Mile High Maverick.

As I write this it’s been a hectic few weeks.  Tomorrow I’m off to Salt Lake City for the day.  Head off first thing in the morning.  Four meetings back to back, and back on the plan at 7 pm to head back to Denver.  I’m sure it’s going to be productive, we’ve just added 6 new locations in Utah and many more to come.  This week it’s been the Maximum Impact members teleconference (I hope you never miss one!) two Mile High Karate Regional Developers Calls, our national (international, actually) Mile High Karate school owners call.

In the mean time I’m just coming off of a week of training new Mile High Karate schools for a week (23 in attendance for the past week)   This week Toby Milroy, myself and the rest of the NAPMA staff and contributors are working 24/7 on details for Quantum Leap … sure to be your best event ever (you better be registered by now!  www.NAPMAQuantumLeap.com) and, Rob Tucker, Jeff Smith and I are working diligently on filling up our newest regions with schools:  Miami, New Zealand, LA, Utah, and many others.

Geeeeeez, I’m exhausted just thinking about the past couple of weeks.

In the mean time I’ve talked to about 10 coaching clients.  A few of them were “whining” about the economy in the 4th Quarter of 2008.  After I slapped them around a little guess what?  Record results for January 2009!  (Record GOOD by the way!)   Most of your results is dependent upon how you are looking at the world, not what’s really happening by the way.

A couple of asides.

I invite you to join me on Facebook, to keep up daily with our various activities:

http://www.facebook.com/people/Stephen-Oliver/820497518

Look also for our new “Social Networking” site being released this month on www.MartialArtsProfessional.com

If you haven’t noticed we’ve completely updated and redesigned Martial Arts Professional Magazine with many more enhancements to come.

Toby Milroy has also recorded a series of “webinars” to help you deal with the 2009 Recession.  It’s a 6 part series.  Make sure you go through all of them.  See www.NAPMA.com for the links (or, www.MartialArtsProfessional.com)

Anyway,  let’s move on to something more valuable for immediate implementation for you.

There’s lots of crazy ideas floating around our industry.  I watch several of the major “Martial Arts Business” discussion board and am typically amused to watch the “blind leading the deaf and dumb”

Hopefully you don’t fall victim to “Masterminding with Failures.”  Or, to repeat my often quoted line from Sales Master Tom Hopkins:  “Never Take Advice from Someone more screwed up that you are.”

Anyway on misconception is about how much income and revenue a relatively small martial arts school can generate.  (2,000 square foot more or less.)  I did the following projection for my Mile High Karate school owner training… and thought I’d share it with you:

Same Enrollment Numbers - GROSS Revenue Triples.   Most of the difference is
Net Profits.

The above comparism does not factor in:
Larger Downpayment.
Size of PIF’s.
Accelerated Tuition on Upgrades.
Successful Kids extending past enrollment period.
Therefore the difference on school 2 is higher than shown.

Now, without becoming too “academic” I’ve got to tell you I’d much rather to TRIPLE the revenue from the same volume, wouldn’t you??

I was thinking about all of this during our training week last week.  Interacting with real school owners like yourself thriving or barely surviving looking to me for a “life raft.”  During my time running the most elite (and, more expensive) coaching program in the industry I had two experiences that repeated themselves over and over and therefore are seared into my memory.

Experience 1.  “Typical” of school owners that I worked with that started at $12,000 to $18,000 a month in gross revenue.  In all most all cases in somewhere between three and twelve months I was able to turn these schools into schools grossing between $27,000 and $52,000 (double sometimes triple or more.)

The formula was easy.  By the way it did NOT include turning coaching clients into “sales masters” or, even marketing gurus.  In most cases it’s was subtle tweaks some simple and some rather sophisticated and difficult to do without the one on one personalization possible.

What are a few of the keys?

Well obviously from above one of them is in fixing pricing structure.   Typically we’d add a larger down payment on enrollments and renewals.  Increase the monthly tuition on enrollment and add in additional levels of “upgrades” with an appropriate price bump.  Typically the “transition” is good for an extra $50,000 to $150,000 in 60 or 90 days (enough to pay for the coaching for 4 to 15 years!)    I always promised coaching clients a 10 to 1 return on their investment (for each $1,000 invested that they’d get back $10,000) in reality they often dramatically exceeded that return.  Our franchisee schools obviously can do better than that (we figure they need a 10% improvement to cover the expense of the program – after that it’s pure and sometimes massive – profits.)

Another “tweak” was typically fixing the intro-enrollment-upgrade process.  Most schools have big holes through that process and are sloppy about “pre-framing” the long-term student relationship.  Fixing those holes can often make a dramatic change in results.

By the way.  In the above Profit and Loss projection there are a few assumptions that are useful to point out and to explain in the context of massive improved NET PROFITS of coaching clients and Mile High Karate franchise schools.   First, most schools tend to overspend on rent, over spend on “head count” ie pay too many people, and under spend on quality people.  Finally, just about everyone under spends on their marketing efforts and fails to properly track their results.

What should be your benchmarks?

Rent no more than 12-15% of the gross.
Total payroll (including yourself) 25-30% of the gross (I target 25%)

Marketing expenditures 15% of the gross.

And, note my projection of $277 average revenue per student.  Obviously a little arbitrary designed to help a round number (300) active students become a $1,000,000 a year school.  In all most all cases coaching clients as described above ended up at $200+ per month average per student (therefore 300 active AT LEAST $60,000 a month.)  My target for Mile High Karate schools is $300 a month and soon to be higher.

Experience 2 from Coaching.   The clients I took under $8,000 a month (and, frankly those over who made no progress) had a couple of things in common:

First.     A very low self-esteem about the value of their instruction and of being a member of their school.

Second.   A tendency to “Question Everything” and therefore not implement proper strategies or “pick and choose” and therefore end up with a hodge-podge of stuff.

Third.  A “good excuse” about why their school, style, city, state, etc. was “different” than the successful schools and why it was not possible for them.

The question for you is whether you’ll be the take massive action, follow the plan to the letter, and make no excuses type…. Or not?

Before we go I want to remind you of a couple of things:

1.    Know your numbers.  If you aren’t keeping track of what’s happening then it’s pretty much impossible to improve.   I’ve enclosed again the template forms for monthly and yearly stats tracking.  More complete forms (including Word and Excel files that are editable) are at your NAPMA Member Site.

2.    If you are in the $12,000 to $20,000 a month range and would like some personal hand-holding to get your school going.  Send me a note with your 2008 Stats and we’ll discuss ways to get your school really rockin in 2009!

A couple of Recession Warnings (again and again.)

In a tough market you really MUST accelerate your educational process.  Open and read (listen to, and watch) each piece of your NAPMA membership materials.  Visit your member website weekly to find new videos or audios to watch/listen to.   Attend all of the live events (100% participation in Quantum Leap and Extreme Success Academy.)  Consider participation in Coaching ($12,000 a month and up only please,) Inner Circle ($25,000 a month and up only) or Peak Performers.

Above all don’t cut back on your own education, the education of your staff, or your marketing efforts to gain new students.