Business plan
Intro
Since your martial arts school offers a service, it has no tangible product, such as a chair or a stove. Your business only offers intangible services, such as the opportunity to increase physical fitness, self-defense skills, confidence, and self-esteem. Your teaching abilities and the benefits that may be gained from your teaching are your product.Know your business
Since you now know your product, you need a business plan that will address the price, place, and promotion of the product. A business plan traditionally is a multi-page document that:- Sets down the goals of the business.
- Helps organize and develop a solid plan for reaching the goals.
- Serves as a document to help in arranging and securing financing.
- Helps the business stay on course by being modified when old goals are reached, and new goals are set.
- An executive summary outlining the basic information contained in the plan.
- A market survey of potential customers.
- An analysis of competition.
- A forecast of revenues, expenses, and profits.
- Plans for financing the business.
- Any other information deemed necessary.
- Understand your product.
- Help you determine how to promote your product.
- Identify your customer.
- Help you set a price for your product that your customer will pay.
- Determine where the school should be located.
Understand your product
As previously stated, your product is your instruction and its benefits, offered through the facilities of your school. When a potential student asks questions about your product, you should be ready to answer them. The following are some examples of questions that may be asked by potential students. Develop answers to the questions that provide an accurate and honest portrayal of you and your school.Some question might be:
- What are your credentials?
- How long have you been studying the martial arts?
- How long have you been an instructor?
- Are you associated with any organization?
- Are you a certified instructor?
- How do you teach and conduct class?
- Special skills that make you a good instructor.
- Other education or skills you have that contribute to your teaching ability.
- A short history of your martial art.
- A short history of your instructor and his or her background.
- Three strengths of your instruction.
- Three weakness of your instruction (in case you are asked, but do not volunteer weaknesses).
- Benefits students will gain from your instruction.
- Why your school is better than other schools (but do not be critical of other schools).
Promote your product
Identify the way that you will use to promote your product, such as:- Flyers
- Posters
- Printed media ads
- Radio ads
- Television media ads
- Demonstrations
- Helping charities
- Parades
- School visits
Identify your customers
Answer the following questions to help you understand exactly who your customers are:- Who are the primary persons (age, sex, income range, background, etc.) that you are trying to attract?
- What is the size (the portion of the population surrounding the location you have chosen) of the group you are trying to attract?
- Who or what is the competition (other schools and other activities) for your target group of people?
- What are the numbers and sizes of the various competitors?
- Given your location and the target market, what possible things could happen in the future to alter your situation, such as new shopping centers across town or a change in highway routing?
- What do you personally have in common with the target market?
- What differences do you have personally with the target market?
- Have other martial arts schools, competing for the same market, opened and then failed in the past? If so, why? Have the failures affected your target market in any way?
Set a price
To attract customers, compete with competitors, and make a profit, you must set a competitive price for your product. To help you set a price, answer the following questions using a variety of possible prices.- What is the minimum you need to charge to keep the business solvent and make a reasonable profit?
- What is minimum and maximum price the target group would pay for your services?
- Would your prices be competitive for the target group as compared to the other activities that you have identified as competition?
- Will you have only one price schedule, or will you use various discounts and rates?
- Based on your financial situation and the target group, would you need to change your pricing if the competition were to raise or lower theirs? What kinds of changes could you make in the price if necessary?
Determine a location
As the old real estate saying goes, "The most important things are location, location, location!" A good location is crucial to the success of any business and is found by analysis of many factors, such as the number of people available from which you can attract students, including their income range; the type of area around the location; and other similar facilities in the area. Suppose that you have selected an area that appeals to you for the above reasons. The next step is to find a location for the school in the area.The following are some considerations to help you make your choice:
- Parking
- The location should have plenty of parking spaces available.
- Does the parking lot have lights at night?
- Would you share the parking facilities with other businesses?
- Would their peak business times coincide with yours?
- Are there any restrictions on the parking spaces?
- Condition
- Will it need a lot of conversion or repair? If so, who must do it?
- Can the location be adapted to your needs?
- Appearance
- What is the general appearance and feeling of the location?
- What kind of impression will it give a potential new student?
- Can location be seen from the street?
- What type of businesses are adjacent?
- Can location adequately accommodate growth in your school? Can you expand the facilities if needed?
- Does the location have restrooms, showers, adequate lighting, air conditioning, heat (electric, oil, or gas), etc?
- Does layout of the space pose any safety problems?
- Does lease permit additions to the interior, such as heavy bags, mirrors, or stretching rails? If not, what can be done?
- What kind of covering is on the floor? What kind may be added?
- Signs
- What are regulations concerning signs?
- May you paint window and door glass, hang signs over the sidewalk, or put a sign at the entrance of the parking lot?
- Lease
- Do you fully understand all the terms of the lease?
- What is required at signing?
- Are first and last month's rent required in advance?
- Is there as a security deposit?
- Any there any special clauses?
- Are there any noise restrictions?
Forcast financial needs
Start-up costsStart-up costs, such as lease signing requirements, renovations, inventory, permits, etc., are those incurred when you initially set up the business and are generally only paid once. Since these costs come before the student payments, you must have the money up front. This money may come from your savings, family, your instructor, friends, or bank loans. If you decide to start your business full-time, you will need to plan a personal budget for at least nine months.
Estimate of monthly expenses and receipts
This aspect financial planning is dependent upon the information you have already obtained. Remember, you are estimating, so allow for the worst case.
- Estimates of Receipts. From your earlier estimates, you may forecast your monthly receipts by multiplying your estimated number of students times a reasonable price. You may also include sales of such things as uniforms and sparring equipment, and testing fees. This total only gives a rough estimate of your receipts. Keep in mind that you earn money personally only after all business obligations have been met.
- Estimates of Expenses. From your previous planning, you have an estimate of monthly costs. Most of these costs are consistent from month-to-month, such as rent or insurance, but you have some control over others, such as utility usage. Other expenses are dependent on usages, such as long-distance telephone calls, advertising, or travel.
SOURCES
- Beaver, W. (1986). Opening Your Own Martial Arts School: A Planning Guide. Originally published by Brennen Business Guides (out of print).
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