Questions regarding opening a school

[scottnshelly]

I have a few questions for those who have successfully opened and ran a school.

A few years ago, my father opened a school and I taught at it. It was closed down after only about a year and a half or two years. I’ve been thinking a lot lately about opening another one. I already have some experience with teaching and running a school. I know I would do a lot differently than he did. I had nothing to do with the finances, books, advertising and things on this nature; this is what most of my questions are about.

What are some of the major challenges? Did you build a building for this, rent something or work out of a building you already owned? How did you get the first couple of students? What kind of permits do you need to get (of course it varies by town/state)? Did you already have a class schedule in mind, or did you work something out as you got the school running? Did you start off with any advanced students (from another school) or did you start with a bunch of white belts? What is the first step that I need to take to get serious about this? Also, if you teach full-time, did you have to work your way to that, or did you just quit your job and open a school?

In my town there are a lot of old run down buildings downtown. I figure I could get one of those for real cheap and have the students help renovate it a little at a time. Has anyone here done something like this?

Thanks,

[octopic]

You seem to be on the right track in terms of knowing what you know and what you don't know. My first piece of advice is to sit down with several different people who have been running schools for at least a few years and pick their brains on each of these questions. Find people from your style, or local school owners that you have a relationship with.

I'll try to give some short answers to the questions that you've asked, but keep in mind that you need to do a lot of research before taking a big step like this.

In terms of major challenges, there are many, but something that many people forget is to research the area that they're going into. What are the demographics of the population? How many other schools are there in the area? Is there enough demand to make your school a success?

You probably are going to want to rent space before buying a building. It is unlikely that you'd be able to get favorable financing for a purchase at this point.

In terms of permits/licenses, you're going to need to consider if you want to incorporate or just file a DBA and get a business license. I'd suggest that you talk with a lawyer and a CPA about how to minimize your liability as well as the tax consequences of those decisions.

While it can be a somewhat painful process, you should write a full business plan as if you were trying to get people to invest in your business. You'd be surprised what potential pitfalls you can avoid by finding problems before you open up. If you'f like, I'd be happy to go through your business plan with you after you've completed it (I'm a MBA and a black belt).

The most important thing, of course, is to make sure that you have fun.

[Aodhan]

While it can be a somewhat painful process, you should write a full business plan as if you were trying to get people to invest in your business. You'd be surprised what potential pitfalls you can avoid by finding problems before you open up. If you'f like, I'd be happy to go through your business plan with you after you've completed it (I'm a MBA and a black belt).

That is probably one of the most important things anyone can do before opening any business. It gives you a complete framework from which to operate, you know what your budget is, what you are looking for, etc.

As far as the other details, here are a few tips.

Pick a spot on a map. Draw a circle with a 3 mile radius. Any martial arts school in that circle is considered to be direct competition. Shop them (Call them like you were a prosective student and find out their pricing structure). Draw another circle with a six mile radius. Any MA school in the second school is considered indirect competition. (Mileage may have changed since I learned it, but it's pretty close.) People generally like to patronize businesses within 3-6 miles of home, unless it's high reputation or specialty.

Pick four or five different spots. Consider things like parking, ease of access, foot traffic, surrounding businesses. Watch each location for a day or two, and I mean just sit there for a few hours at each rush time (Am/pm) and midday. If there were businesses there before, see if you can find why they failed.

Go to the city hall, or do demographic searches on the net, that will tell you the population density and the median incomes in the area you are considering. This will help you decide what the market will bear in that area.

Get advice on negotiating a lease. Be careful you don't get stuck with repairs that aren't covered in the lease, see if there are discounts for year long signings, etc. Find out what insurance you will need and how much it costs.

Figure you will run at a loss, so try to have enough capital to operate at a loss for 6 months to a year. You may need to have another job during this time. I'm getting a high school teaching endorsement on my kinesiology degree so I can teach HS while I'm opening my school.

I would also look into incorporating. That way you can set it up so your personal assets are protected, in case everything goes south.

Aodhan

[scottnshelly]

Wow, thanks guys. Great advise. I pretty well know the area, people and competition. I've lived here my whole life. There is one other school in town - my alma mater. A lot of students left the school when it changed Instructors. I know I could get a lot of those old students to come back to me. So, little competition, large demand and everything in this town is within 6 minutes of everything else.

I appreciate all of your advise and look forward to more.

[kenpo_fighter]

scottnshelly,

first, i understand ALL the questions & concerns that must be doing laps inside your head, as i, am also opening a new dojo myself. though the conditions i'm under are just a little different to yours, i myself do share many of you same questions. i've never ran my own dojo before, but, i do know how to run a business, as that was my major in college. i've been working in sales & coporate sales fo rthe past 3 years. i won't say i know all the tricks of the sales trade, but, i do know a thing or two about marketing, selling, and running a business. working on a 100% commission based pay, is pretty much like running my own business.

Did you build a building for this, rent something or work out of a building you already owned?

As advised by my sensei taking into factor that i'm a still a "1st time" sensei (or will be, very shortly), i'm renting a space in a shopping center. I'm in an area that has a kroger grocery store, a Cato womans apparrel shop, a Subway sandwich shop, a Family Dollar store, & a couple little shops. The traffic they pull in will be about 75% of my "walk-in" sign ups. So, as they say in starting a business, "LOCATION, LOCATION, LOCATION". Also, my instructor also advises that within your 1st year of operating, keep your overhead expenses under $2500; that includes rent, utilities, & other operating expenses.

How did you get the first couple of students?

I believe you've already answered your own question here. you mentioned that many of your fellow classmates had stopped training at the dojo you originally trained at. this one, i've already begun to do myself. get in contact with your old classmates and let them know you're opening up your own dojo. i'm a bit fortunate in this aspect. my sensei will be moving out of town to another part of the state for personal reasons. so, as his highest ranking student, i'll be inheriting all his old students that trained under him. this will give me a student base to work off of until i start recruiting students on my own. but, having higher ranked students in your dojo when you first open your doors, will give all future prospects a sense of confidence thinking "hey, he's already got some students in here. he must know what he's doing".....

What kind of permits do you need to get (of course it varies by town/state)?

that, you would have to check with either the landlord of the building or the realitor who you're working through to acquire the building. i got that info. from my realitor agent. it's especially important if you're looking to do physical changes to the space like put up a wall or some kind of structure in addition to the space.

Did you already have a class schedule in mind, or did you work something out as you got the school running?

i'm reminded of the phrase "if it's not broke, don't fix it." if the routine that you trained under is something that worked for you, there shouldn't be a reason to come up with your own routine. also, since you're first starting out, your original routine, which you already know, would suffice until you decide on a class routine that best fits your standards. I will be pretty much using the same routine that my sensei had previously laid out for me. the way i see it, if you already have a routine that has worked out good for you, as a business owner & instructor, there are alot important issues to tackle than trying to "re-invent" the wheel.

What is the first step that I need to take to get serious about this?

well, in addition to suggestions to what both Aodhan & Octopic as far as doing a demographics study, which, by the way, i very much conccur with, is to do what we say in sales, "do a check up from the neck up". basically meaning, make sure that in your mind & heart that opening up a martial arts school is really what you want to do. when opening up your dojo, your heart has to be in it more than anything else. for me, i feel that in dojo is where i belong and where i can combine all my talents. i'm an entrepenuer & have always wanted to own my own business. i love working in sales & closing deals. i've loved the martial arts since before i can remember. so, opening up a dojo, i'd get to sell the martial arts; combining two passions. though, i will be true to the art and not try to water it down the material like many dojo's in our american society. but, one must also remember it's a business as well, a booming business at that. it's very hard for people to make money doing something they love. i feel very blessed in that aspect.

if you teach full-time, did you have to work your way to that, or did you just quit your job and open a school?

until i get enough of a student base to pay for overhead and actually turn a profit, i'll be keeping my daytime occupation. just think of it as working 2 jobs. something you seem very capable of doing. just stick a schedule on your windows or door that best works for you & your current job & stick to it like white on rice. also, it wouldn't hurt to have a cell phone to where future prospects can get in contact with you when you're not at the dojo.

In my town there are a lot of old run down buildings downtown. I figure I could get one of those for real cheap and have the students help renovate it a little at a time. Has anyone here done something like this?

am so on the same page with you on this. try and work something on your renter's aggreement to where you can get like 30 - 90 days free rent to allow you to get the space up to operational condition if the space requires it. i've got all my future students all volunteering for any type of assistance i may need to get my dojo up & running. those students, i consider like my extend family, which is something you would want to advocate in your school. fester a sense of unity and comradarry in your school. i think that goes without saying.

well, i know these are only but a few questions and concerns that i'm sure have been pondering in your mind. i hope that what i've wrote in some way helps you get footing on your journey and to the next chapter of your own training. for, i'm sure you know, part of your training is not only to obtain your knowledge, but to pass it on. you seem genuinely sincere in your endeavor and feel that as long as you're true to the system of which you come from and to your art, you'll be successful.

my door is open, should you have any further issues you wish to discuss. good luck & godspeed!

kenpo_fighter

[shukokai2000]

Just follow your heart and mind. it will lead you to the right decissions,hense the right path.

i've recently opened a school " no regrets "

Jason Olsen 1st dan "shukokai"

[scottnshelly]

Thanks again,

Another question that I have is about rank certificates. I am certified to teach in what my Instructor called Tae Kwon Do. It was really a mixture of Tae Kwon Do, Kenpo and various grappling styles. I am not a big believer in style anymore though. I do like the idea of belts and ranks, but I’m not sure what style I should put on the rank certificate. I feel that if I teach someone techniques from several different styles, that doesn’t make them certified for one or all of those styles, it’s a mixture.

I’m not talking about MMA here, by the way. My philosophy is styles are finite; we shouldn’t limit our knowledge to just what one style says we are to do. I like Tae Kwon Do for the overall structure and kicks, but Kenpo has very effective self defense and vital point strikes. Just because I teach someone how to kick and gouge eyes doesn’t make them a Black Belt in both styles.

I also hate the idea of making up a new style just for teaching purposes. I don’t have anything new to offer that would necessitate a new style, just more like a ‘greatest hits’ of a couple already famous styles.

Has anyone else run into this? How should I handle the issue of style?

Thanks.

[isshinryu5toforever]

I've actually found that trying to hook up with a school's summer program or community education program can be a good way to get advertising and interest in a fairly quick manner. They may also be able to provide you with a space for a while. If you are looking for a space, try a community center or the like unless you have your own space already. It is difficult to get a place rolling, but with a few dedeicated students you can sustain a small school. My sensei has been doing it for over 20 years, and he has had maybe 25 students at the most during any given time. However, he has had several students for over 7 years, and he's had me since I was 5 or 6 so I am coming up on about 13 or 14 years with him as my instructor.

[Manabimasho1]

I have a few questions for those who have successfully opened and ran a school.

What are some of the major challenges? Did you build a building for this, rent something or work out of a building you already owned? How did you get the first couple of students? What kind of permits do you need to get (of course it varies by town/state)? Did you already have a class schedule in mind, or did you work something out as you got the school running? Did you start off with any advanced students (from another school) or did you start with a bunch of white belts? ,

In my opinon you are asking all the wrong questions.

The worse thing you can ever ever ever do is open a Dojo with less then 50 students and not have another way to support yourself. I would seriously advise you to spend your money in a resteraunt or few houses to rent out or something. What most people don't understand is that if you have 30 students who pay $40 a month and you are open 3 days out of a week that gives you $1600 a Month which is NOTHING....you will usualy be paying out $100 insurance $300-400 electric bill if its considered a commercial property. $100 a month for miselanious stuff like brooms, t-shirts, patches, certificates, lightbulbs, training equipement and so on. You will also have Rent if you rented the building which is gonna be about $300-2000 per building space if you total that up you end up making NOTHING per month.

Our Grandmaster has had 200 students in a month at a time and he only came out making $1500 after paying the bills.....But he has alot of other stuff on the side that he does. That is why you see the Chain Dojos out there Someone with Money bought up places and started training people. That kind of Walmart or McDojo style leads to students who learn little and can't defend thierself, and rich or well off masters.

Seriously add up your finances and think about working at the dojo 3 days a week no more! Because to work everyday or weekday and make nothing would be insaine. Get some kind of money maker on your side. I am already a Landlord and Instructor with my Grandmasters Dojos I won't make my own but take over his much later on. My wife is in College for Nurse Anestists and has 5 years more of schooling, by the time she is out it is a 6 figure income. I will be ok........but I feel bad for those who love to teach and have much to show and can't find the money support.

Another great tip, Get about 2 other Black Belts to join you in your quest open an agreement that all of you open A Dojo, A student who learns from 3 masters will be more flexiable then one who learns from just one.

BTW> Good luck

[Enviroman]

In my opinon you are asking all the wrong questions.

The worse thing you can ever ever ever do is open a Dojo with less then 50 students and not have another way to support yourself. I would seriously advise you to spend your money in a resteraunt or few houses to rent out or something. What most people don't understand is that if you have 30 students who pay $40 a month and you are open 3 days out of a week that gives you $1600 a Month which is NOTHING....you will usualy be paying out $100 insurance $300-400 electric bill if its considered a commercial property. $100 a month for miselanious stuff like brooms, t-shirts, patches, certificates, lightbulbs, training equipement and so on. You will also have Rent if you rented the building which is gonna be about $300-2000 per building space if you total that up you end up making NOTHING per month.

$40/month is very low. (30X40 = $1200, btw).

Here's an average breakdown for a retail commercial front (I work with this stuff as an intern):

Rent: $700+ (can go as high as $3000/month for a large city/wealthy front).

Utilities: $300-350 (if you're paying over $350/month for a 1500-2000 sq. ft. space you need to seriously check out your efficiency...)

Insurance: About $150

Misc: Maybe $100 or so. Marketing would be the big charge here.

So we can do some math:

$1100 (rent) + $350 (util) + 150 (ins) + $100 (misc) = $1700/month for the store. Factor in roughly $1700/month in home bills (considering a 2 income family) and you get about $3400/month in debt.

40(x) = 3400

x = $85

He'd need to charge each student $85 to break even. That's not too bad considering breaking even considers home bills. As his business grows, he will get more students, which means he will begin to profit. It's not too terribly impossible to make it a successful business.

Seriously add up your finances and think about working at the dojo 3 days a week no more! Because to work everyday or weekday and make nothing would be insaine. Get some kind of money maker on your side. I am already a Landlord and Instructor with my Grandmasters Dojos I won't make my own but take over his much later on. My wife is in College for Nurse Anestists and has 5 years more of schooling, by the time she is out it is a 6 figure income. I will be ok........but I feel bad for those who love to teach and have much to show and can't find the money support.

Just as a side note, most CRNAs don't make 6 figures right out of school. The average starting salary is around 50k (the overall average is roughly 100k). Is she going part-time?