I was at the verge of throwing in the towel on my martial arts school when a shift in mindset turned everything around. I had put in so many years to this art that I couldn’t possible give up. I was far to heavily invested. What else could I do anyway? Not a lot else! So I focused on making my school work, not just financially but I also wanted to turn up to a busy class and enjoy teaching again, without worrying about the financial side.
The basic mistake I was making was that I didn’t know how to organize a school in such a way that I could pay for advertising and turn a profit. This is intricately tied up with your back end products such as summer camps, gradings and extra classes of course. The way you organize your payment structure and your retention rates are also a huge factor. If you pay to get people to your school, and they leave soon after, all that advertising is wasted. Having said that the main principle which turned things around for me was learning about return on investment.
Return On Investment
Knowing your return on investment is a game changer because once you know the value of a student, even if they only stay for a year, it empowers you to set a marketing budget. Even if you lose initially, the long term effect of having built a sizable school will pay dividends in the end. There’s also the factor that people don’t want to come to a tiny school with no students.
The more popular your school is, the more likely people are to stay. When I started paying to advertise my school I was very tentative. I was afraid to lose money. As a result I didn’t spend enough to keep the ball rolling. Once I get a few students in, I stopped advertising and closed the doors, thinking that giving those students more of my time would pay dividends later, and help build a good school. The opposite happened. People dropped out and I had a dwindling school.
I would then start advertising again to boost numbers. Often, when a student would visit my school they wouldn’t stay because there were such small numbers.
I didn’t have much money so I looked into ways to advertise for free or very cheaply. By advertising continuously, you keep the flow of new students going, instead of stunting it. When people are looking for a school they want it now! They don’t necessarily want to wait 6 months until your doors open for new students. By focusing on a continuous flow of new students in to the school, knowing there would always be a drop off rate, things began to change. I actively recruit now instead of resting on my laurels and expecting people to come, just because I’m such a good teacher!
I naively thought that just by opening a school people would come and stay. I thought that just because I had spent the larger part of my life training, that other people would too. When I looked at my school differently and realised that it wasn’t my martial arts training at fault, but my lack of awareness in the business of running a martial arts school, I could honestly say I was a beginner, and knew nothing. This awareness of my lack of knowledge led me to find some answers and I invested in my education. This time in a business education and not more martial arts training. This may sound obvious to many people but it wasn’t to me at first. I had struggled for years before it occurred to me that this wasn’t personal. I just didn’t know what I was doing from a business stand point.
Back End Sales & Retention
Of course your ‘back end’ sales and retention play a huge part in your return on investment. You can’t determine exactly how much you will earn from an individual student. However, you can estimate the rough amount based on a year of training and your business set up. Setting up your school to include multiple income streams helps. Have a monthly payment scheme which also encourages your students to get the most from their membership. This also means you have a more solid income each month. If someone doesn’t turn up to class, they are still paying. They lose out and not you! You can also monetize your school with merchandise, summers camps and other ‘after school’ courses. These all make a huge difference to your income and the return on investment from each student over 2-3 years.