I think it's important to make a distinction between three things here:
1) Making money
2) Martial arts schools focussed on getting people in the door and churning them through their programmes quickly
3) Blatantly false or misleading practices
1 is perfectly fine; martial arts teachers need to make money! If you make people pay membership and then lessons, and have contracts, sell uniforms, charge for gradings etc. that is all fine, as long as you are upfront about the ongoing costs. People can chose to train with you or not for that price.
I think 2 is what people would often think of as a McDojo, they just so happen to do a lot of the above too. You get people churned through quickly and end up with a blackbelt in 18 months. You may not get great martial artists out of it, but you're keeping kids occupied, probably making people a bit fitter and have them enjoying themselves. Is it self defence? Often no. Is it the traditional approach? No. Is it bad? Not necessarily. If people are just looking to have fun and exercise there is nothing wrong with it. It's like boxercise or Body Combat. I can see why people do it too, most people quit training after 12-18 month apparently. So if you want to maximise your revenue, you need to have as many touch points within those 18 months as you can.
The only problems with it are that it can cheapen the idea of a black belt (though that is massively misconstrued by the public at large anyway), and can lead to a false sense of confidence, which leads into aspect 3. Again so long as they are honest, let them be.
3 is where things get bad. Either lying about pricing structure, lying about what it is you are teaching (genuine style, your experience and lineage, its effectiveness) or descending into full blown bullshido. I distinguish the latter because you can teach all sorts of techniques that are real, but probably not particularly effective, or high success % moves, but they are real. No touch knockouts, qi balls, magic energy etc. are all just lies.
This recent video featuring McDojoLife talks about signs he looks for to identify McDojos. I don't necessarily agree with the labels, I think you can distinguish a McDojo from a con, as above, but some good general points on what to look out for.
In general though, doing whatever you can to make your business a success so that you can live happily and continue to support your students is a good thing, so long as it is ethical. So do kids parties, sell extra seminars, charge for gradings etc. whatever your customers want. Help them reach their goals and help them have fun and enjoy a community, whilst helping yourself pay the bills. Ideally the martial arts instruction would be good too, but if your customers aren't looking to be the best martial artists, it doesn't matter that much. Generally people want something they know isn't bad, not the best.
