There is a number that many martial arts school owners become obsessed with.
Student numbers.
200 students sounds impressive.
250 sounds even better.
300 must mean you have built a seriously successful school, right?
Not necessarily.
A large student base does not automatically create a profitable martial arts business. In fact, I have spoken to plenty of school owners with 200, 250 or even more active students who are working incredibly hard every week and still do not have enough money left at the end of the month.
That is the part that concerns me.
You can have a full timetable, a busy school, lots of parents coming through the door, instructors teaching classes and money coming into the business every month, yet still find yourself financially squeezed.
The money comes in through the front door, pays the rent, pays the staff, pays the bills, pays for advertising, pays for equipment and quietly disappears out the back door.
You are left wondering where it all went.
That is not what most people set out to build.
More students isn’t always the answer
One of the biggest mistakes I see school owners make is assuming that the answer to a financial problem is simply to enrol more students.
If you have 200 students and there isn’t enough money left for you, why would another 50 students automatically solve the problem?
What happens if those additional students require more staff?
What happens if you need more teaching space?
What happens if your rent increases?
What happens if your marketing costs increase because you need even more enquiries to keep feeding the machine?
What happens if your retention is poor and you’re continually replacing the students who leave?
You can end up building a bigger version of exactly the same problem.
If your business model isn’t producing a healthy return at 200 students, adding another 50 or 100 students may simply exaggerate the weaknesses that are already there.
More students often means more revenue, but more revenue does not necessarily mean more profit.
There is a very important difference.
Student numbers are only one number
Student numbers are certainly important. I would never suggest otherwise.
They just aren’t the only number that matters.
I would much rather have a school with 150 students who have a high average student value, stay for a long time and produce a healthy amount of profit than a school with 300 students who are paying very little, leaving quickly and requiring a huge amount of the owner’s time.
That is why I have always believed school owners need to stop thinking purely about how many students they have and start thinking about the quality and economics of those students.
What is your average student value?
What is your lifetime value?
How much does it cost you to acquire a new student?
How much are you collecting when somebody first enrols?
How long do they stay?
How much does the business actually make from each student?
How much is left for you after everything else has been paid?
Those questions tell you much more about the health of your business than simply saying, “I’ve got 200 students.”
Busy doesn’t necessarily mean profitable
This is another trap.
A school can look successful from the outside.
The timetable is full.
The classes look busy.
The reception area is full of parents.
The instructors are working hard.
The Facebook page is active.
The reviews are good.
The school owner is there six days a week.
Everybody assumes the owner must be doing very well.
Yet the owner is going home exhausted and wondering why they cannot afford to pay themselves properly.
I have been there myself.
There is a horrible feeling that comes from giving your life to something, working evenings and weekends, missing family time and carrying all of the responsibility, yet still not receiving the financial reward you expected.
Nobody starts a martial arts school because they want to spend 20 years building themselves a low-paying job.
Most owners start because they love martial arts.
They want to teach.
They want to help people.
They want to build something of their own.
They want to create a better life for themselves and their family.
There is nothing wrong with wanting all of those things.
The problem comes when the school grows but the business underneath it doesn’t.
What should you be measuring?
If you have 200 active students, I would want to know much more than your active student count.
I want to know;
* what those students are worth.
* how long they stay.
* how many new students you are enrolling every month.
* how many you are losing.
* your retention %.
* your monthly recurring revenue.
* your payroll.
* your fixed overheads.
Most importantly, I want to know how much money is actually left for the owner.
That last number can be very revealing.
You might have a £20,000, £30,000 or £40,000 a month business and still feel financially squeezed if you don’t understand what happens to the money once it enters the business.
Turnover can look impressive.
Profit is what gives you choices.
Cash flow is what keeps the business alive.
Money left at the end of the month is what gives the owner the financial reward for taking the risk, carrying the responsibility and putting in the years of hard work.
Stop chasing the number that looks good
There is nothing wrong with wanting 300 students.
There is something wrong with believing that 300 students is automatically better than 200.
Your objective should not simply be to build the biggest martial arts school possible.
You should be trying to build an efficient, well-run, profitable martial arts business that gives you the lifestyle, income and freedom you originally wanted.
That may require more students.
It may require;
* fewer students paying more.
* better retention.
* different pricing.
* a different staffing structure.
* better systems.
* you to stop doing certain things altogether.
The answer is different for every school.
What matters is understanding what is actually happening inside yours.
If you’ve built a 200+ student school but you’re still working every evening, struggling to pay yourself properly and wondering where all the money goes, I would stop asking, “How do I get more students?”
I would start asking:
“Why isn’t the business I’ve already built producing the income and freedom it should?”
That is a much more important question.
Want to know what’s really happening inside your school?
If you’re serious about building a more profitable martial arts school, I offer a Complimentary School Growth Diagnostic for school owners who want to understand what is really happening inside their business.
It is not simply about getting more students.
It is about looking at the business behind the student numbers and identifying the areas that may be limiting your profitability, growth and freedom.
If that sounds like something you need, you can find out more and request your Complimentary School Growth Diagnostic here:
https://dervishdervish.com/book-your-school-evaluation/
Sensei Dervish
Founder, Sensei In The Room
Author of How to Build a Highly Profitable Martial Arts School
20+ Years Building & Operating a Successful Full-Time Profitable Martial Arts School
6th Degree Black Belt | BSc | PGCE