Starting your own gym/school

[Mantis9]

I would like to ask those of you who own or run your own gym/school for some resources/advice on the nitty-gritty of the business. To pare down the subject a bit, I talking about leasing, student agreements (payment), location, maintainence, loans, etc.
I would like to look at the business side of martial arts training as I have been playing with the idea.

Thanks for your input.

Mantis9

[GLW]

First off do a business plan.

Whether you lease or buy a space, you will have some setup cost. This may include things like dressing rooms, bathrooms, mirrors, heavy bags, speed bag, weapons racks, weapons, stretching bars, and other miscellaneous equipment.

You will need a phone. Cell phones may work for a while but you will eventually need listing in the phone book...likea yellow pages. Yellow pages is NOT cheap.

You WILL need an office with a desk, computer, file cabinets, etc... and an assumed name (DBA - Doing Business As) a business bank account. The office - a lot of folks think they don't need one. Do you REALLY want to be discussing fees and potential discounts for families or having a talk with a deadbeat student in the work out area..or worse - outside....You need a private area...and it does NOT have to be large but 100 sq ft. is not uncommonly large.

Look upon all of the setup costs as money down the drain at first...you will NOT see that money back for a while. It is simply the cost of getting set up to do business and its gone.

Now you get into lease or buy for a space. If you absolutely KNOW that you will be doing this forever - try to buy - it IS cheaper...but it is a committment that a new enterprise may not do well with and you may not be able to swing the loan. also, if you pick the wrong location, you can't just move if you own the place.

Leasing at least for the first time out is probably better.

Figure up how many square feet you need in practice / class space. then check into electicity cost for heating, AC, the phone bill, water, etc... AND INSURANCE...you will need it. First for fire, vandalism and theft and then for liability...injuries DO happen in martial arts...you better be covered.

Now you go out and see what you can find in that size range and how much per square foot it goes for.

NOW you are ready to figure out monthly expenses. Add all of your recurring costs up and get a per month cost. Then, add 10 to 25% on top of that...each month you ALWAYS have incidental things you need to buy or pay for.

Now...you need to check around and see how much other schools charge for classes. You may feel you can charge more...but unless you have a big name, this is a big mistake. Most people who come in for classes don't know JACK about what any of us do. They will go with the flashy school or the one closest to them...and on occasion, some will actually look into it and go either with what is taught or the impression of the teacher.....you have to hit a positive score on all of these items to be a going concern.

Now that you know what your competition charges, you need to decide if you want to do contracts, discounts, etc... Discounts for families are a good idea...brothers, husband/wife, father son, etc... Discounts for paying for longer periods of time in advance is a good way to go....the more up front a person pays for classes, the bigger the discount. BUT...have a refund policy written down in case a person pays up front and then wants to quit early. A typical one is to refund based upon what they used at non-discount prices... For example, if class is $100 per month but they pay for 3 years and get it for $50 per month, then come after 12 months and want to quit with a refund, - they paid 1$1800 for 36 months. they used 12...with no discount, they would have paid $1200 for 12 months...so you refund back $600...

That type of thing.

With all of your cost and your per month charges figured out, DO THE MATH. Take the costs and divide them by the average expected monthly dues for a student. The number you get will be HOW MANY STUDENTS YOU MUST HAVE TO SIMPLY BREAK EVEN and not be paying to teach.

Now look at the space you have and the times you can have classes...CAN YOU PHYSICALLY FIT THAT MANY AND MORE STUDENTS INTO THE CLASSROOM SPACE? If you can easily and fit even more...you are in good shape. If you fit that many people in the space and it is crowded, look elsewhere, raise your rates or think of ways to cut costs....

Now if it all works out, negotiate and sign your lease. If you can, have a lawyer look it over...I guarantee the landlord did.... Look before you leap.

Finally, expect to spend a lot of time NOT breaking even the first year or so. If you are NOT making expenses after a year, you are doing something wrong and need to rethink things. Be prepared to be able to sustain the school on your own for at least a year....full cost

Don't quit your day job....until you are happy with the amount of money you have coming in for many months.

You may be the best thing since sliced bread as far as your martial skills and teaching...but running a business is a totally different skill...and one you MUST develop to do this.

[fa_jing]

Maybe we can all send you a dollar to help you get started? Just kidding, I respect what you're doing and I would like to open a martial arts school too, when the time is right. Good luck out there in Oregon. What's Eugene like, what do you think would interest the people?

[wushu chik]

Mantis9~

Email me~
wenny@fu-ragz.com


~Wen~

[Mantis9]

Ahh, the sobering reality of it all. Thanks for the info. I'm looking at this as a possible goal, down the road, in my development. I appreciate the time you took to respond. There's a lot to think about and research in your post.

Fa Jing

Eugene is a nice liberal arts university town. Think green trees, relatively over educated population, and liberalism. The people here are interested in a lot wide range of things; sometimes I think the more esoteric the better. CMA should be right up there!;)

Please send your dollars by check or money order to:

Mantis9
Eugene, OR 97405
:D