro Forma Statements

The pro forma are estimated statements based on certain assump­tions that you make about your business, i.e. number of new sign-ups per month, estimated advertising and operating costs, the longevity of each enrollment, etc. It also may contain known facts, for instance, a lease payment that will remain constant for the next two years.

The pro forma can also provide you with a goal to shoot for. When making a pro forma, it is best to do three different ones showing a worst, best and probable scenario. Prepare statements for your immediate year and for your next two years. Your current year should be broken down by the month and the second and third year by the quarter. Pro forma are best handled by a personal computer if you have one. Several good programs are available on the market.

The pro forma statements that you will be interested in are found in Appendix A. They include:

Profit and loss statement

Measures how profitable you are now or expect to be. It is a detailed account of your various sources of income and expense categories. Your income minus your ex­penses gives you your pre-income tax profit. A pro forma profit and loss statement is simply a prediction of future sales and expenses and can be used to determine at what point in time a new business will break even.

 

  1. What price will you charge for your programs, for your merchandise?
  2. How do you determine these prices?
  3. Is your price suited to the economic status of your target audience? (Hopefully, you chose your location based on accurate demographics.)
  4. Is your pricing in line with that of your competition or do you have unique circumstances that will allow you to charge more?….or less?
  5. Have you set your price too low? Example: It would take 200 students at $25 each to reach a break-even of $5000. It’s unlikely that such a low price would be made up for in volume
  6. How many students can be taught per class? How many classes will be needed? Will this require another in­structor, which would affect the expense figure?

By using the forms contained in Appendix A and playing with the figures back and forth, you should be able to arrive at a reasonable starting point.

However, whatever blend is needed to attain this figure is not important; achieving it fast is. Reaching your break-even point should command every once of effort that you can muster. Until this point is reached, you must put in longer hours, give out more flyers, push for more referrals and generally perform over and above the call of duty.

Careful planning in combination with your own teaching skills and the sales and advertising ideas in this manual should go a long way towards helping you succeed.

Planning Your Martial Arts School

Planning Your Martial Arts School

 

Level 10 Martial Arts College, Palm Harbor, FL

Master James and Debra Theros

MATA Members since the late 1990s.

Additional Articles on Planning Your Martial Arts School

Is Owning a Martial Arts School Right for You?

I knew from my first night in white belt class on February 12, 1974, at age 13, that I was going to do martial arts for the rest of my life. I was teaching professionally by age 16 and have been teaching ever since. However, I never wanted to own a school, at least until the mid-1980s when I was in my twenties. 

For one thing, I had no business experience. For that matter, I hadn’t even finished high school. 

Second, I was not money directed. I was far more focused on quality of life, and in your twenties, it doesn’t take much money to have the lifestyle you want. I slept until 10 a.m., ran three to five miles on the beach, lifted weights at the gym, took a nap, and then taught for a few hours. It was the life of a karate bum and I loved it. 

Mike Anderson, the co-founder of the PKA (Professional Karate Association) and WAKO (World Association of KickBoxing Organizations) and publisher of Professional Karate magazine, tried to persuade me to open a school in the early 1980s.

He, along with Fred Wren, had operated some very successful schools in the St. Louis area. He tried to tell me I could do the same thing, but I had no clue of how to run a school. I knew I could teach well, but that was about it. 

In 1984, Joe Lewis convinced me to open my first school. Before that, we trained and sparred together at the various locations around town where I taught my classes. One day we were on a basketball court, the next day in a college fitness facility, and another at a boxing club. 

Joe noticed that I was building a solid core of excellent students who would follow me from location to location to take afternoon and evening classes. Kathy Marlor, Phil Beatty, Kevin Walker, Kim Cox, my brother Mark, and eventually even action movie star Gary Daniels (who came to me already as an excellent black belt) all were training hard in my classes almost daily. 

The day Joe called me on the phone it was a seminal moment in my life. I was in the kitchen of my rented house when I heard him say, “You need to give your students a home. You need to give them a place they can take pride in.” That hit home. 

Mike Anderson’s promise of making good money never struck a chord with me, but I certainly could relate to having pride in your school. Since I had often slept at my school when I was a kid, I understood totally the idea of creating a home for my students. I started looking for a location the next day. 

Martial arts is not an ordinary business. Because there is no educational requisite to open a school, schools are opened by people on many levels of experience and skill.

You can come out of college with an MBA and open a school. You can also come right out of prison and open a school.

There are no hard standards or requirements. Some have what it takes and some do not, regardless of what system they study. 

Clarity of Purpose

The martial arts business is much like show business. There is confusion and internal conflict about money. “Serious” artists are concerned that they not sell out or become commercial. I saw an obese martial arts “master” on an A&E special. He said, “Martial arts is about changing lives. It’s not about making money.” Master Po has spoken.

That kind of easy-to-spew rhetoric creates confusion in the martial arts industry. The history of martial arts is rife with stories of master instructors teaching the arts altruistically. When you hear one of those stories, it’s usually from someone who thinks charging for martial arts is wrong. Just keep in mind that:

There is a big difference between you and the story teller or the kind master – they don’t have to pay your bills. You do!

Like sex, money is seldom discussed, other than to complain about the lack of it. If you were raised in a family that struggled financially, you may have certain beliefs drilled into your head: such as, “The rich get richer, while the poor get poorer.” “We can’t afford that!” “I’d rather be happy than rich.” “Money is the root of all evil.” “The rich put their pants on one leg at a time.” Or, my favorite of all time, “If money was so important, look at who God gave it to.”

The message is that not only will you not have money but also that people who have money have sold their soul. The truth is that money is like a hammer: it’s just a tool. Money is also blind; it doesn’t care who has it or uses it. If you save your money, your wealth grows. If you spend it, your wealth shrinks. Money doesn’t care one way or the other.

When you combine that kind of negative association with money – which is very common, by the way – and throw in the so-called spiritual underpinnings of the martial arts, you get idiotic statements like the one from the chubby master guy.

Because the martial arts can be a power for good, many of us convince ourselves that we teach to help people. We feel we should sacrifice our own well-being to “help the children.” We charge too little, and we let people train for free and, when they get good enough, we hire them to teach. When they underperform we keep them on, because, well, Sally has been with me for six years. If I fire her, I don’t know what she would do.

Many of us worked hard to make all our students happy, and I don’t mean only from a student service standpoint. Our reward is that smile on little Johnny’s face, or Cindy’s improved grades, or Joe’s raise at work because we gave him the confidence to ask for it. Most professions don’t offer those rewards. In fact, that is all the reward we need, right? Wrong. Very, very wrong. Beware this dangerous trap of rationalization.

When your well-being depends on how happy your students are, doctors call that co-dependency, and it will eat you alive. There is no way you can keep all of your students happy. This approach will wear you down and burn you out, because the human experience is a balance of good and bad for all of us, including our students.

Tuition Pricing Strategies

Tuition Pricing Strategies

Few areas of running a school are as confusing and daunting as deciding how much to charge for lessons and then how to collect that tuition. This section will help you get answers to the questions of how much to charge; what your tuition really means to your school; strategies for balancing paid in fulls with monthly; whether or not to use contracts; and other critical topics related to tuition pricing.

That’s Too Much For This Area

At the start of many of my seminars, I ask the audience of owners if they would be willing to sell me their black belt for 0,000. For 0,000 they erase martial arts from their life. It would be as though never joined a school. Of course, this is an imaginary bet, but no one has ever said, “I would if I could.”

This is often the same owner who claims his area can’t support a higher tuition. He says his martial arts is worth more than 0,000 to him, but he is afraid to charge 00 per month for the same experience in his town. The common response is, “That’s too much for this area.” What he is really saying higher tuition might rub the poor people the wrong way in his community. He is also saying I don’t have the confidence yet in the value of what I’m doing to ask for that much money.

There are a lot of excuses owners will give for why they charge so little, but there is not one good reason.

Don’t Let Competition Set Your Prices

Most owners set their tuition by finding out what everyone else in town is charging and then under-cutting them by 0 or so in hopes students will stampede to them. However, our observation through the years is that the largest school in town usually has the highest tuition, so the evidence seems to be that undercutting with tuition can actually reduce your response.

Setting tuition based upon competitors is off target. We think it’s a mistake to base your tuition on the competition rather than how you want to position your school in the market. It’s important to know who your customer is and/or who you want it to be. It’s natural to want to have a price that everyone feels is fair and will enroll. That price doesn’t exist.

Certainly, there are situations where the instructor simply is not that good yet or you are teaching out of a community center where pricing is set by others. However, for commercial storefront schools setting tuition is a critically process that has to be driven from an understanding of:

  1. How you want to position your school
  2. The demographics you want to reach
  3. Your expenses on a month-to-month basis
  4. How much you want to make as a school owner

Nowhere in that list is, “What your competitor is charging.”

Choosing Your Market

Step one in the Black Belt Management System is Image Control. Setting your tuition is a factor of your image control. Set it too low and your school will attract lower income students who may make the school less attractive for the more affluent markets.

Next time you are driving, take a look at the cars on the road. Are they all cheap older models or are there some mid-priced and some luxury cars, mini-vans and SUVs too. The Mercedes Benz dealer doesn’t look at the Ford dealer to determine his pricing. He is not selling to the Ford customer. He is selling to a demographic that can and will spend the money required for a Mercedes.

A key point here is that he knows who he is selling to. For the martial artist, this is not, on the surface, as easy to determine your market. Many of us are stuck in that altruistic implied wisdom myth that their mission is to save the community from the dangers of a world without self-confidence, respect and self-defense. This is the owner who doesn’t want to turn anyone away because he wants to help, “everyone.” The truth, “everyone” doesn’t want help and “everyone” will not use the help if it’s offered for free.

If you are basing your success on how well you help your students improve their lives then you are choosing to live a life of tremendous frustration and long-term stress.

“We can’t help the poor by becoming one of them.” Abraham Lincoln

In order for you to be able to help “anyone” your doors have to be open. If you are at another job because your school can’t support your family then your doors are not open. It takes money to keep the doors open. The vast majority of the money will be in tuition.

It makes sense then that if we need money from our students then let’s look at our student market using money as a guide.

If we were to take 100% of the potential market for your school and divide them by income into five categories:

The Top Third – High Income Earners

The Middle Third – Average Income Earners

The Lower Third – Low Income Earners

Our market is in the top two thirds, not the bottom one third. Once our school is stable and we have a strong cash flow, we may be able to extend scholarships and outreach programs to include the lower third, but if we let the lower third drive our tuition pricing, we will always struggle.

Lets’ compare two schools in the same town, each with 100 students. One school charges 0 per month and the other charges 50 per month. They are in the same town. Why is the 2 nd school earning three times the tuition as the first school? Is it three times better? Is it three times bigger? The difference is the 2 nd school determined that it was going to market to the upper two thirds of the market and then built a program to support that goal. While this school may not be three times bigger or better, it is probably three times cleaner. It’s probably three times easier to work with and three times more professional and safe in its presentation. I can assure you owner spends far more than three times on his own professional education and at least two hours a week on his staff’s. If this school created an outreach program for the lower third market, I bet they could help more than three times the number of people than the school charging 0 per month.

Just using rough figures, lets say each school collects 80% of the tuition it is owed each month. Rarely do 100% of our students pay each month.

School A @ 100 students x 0 per month x .75 = ,000 per month in tuition.

School B @ 100 students x 50 per month x .75 = 2,000 per month in tuition.

That is an ,000 per month difference in gross tuition, which equals 6,000 per year!

Know Your Revenue Streams

To maximize your revenue from martial arts school, you must have a clear understanding of your revenue streams.

Read these carefully. Not all will apply to you, but wouldn’t it be nice if they did? One clear requirement for successfully utilizing most of these is that you will have to use agreements rather than month-to-month programs.

Revenue Stream 1 

Down Payments on New Student Agreements

Also known as a registration fee, this is the initial investment a student makes to join your school. Typically, this is at least two months’ tuition. For instance, a program is 99 down payment/registration and 9 per month for 12 months or ongoing.

Revenue Stream 2 

Down Payments on Renewing Agreements

This is the initial investment a student makes in order to renew or upgrade in your school. The best strategy for this has been the Black Belt Club. If you do not have a solid system for upgrades and renewals, this stream is dry for you.

Revenue Stream 3 

Monthly Tuition

This is the lifeblood of your school. As you grow your school, your monthly tuition should grow as well. Ideally, your monthly tuition would cover your base operating expenses each month. For instance, if all the monthly expenses, including your salary, totaled 2,000, your monthly tuition collections from your billing company would cover that amount. In that very healthy scenario, these other streams are 100 percent profit. Mind you, this is not easy to accomplish, but even 75% of expenses paid from your billing check would be good.

Revenue Stream 4 

Product Sales

Consider your retail shop as though it were a separate business. Open a separate business checking account for your retail, and deposit all gear sales revenue into that account. Use an American Express card or any other credit card that requires pay-off each month to pay for equipment purchases. When you place an order, pay for it with your credit card. This gives you up to 30 days to sell the equipment to your students. As they pay for the equipment, deposit the funds into the retail account.

When the credit card bill for the equipment is due, pay for it with a check from the retail account. Since you are usually doubling your money, this retail account will grow fast. Your credit rating will grow, as well as your rewards for using the card. Ideally, you will build a large cash reserve and save money on plane tickets and vacations, too.

Sell thousands of martial arts products and supplies directly from your website. You choose which products to sell, set the retail price, and still only pay wholesale. Veteran schools have reported that they have tripled their retail sales using this valuable service.

Best of all, student payments go straight into your bank account and you are billed your wholesale rate, allowing you to better manage your cash flow and not have to wait for your referral check to arrive.

Revenue Stream 5 

Special Events

Even if you don’t charge for testing, you will want to host at least one special event each month for your student body. These can range from nunchaku seminars to board-breaking, “Fear Into Power” seminars. These are not only pretty easy to manage, but they are a lot of fun. My nunchaku seminars were always packed with 30 to 50 students and would generate around 00-,000 per event. The fee of 5 included two rubber nunchaku to use in the class, so it was almost pure profit.

Birthday parties would also go under this category. A two-hour 50 birthday party is not only a revenue generator, but also a lead generator. Some schools have at least one birthday party per week, so it’s a proven winner.

Revenue Stream 6 

Testing/Grading Fees

I didn’t include these with Special Events, because exam fees are a little different from special events. Most exams for stripes occur in class, and they usually don’t require a fee. The main graduations on the weekends require additional work and staff, so it’s reasonable to charge for these events.

Typically, exam fees range from 0 to 0 and increase with rank. Black belt exams can be as much as 00 to 00 but, to justify this higher fee, you should provide additional prep classes for the black belt candidates.

Some schools are large enough that they rent auditoriums to showcase their graduating black belts or to conduct the exam. The exam fee should cover these additional expenses.

Revenue Stream 7 

Fast Track Testing

This is a touchy subject and has to be handled carefully. The idea is simply that some people are willing to invest more money to get through your belt system faster.

Revenue Stream 8 

Paid in Fulls

In recent years, Paid In Fulls (PIFs) have made a huge comeback. MASS and other such organizations have championed the cash out as a way of getting maximum revenue from a student base that will more than likely drop out anyway. As much as I dislike the idea of treating all students like potential dropouts, smart use of Paid in Fulls can significantly boost your bottom line.

Revenue Stream 9 

Renewals and Upgrades

Black Belt Club and Masters’ Club are the most popular and proven renewal programs.  For now, we want to focus on the renewal as a revenue generator.

Common practice has been to upgrade someone to a BBC or MC and replace his New Student agreement or program with the more expensive BBC or MC program. In most cases, the renewal had a registration of 99 or so, and tuition increased 0 per month.

Another popular strategy is to keep the student on their current tuition plan, but charge them a one-time or annual fee to upgrade to BBC or MC. For instance, a student is paying 10 per month for her current program. A BBC or Masters’ Club upgrade is presented as an annual upgrade for 00.

Revenue Stream 10 

Discounting a Past-Due Contract

When I was a publisher for Martial Arts Professional magazine, we sold advertising to clients who wanted to reach and sell to our readers. On occasion, an advertiser would want to cancel the contract. In the world or publishing, the process for doing this is called “shorting the contract.”

In exchange for committing to a set number of ads, the advertiser would be given a discount for each ad they placed.  “Shorting the contract” meant that the ads the client ran would be re-billed at the one-time rate and, if he paid the difference, we’d  release him from the contract.

Revenue Stream 11 

Career Training Programs

For years, I’ve taught the importance of creating a Leadership Team of assistant instructors to help you provide a higher level of service to your students. Typically, the Leadership Team is a “by invitation only” program for Black Belt Club members.

More and more schools are expanding Leadership Team programs into a precursor to a full-blown Career Development program that trains students to become martial arts school owners and instructors. Students pay for the right to attend staff meetings, practice role playing, and venture “into the kitchen” of the school.

Tuition for these programs are as high as ,900 for a two-year course. Keep in mind that, in order to offer this, you really have to know this business cold and create a solid curriculum on par with a vocational school, because, in a sense, that’s what you are offering.

Student Audit

This is not so much a revenue stream as a way of plugging leaks in your cash flow. The Student Program Audit is a single sheet of paper with three columns and 11 rows. The columns are for a student’s first, second, and third programs within a school. Typically, these are New Student, Black Belt Club, and Masters’ Club, but any program will work.

The first six rows are the various payment options a student might use in your school. The next two are the start and end date for the program, which are followed by a check mark to make sure the Party Responsible for Paying is noted in the agreement and that the injury waiver has been signed. Your job is to audit each and every student’s file to make sure you have each of these important items in the student’s folder.

The first few times you do a Student Audit, it is like found money. You will be amazed at how much important paperwork is missing. More than that, you will be stunned at how many students are training who have expired or have no record of payments.

Staple one Student Audit to the outside of each student file.

Build Around Your Core

Not all of these revenue streams will be for you. That’s why the Core Dynamic of Finding Your Own Voice is so important. I personally helped create many popular trends in this industry. I also made it clear what programs I would never teach, even though I developed and sold them. What is good for me may not be good for you. Know what you like, and why you are doing this for a living, and then build strong revenue streams around those core programs.

The Importance of Multiple Streams of Income

One of the best pieces of business advice I’ve ever received turned into one of the worst. Around 1990, a wealthy dad of a student took me golfing. We talked business for most of the afternoon. It was the best way I knew how to take his mind off my awful golf play.

He enjoyed pontificating and teaching me his world of high finance. One point he made stuck with me. He said to focus on one business,  build it and avoid anything else. Single-minded growth was his mantra. That was great advice at the time. I was coming on strong as a local business owner and as many of you know, the more successful you become, the larger the target on your chest grows. People come to you from all angles trying to get you to invest here, buy there, build this with me, etc… 

Thanks to his advice, I was able to say “No” to many offers that would have distracted from single-minded growth.  Eventually, I “outgrew” my two schools. They were not as large of a platform as I thought I needed so I sold the schools and created NAPMA and Martial Arts Professional magazine. They were the first widely respected professional association and trade journal for the martial arts school business.  Over the course of the next decade, I grew NAPMA into a multi-million dollar business and helped thousands of schools.

My influence grew and, as many of you know, I’m not shy in my assessments of the martial arts business.  My vision for the martial arts flew directly in the face of some people with much deeper pockets and far more experience in litigation than I.  Through a long series of expensive lawsuits over three years, I lost my company, my car, my marriage, and my platform. Little Ninjas, MAPro magazine, Fast Defense, Cardio-Karate and many other programs were assets I created that were removed from life. I still have five figures in legal fees due. Part of the reason I was wiped out was that the guys’ advice backfired on me. I was single-mindedly focused on one revenue stream; NAPMA. When that was decimated, so was my income. 

I use that story because it’s a great illustration of the importance of creating multiple streams of income. Like legs supporting a table, your income streams are supporting your life. The danger in creating multiple streams of income is if you start chasing every shiny object that comes your way. You have to be picky. You still have to say “No!” to most every offer, especially those in the MLM, network marketing arena. Yet, it makes sense to create supportive streams of income that are independent of each other but related in theme so that you are still within your area of expertise.

I am forever grateful to my Martial Arts Teachers’ Association (MATA) members for their valuable support. Many have been with me from day one. It’s with that support I’ve been able to expand, so I’m not in that same situation again. Empower Boxing™, MartialArtsWebsites / Marketing360, and Cobra-Defense have all been profitable, parallel projects each with their own stream of income.  While they share a common thread of the martial arts and MATA, they are radically different. Teaching a Real Estate Self Defense seminar is completely removed from an Empower Boxing™ class, though they complement each other like a hand in glove.

How Billy Joel Can Help Your Retention

How Billy Joel Can Help Your Retention

I know a guy, Steve Harrison, who is a huge Billy Joel fan. He wanted to learn how to play the piano just so he could play along with The Piano Man.

Steve went to a music school and told the instructor that he wanted to learn how to play piano like Billy Joel. The instructor told him, “No problem. Just enroll and we’ll get started.”

For the next four weeks, the instructor tutored this guy on the classical piano. It was hard. It was not fun. Most of all, it was not Billy Joel. Steve figured that learning piano was just too hard, so he quit.

Almost three years later, he was speaking with a client of his when he noticed a keyboard in his office. Steve told the client about his frustrating experience with the piano school. The client laughed and said, “Steve, Billy Joel is super easy to play. It’s just three chords. Watch…”

Steve said his jaw dropped and within 60-seconds he was playing Billy Joel. This is the experience for too many students in martial arts schools.

There is a tight set of benefits they are seeking yet, like the piano instructor, we create all kinds of hoops for the students to jump through in order to reach them.

Though we’ve taught this way for decades, it’s failing. People are more educated about what’s involved in martial arts than ever before and they are choosing other activities.

When I start working with a new coaching client, one of the first places I go is to their curriculum. Your curriculum is like the recipe book for your restaurant. Do your recipes have your students asking for more? Or, are they choking them down for a few months before excusing themselves from the table? Take a good look at your curriculum. Odds are it is bloated and boring.

There are way too many requirements and most of them only remotely related to the benefits a student is seeking when enrolling in a martial arts school.

If you’d like some help, email me and/or join MATA, which has a ton of curriculum content.

Five Steps to Successful Crowdfunding for Martial Arts

Choose the Right Site

1. Match your needs with the right Crowdfunding site. Some sites are focused on creative funding for arts and entertainment. Others are for people in crisis. Many are for businesses, and that’s probably where you want to be.

2. Produce a Killer Video

Video sells. Period. You have to make a strong emotional connection, along with a strong financial connection. People do business with people they like, so make a video that puts your best foot forward with testimonials, plans, and any other exciting elements you can share with your potential investor.

3. Do Your Homework and Set a Conservative Goal

Study other successful Crowdfunding projects and analyze them to see what worked. Studies show that many projects fail to meet their objective and the ones that do tend to squeak past the goal.

Also, 30-days seems to be the best performing timeline.

4. Market, Market, Market

Once you pull the trigger on your Crowdfunding project, spend as much time as you can promoting it online and off.

5. Build Up Day One and Create Great Offers

Build up to a big Day One of the project with media releases, demos, flyers, email blasts, etc… to get your project off to a good start and gain some momentum.

Reward contributors with special memberships and awards. For instance, 5 gets a school shirt. 00 gets three months of classes. 0,000 gets a lifetime membership.

Have you already Crowdfunded a project? If so, let know about it. We’d love to share your story.

Daily & Weekly Reporting Procedures

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.

Creating a Profitable Pro-Shop

A private golf club with a pro-shop and around 300 members will gross around 00,000 in merchandise sales in a single year. While that may not be a realistic figure for any martial arts school it does show just how much income can be generated from a small captive audience.

You have a small captive audience eager to buy. The question is do you have anything to sell? And if so does anyone in your school Know?

The main reason that merchandise sales in martial arts schools are so poor in comparison to lesson income is simply that the merchandise is usually not made available to customers. If it is it is seldom presented in such a way as to create a desire which is essential for any type of sale to happen.

Where to put the pro-shop?

The best place to locate your pro-shop is just inside the door of your school. If the office is on the left then locate your pro-shop on the right. In this way, the window display becomes a part of the pro-shop much like a mall store.

You want to put it here so that students, parents, and passers-by can easily see the merchandise that you offer. If they can see it easily and get to it easily then they can buy easily.

How to set up the pro-shop

If you need help in how to set up a pro-shop or what yours ought to look like go to the mall and look at stores like the Limited or the Gap. Better still find a Tennis pro-shop, they are very similar to what a martial arts pro-shop could be like.

They sell mainly shirts, shorts, and caps. Along with rackets, balls, books, and videos and yet despite having a smaller clientele than a successful martial arts school they sell well over 00,000 of merchandise a year. Golf shops are a more sophisticated example but the principles are the same.

The most effective way to sell merchandise is to put it on display. A good display rack is an excellent way to display uniforms and equipment. Buy a glass showcase and put it in the lobby.

Keep your eyes open in the local classified ads for stores selling their display racks. Stores go out of business all the time, so it’s not expensive to pick up some used racks or displays.

Display t-shirts and patches in your lobby walls at eye level. Use a grid to hang clothes on. Set your pro-shop up with walls or grid work on three sides and the front open so that people can walk in and see and feel the merchandise.

Change your displays on a regular basis, at least every couple of months. Even if you don’t change the actual merchandise, rearrange it.

You will be surprised just how many people who have gotten used to seeing a piece of merchandise in one place for two months, will suddenly notice it as a brand new item when its location is changed.

Change creates interest. Take some merchandise off the display and rotate it so that it never appears to be the same old stuff

You can have the best stock of merchandise in your state but if people don’t know you have it, don’t see it or can’t touch it, it’s not going to sell.

What is Your Professional Brand?

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
  • The consistency of your marketing on and offline
  • The consistency of colors and look on and offline
  • The 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.

Questions to Ask Before Buying Into a Martial Arts After-School Program

If you spend any time on social media, you would think that the hottest scheme now to becoming a martial arts millionaire is with an after-school program.

There are certainly proven and profitable after-school programs that have been successfully helping schools for decades. 

An after-school program is like a separate business, so you have to do your due diligence. Here are some obvious questions.

  1. Can we come and spend time at your after-school facility?
  2. Have you ever been served a cease and desist order?
  3. If so, how did you deal with it and what was the outcome?
  4. How many of your clients have been served a cease and desist order?
  5. How have you been able to help them?
  6. Can I contact them to find out what triggered it?
  7. What will you do for me if I get served with a cease and desist order?
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