Martial arts as a business takes place when martial arts is sold and bought. When a monetary transaction takes place in martial arts, then martial arts experiences a commercial activity, and thus, martial arts may be classified as a business. Business may be loosely defined as a transaction between a seller and a buyer, where a seller sells goods or services that fulfill the needs, wants, or desires of a buyer, at a price that the buyer can afford, and the seller can make a profit to continue the business.
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Why martial arts schools fail as businesses?
Every business starts with a customer and ends with no customer. The customer always comes first. Paying utmost attention to the customer is of supreme importance to any business. Besides customers, some other common reasons why martial arts school face the prospect of closure are due to inadequacies in product, place, person, price, and promotion.
-product. The product offered is essentially martial arts and some other disciplines like physical fitness and self-defence. If the quality of education imparted is poor, then the business faces closure. Another reason is that the school focuses on getting more enrollments, rather than concentrating on the already enrolled students. Acquisition is given more importance rather than retention, which results in the closure of the business. Yet another reason is that too much product variety is offered. For example, besides martial arts, other disciplines like physical fitness, yoga, boxing, gymnastics, weight-loss, self-defence, and more are also offered. Variety in a product is necessary to tap the different interests of the society but excessive variety brands the school as a “jack of all trades and master of none”. Generally, the product variety mix in martial arts schools that are known to be profitable are martial arts, physical fitness, and self-defense, which are targeted at kids, teens, adults, and seniors.
-place. The location of the martial arts school may not be appropriate. The locality may not be safe, or is in a remote area, or there is difficulty in finding local transportation. The hall size may be too small, or there may be inadequate training equipment, or facilities for the students like separate changing rooms and washrooms for ladies and gents may not be available. Having add-ons like a cafeteria, a shop, and a lounge, may be present in a dojo if there is adequate space; however, it is not necessary. Some training halls may have very little or zero hygiene with respect to cleanliness of the hall or equipment. Sometimes, the lease of the training hall expires and renewing it is costly, while another suitable hall in the available budget is not found. Such factors generally make the business face closure.
-person. Mostly, owners of martial arts schools are themselves highly trained martial artists, and they also love teaching. However, over time, as the school expands into multiple branches, more trained martial artists are required to teach at the multiple branches. Sometimes, these instructors are not sufficiently trained, while sometimes they are highly trained, but they are not good at teaching. Instructors need to be trained and also be good teachers, otherwise the business faces the prospect of closure. Sometimes, instructors leave and open their own schools, which creates a temporary void in the business. This can be effectively managed if systems are put in place, so that the void is filled at the earliest, with an equal or better instructor than the earlier one. Without systems, the martial arts business is merely self-employment and not a business. Self-employment is a one-man show, but business is never a one-man show, rather it is a team-show and thus, systems need to be put in place.
-price. The pricing of the programs offered by martial arts schools may be either underpriced or overpriced. If it is underpriced then loss is suffered which would result in a closure, and if it is overpriced, then very few students would come, which would also result in a closure. A competitive analysis of the local martial arts schools would reveal the trending price, and generally, prices hover around the trending price. However, if the instructors are more qualified, then they can offer more quality in their education, and in such a case, keeping the price more than the trending price is normally recommended. Quality is paramount in determining the price and it is only quality that is the most effective unique selling proposition (USP). Exceptions to this happens when the USP is not quality but something else, for example, selling a dream. Some parents dream of their children becoming black belts and if the martial arts school succeeds in selling this dream to the parents, then even a small child may become a black belt. Such dreams should not be sold, rather quality should be given importance and accordingly the pricing should be fixed.
-promotion. Unless word-of-mouth advertising is extremely strong, it is essential that all ways of promoting the school should be done. Promotion entails branding and marketing, and both can be effectively done via physical and online mediums. Generally, most schools need a very good online presence including consistent social media marketing to remain successful and thereby, gain organic traffic. Thereafter, advertising can help to obtain paid traffic, while partnering with other martial art schools who teach other types of martial arts, can help to get partner traffic. Usually, getting traffic and leads, and converting them into customers comes under the promotion-marketing-sales chain. This chain helps to get new customers, while the delivery-support chain helps to retain existing customers.
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Handling a small business
All businesses in the world start small. Handling a small business, especially in the beginning years is extremely difficult.
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Scaling up a small business
After the initial years, a growth phase starts and then scaling the small business becomes necessary. Here, the distinction between a self-employed person and a businessperson is evident. A self-employed person is a person without whom his business cannot run, while a businessperson is a person without whom his business can run. For example, doctors, lawyers, coaches, teachers, trainers, and more, are all self-employed. They may have a small business of their own, where they practice their profession, but they are still self-employed, because the business cannot run without them. On the other hand, a business is where the owner does not need to be present, because it runs on its own. This can happen only if the business has some systems in place. For scaling up a business, it is necessary to have systems, so that the business can go on running without the business owner.
Systematizing a small business
A small business owner needs to install and implement systems, so that the transition from being self-employed to being a business owner can take place. Systems are made of processes, which in turn are documented, so that it can be repeated in a reliable fashion.
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Martial Arts Industry
Martial arts as a business is global in nature and is a thriving industry in itself. As an economic activity, the martial arts industry uses martial arts as an economic product for management and investment [1]. The United States had about 39,310 martial arts studio businesses in 2020 with per school having an average annual revenue of $114,657 [2]. In 2020, the global martial arts industry was valued at $90.25 billion, and by 2028 it is predicted to grow to $171.14 billion [3]. With such impressive statistics, it is common to find martial arts schools mushrooming all around the world.
Martial Arts Franchise
A martial arts business, although small, creates a brand of its own. This brand is usually the name and logo of the business. When customers see the brand, then they automatically relate it to the quality of that business and are willing to enrol in it, irrespective of where they see the brand. For example, if XYZ Judo is a martial arts school in London, which has acquired a reputation over several years, then XYZ Judo is a brand. If people see the XYZ Judo brand in New York, then they understand that it has the same quality as XYZ Judo London. However, the XYZ Judo New York, is not a branch of XYZ Judo London, rather it is an independent school but having the brand name of XYZ Judo, and this is known as a franchise.
Scaling up with systems can also lead to becoming a franchise brand. The franchise business is also one of the benefits of scaling up. Thus, any reputed martial arts school with a good brand, can also enter the franchise business with systematized scaling. In the martial arts industry, the most famous franchise brand is Premier Martial Arts, which in the United States has more than 100 franchisees, along with branches in Great Britain and Canada [4].
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Conclusion
Normally, martial artists view martial arts as a Way of Life; however, they also need to survive, and so they open up a martial arts school. This way they can pursue their passion of martial arts, and also be able to survive on tuition fees. But the hard reality is that the majority of martial arts schools are neck deep in debts. This is because they are run by martial artists and not by businesspersons. They know how to teach martial arts, but they do not know how to run a business.
If martial art is viewed purely as a Way of Life, then the martial artist may not be economically well off, but nonetheless he would have tremendous happiness and satisfaction, while travelling on his chosen Way.
If martial art is viewed purely as a business, then compromises may have to be done, but the martial artist would be economically very well off.
If martial art is not viewed purely as a Way of Life, or purely as a business, but it is viewed as somewhere in-between, then the martial artist can pursue his passion while also remain economically somewhat stable. By systematizing and scaling up the small business, the martial artist need not worry about finances, because the business will run without him. And although not required, yet the martial artist may continue to teach at his school, so that his passion of pursuing the Way of Life also continues. In this manner, both passion and finances are somewhat taken care of. Generally, this middle path is followed by most martial arts schools.
If the martial art business has survived for many years, then it has already built a brand of its own. This brand can also be franchised, which in itself, is a very lucrative business model.
Alternatively, if at some point in time, if the martial artist decides to retire, then the brand that he has so passionately built, can also be sold at a premium amount as goodwill and the money obtained can be used as retirement funds.
Thus, a martial arts business offers several options, when it is viewed only as a Way of Life, or only as a business, or as a mix of both. It may also be viewed as a franchise opportunity or as a goodwill that can be sold. Ultimately, how the martial artist views his martial art, would influence the deciding factor whether his martial arts business, in the financial aspect, fails, succeeds, or remains somewhere in-between.
References:
1. Yun Chen (2021). The development trend of martial arts industry in the new era. Frontiers in Sport Research, 3(4), 62-65. https://francis-press.com/uploads/papers/RSV9cCXWExskMJhchslm8gLkifWXnWl8pzegpRmC.pdf [Accessed on 8 July 2024]
2. Eran Galperin (Nov 30, 2022). Webpage. 39 Martial Arts Industry Statistics to Know. Gymdesk. https://gymdesk.com/blog/martial-arts-industry-statistics/ [Accessed on 8 July 2024]
3. ABC Glofox (undated). Webpage. 13 Martial Arts Industry Trends You Need to Know. ABV Glofox. https://www.glofox.com/blog/martial-arts-industry-trends/ [Accessed on 8 July 2024]
4. Richard Blaine. MAIA. (Oct 02, 2019). Webpage. Premier Martial Arts: The Franchise That’s Leading the Pack in the Martial Arts Industry. Martial Arts Industry Association. https://www.maiahub.com/blog/premier-martial-arts-the-franchise-that-s-leading-the-pack-in-the-martial-arts-industry [Accessed on 8 July 2024]
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