BUSINESS SERIES
WHAT YOU MUST KNOW BEFORE
YOU OPEN A STUDIO
or
Is it
already too late, I've already opened a studio?
For too many of
you my reply will be:
(I have good
news and I have bad news for you.)
The good new is
you are going to die!
The bad news is
you death will be long and painful!
NO BRAINIER: I am not going to put my
entire "Business
System" up
on the web for every competitor to get for free!
However I will give a lot of
essential information - enough for you to question the business advice you are now
getting. In many cases my advice will be exactly the opposite of my competitors. Why? Many
have a vested interest they want to protect: (their cash flow).
Click here - go to RULE TO LIVE or DIE BY!
Example: I tell you cash is
"king"; "cash flow" is the key to survival. Therefore we offer each of
our students a "cash" price for any course. In any business the price (for a car
or TV or Air Plane ticket is always the "cash price"! If you do not have the
cash you have to sign a contract or put it on a credit card - and then interest is added
because you did not pay cash! But your first option is cash. If you have $20,000 cash you
can buy a car and walk out with the title. Look at a house. The cash price is $100,000;
most people do not have it so they put it on a 30 years mortgage at 8% interest. Over 30
years the price of the house will be over $300,000.
Major
competitor:
NEVER, NEVER, NEVER cash out a person. Then they add - it’s almost immoral.
I saw a contract with this
same company for $4,800 for a program for a 10-year-old kid. To me that's immoral!
The billing companies tell
you: let us be the "bad guys", send your contact to us - we will - TRY - to collect it for you -
send you back small monthly checks - over the next year or two (MINUS OUR SMALL
COLLECT FEE 6%-10%).
Reality: what the billing
companies never tell you is about 1/3 of all contracts are never collected. Why? They were
bad before they were ever written! 20% of all Americans move every year.
Example: 21-year-old male -
unemployed - wife and 3 kids! He is put on a $2,000 contract, because the salesman gave
him a special deal. The $4,000 black belt program is only $2,000, but for today
only. Now that
he has no job he has lot of free time – “Karate
from now on going to be his life” - and the studio has told
him they need Karate instructors. So he signs the contract, takes a few lessons until they
ask for a payment - (usually less than two weeks) and you never see him again. And the
studio brags they just make another $2,000! We have a name for it. It’s called
“funny money”! Just try spending it!
NO BRAINIER: A
contract has no real value until it is converted to cash.
There are two
basic ways you can do this.
Get the cash from him when he signs up – use it to pay the rent – buy
food – put in your retirement fund. Its money do with it what you want!
Turn it over to a billing company (you won’t see one penny for (30-60) days.
Wait each month (and hope) for the check to
come from the billing company. Their guarantee “If we don’t collect you
don’t pay” --- I hope not!
One other problem: You have no guarantee the billing company will stay in business!
About 70% of all billing companies are no bankrupt!
Another problem – if you are unhappy with their service – too bad. Just
try getting your accounts back.
Major competitor - lays on
classic "quilt
trip": "You
can't wear two hats: being the sensei/sifu and the "bad" guy who asks to be paid
for the lesson they have given you.
Isn't it strange
that every profession you can name: DR's, Lawyers, Dentist, Piano teachers, Tennis
pro's, Ski instructors have no problem asking you to pay for their services when they are
rendered!
Note: how
every professional office has a sign: Payment at time of
service, unless other arrangements have been made. Is a minister or Rabbi or
Priest a bad guy every time they ask for a donation?
Listed below are essential things you must know before you open a studio - In most cases they are listed in order of importance - click to go to the individual pages - for more detailed information!
This is a new page and not
all pages are complete - those with links are complete!
WARNING: Knowing the answer to each
of the below is like a "link" in a fence. Make just one fatal mistake and you
are bankrupt! I have inserted (XXX) in each area that can destroy you if they are not
handled properly. Then there are other like the old "Chinese" torture of
"one thousand cut" - no one cut will kill - but over the long haul a series of
small mistakes will bleed you to death!
OLD COUNTRY AND WESTERN SONG
ADVICE: "You got to
know when to hold them; know when to fold them" Don't let you
"ego" keep you from closing down a "loosing location"! Or don't keep
chasing bad money with good money! Cut your losses and get out while you can!
As you look at the list you will realize it takes more than just being a "good" martial artist. Borrowing a few dollars from friends, getting a building - and waiting for all the potential students to rush to your studio!
FIRST BIT OF ADVICE: Get rid of all those trophies you won at "point tournaments" - That is not why people study the Martial (MILITARY) Arts:
To par- phrase Shania Twain: "So you think your Bruce Lee; I'm not impressed"!
Why Studios Fail! |
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Where can you get business training? |
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Are you in it for the long haul or short term? |
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Are you going to run the studio yourself or hire a manager? |
How
much will it cost to open a studio? |
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Where
will this money come from? (Never open on a promise – have the money in hand before you open) |
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Do I
need an Attorney? (Did O.J.)? |
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Should
you run a full time or part time studio |
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What
hours MUST you be open? I look at it the other way! How many hours will it be closed - not making you any money! |
How
long before the studio makes a profit? |
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How do
you chooses a location? (This may be the most important decision you ever make) You will have to see my section on this one it is so important! |
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How
long of a lease do I sign? (Good question Grasshopper) |
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How important is a sign? What type? How much will it cost? |
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| “Never trust a land lord or realtor – get it in
writing and have your Lawyer look it over BEFORE you
sign it. |
What
you must know before you sign any lease! (Leases have been drawn up by the best legal minds in the business – not one thing in that lease is there to protect you) |
How
large of a studio do you need? (in sq.ft.) |
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How
much do you charge for lessons? (The maximum you are worth) |
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What do
you teach? (What people expect to get – true – effective – practice self defense) |
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How do
you teach? One lesson at a time – one student at a time
– one payment at a time. (Sorry –that what all our competitors do) |
| Over the years we have never found any one form of advertising: radio
TV., newspaper, direct mail to
works constituently. And I have tried them all. |
Where
will you advertise? (On any give day – who knows) But I know the Yellow Pages sell, 24 hours a day, seven days a week, 365 days a year. They never take a vacation or ask for a day off. They don’t cop an attitude and every new person who moves into town and gets a telephone – also gets a copy of the real “Yellow Pages”! |
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Who are
your potential students? (I’ll give you a hint – they are not
looking to the martial arts for “self improvement) |
| Don’t even consider opening without yellow pages - take that razor blade ,,,, |
Do you
need Yellow Page advertising? (Yes – but a proper ad – proper size
– proper placement – targeting the right market) |
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Should
you use a billing company? Partial covered in the opening section. |
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Should
you use contracts? (Yes – No – Maybe – on the other
hand) |
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Do You
need liability insurance? (How do lawyers make a living?) |
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What is
the #1 reason for injuries and lawsuits? How do you prevent it? (Simple: Freestyle) |
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How do
you train and keep Instructors? (When you solve this one – let me know) but – we can cut out losses! |
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You
must be trained to do your own bookkeeping! (It’s a lot QUICKEN than you think) |
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You must be
"Computer Literate" |
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What computer
program will you use to help run the studio? |
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Should
you open more that one Studio? (Get a razor blade - sit down – cut your wrist – and watch yourself slowly bleed to death) |
| Where is that “Guru” who only yesterday
was bragging: his “Business Manual” was
the biggest selling in history? |
How come none of the other "Business Gurus" tell you these things? (Most
don’t have the answers) How can they, they don’t run studios – they make
their money telling others how they think (it’s not their money) a studio should be
run! Unless they have a better idea tomorrow – or another fad or movies comes out, or
it rains. |
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I have been running
a successful business system for over 35 years. The system is basically the same as when
we started in 1964. You will hear me yell: |
| WARNING:
xxxxx |
Don't try and take bits and pieces that you like and make you own system. Many have tried and they are all out of business! |
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Every day - some
new problem will arise - some you handle right, some you handle wrong. If the mistake does
not kill you - learn from that mistake so you never make it again! I don't care whose
fault the problem is. Get the problem fixed first - then establish blame! Example: you
have a bad instructor - give the student a new instructor - then fire the problem maker
before he teaches another student! The real question: how did you end up with a “bad” instructor to start? |