Unexpected developments and a request for advice from gym owners

[Tony Dismukes]

So, I've been training out of the same gym for 18 years now. Teaching for 15.

The gym has always been kind of chaotic and teetering on the edge of profitability. My coach is a good guy and a top-notch martial artist, but not really much of a manager or businessperson. In recent months the level of management had dropped even lower as various health issues prevented him from attending to business necessities.

Over the weekend, we found out that due to his health, my coach was going to be moving out of state to be close to the rest of his family and that the gym was going to be closed down. This caused much consternation among those who love the gym and its place in Kentucky martial arts history. I was also very concerned about our current students and making sure that they were taken care of fairly.

As of last night a small group of us signed papers to form an LLC to take over the gym and keep it running. I am now head instructor, co-manager, and part owner. My ownership share is based on sweat equity rather than financial investment. I'm going from being one of 8 instructors teaching 2 nights per week to being the head coach, teaching 4 nights per week as well as working to design a cohesive curriculum for all the teachers, helping to codify gym policies, and helping to figure out business and financial decisions.

Right now the other managers and I are scrambling to figure out everything from the best products for cleaning mats to whether we should switch membership payment solution companies. (We currently have ASF, which apparently is known to have some issues.)

Fortunately, none of us are in need of deriving an income from the gym. We all have good day jobs. We just need to get things stabilized so that the gym can consistently generate enough revenue to cover expenses, then hopefully profitable enough to invest back into improvements, then any eventual profit coming back to the owners will be just a nice bonus.

Any of you who have experience running a profitable gym, please share any and all advice. General or specific. Best cleaning products, membership payment solutions that you suggest we check out or avoid, student retention policies, marketing, alternate revenue streams, gym code of conduct, social media, things that you wish you had known in your first year of running a gym. Whatever.

We've already got a long list of steps that we know we need to take and changes that we want to make. But I figure the more input we get from experienced gym owners, the less likely we are to overlook some important detail because we were too busy attending to everything else that needed doing.

 

[Flying Crane]

I am definitely not the person to give you advice on this. Instead I’ll just say that I’ve always appreciate you here in the forums and I think the school is in good hands. Best of luck and don’t let it steal your sanity.

 

[J. Pickard]

My 2 cents. Not being a business person and struggling with the business side of it, get a business consultant that you trust. I am luck that I have a student with a degree in business that I trust deeply. Our school was on the verge of closure at the end of last year because while I am an accomplished martial artist, I don't know the first thing about business. Hiring a business consultant was probably the best decision I ever made. Not only are we profitable now we are growing beyond capacity and looking to get a new, bigger building by the end of the year.

 

[isshinryuronin]

Have a membership drive. Get your students to work for the good of the school. They get a free month for each student they bring in. (You can pass out referral cards for them to hand out) Whoever brings in the most new students in the next month gets an additional month free and some sort of recognition. This may be a competitive motivator aside from the free lessons.

Perhaps have some sort of party at the school for current students to build some esprit de corps to launch the membership drive and build loyalty/retention. Some social events for holiday celebrations or just a quarterly potluck lunch can have positive results.

Another idea is to get some students to host a karate party (like a tupperware party) to give some demo and free lesson to expose others to your school and tap into their individual networks. May want to stress women's self-defense.

Have an advertised Grand Re-Opening to mark the "rebirth" of your school being under new management with a mini tournament/demo at the school with refreshments and a drawing for free lessons. If you belong to the local Chamber of Commerce, there may be additional support.

Many organizations have fundraiser raffles with local businesses donating some item or service as prizes. Consider donating a month's free lessons for a couple of winners.

Go for more exclusive clientele and charge a substantial fee for private lessons. Private security guard companies or Loss Prevention departments may be niche targets to go after.

Most of these ideas worked to some degree back in the 70's and maybe a couple will work for you now? The key, I believe, is generating excitement amongst your students to make your school more than just a "gym."

Good luck Tony. Hope you can stay afloat.

 

[Holmejr]

One of the great things about “everybody have good day jobs” is that you not trying to make an income theoretically and just meeting expenses. This takes pressure off you, allowing more attention to the art. Most states have a small business association that educates small businesses about business plans, budgeting and strategy.

 

[Kemposhot]

Social media and Google are definitely good places to begin. Any young students who could be trusted to manage your gyms social media? Often this requires daily updates across several platforms (Facebook, Instagram, etc.). People shopping for a new school love seeing current content and positive Google reviews. Perhaps ask all current students if they wouldn’t mind posting a positive Google review about the school?

 

[Tony Dismukes]

Social media and Google are definitely good places to begin. Any young students who could be trusted to manage your gyms social media? Often this requires daily updates across several platforms (Facebook, Instagram, etc.). People shopping for a new school love seeing current content and positive Google reviews. Perhaps ask all current students if they wouldn’t mind posting a positive Google review about the school?

We have one student who has already volunteered for the job.

 

[Flying Crane]

Social media and Google are definitely good places to begin. Any young students who could be trusted to manage your gyms social media? Often this requires daily updates across several platforms (Facebook, Instagram, etc.). People shopping for a new school love seeing current content and positive Google reviews. Perhaps ask all current students if they wouldn’t mind posting a positive Google review about the school?

I’m not a fan of the school reviews on the website. I know they are popular, but I find they often make me doubt their authenticity. They just read as forced. That’s just my opinion. I’m kinda old-school I guess. I don’t notice much of the modern social media stuff. Never could get into it.

 

[jks9199]

Get a real business manager involved. Whether it's a member who contributes his experience in return for a discount or someone you hire... you need someone who can really focus on the business concerns and making sure they get taken care of. Beyond that... good luck!

 

[Kemposhot]

I’m not a fan of the school reviews on the website. I know they are popular, but I find they often make me doubt their authenticity. They just read as forced. That’s just my opinion. I’m kinda old-school I guess. I don’t notice much of the modern social media stuff. Never could get into it.

I completely understand your point of view. However, modern business draws a lot from this. People just tend to google search a service before they use it now and the negative reviews stick out like a sore thumb.

Facebook and Instagram augment this by giving people a view of what goes on inside, and when they see current content it looks even better.

While I agree, it is unfortunate that this is how many people make a decision, denying the reality won’t bring more people into the gym.

 

[Wing Woo Gar]

Make sure your injury waivers are solid, and perhaps consider an umbrella liability insurance for the school. These are often inexpensive for the peace of mind they provide.

 

[Flying Crane]

Make sure your injury waivers are solid, and perhaps consider an umbrella liability insurance for the school. These are often inexpensive for the peace of mind they provide.

Liability insurance is an absolute must. A solid waiver is important, but does not replace the need for insurance.

 

[HighKick]

I will add more thoughts on this but thought this may be somewhat pressing. First off, I know nothing about your gym but it sounds like there is a history you want to stay attached to. With that in mind, think about how you want to publicize & promote the transition of ownership. How you will maintain the legacy and present the future plans for the gym. Doing this the right way minimizes any dip in business and can create growth.
One of the hardest things is making the transition ’right’ and not having speculation of any problems’. The best description I think of is making it a celebration, sending off your former instructor with respect and fanfare (if warranted) and rolling out any new business plans.

Can you provide feedback on how you are currently doing billing, payments, and what the business consists of (rent/own, space, exclusive/share, etc…)?

 

[Tony Dismukes]

I will add more thoughts on this but thought this may be somewhat pressing. First off, I know nothing about your gym but it sounds like there is a history you want to stay attached to. With that in mind, think about how you want to publicize & promote the transition of ownership. How you will maintain the legacy and present the future plans for the gym. Doing this the right way minimizes any dip in business and can create growth.
One of the hardest things is making the transition ’right’ and not having speculation of any problems’. The best description I think of is making it a celebration, sending off your former instructor with respect and fanfare (if warranted) and rolling out any new business plans.

Can you provide feedback on how you are currently doing billing, payments, and what the business consists of (rent/own, space, exclusive/share, etc…)?

We lease a large space which is essentially a repurposed warehouse. It's honestly too big for the number of students we have now, but if we can get our student base back to where it was a few years back, it will be perfect.

We use ASF for billing and tracking membership. Based on reviews, it may not be the best option, so we may end up looking for other options down the line. But for right now we're just working on getting logins for the new managers, learning how their system works, and getting them connected to the new gym bank account.

I've been holding off on making big public announcements about the change for a few days until we have some basics nailed down (like the new bank account, etc). But I've been talking with our students about all the positive changes that we have planned and so far everyone seems very happy about them.

The good thing regarding speculation of problems is that the various problems were already known both in the gym and in the larger community. Everyone seems to be relieved that we are working on addressing them.

(In fact I just got word that one of our former top instructors who had moved out and started his own gym a few years ago due to said issues wishes he wasn't stuck in a lease because otherwise he'd consider coming back and rejoining us now that we are taking care of the problems.)

I do like the idea of celebration. One of our LLC members is an old training partner who now owns 4 gyms around the state. We were just now talking about him coming in to give a seminar in a couple of weeks, bringing a bunch of his students from those schools, promoting some people that need promoted, and putting any money raised back into the gym. We should find someway to frame that as a part of the grand rebirth of our gym.

 

[Wing Woo Gar]

We lease a large space which is essentially a repurposed warehouse. It's honestly too big for the number of students we have now, but if we can get our student base back to where it was a few years back, it will be perfect.

We use ASF for billing and tracking membership. Based on reviews, it may not be the best option, so we may end up looking for other options down the line. But for right now we're just working on getting logins for the new managers, learning how their system works, and getting them connected to the new gym bank account.

I've been holding off on making big public announcements about the change for a few days until we have some basics nailed down (like the new bank account, etc). But I've been talking with our students about all the positive changes that we have planned and so far everyone seems very happy about them.

The good thing regarding speculation of problems is that the various problems were already known both in the gym and in the larger community. Everyone seems to be relieved that we are working on addressing them.

(In fact I just got word that one of our former top instructors who had moved out and started his own gym a few years ago due to said issues wishes he wasn't stuck in a lease because otherwise he'd consider coming back and rejoining us now that we are taking care of the problems.)

I do like the idea of celebration. One of our LLC members is an old training partner who now owns 4 gyms around the state. We were just now talking about him coming in to give a seminar in a couple of weeks, bringing a bunch of his students from those schools, promoting some people that need promoted, and putting any money raised back into the gym. We should find someway to frame that as a part of the grand rebirth of our gym.

I’m excited for your new prospects Tony! Good for you for keeping it running!

 

[hoshin1600]

I will be the third person to recommend having some kind of operations or buisness manager.
Yes, your space may be bigger than currently need but if you can afford it, I wouldn't let that go. The gym is a buisness period. Many people make the mistake of not understanding the difference between owning a buisness and owning a job. Owning a job is where you sink your life savings into a business just to make the same average salary you could have made if you worked for someone else. You need the gym to be making a better than average profit. This means you have to grow.
Someone in your organization needs to own the operations manager role and set the vision, mission and path forward on how to make that growth happen. Someone needs to be tracking the numbers. if not weekly then at least monthly.
What are the enrollment numbers?
How many people dropped out of membership? Why did they leave and what corrective actions can be taken to pull them back or prevent other drop outs.
What are your expenses? There should be cost savings goals every year.
What percentage of inquiry calls get turned into memberships? What is the marketing cost to get that call? What is that expected conversion, track the results monthly, do you need a better sales team?
I would definitely want a receptionist or front desk person. Preferably not one of the sweaty teachers that just finished thier class. Look at how the national brand fitness gyms run their front desk and how those people get paid. Is there commission on memberships sold?
Look beyond memberships for revenue. What other revenue streams can you create? Think merchandise, private lessons, tanning booths, juice bar what ever seems appropriate.
Also be prepared for people leaving. Even if every change is a positive one that people love, some people just don't like change and will leave.
I'm not sure what the ownership details are but having regular buisness meetings and having transparency on the numbers is a must. Invest the time * and maybe $$) into some kind of instructor training program. Everyone needs to be on the same page with set expectations. Instructors need to be held accountable for behaviors that meet the gym standards as well as the $$ numbers.
Reward performance and if an instructor is not retaining students or making the buisness money, who is going to have those hard conversations ?
That's what I could think of for the moment.
Good luck Tony, I wish you the best.

 

[HighKick]

We lease a large space which is essentially a repurposed warehouse. It's honestly too big for the number of students we have now, but if we can get our student base back to where it was a few years back, it will be perfect.

We use ASF for billing and tracking membership. Based on reviews, it may not be the best option, so we may end up looking for other options down the line. But for right now we're just working on getting logins for the new managers, learning how their system works, and getting them connected to the new gym bank account.

I've been holding off on making big public announcements about the change for a few days until we have some basics nailed down (like the new bank account, etc). But I've been talking with our students about all the positive changes that we have planned and so far everyone seems very happy about them.

The good thing regarding speculation of problems is that the various problems were already known both in the gym and in the larger community. Everyone seems to be relieved that we are working on addressing them.

(In fact I just got word that one of our former top instructors who had moved out and started his own gym a few years ago due to said issues wishes he wasn't stuck in a lease because otherwise he'd consider coming back and rejoining us now that we are taking care of the problems.)

I do like the idea of celebration. One of our LLC members is an old training partner who now owns 4 gyms around the state. We were just now talking about him coming in to give a seminar in a couple of weeks, bringing a bunch of his students from those schools, promoting some people that need promoted, and putting any money raised back into the gym. We should find someway to frame that as a part of the grand rebirth of our gym.

I do not know much about ASF other than its origination in ATA. I would imagine it is a solid product since ATA is rather large. Did it rebrand to another name? Club something?

We are an outlier since one of my businesses is in control & automation and two others in our MA's organization are programmers. We have built our own ad-hock system over the years, essentially a combination of threaded Office Suite, Intuit/Quickbooks, and a custom-built CRM. Analytics are part and parcel for us. Especially since your group has full-time jobs, being a mobile app is super important.
Putting someone on point to learn (and subsequently teach) the product and fully leverage the tools included makes it Much more valuable. It can be a real process to get a handle on a largish scale CRM tool. If you are not positive it is your long-term solution, this may not be necessary, so this would be one of my first decisions.
Scaling can be one of the bigger challenges if you don't have a good handle on the product. And if you are in a packaged fee agreement, (0-99, 100-999, etc...) the cost bump can be abrupt. In a nutshell, do you need a truly all in one, all-encompassing tool, or does your group have the skillset to integrate a group of only the tools you will actually use? The former is Always going to cost you more both from the user and consumer sides but should be easier for the novice to use, the latter will cost (much) less but require more onsite skillset (which may equate to more costs depending on your staff makeup). When thinking of costs avoidance/management, this can lead to huge cost savings if you have the inhouse knowledge base.

How secure and long-term is the space? Are the upkeep costs on you? Is it up to par/code or does it need renovations? Is it your 'ideal' brick & mortar storefront space? It all adds up at the end of the month so make certain you are capturing all the costs. The hidden bills are business killers, especially during a startup, which is how I would approach your venture.
Clientele: Do you target blue-collar sparring/fighting sector or more of the recreational/exercise crowd? Do you do privates? Have a very, very good handle on the makeup of your market and what your target market is. Never try to rely too heavily on a segment that you do not really have (banking on privates that are not really coming the door, etc...). Are you very style heavy, whereas you are paying to be part of a larger organization? If so, unless the positives outweigh the negatives, mitigate this as much as possible.

The martials arts are evolving faster than I have ever seen them in my 41-years of involvement in the area. I was fortunate enough to catch the first Olympic wave of TKD and rode that for a Long time with great success. Fortunately, I saw the change coming in what clientele were looking for, read society trends, and had enough personal curiosity to expand my own base of MA's knowledge. I have said for some time (decades) that an amalgamation of the arts is happening. Since most of the major styles have been exposed to the world, the best parts of all of them have been cherry picked to create 'super' styles. And remember, fads and phases come and go. Right now, MMA is on the back side of it's peak in popularity, purely grappling styles are very in vogue, and boxing is at an all-time low. This will surely change in time. Standing/out-fighting seems to stay fairly consistent, I feel because it is almost always a component part of the other fighting systems. And do not forget the value of (realistic) weapons-based training. Invaluable if you train LEO/EMS, etc... I would Never lobby for being a generalist in any style but have a Full set of tools to offer is imperative IMHO. And change is a constant.

It is a business so run it as such. Create a solid, unchanging organizational chart and function block diagrams or SFC's for Everything. I mean Everything. Test/modify them until they are concrete. This is your foundation and will make everything easier. Truly where the buck stops when it comes to decisions and issues. It sounds like you are well past this phase but 'dreaming' about what to do and never taking action is a business killer faster than anything I know. Make a HARD plan and put it into action. Hopefully, the 'regular' job that all the principals have is secure enough to pour into the new venture to get it where it needs to be. Plan the Plan.

It is Extremely important that you have a Great relationship with your local government and ideally become involved. No, you do not have to become a politician. If not already, get involved in the local education system, at least in your target age ranges. Do not overlook your local college (if exists).
Offer free or reduced-cost training (and specialty training if qualified) for LEO and EMS. Grow from this model and become the de-facto expert in your area.

For your side of things, it sounds like you are taking a heavier/the heaviest role on the mat and in teaching overall. Where does this stop? Are you only the brain trust during live classes or are you also responsible for all the ancillaries? Cleaning, supplies, equipment, promos, tournaments, etc...)? I do not know about your style or school system. Are you taking the role as GM or similar? Is this an issue for you?

Let's keep brainstorming.

 

[Tony Dismukes]

For your side of things, it sounds like you are taking a heavier/the heaviest role on the mat and in teaching overall. Where does this stop? Are you only the brain trust during live classes or are you also responsible for all the ancillaries? Cleaning, supplies, equipment, promos, tournaments, etc...)? I do not know about your style or school system. Are you taking the role as GM or similar? Is this an issue for you?

I am one of three people on the management team. We are responsible for day-to-day running of the gym, making sure the lights stay on, and making the decisions on everything from class schedules to pricing to code of conduct to making a budget to implementing new revenue streams, etc, etc, etc. Fortunately everyone on the team is highly motivated, hard-working, smart, and in close agreement about how we want to approach things. As we get things more stabilized we will probably start divvying up responsibilities a bit more, but in these first few days we've just been in constant communication working everything together.

As an introduction to how I see my role as head instructor, I should explain something about our prior situation. My coach was a believer in an open-ended, big-tent approach to martial arts where everyone could find their own path. This is great. Unfortunately, his implementation of the philosophy was just to give a time slot to anyone who was willing and able to teach and let them go their own way without supervision. That produced a lot of great classes ... but also some instructors who would flake out and not show up at their scheduled class times, some instructors who weren't diligent about student safety, junior instructors who weren't getting their own continued training needs met, overlapping class schedules that were competing for students, and a situation where there was no instructor who knew all the students and what they were working on.

As head instructor, my immediate top priorities are as follows:

• Ensure that no matter what, if a class is on the schedule, there will be an instructor on the mat at that time. Period.
• Making sure that we have a structured path for advancement for all students (both in terms of skills and ranks)
• Making sure that we have a robust culture of safety in training that is strictly enforced.
• Helping to design and enforce an appropriate code of conduct for both students and instructors
• Getting to personally know every student in the gym and have at least a rough idea of where they are in their progress and what they are working on. I am terrible with faces and names, so this is going to be a challenge for me.
• Making sure that class schedules and curriculums work so that the different classes support each other.
• Have a consistent structure in place to support students who want to compete, rather than the semi-random, ad-hoc approach we've had in the past. This includes making sure students are aware of competition opportunities, making sure they are properly prepared for competition, and that we have coaches accompany them and support them during their matches.
• Making sure that the other instructors are given the support and guidance that they need to continue progressing
• Making sure the mats are cleaned every night. I'm leading by example on this one, but I want to build a culture where first the instructors and then the senior students are just in the habit of automatically picking up the brooms and mops at the end of the evening.

Our school is a BJJ/MMA/Muay Thai/Boxing gym, although we have had classes for other styles in the past and I hope we will again. I don't know exactly what the connotations of GM status in TKD are or whether we have anything in BJJ which exactly corresponds to that. I'm a 3rd degree BB in BJJ, which represents 25 years of training in the art, and a passable amateur boxing/Muay Thai coach. (Weirdly enough, "3rd degree" in BJJ is actually the 4th level of BB, since we have a zero-based system that starts with no degrees.) I also have various levels of functional skills in a number of other arts. I don't present myself as an instructor in those arts, since I don't have the credentials or expertise, but that experience does influence my coaching.