| Friend,
So what are the top 5 things that will skyrocket profits in your martial art school?
I spoke about them briefly last Friday, and many of you expressed an interest in hearing more about the 80/20 basics that all martial art school owners should focus on.
These are the top 5 action items that every dojo owner needs to work on BEFORE they go off on some crazy tangent... the stuff you need to get done FIRST before you decide to follow your pet projects and flights of fancy.
Failure to address these 5 common areas is what trips up the majority of dojo owners and instructors that I've seen. But once you get this stuff straight, you'll be well on the way to owning a successful school.
So, here goes with the first on my list of The Top Five Things You Need To Focus On To Have A Highly Profitable Martial Arts School:
#1: Set Your Dojo Up With Low Overhead For High Profit Margins
Over the years, I've had a lot of people contact me for advice on how to start and grow a profitable studio. And at least a few times a year, someone will contact me for coaching that I just can't help.
Why?
Because they took bad business advice and put themselves in an impossible financial situation when they started their school.
For example: - Maybe it's because they took out huge loans to finance their studio...
- Or maybe it's because they got too much square footage and have a huge lease to pay each month (that one is all too common)...
- Or maybe it's because they bought a school from someone else that they THOUGHT was real a winner, only to find out that the former owner saddled them with a huge debts, a high monthly rent payment, and a bunch of students on cash-out agreements who've already paid their tuition years in advance...
Whatever the reason, the main lesson I want you to get here is this - to have a PROFITABLE dojo, you need to keep your overhead costs under control!
I know, that's common sense, right? I mean, it seems like a real no-brainer. Yet, there are a million-and-one ways to let your overhead get out of control, and they can all kill your profits and wreck your school.
But for the sake of today's message, let's stick with the basic things you need to avoid when you're setting up your dojo. - Too Much Space - One of the most common mistakes I see new school owners making is to start off in a space that's way too big for their needs. Too much space = too much rent. And that means money that should be spent to build revenue instead gets spent for space you don't yet need. That alone can kill a school before it ever has a chance to grow. Don't make this mistake!
- Going For The Most Upscale Location - I get it, foot traffic is nice to have in front of your school. Yes, I know that you can easily turn foot traffic into students, if you know how to capitalize on it. But here's the thing - most people who are starting martial art schools have to work a day job while they are growing their dojo. And guess when you need to be at your school to capitalize on all that foot-traffic? That's right - during the day! So, renting that high-foot-traffic location next to local grocery store or department store isn't going to do you much good if you can't be there to take advantage of it. Again, don't make this mistake! You're better off getting some space that's cheaper, and using the money you would have spent on a more visible location on marketing instead.
- Hiring Staff Too Soon - The best position you can be in when you're starting a school is to have your spouse partnering with you to grow your school. That way, you can put off hiring staff until you're well past 100 students (you're going to be working a lot, but trust me, you can do it). But what if you're starting a school solo? Well, for one you can still start the school without hiring staff (granted, we're talking about bootstrapping a dojo here, and keeping your operation lean - it'll be rough, but you can do it). Then, when you have the budget to hire help, you'll have plenty of time AND cash flow to find the right person to help you take your dojo to the next level.
The main thing I want you to remember from today's email is this - new businesses need revenue (cash flow) to survive and grow.
If you take on too many liabilities (money going out of your business, a.k.a. "bills") when you're first starting out, you're effectively putting a chokehold on your business that will strangle it out of existence...
...or at the very least, you'll prevent it from achieving rapid, steady growth.
So, if you're starting a dojo or if you're in the process of restructuring your dojo, keep a close eye on your liabilities and cash flow. Make certain that you keep your overhead as low as possible to free up the cash that your business desperately needs to grow.
Believe me, it's the best way to ensure you have the cash flow necessary to grow your school rapidly.
Until next time,
Mike Massie MartialArtsBusinessDaily.com
P.S. - If you want details on all the tricks and inside info I used to bootstrap three dojos over the last twenty years, click here to find out how I did it.
P.S.S. - Tomorrow I'm going to talk about building revenue - keep an eye out for that, because it's perhaps the most crucial step to growing your thriving, profitable dojo. |
