You’re ready to go for it and launch your school. How will you fund it? Even if you already operate a school – how can you expand and invest into growing it? We will discuss the 5 funding options, including a way to mitigate nearly all start-up expenses with a pre-enrollment campaign. Some other useful topics:
Hello everyone, and welcome to another episode of Rank Up, where you will learn how to become an elite instructor and grow your martial arts school. My name is Michael Hodge. I’m the founder of the GMAU, and I’m also one of the leading contributors to the Certified Martial Arts Teacher course and certification. Today we’re talking about funding and launching your school. Now if you already operate a school at some capacity, there’s still going to be a lot of information here that’s going to help you out in expanding, growing and improving what you already have and taking it to the next level. How can you do that in a financially sound way that actually works out? You’re not going to get into a lot of debt. You’re not going to be owing lenders and banks and investors the shirt off your back.
Sustainable growth, basically. Right? We’re going to look at different options. Just quickly, the five ways to fund your school that I’m going to put into categories or buckets here:
Now of course, you might use a combination of these things as well as I did to initially start my first school. Things can change depending on what your goals are, right? We also are going to talk about should you bootstrap and improve your martial arts school as you go or should you just do a full build out up front? We’ll go ahead and dig into this. Of course, the five ways to fund your school.
The first one, personal savings. If you haven’t been saving at least 10% of your salary or your income, whatever it is to this point in time, that’s something you should really start doing, anyway. But having some level of personal savings as an emergency fund, but then also to start a business or something like this is very important. Having some personal savings to start with would be great.
I mean if not, if this is just a time for you to jump in and go for this, asking some friends, asking some family members especially to help you out and then you pay them back on your own terms with them is not something to be too afraid of. You don’t have to worry about having your tail between your legs here on this one. Don’t ask for too much if you’re going to do that. If you’re going to do a full build out and you’re looking to start a mega school and put a lot of money into it upfront, you might do a combination of these things. But you really don’t want to sour relationships. What I’m saying is if you’re going that route, I would definitely start with smaller asks and just make it work and make it happen as you go. That’s just how I see things.
The next one is investor. It’s actually quite rare that people get investors to invest in the creation of a martial arts school. The reason why is it is a service business. There’s nothing particularly proprietary about it in most cases. It’s not like you have this new app or you have this new product that is completely unique around the world. That doesn’t mean your school isn’t going to be amazing and can’t be different and better. I’m not saying that. It’s just in general not as investible as some other things with perhaps higher or hyper growth that they could invest in.
Now I actually have two friends that they both had investors get them started with their schools. I know it does happen. With an investor, I’ll probably talk about this a little bit later on, but I have a friend who he started his school. He had met some multimillionaires that run some very successful online businesses whenever he was working at someone else’s martial arts school as an instructor. They hit it off and he was telling them about all his plans and things that he wanted to do in his own life, my friend. The investor pretty much offered and they worked a deal out. I don’t know all the specifics, but the investor put a pretty good amount of money up, wrote him a check and then they invested in equity stake in the business itself.
Like, “Oh, that sounds pretty awesome, having multimillionaires invest in my school.” It could be. What I would say is that if you’re going to work with an investor, make sure they add value beyond just the monetary insertion, okay? If they’re going to write you a check for $50,000 and they’re like, “Okay, here’s your $50,000. This is what you need to open your school and I’m going to own 25% of it.” You’re like, “Cool, I have an investor. This is like being on Shark Tank or something.” The thing is you could have just gotten a bank loan or done something else for that $50,000 or started with more of a bootstrapped operation and kept 100%.
It’s not just even about the equity percentage, but what value are they going to add? Who are they? Are they interested at all in adding value from a marketing perspective, management, helping me go to multiple locations, helping me take this to an online school as well or doing other things like that? Then yeah, it might be worthwhile working with them. If I was going to invest into your school, like, “Hey, here’s a check for $50,000. I now own 25% of it,” you might want to take that because I actually do have a lot of experience in the industry. I have connections. I have the ability to add value to what you’re doing in a way that would make sense.
Now if you met someone that you’re teaching his kid karate at a local school and he owns a successful used car dealership and you’re telling him about how you want to start a school and you don’t have a lot of money, though. He’s like, “Hey, I’ll get you started. Here’s the money. I just want 25%,” or whatever. You take it. He just gave you money. It’s very possible he’s not going to add value beyond that. He’s just being a shrewd businessman. He just wants to get a return on his money. Even then, I guess he must have a lot of confidence in you. In most cases, investor isn’t an avenue to pursue. If it happens to fall into your lap and it works out, definitely try to give up as little of your business as possible and don’t ask for too large of an amount again, but I’ll move on.
The next one we’re going to talk about real quick is bank loan or credit cards. Getting a traditional bank loan for a business that has obviously not yet been established can happen depending on your credit score, depending on your previous salaries and your tax returns. It’s definitely a process that can take a while. Lots of paperwork and everything else. Definitely look for an SBA or a lower interest rate loan if you’re going to do that. Another option is credit cards. I’m not a big fan of using credit cards other than taking advantage of them to get reward points and paying off the balance in full each month.
If you needed to open up a card, specifically looking for a zero percent APR card maybe for the first 18 months … I know there are some credit cards out there that do things like this. This would actually allow you to put your initial purchases on the credit card, the most important ones, just to get going. Like maybe buying your mats and your initial opening inventory for your uniforms and equipment and things like that. As you go, you’re obviously going to be building up your student base and your recurring revenue. You can pay that off without any interest. Once you’re done a couple of years from now, you can just shut down the card if you need to. It really doesn’t affect your credit as much as a lot of people think.
That’s an option. I did open up a zero percent credit card once actually for a book publishing company that I started. I used it literally because I didn’t have the cash flow, and I used it to create my first order to buy books. It was about $3000 just to get my first book shipment. Yeah, it was zero percent. I just want to point that up as an option.
The last one is definitely my favorite way, which is crowdfunding or pre-enrolling. We’ll go into details on this a little bit later, but the idea here is you know about crowdfunding by now I’m sure, whether it be Kickstarter, GoFundMe, Indiegogo, these sort of websites. Right? A lot of that is good for online businesses or products.
Local businesses and service businesses sometimes will use it. In a way, it’s not always as necessary, but the thing about crowdfunding is people think you’re going to put out this thing and you’re just going to ask friends and family and community members, “Hey, help me out. Help support me. Hey, send me some money so I can start this business.” It usually doesn’t work that way. I mean you’re pretty much getting people who would potentially be interested as customers to crowdfund you and back you, anyway.
What I would say is really do a pre-enrollment campaign. For the Global Martial Arts University, we’ve done pre-enrollment campaigns before. To get the GMAU, the new website and everything started, we actually did one. We did it for the Tae Kwon Do course we just launched actually earlier this year. It allows you to have people pre-enroll at a special price and know that you’re going to have those students already on day one. Now we’ll go into more details on how to pre-enroll in a little bit, but pre-enrolling, you generally want to offer a special deal. What we call a founder’s membership. Okay. The membership is actually going to be $150 a month for the two classes a week or whatever it is.
But for everyone who’s going to get a founder’s membership … We’re only offering 50 of these. The first 50 students to enroll into this school, you’re going to get for just $100 a month or $125 a month. Whatever you choose. Then the price will never change for you. So they know they’re getting a really special deal. They know it’s a founder’s membership. It sounds very special. Then also, you don’t have to do this, but you could say it’ll never go up. It’ll never change, which again, I’m not a big fan of raising tuition prices on someone. I usually grandfather rates in, even once I do raise my prices to the public anyway, but you could mention that.
Of course, pre-enrolling is amazing because if you pre-enroll the 50 students over the course of a month, two months, as you’re preparing to get your school totally open, them paying their first month, their registration fees, their equipment can easily be, let’s say, $10,000 or something, which could very well pay for a lot of the things you needed to get going, anyway. Now you don’t have any debt. You already know you have 50 students on day one that’s about to be recurring revenue on their tuition and everything. There’s just a lot of good things about that.
We talked about should you bootstrap or should you go for that full build out upfront. Again, a friend of mine, Michael South, who was one of the founding GMAU Krav Maga instructors, has a really awesome school. It’s at Oklahoma City. He has about 300 active students. He’s really killing it over there. He’s doing a great job. Just amazing classes. The quality of his students are really impressive, and I know that because I know him well and I know his school well. I’ve been over there quite a few times. He actually did get an investor to get launched with his school. He did go for the full build out model. He just had everything done from the beginning.
I did a bootstrap model, so I have more experience in that. That’s just how I like to handle things, anyway. I like to prove myself, prove the model in the market first before I go all in and get a bunch of loans and debt and things like that just in general. As an entrepreneur, that’s how I prefer it. When you’re going to bootstrap, you just need to start with the most important things. What do you really need to run a martial arts school? What’s most essential? Well, you really don’t have to have anything. To be honest with you, it is a service business. Again, you could just have a warehouse. It’s you. You’re just training right there with a group. You could do it in a garage dojo. There’s lots of options. Ultimately, you’re the product. You’re the person teaching.
But if I’m starting an actual physical facility, the first thing first of all regarding the business itself is a great logo. I wanted to make sure and point this out. A great logo or branding in general, please don’t skimp on this. You’re like, “Oh, I need to keep my costs low. I’m bootstrapping.” Don’t bootstrap your logo. Don’t have some friend just because he kind of is good at graphic design design it. Make sure you get something that’s really impressive, that looks very professional.
I’ve used 99 Designs before, which is a logo design contest. They actually designed the most recent GMAU acronym logo and I’ve used them for a couple of other ones in the past. You could use something like Upwork or Fiverr or hire an online freelancer or potentially even a local designer, but spend some money and make sure you have a really awesome logo that you can change colors on easily. Make sure it’s something you can go a single color on, that you can put on different colored backgrounds because you’re going to have different colored shirts and uniforms. Some people don’t realize this. They have a very multi-colored logo and then they’re not very graphically oriented or computer literate, perhaps. It just can look bad in other places than just on one piece of paper or in the initial graphic that you saw.
Now next, mats or good flooring. Clearly I know a lot of traditional schools like to use wooden floors. Actually here in the studio that we built, we put a high-quality, 100% bamboo down originally for our Japanese martial arts program, such as Bōjutsu and Shotokan karate. Now I do have mats. I think they’re an inch and a half to Tommy Hybrid Swain mats made by Swain Dollamur. My original school had Swain mats and they lasted for over 10 years. They’re really, really good. A good quality mat not only makes your school look more professional … It just looks awesome. It looks like the real deal. They’re not just these cheap puzzle mats that you would see in a kid’s playroom with toddlers walking around on. It looks like it’s a real martial arts school I guess is what I’m saying, whether it be the seamless mats, the smooth mats for MMA, BJJ, that sort of thing. Invest in some good mats. These will last you a very long time if you take good care of them. It’s something that is worthwhile.
Branded equipment. Just get what you need at the beginning, whether it be square hand targets, focus mitts, kick shields, tombstone pads, that sort of thing. You might not even need a bunch of wave masters or freestanding bags or hanging bags. You could add those things later on. Get the things you need right at the beginning to really run good classes. Brand it with your new logo. Make it look like it’s legit. It’s a real professional organization. It’s not just you buying random stuff in random places. You don’t go to a restaurant that has a chain of hundreds of locations, and it shows the name and the brand of the company that makes the cups and the forks. You know what I mean? It’s branded and they’re creating an experience for you. It doesn’t really cost that much more.
Definitely get some good chairs. Something that looks nice. Don’t skimp on your parent chairs or your spectator chairs. Whatever you want to call them. Make sure something that looks clean and a good sign. Investing in a good sign. You could start with even a more basic sign and then upgrade it later on, but something that looks clean and professional. You don’t just put some grand opening banner out and keep it out for a year. Those are some of the most essential things that I would point out. Of course, you also need some starting inventory, such as T-shirts that you get branded, uniforms that I recommend also getting branded and equipment for your equipment packages.
You always want to have students buy their equipment package when they enroll. Make that mandatory. The equipment package might be a pair of gloves or boxing gloves, for example, or MMA gloves. Then their uniform, the T-shirt, maybe a duffel bag or a backpack, a square hand target that they can practice at home with, maybe even a DVD with your video curriculum on it or whatever you want to put in it. Have your starting inventory for that.
You also want to have some money for marketing. Print materials, printing out some good quality postcards or flyers or something like that. Again, don’t skimp on paying a designer to get a good grand opening graphic made that you could use on social media or that you could also print out on flyers or postcards and put them up around the local community. Also have some money for some Facebook or Google ads, which you might want to run some of those. I would definitely recommend running some of those to get things started. Have a little money for that.
Definitely get a website started, clearly. You don’t have to build everything from scratch. There are a lot of turnkey options. You could just build a simple WordPress site or something that has a lead capture on it. You definitely want to make it easy for people to give you their name and their information, their phone number, their email so that you can get back with them, set up a free introductory course or whatever it is that you’re doing. Make sure it’s a lead magnet-style website and you’re not just giving people information. That’s important. Some other things I want to point out is when you’re bootstrapping, you can negotiate terms and demand a longer pay period. Whenever you’re buying these big purchases, like mats … Mats are probably going to be your biggest purchase.
First of all, negotiate. Offer a lower price because you’re like, “Hey, I’m comparing these guys. I’m comparing Dollamur. I’m comparing Fuji. I’m comparing a couple of different … Zebra and they gave me this quote. If you can beat that, I’ll go with you. If they’re willing to beat those prices, they’re willing to work with you some, okay? If you can get a zero percent financing or low-interest financing on those big purchases also … Don’t just take things at face value. If you’re not used to negotiating, if you’re not used to running a business and doing these things, it’s something that you should learn.
You’re in control. You’re the consumer. You’re the one who’s actually paying for these things. Don’t think that you don’t have the voice to state that you want better terms, right? I just wanted to point that out. I also wanted to point out that starting in a smaller location … Maybe 1500 square feet, 1500, 2000 square feet is fine. A clean, respectable location. Not some back alley, gross-looking building just because it’s cheap. No. It needs to be clean. It needs to be a respectable location. It doesn’t have to be on Main Street necessarily. This isn’t a hotel. This isn’t a gas station. This isn’t a restaurant. The internet will drive people to your school.
I wanted to point out that you don’t have to have the very best location, which is more important for something like a restaurant, but it should still be again a nice building that you’re actually getting a lease in. There are lots of different types of buildings. It could be a shopping center. It could be a warehouse or a metal building, but it’s clean. It’s respectful. It’s got good parking. It’s got good terms. Negotiate those terms on your lease. Consider something for one, two or three years. Go for a shorter period of time, especially because you’re probably going to be able to outgrow that facility and maybe move into something even better down the line.
You don’t want to put yourself on the hook with very high overhead when you’re starting out. Again, this is the bootstrapping model. If you’re going for the full build out model, which we’ll talk about in a second, you might be more likely for something that’s much more costly. Look at the triple nets. Look at the utility costs. Look at what you’re going to be responsible for. In my lease, I had to pay for air conditioning, HVAC, maintenance and repair, which got expensive sometimes. You need to be aware of all these things.
Again, in a previous episode, we talked about the five different models. You might start out at a part-time martial arts school in a community center. You might find a local fitness facility or dance studio, where they have a completely free room for a few hours twice a week and you pay them a small rent. You don’t have utilities. You don’t have a lease. You don’t have any of that. You can build up your school initially. You can still build up your school and then have 40, 50 students or something and then go full-time or go into another facility, right? I want to point this out. Don’t price yourself too low just because you don’t have your own facility. That’s a limiting belief.
I see people who run martial arts schools. They’re good instructors and they’re making a big change in their students’ lives. Because they’re in a community center or something like that, they charge like $50 a month. First of all, you’re bringing the entire industry down. You’re making martial arts seem like they create no value for your student base, which isn’t true. Just because you’re not in some fancy, shiny, 5000-square foot brand new facility, that doesn’t mean you have to price yourself so low. Ultimately, people aren’t paying for the facility.
Again, you want a clean, respectful and nice facility, but you can do that in a community center or at your own place that you lease. It’s ultimately about the instructors. It’s about you or the instructors that are teaching the classes, the product that they’re creating, the experience, the results that they’re giving the students. That’s why people come. I run my private academy, my kids academy right now on our property in the middle of nowhere in this building that has metal siding. It’s a nice building, but it doesn’t look like a martial arts group. People are like, “Is this a barn or something?” They walk in the door. It’s all branded. It’s got nice mats. It’s got great equipment and everything, but still, it’s fairly simple.
Ultimately, it’s about the class. It’s about the experience. With bootstrapping, and this is what I did is I actually started my full-time school in 2009 when I went all in. I already did have mats from the previous school, but I had $5000 saved and that’s it. I used it to get a basic sign, to get my initial equipment going, to get the starting inventory and to pay for some print marketing materials. I did a little build out. My father-in-law helped me build a little three-foot barrier wall and then a front counter and that was it, and we were out of money.
It wasn’t a whole lot, but what happened is as we grew, we would reinvest profits into the business. I remember we had a little bit of money, so we bought six wave masters, right? We had more wave masters now that we could use, which was great for classes, and we had a little bit more money. We got a couple more mats actually to make our mat space bigger. Next month, we had some money, so we bought some tables and chairs for the lobby. Then next month, we bought a sofa for the lobby. We bought a new computer for the front desk.
Later on, we bought a new sign. Later on, we actually did a total new build out inside of there. We enclosed the rooms with glass, with huge windows. You could actually see inside of the classes, but it was completely soundproof in there. We added another room. We enclosed the program director’s office with a glass door and all these things. All these things were improved and built out over time. We got this really nice channel letter branded sign that was out front and we reinvested as we went without any debt at all. I just wanted to point out that’s the bootstrapping model.
The other model is the full build out model. Again, I don’t have as much personal experience with this, but I have some friends who have done this, such as again my friend Michael South. You do it big from the beginning. You pretty much have a loan or an investor or just you had a lot of money saved up. Whatever you’re doing. You get everything done. You’re like, “Okay, this is my model. I want to have 250, 300 students within two years. I need to have these two big training floors. I need this. I need the showers, the changing rooms. I need the build out.” You spend a lot of money on your build out. On your mats, on all your equipment, everything like that.
You’re going to need some operating capital to cover your burn rate or your monthly overhead because it’s going to take you longer to go into the black to actually become profitable. You might need to have help out the gate with some staff members if you’re going this way. You’re going big or going home. That can be done and that can be very successful. You might also consider subcontracting out instructors, such as a yoga instructor or someone like this that’s teaching classes in off-peak times to help you bring in more revenue to cover your expenses while you’re getting everything up to speed. A couple of years down the line, you might have way more students and you might have to kindly ask the yoga instructor to go teach somewhere else because you now need to run classes at that time period, but it’s a good thing you can do to get you moving forward.
That is the full build out model. That’s another option. It’s riskier, but it could give you that special fill. You might have a specific type of facility you want to operate. Maybe you really need a large space and you want to go big or go home. That’s definitely an option. Let’s go ahead and talk about launch marketing. Let’s talk about how do you actually start marketing that school, get those initial students, bring in some revenue, know that you have students for your first class ever?
I started that school, the full-time commercial school, in 2009. Then just two years ago is when I launched the Kids Academy here and I did things a little differently for both of them. One idea is definitely setting up a weekly Saturday morning beginner’s workshop. Now if you already have the place that you sign the lease on, even if you’re still doing construction, if you have one room or just one place you can do a small group class, do that. Or if you need to, find some other location to meet with people to sign them up. That’s something that you can do.
Now let’s talk about launch marketing. How do you actually get new students to your school? Back in 2009, I launched the full-time commercial school. Then just two years ago, I actually launched my private kids academy here. So I’ve done things a little bit differently in each of these. For one, with the Kids Academy, I set up one-on-one introductory lessons throughout the week to pre-enroll students. You’re busy. You’re probably helping with the build out. You’re painting. You’re just doing different things, getting things going. You have stuff going on social media. You have some flyers out already. You have some people contacting you, right?
You’re like, “Okay. I just want to let you know that I offer a free introductory lesson to actually work with your child or work with you,” if they’re an adult, “one-on-one to show you all the benefits.” Of course you’ve already asked them about what benefit are they looking for as well. That’s really important. We’re not talking about a phone script right now, but you know what’s important to them. You talk about that. You point out an introductory lesson. They’re going to get to know you. They’re going to get to have a feel to make sure this is the right fit for them. Then afterwards, you’ll get them enrolled into the program. I always say that. I always let them know. I don’t say, “Then afterwards, I’ll talk to you about the prices,” or, “Afterwards, I’ll see if you want to enroll.” I absolutely would never say that.
Just set up a one-on-one introductory class. This whole thing usually takes 30, 45 minutes. This could be done at the place you’re building out right now. If you have a small space, just somewhere to do your lesson. If you literally don’t have that place yet, you could meet somewhere else or ask if there’s someone that you know or a fitness center or some community center that would let you meet up and do a lesson or a garage dojo or whatever you’ve got to do to do that introductory lesson.
I did these. I was doing quite a few of these, three, four a week, for the five, six weeks leading up to the launch of the Kids Academy. I literally enrolled every single person. No one didn’t want to enroll. There was one person I had to turn down for another reason, but you need to know how to do a good introductory lesson, which we’re not discussing right now, but you do a good introductory lesson. Again, this is launching the school. You’re pointing out, “This is what the price is going to be. This is our pre-enrollment founder’s membership deal special that you get, and I’ll get you going right now.” They pay the registration fee their first month and then you get their equipment going. Whatever you need to do to get them enrolled.
You go, “Here’s the class schedule. Our first class is this day at this time. I won’t be seeing you guys for three or four weeks.” You might be enrolling them three, four, five weeks before the first class ever. I’ve done that before and it was no problem. Of course, just make sure you give them a call and an email before. A couple of days before the first class just to remind them. The other thing to do that I did with my full-time commercial school is set up a Saturday morning beginner’s workshop, also called a mass intro. 10 a.m. is a really good time for this. Maybe you’ll do one at 11:30 a.m. for your adult program. You can promote this.
You promote the event throughout the week. You promote it on social media with posts. You can do boosted posts. You can put it on your Google business listing. You can make that free event on Facebook, on Google, on Craigslist. You can put flyers up around the time. You can put cards and businesses, right? You can put up snipe signs talking about it or political looking signs that go on the side of roads. You can promote this free event. All the interest you get throughout the week … Four, five, six, seven, eight, nine phone calls. Tell them all about this beginner’s workshop. “We’re going to be showing you the basics of martial arts, helping your child succeed and teaching them focus and concentration and respect and self-discipline.” All the things that we do in martial arts. “Then afterwards, we’re going to give you guys a special offer and give you the ability to actually enroll into our school that we’re about to launch.”
What happens is you do a mass introductory lesson. Basically, it was like the one-on-one introductory lesson, but now you’re doing it for five, six kids at once or five or six adults all at once. Then afterwards, you give them a special and then you go ahead and enroll them. Now I have a future episode on how to do this because I spent a lot of time on more or less perfecting this. You can enroll five or six people all at one time and it really maximizes your time. You’re able to continue to work if you still are working full-time at another job or you’re doing all the other things to get your school launched. Then come Saturday morning, you have 10 new students because you did one at 10:00 a.m. You did one at 11:30 a.m.
You could do that every Saturday for a month leading up to the launch of your school. You could do something called sign ups, where you don’t actually do a lesson yet. You just have people walk in the door. You talk to them about everything that’s happening. “This is the special.” Then you say, “We only have a few spots left.” You have the paper out in front of them. I literally did this with the Kids Academy because I genuinely only had 10 spots I was enrolling. I’m like, “Look, I only have three spots left in this age group. I can go and get you enrolled now.”
I had people that were just willing to enroll. I liked doing the introductory lesson, anyway. It wasn’t just about, “Oh, I think that I’ll make sure that they’re enrolled because they’ll see the value, the kid will enjoy it, et cetera.” It’s because I wanted to give them that orientation. I wanted the student to feel welcome and ready to go on their first class. They know some basics. They know the importance of saying, “Yes, sir,” and, “No, sir,” and bowing. Showing respect. They know how to sit down in our legs locked position. They know how to do some things already.
Class number one isn’t going to be throwing them into the wild. That’s another reason I do introductory lessons, whether it’s one-on-one or a mass introductory lesson. Other ways to get your launch marketing going, setting up a booth in front of us or a table, going to a daycare or a local school, if they have a meet the teacher event, some sort of parent teacher organization event coming up. Some way where you can come out and just present what you’re doing, become a part of the community, create that conversation and just get it going. Right? I already mentioned it, but social media. Doing good posts, making quick videos, putting out photos and building up that interest and doing even boosted or advertised posts can also be very good.
Okay. Finally, before we get into our question, I want to talk about how you bring in initial revenue. How you actually make money before your school even starts. Whenever I enrolled new students before my school started, I had a registration fee. A new student registration fee, which you could charge $49, $79. Whatever. You might be in a completely different country, anyway, and that currency doesn’t make any sense. You most likely would charge their first month and also their equipment package.
Now it really depends on the income level, income bracket of the student base or the demographics that you’re working with. For some, it might be like, “Okay. $49 plus the first month is …” Let’s say it’s $150. Okay. That’s $199. The equipment package let’s say is $100. That’s $299. Okay. For some, that’s no big deal at all. You might have a different income bracket, which I personally worked with more of a middle-class or even lower middle-class … Not an extremely affluent income bracket. I know the challenges. I know the struggle, but I know how willing these families are to do whatever it takes for their kids. I know how willing even the adults are to make change. They see the value in martial arts, right?
You can do something like they pay their registration fee and then you schedule the first month actually a couple of weeks from now, or they pay the registration fee and the first month. The equipment package is mandatory, but you offer them to make two payments on it. The two payments are scheduled on their account three weeks from now and then the other half is five weeks from now. Always working with people and giving them options. If they really want to enroll and they’re going to be able to pay for it, but it’s a lot all up front, split that up.
I want to point out that depending on where you’re at, you might have to do this. But I usually don’t do what’s called a cash promise. Them saying, “Okay, no problem. I’ll come back in next week. I’ll give you some of the cash. I’ll pay for half of it.” What happens is you become a bill collector. What happens is that you have to make notes about them not paying you this, this and this. It’s really a headache. It’s really a problem. It’s something I used to do sometimes and then I stopped completely.
If someone doesn’t pay the full amount that you ask them … That they legitimately owe on the day they’re enrolling, you have to schedule an advance on their account. For us, we only set up payments on debit card, credit card or checking accounts. They’re automatic payments. It’s very simple. People honestly prefer it. You can choose a day of the month or another thing I was going to point out is we offer monthly tuition or biweekly. Let’s say our tuition is $150 a month or it’s $75 every two weeks. Again with the equipment package, if it’s $100, with tax $108.24, if they’re having trouble paying that, you can say, “Also you can do two payments. $54.12,” or whatever that is. That is another way to do that. Just schedule it on their account.
Where I’m talking about billing … Billing software and things like that today, but having a good recurring billing program is also critical. I didn’t mention it earlier in the startup cost because it doesn’t actually cost anything, but you definitely either want good school software from the get go or just a basic good recurring billing program. I also want to point out paid in fulls. Offering a paid in full membership for, let’s say, a six-month package or 12 months or whatever you’re doing is so important. Always offer it. Always make it valuable in some way, whether you get a discount because you do it. That’s usually what makes sense. You get some sort of percentage off when you pay in full. Whatever it might be.
Of course, remember to offer a discount for second and third family members that you’re adding on. The easiest way to enroll another new student is a family member. With the paid in full, if you don’t ask for it, you won’t get it. I just wanted to point that out, that people are willing to invest in that. People are willing to see the value. They might put it on a credit card. They might pull it out of their savings account and just know that they’re … Part of it is actually just mentally knowing that they took care of that. “I took care of this for my child. The next year is paid for because this is important to me.”
It gives them a sense of pride. That’s a great thing. Then they’re going to be more likely to follow through because they’ve already paid for it. If it’s an adult program, they’re like, “I’m totally invested in this. I’m not quitting. I’m going to make this happen. I’m going to do this six months. I’m going to do this 12 months.” Whatever it is. Go all the way through. “I’m going to get this out of it.” That’s how you can bring in initial revenue when you’re launching your school.
Today’s question comes from Jonathan Martin from Toccoa, Georgia. Thanks Jonathan, for sending in question. His question is, “How do you deal with parents who are lazy when it comes to getting their kids to class?” Now I’m sorry Jonathan that you’ve been dealing with this. I have experienced it as well. This is really difficult to handle once it starts. It’s like a cancer that can spread. My answer to this though is setting the tone from the beginning of the relationship. It’s really important that you show that you have a culture of respect, that you have a culture of high standards, that you take attendance very seriously. You point those things out.
You might have a new student checklist that you go over, saying things like, “It’s required that the student has equipment. It’s required that they show up to at least 90% of classes or they have to show up at least two times out of each week,” or whatever it might be. We close for holidays. You go over the most important things that they might get upset about at some point in the future. You need to verbally go over these things and make sure you’re on the same page.
You need to set that tone and then continue it, right? It’s just the way you are every day when people come to class. I’ve walked in to martial arts schools before class starts. It’s like mayhem. There’s stuff everywhere. Kids are playing and talking. Maybe a class is going on right now and they have no respect for that class. No respect whatsoever. I can’t believe it when I see this. I would never allow that in my school. Whenever a class is in session, people know to be very quiet, very respectful. If they have to talk on their phone, they step outside. If they have a small child that is getting unruly, they know they can step outside or into another room with them. That’s something that we expect.
We expect for people to respect the class in session. We expect that students and parents, the entire family, are going to show up. They’re going to show up on time. I also have had a lot of issues in the past with people showing up late. The same people always showing up late to class. I’m like, “Really? Are you always showing up late to class? What’s going on?” The thing is you need to have good communication, right? I would recommend doing a student checkup, which is what I call them. It’s really just a parent teacher conference. Call that parent right after class. Talk to them in person ideally. Well, because maybe they showed up late, so you couldn’t before class.
“I’ve been really concerned because Johnny hasn’t been coming to class very often.” Jonathan, you mentioned actually that the parents are lazy. This is a difficult thing because I assume you know or somehow know based upon their personality type they’re just not wanting to bring their kids to class. If they really don’t want to bring their kids to class, they should not be in your school in general. Just point that out.
I have such high standards that I would have that parent teacher conference and I would tell them, “This might not work out for you guys. At our academy, we want the very best for our students. We know consistent training is important. I understand sometimes we get sick. Sometimes we even go on vacations and things like that. Please give me a heads up. Tell me in person or send me an email, so I know that Johnny is not going to be in class because that really helps me out. I want to make sure he makes it to at least two classes a week because that’s what it takes for him to be successful. I’m here to help him reach his goals of getting into better shape or to be more focused, just like we talked about.”
Re-point out the initial benefit of why they signed up if you remember or took note of that. You might even need to instate an attendance policy, just like a private or a public school does. If you miss 10 times out of the school year, you can get on a bad list and you can even be expelled from the school. The state can even take action. At least that’s how it is in Texas. It’s pretty serious. People take their academic education this seriously because the rules and the regulations and the standards are in place. They’re there for a reason. You can do the same thing for your martial arts school.
You might be afraid to do this. Like, “Oh, I’m going to lose people because I’m pretty much bullying them and telling them, ‘Hey, if you don’t show up to class, then you really shouldn’t be here. I’m going to have to cancel your membership.'” No. Do that. It’s actually going to increase the quality of the people that come to your school. It’s going to improve the culture. You’re not going to have these cancerous individuals that don’t actually care about their children. I’m not saying that they don’t, but their actions speak louder than their words. I hope that answers your question somewhat.
This is very much a difficult issue, but maybe the parent has something very difficult they’re going through. Some life change, things like that. That’s when we try to have some level of communication with them and we give them another chance and we work with them. But if it just continues to happen and continues to happen, basically fire the student in a kind way. I hope you guys really enjoyed this episode. You guys continue to train hard. Keep learning and spread abundance.
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