Opening Your Own Martial Arts School :
A Planning Guide

Let's simply start with the basic qualifications to open a martial arts school.

BASIC QUALIFICATIONS FOR A SUCCESSFUL MARTIAL ARTS SCHOOL

These seven points are for you to better understand your ability to operate a successful school. They should be considered as thought provokers, not final criteria.

BLACK BELT:- obtaining the rank of black belt is the absolute minimum rank for opening a martial arts school. Lower ranks may be able to do so, but by now the public has come to associate a black belt ranking with being a martial arts instructor. There are many who feel, with good reason, that a third or fourth degree black belt is the minimum.

TEACHING EXPERIENCE: Being a good technician and being a good teacher are two separate skill groups. You should have taught classes in your instructor's school and come to understand the many problems and situations that can arise while teaching, The new shcool will certainly give you experience, but previous experience will come through in your teaching style, giving you the ability to teach with a knowledgable authority, and instilling the new students with confidence in your abilities.

ASSISTANCE: We will assume you have earned the approval of your instructor to start the new school. Approval is not necessary, per se, but you may find it foolish not having it for the following reasons- first, your own training should not stop simply because you have a new school, and secondly, as someone who has opened his own sscool (we will assume), your instructor offers a wealth of experience and information from which you can draw. Working together, he can lend you assistance when needed.

KNOWLEDGE: you must have a working knowledge of not only your own particular art, but also of the business side of the martial arts school. The former you must acquire on your own, and the latter will come in part from this book.

PLANNING: one of the greatest principles of success is planning. From the moment you decide to open your own school, until the day you close your doors, your business will require organization, a plan of attack, and most importantly, the persistent carrying-out of the plan.

AWARENESS: planning and knowledge require a third factor-being constantly aware of problems and possibilities, both for you and your students. In short, your must strive to stary aware of everything affecting your school and your business.

PERSONAL UNDERSTANDING: This book is designed for martial artists and therefore we recommend that you discuss with your instructor, your own particular strengths and weaknesses, both as a teacher and as a technician. Such a discussion is apt to give you a much more realistic appraisal for this particular business- your own martial arts school.

Assuming that you have the qualifications laid out in the Seven Stategies table, the next step is to consider the martial arts business more in depth. Traditional marketing outlines several parts of what is usually called the marketing mix- product, price, place, and promotion.

The martial arts school, more accurately, your instructional abilities and the benefits of your teaching are the product. The martial arts school is a service business- you offer no tangible product like a stereo or automobile, rather you make available the attainment of intangibles, such as physical fitness, self-defense skills, improved confidence, and better self-esteem.

Having and understanding the product are only the beginning. You must develop a business plan. The business plan traditionally is a multi-page document that accomplishes several important functions- it helps the new business person organize and develop a solid plan for reaching goals and deciding what the goals are; it serves as a document to help arrange and secure financing from banks, private individuals, and other institutions; and it helps the business stay on course by being modified when old goals are reached and new goals are set.

There are many excellent sources written strictly about business plans, some of which are mentioned in the appendix, but for our purposes- the martial arts school- this book can be used as an outline from which to construct a business plan.

The business plan includes an executive summary outlining the basic information contained in the plan as a whole, a market survey of potential customers, an analysis of competition, a forecast of revenues, expenses, and profits, plans for financing the business, and any other information deemed necessary. Try not to be intimidated by words like "analysis" and "market forecasting". We will examine all these concepts in the following chapters.

No matter what type of business you start, there are basics which must be understood and utilized to insure success. The basic elements, simply stated, are understanding the customer, setting the price, understanding the product, and promoting the product. Each must be examined at length.

Understanding The Product

As we have already stated, the product that concerns you is the martial arts instruction and it's benefits, offered through the facilities of your school. What is the nature of this instruction? If a potential student were to ask questions at length, could you answer them, at the same time giving an accurate and honest portrayal of the new school? The following series of questions will help make this point clearer and also help you formulate a better understanding of your product. Take the time to think out and write the answer to all the questions. I have been a student of the martial arts for how long? ____________________________________________________________ I have been a martial arts instructor for how long? ____________________________________________________________

I have the following special skills which make me a good instructor (and why so): ____________________________________________________________

The following non martial arts related skills also contribute to my teaching ability and quality (how?): ____________________________________________________________

My classes are conducted in the following manner: ____________________________________________________________

A short history of my style of martial arts is: ____________________________________________________________

A short history of my instructor and his background is: ____________________________________________________________

Three strengths of my instruction are: ____________________________________________________________

Three weakness of my instruction are (yes, you have them): ____________________________________________________________

Some of the benefits which students will enjoy from my training are: ____________________________________________________________

Why someone should choose my school over another is: ____________________________________________________________

KNOWING THE CUSTOMER

Answer the following questions in detail. If you do not have the information necessary, then take the time to find it out- it will prove critical. ____________________________________________________________

Who are the primary persons (age, sex, income range, background) that your are trying to attract as new students? ____________________________________________________________

What is the size of the group (portion of the population surrounding the location you have chosen) you are trying to attract? ____________________________________________________________

Who or what is the competition (other schools, other activities) for your target group of people? ____________________________________________________________

What is the size and number of the various competitors? ____________________________________________________________

Given the location and the target market, what possible things could happen in the future to alter your situation? For example, is your location dependent on a single factory? If so, how would you handle it's closing? ____________________________________________________________

What do you personally have in common with the target market? ____________________________________________________________

What differences do you have personally with the target market? ____________________________________________________________

Have other martial arts schools, aiming for the same market, open and then failed in the past? If so, why, and has the failure affected your target market in any way?

PRICING DECISIONS

It is far too easy to simply say "I will charge X dollars for lessons" and hope that the market will bear the price. You must instead carefully consider several pricing factors first.

Completely answer the following questions. Given a range of possible prices: ____________________________________________________________

What is minimum and maximum price the target group would pay for your services?

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Would your prices be competitive for the target group as compared to the other activities which you have identified as competition? ____________________________________________________________

Will you have only one price schedule, or will you use various discounts and rates? ____________________________________________________________

Based on your financial situation and the target group, would you need to change your pricing if the competition would raise or lower theirs? What kinds of changes could you make in the price if necessary?

LOCATION AND MARKET ANALYSIS

A good location is crucial to success for any business and is found by analysis of many factors- the number of people from which to attract students, their income range, the type of area, the various facilities available and much more. The next several sections will consist not only of information, but also a series of question for you to answer.

Choosing A Location

Suppose that you have selected two general areas which appeal to you for several reasons- they have a large population near by, a steady economy, and it is possible to open a school in the area. The next immediate necessity is to find a location for the school. The following are some considerations to help make your choice the proper one. Be sure to answer all the questions in detail.

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Parking Space- pick a location with plenty of parking space available. This may not be possible in a downtown location. Does the parking lot have lights at night? Would you share the parking facilities with other businesses? Are there any restrictions on the parking spaces? Describe your choice: ____________________________________________________________

What kind of condition is the premises in? Do it need at fixing? If so, who must do it? Can the place be adapted for your needs. ____________________________________________________________

What is the general appearance and feeling of the location? What kind of impression does it give a potential new student? ____________________________________________________________

If your school were to grow and be successful, could the location adequately accomodate the growth? Can you expand the facilities in any way? ____________________________________________________________

What kind of facilities does the location have? Restrooms? Adequate lighting? Air-conditioning? Electric? Heat? ____________________________________________________________

Does the lease permit additions to the interior for such things as heavy bags, mirrors, stretching rails? If not, what can be done? ____________________________________________________________

What kind of covering is on the floor? What kind can be added? ____________________________________________________________

What are the regulations concerning signs at your location? Can you paint of the window and door glass? Hang signs over the sidewalk? Put a sign at the entrance of the parking lot, if in a mall? ____________________________________________________________

Do you fully understand all the terms of the lease? What is required at signing? First and last months rent in advance? Security deposit? Any special clauses? Are there any noise restrictions? ____________________________________________________________

You should have all the answers to the previous questions before deciding on a location. More importantly, however, is the complete and thorough understanding of the lease and it's clauses, implications, and details. If you are unclear or uncertain about any part, seek legal counsel. It may be expensive to do so now, but you should know in advance if any possibilities for trouble are in the contract.

The next important part of preliminary planning involves forcasting your revenue, expenses, and other financial considerations.

START-UP COSTS AND REVENUE FORECASTING

The next step is to begin an examination of the financial needs for the new school. This will also include a brief section on long-term planning.

START-UP COSTS

Start-up costs are those involved when you initially set up the business and are generally paid only once. As you will see, you must be prepared to pay them without the benefit of student revenue. Start-up costs include such items as: Lease signing requirements- first, last months rent, security deposits. Any new equipment or fixtures you will need. If you decide to supply uniforms, the initial inventory will be needed. Any costs for structural changes. Deposits for utilities- gas, electric, telephone, water, sewage, garbage. Any legal fees you might incur setting up the business. Any license or permits needed. All beginning advertising and marketing costs. Setting up a cash reserve. if you decide to start your business full-time, you will need to plan a personal budget for at least nine months.

ESTIMATIONS OF EXPENSE AND REVENUE

The next step of your financial planning involves estimating all monthly expenses and monthly receipts. This aspect is crucial to planning and is greatly dependent on the information you have already obtained. Remember you are estimating. Allow for the worst case. Having more revenue or less expense is nothing to plan on and certainly a luxury you can manage should it magically appear.

Figuring Revenue Estimates

The first section detailing information about potential students and competition should have given you a range of acceptable prices charged by other martial arts schools in your area. With this information, you now prepare a forecast of what you might expect to earn when the school opens. To do so, multiply the number of students by the amount charged per student. This total gives only a rough estimate. Keep in mind that you earn money personally only after all other obligations have been met.

An excellent technique for forecasting involves giving yourself a range of students and prices from which to plan. For example, you might include the following: 100 students x $25 per month = $2500 per month 150 students x $30 per month = $4500 per month 50 students x $35 per month = $1750 per month

Once you have found a range of revenue forecasts, you can set up estimation worksheets for each. The numbers and prices you choose cannot be based on a fantasy of becoming an overnight martial arts mogul. Base your choices and forecasts on solid research.

MONTHLY EXPENSES

Several monthly expenses have been listed as a model for estimation. These expenses will be the key to financial control, being the expenses over which you have some control.

If you knew for example, that during a particular season you would have trouble keeping students enrolled, you can adjust the amount of expenses in order to compensate. Some expenses are generally consistant from month to month- rent, electric, or insurance, for example.