Success Tips: Have You Reached “Black Belt” Rank in Business?


Jeff Smith, Greg Moody, and I were discussing the average martial arts school that we
interact with, which request free information from us. The topic came up about the level of
results that many of the school owners were having (many schools under $10,000) per month and
the backward way that many had structured their curriculum, their tuition, and their marketing
Someone, I forget who said that it’s amazing given how much information is available to
school owners and the huge advances that have been made by the top school owners in the past
30 years. After some discussion, I pointed out that our industry “turns over” every 4 to 5 years —
in other words, 20—25% of all schools go out of business each year. Therefore, the general
knowledge of the industry doesn’t date back to the 1960s but really is, on average, only a year or
two. And, frankly, many who’ve been in business for 15 or 20 years really have only 1 or 2
years of experience repeated over and over again.
In terms of your martial arts school, most owners are only green or blue belts in the business
of operating a martial arts school. Frankly, they usually are at that level as a teacher of martial
arts as well, no matter their personal “Athletic Talent.” They don’t know what they don’t know.
Actually, that’s giving most too much credit. Most school owners (probably the bottom 80%,
certainly at least the bottom 50%) DO NOT seek out teachers and training on how to run their
business more effectively. In a similar vein, I heard a stat recently that said 80% of salespeople
have never read even one sales book. The head of a HUGE insurance company said the
difference between his mediocre salespeople and his top 10% was reading two books per month.
The unfortunate reality is that most people are ignorant by choice. They then blame
circumstances for their failure rather than looking in a mirror.

In fact, the number one complaint that we get from members is that they need more time to
read all of the stuff we send them. In reality, if you allotted 30 minutes a day to your own
training, you’d go through all of our material, plus an additional book or two each month. It’s
simple. Surely you should allot 30 minutes or an hour a day to improve your CAREER? Make
sure you commit right now to being in the top 20%, then the top 5%, then the top 3% of our
industry. More on that later.
There continue to be common themes among failing school owners. I point them out again
here. (By the way, I’ll also share some common traits of successful owners.)
First, they tell us their best source of enrollments is “word of mouth,” aka, code for waiting
and hoping. They say that in seriousness, but when asked what referral strategies and systems
they have in place, you get a blank expression. To be successful, you must “do more stuff.”
Frankly, you should be actively working on internal referral strategies (pizza parties, birthday
parties, events tied to belt graduations, self-defense days, movie nights, etc.) and working on
community outreach activities with churches, day-cares, sports leagues, businesses, schools, etc.
— and advertising regularly. If you’re not doing 15 or 20 things each and every month to attract
new students, then you are missing the boat.
As an aside, if you have less than 100 actively training students, you aren’t going to get much
traction on referrals, no matter how hard you try. A school with 300, 500, or 800 students can
create a large flow of friends and family members. A school with 48 students needs a “jump-
start” before even working on that area.

Second, they charge way too little. You really should be at least in the $297—$397 range for
your lessons. I’d prefer closer to $400 or more for new enrollments. In almost any town or city,
charging less than $200 is crazy. There’s been a lot of recent inflation, and even without that
being stuck in 1970’s or 1980’s, pricing is a problem.

Third, program structure. Most schools are making their initial enrollment too complicated.
Many still shy away from contracts or offer “month-to-month” options. For many years (starting
in 1983), I offered a 12-month and an 18-month enrollment option. I’ve seen successful schools
that offer 6-month enrollments and others that offer 12-month initial enrollments. But don’t make
it too complicated. One school I talked to offered month-to-month, three months, six months, and
nine months as options. Too complicated. The effort to move away from contracts is
counterproductive. We focus on a “Trial Enrollment” and then a renewal to Leadership or Black
Belt, which takes them to Black Belt and Beyond.

Fourth, no upgrade system. Many schools STILL just enroll students on a monthly tuition
forever (i.e. until they drop out). Others enroll them for six months or 12 months and then just do
a new contract. You must have a RENEWAL system in place to help your students set their goal
to Black Belt and beyond. It’s imperative for them to see that vision and buy into the idea of
“graduating” to Black Belt and then to 2nd- and 3rd-Degree Black Belt.
You also need to have some upgrade system. What I mean by that is a mechanism to move
them to pay more than you charged at the initial enrollment. There are several ways to do that,
but I’ll leave it at you can move them to Black Belt Club, Master Club, or Leadership at higher
monthly or per lesson tuitions, or you can have “add-on” options such as demo team, weapons
classes, etc. The objective is to add 50%, 100%, or more to the tuition being paid.

Fifth, EVERYONE thinks they teach great classes, have great curriculum, and have great
student retention. MOST are fooling themselves. The best indicator is your monthly dropout or
quit rate, along with your renewal rate and graduation rates. If you are losing more than 2% per
month, you have room for improvement. So, if you have 300 students and are losing more than
six per month, I can show you how to fix your student retention levels. Keep in mind it’s easier
by far and cheaper to cut your dropout rate by 50% than to double your new enrollments. It
enhances your reputation, actually delivers on promises to your students, and creates a much
more solid school.

If you are ready to take the next step forward for your business, then we should talk and get a
game plan to radically grow your school — now.
-Stephen Oliver