Weekly Business Update!
January 20, 2008
I just have to share with you a e-mail of 1/16/08 from a Top Business Guru
personally addressed to: Al & Pat, this might be VERY valuable to you!
The following from his e-mail is the type of business advice you can get for
only
$199 per month or $2,388 per
year!
"The fact is there has never been a better time in the history of the martial arts to own or operate a school. I see men and women just like you - all over the country - kicking some major butt these days . . . and they're doing it without sacrificing their integrity... without 'selling out'.
From my seat in the "crows nest", I see another millionaire being born nearly every single day."
My comments
will be in Red:
And my advice is free!
From MY seat in the "crows nest" I see things a lot differently!
I have been
operating Successful Martial Arts Schools for over 45 years. I have never seen a
WORSE TIME to open a
new studio. Just look at the economy - it's going to get worse!
Where are all these new "Millionaire" studios?
What I see is hundreds of studios going out of business. And many of the
"Big Boys" are getting rid of their multiple locations and turning
their attention to running only one location. There are about 13-15,000 martial
arts studios in the United States. They are trying to tell us that last year and
this year that 350+ 350 (700) martial arts owners will become
millionaires. At this rate in the next 5 years there will be 2400 new
millionaires, or every 1 in 18 studios owner will be millionaires! That a
lot better than Am-Way!
They will
send you business advice from one of their Millionaire business advisers with a
claimed 21 World wide franchised location! Well not quite that many! 2 (10%) of their
"flagship" Franchise in Victoria BC Canada just went out of business.
To put things in proper perspective - We have more location than that in just
the state of Ohio - and most of them have been in business over 15 years.
I take a personal interest because they tried to take on "business
wise" one of our "BULLET PROOF" studios in Victoria BC.
They were bragging to us, they were grossing a million dollars a year. Signing
up people on $6,000 black belt programs and getting at least $300 a month - plus
big down payments - from each student.
They were making these
claims right up to the day they closed their doors!
Of great interest:
As of 1/16/08 - On their web-site they have a picture of the
three directors of their business. One of these directors is Bernard B. Kerik,
the former Chief of Police of NY City, under NY Mayor Rudolph w. Giuliani.
Bernard B. Kerik on Nov. 9, 2008 was named in a 16-count federal indictment in
New York on charges of fraud and conspiracy. If convicted on all 16
counts, he could face 142 years in prison and $4.7 million in fines. Below is
link to the full article.
http://www.washingtontimes.com/apps/pbcs.dll/article?AID=/20071110/NATION/111100048/1002
another link showing Kerik on the board of directors
January 3, 2008
Warning: Do not try to cut prices to get new students:
Increase Value!
Fact: The days of depending upon the Yellow Pages as a reliable source of
new students is over. People do not use the Yellow Pages anymore - they
"Google" instead!
Which means you must have a "professionally" designed and updated
"Web Site."
Right up front on your web site you have to give the prospective student a
reason to call.
Back in 1966, Hal Bowen set up our sales program. To be successful, he
told us, you have to make the maximum amount of money
off each student who walks through that door.
Fact: The phones are not ringing and there are
fewer walk-ins. Each new prospective student is potentially worth $1000 to you!
Important: When the phone rings you must be there to answer it - especially during
normal business hours. Most people calling for information do not want to talk
to an answering machine.
If a person takes the time to come by your studio, you cannot make a sale if
they find a "Closed" sign on the door.
On your web site, if you do not have what they want (and
are
willing to pay for) with a click of the mouse they will look else where.
In order of importance:
1. Practical, effective self defense for Men,
Women, Youth - with a link to a page covering each category.
2. Free Introductory Private Lesson. Try before
they buy!
Warning: This is the most important lesson you will ever
give! The object of this lesson is not to show the prospective student how good you
are, but now good and effective the student can be - WITH PROPER
TRAINING!
3. 2 for 1 special - Study with a friend!
NOTE: This is how I sold over 1000 DVD'S in just
one month!
I just got a coupon book from Burger King: Buy 1 Whopper, get one free!
4. Special Family Rates - One adult member of the family pays:
Option 1 - the rest study free!
Option 2 - each additional family members pay only $10
or $20 a month extra.
5. Special Youth programs (Warning: all studios
have special youth programs!
December 12, 2007
Hurt students don't stay. Hurt students don't pay. Hurt students will SUE!
This year one of our studios had a student injure his knee in a grappling
takedown.
The injured student sued and won a judgment against the studio owner. The studio
owner appealed the decision and last week the appeal was turned down.
The judgment: $150,000
plus $30,000 attorney's fees.
The studio owner
had no insurance - and the court ruled against the "Hold
Harmless Agreement"
So you want
to be one of the Big Boys with 700+ students.
Recently a "High Flying Studio" with 280 students and $8,000 a month
rent was talked into going big time. They believed all the hype about how easy
it is to have a studio with 700+ students. They doubled the size of their building
and the rent went up to $16,000 a month. They were told: "If you are making a
$$millions dollars a year you can afford $180,000 a year in rent."
Reality:
Their student enrollment dropped from 280 students to 125.
HISTORICAL NOTE: "Black Friday", the day after Thanksgiving, got its
name from the fact that most retailers, up to this point, have been operating at
a Loss (in the Red). This huge sales day
(in theory) marks the day they start making a profit
(Operating in the Black). Retailers only have about 30 days to make up
for the entire year.
Reality: The retailers' gain is our loss. The more
consumers spend on Christmas, the less they have to spend on Martial Arts.
November 24, 2007
I told you so! For months I have been predicting we are heading into a
recession. Now almost all economic experts agree with me. That is, with the
exception of our "Beloved" government, that keeps telling us how well
the economy is doing. The real concern: How bad and how long will the recession
be? The real crunch will come as banks simply do not have money to loan. The US
consumer not only drives the US economy but drives the economy of the
world.
Oil is almost $100 a barrel. How much does it cost to fill up your car? Winter
is just starting and with it higher bills.
Warning: Unless you are -
very - very - rich do not close your studio for the entire Christmas Holiday.
November 15, 2007
Your studio survival depends upon 1. New Students 2.
Retention of existing students!!
Reality: We have very little control over the amount of new students we will
sign up each month. Therefore you must do everything you can to retain your
existing students!
Fact: Each student is
potentially worth between $1200-$1400 per year. Your existing students are the
backbone of your Studio.
Why are your existing students quitting?
Last week I had 5 former Tracy's students call to buy my DVD's! They still
wanted to learn and study, but they were VERY unhappy with the training they
were getting, especially at the prices they were paying!
Here were their biggest reason for leaving!
1. Being switched from instructor to
instructor. Many time they would not even know who their would be form lesson to
lesson.
2. Poor attitude of the instructor, especially when
the instructor was not the studio owner. The instructors attitude: you
should be lucky to have me for your instructor.
3. Not learning anything new. Just Review, Review,
Review.
Historical background of our sale and
teaching system.
Over 75 years ago a team of EXPERTS was hired to developed
a sale and teaching system.
The following Critical Areas have stood the test of
time:
1. The best way to teach is with private lesson!
(The best learning to cost ratio is a 30 minute private
lesson)
2. Once a "BOND- TRUST" has been developed between the instructor and
the student; if possible do not change instructors.
3. Instructors must be "people" -
"People". They must be able to relate to the needs of their
students!
WARNING: The most talented instructors are not
usually the best instructors! It seem with talent also comes a "Bad
Attitude".
4. Critically
important - the student must learn something new
every lesson!
Students are not going to pay you
$100++ per month just to review old material!
We know that most students; 1. Do not come to groups. 2. Do not study at home.
This is why we, TRACYS, provides teaching aids.
1. Quick Reference
Manual
2. Picture
manuals for each bet level. This
one item is very important for students to be able to review what they have
already learned. Plus you make a profit of $20 with each new manual you sell.
3. DVD'S
for all belt self defense techniques and Kata DVD'S. Especially
Kata DVD'S.
REALITY: You teach a student a new section of the
Kata, he/she goes home, cannot remember the new section, so they cannot
practice. The same is true of Self Defense Techniques!
SUMMARY: Happy students stay. Happy students pay and bring in their friends!
November 6. 2007
Think outside the STUDIO!
AS long as I have been in the Martial Arts, there is a lot of
"Dead Time" in the studio between 10AM AND 3PM. The
students won't come to you so you must go to the students! But, what students?
Seniors: 55age and up! How do you get to them?
Tai Chi! What is the
appeal? Tai Chi for Health, Tai Chi for Life.
For years Tracy's has used the slogan:
Kenpo for Self Defense. Tai Chi for Health!
If you do not teach Tai Chi, now is the
time to start learning!
Below is a link to the world Famous Mayo Clinic, showing all the benefits of Tai
Chi.
HTTP://www.mayoclinic.com/health/tai-chi/SA00087
The article stress all of
the benefits of Tai Chi. Following is just one quote for the report:
"Because tai chi is slow and gentle, it has virtually
no negative side effects."
Try that with any other for of exercise, especially for seniors!
In this months
"Black Belt" (the same issue that
features Bart Vale) they ask Frank Shamrock
"Is there a particular art you'd like to be more familiar with"?
His answer: Tai Chi. I think its one of the better
healing and focusing arts. I'm into a lot of
healing these days."
In almost all communities you have adult recreation centers. These centers
are a ready market for Tai Chi classes. And there are very few competitors
who can or will teach Tai Chi!
If your are not teaching Tai Chi it may mean the difference between success and
failure. It sure beats teaching Kids!
The average pay for teaching at a senior center is about $40 per hour (all
profit - no overhead)
My son Mark, Personally teaches at 7 Senior centers
each week.
Financially reality!
1. Teaching at one center, once a week at $40 per
hour will bring in about $2,000 per year.
Four centers will bring in an extra $8,000 per
year.
Eight center will bring in about $16,000 per year.
For your present studio to Net an additional $16,000 per year you would have to
increase you studio Gross by $30,000 - $50,000 per year. Almost impossible in to
days bad business climate.
Bonus: Teaching
Tai Chi is one of the easiest and most enjoyable hour of teaching you can do.
Your only expense will be your auto expense to and from the centers. Plus the
IRS allows you to write off these business miles at .43 cents per mile.
Next week I will add another out of studio profit program.
November 5, 2007
Think small!
Get rid of expenses: Smaller building (smaller utility bills), smaller staff
(better yet no staff) Smaller YP ads. LEARN TO USE THE WEB! Smaller car, fewer
cars!
Think small people: Like it or not most
studios (to survive) have more youth than adults. The critical part: who will
teach this age group? Its not just enough that you sign up a lot of youth, but
you must retain them.
Reality: Most youth are not ready for True
Martial Arts. This means that most youth programs are mostly "Fun and
Games". Keep your youth groups in the 30-45 minute range.
Rule of thumb: You want enough youth to pay the rent.
October 27,2007
How bad is the General Business Economy?
Saturday, Pat and I went to one of our Favorite - upscale Oriental Restaurant.
We decide to go early because by 6:30 there is always a waiting list. We arrived
at 5:30 and at that time there was only one customer in the restaurant. When we
left at 6:30 no new customers had come in and when we left the restaurant was
empty. And this was a Saturday night, usually the busiest night of the
week. During the time we were there they did not have 1 takeout order.
Reality: Restaurants and Martial Arts studio are
low on the priority list when money choices have to be made.
October/23/07
WARNING - WARNING - WARNING
The reports from all across the US and CANADA
are all the same:
NO NEW STUDENTS! The phones are not ringing - and
new students are not walking in. This is a BAD sign because we need a STRONG
October to carry us in the weak months of Nov. and Dec.
Form where I sit I see Two major problems:
1. Weak economy and its going to get worst.
2. The Ultimate Fights have created a very NEGATIVE
view of the martial arts for our traditional students: Families, youth, females
and professionals! These were the types of students that came to our studios
because of "The Karate Kid"; "Kung-Fu" and Bruce Lee.
OCTOBER
10/19/07
WARNING: You cannot control your Gross - you can only estimate (HOPE) what it
will be.
The only thing you have control over is your EXPENSES! You must start right now
to get rid of as many expenses as possible!
The economy is the worst we have seen in years - and it will only get worst!
SEPTEMBER
09/22/07
September has been a so-so month. Some studios started out quite strong and now
many studios. Many of the top retailer have announced a decline of sale in
September, and October looks no better.
SEPTEMBER
09/15/07
The days of using the YELLOW
PAGES as a dependable source of new students are over! Not only are the
Yellow Pages less effective, they cost more. And in most cities you now have
2-3-4 competing yellow page books. Do not let the
yellow page sales person sell you on using their YELLOW PAGES.COM. What has
replaced them? The internet - A PROPERLY designed
and Maintained Web site.
The only thing you will want from the Yellow Pages, is an add large enough to
direct them to you Web site.
2 sad but true stories:
#1 Story: One our larger studios
(In business over 35 years) has for years ran a 1/2 page ad in the Yellow Pages
at a cost of thousands of dollars each year. They also have a well designed Web
sit. Last year, because of their Web host, the site went down for several
months. Result: THE PHONE STOPPED RINGING. They discover the hard way, they were
not getting any call off the Yellow Pages. Now they have dropped their Yellow
Page ad.
#2 Story: Because of a serious industrial accident
my brother Will can only do Tai Chi for exercise. He also teaches Tai Chi. Last
year he decided to go commercial and put in a Yellow Page ad. He also set up a separate
phone line only for Tai Chi calls. Last year he only got one (1) phone call.
WARNING: Your Web site must be directed to the
people in your drawing area. It does you no good to have the #1 Goggle listing
under KENPO! That listing will cover the entire world. If you live in Chicago
(put in your own city) for instance you would mot put an add in the NY
yellow pages.
Your Web site must be set up to cover as to draw as many hits as possible from
prospective students.
Example: Chicago Kenpo - Chicago Karate - Chicago Martial Arts. etc.
TRACYS TO THE RESCUE.
We were some of the first to recognize the vast potential of this
new media.
Go to Goggle - type in Kenpo. The #1 listing is my
brother Will Tracy.
Type in Kenpo Karate - the #1 listing is my brother
Will Tracy.
Type in American Kenpo - the #1 listing is my
brother Will Tracy!!
My brother Will has been setting up and hosting web site for many large
companies for years!
We are the pro's when it comes to setting up Martial Arts web sites. 80% of my
business comes from my own Web Site!
I am now making arrangements for my brother Will to set up - host - and
administer Web sites for our studios.
And it will not cost you an arm and a leg!
In the next few days I will be posting Will's phone number
so you can talk to him directly.
WARNING: Do not expect to use one of your students
to be able to set up and MAINTAIN your web
site! I see it happen time and time again. A student will set up your Web
site. They will leave and your Web site is never UPDATED
again!
SEPTEMBER
09-11/07
Over the next few week I will be putting a
"Complete" update Business Manual.
Click here for the first installment
SEPTEMBER
09/07/07
"Trouble in River
City"
The dreaded "R" (Recession) word is being uttered more business
leaders.
Many major segments of our economy are already in a recession: The housing
industry and the auto industry are two major examples. The Martial Arts has been
in a recession for the past 2-3 years.
Just today, the jobs report showed a lose of Jobs (NOT GAINS)
Over the past 4-5 years most studios have reported their grosses are down
25%-40%! One well established Tae Kwon studio told me is enrollment dropped form
170 students to 65.
Martial Arts and all
small business have one major problem: the cost of health insurance. The average
family is now paying between $600
- $1200 PER MONTH. On top of that they still have deductible and co-pays.
Just this month, my wife's health insurance went up $80 per month or $920 per
year.
I know many martial artists who
had to give up their studio to take jobs that provided health insurance!
Health insurance rate keep going up 8%-10% a year, with no signs these increases
will slow down.
For many, they simply have no health insurance!
SEPTEMBER
9/04/07
If OLD indicators hold true September and October may turn out to be goods
months for the Martial Arts!
Retailers, especially Wal-Mart reported Strong back to School sales and have
indicated they expect good sales for Sept. and Oct. Now we will see if this will
mean consumers have extra money left over for "Karate Lessons"!
8/20/07
Why teach private lessons!
This week I was on the phone with Ralph Chinnick in Canada. His believe in
Private Instruction was really brought home: he just signed up a businessman
for a standard program. The new student told him he wanted to take and pay for
an additional (four) 4 private lessons each week. Try
doing that with classes only.
8/27/07
What effect has the popularity of the exposure on television of "Ultimate
Fighting" had on the Martial Arts?
99% Negative!
With the Michael Vick and "Pit Bull fighting" making the headlines the comparison
was made between the Ultimate Fights and Pit Bulls. As one lover of both stated,
"the only difference between the two is the dogs do not get to "Tap
Out"! And of course, the name of one of the 5 man fighting teams is
"PIT BULLS".
What parent, especially a mother, is going to let their kids watch this on TV?
Let alone study in a studio that teaches this type of fighting?
Recently there was a TV article on a survey taken in a larger Penn. town of the
effect on the current effect of "Ultimate Fighting" on the enrollment
in Martial Arts Studios. Tradition studios stated their enrollment on an average
was down 40% with the advent of "Ultimate Fighting" on TV. And
the studio who claimed to teach "Mixed Martial Arts" had no increase
in Students.
ONE QUESTION? How do you train - to lie on your
back - and have your head and face, pounded from above, by a fist covered with
4oz gloves?
The promoters of these fights (Especially Pay per View) made over
$250,000,000 last year. The average viewer is a Male 18-35 years of age.
Reality: is this really the "Ultimate Fighting" to be used on the
street in Life or Death Situation?
Let's look at the rules!
1. Weight divisions -
2. So far no divisions of females or kids. Wonder why?
3. Time Limits
4. Referee to keep you from being killed!
5. No kicks, knees or strikes to the groin
6. No strikes to or ripping out of the throat.
7. No strikes or gouging the eyes
8. No head butts
9. No ripping of the ears
10. Hands protected by gloves
11. No kicks to the knees
12. No biting
13. If you are losing - you can "tap out" and shake hands!
Also for your consideration:
1. No guns -
2. No Knives -
3. No clubs -
4. No multiple opponents
(So much for "ultimate".)
OWNERS: Start
thinking Christmas NOW! All retailer are . . . they already have all their Xmas
products on order.
December is always our worst business month. People are not spending money on
Karate Lesson. But, they have lots of money to spend on Xmas Presents! Start now
stocking your studio with Retail Products to sell to your students. Where else
can you make 40%-150% on your money? Or, better yet - on someone else's money:
A
Credit card!
www.thekenpostore.com Gives discounts
on all our products to Studio Owners! Since all orders are custom made, get your
orders in early.
You should have all your retail products in stock - for sale - by Dec. 1, 2007
Christmas - is wintertime. Your biggest seller of clothing will be: Sweatshirts, Pullover
hoodies, and Zip up hoodies. Pullover hoodies are the biggest seller.
All of these products are available silkscreened or Embroidered. 90% of the
students want the Embroidered products for Christmas!
If you are following and teaching our system I give HUGE discounts to our
studios on all DVD orders. You make between 100% and 200% on each DVD you sell.
Two years ago Steve Finn sold over $2000 in DVD's at Christmas time. Call me at 859-271-9587
to get the discount price!
You can call Mark Tracy directly at 513-851-2113 to order your embroidered products.
8/28/07
THE NEXT TWO
MONTHS - SEPT. AND OCT. ARE USUALLY "MAKE
OR BREAK" MONTHS TO
START OUR NEXT BUSINESS CYCLE!
For over 40 years the
Martial Arts - as a business - has established monthly business cycles: Good
Months - Bad Months and those in between!
The following list has held constant over the years.
List from Best to Worst.
Signs to look for: Retail sales - back to school sales. If these two figures are
weak, it usually means people do not have enough money for "Karate
Lessons".
Warning: If we have a weak or bad
September and especially October we are in for trouble. Happens about every 5-6
years!
1. October (October
must be strong to get us thru the Next two weakest months of the year: Nov. and
Dec.
2. September (September
is the Kick off month follow usually slow summers. Starts a little slow because
of the Labor day holiday - Kids are back in schools and vacations are over.
3. January (Unless you
are in an area hit by bad weather)
4. Feb.
good if January was good - only drawbacks: Short month, bad weather!
5.
March is one of the
middle of the road months!
6.
April (TAX time)
7.
June - Summer: lose all
the kids and everyone starts vacations
8
. July - another
"Dog Day" of Summer
9.
August - dead until the
kids are back in school.
10.
May - Always a weak
month
11. November The
start of a very noticeable slowdown - Plus you are faced with "Thanksgiving"
at the end of the month
12.
December - The worst
month of all for new students and payments (Plan and make up for this with
retail sales).
8/29/07
Death by a
thousand cuts. No one cut does it, but you slowly bleed to death over time.
History: For years, (see
the list below) most
of the United States schools traditionally started after Labor Day which was the
first week in September. This meant that we did not see new students
coming into the studios until after this date.
This was an old "outdated" economic policy based upon small
family operated farms, where all members of the
family were needed to look after and harvest the crops.
Many states and school districts saw this as an outdated policy and
started the school year in August (Usually about the middle of the Month).
This a great for the Martial Arts because it gave us a 2-3 week "Jump
Start" on signing up new students. This really helped get us off to a fast
start for fall!
In 1988 - 51%
started before Sept. 1
2006 - 75% started before Sept. 1
When school
districts opened for 2006-2007 school year.
Before Aug. 14 - 12%
Week of Aug. 14 - 20%
Week of Aug. 21 - 24%
Week of Aug. 28 - 20%
After Labor Day - 24%
Today the trend in many states is to start the school year later. Why? Money!
Money for the tourist industry an more tax dollars for the State.
Example: In Pennsylvania, where 9 in 10 of the states 501 school districts start before Labor Day, the Legislature is considering a bill to begin classes the day after the holiday. A legislative finance report found that the state would collect an additional $18 million in tax revenue every year if families vacationed in the last week of August.
Factually for us, many states and school districts saw this as an outdated policy and started the school year in August (Usually about the middle of the Month). This a great for the Martial Arts because it gave us a 2-3 week "Jump Start" on signing up new students. This really helped get us off to a fast start for fall!
BAD NEWS!
This policy is now being reversed as lobbyist from the "tourist" industry
are getting state after state to make school districts start there classes
later. They complain about lost income and a lack of student workers (most work
for minimum wage) when school starts in early August
Example: This year, new laws took effect in Florida where the 67 public school
districts may not begin classes earlier that 14 days before Labor Day, and Texas
, where the 1033 public school districts may not begin unlit the fourth week in
August. In Michigan, a law enacted last year said the 838 school
districts must begin classes after Labor Day.
Other states, including Pennsylvania, Tennessee,
Alabama and Kentucky, are debating the start date.