Estimated Income of a TKD School

[tkdDougie]

I have been considering opening a TKD school recently. I have been involved in the art for 20 years. During the day I am a computer consultant and that is what I am educated in.

I was wondering if someone could help me figure out annual salary based on the following:

150 students
$50 / month
bi monthly testings

I will need another instructor to help (not sure what i should pay or how to structure that)

the cost of insurance?
the cost of rent
what is the average time to acquire 150 students, is 1 1/2 years reasonable?

what is the average annual salary of a school owner with these statistics?

It seems to me nobody seems to make a lot of money in martial arts schools (except where I was taught) am i missing something?

thanks

 

[lvwhitebir]

When I opened my school I had the same questions. Here are some of the things I found out.

My average monthly expenditures were about $4000-5000. That included rent (2000 sq. ft.), insurance, phone, heating/cooling, electricity, school supplies/gear, and advertising (yellow pages, occasional newspaper ad). Rent alone was about $2000 per month. I had a full-time job as well, so I didn't have to worry about health insurance, which is very expensive (I believe $500 a month is about right as a guess).

To survive the opening months, I had to have about $20K in the bank. That included money for the build-out, lawyer fees, incorporation fees, signage, and to pay the bills until enough students joined to do that.

Taking your figures into account, I think it would give you about $25-30K a year, before taxes and without taking ancillary income into play (e.g., selling gear), once you reached 150 students.

My school is primarily adult-based and I had 4 other schools within a 1 mile radius of me, so my experience with student enrollment rates is a little off from a typical TKD school. I've heard of schools getting up to 100 students within a few months, especially if you start just before the school year. You have to be careful of too fast of growth however, because the "back door" kills you quickly because you won't have processes in place to handle the load.

My results were far less, never even getting 100 students in 4 years. That's why most martial arts schools (I believe the last stat I saw was 80%) close within 2 years and most small businesses in general close within 5 years. Only a small percentage of schools actually make the big bucks, (what you probably make with computers) but it can happen.

WhiteBirch

 

[tkdDougie]

So were you ever able to quit your job and teach full time or did you just do it as a part - time gig?

Well I am very unhappy working in the computer industry. There is just so much stress and working long hours for someone else. If I could get to the point of making around 50 - 70k a year with about 300 students I think that would be a good life style.

Is this feasible? Does anyone have experience with this?

Thanks so much for your feedback, it was very helpful.

Also, what is the avg cost on insurance?

I am not in it for the money as I love teaching MA, I do however need enough money to support a family and leave a certain way with debts i have accumulated over the years.

 

[Andrew Green]

Plan to lose a lot of money, then maybe make some a couple years later if you're lucky.

 

[Gary Crawford]

That's the bad part of MA schools,it's a terrible busness as far as business is concearned.Anyone who can run a school full time without another job is unusually lucky.Whoever can acomplish that deserves the highest amount of respect.It takes perseverence,dedication and allot of prayer!

 

[TigerWoman]

You haven't posted your rank. A black belt 1st dan might set up a satellite school under a master. He then has to send his students to him for testings. If you have that rank behind you, you become a much more credible master/dojang owner. Parents will want to know if you will be around in two years. Kids are easier to sign up by their parents and are much more lucrative. Also time consuming. You have to order equipment, uniforms and keep track of that for the IRS besides trying to get paid. If you are in a network with other masters, you can set up tournaments too. Actually parents rather expect tournaments in TKD. This requires purchase/making trophies, hall rental, boards, equipment, etc.

My master 6th, now teaches two classes minimum in 4 other communities, has one satellite school under a black belt 2nd, and teaches 2 kids classes and 2 adult classes in his home school. He doesn't make alot, not with all that rent and overhead. He might have 300 students.

I"m nearly a 2nd dan, but wouldn't consider opening up a shop even though I would love to teach. I would teach for no money (and have). But I can't compete with a master. If you don't have the credentials you couldn't either if one came to town, or even sent his minion to open a satellite. It's hard enough without competition in town.

You haven't said whether you have taught, have experience teaching with your master?? If so why don't you open a school under his guidance, and try that way? As a part time, after work job. That is what the other 2nd dan is doing. Then when you make 4th dan/master when most break away and test their own, you will have a school established. Makes for a loonnnng day though. But by then you will have adults who can help you. TW

 

[Han-Mi]

If you plan on having 300 students, plan on having 2 other instructors to work with you.

 

[tkdDougie]

I have taught martial arts for the last 12 years. I took quite a few years off due to medical problems. I am a 3rd degree black belt in ATA but by time I should be 5th going for 6th. My skill and technique are excellent and I have won many titles and tournements.

However, I am starting to think you guys are right. I can't open a school here because I am probably going to be moving in a year or so.

Thanks for all the input, I guess my Master must have a fluke school because he has a huge house, cars, etc. Maybe he's one of the few.

Thanks.

 

[lvwhitebir]

So were you ever able to quit your job and teach full time or did you just do it as a part - time gig?

Nope, I stayed with my full-time job. I've moved out of the "commercial" location and am teaching a few days a week out of a local church. I lost a third to half of my students due to the move, but my expenses went way down. Now I'm at least not losing money. I still have a goal of doing it full time, but it's gonna take a while.

Also, what is the avg cost on insurance?

I gather you mean insurance for the school and not health insurance. I believe mine is around $1000-1200 per year.

I am not in it for the money as I love teaching MA, I do however need enough money to support a family and leave a certain way with debts i have accumulated over the years.

If someone thinks they can do this just for the money, they've got a rude awakening coming...

I don't do anything just for the money. I work for personal satisfaction and to make a living. My salary is what I, as most people would, consider my work (current time plus what I had to do to get here) to be worth.

Thanks for all the input, I guess my Master must have a fluke school because he has a huge house, cars, etc. Maybe he's one of the few.

It's possible he's in debt way up to his ears, too. Far too many people buy way beyond their means with the belief that "money will attract money" or use it as a status symbol. I have a friend that, although he's in worse debt than me and owns 7 cars, had to buy a new $25K car for his new job. His wife claims they have to buy groceries on their credit card, but he keeps on spending.

WhiteBirch

 

[tkdDougie]

I agree with many people living way beyond there means. I was doing some calculations though and this is what it looks like.


400 students at 50/month = $20,000
say 1/2 test every 2 months @ $45 = $4500 / month
3 instructors say at = ($6,000) month
expenses say at = ($6,000) month

That ends up netting $12,500

I guess I am missing something big in this plan.

thanks

 

[TigerWoman]

I agree with many people living way beyond there means. I was doing some calculations though and this is what it looks like.

400 students at 50/month = $20,000
say 1/2 test every 2 months @ $45 = $4500 / month
3 instructors say at = ($6,000) month
expenses say at = ($6,000) month

That ends up netting $12,500

I guess I am missing something big in this plan.

thanks

You won't get 400 to start. Do you have your own base right now? Read some of the threads in here about how some couldn't keep six students. You might advertise alot and get 30 student in two classes, kids and adults. The kids stay, the adults drop out like crazy. The lower count lowers your test money intake. Instructors in our school, get classes free, and a discount on equipment. That's all. Most work for tuition basically. You have to be willing to be a "starving artist" for awhile for it to work in the long run, IMO. If you have a family, I think it would be wise to keep your job. TW

 

[lvwhitebir]

I guess I am missing something big in this plan.

At my school only about 10% of the student population test in any given month. I don't require tests in a specific time frame, but I would guess that for any school saying 50% every month would be extremely high. I've heard of large yearly tests having several hundred students, but not every month.

Also, a few schools have over 100 students and VERY few have over 200.

100 students at $50/month = $5,000
say 10% test every months @ $45 = $450 / month
0 instructors say at = $0 month
expenses say at = ($5,000) month

Nets only $450 per month or $5.4K per year.


200 students at 50/month = $10,000
say 10% test every months @ $45 = $900 / month
1 instructors say at = ($2000) month
expenses say at = ($6,000) month

Nets only $2900 per month or $34.8K per year.

A more reasonable ful-blown estimate would be (boy I had fun with Excel):

- Build-out of the facility: $5000
- Target is 200 students at $70/month
- Starting at 0 and adding 5 students per month (very healthy growth with no losses)
- 10% test every month @ $45
- expenses say at = ($5,000) month,
- the facility (2000 sq.ft. total or about 1500 sq ft of class space) supports about 4 classes per day (say working 5-9pm) at a max of 10 students per class (40 students per day); you allow each student 2 classes per week, so you can support a max of 120 students before you have to have additional classes or a larger facility. At 3 classes per week, you can support a student base of 80 students.
- 0 additional instructors until 120 students then 1 @ $2000 month

At month 28 you're finally breaking even, after going down to $36125 in debt. At this point you've finally gotten 140 students and at month 24 hired on a 2nd full-time instructor to help out (you're still working your day job). You won't make even $50K until you've reached month 38, just over 3 years into this venture. Until this point, you've had to work another full-time job, which means you're working 75 hours per week for 3 years. At this point, the school is earning you about $7155 per month or $85.8K per year and you can finally quit your day job.

If you're even close to what MOST schools experience you top out at about 100 students (that's because less than 1% of the population does martial arts; you'd need a population of 100,000 to support just your school). Then you break even at month 31 and don't make $50K until month 52, just over 4 years into the venture. At this point, you're making about $2450 per month or $29.4K per year.

I should have done this before I opened up...

By the way, many school owners get divorced because they have to spend so much time away from family. It's not a pretty picture. But if you love what you're doing, you'll find a way.

WhiteBirch

 

[lvwhitebir]

(that's because less than 1% of the population does martial arts; you'd need a population of 100,000 to support just your school).

Oops, too many zeros. You need a population of 10,000 to support a school of 100 students. And that 10,000 need to be in a radius of less than 5 miles or so.

WhiteBirch

 

[LSage]

I have been considering opening a TKD school recently. I have been involved in the art for 20 years. During the day I am a computer consultant and that is what I am educated in.

I was wondering if someone could help me figure out annual salary based on the following:

150 students
$50 / month
bi monthly testings

I will need another instructor to help (not sure what i should pay or how to structure that)

the cost of insurance?
the cost of rent
what is the average time to acquire 150 students, is 1 1/2 years reasonable?

what is the average annual salary of a school owner with these statistics?

It seems to me nobody seems to make a lot of money in martial arts schools (except where I was taught) am i missing something?

thanks

There are a varitey of anwsers here, and most of them are seemingly negative, in my opinion. The first issue that you have is that $50 a month is a death sentence when it comes to owning an operating a martial arts school. It takes the same amount of effort to ask someone for $50 as it takes to ask for $100 and with the lessor rate you are much more likely to go out of business for not meeting your monthly expenses. Your minimum progam should be $100 a month and can go up from there, you will struggle with anything less. The goal is to touch the lives of as many people as you can with the amazing experience of martial arts, and this means you can't go out of business! There is nothing more devistating to children or this industry than people who open a school that goes out of business.

In addition, you mentioned 150 students. You may think that this will be easy to come by because the prices are low, but the fact is that 150 students requires a lot of recruitment. Now there are two ways to go about recruitment and one of them is more expensive than the other. If you are willing to spend the money for ads (least effective) and other things (you will definately need that $100 a month then) to do that for you, or you can do it yourself and have your students recruiting for you as well (most effective). Which takes time... time every single day (in which case shouldn't you be paid for your time?). Personally, I would rather take classes (and always have) with someone who is a professional martial artist, who sees this is their chosen path in life than someone who is doing it a few hours a week or night and has other responsibilties outside his or her school. I don't think I am alone in that and it's exactly why martial arts school are able to charge $100 to $300 a month for their programs.

I wonder if you are planning to do this for that reason (you would like it to be your fill time profession), or for some other reason?

In any case, it is important to understand that it is a job, and it takes work, no matter your desire to be a full-time or part time instructor/school owner. It is not a job that you can just show up for unless you are an instructor of someone elses school. The negtive comments of risk and how hard it is to build a school or how long it takes to get your desired students is subjective. The reality is that it doesn't have to take long. The effort put in creates the result as it does in any other business. You have to be as comfortable promoting your program and asking for money as you are teaching your classes. That is the real key to success in the martial arts buisness. I know, because I have worked for other school owners, run schools, and later trained people from all over the world to run and create sucessful martials businesses. There is a way to do it right, there is a way to lower or eliminate risk, there is a way to make it a full time job that make you more money than you work at your current job (if that is your desire), and there is a way to get a commitment from potential clients before you ever even open your doors.

I can tell you a thousand things, however, what has been stated already is the foundation for everything else. You will be successful right out of the gates if you:

1. Understand it has to be treated as a busines and not a hobby.
2. Have a plan for how you will recruit new stundents (you can have 50 students before you open the doors).
3. Decide on your program (what age groups do you teach, if you need help with this join a federation or association, like the ATA or some other Association (this is important for testing as well).
4. Decide on the cost of each of your programs (Basic, BBC, and Leadership Program).
5. Make sure your area demographics support a martial arts school.
6. Have a professional plan for how you will speak about yoru program (don't leave things to chance).
7. Get a list of all of the vendors that you will work with so you can have packages availble when your new students sign up before your school opens. Students need something tangible to take home when signing up, especially if they have to wait a few weeks for classes.
8. Teach and promote lifeskills.
9. Have a family class available where parents and children can work out together.

There is more, but hey, it would take hours.

I wish you all good things and great success!

I am also a black belt.

 

[Tez3]

I don't want to be discouraging after such a long post but this thread is 12 years old.

 

[Tames D]

It's still good advice for anyone considering opening a school.
Welcome

I don't want to be discouraging after such a long post but this thread is 12 years old.

It's still good advice for anyone considering opening a school.
Welcome to MartialTalk LSage.

 

[crshieh]

12 years later, I found that long post to be very helpful.

Very curious if original poster has any update or if anybody else here have more to share.

 

[Andrew Green]

12 years later, I found that long post to be very helpful.

Very curious if original poster has any update or if anybody else here have more to share.

Anything in particular? I posted on it 12 years ago, but since then have made this into a full time thing and know a decent amount about the industry as a whole.

 

[wingchun100]

Talk about resurrecting a thread! If I had been around when it started, I would have asked the OP, "Why only $50 per month?" Maybe he thought a lower rate would make people more likely to bring in students.