Robert Blum: Turning Around a School That Had Limped Along for Fifteen Years

The school’s been open almost 15 years now. I’ve been running it for the last three and a half, almost four years. Okay. And if I recall correctly, you took it over from your dad. You were working for Big Corporate America before that, right?

Yes, sir. I worked for IBM Corp for about nine years. Fresh out of college, went right into IBM, started working as a programmer, worked my way up to management. And then they had the pleasantry of telling me my job was being sent overseas to Brazil. Lovely. Absolutely. New America. Yeah. Well, it’s the false expectation of corporate America being a reliable career and being self-employed being unreliable is, you know, the good thing about being self-employed is you’re the one that has outcome, you know, control over your outcome. And the reality is, is a big corporate America that’s, you know, there’s no guarantee to, you know, lifetime employment anywhere. I mean, IBM was the was the company known for that and even that got them in trouble a while back. So, you know, it’s the new reality. Anyway, when you inherited your school from your dad, what was it like?

What was… To put it as nicely as possible, it was a mess. We had 40 students doing somewhere right around 5,000 a month. Okay. So that was the starting point. 40 students, 4,000 a month, and fish killed New York, which is Hudson Valley, what are you, about 90 minutes north of New York City?

If that, maybe even a little bit less, yes sir. Yeah, yeah. Not a rapid growth area. In fact, I think your population has been shrinking for a while. population like immediately in the area of your school?

The city that I’m in, Fishkill, is about 12,000 to 16,000, somewhere in that range. And it’s constantly in touch, being that it’s the commuter area. So you’ve got a stable population base, but we’re not talking in Manhattan or in LA or Chicago. No, no, not in all. And so, yeah. About the time you took over the school, you ended up joining up in Peak Performers. How did you come about that?

How did you end up working in the Peak Performers group?

Well, you know, it’s actually kind of funny. You know, I told my wife when we had originally taken over the school that if we were going to do this, that I didn’t want to be broke forever. I have a lot of friends that, you know, they run schools and they’re part-time gigs for them. And, you know, that’s their thing and that’s okay. But, you know, they all have a real job and they work their schools afterwards, which is what I did for all the time that I was with IBM. But, you know, I said if we were going to just do the school, that that’s not how I wanted it to be. I didn’t want to have a job during the day and work at night as well. So we wanted to figure out what we could do about, you know, trying to figure out how to learn the business.

[04:24] I mean, you know, my father owned the business all those years, but, you know, with a business background, still didn’t know the martial arts business, you know, being that it’s very different from everything else. We did some searching. We tried a couple other organizations. And then I met you guys at a show. I talked to Toby at length. Really kind of liked some of the stuff that I was hearing. We signed up actually for Maximum Impact first. We spent a few months going through that material. I got an invitation I believe to the very first Extreme Success Academy in Tampa. And we went, we wanted to see what it was all about. While we were there, they had made mention that they were going to be doing a coaching group, the big performers group. And I didn’t know what to do because our numbers really were not qualifying for the group at the time.

But it was something that I had said I really wanted to do. We put an application in and I met with you a little bit. I met with Toby. You know, I had told Toby that, you know, didn’t want to stay broke. Would pretty much do anything I could. And, you know, you guys were nice enough to make an exception to get us into the peak performance group, even though our numbers didn’t meet. And, you know, we kind of jumped in head first. I remember the very first coaching meeting I went to, I came home with a list of 73 things to change in my school. You know, and I’m not the kind of person that drags its feet. I implement immediately. I think in the first month we had about 45 of those things implemented.

By the time we came back to our next meeting they were all done. Wow. So you really took action. One of the things that I have seen with people that I work with on coaching, and certainly you’re one of them now, is that when you have that 74 point to do list, one of the value of the one-on-one calls and the one-on-one coaching we do is to help prioritize that to-do list. is so many times you start off your work number 32. Talk about that a little bit. I mean, you know, when you get that much stuff that you want to make change, that you know you got all this better that can come from it, but you’re staring at the daunting list and you don’t even know where to begin, it’s nice to have somebody on the other side look at you and go, listen, these are the three things you need to change first.

Do those. And then everything else may fall in behind it. You can work this in around it. I know the first thing that we were told to do is when we get home, forget everything else and just start changing prices, start using longer term contracts, and a couple of the things that would help secure the business a little bit better than what we were currently doing. Yeah, absolutely. Now tell them about your trajectory. So you started at, I remember what you said a minute ago, 45 students, 5,000 growths a month. Yes sir. And where have you been for the, first half of this year so far on average?

First half of this year we’re doing anywhere between 32 and 38. We’ve had two record months there. One was 40 and one was 41 as well. Okay, so your record month was 41,000 for the year so far. Yes, sir. Like consistently in the mid 30s. Yes, sir. From 5,000. So you’ve added about $30,000 a month. to your growth. Maybe you said differently you’ve had almost a 700% growth in the school. Yes sir, absolutely. And I mean we saw a giant leap right away. I mean we went from doing five to about, I want to say 15, just in the first six months to a year. Really?

[08:06] So you went from 5,000 to 15,000. You had about 300% increase in the first six months, more or less. Yeah, give or take, yes, sir. Yeah, maybe a little bit longer. I tend to think that what’s typical is to have that kind of growth in about nine months, within about nine months. I’ve seen that happen within, I had one client that went from 12,000 a month, I think it was, to 32,000 a month to 90 days. That’s extremely unusual, but what’s typical is the kind of numbers you’re talking about within six to nine months. So that’s fabulous. What kind of active counts do you have now?

We just broke 200 this month. Yes, it’s correct. We’re sitting at 202. Beautiful. And let’s tell people, if you look at your school, are you predominantly kids or adults?

How does the mix work? And tell them a little bit about your style and your martial arts background. We’re actually… probably sixty, forty kids to adults. You know, we were actually a very heavy kid for a while and then we started an adult kickboxing program, which, you know, I’ll specify it’s very different than the regular kickboxing program and we have upgrades in our kickboxing program and things like that. So it’s not just a fitness kickboxing program. So we are, you know, very heavy children. But we are actually really expanding on the adult market here as well. Okay. Well, tell us about the kickboxing just for a second as an aside. What are you charging for?

What are the upgrades? How does that work? The kickboxing program is between $125 and $149 for entry level. And the upgrade program is $249. $249. Yes, sir. So you’re bringing them in around $135, $40 a month. and then fairly quickly upgrade them into $249 a month. Yes sir, that’s correct. And see, what would you say to the average guy who says, well how the hell can you do that?

Jim down the street is charging $29 a month and it has kickboxing built into the thing. Well, and I, we have the same situation. Yeah, we have the same situation. I mean I have a school literally, I could stand at my front door, take a rock and throw it. Hit his school, he’s charging $75 a month for his kickboxing program. We have a school maybe three miles in the other direction and they’re charging 85, I believe it is, for theirs. And we’ve got four times the number of students. Either one of them has an Arcade Boxing program already. Yeah, that’s an important statement. You have 400%, four times the market share at what ends up being triple the price point once they have Great. And by the way, as we’ve talked, that replicates, when I opened in Denver in the early 80s, I was charging double or triple what anybody else was and had five, 10 times as many students as anybody else did.

And they were always mad that they couldn’t figure out why I could charge double and half double the number of students or more. In fact, we did a little seminar recently and there was one of your competitors from right down the street. And for your normal Mark source program you’re charging what now?

Entry level right now sir is 177. That’s actually going up for the September timeframe. It’s going up to 197. And the leadership program is at 297. Yeah and I talked to him, I think he was charging 75 dollars a month. Yeah and I believe he’s remember correctly. He told you that that’s the most he could get in our area. [inaudible] And was absolutely convinced of that. Absolutely convinced. So let’s give everybody some meat here, Robert. If you were at school, let’s take where you started. You’re at $5,000 a month. You want to get $15,000 a month. What would be some of the immediate things that you would do?

[12:15] I would look at my processes, my systems. I mean, you already said that you definitely want to raise your prices if you’re not. Not at a higher price point. I mean there’s a lot of guys in the 60 to $100 a month range. I would tell them to double their prices immediately. If not more than that, depending on where they are. If they’re not using contracts, obviously they need to be on a 12 month minimum agreement to start. And then I would say from there you got to look at systems. They got to take a good look at their intro system, their upgrade process, if they even have an upgrade process. I mean that would be where I would start. I would think those would be the biggest thing for them right off the bat. You know, and a word of caution as we both know, you don’t just go to your current student body whether it’s 45 or 145 and say the price is double now.

No, no, no, no. I mean, we grandfathered all those people in, you know, whatever they were paying, they were paying. We did, however, try to upgrade a lot of them because we didn’t have an upgrade program. So if we could get them in a higher up program. I mean we didn’t make it the new price but we made it you know fifty to a hundred bucks more depending on what we were getting from them. You know just to get their price point their average same value up a little bit higher. Yeah our rule of thumb has been you can you can bump them fifty to a hundred percent from what they’re paying now as long as you have the right presentation. Now each transition is a little different that’s why. really walking through one-on-one to get that to happen without disrupting people’s perspective within the student body is important.

Because it’s so important about what you already thought of the zinc. I absolutely agree with that. I think that’s also what’s really great about being in the coaching programs is that you can sit down with you or Toby, not only you guys, but even the other people in the group to who have been there and done this already and say, hey, listen, this is what I’m looking to do. How would you guys approach it?

How did you handle it? I mean, that for me was invaluable to be able to talk to guys like Eric Sparg and Jason Nee, who were in the group at the time, Charles and Penny, who were still in the group, just a chance to see what they’re doing then and get their input on how it all works. I mean, I think it’s completely invaluable. Oh, absolutely. Well, you’re describing the process of the mastermind meetings that we’ve had. Yes, sir. As you’re alluding to, we have school owners in there that are doing a million, even two million a year, I think, are MMA guys in Houston. They’ll be at two million next year. And all across the board, kids’ programs, adult programs, cardio kickboxing programs, MMA programs. So look at your processes. What do you mean specifically by that?

What systems and processes would you evaluate early on to see the evidence?

I mean, I know for me, my biggest problem was we didn’t know how to take a phone call properly. We didn’t know what information to get. We had no follow-up systems. If somebody called and they didn’t come in, that was it. We never worked without them. We didn’t talk to them again. And now we look at that and I go, if one of my employees doesn’t get an email address or phone number to be able to follow up with somebody I want to kill them. Even just info call information was just vital. Once we started doing info calls, we saw conversion rates go up 100%. It was crazy. And then past that, I would say even just intro processes. A lot of guys just take their students and throw them in class, sink or swim per se.

Which doesn’t help the child, doesn’t help the family really get a good feel for what’s going on in your school, especially if you’re trying to teach character development and leadership skills. Absolutely. And so a lot of what we’re doing is really keeping track of numbers. And you probably wouldn’t be surprised if I told you that most of the schools don’t know anything about what their numbers are. They’re not keeping track. Oh, I do know, not at all. But that was an important first step, right, is keeping track of lead calls, outbound calls, appointments, inductees, enrollment, renewal prep, renewal. We have a statistics tracker that we’re using now. I mean, in the beginning it was just that simple stuff. I mean, but now I can tell you cost per lead, cost per sale, you know, I can tell you what my average student value is.

[16:50] How many people called, how many people followed up on that call, where the ads came from. I mean, we know everything now. I mean, I know what ads pull better than others, you know, what advertising with those ads pulls better than others. I mean, we track every number down to a size. What is your average student value right now on an on up?

The average student value in the school right now, and in my opinion, it’s still too low. It’s about, it’s about 196. I would like be somewhere around 225, 250. Yeah, and I’m working on getting all you guys to 300. And to give them a perspective, at 300 value per student, that means that you’d be doing 2,000 months with your 200 active students. And right now, as we talked about, you’re in the mid 30s, peaking at the low 40s. And a lot of the legacy students in Black Belt are still in the old structure your dad put in place. Yes, sir, correct. I mean, I still have some Black Belt fans, you know, 90 bucks a month, which kills me. Yeah, this is you off. But anyway, so if you look at in order to maintain 200 students doing 35 to 40,000 a month, how many new enrollments are you bringing in on a monthly basis right now?

Well, you know, with my new program director that we just hired about three months ago, she’s been pulling phenomenal numbers. I mean, we’ve had three amazing months. In April, she did 28 enrollments. In May, she did 19. And this month, with a couple of days left, we’ve got 20. 20. And just so people know, because I don’t know what time of year they’ll be listening to this recording, 20, that was in June. 19 was in May, 28 was in April. And my guesstimate is you’re going to have a record July and August. Absolutely. I mean we have right now from events that we’ve been doing, I’ve got about 450 to 500 leads that I still haven’t even followed up on yet. Define for everybody what you mean by a lead. What is a lead?

We’ve got people who raised their hand and said they’re interested in martial arts classes. These are not even cold These are not even people that said, oh well, you know, I have a kid and I might be interested in something. These are people that we were actually, you know, either at a movie theater booth or at a community day that said, I actually want my child to do martial arts classes or we want to do kickboxing ourselves or something along those lines. Yeah, and you’ve got a name, phone number, mailing address, email address at least. Yes, sir, all of the above. Yeah. And of course the new thing we’re going to be working with everybody on is text messaging. So we’re going to be doing a lot of text messaging, follow-up and all that kind of thing.

So shift the other direction here. You’ve been very good and I’ll take the credit for having written the first book on how to do this stuff. I think most people, well I know 99% of school owners have no clue what the Internet is for other than how to go to their AOL account. You’ve been very good at creating search engine placement and using your website effectively. What percentage of your traffic is coming through there right now?

[20:11] I would say it’s actually down a little bit only because we have so many leads from events right now. But on average, we’re doing probably 60% of my leads a month are off of my internet. 60% are coming from your website. And do you have a sense of how many of those are coming from Search Engine and PaperClick versus how many of them are coming from your other marketing and then show up at your website?

I think right now, I mean, we own so much organic that my PaperClick is really down to a 5% or 10% amount. We’re doing so much just regular driven traffic now. that it’s all coming from organic. Before that, before we built up our organic traffic, I would say pay per click was a good 50%. Great. Yeah, the interesting story is back when I really was first engaged with this and then my first group of coaching clients, Bobby is one of the guys who really took that and ran with it. And at one time for the school there in Orange City, which is suburban Orlando, we had it where if you looked at the first four pages of Google or Yahoo, is 95% if not 100% of the search results are all for history. And a lot of these guys were trying to teach a search engine optimization.

They’re happy if they get you know, one listing on the fourth place on the search results. We actually had it many times and for a bunch of my schools as well. We had it where you’d have 15 listings in the first 30 pages, 20 listings in the first 25 pages of results. And you’re similar now in Fishco. Yeah, I think, I can give you Google My School in the local area here. Orfish for martial arts, I want to say we own probably 98% of the search listings. I think there’s maybe two or three on the first six or seven pages. We don’t own. Yeah, absolutely. And we’re doing it, you may not have heard because you weren’t at the last meeting. You were cruising the Bermuda Triangle, if I remember correctly. Yes, sir. First vacation I’ve been able to take in many years.

Yeah, yeah, well, and now that all has changed, it helps to have money and well-trained staff. Absolutely, I mean, we left the school open, I don’t close my school when I go away anymore, and they did six contracts while I was away. Perfect. But we’re doing a series of webinars for the people, performers in our circle on A to Z, on internet, and as you know, I mean, everything changes. There’s now the Facebook, Twitter universe that people are really excited about. I think you’re probably more excited than it justifies so far, but they’re real excited about it. There’s the search engine stuff, and Google just changed their algorithm again recently. So that all changes fairly regularly, but we’re going to walk through that. We walked through at the meeting several of the members’ websites. Joe Borucki has has really gone from like nothing to a massive amount of traffic online.

But we went through and critiqued his website. We’re also going to go through and really go through how to do pay-per-click effectively on Google, how to do pay-per-click effectively with Bing, which also features Yahoo, and how to do pay-per-click on Facebook. And so far, by the way, Facebook has what, 1,000?

So the click-through rate that Google does. So, you know, the night… Yeah, and I think that’s probably about right, but we found what I like about Facebook for us is it’s so targeted. Being a geotarget, you can target what they’re into, what they like, what they’re looking for. We found that when we do do that, we do get a pretty good success rate with it. Yeah, absolutely. Well, and the important thing from a budget standpoint, not click through rate, it’s the how much your pain for click and if there’s enough traffic. And what we walk through with Greg and I down in Houston is they’re running this big MMA school. But what they don’t want is they don’t want 23 year old high school dropouts. What they want is 28 and up college educated, professional, even better if they’re married.

[24:50] So they can go into Facebook and they’re looking for education level. obviously geography, age threshold, and they’re sorting out all the guys who would be responsive, but they don’t want. And sorting for the ones that will be both responsive and that they do want. And it’s a very instructive lesson, because especially on the adult market, so many people are just trying to get adults and not thinking about getting the ones that are, you know, smart, stable, you know, have a good income, will be a good student, will be there in 12, 18, 24 months, and will continue to learn. All criteria are very important. From a marketing standpoint, on an ongoing basis, you’re generating a ton of effort from websites. And the websites are doing a lot of search engine optimization as well as pay-per-click. And which means how much time and effort do you have to spend once you’ve learned the systems you’ve got to keep the website thing going?

How much? I don’t spend any time. I spend no time and effort. I have a 15 year old kid that works for the business. We like him handle it. Yeah, yeah, yeah. Well, and clarify for everybody, it’s not what most karate schools do, which is the high school kid who knows how to design websites and let him have at it. It’s, you know, you know, no, no, no, no, no, correct. Yes, sir. No, I mean, we walk. him through the whole process, all the things that he has to do, everything that he does, I have an account that’s tied to it. So, you know, God forbid, something goes belly up, I can still jump back in and save it. Yeah, yeah. But you’re getting a lot of traffic by having first learned how to do it, then handed it off to an enthusiastic teenager who had some basic skills, and then once you taught him to do the stuff, he can really make major, I mean, anybody who’s looking for martial arts of any sort.

In fish killer surrounding areas are going to come up with you and probably mostly only you. Yeah, for the most part, sir. It’s hard to find anybody else other than us. Yeah, that’s a wonderful thing. Absolutely. So on the events and fairs and movies and so forth, what kind of results have you been getting with those recently?

Well, you know, we just recently changed the way we approached the movies. You know, we had been doing it for a long time with a prize wheel or a bike raffle or things like that just to get anybody’s name and information. But we were not getting the results and conversions that we wanted. Now when I say that, right, I mean we were getting conversions, but I’m crazy about how much I want to convert. I mean I wasn’t happy with a 30% conversion rate or 20% conversion rate. I wanted to see it go much higher, which I mean I know when on those kind of leads, because of the type of lead that they are, you’re not going to see much more than that. We actually made a week and it came down to the point of I would have rather gotten you know twenty or thirty solid lead and a hundred that for useless or what we decided to do was instead of of biker prize will we actually just started rapping off karate kat we had big time spring to bring with us and we’re given away thirty days of free classes and that’s what the raffle is for instead of just doing the prize will come up in and to our surprise the number of leads we pulled went up

[28:08] You know, we actually put a poll in 50 or 60. We’ve been polling 100, 150 a weekend. My program director did a women’s only event and polled 112 leads in one night. That’s great. Now, what you just described is there’s three levels of that that most people don’t get. And even some of the big organizations, who supposedly have good marketing skills. I’ve seen what they’re teaching. And it’s all about just like sitting out there and putting up a sign and handing out flyers. They don’t get that it’s about get a name address, phone number, email address, follow up 52 times if possible, make an appointment or a sale at the time. The other thing that’s different about what you just said is think of, prototypical lead box. So you put leads out there, lead boxes, let’s say you get 200 leads a bunch from lead boxes, but they’re all very, very low commitment level.

And on a scale of one to 10, maybe a level of interest of a one or two. Where what you’re talking about is sorting them out by interest and sorting them out by whether they’re going to be willing to jump on it or not and being willing to accept fewer leads for higher quality ones. And again, we’ve seen that with some of the schools. What happens oftentimes when they come into e-performers or coaching is they end up drinking from our hose on leads. And then we have to back down and get much higher quality leads. Because the mission is to have 20, 30, 40, 50 enrollments a month, not to just cycle through and spend all your time doing outbound calls and intros. Correct. Yeah, and I mean, even more so than that, I mean, you know, what we’ve really seen is, you know, like I said, that conversion rate went through the roof.

I mean, we went from, you know, a 20, you know, at a best 25% conversion rate. I mean, we’re closing 60% of the leads that we get through the door right now. That’s great. You know, I mean, I’m sorry, let me rephrase that. 60% of the leads that we call, we’re getting through the door right now. I mean, our closing ratio, as far as, you know, once they’re through the door, the 85% range. Right. Well, and the first important part is that you know that. And then once you know what, this is what the typical cycle is, you don’t know what your numbers are. And when you don’t know your numbers, you assume they’re pretty good. And then when you start to learn your numbers, it’s easy to become depressed because you went from feeling like you’re doing great doing horrible, but once you have realistic information, you can now go about fixing each of the processes.

That’s something we recently did with the group is went to the sales process A to Z, but there were a couple of the guys that were getting great traffic, but horrible intro to enrollment ratio conversion, so we went through and really identified what the gaps were. Sometimes the gap is staffing and sometimes it’s systems and sometimes it’s carrying them with, it’s pouring milk. It’s carrying them away too early. How would you tell people to think about transitioning from open-ended enrollments to having some kind of renewal or upgrade process in place?

I think it’s a must. I mean, I can remember a wheat-dreaded ball season. When Lip Big used to come around, I’d lose half my school. And as we learned over the years, you know, you lose half your school and then only half of them come back. And you know, you went from having 50 students to having 30 and then trying to climb back out of the hole. And you know, it was just, it was a nasty, vicious, revolving cycle. Plus, you know, I mean, what we’ve learned over time is that, you know, we’re teaching these kids about leadership and part of leadership is commitment. And it just helps tie your program together. it really helps you explain to a parent what it is you’re trying to do for their child. When they understand that you’re committed to serving them at the best of your ability for 12 months, they’re not afraid to give you that opportunity.

[32:27] Absolutely. One of the things that, I’ve been saying this for 20 years, but at this last meeting we validated it from several sources, but the the number I remember at the top of my head was Jonathan Metcalfe. And he had numbers going back 10 years for his school. Me as you know, he’s very meticulous. But he had over 10 years, had 1,556 I think the number was, students who had dropped out, 26 students who had dropped out that had committed to black belt training or beyond. And we went through with several schools and we were trying to figure out what the average monthly dropout rate was among the group. And it was somewhere between 3 and 5%. But then we tried to figure out what the average monthly dropout rate was among people who had gone through an appropriate renewal process and committed a train to Blackbird and beyond.

And the best number we could come up with was like one-tenth of 1% per month. So what’s the number?

Oh, no, I would agree with that wholeheartedly. in our own students almost always make it to leadership or didn’t make it into an upgrade program of some kind. Yeah, what kind of ratio are you shooting for that for new enrollments into they renew?

We would like to be at a minimum of 80%. We’re actually still a little bit below that. We’re still pulling about 65, which is it’s just and you know I know it’s not an excuse but the economy here has actually hurt us a little bit You know our average household income here dropped $20,000 last year because IBM’s gone on a layoff spree So the average income in the area dropped 20% and that’s a 20 thousand dollars a year. Yeah, it’s actually more than 20% that it drops. I would say it probably dropped close to almost 30%. Wow. Well, and see, here’s the thing is the economy has ups and downs, right?

And we always tell people, you know, don’t worry about the economy. Just, you know, set your own game and make it work. And the thing is, is whatever your current baseline is, if you just keep doing all the things that you keep doing in the economy, plumbing, then your numbers are going to plummet pretty much in the ratio of the economy plummeting. In fact, we are a discretionary activity, it will probably plummet quite a bit worse. But you’ve made this growth from 5,000 to 35,000 to 40,000 one of the worst economies in 50, 60 years. Oh absolutely. We can’t wait for things to turn around because I’ll have 500 students. Oh absolutely. Absolutely. without a doubt. So let’s wrap up here by giving people three or four tips on really what they should be thinking about from the standpoint of growing their school and taking the kind of rapid growth that you’ve taken.

First, what would you tell them about their belief systems?

Again, as you know, I’ve just recently talked to a whole bunch of school owners one-on-one, and I found that, one, a lot of them who are at 5,000 would be happy to get $7,000. So they have very limited beliefs in where they’re at, where they should be. Two is they have limited value in their program and are very hesitant to make a jump in the kind of price points you’re talking about. Three, they have an assumption about what people will do. So a lot of them think that the only market there is right now is adult man MMA, for instance. what would you tell them if they’re at the place that you used to be at and they want to make that big jump?

[36:17] Well, I mean here’s the thing, right? And when you say belief systems, the biggest problem is everybody thinks it’s a bad thing to make money. You know, for some reason, I don’t know what’s going on in this country, but everybody thinks that, you know, if I make a little bit of money, everybody’s going to hate me. You know, my students, they love it when I pull up in my brand new car. They ask me how my vacations are. They wish me good luck and they hope I have a nice time when I’m not in the school. There’s nobody jealous of our success because they know how hard we’ve worked for it. If anything, I think they’re happy that the people that are teaching their kids about leadership are actually successful themselves, which I think is really important.

I mean, if you’re going to be working with children and teaching them leadership and life skills, well, you know, you should probably have some yourself. Exactly. which is why we stress the reading, which is why you and Toby, you know, every time we’re together, I think I get four or five new books to go home and read, and I run right out to the librarian, or I run up to the bookstore and buy them, one or the other. Yeah, you know, and I would say even further than that, if you’re teaching success skills to people, it’s hard to be credible if you don’t look like you’re successful. Absolutely. And it’s hard for them to believe that you’re going to be there in three years, five years, 10 years for them to really commit to this long term if it looks like you or your school are on their last legs, right?

So those two things are… I think that’s part of that mindset is what kills being able to even have an upgrade program. I mean, if you drive up in your beat up car every day and you barely have enough money to afford a new uniform, you’re making ends How are you going to sell somebody a $15,000 upgrade program?

Or in your case, I know you guys are on a five-year plan. I think your upgrades are in the $25,000 range, right?

Yeah. Yeah, they can be. Yeah, and that shocks people. As you know, I don’t do many of these things personally anymore, but I walked into one of the schools at Christmas and somebody wrote me, I think I showed you the picture of the check. What was it?

$27,900 for a $5,000 upgrade. for a leadership program. And people are shocked. I think it’s hard to get a $200 check or $300 check, but it’s all about creating that value in the program. From a martial arts standpoint, in order to run a $40,000 a month school, and of course our mission is to get you to be a million dollar a year school, but in order to run a $40,000 a month school, do you water down what you’re doing?

Do you have to make your curriculum weaker or less effective?

How is that? fact that you are over the process?

No, absolutely not. I mean, I have a very traditional background. I’m a 63 black belt and plumsetto, a 63 black belt, and I TF Taekwondo. you know, I came from very traditional roots, right?

I didn’t, I, one of the things I had always told my wife was, yeah, we want to make money at this, but I’m not going to kill my art in the process. And you know, and everybody goes in with that mindset, right?

Cause you don’t know, you know, when you’re, when you’re doing $5,000 a month, you have no idea what these guys doing. 40 and 50 have done with their program. And I got to tell you, the guys that we hang out with, the guys from the Inner Circle group, not only are their schools extremely successful, but they have some of the best martial artists that I’ve ever seen. I’ve had opportunities to go to a few of their schools. I’ve been to Penny Potosky School. I’ve been to Charles Dudley School. Their students are just stellar, top-notch martial artists. And I mean, even myself, with our own school, you know, we take a team every year to US Nationals. Last year we had eight US National Champions come out of the school. You know, so the art doesn’t suffer at all, and I think that’s a big misconception.

[40:04] Everyone thinks that, you know, well, I can’t teach forms anymore because they’re not fun, or I can’t do, you know, self-defense anymore because it’s dangerous, or whatever. You know, and parents don’t buy into that, it’s not true. You know, it’s all in how it’s presented. It’s all in how you present your program. And I mean, you’ve got to be able to show value the right way. Yeah, absolutely. Absolutely. You know, the last thing, if you talked about pricing, when I talk to people about, you know, what I charge for consulting or, you know, consulting days or for what we charge for people performers or coaching or inner circle, it’s the same reaction that your friends in our industry had with with you charging $249 a month or whatnot, they think that it’s crazy. And what would you tell them about return on investment versus, you know, they’re thinking about what the expense is on those things?

Well, you know, it’s funny because you’ve probably heard me say this a few times as I’ve talked to new people thinking about coming into the programs and stuff. You know, you always say they think it’s crazy or they say they think it’s crazy. And I personally have always felt that I think it’s crazy if they don’t do it. you know, everybody’s common excuses, oh my god, I can’t afford to do that. Well, you know, I come from a standpoint where I was broke, I know what it’s like. I mean, you know, in the first two years I had my school as we tried to build an Iraq, you know, and had no other job, my wife didn’t have a job. So we racked up quite a bit of debt on credit cards that, you know, I now no longer have because my school’s successful.

So I know what broke is like, and I don’t ever want to go back there. But, and the reason I say that, I think it’s crazy if they don’t, I think they can’t afford not to. I mean, I’m in the opinion that if you don’t take the steps to continue to grow, that you’re just going to fall behind and you’re going to drown at some point. And, you know, especially the way things are now, the schools that are not taking action to help themselves, they’re just going to get left in the wayside because this economy, this slump is not over with. We’ve got a few more years of this, I think, at a minimum of 12 more months. And I think there’s a lot of schools. I mean, I think we said there was what, 6,000 schools in the last couple of years that have gone under?

Exactly. I can’t see why we’re not going to see more, you know, unless people start really waking up and realizing, hey, I can keep the integrity in my art, but I should be trying to make some money at this business as well. Yeah. Well, and what people even miss with that 6,000 number is that was net loss. So that was… Right. who’s gone out of business minus startups, right?

And what happens in this industry is somewhere between 20% and 25% go out of business every year. And Tony Robbins line is you can’t, you must, right?

And the thing about it is if somebody is struggling and they don’t, step up to the plate, get somebody who’s gonna coach them. get in a positive peer group, get the tools and information they need. All they’re doing is guaranteeing themselves a year from now, two years from now, three years from now, being exactly where they’re at if they’re even still in business. And… Well, I mean, we’re poised for hyperinflation. I mean, it’s going to hit. And, you know, if school’s doing 5,000 a month now, maybe able to survive part-time. If hyperinflation hits a school doing 5,000 a month now, it’ll be like doing two. And there’s a lot of schools that are just not going to make it. Yeah, yeah. Without a doubt. But at the higher end, if you were to look ahead a year, where do you think your main school will be in?

I know you’re going to be in the middle of Grand Ole’an for a second school as well. But what’s your realistic target given your growth trajectory for your main school?

We’re looking to be between 45 and 50 by the end of the year. Okay. So in the next six months to be in the 45 to 50 range. And my mission is to get you to a million a year. And I think that’s completely doable with the foundation we’ve built now. Absolutely. I mean, that’s the long-term goal. There’s no doubt. Well, Robert, hopefully this has been very effective for you, or for you, for our members. I appreciate you sharing so openly with everybody and I’m sure we’ll do a follow-up and get them even more information about your school in the coming months and show them how that we’ve taken you from 35 to 50 and then from 50 to a million. Absolutely sir, I look forward to it. Thank you Robert and I hope you have a great rest of your day and enjoy your nice weather there in the Hudson Valley.

[44:47] Thank you sir and if I may before before we finish, you know, just to the school owners that are listening, you know, stop telling yourselves you guys can’t do it. Stop telling yourselves that it’s not fair. Just go out and make it happen, you know, get Toby or Master Oliver on board with you and, you know, make NAPMA, you know, work for you guys like it’s worked for us. Because, I mean, without you guys, we wouldn’t be where we are. And, you know, my family and I owe you guys the world. Thank you very much for that. I certainly appreciate it. You know, that’s, of course, my mission, last now, is to create a whole bunch of half a million, a million dollar a year schools. Most importantly, Robert, the inner circle is all going to be in the top 3% and a lot of them in the top 1% of the U.S.

Income bracket. So the top 3% is $200,000 and up and the top 1% is, I think, a quarter million and up. So we’re going to make sure that every one of you guys are in that range this year. I’m sure you’re in favor of that. Absolutely. I’ve got my eyes on a convertible Mercedes that I’ve been looking at for a few years, so that’ll be a nice present. Works for me. Okay. Have a great afternoon, and thanks for everybody for listening in. Thank you, sir. You too.