Wanting to start my own school

[chiliphil1]

Hey folks, I will spare you the long story but essentially I am hopefully going to be getting a good sum of money here soon and I have been planning to start my own business. This morning the craziest thing happened and my wife comes to me and says "honey, why don't you open your own karate studio?" I was amazed but at the same time hit with an overwhelming feeling that this was the right thing for me. I get to take my love and make it my living, sounds pretty awesome to me.

I would like to ask you guys here because I respect your opinions very much and I know that many of you have already been where I am.

I am wondering when I go to start it up what should I expect in terms of start up cost? What would be a guesstimate of the costs it would take to get it started? I understand you can't predict my areas rent, bills, etc but I mean in terms of equipment. I also wonder how much stuff I need, should I buy 20 punching bags? Kicking targets? Mats? How much do you guys think would be sufficient to get started?

I am meeting with my old chief instructor tomorrow, there is a dan test in which I will be on the board, I am going to take the opportunity to speak with him about it as well. My deepest hope is that he would be willing to allow me to open a "franchise" from his schools and I would have an awesome support system if that happened, but if not I may end up flying solo.

I have only one problem with the whole thing but I think I have a work around but I want to mention it here to see what everyone thought of it. I am not a high enough rank to be considered a chief instructor. I am a black belt and I have over 20 years of experience in the MA but in my old school I believe you had to be 3rd dan and up in order to be a CI. Now, here is my work around, while I am working to move up in rank in order to be the CI myself I could hire one, I know several people from my school who are ranked high enough and are not involved in teaching at any other schools, I was thinking I could "hire" them to be the CI and pay them a salary. Do you guys think that would work? Is it uncommon to do something like that? And finally for you higher ranking folks what do you think would be a fare pay rate for a 4th dan to teach classes?

I want to add to the above, I fully intend to teach and am qualified and certified to do so, I am just not high enough rank for the school to be 100% me. I know this may be a hindrance but I think I can work around it fine, it may be possible for the other instructor to simply come in a couple of times a week to see how things are going and possibly provide a ciriculum and also be present for all testing even though I do hold sufficient rank to promote up to the 1st dan level.

I appreciate your comments, concerns, criticism, and anything else you care to share. Thank you in advance.

[tallgeese]

chiliphil, first up congrats on getting to a spot where you are ready to go. There's a lot of experience on this board that can talk about a lot of different aspects. For me, having just opened my own school, I'll speak from that stand point.

There are a couple of things to think about. First, start looking at what kind of incorporation structure that you want. This will effect how you deal with everything from taxes to dividends. There are quire a few ways to go and they vary from state to state in application fee and structure. Do some research. Budget around $1,000 if you're going to go thru a web site, more if you run in past a lawyer. I've seen success both ways. In both business I'm part of, we did them ourselves with no problem. Each, for that matter, is incorporated differently. Again, delve into the differences in LLC, S-Corp, sole proprietors, etc. Whatever works best for for you is great,but DO THIS STEP. I've seen the hassles that come when you don't.

Next, don't skimp on insurance. Get it. Budget based on what you're going to be offering and the research. The dollar amount will vary based on what you're doing at the gym. Don't skimp. We have a pretty comprehensive policy that cover way more than injuries. It cost more, but ask yourself how much you like your house and cars before buying budget. For the love of all that is holy, don't buy cheap and then work outside your insurance just so you can get a lower buy in.

I know a gym owner that had bare bones liability for sport karate only. It was pretty cost effective. HE RAN AN MMA GYM! Once a law suit kicks off that piece of paper is worthless.

Depending on what you're doing, figure 5-800 per year will likely be reasonable.

Next, talk to the city in which you're opening. I felt like we did a nice job on the first two points I made at the outset. Where we dropped the ball was on this one. It might not be a big deal if you're just slapping a sign on the perfect building (industrial space comes to mind) but if your'e doing anything like building a bathroom, running wires, putting in a better floor...TALK TO THE CITY. This jammed us up on our projected opening and cost us an unexpected set back of coin. Didn't end us, but we weren't happy. And it was our fault. City code and ADA laws can be a hassle, but they are mandatory. Get ahead of the game early. At least confirm that you don't need to do anything.

Get aggressive with marking early, utilize FB and other social media to their full potential. We talked about this a bit on another thread here:

http://www.karateforums.com/how-do-you-advertise-your-dojo-etc-vt48047.html

You have to leverage an many people an you can thru those doors once they open. You'll have bills rolling in AND your investment to cover. You'll need bodies Not everyone who checks you out will sign up, you need to cover this spread. Then, and most importantly, you'll have to build a good frame work of content to keep them Attrition is high in the martial arts, by building good content you help to minimize it. A good ciricullum is key as is dynamic presentation.

On that, don't stress too much about paying higher ranked people. You are a BB with 20 years of experience. That puts you ahead of most of the other people teaching. Keep advancing and rank appropriately. If, as in may karate based system, you need a year to second dan, and 3 to 3rd, you'll be there before your first new student is ready to test for Dan grade.

Teach class yourself, run your program, rank students as you can till then. I'd pass on bringing in a higher rank to teach. New students don't need a 3rd dan to teach them.

Take my situation. I'm a black belt in BJJ. I run a BJJ school. I can rank up to stripes on brown belt but not make BB's until I get my first stripe on the BB. That's 3 years in BJJ. I've inherited people who will need to get BB rank before I get the stripe. That's okay, I'll have my coach come in and do it. New people coming in now won't even be close to ready before I get my stripe. Heck, anyone below a 2 stripe purple will be fine.

We as MAist put a lot of emphasis on these sorts of things. The general public cares very little. It's the instruction that sells.

If that last sentence sounds pretty "business-y" then your right. It is. And I'd point out this might be the biggest hurdle to realize. As soon as you put ink to paper on this, you are running a business. It is no longer just your hobby. You will NEED to make profit if you want the doors open. You will need to do a bit better to show your spouse, significant other, etc. why it's important you sink all this time into it. Treat it as such. That's not to say you can't be friends with the students, have a laid back vibe, whatever. But you must be collecting and tracking dues and memberships.

I trained at a gym full of fighters once, great guys all, great fighters all, no one could pay. The owner liked having a bunch of hungry fighters there. Guess what happened? Yup, major effort to make the doors stay open.

It's a reality you have to be ready for.

Now, that said, opening a gym (and my other side gig) has been about the coolest thing I've ever done. I love doing it, love having a program. I tolerate the rest because of that. Heck, you even learn to enjoy the challenge of it. Yes, you should defiantly do it. Just look deep at all the aspects of it. There are more than most people would think.

Good luck in your endeavor. Keep us posted and keep asking questions! If you need anything specific just ask.

[chiliphil1]

Tallgeese, thank you so much for your reply!

I greatly appreciatte you taking time to type all of that out for me. I am looking to go the LLC route, it seems the most straight forward and I think it would be the easiest one( I may be wrong) and i believe it should sufficiently cover what I need it to.

I am a former insurance agent so believe you me I will not skimp in this area!

My hope is that my old school will allow me to make a new location under their umbrella, this is the ciriculim that I know and it would be a massive jump start if I could open a new location for them. I think the support and know how in that would be worth while even if it means giving a little profit to them. One other aspect which would be beneficial is that being under their umbrella would mean that my students would be able to test with them for the higher ranks.

I should be able to be at the 3rd dan level within about 3-4 years, give or take but for right now I am just not there. I appreciate your opinion in regard to the higher rank instructor, I almost assumed that would be an absolute requirement but I see your point for sure, in regard to beginner students there is no need for someone so high up. Much like with my guitar teaching, I would have nothing to show to a pro but I am able to show a beginner everything they can handle.

I also get your point on the business side, this is something I thought of as well. I know you have to act like the manager at wal-mart, interested but indifferent so to speak. I realize that you can build relationships but at the same time you have to watch your own back. You have to worry about the bills while still devoting yourself to your students and your classes, I can see where it would be challenging but I think I am up to it.

The one biggest concern for me is how many students I need and how long it will take to get them! I am trying to guess how much money I need to hold back to cover myself for x amount of time. I assume it would take about 20-30 students to cover the monthly bills, so there would be no profit until I top that number which is fine with me, I plan to have other income for a while. Hopefully one day I can live on the school alone but at the start up I know I will need something more.

I appreciate your advice on marketing, I will definitely plan on this, flyers, web ads, etc.. I will do all I can. I have an MA school somewhat close to me that does demos in all of the local elementary, middle, and high schools and they also do free "open house" events which they promote in the school. My kids brought home a flyer one day where they did a demo in his school and handed out flyers for the open house, we went to it and the kids got to do a 30 minute class and then the instructor passed out the sign up sheets! It was brilliant though because they did all the fun stuff, broke boards, etc.. The instructor there really knows what he is doing, he has 2 schools and is living very well from them.

I have so many things in mind that I can do. I am fortunate, I started MA as a kid and know what kids would enjoy and what they would not, I think with that knowledge I can keep at least a little bit of a handle on the attrition rate. In regard to adult students I hope that I can get some who are in it for their own betterment, this is how I look at MA, not sport or fitness but betterment of oneself. I think I can do good with this, I love the MA and I have certainly seen the good and bad of it all, and I have learned a ton from this forum.

Thank you for the well wishes.. This will most likely be a couple of months away possibly longer, just depends on when I get the money and how things are working out then. I will hopefully get the chance to speak with my instructor tomorrow but if I can't do it then I will definitely do it ASAP. If he is not on board I can go to the head and founder of my organization which is AFAF and ask for his permission to open an AFAF school, even if it is not associated with my old school. I think by doing this it will help me. I will have a sanctioning body and all of the knowledge and access that comes with it, I will be able to take my students to tournaments and testing within the organization.

One other question which is up to you whether or not you answer. How much money did you put into opening the school and how much did you sit on to make it until you had enough students to cover everything? I will have a good bit of money but it won't be an endless supply!

Edited May 1, 2015 by chiliphil1

[sensei8]

chiliphil, first up congrats on getting to a spot where you are ready to go. There's a lot of experience on this board that can talk about a lot of different aspects. For me, having just opened my own school, I'll speak from that stand point.

There are a couple of things to think about. First, start looking at what kind of incorporation structure that you want. This will effect how you deal with everything from taxes to dividends. There are quire a few ways to go and they vary from state to state in application fee and structure. Do some research. Budget around $1,000 if you're going to go thru a web site, more if you run in past a lawyer. I've seen success both ways. In both business I'm part of, we did them ourselves with no problem. Each, for that matter, is incorporated differently. Again, delve into the differences in LLC, S-Corp, sole proprietors, etc. Whatever works best for for you is great,but DO THIS STEP. I've seen the hassles that come when you don't.

Next, don't skimp on insurance. Get it. Budget based on what you're going to be offering and the research. The dollar amount will vary based on what you're doing at the gym. Don't skimp. We have a pretty comprehensive policy that cover way more than injuries. It cost more, but ask yourself how much you like your house and cars before buying budget. For the love of all that is holy, don't buy cheap and then work outside your insurance just so you can get a lower buy in.

I know a gym owner that had bare bones liability for sport karate only. It was pretty cost effective. HE RAN AN MMA GYM! Once a law suit kicks off that piece of paper is worthless.

Depending on what you're doing, figure 5-800 per year will likely be reasonable.

Next, talk to the city in which you're opening. I felt like we did a nice job on the first two points I made at the outset. Where we dropped the ball was on this one. It might not be a big deal if you're just slapping a sign on the perfect building (industrial space comes to mind) but if your'e doing anything like building a bathroom, running wires, putting in a better floor...TALK TO THE CITY. This jammed us up on our projected opening and cost us an unexpected set back of coin. Didn't end us, but we weren't happy. And it was our fault. City code and ADA laws can be a hassle, but they are mandatory. Get ahead of the game early. At least confirm that you don't need to do anything.

Get aggressive with marking early, utilize FB and other social media to their full potential. We talked about this a bit on another thread here:

http://www.karateforums.com/how-do-you-advertise-your-dojo-etc-vt48047.html

You have to leverage an many people an you can thru those doors once they open. You'll have bills rolling in AND your investment to cover. You'll need bodies Not everyone who checks you out will sign up, you need to cover this spread. Then, and most importantly, you'll have to build a good frame work of content to keep them Attrition is high in the martial arts, by building good content you help to minimize it. A good ciricullum is key as is dynamic presentation.

On that, don't stress too much about paying higher ranked people. You are a BB with 20 years of experience. That puts you ahead of most of the other people teaching. Keep advancing and rank appropriately. If, as in may karate based system, you need a year to second dan, and 3 to 3rd, you'll be there before your first new student is ready to test for Dan grade.

Teach class yourself, run your program, rank students as you can till then. I'd pass on bringing in a higher rank to teach. New students don't need a 3rd dan to teach them.

Take my situation. I'm a black belt in BJJ. I run a BJJ school. I can rank up to stripes on brown belt but not make BB's until I get my first stripe on the BB. That's 3 years in BJJ. I've inherited people who will need to get BB rank before I get the stripe. That's okay, I'll have my coach come in and do it. New people coming in now won't even be close to ready before I get my stripe. Heck, anyone below a 2 stripe purple will be fine.

We as MAist put a lot of emphasis on these sorts of things. The general public cares very little. It's the instruction that sells.

If that last sentence sounds pretty "business-y" then your right. It is. And I'd point out this might be the biggest hurdle to realize. As soon as you put ink to paper on this, you are running a business. It is no longer just your hobby. You will NEED to make profit if you want the doors open. You will need to do a bit better to show your spouse, significant other, etc. why it's important you sink all this time into it. Treat it as such. That's not to say you can't be friends with the students, have a laid back vibe, whatever. But you must be collecting and tracking dues and memberships.

I trained at a gym full of fighters once, great guys all, great fighters all, no one could pay. The owner liked having a bunch of hungry fighters there. Guess what happened? Yup, major effort to make the doors stay open.

It's a reality you have to be ready for.

Now, that said, opening a gym (and my other side gig) has been about the coolest thing I've ever done. I love doing it, love having a program. I tolerate the rest because of that. Heck, you even learn to enjoy the challenge of it. Yes, you should defiantly do it. Just look deep at all the aspects of it. There are more than most people would think.

Good luck in your endeavor. Keep us posted and keep asking questions! If you need anything specific just ask.

Solid post!!

For the time, I've nothing to add!! Sorry!!

[JohnASE]

Great info in these posts! I have a few thoughts.

Are you 2nd degree? I don't know what the deal is in your organization, but I think that's high enough to open your own school. I've had many successful customers open at that level, and I don't think you need to hire anyone.

If you don't have real knowledge, talk to someone about LLC vs S-corp or whatever. I recently went over this with our accountant, and there were some pretty strong reasons to choose one over the other. I don't remember what they are, but my wife and I have two businesses and we went with LLC for one and S-corp for the other.

If you're going to rent or buy a space, I strongly recommend building a student base before you open. If you have time, start a park and rec program or teach out of a church or a school or even someone's garage. It'd be nice to have a little head start before the big expenses roll in. More mouths to spread the word when it's time. Maybe you can do this while you look for a space and get all the business stuff squared away.

Regarding the number of students you need to keep your doors open, you say 20, but this depends a lot on your specifics. I know one place that needed 50 to break even. I know another who has a dozen and are late on their rent but managing to keep creditors at bay. Take care when you work the numbers.

Finally, if you open and get a bunch of new students right off the bat, don't get cocky. Listen to what tailgeese said about attrition. I know many people who got off to a great start, but after the first big surge, they weren't able to draw in enough new people to keep up with attrition.

Good luck and have fun!

[sensei8]

I've owned my own dojo's since 1977; it's all I've ever done!! What tallgeese and JohnASE speak about is the core of opening a school 101. One thing, read the book...Who Moved My Cheese...one of the greatest business books you might ever read, and imho, what it highlights is for any business, including the MA.

[chiliphil1]

Great info in these posts! I have a few thoughts.

Are you 2nd degree? I don't know what the deal is in your organization, but I think that's high enough to open your own school. I've had many successful customers open at that level, and I don't think you need to hire anyone.

If you don't have real knowledge, talk to someone about LLC vs S-corp or whatever. I recently went over this with our accountant, and there were some pretty strong reasons to choose one over the other. I don't remember what they are, but my wife and I have two businesses and we went with LLC for one and S-corp for the other.

If you're going to rent or buy a space, I strongly recommend building a student base before you open. If you have time, start a park and rec program or teach out of a church or a school or even someone's garage. It'd be nice to have a little head start before the big expenses roll in. More mouths to spread the word when it's time. Maybe you can do this while you look for a space and get all the business stuff squared away.

Regarding the number of students you need to keep your doors open, you say 20, but this depends a lot on your specifics. I know one place that needed 50 to break even. I know another who has a dozen and are late on their rent but managing to keep creditors at bay. Take care when you work the numbers.

Finally, if you open and get a bunch of new students right off the bat, don't get cocky. Listen to what tailgeese said about attrition. I know many people who got off to a great start, but after the first big surge, they weren't able to draw in enough new people to keep up with attrition.

Good luck and have fun!

My organization is a little funny on rank. We have black belt, then 1st degree black belt, and so on. I am just a black belt. I am high enough that I can grade all the way to what would be 2nd kyu. Most of the time students going for 1st kyu or bb test in front of the large board anyway so I would not absolutely have to be high enough to test them myself.

I certainly did not mean to come off as cocky with my previous post. I have seen enough attrition attending and assisting with ma classes that I know it is a constant threat to you. I just meant that I have a plan for a ciriculum which I hope would keep students coming back though I could be completely wrong, only time will tell me that.

I get the impression that my posts read like I am in over my head but I don't feel that I am. This would be my first business, so I think that would be my biggest challenge. This is my main reason for wanting to join with my old school, my old instructor has over 30 years in the same location so he could definitely give me the guidance I need to not fall completely on my face. My ultimate dream would be to have a school like his where he also has a room full of weight equipment and tanning beds and also conducts a tae-Bo style fitness class as well. These are things that I would at least think would help keep the doors open.

My biggest concern was, and still is being too low of a rank to be considered a head instructor under his school system, which is why I referenced hiring a higher rank to take that role. Today was a good example, I went and sat on the board for the bb test this morning and he told me " you can sit in but you cannot grade, your rank isn't high enough" I'm afraid that would be the statement if I tried to open a school by myself. Looking back however I remember that when I started way back in 1992 my chief instructor was also just a black belt, the asst instructor was a 1st degree, so maybe there is a shot. Both of them are now 4th degrees.

I do like your suggestion of setting up a class at a local area first, and honestly that didn't even occur to me. I will seriously look into doing that, I could even start now I wouldn't even have to wait for the money. One thing I want to mention, some of you may read into my post and ask me, "why have you been doing it so long but are ranked so low?" The answer to that has many layers but in essence I was sort of a prodigy I got my bb at 10 and continued to train, I took time off to be a teen and then found myself wanting something different. At this stage I did not go back to the same school but rather began a self study regimine in which I branched out into other styles of ma as well as weapons and techniques that my training did not cover. I also started to learn about and focus on the mental side of ma which in my opinion was lacking at my school.

I want to follow the ciriculum of my old school so that my students have a set of goals and clear requirements needed to meet them however I strongly want to incorporate what I have learned beyond my school. All of the instructors were talking today about everything I have thought was wrong with what I learned and they seem to be moving away from it themselves so I think my ideas would work well. The things are basic but essentially moving from the more traditional stances and positions into more modern self defense oriented things, more practical use training if you will. I would also like to include mental development and general fitness into my programs whereas again they were lacking when I came up.

Hopefully I'm not wrong about all of this, but I'm new to the business side of things however it has been a long standing dream of mine on both counts. I have wanted my own school since I was around 8 and I have wanted my own business ever since I was old enough to realize I would have to make my own money somehow. I feel that I have the heart, the drive, and the determination to do it and with the right coaching I can make it great and for that I thank all of you again for giving me advice. You have no idea what it means to me to have people who I respect as much as you guys helping me out.

In closing you have again inspired me, I believe my next step is going to be a couple of things. First I am going to speak with my old instructor, I didn't get the chance today as it was fairly hectic, secondly I am going to speak with the founder of my system, thirdly I am going to speak with other instructors in my area, and finally I am going to look into churches, youth groups, etc to see if I can bring in a martial arts program. Thank you again for the wisdom and inspiration.

[sensei8]

There's no law/rule that says that one HAS to be a black belt to own/operate a school of the MA. I suppose that having a BB as the CI eases the minds of the students and parents.

I knew a Ikkyu who owned and operated a school of the MA. In time, students were ready to test for Shodan, so this Ikkyu, who became a Nidan when a student was approved for a Shodan testing cycle, his Sensei came to run the testing table, while he seconded on the table.

In time, students forgot that the CI wasn't a full-fledged BB; quality spoke loud!!

[chiliphil1]

There's no law/rule that says that one HAS to be a black belt to own/operate a school of the MA. I suppose that having a BB as the CI eases the minds of the students and parents.

I knew a Ikkyu who owned and operated a school of the MA. In time, students were ready to test for Shodan, so this Ikkyu, who became a Nidan when a student was approved for a Shodan testing cycle, his Sensei came to run the testing table, while he seconded on the table.

In time, students forgot that the CI wasn't a full-fledged BB; quality spoke loud!!

Thank you for that, it eases my concerns and helps my confidence.

[Nidan Melbourne]

Congrats on the point that your at. It is a difficult decision to make if your going to open your own school or a branch dojo of your current school.

If it is just a branch dojo then you will have access to help from the Hombu Dojo. But not as much if opening your own stand-a-lone school.

But I have never heard the rule of you having to be a 3rd Dan to be considered a CI before. But I do know many schools that have been opened when the CI has been at least 3rd Dan. BUT I do have friends who run schools and they are either 1st or 2nd Dan and they are the CI.

Personally I believe it is the amount of experience that you have and not the number of Dan Grades you hold.