Black Belt Business Tactics

You've decided to do it! For years, you've been on the outside looking in, wondering what this martial arts business was all about. From the earliest, you were spellbound by the arts, and somewhere in your heart knew a day would come when you would actively participate. You're single, 25 years old and work as a field representative for a consumer products company. You don't know anything about the martial arts, but you do know you need a regular exercise program you can do "on the road." You're also looking for a way to meet new friends, and the nightclub scene doesn't appeal to you.

Knowing nothing, you begin your search using the Yellow Pages. What first becomes clear to you is there are many varieties of martial arts. In your preliminary scan, you encounter names like Tae Kwon Do, Shotokan, Ai Ki Do, Tang Soo Do, Goju Ryu and Chinese Boxing. You've seen the Kung Fu show on T.V. and witnessed the extraordinary abilities of Master Po. To your pleasant surprise, there are eight instructors who are listed as "Masters." Eight out of ten that is.

"Hmmm ..." you ponder, "There's some really talented guys around here." Some of the masters have advertising on the page. "This one ... Master Frank, teaches Tang Soo Do, Karate, Kung Fu, Yoga, meditation and Ninja." Another ad describes, "The only nationally rated point fighter from this region." Still another describes a Master Lee as "Trainer of champions; master of Tae Kwon Do/ Hap Ki Do and acupuncturist." Your head is starting to reel with all the alien terms. Your dictionary is of no help.

Being an astute and informed consumer, you decide to visit some of the schools. You make a list of those advertising in the Yellow Pages, reasoning that teachers who advertise must be the most prominent. You visit the several schools and observe worlds of differences from one to the next. Master Frank's class is being run by a Brown Belt (a very high rank as a participating White Belt explains). The attitude of the class is casual and relaxed. In fact, there is so little activity in class that you doubt you would meet your needs for an exercise program here. You see an attractive Green Belt off to the side and ask her about the class. The Green Belt responds, "I've been here five months, and it's hard to express how much I've learned and how quickly I've come along. On top of that, Frank and his staff are really into social activities, and we're always having things like parties and get togethers. It's like one big happy family."

The social aspect really presses your "on" button, but you really want more activity than you’re seeing. Also, somewhere in the recesses of your mind, you remember hearing something about Green Belts taking more than five months to earn.

Before making any decisions, you venture to Master Lee's Martial Arts University ... since you were always fascinated by acupuncture. When you enter the training hall, there is a class going on. Master Lee is leading, and you can see it's a tightly regimented group. You sit to observe as they are throwing punches in unison. Five minutes go by, then ten, then fifteen. They are still throwing punches in unison. A few elderly people on the far side of the floor have had to stop. Instantly, Lee has them jogging backwards around the perimeter. After an equal amount of time spent on kicks, Lee tells his class to gear up for sparring. He zeros in on you and comes over to introduce himself. He bows, then takes your hand. While holding your hand in a vicelike grip, he introduces, "I’m Lee, he introduces with heavily accented English. I Teach Tae Kwon Do ... and also Judo, Ki Do and pressure points. Please come, exercise now, see if you like it."

With some hesitation, you put on a pair of worn and taped safety gloves and kick boots which, you are told, are to protect fighters from injuring one another. "Fighters!", you think, "I'm only here for exercise and to make some new friends ... I'm no fighter!" Instantly, you are standing across from a gentleman wearing a Black Belt. He has already bowed and assumed a fighting stance. He instructs, "Attack me, I'm not going to hurt you. I just want to show you some applications." As you attack, he responds with a multitude of kicks and punches to all your vital areas as you stand frozen in space with your hand extended in a mock punch. "Attack me again.  Try something different." Trying a kick, you clumsily lift your leg up and point it toward his groin. Suddenly he is behind you and your feet are in the air, as you drop suddenly to the floor. Hitting with a thud, you feel the air drain from your lungs. Everything around you begins to darken. In seconds, standing above you is Master Lee who admonishes, "You leave yourself too open, maybe you should take a break.  Go sit down."

Though Frank was able to give you 30 minutes while explaining his 6-month contract and $150 sign up fee (which included a uniform and the class instruction manual), Master Lee was unable to explain his charges and asked that you return tomorrow to speak with his son, who is also a "Master."

By now, you're starting to doubt whether this martial arts thing is something you really want to get involved with. You think, "Maybe I should go back to jogging." Not one to give up easily, you decide to pay a visit to the gentleman who's nationally rated as a point fighter and kata competitor. As you enter the school, you meet a formidable man dressed in a very stylish black Kung Fu-ish uniform. "Hi, I'm Shannon. I'm the head instructor here. C'mon in, you're just in time for a class."

Stepping into the workout area, you see that almost the entire space is occupied by what appears to be a boxing ring. Outside the ring, sitting on a bench, are seven fighters with boxing gloves and foot gear on. On the other side, getting into the ring, is Shannon. His uniform top is off, revealing an admirable musculature on his 200 pound, 6-foot-plus frame, as he struts to the middle of the ring and announces to the people on the bench that, "Today, we're going to work on attacking the solar plexus. There are any number of ways to attack the solar plexus. The important thing is to remember that when you take your shot, it should bring the opponent down." He invites all seven students into the ring. As they stand about the perimeter, you notice looks of trepidation on several brows. He invites each to attack him in succession. With an assortment of punches, elbow strikes, side kicks and even a hip strike, he systematically drills each of his students in their solar plexi and within seconds, the floor is carpeted with their sprawling bodies. In a leaping bound, Shannon jumps over the top rope and stands in front of you. "C'mon you try."

Struggling for the words, you respond "I'm getting out of here, before I get hurt."

As you hurriedly make for the door, Shannon taunts in the background, "C'mon, don't be a pussy! Come back here!" You hear pained laughter coming from the bodies on the mat as they ridicule your hasty retreat. A few days later, Shannon tracks you down to encourage your return. "Look, I'm training people for the street. Most instructors don't have the intestinal fortitude to put gloves on against their students. With me, it's always one-on-one. Every lesson is a private lesson with the instructor. On top of that, the price is right at $50/month." You angrily tell Shannon that the seven bodies you saw on the floor didn't seem to know all that much about self defense. You further point out that you already proved you know enough about self defense to escape uninjured. As you part, Shannon is now challenging you to come back to the school to try any one of them in the ring.

More confused than ever, you continue your search at the local "Y", where, as you go to observe another class, your attention is diverted by a large aerobics class. The people are working hard, as evidenced by their sweat, but more important to you, they are socializing and having a good time. You stick around and notice that as the class ends, the members leave in groups. The instructor is a pleasant lady who assures you that once you've mastered the routines, you can do them on your own to taped music. She's a regular person and seems to know exactly what you're looking for. Within minutes, you let go of your martial arts fantasy and sign up for aerobics.

What Just Happened

Before going further, let's take an analytical look at what occurred. We had a person who was looking to join a martial arts class to satisfy some specific needs. First, he wanted a regular exercise program. Second, he spends occasional time on the road, doesn't like the nightclub scene, and is looking for a way to meet other people. He focused initially on martial arts because of a long-standing interest but no past opportunity to get involved. None of the schools listed in the Yellow Pages specifically addressed his needs. Furthermore, when the person visited several classes, no instructor took the time to sit with him, identify his needs and interests and determine with him whether or not the class was appropriate for his specific situation. Further complicating the situation was that some of the instructors may have been claiming abilities and stature they did not in fact have, exaggerating their expertise and in the end, proving to be far less than the idealized image of Master Po still imprinted in the person's mind. In the end, he satisfied his needs by joining an aerobics class.

Black Belt Martial Artist/White Belt Business Person

Though not all martial artists elect to become teachers, it is clear from the high rate of failure and the rapid rate of turnover of schools that those who do are often poorly equipped in the skills requisite to running a successful business. The most common approach used by martial artists is the "We have everything" approach. One need only check the Yellow Pages to see samples of this mentality. As any experienced business person will tell you, "Selling everything to everybody really means you're not selling anything to anybody."

It's not that most Black Belts lack the skills necessary to be good business people. Rather, they haven't awakened their already developed skills and learned how to transfer them to the business arena. The business arena is no different from the tournament arena, or for that matter, the dojo, kwoon or dojang. Discipline, focus and commitment are essential to success in all of them. The ability to plan and strategize, to be flexible, to respond and execute are the very attributes that make a person a first rate martial artist and a first rate business person. If you aspire to do martial arts for a living, you cannot be one without being the other. If you are a true martial artist, traits you acquired in the martial arts should permeate through all your other activities.  They should infuse your life.. One Black Belt even went so far as to say, "The martial artist who is a Black Belt but cannot solve the problem of keeping a school open or a class motivated raises the question of whether he deserves a Black Belt in the first place." Every Black Belt instructor should be able to look at the martial arts as a business vehicle, identify the pluses and minuses, establish goals and create a plan to attain those goals. That's good Karate, good Kung Fu, good Tae Kwon Do ... and most certainly, good business.

The Product

The starting point in doing martial arts as a business is defining the product. Fortunately, martial artists usually have different talents and interests and therefore, different proclivities. Not only does this help to make life more interesting, but it allows for many differing avenues through which the expert teacher can tailor a "package" to satisfy the needs of virtually every student. The instructor who was selling Karate, Tai Chi, Kung Fu, Tae Kwon Do, Judo, Yoga, meditation, acupuncture and nutrition is probably not selling anything. An expert in any of those areas would have enough material to do a full-time class. The point is that each of us has our own skills and interests. For some of us, our special talent is tournament fighting. For others, it's Kata. Still others steer toward self defense, weapons or even full contact fighting. There are no limits to the opportunities for specialization. The point is that your product is always directly related to: 1) what you are best at; 2) what you enjoy doing the most; and 3) what your students will pay you to teach them. The martial artist should immediately ask himself the question, "Who can I bring this product to?" Would you teach self defense to a group of Kindergarten children? If you were helping to train a football team, would you have them practice Kata? If your talent was full contact fighting, would you be better served marketing your product at a military base or a retirement community? On the other hand, if there were a kissing bandit on the prowl, don’t you think you'd have hits advertising a self defense class for women?

One Tacoma, Washington Black Belt had been teaching classes for years before he observed what to others had been a very obvious pattern. While his youth classes thrived, his adult classes had such high rates of absence and turnover they would always eventually fold. Using his good martial arts’ judgment, he began to teach "children only,” and in time went on to promote a series of successful "children's only" tournaments.

Identifying and establishing your product does not mean that you have to become a specialist or forsake a more generalized approach to teaching. In fact, some teachers have been very successful in combining several interest areas into a spectrum of "product lines." The same teacher who is teaching the traditional Tae Kwon Do class may be giving self defense seminars at the community college, teaching knife and stick techniques to the local police force, sponsoring an aerobics class and writing martial arts articles for magazines. Once you have identified your interests and your talents, you should easily be able to identify the most likely end user or consumer of what you have to offer. That's known as defining the product and establishing your market. Once that's out of the way, the next step is promoting your product.

Promotion

Most people interpret promotion as having something to do with advertising. To some extent, it does. However, the best way for a business person to think about promotion is as follows. You've identified your product or products. You've identified the potential end users. Now you have to express to them that you are the one who satisfies their needs, and you want their business! Closely aligned with promotion is the concept of market segmentation. Since promotion usually involves some expenditure of time and money, it must be applied in near-surgical fashion for maximum efficiency. In other words, it should be used only in those situations where it will produce results.

The ad in the Yellow Pages is an excellent device for getting some initial attention at moderate cost. However, the ad must be informative and truthful. If you are a 5th degree Black Belt, don't call yourself a master or a grand master. Simply state your rank. If you are not a certified yoga instructor, don't give the impression you are. If you are, then say so elsewhere in the Yellow Pages. The point is, you should be able to communicate exactly what you're selling in 20 words or less. It should be targeted at the expected needs of the kind of student you're looking for. Don't try to make yourself into a deity. When everyone calls themselves "master,” then being a master doesn't mean a thing. By being accurate and forthright, you will stand out from the crowd. A good example of ad wording for the Yellow Pages is as follows: Western Tae Kwon Do, Chief Instructor -- John Smith, 4th degree Black Belt -- specializing in street defense and physical conditioning in a safe, friendly environment ... activities sanctioned by the Galactic Athletic Association. Remember, the way you promote always has something to do with the audience or customers you're trying to reach. Quality targeting will produce a quality clientele. If your emphasis is going to be teaching children, an effective promotional activity would be to give demonstrations at boy and girl scout meetings. Sure, it takes initiative to call the Scouting Office and identify the leaders for each troop, but the bottom line is that it's effective promotion, it's fun and it produces results.

The approaches are endless. A recent trend that has become commonplace has been for tournament promoters and seminar instructors to pass out flyers for their upcoming events while at tournaments. Promoting a future tournament or seminar at a current tournament is certainly an effective technique, since people who have been interested enough to attend one tournament may very well attend another. However, there is a fundamental item of courtesy to keep in mind. Get the tournament promoter's permission! Don't risk offending the sensitivities of a fellow martial artist by improper business etiquette.

A final promotional concept is the seminar. For the seminar approach to be effective, it must be tightly focused on one major subject area, reasonably priced and communicated specifically to the audience who needs the information. One of the best examples of how this notion works was a story related by Donald Wasielewski of Tacoma, an Isshinryu instructort, who over the years, has specialized in the seminar approach to teaching. "I had been doing women’s self defense seminars on and off for several years with inconsistent results. One class would be relatively large, the next small. I knew there was something out there motivating attendance, but I couldn’t put my finger on it. Then one autumn, as Halloween approached, a mysterious and prolific rapist began to prowl the communities adjacent to Tacoma, Washington. We were entering the usual Washington rainy season, and darkness was falling at 4-4:40 p.m. The combination of factors: darkness, a rapist, Halloween mentality, made for an interesting chemistry as I was about to initiate my usual fall seminar. Registration night produced an unbelievable turnout. I remember I had to put the money in a paper bag because I had no other way to carry it discreetly. I learned my woman's self defense seminar was tied closely to what was in the media and to factors such as season, early darkness and secondary concerns like subliminal fears surrounding things like Halloween. I began to time my seminars to capitalize on media happenings as well as on other factors, such as number of hours of darkness. The end result was that attendance at my seminars went up and variances in turnouts from one cycle to the next went down."

Consummate entrepreneur that he is, Don quickly learned the public's self defense needs extended well beyond the need for martial arts instruction. It wasn't long before people were contacting him about pocket alarms and mace and other protective devices. After screening several product lines, Don selected some as worthwhile to have in a self defense context and began promoting them in concert with his self defense class. This expanded approach proved to be successful in its own right and eventually Don ventured into markets other than the strictly martial arts.

Pricing Your Offering

One can't afford to be overly casual in establishing an appropriate price for a class or seminar. The pricing decision is ultimately driven by three factors: 1) the income you expect to derive from your activity; 2) your overhead and/or expenses; and 3) what the customer is willing to pay for what you have to offer. Say for example your rent and utilities are costing $400/month. You estimate your additional expenses, equipment, advertising, inventory, miscellaneous etcetera at an additional $200/month. Your overhead is therefore roughly $600/month ($400 plus $200 equals $600).

Next, you have a family of four and are able to make $3,000/month working as a plumber. Because teaching martial arts is your first love, you are willing to sacrifice on your income to be able to do martial arts full time. You agree with your wife that so long as she works, the family can get by with an income from you of $2,000/month. Adding that to the $600 projected overhead means that to meet your income expectations and to break even on your expenses, the class must generate $2,600 in revenues each month.

This is your starting point. Now you have some other questions to resolve. How many students do you need to make the necessary $2,600/month? How much should you charge each student for lessons? Should you factor the possibility that summer will be a slack period into your winter rates? To ensure your cash flow is maintained, should you insist on a contract? What price is reasonable and appropriate for the area you're in? These questions and many more are sure to rise once the doors open. Ultimately, you may have to contend with the question of whether you might be better off with a steady job. You should never read this as a sign of failure. Every successful entrepreneur has had to face that same question at some point in time.

So ... you check around and learn from your associates that other schools are charging between $30 and $60/month. Using the break-even analysis detailed in figure #1 (see figure #1), you quickly learn that at $30/month, you will need 87 students, while at $60/month, you will need 44. If you took the middle road and charged $45/month, you would need 58 students. If you were willing to forego all salary, your overhead of $600 would be met by 10 students at $60/month or 20 students at $30/month. As you go through this analysis, you should be thinking of questions like, "Does a lower monthly rate necessarily mean I will attract more students? If so, is it more profitable to have more students at a lower price or fewer students at a higher price?" Though each particular situation is unique, it is clear to my observation that price alone has little correlation to the ultimate number of students in a class.

You can take another approach to your pricing analysis, based upon the average number of active students you set as a goal. For example, you estimate that your dojo can hold 50 students at one time. You reason that you and your senior students will be able to staff the school 6 days/week. You further estimate that by grouping classes according to skill groups, subject areas and particular topics/seminars, your school can support a full time enrollment of 200 students. If this proved to be true (see figure #2), you would be able to charge $13 per student and accomplish your income objectives. If you charged $20 per student, you would generate the necessary $2,600 and a surplus of $1,400. Now you're really in business! If you charge $30, your surplus would be $3,400. With that kind of surplus, there's no reason why you couldn't buy the facility. As you can see, once you've got your income and expenses covered, the potential for growth is tremendous. Most instructors never think beyond, "How am I going to break even this month?" Because of that, they're always struggling to break even and consequently are less than fulfilled. It's like breaking bricks. If you want to break two bricks, you train on 4.  In time, 2 bricks become3 an easy task.

As experience ultimately proves to everyone, getting students through the door is not as easy as it sounds. It can be several years before your enrollment is at the expected 200 students. In the meantime, there are all sorts of supplemental activities you can undertake. Many teachers will sublet their schools to teachers from other styles. Others will encourage classes such as aerobics, dancing and gymnastics. This not only helps pay the rent but almost guarantees a certain spillover from those other activities into the martial arts. If you have expertise in other specialized areas, an organized offering of seminars might be an appropriate income-generating activity. The challenges are always there, but the opportunities are unlimited.

Distribution

The final topic in developing a Black Belt Business Plan addresses the question of how to deliver the product to the consumer. The great majority of instructors elect to do so through a formal school. That means entering a lease agreement with a landlord and having to live with monthly expenses in the vicinity of $400-600. If you're doing marital arts instruction for a living, losing the first $600/month to expenses can be a bit intimidating. The ultimate goal for someone who has a school is to maximize enrollment and/or to figure out a way to get his expenses down to a minimum level. One Pacific Northwest instructor elected to close his place of business and to teach class out of a 2-car garage, which he had converted to a first class dojo for the minimal investment of $1,000. The economics of his situation (see figure #3) are vastly superior to what they would be if he had to pay outside rent. His revenues almost entirely represent income. Teaching part time out of his home, he is easily able to generate $450 of additional income, teaching 6 hours per week. He limits his class to 15 students, teaches 3 nights a week and leaves the school open on Saturdays for everyone's use. There is always a waiting list.

Dave Bird, a Tacoma area Black Belt and head of the Northwest Arnis Association, had an arrangement with a local community recreational center. He was able to rent 1,000 square feet of space for 2 nights a week at $150/month. In addition, he gave private lessons to those students of means who had limited time for formal class and who learned better in the one-on-one format. However, Bird explains that an instructor must have some regional notoriety before he can break into the more lucrative private instruction market.

Not to be overlooked is the "free use" facility. Places such as university gymnasiums, athletic clubs and community activity centers (such as in modern apartment complexes) are often available at no cost if you can convince the management the activity you offer is worthwhile to the community involved.

The possibilities for distribution are limitless. Once you've identified your specific product and the probable consumer, questions about how to bring the product to the consumer will often answer themselves.

Tying It All Together

Tying it all together means remembering what we said at the very beginning. Doing business is like being in the tournament ring. You need discipline, commitment, strategy and an ability to adjust quickly. You may spend considerable time putting together your business plan and then find that adjustments have to be made once your doors are open. For example, your estimate of 200 students may turn out to be unrealistic. Do you give up, or do you adjust? How to react? How to adjust? How to get enrollment up? There are endless issues, and new challenges will arise, often daily. This article is a basic primer on good business judgment. I've seen countless Black Belts close their schools at the first sign of trouble. I've seen innumerable others who dejectedly accepted 10 students or $300/month as barriers that they could not penetrate no matter what they did , which was usually nothing. Like the man says, "If you can sell one car, you can sell a hundred. If you can sell a hundred, you can sell as many as you want. Still, you can't sell a car to the person who has no need for one and doesn't want one." The vast potential in the martial arts market remains untapped. Who would have imagined that a force like combat oriented Jiu Jitsu would surface to satisfy latent needs of the public for the combat arts.

In business, as in the martial arts, it's the basics that make the difference -- that means Product, Promotion, Pricing and Distribution. Make those concepts part of your business thinking, and you cannot fail. Remember, a person who has earned a Black Belt can do anything. If you choose to prosper, you certainly will!