Treating Your Dojo/Martial Arts School as a Business

[sensei8]

This post was originally published as an article in a dedicated KarateForums.com Articles section, which is no longer online. After the section was closed, this article was most to the most appropriate forum in our community.

I can appreciate wholeheartedly that a school is a sacred and important part of one's martial arts journey, life and betterment. Whether your school is in your basement, backyard, garage, park, commercial space or wherever else it might be; it's yours. Be proud of it!

How you treat it is up to you! As a hobby, as a way to exchange ideas with other martial artists, a way to relieve pent up stress or whatever else you desire! In that same light, I treat my dojo, as well as the Shindokan Hombu, as a business. I do this because no matter what's on the surface, both inside and outside, it's first, and foremost, a business. Depending on its size, whether small, medium or large, the needs are different, but their goals are akin: profit; the bottom line.

A Business By Any Other Name

Wikipedia: "A business, also known as an enterprise or a firm, is an organization involved in the trade of goods, services or both to consumers. Businesses are prevalent in capitalist economies, where most of them are privately owned and provide goods and services to customers in exchange for other goods, services or money. Businesses may also be not-for-profit or state-owned. A business owned by multiple individuals may be referred to as a company."

Isn't that what a martial arts school is and does? My dojo is involved in the trade of goods and services to consumers. In the very front of my dojo, I have a martial arts supply store, in which I provide "goods" of the martial arts type. In the back, what I deem as the heart of my dojo, I teach Shindokan Saitou-ryu, primarily, in which I provide "services" of the educational type. For these goods and services, I receive money in many various forms - for profit. Mine isn't a corporate charter nor is it a company because I'm the sole proprietor of my dojo, the Kyuodan Dojo, all under one roof to serve my customers.

Who are my customers? Quite simply, they're the consumers who are and aren't my students. Those who aren't my students are folded into two: one visits my martial arts supply store for the sole purpose of purchasing goods. The other are those who pay for martial art lessons for either their children, spouse and/or someone else. Nonetheless, there's another type of customer: one who is both a student of the martial arts as well as one who purchases goods as a martial artist.

How many hats do I wear? Many! As many as it takes to serve the better good of all interested parties. Under one hat, I'm the person who teaches students the martial arts. Under another hat, I'm the person who sells goods of the martial arts variety to those who are or aren't martial artists. Under yet another hat, I'm the general manager, buyer, human resources, payroll and accounts payable/receivable - just to mention a few. In the end, I wear just one hat: entrepreneur.

As an entrepreneur I've built up plenty of "goodwill." Having a solid portfolio of goodwill adds to the value of the business across the board. This goodwill takes many years to accumulate. Goodwill, according to ValuAdder is "that part of business value over and above the value of identifiable business assets." In addition, "business goodwill is a key intangible asset that represents the portion of the business value that cannot be attributed to other business assets."

This business goodwill speaks volumes, and it's that volume that gets the attention of current and future creditors. If it's in the future, the selling of said dojo becomes much more attractive because of the established business goodwill that's been earned over those years.

When your students, customers and/or the general public think about your dojo - your business - do they cringe or do they smile? Hopefully, they smile, and if they're not smiling, then re-evaluate both the tangible as well as the intangible to bring that smile back. If not, then closing the doors might be a viable option that can no longer be avoided.

Commercial Isn't a Bad Thing!

My dojo, Kyuodan Dojo, is my primary income. Hombu is my secondary income. I'm accountable to both. Both are provided in a setting that promotes goods and services from inside a commercial building. Both are free-standing. Both pay a landlord. In other words, both are commercial entities.

Depending on local city laws and/or ordinances, one can't establish any type of business in a residential zone/district unless waiver acceptances are granted by the city. One would be quite challenged to find such a city willing to grant such waiver because the city tax code changes. Therefore, the city might lose valuable revenues in the long run. It wouldn't be favorable for the city to do so. Want to hang a business shingle within the boundaries of a residential zone/district? Better be sure to visit your city hall of records and the like beforehand.

Here is how SmallBusinessLawfirms.com defines "commercial business":

"A commercial business is organized by its owners because of the expertise or skills that they feel they are able to offer to the society. In capitalist societies, these businesses invest their time and money and assume the risks involved to earn profits for the company and its owners without the guarantee of success. It is the dream of many people to establish and own their own business for many reasons - independence and the chance to earn large profits being among them. It is essential that when one is considering the possibility of starting a small business that they engage the services of commercial lawyers to check that all legal bases are covered and to increase the possibility of a successful operation."

Well, if the building that I pay rent for has been established within a commercial zone/district in which I'm selling goods and services to consumers, then I must be the owner of a commercial dojo. That can't be a bad thing!

I have overhead. Nothing is free in a commercial setting. Nothing! The bills keep coming; they're a reoccurring obligation. These monthly, quarterly and annual obligations must be met in a timely matter. If not, I've got to close the doors. In that light, as an entrepreneur, my biggest obligations are those towards my creditors. If I take care of my family, then I'm taken care of. If I take care of my students, then I'm taken care of. If I take care of the dojo and the Hombu, my students have a safe place to train and learn.

"What? Your student body isn't your biggest obligation?"

On the floor, they are! They are the reason as to why the Kyuodan Dojo exists to begin with; to teach Shindokan Saitou-ryu, as it was taught to me by Soke and Dai-Soke and then some. Without my students, I'm nothing. With them, I'm everything!

My students are important to me, but in a profit and loss (P&L) spreadsheet, they're customers. Sound cold? It's not! The businesses that you frequent view you as part of their bottom line. In looking over a P&L statement, a business can take the pulse of their successes as well as their failures. Successes are calculated as profit and failures as losses. Either you have experienced some appreciative profit or you haven't.

Commercial martial art schools are being unfairly deemed to be no more worthy than a McDojo! Why? Because my dojo is in a commercial setting! Because I operate my dojo as a business! Because my dojo is for profit! The summation of "why" is the summation of "because"! I don't sell rank! I don't guarantee rank! I don't even guarantee that my students will be invited to each and every testing cycle! I don't guarantee that my students will ever pass a testing cycle! I don't charge my students a testing fee! To be honest, I sincerely believe that I'm the furthest thing from being a McDojo!

Customers Are Students and Students Are Customers!

Customers are your students, and your students are your customers. To me, this isn't some hazy fine line that gets even more blurred as the years roll by unnoticed. My students pay a monthly tuition to learn Shindokan from my staff and myself. Therefore, my students are my customers.

BusinessDictionary.com defines "customer" as "a party that receives or consumes products (goods or services) and has the ability to choose between different products and suppliers."

Through that understanding, my students receive goods or services from me through the martial art supplies that they purchase and through the martial art lessons that they learn from the Kyuodan Dojo - my business. I can call my students just students; after all, that's what they are. There is nothing wrong with that; I can appreciate that label. However, I don't differentiate between the two on or off the floor whenever I'm interacting with them. Yet, in the context, I do differentiate between the two on and off the floor whenever I'm exercising my abilities to concisely and consistently monitor and finalize the P&L statement. This includes whenever I'm conducting business with my local bank.

If I can't read what the P&L is telling me, then an unforeseen difficulty grows even larger. It's up to me to interpret what must be changed, and these needed changes can be found by interpreting what's discovered in a P&L. The change can be as small as pricing or as large as merchandising. You have to manage the brand because the brand can't manage itself. Whatever the problem is, I must fix it expeditiously because every single student and every customer, martial artist or not, deserves that exceptional service both on and off the floor.

My students don't run the school. I do! My retail store customers don't run the supply store. I do! To a very small degree, customers are always right. Give them an inch, they'll try to take a mile! And when it comes to the Shindokan floor, only I run that. A student doesn't pass? Tough! Rank isn't guaranteed. A student is not advancing fast enough? Tough! Nothing on a dojo floor is a guarantee except that I'll give all of my students, as well as my retail customers, more than one-hundred percent of myself both on and off the floor, each and every day.

Conclusion

Rent, utilities, supplies, equipment and much more - those are just some of the overhead that I can't ignore. If you have no overhead, I suppose you're not a commercial business. That's fine, but I have overhead, and I treat my dojo like a business. Even non-profit organizations are still businesses because they've got to be answerable to someone somehow.

I treat my dojo like a business because, to my understanding, it is a business.

[Patrick]

Thank you for the submission, Bob.

Patrick

[ninjanurse]

GREAT article!!!!

[bushido_man96]

Great article, Bob. You lay it out quite nicely. There is nothing wrong with running an MA school as a commercial business. There is good money to be made, and it can be done in an honest manner.

[sensei8]

Thank you, Patrick, Heidi, and Brian...it was my pleasure!!

[LLLEARNER]

I used to teach SCUBA. I have seen SCUBA ventures treated like a hobby. Hours of operation are often whatever the owner feels like on any given day, available product is whatever happens to be on hand, no employees means no regular hours customers can expect, bad relationships with suppliers means poor availability of parts an goods, it is a disservice to all involved. Service suffers, employees suffer, customers suffer. It is my belief that a business owner needs to make the business (therefore) his customers a priority. Otherwise, it is the equivalent of public self-gratification.

[LLLEARNER]

This is not to badmouth new ventures that just have not gotten off the ground yet. Those owners are often burning the candle at both ends at a day job to afford life, and support their priority/non-hobby until it becomes self-supporting. It can take awhile to recover the initial investment made to start any new business, but these owners are making the new baby business a priority, often going without many luxuries for themselves so they can properly serve their customers.

[Spartacus Maximus]

It is unfair to deny another person's right to earn a profit. There is also nothing wrong with teaching martial arts as a business. If one is getting money or anything else of tangible value in exchange, it is commercial and it is a business. Just like any other business, there are honest and reputable ones as well as unscrupulous dishonest ones with questionable practices.

[Amine1332]

thanks alot!