Ep. 45: Why Martial Arts School Owners Have It Made
Episode Description:
When it comes to our business model, martial arts school owners have it made compared to other small businesses and industries. While this statement might fly in the face of your current experience as a studio owner, in this episode I explain why I believe it to be true. Also, you’ll learn The Five Core Disciplines & Skills that you must master in order to have a successful dojo, straight from the Small Dojo Big Profits business systems I teach.
Mentioned in This Episode:
Show Transcript:
You’re listening to the Martial Arts Business Podcast with your host, Small Dojo Big Profits author Mike Massie. Remember to go to Martial Arts Business Daily dot com for show notes, transcripts, links to martial arts business resources, and more. Now, here’s your host, Mike Massie.
Hey everyone, it’s Mike Massie. I’m back with another edition of the Martial Arts Business Podcast, and I’m here to talk to you today about why dojo owners have it made, even though we don’t realize it.
I know that might be a stretch for you, that statement, because so many of you out there are suffering right now due to various economic conditions, recession and inflation and so forth. Regardless of what you’re told on the media, we are still in a recession and inflation is still sky-high and it’s still impacting families.
And when families incomes are impacted, as we know, when disposable income gets stretched, you know, families start to cut out things that are luxuries. And for many families, unless they see your business and you know your instruction as something that they can’t live without, well, you know, you’re going to be one of the first things that they cut out.
Some of you are experiencing that right now. But I’m still here to tell you that we do have a great business model. We are in one of the best businesses, small business owners can engage in, and here’s why.
So before I begin, before I start rambling on about this, I want to explain a little bit of background. So many of you know that I run three groups on Facebook.
So one is my private coaching group and those people in the private coaching group, those are generally people who are extremely serious about running martial arts studios. Those are people who they’re, you know, in my opinion, the people that I work with on a daily basis in my coaching group, they’re some of the smartest, most disciplined business owners you’ll ever run into. And. 1s You know, honestly, when I share information with them, they listen and they implement that information. I don’t have to, you know, fight people in that group to take the information that I give them and then put it into practice. And that really makes them a joy to work with.
I also run my small big profits group, which is to this point, it’s been a free group, although it is a secret group, and you have to know where to find it to be able to join. But that group is where basically people get together and they discuss small, big profits. They discuss the book, they discuss implementing the book and so forth. Some people come to that group thinking they’re going to get free consulting. That’s not really, really what the group’s about. I don’t have time to give free consulting to all and sundry on the internet, but for the most part, that’s what that group is all about.
And then my third group that I run is actually my page, which is Martial Arts Business Daily, which for a long time was nothing more than just a bunch of funny martial arts names because I didn’t have time to post anything else. But lately we’ve been posting some some pretty decent content I think on there some video content, some shorts, and some other content related to the business of running martial arts studios. And so those are the three groups or the three pages that are on Facebook.
And because I run those three groups or those three pages that I have for some time, besides the fact that I’ve been doing consulting in the martial arts industry for 20 years now, I hear a lot of common complaints and maladies from martial arts school owners in general across the board.
And, you know, it’s interesting because I hear the same complaints, the same things over and over and over again. And, you know, here’s a laundry list. I kind of made some notes here.
Hard to get students, hard to keep students. People are committed to doing martial arts these days. That’s one that I hear more and more often lately.
People are flaky. That’s another one that I hear when people are trying to get when school owners are trying to get students or potential students to come in and show up for their introductory lessons and so forth, or to stick to membership agreements.
My overhead is killing me. That’s a very common complaint. And, you know, it’s self-inflicted, to be honest.
The competition is killing me.
My location is killing me.
No one’s interested in learning, you know. Blank, you know, just insert art there, okay? No matter what the art is, people will say, oh, no one’s interested in learning traditional martial arts anymore, or no one’s interested in learning this particular martial art.
I can’t find good help. That’s another common complaint I hear from martial arts school owners.
And then another one is I can’t afford to hire good help, which is actually a cash flow issue. And if you listen to me for any amount of time, you know that cash flow is one of the first things that we deal with in the Small Dojo Big Profits system.
So these complaints, they go on and on and on and on. And I’ve heard the same complaints year after year.
And the fact that I have heard those same complaints year after year is very telling. And it kind of speaks to the fact that martial arts instructors face the same issues, no matter how good or bad the economy is at any given time, whether the economy is good. I hear these complaints, whether it’s bad, I hear these complaints.
And sadly, really all of those complaints are self-inflicted issues, pretty much every last one. And if instructors, these instructors who are complaining about these, these various self-inflicted maladies in their business, if they would just spend some time educating themselves on even the most basic of business principles, they most likely wouldn’t have those problems.
And this leads me to my point for this week’s podcast, which is martial arts school owners really don’t know how good they have it. And it’s really kind of striking to me, because if you’ve worked in any other industry or if you’ve been a business owner in any other industry or in parallel industries like fitness, you would know that we have it very, very good. In the martial arts industry.
A martial arts school owner has it really good. And I’m not kidding about this. I am deadly serious. 1s The businesses that we run running a small, highly profitable martial arts studio. The way that I teach martial arts owners how to do it is really a small business owner story. And let me explain that, because I know some of you are probably rolling your eyes right now, but the business of teaching martial arts is relatively lucrative. There’s a low barrier to entry, low overhead, and high profit margins.
Now that low barrier entry is kind of it’s kind of a curse and a blessing because it makes it really easy for people to open up martial arts studios, or sometimes just to fall backwards and running a martial arts studio 1s almost unintentionally. It seems like for some school owners that I’ve worked with in the past and and sometimes that can’t be a curse, because if it’s really easy to start a business, then many times, oftentimes people who start those businesses don’t take them seriously. They don’t educate themselves, they don’t start off with enough capital and so forth.
Now also, another benefit to our business model, at least here in the United States, is there’s no licensing requirements. There’s little, if any regulation in the industry here in the United States. And the only credential you really need to open up a studio is an instructor certificate from a reputable organization.
As we know, there have been some charlatans out there that have opened studios that have none of that. But we won’t get into that because I’m only speaking of and addressing legitimate, serious martial arts instructors and martial artists in this podcast.
So you don’t need a great deal of capital to open a studio. Um, successful studio. You can run a studio in as little as, say, 1200 square feet or even less, depending on the business model. You follow my micro business model, you could open up an even smaller footprint, but that’s kind of another story.
But some of my coaching clients could attest to that. You can open with nothing more than a few grand, a few thousand dollars spend on mats, paint, decorations, you know, a bathroom, possibly an office. Even though an office isn’t really necessary in a martial art studio. Some people will argue with me about that. Have some chairs and benches for the lobby and observation area, and then a reception counter.
That’s pretty much all you need to get started in a martial arts studio. Added some decorations, some nice decor, and boom, you’re open. Now I’ve opened. Personally, I’ve opened two studios for under $5,000 in investment before I open the doors, including what I spent on the first and last month’s rent when I signed the lease.
That may sound crazy to some of you, but I’ve done it. And you know the reason why I was able to do that is because, number one, initially when I first did it, I was desperate. And that’s what led to the whole small big profits approach to starting a running martial arts studios. I was, I was poor, I had come from an Indian background. I, you know, did have an education, although I tried to get an education. The only job training I had was what I got in the military, and all I really had was was drive and, you know, my own personal efforts. And that’s what allowed me to start my first martial arts studio. So, you know, it can be done.
And the crazy thing is, is that you can open up a studio for such little money. And really, all you need beyond that is maybe $1000 or $2000 for initial marketing push and, you know, a few grand out of pocket to pay rent until play starts breaking even. And let’s add in maybe like $1,000 for miscellaneous expenses. And guess what? Do you have a business model where a profitable location can be opened in the black in a few months for under ten grand, which is crazy. It’s nuts.
Now, having been a franchise owner in another parallel industry in the fitness industry, although I ended up walking away from that partnership and that’s a topic for another discussion. Why you shouldn’t entertain partnerships and small businesses.
But but I can tell you that the initial outlay for a franchise, if you’re purchasing a franchise, it’s tremendous. I mean, you might pay $100,000 just for the franchise fee easily, and then you’re paying anywhere from 3% all the way up to, in some cases, 10 or 12% of your gross, your gross profits, not your net profits, not after expenses, but before expenses to the franchise organization that you purchased the franchise from.
And you know, these franchises, they often promise they make these pie in the sky promise is really about business systems being so valuable and helping you succeed. And then also national branding and advertisement and so forth. But, you know, in our industry and in parallel in industries that rarely comes into play, I mean, you rarely see a fitness or martial arts franchise.
I’ve never seen a martial arts franchise that really had national name, brand recognition or international name brand recognition. And I have not seen one that has business systems that you couldn’t easily acquire somewhere else, or maybe acquire superior business system somewhere else. So. So yeah. Still though. When you compare that to opening a martial art school as independent business center, it’s just no comparison. So the thing is, what I want to emphasize, though, is that this is a very simple business that we that we have martial arts.
Running a martial arts school is a very simple business. It’s simple, but it is not easy. And I might somewhat make it sound easy when I’m explaining this, but it really isn’t. First thing is, it’s a lot of work to open a studio from scratch. You’re going to bust your butt. I mean, you’re really going to bust your hump during the first year in business and possibly the first two years.
And, you know, honestly, most people attend classes in the evening, so it is quite doable even when working a full time job during the day. And I’ve known many martial arts school owners that worked a full time, 40 hour week job and then ran their martial arts school in the evenings. I did it myself in my first studio and that’s how I got started.
So because of the way that our business works, it does make it somewhat more attainable to open a martial art studio and get it to the point to where it is profitable within a year’s time, to where you can quit your job within a year’s time, or maybe two years time on the outset if you’re doing everything right. So what is somewhat of a drawback is also a benefit. Then of course, opening any business is risky. There’s no guarantee that you’re going to get enough students to break even in your first few months. And you know, that’s why I teach the bootstrapping approach that I outline in small dojo big profits.
And if you’re unfamiliar with that approach, I suggest that you read the book because it’s pretty straightforward and Small Dojo Big Profits pretty much explains everything that you need to do to be successful. And your first year of running a martial arts studio. And then I have follow up books that describe what you should do after that. But but that’s the book that I usually recommend people read for if they’re just getting started. Also, planning is everything, and having a good marketing plan is really essential to launching a successful studio. And if you don’t know what you’re doing.
You can easily end up owning a studio that’s just barely making rent, essentially buying your way into a second job that’s a little more than indentured servitude, because it’s a lot of work to run a studio, as I said again. That’s why it’s so important to, you know, get some guidance, you know, find somebody who can guide you through the process of starting a martial arts school, marketing your programs, filling your classrooms, and so forth.
And, you know, I would say that the majority of martial arts school owners that I end up working with who are struggling have been people who have kind of foregone that initial guidance when they first got started and then after they got in and kind of got, you know, found themselves in the deep end, so to speak, in their businesses. That’s when they started seeking out somebody to help them in their business, to help them grow their business or help them save their business.
And sadly, sometimes, you know, I have people come to me and honestly, it’s too late. I’ve had people come to me when they were like, you know, I’ve got to get 30 students right now, because if I don’t next week my landlord’s going to shut the doors on me, and I have to tell these people I’m like, look, you know, we could try, but, you know, that’s that’s a big ask, you know, especially when you’re taking somebody from.
And not knowing anything about business, or not knowing anything about how to run a proper business and being a dud and so forth. And they’re asking you to help them get 30 or 50 students in a week’s time or a month’s time or whatever. It’s just crazy. We have turned martial arts studios around that have been in dire straits and turn them around a very short period of time, but it’s always a gamble.
So my advice to you is, is that you get somebody to guide you through the process of starting a martial arts school from the beginning, from the get go. Now, having said all that, I still think that martial arts instructors have it made. I can’t think of a single other industry where you can open a profitable business for under $10,000, and the closest thing I can think of is the personal training industry.
But to own a studio, you’d still have to spend tens of thousands of dollars on weights and chains and other gear to have the necessary equipment to do your job properly. You’d probably have to have a similar footprint as far as the size of the lease space that that you acquire and even opening, say, a CrossFit box, you know, costs many times more than it does to open a dojo because you still have to spend money and capital outlay. You have to have capital outlay on the equipment necessary for that particular business model.
So I really don’t think there’s anything that compares to running a martial arts studio. You could say probably dance or yoga because, you know, they are a pretty similar business model and there’s virtually no equipment involved there.
But yet, I don’t know. I mean, I’m not familiar with those industries, but I think it’s easier to run a martial arts studio than it is to run a dancer or yoga studio. And that’s just my personal opinion, and I’m not going to go into the reasons for that. But I think it has to do with the ability to to acquire students and to keep students for the long haul. Because of the culture that we have in the martial arts as far as training and martial arts.
The tip of the week. It’s time for our featured martial arts business tip of the week. For more great tips, be sure to visit Martial Arts Business Daily to subscribe to our newsletter. And while you’re there, click on the Business Resources tab for links to all Mike’s martial arts business books and courses. Now here’s your martial arts business tip of the week.
So speaking of making your school a social center, which kind of goes along with your identity and your culture and so forth in your school, let’s actually get into that, because that’s something that I want to talk about, because in a way, that whole premise of making your school a social center right now has become possibly what is the greatest advantage of all in our business? Now, I’ve written about these issues before, and I’ve talked about the advantages of benefits of being a school owner time and time again.
But lately, because of the pandemic and because of things that happened during the pandemic and kind of changes in, I would say, the overall, you know, attitude of consumers and people in general and some of the challenges that people are having now. I think that we do have an advantage that a lot of martial arts instructors and studio owners have not considered, or that they’re really not taking advantage of right now.
And that is that, number one. Well, you’ll never be replaced by artificial intelligence, which is which is absolutely great. That’s one of the biggest disruptions is happening right now. Okay. I think it’s pretty obvious to most of you that you’re not going to be, you know, replaced by artificial intelligence, but here we are.
I’ve been following this for a long time, and it’s something that I’m kind of concerned with because I moonlights as a fiction author and so forth, and I’m seeing a lot of upheaval in that industry and the publishing industry, and also the music recording industry, and also among certain actors and actors that I know that are really worried about AI taking their jobs. We personally, I don’t think we’re ever going to be replaced by because people want to learn martial arts face to face.
Which brings me to my next point, and that is that people want to belong to. Let me say this. I guess you could say a group of people, they want to be accepted and a group of people and people want to have a place these days where they can come and they can interact with other people in a group setting. In other words, people need social interaction.
Now, for the most part, as we found near the pandemic, people don’t want to learn martial arts over the internet. We saw many martial arts videos shifting to the online model during the pandemic. I would say most martial arts schools that actually survived the pandemic, you know, however, you guys survived it. Um, I would say most people moved to that model. I didn’t personally move with that model.
I moved to the Micro Dojo model, and it worked very well for me. And I would say that my martial arts programs were probably some of the few in the country that were actually highly profitable during the pandemic, but that’s a whole other story. But for most of you, you switch to an online business model. He were forced to do so. And I get that, I understand that.
How much of that actually stuck after the pandemic for you? I would say for almost every martial arts instructor, especially those you that got burned out on teaching zoom classes over the pandemic, I would say none of it stuck, because, number one, you don’t want to be stuck teaching to a camera all day because it takes away the personal interaction and it takes away the personal touch.
And you’re teaching, which is one of the reasons why I think we become martial arts instructors, because we want that, you know, that personal interaction, that personal approach, you know, that we kind of I would say we kind of thrive on that.
Students don’t want it either. You know, they don’t want to be learning from a computer screen. I know I certainly don’t, although I know several instructors now that part of their business has become doing zoom classes and doing distance private lessons for people and so forth. And I don’t think there’s anything wrong with that. I do think, however, that it’s not necessarily a sustainable business model, not for your entire business. I think it could be maybe an adjunct to your business, but it’s not necessarily an entire business model in and of itself.
So what we found is, is that even though people, they were looking for things to do, another pandemic and a lot of people flocked to online martial arts classes and so forth, either just for a way to be able to continue what they were doing during the pandemic or simply out of boredom. People spend way too much time online, and they don’t want to spend any more time online than they have to. What people crave now, what they’re craving. And I would say that a lot of the anthropological and sociological research that we’re seeing come out now supports this.
People are craving personal interaction. They’re craving social interaction more now than ever, and people are having a harder time than ever making social connections with other people. And that is where your martial art school comes in, and that is where we have a particular advantage that I think other small businesses don’t have, because really, this is an opportunity that nobody’s talking about. It creates a tremendous opportunity for studio owners.
The fact that a lot of individuals, especially younger generations, really seem to be having a difficult time making social connections and making meaningful connections with other people. Now, if you’re sharp enough to capitalize on this by emphasizing the social aspects of what you do, both in your ads and how you deliver your services, you can become an indispensable and vital part of your student’s daily lives.
Which means that if they see you as indispensable and vital, guess what? Even when they have to, you know, cinch up their belt a little bit because of inflation or the recession or whatever. It’s quite possible that people aren’t going to want to cut your activity out of their lives or out of their children’s lives, because it might be the only meaningful social interaction they have all week.
I mean, let’s face it, things are changing in society today, and you don’t see as many people involved in, say, civic organizations anymore. You don’t see as many people involved in church. The church, especially the evangelical church, has been declining in numbers and attendance for many, many years. And I think people are falling away from those types of institutions. And whether that is good or bad, whether it’s right or wrong, whether it has benefit or it’s a detriment to people overall, I would say it’s happening.
And I would say that people are looking for institutions and they’re looking for activities to replace those types of social connections. Now, if you’ve done any study whatsoever into the psychology of happiness, and I suggest that you do, and there are many good books out there that that I might recommend to you, although I can’t think of any now because obviously I’m on the spot.
But look into the psychology of happiness, and you will see that one of the primary things that psychologists and researchers cite as one of the keys to prolonged happiness in life are social connections and social interactions, especially family connections and close connections, but also overall being connected in the community, in your community somehow or in a community. Guess what? Martial arts instruction.
A good martial arts studio, one that’s run by an instructor who cares and who cares about helping students be a part or feel like they are welcome. And and they’re a part of the overall culture and community of the school. You can provide that for people. It’s a huge, huge, huge benefit for you as a business because you’re not going to see that in other types of small businesses that do what we do.
Possibly, I would say if somebody’s smart, they’re going to be creating that kind of culture of belonging, which in turn creates a culture of commitment. But honestly, you’re not going to see it in very many small businesses. You know, certainly if you open a restaurant, you know, there’s nothing there to make people want to come and belong to a community. Yeah.
You know, I think the days of people, you know, going to the local diner and sitting around and playing dominoes with their neighbors and so forth, you know, every morning or whatever, or talking over the morning coffee about the news and whatnot.
I think those days are long gone. I think people are too busy for interactions like that. And I think they’re looking for something that is more compact, that’s more compartmentalized, and it fits more into their daily lives. And that’s where we come in. So having said that, I want you to carefully consider the ideas and concepts that I presented to you today.
In this talk, I want you to think deeply about the social aspect of martial arts training and the difficulties that modern adults are facing and connecting with others, and in forming meaningful peer groups. And then I want you to think about how your studio can solve that issue for the market. Ask yourself, though, does your marketing and advertising convey to the public as your central marketing message that that is something that you offer?
Does it? Are your ads and your social media post conveying are they showing adults and groups laughing and sweating and smiling and having a good time, or is it the opposite, you know, is your marketing and is your social media offputting to people you know?
Are you trying to present, you know, that stern face and the crossed arms and you know, hey, God, I hate that, you know. See it all the time in certain martial arts, you know, not pointing any fingers in anyone. But, you know, some of you have real issues with trying to I’d say just with your, your public image, like, put it that way.
Ask yourself if your sales copy in your websites and in your marketing materials emphasizes how much fun martial arts training is at your studio. Does it talk about how the connections you make in martial arts training can lead to making lifelong friends? If not, you need to fix it.
Then ask yourself if the actual manner in which you deliver your services is reflecting that message. Are your classes fun? Is the atmosphere warm and friendly? Do students actually have the opportunity to interact in meaningful ways before, during, and after classes? What’s the answer? Yes. No. Maybe?
You need to answer this for yourself. Now, I’m not telling you that you need to become a big softie, that you need to start making your classrooms, you know, one big hand-holding, kumbaya session. You know, your dojo should not become, you know, a big Oprah session every single class. That’s not what I’m talking about.
What I’m talking about is, is still teaching quality martial arts, still being a tough instructor, but doing it with a smile, doing it with an openness and a friendliness that perhaps you didn’t get from your instructor when you were coming up. The type of thing that makes beginners who may be intimidated about learning self-defense, martial arts, or whatever that makes them feel welcome and makes them feel comfortable when they come into your studio. You might be confused about all this, so I make it a little bit more clear.
If your classes are run like a military bootcamp with you and your staff running around yelling at students like drill instructors, then the answer to my question a previous question is probably no. Your classes probably are not welcoming. They’re probably not friendly. They’re probably not going to convey the message that your school is a place where people can make social connections. But if you’re teaching, style is a bit more relaxed. If you push students to do their best while encouraging them verbally.
If your students leave every class sweating and smiling, then you’re probably on the right track. If you set your school up so there are places for students to hang out before and after class, like bleachers or a coffee lounge or, you know, maybe a welcoming front lobby or an observation area, then you get bonus points for that. Subtract those points though. If you’re chasing students off after class, add points.
If you encourage extra training and conversation after the last adult class, the night or after open mat or after adult special events. And yeah, I know it’s a pain. It’s a pain to have to spend those extra hours at the studio. You just want to go home and relax after class. I hate to tell you this, but your job description has changed admin necessity and you need to adapt, so you need to get used to it again.
I want you to consider these issues I’ve discussed here and figure out how to make necessary changes happen at your school, so you attract adult students and their children for the long haul. Just think about making your school a warmer and more welcoming place. Make it a social hub for your adult students. And mark my words, this is how you’re going to thrive in the coming years. All right, so enough of that. Let’s get on to our tip of the week.
Now, the tip of the week today is really just talking about the five core essential disciplines in the Small Dojo Big Profits system. And those disciplines are pretty simple. And they revolve around five core SDBP skills.
The first skill is money management, the second is lead generation, the third is sales, the fourth is retaining clients, and the fifth is profit maximization. Now, implementing those skills or those disciplines involves first tackling cash flow. And cash flow problems are solved by generating leads.
So that’s the very first thing you need to tackle in the small big profit system. It’s the very first thing we tackle. It’s the first thing attack with my coaching clients. It’s the first thing I tackle in my courses. So if you’re struggling with that, of course I’m biased, but I would suggest that you start digging into some of my materials.
The second skill or discipline that you need to master is sales, and that means converting inquiries and leads to students. It’s as simple as that. Now, many martial arts school owners think that selling is a dirty word. It’s not. Selling is not a dirty word. Selling is something that is essential to running a business.
As one of my good friends Tom Whitaker says, he says, you know Mike as he he travels around, he teaches seminars at a lot of different martial arts studios. And he says, you know, I’ll go to martial arts studios where they haven’t enrolled a single student all week now and then he follows this up by saying, tell me of any business that you know of that can survive without making even a single sale in a week. That’s true.
Martial arts school owners often think that they can get by without selling, because they see that money coming in on the back end through their their students memberships or subscriptions, you know, through that recurring revenue. I’m here to tell you that recurring revenue, it’s going to go away if you are.
Let’s say you had 100 students, and let’s say that you have what is pretty much typical of a martial arts school understatement wide about 5% attrition, which means about 1 in 20 of your students, or five and a hundred students are going to be gone every single month, no matter what you do. Just through insensible attrition, people just leaving because you know, they had babies, they lost their job, they moved away or whatever.
Well, within a year’s time you’re going to be down to what, like 40 students or something like that, you know, and I guess what, you know, you go from under students to 40 students, you’re going to be shutting your doors. Selling is crucial. You have to replace the churn in your business.
If you don’t replace the churn. Guess what? Pretty soon you’re going to find yourself in dire straits. And that goes on to the next skill, which is retention. That’s keeping students for the long haul. And you know what? Many martial arts instructors I’m going to talk about the flip side of selling. What many martial arts instructors miss is they focus on the front end.
And I’ll never forget the time when I went to a very well known martial arts school after school, then spent some time with them, is very good guy. He shared a lot of vital information with me back in the early days of my business when I was first starting off. But you know, I spent some time shadowing this person. And then I asked him, you know, hey, you know, I don’t see anybody tracking attendance in your school, you know, how do you guys track attendance? And he kind of got the sheepish grin and he looked out and he said, well, to be honest, we don’t.
And you know, that kind of, you know, it made an impression on me because what it told me was, is that they were solely focused on the front end of their business. They weren’t they weren’t focused on the back end. They weren’t really focused on, you know, really satisfying students and keeping students around for the long haul, which is really where the long term money is and the stability is in running a martial arts studio. So you have to learn how to plug the holes in your retention and keep people for the long haul.
And then next you got to tackle billing and budgeting. And that’s nothing more than getting your money on time and spending it where it counts, and then saving it where it does. And that saving it where it doesn’t part is something that we start off with that we consider foundational and small dojo big profits approach. Because if you’re spending too much money from the outset, you’re almost doomed to failure.
And so many times I have coached people and against my advice, and possibly against their better judgment, they have decided to get much more space, much more lease space than they need. And that’s always a mistake. When you first starting off in a martial arts studio, you want to start off with the minimal space that you require, the minimal overhead that you require to be able to function.
What’s the point in having 5000 or 6000 or 8000 or 10,000ft² if you only have 15 students? Doesn’t make sense. It’s a complete and utter waste. All you’re doing is is you’re stroking your own ego, and then also you’re making it harder to enroll students.
The worst possible thing that can happen is somebody walks in your front door and they see five students in 3000ft², and they’re going to look around and they’re going to go, you know, pretty soon they’re looking at the cobwebs up in the corners. You know, they’re looking at the dust on the mats and they’re thinking, man, there ain’t nothing happening here. And guess what? Nobody wants to be a part of something that nobody else wants to be a part of.
And after that, next after that, after we deal with billing and budgeting, then we talk about profit maximization and profit maximization. In order to paraphrase or to paraphrase. Abraham is simply giving everything you have, everything you can out of all you have. In other words, it’s just maximizing the resources and leveraging the business that you already have. It doesn’t mean nickel and diming your students. It doesn’t mean bilking them out of every last penny that you can by charging them exorbitant testing fees or anything like that.
What it does mean, however, on one side of that equation, is providing added value and charging accordingly for it. In other words, giving your students services and opportunities for training that they want and then charging a fair price for it. Simple as that. It also means reinvesting a portion of your profits, not eating your profits.
As I say, I often run into martial arts instructors that I see them and they have, you know, a couple hundred students, you know, they have full classes every night. They have healthy inflow. An inflow of healthy inflow of cash in their business. But yet when you look at the outflow, the outflow is insane. They’re spending way too much money in their business. So you need to make sure that you’re not eating all your profits. Sometimes that outflow is just they’re paying themselves too much. You’re just taking too much money out of their business. And that will kill a business man. Will he kill business so quickly? And I’ve seen it happen to healthy martial arts studios.
And then finally, the last part of that profit maximization equation is planning for the future. Do you have an exit strategy? And I can tell you from personal experience, having had some major serious health problems, especially in the last few years, you need to have an exit strategy for your studio.
That exit strategy could involve a number of things. It could involve the more conventional strategies, such as investments starting a 401 K, you know, and, you know, keeping up your investments, automated investments over the long term, you know, investing in index funds and so forth. You know, just very straightforward strategies. It could involve purchasing real estate in which to house your studio and becoming a real estate investor over time. Once you have healthy business, it could also involve making sure that your business is systems driven.
So at some point, possibly you can sell your business, or it could be a combination of of those things, or it could involve other things. But you need to have an exit strategy for your business because tragedy does happen and a life happens and you need to be prepared for it. You know, there are other strategies involved in there that I deal with my clients that I talk about. 1s I don’t have time to go into detail about it, but it’s something that we definitely address from our school owners.
And once we get them past the point where their studios are stable, financially stable, successful, they’re making comfortable incomes what they want to make, typically that’s a six figure income or better, and they’ve done that for a few years. Then we start looking at those exit strategies and setting them up. Even though the instructor might not want to exit their business for 15, 20, 25 years, it’s still something that we need to start talking about early on in the martial arts instructors career, because by the time you need to have that exit strategy, it could be too late.
Okay, so those are the five disciplines, the five core disciplines, the five core skills that we talk about and that we teach in the small dojo, big profits, martial arts, business systems. If any of what I’ve discussed with you is new to you, or it sounds unfamiliar, or it’s something that you haven’t heard before, it’s probably because either you need to find somebody who’s a mentor for you, or find better martial arts, business, education, 1s or whoever you’re listening to you right now just simply isn’t teaching you the, you know, the the whole enchilada. They’re not teaching you the full package of what you need to know to be a successful instructor. So what I would encourage you to do is. Get a martial arts business daily. Start reading some of the material there.
You can also find my books there. You can start downloading my books. There’s a link up at the top and the navigation. It goes to store martial arts business daily.com. That’s where you can purchase all my books. You can purchase some cheaper, then you can get them on Amazon. And it’s actually one of the only places that you can purchase small profits. I would encourage you as well to visit DojoSuccessCoach.com. That is my current business coaching website. You can also find my courses there. You can purchase my courses a la carte, or you can join my online coaching program and have access to all the courses that you want as part of the coaching program.
And then finally, you know, I encourage you to start digging into some of the free information that’s in the groups on Facebook. Go to Facebook, look for the Martial Arts Business Daily group. You’ll also probably find it linked off martial arts business daily, although it probably did update those social links on that website, but I’m pretty sure they’re still accurate and start digging into some of the free information. Interacting with instructors there. And if you can find it, join the Small Dojo Big Profits group on Facebook and we’ll be happy to have you there.
Alright, that’s it for this week’s podcast. I hope this information has been beneficial to you, and I encourage you to go out there and kill it this week, and I will see you in the next podcast. You’ve been listening to the Martial Arts Business podcast with Mike Massie. Be sure to subscribe to this podcast on iTunes and if you’ve enjoyed this show, leave us a positive review while you’re there. Thanks for your support and tune in again next time for more great martial arts business tips and advice from MartialArtsBusinessDaily.com.
