Martial Arts Professional Magazine

An Interview by Toby Milroy with Miko Peled, NAPMA Maximum Impact Member and Stephen Oliver Coaching Client and Millionaire Wealth Group Member.

SENSEI MIKO PELED is another out-standing example of a NAPMA member and martial arts school owner who has learned to balance tradition with a new mindset of how his school and its programs can benefit more students and his professional and personal goals.

He attributes his new gross revenue record of $57,000, in November 2007, to being a member of NAPMA’s Maximum Impact program, the Millionaire Wealth Group and a Stephen Oliver Coaching client. His school’s average gross revenues have increased during the past three years from less than $200,000, annually to close to $500,000.

As he readily admits, he had to overcome a number of challenges or misperceptions before he could improve program quality, be able to communicate that quality to prospects and grow his martial arts school. He had to realize that there was no ceiling to his opportunities, just as there aren’t any for his students. He had to open his mind to new ideas and information and meet with other martial arts school owners, who might teach differently than him, but were more than willing to share those new ideas and information.

In fact, this entire interview could have just as easily been your story; and it will be, if you follow Master Peled’s lead and open your mind to the possibilities.

Toby Milroy: This month’s Member’s Success Story interview is with Miko Peled, NAPMA Maximum Impact member. Miko is featured this month not only because he is a successful martial arts school owner, but also because he represents a subniche within the industry. As we all know, the martial arts industry is very diverse. For example, some schools are primarily focused on after-school-transported karate, while others may be adults-only, sports-oriented or competitive schools. Miko is a very interesting professional because he has been able to teach a traditional sub-niche and dramatically grow his school, based on what he’s learned as a Maximum Impact member and one of Stephen Oliver’s coaching clients. In fact, he is one of the fastest implementers of strategic sales, marketing and business systems, which has resulted in fantastic growth during a very short period of time. Miko, your biographical information can be read in the sidebar on page 56, but would you provide us with a description and history of your school?

Miko Peled: My wife and I arrived in the U.S. in 1987 and I opened my school in 1989. I started in a small place with just a couple of students; then, I managed to scrape together some money and put an ad in the local family magazine, which cost $400 or $500. That was a considerable amount of money for me at the time, but my enrollments started to grow. At the time, my school was in San Diego, but I started to attract new students from Coronado, which is adjacent to San Diego. I grew from 10 or 15 students to 50, and I thought, “Wow.” It was unreal.I began traveling to Coronado once or twice a week to teach another 30 or 40 students there. After a couple of years, I made a smart choice and opened a school in Coronado and closed the school in San Diego. Eighty percent of my students were coming from Coronado, anyway. That fi rst school was small, but I was able to move to another facility in 1995, which is where I am now. It is 2,300 square feet, where I teach approximately 230 students.

 

Toby Milroy: Allow me to interrupt because I think it is important to emphasize for our readers that you are not a super school, with 7,000 to 13,000 square feet in a standalone facility; you’re an average shopping center-sized martial arts school.Frankly, your size school is the Mile High Karate model and the trend in the industry. Lately, it has been to reduce the size of schools, so they’re more serviceable and the rent and overhead are more manageable. Your 230 students in 2,300 square feet is a very good blend. It’s not overcrowded and it’s not empty, so it’s a very good ratio. Please continue with your story, Miko.Miko Peled: I love karate and I love gojuryu, so I taught from my heart and sold from my heart. I didn’t really know any-thing about business strategies or marketing, so it was more luck than brains and maybe some talent that I might have been aware that I had.

I’ve tried all kinds of business systems and consulting services, but, then, at one point, I heard Stephen Oliver speaking at a conference in 1994, and I could tell the guy knew his stuff; he’s really smart.

For many years, it was touch and go. I’d do pretty well, then there would be a lull and then the numbers would increase again. When I moved to Coronado, my enrollments grew from approximately 80 to 200, literally overnight. I wish I had known then what I know now because I would have retained more of those students.

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I always thought that a traditional martial artist had to either practice traditional martial arts or work another job to make money. I never thought that you could combine the two. I knew that you could use some smart business practices and do well, but I never thought you could sustain any kind of a lifestyle I have now. Then, a few years ago, at the Martial Arts SuperShow in Las Vegas, I registered for a one-day event that Stephen Oliver was conducting. It cost more than attending the SuperShow, but I had a feeling it would be a good opportunity.

When he introduced his coaching program, my first thought was, “Oh my God, can I afford this? This is so expensive;” and it was. I had a really good feeling about Stephen Oliver as a person, what he knows professionally and the ideas and information he is able to share, so I joined his coaching program. It took me a while to digest it, but I think within a week or so I was on-track. I have been a coaching program member for approximately four years, and I haven’t looked back.

There is a two-fold advantage to being in a coaching program. First is financial: knowing how to charge, financing, monthly payments versus paid in full, and having the guts to charge what I really thought I should be paid, given the experience and the program that I had. I had to learn how to develop a program that has the quality that justifies the kind of tuition that I wanted to charge.

My purpose is not to con people to pay tuitions and then give them bad karate or not even have a program in place. I had to make sure my program offers the kind of quality that is congruent with high tuition rates.

With a congruent system in place, I had to learn marketing next, which is the system to communicate and explain the quality of the program to parents, in terms they understand. My education also included how to write an ad that explains my program, how to sit with the parents and explain it, and how to teach my staff to explain it, as well.

This is what I learned when I work ed with Stephen Oliver in his coaching program, and at a level that I never thought was possible. I always thought there was a ceiling. I never realized that I could go way beyond that ceiling; and I’m learning as I move forward that once you break through that ceiling, then it’s all in your mind. There really is no ceiling. You can offer better quality, rethink and improve your program, your curriculum, and rethink your service as a learning institution, as a school. You can even rethink the financial benefits of running a good school as a business.

Toby Milroy: You’re obviously very focused on quality and the traditions of gojuryu karate and its systems. You’re very rooted in your style, which is not a bad thing; in fact, culture is one of the topics we discuss in almost all of our coaching sessions and group meetings.

Culture is extremely important in a martial arts school, not necessarily because what the master says is exactly what happens; that is very important. It’s not necessarily because it’s right or wrong, but because that’s what he said, if that makes any sense. Let me clarify: it may not be so important that students learn to chamber their punches on their hips, by their belt or ribs. It’s not necessary to argue which is right; it’s only important that you’ve picked one and your instructors and you are 100% consistent when teaching your students. That means culture is even above that component of your style.

You’ve done a masterful job combining a very traditional curriculum with business concepts that result in a successful business. Tell our readers about your internal thinking.

How did you come to understanding that the kick and the punch is the tool, but the system that serves students is really the vehicle that produces the outcome you wanted? What was the evolutionary process of your thinking?

Miko Peled: Evolutionary is the correct word. First, as you said, it doesn’t matter where the hand is in the chamber, if it’s consistent. This is the style we follow and we understand why we do it; and we also must understand that just because someone may do it differently doesn’t make him or her bad or stupid.

There are many good martial artists and they hold their hands in different places on a chamber. They are good people and smart; and we can learn from each other. I think that’s one revolutionary step that is still a problem for many traditional karate instructors that I know. “It’s my way and everyone else is trash.” I certainly had to change my thinking and realize that other instructors do it differently, and they’re smart. They have much to offer, and they serve their students and communities at a high level. Once you realize that, you tend to open your mind to many other possibilities.

Typically, in the traditional martial arts world, those school owners that operate like a business are considered to have compromised quality. I agreed, until I started attending seminars, where I met some really smart people who make a good living teaching karate. It may be different than what I teach, but it’s just as good, and may be even better.

There’s no point to try to judge who’s good, who’s better. We do what we like and if we’re true to ourselves and teach it well, then that’s all that matters. That was a big step for me: to realize that there are many smart people who may be teaching and operating their schools differently, but I can learn from them and, perhaps, they can learn from me.

I also had to learn that marketing and money are not bad words. I was shocked the fi rst time a mother said to me that I “sell” karate very well. I thought, “How could she say such a thing? I don’t know how to sell.” That was a long time ago, but I convinced her that the best strategy for her son was to continue.

That is one of most basic concepts instructors try to convey to parents: It’s best for your kid not to quit. Even though he or she is not as motivated now, he or she was six months ago at the start of classes. What I realized is that selling is not that hard, when you care about your product and when you are excited about teaching martial arts. I also realized that the more tools you have, the more likely you can sell successfully.

It was a very revolutionary for me to move from the traditionalist attitude that making money is bad to a realization that it’s actually a good thing. I look at it from the perspective that the more people that receive my message, the more people will benefit from martial arts, my karate program and my instructors as great role models. I can serve more people and teach them concepts that could change their lives.

I always tell parents that their children will experience difficult times during their childhoods: Starting school, first grade; advancing to third grade; and entering middle school and high school. I say to parents that karate is a positive experience for their children because it keeps their feet on the ground. It’s steady, stable and ongoing. Karate instruction is always there; they can rely on its consistency. It can serve as an anchor and a steadying force when those difficult times in their lives.

“ I always thought there was a ceiling, but once someone shows you how to break through that ceiling, then you realize it’s all in your mind.”

You must have the tools and knowledge to be able to articulate that message in an ad or flyer that is relevant to parents. If you don’t have those tools, then you can’t communicate your message very well, and that doesn’t serve anyone.

You can be really excited about your “product,” but if you don’t know how to market or talk about it, then your prospective students won’t thoroughly understand the benefits of martial arts and your “business” results will only be mediocre. If you have the tools, however, then you can be fantastic; you can be really good; and you can impact many people.

There is a balance I am trying to achieve: a very traditional martial arts background and school in conjunction with a great business operation that’s helping me do what I want to do.

That’s the lesson for your readers: Structuring their businesses so they can accomplish some of their personal goals internally and externally to the school.

Most instructors try to develop an “I can” attitude in their students, but those same instructors should listen to that very important and simple message, to progress from “I cannot” to “I can” … and I did!

I always knew that teaching means working with children.

You teach in a positive way because building self-esteem is our most important task. I am convinced that martial arts instructors help their students reach that goal better than any other professionals because no one has the tools that we have. It’s almost as if karate or the martial arts was specifically designed for building self-esteem in children.

Our tools - curriculum, a belt system, special events, etc. - are incredible if we know how to use them and we are willing to open our minds to new sources of ideas and information. Once you do, you can see breathtaking results from kids; and, of course, parents see the results and they talk with other parents, which improves the reputation of your school.

I have the proof in the e-mails I receive from teachers and parents who tell me how the martial arts, karate, continues to have such an incredible impact on children. If we limit our ability to market and sell that positive impact, then we’re limiting the number of people to benefit from martial arts and improve their lives.

Toby Milroy: Service is certainly the most important concept you mentioned. In some instructor’s minds, there is a disconnect between service, or what we can do, and the act of persuading a prospect that he or she should do it. The instructor’s logic is, “If I have to talk someone into enrolling, then it’s not right for them.”

The difficulty with that logic is that it’s in the nature of people to be, for lack of a better word, lazy. People don’t want to move, until a powerful message or urge forces them to move.

You and I and many NAPMA members and readers of Martial Arts Professional are big fans of Dan Kennedy. He teaches that you should picture your average prospect as Homer Simpson. Not to be disrespectful to our prospects, but it’s a very illustrative example.

Homer is at home, slouched on the couch, with a beer in one hand and the remote control in the other. He is flipping through the channels and when he takes a drink of beer he drops the remote control. Homer is so lazy that there must be a very bad show on TV, before he’ll muster the intestinal fortitude to move and reach for the remote control.

Now, if you apply this analogy to your school’s marketing and selling system, then your prospects must be viewed as having a lack of inertia, much like Homer. It takes Herculean effort for them to move, to convince them to act. That’s what some instructors perceive as selling. Instead, it is almost an act of caring, to motivate all those Homers to move, act and change. To do what everyone knows is best for them, what they know is best for them; but they need a catalyst, someone to help them and walk them, by the hand, through the process.

If you teach ten students and you love those students and you make a big impact on those ten lives, then you’ve accomplished a great goal. Do you think you could impact the lives of 200 students just as deeply? Absolutely! I think it’s our duty to teach 200 or more students, if we can.

As you said, many traditionalists have still not grasped this concept because they have not experienced the mastermind effect, which is what you described earlier. You finally leaped that gap and decided to surround yourself with school owners that may teach and operate their schools differently than you, but are very smart and successful. You’ve learned to open your mind and extract the ideas from those school owners and then have the courage to try them in your school. Will you please talk about how valuable it has been to surround yourself with other very successful school owners that are different than you are, but share your same goals?

Miko Peled: It’s been terrific. You must be open to the possibility that someone might have a really good idea that has never crossed your mind, and could help you. You must be willing to leave your school and meet other school owners, and listen to them. You’ll like some and others you won’t, but that is the first step to change your thinking: to take action and to be open to new ideas and how they could benefit your students and you.

On of Stephen Oliver’s best analogies is comparing Harvard University to martial arts schools.

Harvard is the epitome of quality. It’s synonymous with high class. They have the facilities, the curriculum, the faculty, the service, the reputation and thousands of graduates who will tell others about how special it is. The tuition is extremely expensive, but not only can it justify the cost, but also many more students are willing to pay that tuition than the number of openings. That’s a congruent system that is reflected in its marketing, which is also first-class and outstanding.

What school owner wouldn’t want his or her school to be considered like Harvard in the minds of the local population? As with freshman students at Harvard, we help students achieve goals they never thought they could achieve; but, we must have the high quality, congruent system that allows to charge a higher tuition and be confident students make sure parents and students recognize the value of the program.

To achieve this, of course, means you must be willing to change your mindset, as you learn from others. I can’t over-emphasize how important that is to preserve the integrity of all martial arts. Most martial artists understand the benefits of martial arts, but even those who don’t know the first thing about martial arts considered it a valuable asset to society.

If we, as martial arts professional, want to maintain that reputation and keep it alive, then we must work together; and that means opening our minds to each other and listen to what we all have to say. We must lead by example that we are the professionals we claim to be, just as the Harvard faculty claims its reputation. Most school owners and instructors are independent thinkers, but that independence shouldn’t isolate us; it should be a positive force that opens are minds to suggestions and not being afraid to learn from others and maybe doing things differently.

There are many Homer Simpsons in every community; and the only way you’ll ever motivate them to enroll is to develop a congruent system and the sales and marketing tools that communicates your important message.

Part of your marketing education is to understand that many people are suspicious - and they may have every right to be, given how our consumer society operates. You must learn specifically how to overcome those objections: a bad experience at another school, the cost versus benefits, etc. Many other school owners just like you have this knowledge, the smarts, and put it to use everyday - and I know for a fact that most of them are ready to share what they know with you.

That’s why I’ve been willing to invest in mastermind groups and surround myself with those who know the exact steps to help me grow my school, despite the differences in our styles and teaching methods. These people help to motivate me, to eliminate my Homer Simpson persona.

Toby Milroy: I think what you said is exactly right, and very valuable. You must continue to surround yourself with people who are as good or better than you are at what it is you want to do. You also made some statements that are extremely important to emphasize for our readers.

First, the biggest difference between success and failure in a martial arts school is the ability to clearly articulate and communicate the benefits that students should experience and the goals they should achieve. You could have a beautiful, functional school, with a great staff of instructors, but if your instructors and you can’t communicate the benefits of martial arts, can’t persuade Mom and Dad that Johnny will benefit, then the other positive qualities of your school don’t matter.

NAPMA has collected and analyzed data from a number of sources, and it tells us that the martial arts industry has approximately an 8% market penetration. Of course, that number fluctuates from county to county and market to market, so, individual schools may experience more or less penetration than 8%.

The important statistic is not the 8%, but the remaining 92% of the population that has never experienced the benefits of martial arts, and probably most of that population has no knowledge of the benefits of martial arts. Of course, there is a significant number of people who will never participate in martial arts for a number of reasons: age, physical condition, cost, proximity to a school, etc.; however, there is still a huge population available to the industry as prospects that require proactive, even aggressive, communications to understand why they should participate - and marketing and sales are the tools you use to increase penetration of your local market and the number of students at your school.

Register now for Stephen Oliver’s
Complete Extraordinary Marketing System and receive

60 Day FREE Trial Membership in
Stephen Oliver’s Coaching
& Master-Mind program –
the program that has created more martial arts
millionaires than any other.

The program that has helped Miko Peled Grow his school DRAMATICALLY.

Click here:
WWW.EXTRAORDINARYMARKETING.COM

Your second point is the direct proportion between student outcomes and the amount of tuition a school owner can charge. You, being a traditionalist, actually enhances your opportunity to charge a higher tuition because your emphasis is on developing quality students; and, if you can produce great quality students, then you can command a higher price point, just like your Harvard analogy.

If any school owners reading this interview are challenged by the concept of charging a higher price point, then you must take a closer look at your market, especially other businesses that are similar to yours. This is a perfect example of learning from other business owners who have developed the systems that create quality outcomes for their customers and, therefore, can charge a higher price.

For example, a few months ago, I had a great lunch meeting with the franchisee and operations director of a new Huntington Learning Center that opened a block and a half from one of my schools. I was not surprised to learn that the Huntington franchise document is very similar to the business plan of most martial arts schools.

The marketing strategy and materials and business processes are almost identical. Huntington has a two-step intro process just like we do. First, there is an evaluation exam or a skills assessment, and, second, is a discovery of findings with the parents.

The local Huntingdon’s sells an average package of 250 hours. A student normally attends two hours a day, three days a week, or six total hours a week. The tuition is approximately $50 per hour, so the Huntington tuition is $300 a week.

Huntington Learning Center a very successful franchise. There is no price resistance to their product because parents clearly believe that its system of learning will help Johnny learn better, so they are more than willing to invest in their children’s education.

I think what we are both saying, Miko, is that if a school owner charges less than $150 a month, then he or she can raise the tuition considerably before there is any market resistance. Now, that advice is predicated on what you said. Once you believe in your service and over-deliver - two-to-one to four-to-one ratio - then you easily justify a higher tuition point and parents will pay it. When your instruction is based on sound martial arts, physical and character outcomes, then I think there is plenty of elasticity in the amount of tuition your market will pay.

Tell us a little bit about your tuition structure. Where did you start, what have you learned and what are you charging now?

Miko Peled: Before answering your question, let me explain my recent experience with a learning center in my community. One of my students is a little boy whose family’s income is probably below average. He was having trouble in school, so his mother visited this local learning center, which wanted two to three hundred dollars a week for tuition.

The family doesn’t have the resources to pay for both martial arts and the learning program. When the mother talked with the boy’s regular academic teacher, she recommended martial arts over the learning center. Since then, I’ve talked with the teacher, and she understands that martial arts will help that child become a better student and a self-starter and learn how to channel his energies and be more respectful and disciplined. That is the kind of impact you can have when you do a better job of communicating the benefits of martial arts through your marketing and sales processes.

Toby Milroy: That’s very instructive because the challenge is to help the parents of a White Belt student to see through the eyes of the parents of a Black Belt student. In almost every case, the Black Belt student and his parents are not willing to exchange all the tuition they’ve paid for what that student has learned and the value the family has received. If White Belt parents had pre-knowledge of the many benefits of becoming a Black Belt, then fewer of them wouldn’t hesitate to pay a higher tuition.

To repeat, charging a higher tuition and receiving it has more to do with the quality of the service than anything else. Your market, the location of your school and the target demographic for your courses are essentially immaterial. The critical factor is your students’ outcomes - the quality of service they receive for the tuition they pay.

Parents need tangible evidence of that quality, however. One superstar Black Belt student isn’t enough; you want 10, 20 or 50 quality Black Belts (depending on the size of your school) that are very respectful and serve as role models of the kind of person those White Belt parents want their children to become. That is high quality student outcomes for the long-term benefit of the school; and, that’s what we want for our students and schools, anyway.

Another point that I want to explore with you that will be very instructive for all our readers is how you’ve benefited on a professional and personal level, with the systemization of your school. It only took you a few years to change your mindset about how much you had to be involved in the day-to-day, moment-to-moment operations of the school. Did systemization and a staff that could follow those systems provide you with more freedom?

Miko Peled: It did. Instead of being the chief cook and bottle washer, I was able to leave my school in the hands of my staff and visit Israel for six weeks. When I returned, the school was functioning just as I expected.

Toby Milroy: Tell us how you changed your mindset and were able to systematize your school, so it could function without you?

Miko Peled: As I said earlier, I had to realize that there is no ceiling. Every time I think there is a ceiling now, I look for ways to break that ceiling. Of course, it’s a figment of my imagination; there is no ceiling.

That’s why I joined the Millionaire Wealth Group; in fact, I’m a charter member. I thought, “Okay, there’s probably knowledge that I’m missing, and I must learn it because I think I see a ceiling again.” I’m glad I joined because I’ve come to realize that there is always another step, even though I may not know what that step is today.

I may have a really good business plan, but it’s limited by my perceptions, so working with others who are smarter and have had more experience is exactly what I needed. The wealth group is fantastic because I’m in a small group of like-minded people who will help me break through those imaginary ceilings, and move forward.

Part of my mindset development was to learn how to delegate authority to my staff and trust them to operate the school correctly, even if I’m not there. I also realized that there are plenty of ways to communicate - e-mail, faxes, etc. - with the staff, in case of an emergency.

I discovered that the situation was not that bad when I returned and the school was much the same as when I left: the bad, the good parents with the annoying parents and the positives and negatives.

I was able to restructure my martial arts, business and personal goals. I realized that there are many more possibilities for me; the sky’s the limit for me and, therefore, also for my students. Everything that I gain, as a result of being a martial artist and a business owner, I can pass to my students. I can tell them, “At this point in my life, I’m realizing that the sky’s still the limit, and it’s true for you too; you can shoot for the stars.” It enhances my position as a role model, which again delivers student quality and that translates into a growing school.

I was able to open my eyes to the unfortunate situation of many school owners/instructors. There are so many fantastic instructors. An instructor teaches an inspiring class to a group of nine-year-olds, showing them that there’s nothing that they can’t do if they put their minds to it. Those nine-year-olds sweat and put all their energy into the class and, as soon as they leave, however, the instructor returns to his cloud of indecision when it comes to where he wants to in his career and life, professionally, financially and emotionally.

The instructor has just taught a class of nine-year-olds that there isn’t anything that they can’t do; but, all of a sudden, he has all of these self-limiting beliefs. That’s a change of mindset that is critical if you expect more from your school and your life.

Toby Milroy: That’s one of the reasons NAPMA introduced the Maximum Impact, Peak Performers and Inner Circle groups and Stephen Oliver started his coaching program and wealth group. What is important is changing the way you think, so your day-to-day actions will be more focused on your goals. According to Master Oliver, you’ve done a masterful job at realizing your business serves you. Please comment on that concept.

Miko Peled: I learned that you don’t necessarily serve the business. What that means is you’re there to be the owner, the entrepreneur and the driving force, and the manager of your staff’s activities. Ultimately, it’s your business; therefore, it must facilitate your life goals. You don’t have to be there, pushing the buttons every day.

Sensei Miko Peled (Rokudan) was born in Jerusalem, Israel, in 1961, and began practicing karate during high school. From 1980 — 1983, he served a mandatory three years in the Israeli Army; and, in 1983, traveled to London to train with Sensei George Andrews. He received his shodan from him in Goju-Ryu Karate. In 1985, he traveled to Japan to train with Sensei Higaonna, who was living and teaching in Tokyo.

Sensei Peled lived in Tokyo for a number of years, training two or three times a day for four or five days a week. According to him, this was an incredible experience, providing him with the depth of travining in the traditional martial arts of gojuryu, which is what he was hoping to find.

When Sensei Higaonna relocated to the United States in 1987, Sensei Peled also came to the U.S. to continue his training. In 1989, with the support of Higaonna Sensei and Alanna, Sensei Peled began teaching at his own dojo in San Diego, then, a few years later, he opened Martial Arts America in Coronado, California, where he lives and teaches now.

Register now for Stephen Oliver’s
Complete Extraordinary Marketing System and receive

60 Day FREE Trial Membership in
Stephen Oliver’s Coaching
& Master-Mind program –
the program that has created more martial arts
millionaires than any other.

The program that has helped Miko Peled Grow his school DRAMATICALLY.

Click here:
WWW.EXTRAORDINARYMARKETING.COM