Lesson One: Grow a Bigger Business By Keeping It Small
Now, maybe the most obvious system to increase the value of any business is to grow a bigger business. That is generally true; and there are many examples of martial arts school owners with successful “super” schools: one big facility serving 800, 1,000 or more students. It is also generally true, however, that to make that happen you must be willing
to become the everyday manager of your business, which will probably eliminate or severely reduce your teaching time. The other option is to hire someone to manage your business, so you can continue to teach; but that means your manager will make some business decisions, without your input or control.
The rule of thumb is that the bigger a business becomes, the more management is required. A “super” school with 1,000 students needs a substantial staff to serve them: head instructors, instructors, assistant instructors, marketing/sales director, support staff, etc.
Managing that much labor is a full-time job. Plus, you want to continue to provide the kind of personal interaction and customer service you did when you had 100 students.
You also have more and bigger financial obligations with a school of that size; so you must be very aggressive with sales and marketing to sustain enrollments levels and long-term contracts. Every month, you need a very large cash flow, so you pay for a very big nut.
My point is that owning and operating a “super” school with 1,000 students is only an option if you are willing to change your role significantly, as
I described above. I also don’t want to suggest that you should avoid this system; especially if you relish the idea of learning the tools you’ll need to grow a much bigger school in this way and becoming more of an entrepreneur and less of a teacher.
I think, however, that there is a better alternative that fits the mindset of martial arts school owners like you. Simply put, this system is the duplication of your current school as many times as you’re comfortable doing. The real secret is that those duplicated schools are purposely
limited to the student numbers (and required instructors and staff) you are already very experienced at managing: 150 to 250 students and a staff of three or four.
There are many reasons why duplication is probably a better business- growth system for you than a single “super” school. You know what it costs to operate a school exactly like your current one; there are more instructors to hire that have experience at a 200-student school than a 1,000-student “super” school; it’s easier to control overhead and maintain “small-school” customer service, etc. The other great benefit is that
you can start with just one new school, and it won’t be long before it is reaching its goals, which means you can then open a third.
By following the general system I’ve outlined below, you’re more likely to have 500 or more paying students much sooner than someone that opened a “super” school at the same time.
Assignment One: Make Your Plan
Because you already have all the facts and figures of operating your current school, it should be easy to prepare a projection of upfront and near-term costs and enrollment and revenue goals for a duplicate school. It’s a good idea to review your plan and numbers with your attorney and/or accountant.
Assignment Two: Find a Facility
You know what kind of facility to rent, but where should it be in relation to your current school? It may seem counter-intuitive, but you don’t want to open a second school on the other side of town. A better strategy is to choose a location in a geographic area that you’ve determined matches
your target audience (probably families with children), but slightly overlaps the geographic market area of your current school.
There are a number of benefits of that second-school-location strategy.
- It allows you to use your current school as a “feeder” school. Some prospects, or even current, students will live in that overlapping area; many will live near it. You can direct those prospects to your new school, and sell it as being more convenient. You may discover that some of your current students will be happy to transfer to the new school because it helps to solve a scheduling or transportation problem for mom or dad.
- Because of the proximity of the two schools, you can market both of them to both geographic areas. This means that your marketing is much more efficient since the second school doesn’t require much of a separate marketing budget or effort. Your direct mail costs may increase, but those pieces can advertise both schools. Plus, prospect-generating events at either school can be promoted to all prospects in both geographic market areas.
- You can immediately start to market your second location as soon as the lease is signed. There’s no reason to wait until you occupy it. You can use your first school for intro conferences and offer parents special packages to contract for classes in advance. You could easily accomplish a significant amount of your new-student goal before you pay the first month’s lease and other operating costs for the second school. In some cases, your new landlord may allow you to conduct limited classes in the partially built-out second school during the evening. Although it won’t be finished, this is a positive symbol for parents that you are a growing business.
Assignment Three: Hire a Staff
Staff is another major component of duplicating your current school. If you operate a 150- to 250-student school, then it may be you and another instructor, plus some assistants, and someone to answer the phone.
It may be smart to execute your school duplication plan when your current full-time instructor is ready to operate a school. He or she has probably been your “right-hand” person for some time, so he or she understands your teaching and operational systems. Just as important is that you are asking him or her to do a job at the new school that he or she has been doing at your current school. In other words, the instructor you choose
to operate the new school doesn’t require much additional knowledge or experience; he or she must simply duplicate what already works.
As with selecting the location of the new school, seek and hire new staff for it as soon as the ink is dry on the lease. You may incur some additional labor costs during the build-out period of the new location, but it’s a valuable investment. The new staff can work with the current members and you to be fully trained and ready to hit the ground running on the first day of the duplicated school. You’ll also know you’ve hired the right people or can replace them before the second school is ready.
Assignment Four: Open Your Duplicated School
Make sure you actively promote the opening of your new school with a grand opening event, distribution of a direct-mail piece to the area and as much publicity as you can generate from the media—using, of course, the many tools and strategies from your MATA Marketing Media System.
Maybe the greatest benefit to you is how easy it will be to manage two or more martial arts schools of the same moderate size. You can continue to teach at one or split your teaching time at the two schools.
This is an excellent strategy to appear to be serving both groups of students and parents sufficiently, and also have the opportunity to work with both staff to make improvements or changes.
As mentioned above, your marketing work isn’t duplicated; and because you have the operational and financial systems in place for your first school, any additional management of these segments of your business is minimal.
To take it a step further, you are now generating twice as much revenue (or close to it) during a short amount of time, which dramatically increases the value of your business and provides you with the cash to duplicate yourself again, add to your retirement savings, or even start to invest in real estate.
