First and foremost, martial artists open martial arts schools to spread their arts to their communities. But they also, often, open their own schools as a way to gain more control over their curriculum and enhance their own training. While both of these are good things, they do not form the best roadmap for building that school into a profitable, sustainable business. For this reason, it’s important that future martial arts school owners write out legitimate business plans to guide their efforts.
One of the big pitfalls of running any business is to have a vague idea of who your customers are and the direction that the business is headed in. Another major pitfall is to neglect your numbers; to have little to no idea of what you’ll be spending and what milestones you need to hit in order to begin making profit.
Putting pen to paper, so to speak, is a proven way to get your brain thinking in more realistic terms about your new martial arts business. It helps you iron out what martial arts services you offer, who you offer them to, and how you’re going to reach them with that offer.
It’s for that reason that you should strongly consider writing a business plan for your martial arts school. In this article, we’ll be exploring two different ways to write a good business plan: the traditional way and the “lean” way.
Traditional Martial Arts School Business Plan
Traditional business plans are extremely thorough and very clear. They offer exceptionally concrete guidance to the opening and running of a new business, which can often be a messy affair full of distractions that threaten its profitability.
A typical business plan should include these elements:
- Executive & Company Summary
- Market Analysis
- Marketing Plan
- Operations & Management Plan
- Financial Projections
Below, we’ll summarize what each of these business plan sections entails.
Executive & Company Summary
The Executive Summary should summarize all the information and insights from the rest of your business plan. It shouldn’t be several pages long, but it also shouldn’t only be a few sentences long. It should give a clear picture of your martial arts school and the business opportunity it is capitalizing on.
Your company summary defines the structure, values, and purpose of your martial arts school. Overall, you should answer these questions:
- Who does my school serve?
- What problems of theirs does it solve?
- What competitive advantages does my company have?
Be clear about who you serve, and then make the case for why you, uniquely, will be successful.
Take a look at the demographics in the town that your school is opening in. Then analyze all the martial arts and related businesses in that area. You want to prove that there is room for your business; and more than that, you want to find, define, and map out what particular market you’re going to target with your martial arts services. If it’s an underserved market, you’ve definitely got a great business opportunity.
Marketing & Sales Plan
Martial arts marketing is a cinch if you have the right knowledge and some budget. The key is to have a plan for how to approach it, adjusting as you gain data, and not burning money on sporadic efforts.
This section should detail all the marketing channels you will be using, a tentative estimate of which you will be your dominant channels, and how you leverage those channels (ads, articles, posts, etc.). Estimate how you will allocate marketing budget between the different channels and if any contractors, consultants, or agencies will be needed to execute these campaigns.
Operations & Management Plan
Talk about the legal business structure your martial arts school will have, such as an LLC or a corporation. Clarify who will manage the business, his or her responsibilities, and how other potential employees or contractors will relate to that manager.
For a martial arts school, this shouldn’t be as complicated or lengthy as it would be for more complex business, but it could also cover onboarding new students, supporting current students through customer service, and procedures on hiring help.
Understanding the financial feasibility of your new dojo is one of the main and most important reasons why any school owner should write a business plan.
Take your fees, your member targets, and your estimates for other income streams (e.g., merchandise sales, events) and place them into a nice graph or tables to show income and profit potentials. Be sure to include estimated expenses, accounting for overhead and emergency expenses. This should all err on the side of cautious conservativeness: be sure to inflate your expense numbers to account for unexpected expenses.
To do all this, you first need to estimate all of your expenses – from one-time startup costs to your projected ongoing costs. Those costs include but are not necessarily limited to:
- Fixed overhead expenses
- CAM/leasing costs
- General liability insurance
- Management software/CRM
- Phone & internet cost
- Variable overhead expenses
- Electric & utilities
- Marketing budget
- Equipment & gear orders
- One-time startup costs
- Point-of-Sale hardware
- Initial equipment expenses
- Cleaning & maintenance supplies
- Furnishments for the dojo
- Office supplies
- Technology (computer, phone, tablet, etc.)
To learn more, read our article about the cost of opening a martial arts school. Now, moving on the next step, list out your planned income stream and how much money each brings in per unit. We want to calculate how many memberships and product sales you need to make in order to break even.
Since it’s hard to calculate pro shop sales and event profits, we can simplify this by dividing the projected overhead costs + startup costs with the 12 month dollar value of a membership. So if a membership is $130 a month, the 12 month value will be $1,560. The number you get from this will be the number of active students you need to break even. Growing beyond that is all profit.
To learn more about how to set your prices and design your business in a way that allows you to pay yourself a handsome salary, check out our martial arts pricing article.
Lean Business Plan for Martial Arts Schools
Also known as a “one page business plan,” lean business plans cover more topics than traditional ones, with the key difference being that each is addressed with drastically greater brevity. The plan is divided into four major sections: “strategy,” “tactics,” “business model,” and “milestones.” Overall, it’s a less time-intensive, more agile way to put together a plan for your martial arts school.
Below is a breakdown of the proposed subsection each main section should contain. Since this all should fit on one page, only a sentence or two is used to describe what should be found in each subsection.
- Identity. Write down what your company is all about, including your company values. This is your branding and your culture.
- Service(s). What services do you offer to the community? One martial art, several, classes for adults and/or kids?
- Target Market. What is the specific group of people you are targeting? As a taekwondo school, your primary market might be children ages 6-12 from homes with a median income of $70,000 a year or more. As a Brazilian Jiu Jitsu school, your target market might be adults ages 25-50 with a similar financial situation.
- Competition. Analyze the other dojos in town. What do their services look like? What audience do they seem to appeal to? Figure out what your niche is.
- Marketing activities. Map out all the most important marketing methods you will use, like website SEO, PPC, social ads, and any traditional marketing materials. Our martial arts software can help to streamline this process.
- Partners and resources. Most school owners don’t have business partners; but if you do, be sure to write them down here. Moreover, list out the resources available to you, be it advice from business connections, loans, investments, or anything else.
- Team. If you have help with your school, who’s on staff, and what are their duties?
- Put together an action list of all the most important tasks that need to be completed to open the school and get it operational, including who owns each task (if you have help).
- Plan a schedule to revisit and revise your lean business plan at a later date, as appropriate.
- Map out what the major achievement milestones will be for your business (first 10 students, first 50 students, first belt promotion, etc.).
- Business Model
- Revenue. List all the ways your dojo will bring in money. The main way will usually be monthly tuition, but also incorporate seminars, paid trials (if you plan on using them), and merchandise sales.
- Expenses. List all your projected overhead expenses, including marketing your budget.
- Financial Projections. Project income and profit based on your revenue, expenses, and milestones. Show what your income and profit will look like at different stages of growth of your student body.
While most martial arts school owners are the sole proprietors of their businesses, many still sometimes have business partners or investors. In this case, the sparseness of the one page business plan might not be enough. But for single-operated martial arts schools, it’s sufficient (and much more practical).
Business plans are an indispensable part of planning a martial arts school. While it might seem like a martial arts school doesn’t warrant one, the truth is that you are in danger of wasting money if you don’t have one.
If you’re starting a school with a partner or investors, or you plan on starting a chain of schools, a traditional, full business plan is the right move. If you’re opening one school by yourself, the lean business plan is the most practical and a huge time-saver.