| Friend,
As I promised in yesterday's email, today we're going to take a good hard look at the hard numbers related to retention and school growth.
But first, let me lay down some hard truths based on some observations gleaned from coaching martial art school owners over the last fifteen years or so...
First, most STRUGGLING school owners maintain a much higher attrition rate than they realize. Typically when I interview new coaching clients who are struggling, they estimate their attrition to be under 5%, and usually state it at 3% or less.
However, those in the know understand that a sub-3% attrition rate is very hard to achieve, and they also know that any dojo with a sub-3% attrition rate is going to grow, so long as they are getting new students through the door.
But in reality, most of the struggling schools I deal with that are stuck in the 40-75 student enrollment range are operating with an 8-10% attrition rate.
The second hard truth is this: it's nearly impossible to grow a school with a 8-10% attrition rate unless you are VERY good at marketing and selling, and I'm going to show you why.
THE SECOND GREATEST CHALLENGE IN GROWING A DOJO
As most of you are aware, the first greatest challenge in growing a dojo is attracting students... but the second is keeping them.
I've observed that most schools that are struggling average about 5 enrollments a month. Sure, they may enroll 10 or even 15 students a month during the months of September, October, and even into November, but as a monthly average over the course of the year it ends up being about 5 students a month.
Here's what the typical struggling martial art school's enrollments look like over the course of a year:
Jan - 10 enrollments Feb - 5 enrollments Mar - 5 enrollments April - 4 enrollments May - 4 enrollments June - 3 enrollments July - 1 enrollment August - 3 enrollments September - 12 enrollments October - 10 enrollments November - 6 enrollments December - 1 enrollment
Average = 5.33 enrollments a month
Pretty dismal when you look at the average over the course of the year, right?
"But hang on a second," you say. "That means they added 64 students in a year. Surely a school would grow if they added 64 students in a year, right?"
Not necessarily, and here's why...
SCENARIO #1 - THE TYPICAL STRUGGLING DOJO
Let's say you start your full-time school with 40 students. That's roughly the point where most part-time instructors look at their cash flow and decide it's time to get their own place. So, we'll say that we're starting with 40 students.
And, let's be generous and say that you're operating at a 8% attrition rate.
If you start the year with 40 students enrolled, and you operate at a steady 8% attrition rate, enrolling ON AVERAGE 5 new students a month, then guess how many students you'd have at the end of the year?
Take a guess - would you say... Nope. At the end of the year you'd have just 51 students!
All that work, all year long, and you're still treading water and spinning your wheels at 51 students. Hardly enough to go full-time, is it?
And for most school owners who are just starting out, that represents 12 months of working 8 hours at your day job, then another 4 hours at the school...
Then cleaning and doing admin work and teaching classes again on Saturday...
Just to have to do it all over again, week after week, year after year, with no end in sight.
Let me tell you, that sucks. It'll leave you drained, with no hope, no energy to do the extra things you need to do to grow your school, and burned out to all hell wondering why you ever tried to open a full-time dojo in the first place.
But let's not give up just yet... because we need to look at what happens when we just slightly improve our retention rates...
SCENARIO #2 - JUST A 3% IMPROVEMENT IN RETENTION
So, what happens if we get that attrition rate down from 8% to 5%, and do nothing else different in our school?
Even with a dismal average enrollment rate of just 5 new students a month, at the end of the year you'd be looking at having added another 25 students to your school...
Which would mean you'd be at 65 students strong! Not a thriving school, but at least you'd be able to see the light at the end of the tunnel.
And if you were charging each student $150 a month, at 65 students you'd be close to grossing $10,000 a month in tuition alone. That's not including your other sources of income, either.
At $10k a month gross, even if your rent is pretty high you should still be able to pay the bills on the dojo, hire some part-time help, and write yourself a $4,000 paycheck every month.
I know that's not exactly living large, but it's enough to pay your own bills so you can go full time.
But hang on... what if we improve that retention even further?
SCENARIO #3 - A 5% IMPROVEMENT IN RETENTION
Alright, so what if we improved our retention by 5% over the first example?
At 3% attrition, if you changed nothing else, at the end of the year you'd be looking at 77 students - nearly DOUBLING your enrollment over the course of the year.
Do you see what a difference retention makes in the earning potential and growth of your dojo?
Folks, when you're trying to go from part-time to full-time in your martial art school, retention is absolutely critical to your success!
It's something that you simply can't take lightly, which is why we're going to spend the next week or so looking at retention and at how you can go about improving it.
So, keep an eye out for more on this topic in coming emails from me.
Until next time,
Mike Massie MartialArtsBusinessDaily.com
P.S. - In Small Dojo Big Profits, I cover the exact steps I took to go from zero students and no money in a town where I knew no one, to running a full-time school with 150+ students in just a few years. Hundreds of martial arts instructors have followed the advice in the book in order to open their own schools. If you're just starting out, it's worth taking a look.
P.S.S. - The book tells you everything you need to know, but if you get the full package you'll also get my spreadsheets that will allow you to calculate your attrition, school growth, and profit projections, along with a ton of other bonuses and additional modules worth hundreds of dollars. But, if you can't afford it you can still just order the book for a fraction of the full cost. Just scroll down the page to the bottom once you get to the site to order the book by itself:
http://small-dojo-big-profits.com | 