buying a martials arts business

[rotaryman]

curious if any of you have had the opportunity to buy a ongoing school and what amounts you have heard them selling for. I have a chance to keep our grand master involved in name and to a limited degree in testing. His health is declining ( had a stroke) proably from the excitement of selling another black belt life time membership. The school is successful in terms of attendance but as many sole proprietorships go tracking where the money went is always interesting. I was wondering if you guys had some thoughts on grading a school and setting a value. thanks

[fcokeefe]

Usually (if I remember correctly) its anywhere form 50 to 75% of one years gross that a school will sell for. You should see a complete record of all accounting, findout where the money go and how much comes in each month, not including new sales. Find out how many new students have sighned up each month and how many students left each month for the last two years, this way you can get an average growth rate and find out you retention rate. Those factors will wiegh on your decision to buy or not. After all you are going into this to make money, not loose money. Only base you decision on how much the school makes NOW, not how much it could make or how much they tell you it could make by signing up X amount of people a month. And what do you mean by limited degrees?

[rotaryman]

grand master testing

I meant that he would be there for most of the black belt test but not always for the monthly colored belts. But also i would hope to have a little better ethical control of sales procedures rather then the used car sales approach if you know what I mean. That is what i meant by limited the senior instructor is a fifth don black belt but is lacking in money and business savvy for now but I would make him a partner as the grand master should have.

[fcokeefe]

I meant that he would be there for most of the black belt test but not always for the monthly colored belts. But also i would hope to have a little better ethical control of sales procedures rather then the used car sales approach if you know what I mean. That is what i meant by limited the senior instructor is a fifth don black belt but is lacking in money and business savvy for now but I would make him a partner as the grand master should have.

You deffinently want to establish you own marketing and sales outline. You can't "sell" anything if 1) your not comfortable with the sale outline (i.e. high pressure, get some money from them NOW, or the structure of the sale and how it is laid out) or 2) (I don't see this one happening) If you don't believe in the product you are selling. Basically you must be comfortable with what you do and your product. I see what you mean by limited, but is it your decision to promote or your instructors? Another thing, the partnership is not a good idea. Partnerships are worse than bosses! If you would like to help him out as he has helped the school out come up with another idea that is better for the both of you. Here is an example, Lets say he operates in the back so he doesn't deal with the sales part so commision is not a factor till he learns the fromt end and how to sell, but you could "put him on a pedistal" another words make his time reserved for privates, seminars, special classes (that students pay for), black belts and instructors, while overseeing all of the teachings in the dojo. By doing this you could free up his time to learn the front end of the business and sales so he could start to get commisions while you increase his pay and not make him a "partner". All it takes is some restructuring and for the other instructors to step up and disperse the workload evenly amongst themselves.