Starting a school - partner with YMCA or just open?

[skribs135 155]

I know this is a question that's been asked before in different ways, but I'm here to ask it again.

Next year, I will most likely be moving forward with my plans to open my own school. There are two avenues I am looking at.

1. Start by opening classes at the local YMCA.
2. Start by jumping straight to a storefront school.

With opening at a local YMCA, there's less immediate financial requirements (and I could probably start sooner). It would be a good way to build up a student base and a reputation. However, students would probably only be charged a small amount (say $50/month or so) where I'd be looking to charge $150+/month when I open full-time. If I do turn around and open full time then I might be in one of two situations: 1) I don't raise price on legacy students and now it's a lot harder to pay lease/rent; or 2) raise prices on legacy students and risk most of them not following me when the prices go up.

With opening a storefront from the start, it might be an even slower start and come with initially higher financial risk and burden, but it might become my main source of income faster and more reliably than if I start at a YMCA first.

The goal here is in the next few years to make running a school my primary source of income, and what is the best way of doing that.

(Other considerations such as insurance, website, marketing, business plan, etc. are out-of-scope for this thread).

 

[Monkey Turned Wolf136 1]

I think the largest thing here is how much risk can you take, and how much can you afford to not make money for a while.

My own research/limited experience suggests that you'll have more success opening a storefront school because a) the location itself can help market, and b) exactly the issue you listed - students aren't going to be happy about a 3x cost increase, and then you lose most of the base you built up. Or if you don't raise it, you'll struggle to get word of mouth students because one of the things parents will say to other parents is "and it's so cheap too!"

You will lose out on any marketing the YMCA does, but depending on the location they may or may not do much anyway.

The big issue (and it's a really big one) is that you'll have to shoulder the whole burden of the finances, including marketing, and if it doesn't go well for whatever reason, there's no safety net there.

FWIW: If I choose to transition to opening a school, I'm planning to treat it like it's a brand new one regardless of how many students may be transferring over. Any students I already have, in terms of finances, I'd keep at the same rate they already had, and just treat them as bonus students/hopefully advanced students which could make classes a bit easier overall. I have to build up a safety net and get my own situation settled first though, and it'll probably be 5-10 years before I feel secure enough to do that.

 

[Flying Crane]

Have you checked with the Y to know they would be agreeable to the idea?

 

[skribs135 155]

Have you checked with the Y to know they would be agreeable to the idea?

Yes, at least a few years ago. They said they have constant demand for it but no supply.

 

[philwhite]

If you need any ideas you can hit me up. I'm just going through this. I'm not sure how we'll do but I'm optimistic and excited to see what happens. The folks here on MT have been very helpful.

We budgeted for our startup costs and have plans to budget for growth. We have other jobs so we can break even or go in the red for a while to get things going. I know its hard to penny pinch but I'd make sure your in a good financial position before moving forward. Between business expenses, taxes, marketing, equipment, insurance, your time, it adds up. We've put a lot into this so far.

We also agreed to do this as a family so if I'm sick my wife can help out and my son helps out with some small stuff too. Whether is is cutting out stickers or putting down mats, every bit helps. If you are the sole person I imagine its going to be very tough.

 

[MadMartigan127 43]

I got lucky when I opened, with the local Judo club being willing to sublet to me on the nights they were not running. This kept overhead way down, without having to coordinate billing through the Y or a Rec center, and let me get started building clientele.

I know you train at a BJJ club in your area. Have you explored the idea of renting space from them a couple nights/week to start building a student base?

 

[skribs135 155]

I got lucky when I opened, with the local Judo club being willing to sublet to me on the nights they were not running. This kept overhead way down, without having to coordinate billing through the Y or a Rec center, and let me get started building clientele.

I know you train at a BJJ club in your area. Have you explored the idea of renting space from them a couple nights/week to start building a student base?

That's a good idea and I'm certain my Professor would help me in that regard...if there was mat time available. (But there isn't).

 

[jks9199109 2]

Have you taken some business classes at your local community college? Looked into any incubator opportunities there? Have you written a business plan?

You're looking to start a business. Treat it like a job and business. The small start at the Y is not necessarily bad, and doesn't have to leave you with a problem for pricing when you move into a storefront. You simply have two price tiers; at the Y, the cost is lower, but there are no extra classes, no outside sessions, etc. since many of the costs are being covered by the Y. At the storefront, you're charging more, but you're providing extra opportunities like private classes, and, of course, you're providing the space and the rest. You'll probably have better/more specific gear there, too, right? You might offer a "bridge" option for students converting "up" from the Y to the regular school.

 

[skribs135 155]

I think the largest thing here is how much risk can you take, and how much can you afford to not make money for a while.

My own research/limited experience suggests that you'll have more success opening a storefront school because a) the location itself can help market, and b) exactly the issue you listed - students aren't going to be happy about a 3x cost increase, and then you lose most of the base you built up. Or if you don't raise it, you'll struggle to get word of mouth students because one of the things parents will say to other parents is "and it's so cheap too!"

You will lose out on any marketing the YMCA does, but depending on the location they may or may not do much anyway.

The big issue (and it's a really big one) is that you'll have to shoulder the whole burden of the finances, including marketing, and if it doesn't go well for whatever reason, there's no safety net there.

FWIW: If I choose to transition to opening a school, I'm planning to treat it like it's a brand new one regardless of how many students may be transferring over. Any students I already have, in terms of finances, I'd keep at the same rate they already had, and just treat them as bonus students/hopefully advanced students which could make classes a bit easier overall. I have to build up a safety net and get my own situation settled first though, and it'll probably be 5-10 years before I feel secure enough to do that.

You were one of the ones I was hoping to hear from, because I know you're opening your own school as well. I think you're right, and this is the right approach.

If you need any ideas you can hit me up. I'm just going through this. I'm not sure how we'll do but I'm optimistic and excited to see what happens. The folks here on MT have been very helpful.

We budgeted for our startup costs and have plans to budget for growth. We have other jobs so we can break even or go in the red for a while to get things going. I know its hard to penny pinch but I'd make sure your in a good financial position before moving forward. Between business expenses, taxes, marketing, equipment, insurance, your time, it adds up. We've put a lot into this so far.

We also agreed to do this as a family so if I'm sick my wife can help out and my son helps out with some small stuff too. Whether is is cutting out stickers or putting down mats, every bit helps. If you are the sole person I imagine its going to be very tough.

I'll definitely take you up on that. In addition to the folks here, my BJJ professor and one of our purple belts (who has basically been the gym manager) are also great resources for me.

Have you taken some business classes at your local community college? Looked into any incubator opportunities there? Have you written a business plan?

You're looking to start a business. Treat it like a job and business. The small start at the Y is not necessarily bad, and doesn't have to leave you with a problem for pricing when you move into a storefront. You simply have two price tiers; at the Y, the cost is lower, but there are no extra classes, no outside sessions, etc. since many of the costs are being covered by the Y. At the storefront, you're charging more, but you're providing extra opportunities like private classes, and, of course, you're providing the space and the rest. You'll probably have better/more specific gear there, too, right? You might offer a "bridge" option for students converting "up" from the Y to the regular school.

I definitely plan to have some professional help with my business plan before I actually launch. I have not yet done that.

 

[Dirty Dog11 1]

I've never personally been interested in teaching as a for-profit endeavor.
Teaching at the Y gave me the opportunity to pass on what I've learned without worrying about money. Which means lots of students who cannot afford a commercial school. It also removes the monetary pressure to promote.
What I've gained financially from all these years is exactly $0.00. What I've gained in other areas cannot be measured.

 

[skribs135 155]

I've never personally been interested in teaching as a for-profit endeavor.
Teaching at the Y gave me the opportunity to pass on what I've learned without worrying about money. Which means lots of students who cannot afford a commercial school. It also removes the monetary pressure to promote.
What I've gained financially from all these years is exactly $0.00. What I've gained in other areas cannot be measured.

I've spent most of my teaching career so far either as a volunteer or a nearly minimum-wage position. I agree it has given me a lot of rewards.

However, I'm currently between jobs and have been for some time. I don't think the job market is going to change in a positive way anytime soon. If I run my own school, I don't have to deal with the uncertainty of a day job. Do I get a new manager who is incredibly toxic? Does the organization change the ways of doing things that degrades the culture? Do I get laid off?

If I'm running my own school, then there is obvious concern if I fail to have a service that people are willing to pay for. But I think that's a lesser risk than the concerns with my day job situation.

 

[skribs135 155]

I know you train at a BJJ club in your area. Have you explored the idea of renting space from them a couple nights/week to start building a student base?

I finally got a chance to talk with my BJJ Professor about this (he just opened a new location of his own this week, so he's been over there). He actually had a different suggestion, open a TKD school under his brand.

I know we'll have to discuss ahead of time how to make sure that we're both protected when we do this (especially since I would like to eventually take ownership or start my own). But it would be a good way to get the business going without me needing to do the business overhead.

 

[Dirty Dog11 1]

However, I'm currently between jobs and have been for some time. I don't think the job market is going to change in a positive way anytime soon. If I run my own school, I don't have to deal with the uncertainty of a day job. Do I get a new manager who is incredibly toxic? Does the organization change the ways of doing things that degrades the culture? Do I get laid off?

Do you have the resources to keep the school afloat, or will it need to be profitable - or at least break even - from Day One?

 

[skribs135 155]

Do you have the resources to keep the school afloat, or will it need to be profitable - or at least break even - from Day One?

I'm going to rephrase this as "will I have the resources", and the goal is that I will before I take that leap.

 

[HighKick]

I finally got a chance to talk with my BJJ Professor about this (he just opened a new location of his own this week, so he's been over there). He actually had a different suggestion, open a TKD school under his brand.

I know we'll have to discuss ahead of time how to make sure that we're both protected when we do this (especially since I would like to eventually take ownership or start my own). But it would be a good way to get the business going without me needing to do the business overhead.

A LOT of T's to cross and I's to dot.

 

[skribs135 155]

A LOT of T's to cross and I's to dot.

It's also possible that I may end up preferring just to stay under him.

 

[HighKick]

It's also possible that I may end up preferring just to stay under him.

It is a choice only you can make. And one you must make.

You were strongly stating that your plan was to be a stand-alone, for profit venture AS your source of income. So this statement is literally the other side of the proverbial coin.
I fully get your own stand alone school as a 'want' but if you look at the very limited data on martial schools, it is easy to see that profitable schools makeup a small percentage of the whole. When you break it down even further into the primary models:
home/garage - 10%
shared space at a gym/YMCA, etc... - 30ish%
rented space from an existing school or similar business (dance, etc... - 15%
stand alone brick and mortar - 30%
other - 15%

This can be further broken down, but what I find most interesting is the change after approx. 5-years. Generally, either of the shared space formats make the most money from jump but never increase a whole lot. Stand alone and even home schools that last longer than 5-years usually seen a positive financial trend. But this too can be deceiving. 'Positive' can be anything from moving away from being in the red to increasing profitability.
Diversity and an innate willingness to do anything (right and decent) to improve a school visibility is far and away the biggest key. It is simply something that not everyone can do.