Expanding your Martial Arts Business

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Purchase market share or grow organically

Andries Pruim | October 2021

Is it time to grow the Business?

I wrote a MA Success article about a year ago on the probable consolidation of the Martial Arts industry, which I wrote before the full onset of the recent pandemic. We have seen many Martial Arts schools having to close permanently due to COVID with those remaining schools noting a sizable increase in their enrollments.

This forced consolidation of students into schools which had survived the pandemic brought my conclusions to fruition. It was Martial Arts schools that were well established with proper “systems” in place, including technology, together with quality and well thought out staffing and curriculum strategies, that not only survived the pandemic but actually grew their business during these stressful times.

In recent MAIA Elite webinars, Mr. Metzger and Mr. Tassoul have been driving these points consistently in order to assist the industry in stopping the further closure of the myriad of Martial Arts schools. Lately, the MAIA team has also explored options on how best to grow your business including expanding to multiple locations.

While these MAIA sessions were informative and apropos in how best to expand your school into new markets, what struck me was how these same conversations are presently being had in the Financial Services industry as it relates to various Banks expanding into new markets. You see, even though I have out of the Banking Industry for many years, I continue to keep up on the latest Banking news via Banker magazines (yes, there is such a thing 😊). In a recent edition, a community bank was exploring ways to expand to new counties or even states and was careful to follow well established guidelines.

What surprised me was the similarities between the two Industries as it pertains to how best to proceed in expanding their presence into a new Market area. So primarily to supplement what the MAIA Team has be espousing for many years, I would like to provide a summary of Best Practices when making the decision to expand your school. While I have leveraged the Community Bank example, I have simply provided a similar argument for the Martial Arts Industry.

Which is Better? - "Build or Buy"

There are a number of variables when thinking about expanding your school especially into a new Market area. This includes whether to grow your school organically (start from scratch) or take over the operations of an existing well-established school. Sometimes it is easier to take over an existing location if you feel you can provide the necessary support and infrastructure to ensure success.

Both options are feasible, but must be examined on a case-by-case basis, depending on the market you are entering and your business acumen. We will examine some high-level considerations which should help you decide on whether to grow organically, purchase on existing operation or simply pass on the Market and look elsewhere.

First examine your existing location or locations  in order to determine what makes your school competitive and successful.

Before you start even contemplating expanding your business, you must take stock of what you have and what made you successful in your present location(s). It is obvious that you are successful because of some unique qualities you have displayed and implemented. Systemize these qualities and ensure they can be migrated to a new location.

As the MAIA Team stress constantly, you should be documenting your successful processes and looking at the talent you have hired (as staff) for your existing school(s). Once you are confident that your systems are solid and the staff is correctly teaching the school’s curriculum, then it’s your job to duplicate this successful endeavor to the new location.

Leverage these traits in determining the next Market to enter into.

Once you have systemized your successful processes and unique traits (e.g.: Curriculum, Grading Criteria, special events, etc.), you must be able to establish the same criteria in your new location. Seeing that your unique way of delivering a quality product was successful due to the demographics and possible location of your existing school (amongst many other reasons), you should be looking for similar traits in the new Market you are thinking of expanding into.

If the new Market has too many strong competitors, maybe look at alternative options.

While some Markets “look ripe for the taking”, the saying “looks too good to be true” may be the more appropriate way to “look” at it. Even if the demographics look enticing, with a sizable family component, not to mention good economic conditions, it is best to first appraise the competition before making any commitments.

If the competition is plentiful and most look prosperous, the barriers to entry may be hard to overcome. It would be in these competitive environments where the purchase of an existing location would be more ideal than trying to grow organically and even then, it may be hard finding someone willing to sell. It may be best to look at a less mature business community.

Even if the new Market appears to be similar to the Market you are presently in, it should be noted that the new Market will still have unique nuances which may be subtle and hard to detect.

Regardless of how much of a match you feel the new Market is to your existing one, there will always be local “customs” that will have to be taken into consideration before you can fully establish your business. You must become familiar with the community you are entering and without hiring some local talent, this could lead to a difficult time in growing your business.

Hire an Experienced Local Head Instructor and possibly a Program Director which should allow the school to stay focused on the needs of the community you are entering.

If you really wish to ensure success in your new Market, then it would best to hire staff that are familiar with the community including knowing some of the other business leaders. Hiring a local Head Instructor, if possible, would increase word of mouth referrals as your new head Instructor should be well known in the community.

If you are looking to hire a local Program Director, you will need to ensure they have some experience with the local business community and especially the Chamber of Commerce. Developing Business and Referral networks are more easily accomplished by someone who knows “the lay of the land”.

Ensure the new Market has substantial growth potential.

One way to determine Market Potential is to closely examine the performance of the competition. Are they successful and growing? In other words, do your homework and research the new Market’s demographics as well as employment levels, real estate prices, commercial lease rates and other factors.

Once you have identified your primary customer base (e.g.: children’s classes), then you must confirm that the new market has the necessary demographic base to fill your classes. Once again contacting the local Chamber of Commerce or School Board should be one of the first steps in your research.

Try to avoid Markets where there is substantial but small-scale competition. It may be difficult to garner traction is such a fragmented Market.

Of course, if during your research of the new Market area, you find a sizable number of small but successful schools, you may wish to re-think your decision to expand into this area. While national or regional martial arts school are difficult to compete against, the small single operator or husband and wife schools can be fully entrenched within the community and a sizable barrier to overcome.

Always enter a new Market from a position of strength. Highlight your unique qualities and how your new school can benefit the community.

Standard business strategy dictates that for your school to stand out from the crowd is to emphasize your strengths and uniqueness when entering into a new Market. Determine what your “differentiator” is …. what makes your school different from the rest and how has it resulted in your school’s success.

When marketing in your new location, stress how well your existing school(s) integrated into their respective communities and how you are also seen as a leader within your business community. So, whether its your martial art (style), your teaching methodologies, your curriculum, your on-line presence or even just the friendliness and effectiveness of your processes, ensure you properly market your strengths when opening your new locations. 

Staffing in your new Market area is also extremely important. 

Unless you have a fully trained group of instructors ready to relocate to your new market, you will be looking for local talent, which is not only a must (as previously noted) but a challenging task at the very least. Ensuring you select the best candidates in a new Market can be difficult so if you can’t find qualified candidates from within the new Market, then it may be best to avoid this location.

Ensure your existing systems are robust, well defined and migratable to the new operation. Your Membership Management Service Provider should be able to easily and quickly scale up accordingly.

Technology is a must in any of today’s successful businesses and the martial arts industry is no exception. Together with your documented staff hiring processes, risk management strategies, on-boarding methodologies, your Membership Management software must be able to handle the increased workload that a new school will generate.

Fortunately, most Martial Arts Membership software platforms, (especially those advertising on the MAIA and Black Belt Magazine platforms) will be able to assist your school in all your expansion needs and we recommend reaching out to them if you are contemplating growing your business.

When expanding your business, you are also expanding your brand.

Remember that your school, your staff and yourself are representatives of the successful business you have developed, which is, for all intents and purposes, your Brand    …. your symbol of success, your goodwill with the community, your effectiveness in enhancing peoples lives …. is so much more than just a fancy Logo and accompanying T-Shirts.

This means committing your new location to the community by joining the local Chamber of Commerce, other similar community organizations and becoming friends with the local school board. Your Brand is what everyone will notice and talk about. Make sure you represent yourself and your new school in the best light possible by making your school’s “Best Practices” a hallmark of your success.

Best strategy is to do both.

Its as simple as that. Keep your options open. While growing organically allows you to control all aspects of the new location, sometimes an opportunity exists to take over the operations of an existing location where your enhancements to the business could lead to sizable growth.

In conclusion, just like any business wanting to expand into new markets, there are certain steps which are a must and I found the similarities in a community bank wanting to expand and that of a Martial Arts School owner were amusing and refreshing … it says to me that the maturity of the martial arts industry is starting to show and we are all the better for it.

Disclaimer

Although every care has been taken by the MAPS Advisors Group Ltd., in the preparation of this publication, no warranty is given by the MAPS Advisors Group Ltd. as to the accuracy or completeness of the information contained within it and the MAPS Advisors Group Ltd. shall not be responsible or liable for any loss or damage whatsoever arising by virtue of such information or any instructions or advice contained within this publication or by any of the aforementioned.