End-Game Strategy for Martial Arts School Owners

In most cases, the MATA Systems Generator is meant to be a unique tool that you can use to develop, organize, and implement various systems that make owning and operating a martial arts school personally and professionally fulfilling and a good source of income. This month, I want to help you apply the MATA Systems Generator to a “system” that you may have neglected or have only partially developed—and that’s your end-game strategy.

Whether you’re a butcher, baker, candlestick maker, or martial arts school owner, someday you will reach the end of your career—and that could possibly be sooner than later—for any number of health, financial, and/or lifestyle reasons. Life may seem to move ahead at a steady rate, but there are always bumps, and the matching bruises.

Why You Need an End-Game Strategy

The death of a family member, spouse, or business partner, or a sudden divorce would be a shocking event, which is why an end-game strategy is essential. As a human, there are many medical conditions that could abruptly change your life; but, as a martial artist, you are also susceptible to injuries and chronic conditions, such as arthritis, that could stop your teaching career. In addition, we are all vulnerable to unexpected financial challenges, regardless of how well we’ve planned and saved.

It’s a bit easier for people who are employed their entire careers. If they save/invest a specific amount of money from every paycheck, then they are likely to have the financial resources to retire at a pre-determined age. Of course, you should also be contributing to a retirement fund, but you have the added element of business ownership, which makes your end-game strategy quite different. If you don’t know how much your school business is currently worth, then you should. Not only do you want to be prepared for the unexpected shocks to your life, but also to take immediate advantage of any opportunity to sell your school if someone offered to buy it tomorrow.

Lesson One: Plan an End-Game Strategy with the MATA Systems Generator

As a MATA-member school, you have the advantage of using the MATA Systems Generator for this task. The step-by-step organization of the Generator can help you plan a specific prospects-generating event at your school as well as your career’s end-game strategy.

The Project: Your “end-game strategy.”

The Goal: To become financially secure at a future retirement age, including the future of your school business. Be very specific here.

  • “How much money will I need per year for X number of years to live a Y lifestyle?”
  • “How much money will I have to save per year, per month to reach my retirement financial goals?”

These and many other similar questions should not be new to you. Everyone (parents, teachers, spouses, etc.) has been drilling them into our heads for years, and often before we were old enough to make a living and save for retirement. Regardless of your age, you should find time immediately to start the process of developing an end-game strategy.

Assignment One: Commit to paper the outline of an end-game strategy and use the MATA Systems Generator to organize your plan of action.

Step 1: Start with a meeting with yourself to determine, as best you can, the details and specific goals of your end-game strategy. Where do you want to be 20, 30, or 40 years in the future? Describe your goals in a paragraph and also quantify them in terms of time and money.

Step 2: Remember, there is an Internet overflowing with information about planning for retirement. Invest the time to educate yourself. That’s as valuable as investing your hard-earned money.

Assignment Two: Review and “finalize” your end-game strategy.

Step 1: Once you’ve done all you can on your own to develop your end-game strategy, it’s time to review it with the many people in your life (personal and professional) that are ready to help you complete it.

  • If you’re married, include your spouse (or life partner) in your planning and decision-making. He or she has a stake in your future together. Of course, one of the primary reasons for developing an end-game strategy is the possibility of divorce. Having such a plan in place and clearly detailed will make that unfortunate event (if it should occur) somewhat easier to face and resolve.

Step 2: Review your end-game strategy with your attorney, financial advisor, and/or retirement counselor.

  • There are many tax and legal considerations that must be taken into account when developing your end-game strategy—and only the professionals know the answers as well as the pitfalls and perils. You want the professionals to be involved regularly because your end-game strategy is never really “final.” As time passes, life and business events (as well as changes in the tax laws) will affect what you’ve planned, which means you must constantly tweak your end-game strategy.

Assignment Three: Determine the current value of your school business.

This is a very important task for your attorney or accountant because it’s likely that your business is one of your major assets.

Step 1: Be prepared to review with your attorney or accountant all your school’s financial data to determine annual gross revenue and net profits.

Step 2: Consider contracting with a business-valuation expert to assess your business and its potential sale value today and in the future. Your attorney or accountant should be able to recommend someone.

  • It’s important to know that business valuation, especially small businesses, is an inexact science. Don’t be surprised, as many small business owners are, that your school is not worth what you think it is worth. In fact, your school is no different than any parcel of real estate or antique clock: It is only worth what someone is willing to pay for it at any particular time.
  • Some experts say that you should multiply your school’s annual profits by a factor of one, two, or more. For example, a business that requires the new owner to provide most of the professional services himself or herself (such as teaching martial arts classes) is probably only worth a factor of one.
  • Other experts claim that a small business is usually only worth a percentage (50% to 70%) of its current profits because a buyer is more concerned with a business’s future value and not what the numbers show today.

Assignment Four: Expand your end-game strategy to include methods to make your business worth more.

Step 1: Once you’ve met with your attorney or accountant and possibly had a professional valuation of your school performed, you may learn that your school business is not worth what you thought it was worth.

  • Use a blank MATA Systems Generator to create a plan to increase the value of your school business. Throughout the MATA Systems, Media Marketing, and Web modules, I’ve shared many of the best ideas in the martial arts industry to add more students at a higher per-student value.
  • Ultimately, the primary benefit of developing an end-game strategy is that once you know where you are today and your goals for the future, you can then concentrate on growing your business every day, so it’s worth more when you are ready to sell it.

By implementing these steps and using the MATA Systems Generator, you can create a comprehensive end-game strategy that ensures your financial security and the continued success of your martial arts school.