Do I recommend that you open five schools in 18 months as I did when I was 23?No way!
However, these lessons working for opening one school or dramatically growing your existing school.
Prior to opening, get extensive training on business operations. Do extensive market research to locate a good market with adequate income levels, population densities and proper age breakdowns. Negotiate a lease with build-out dollars and free rent early in the deal. Then open the doors.
The six steps that I followed:
- Put all start-up capital into marketing.
- Get 100 enrollments in 6 weeks.
- Renew everyone on the 2nd or 3rd month.
- Get them to pay cash.
- Use that cash to improve facilities and to open location #2.
- Continue to repeat this cycle.
Here are key ingredients that I believe most new schools miss:
First, growing slowly as start-up means either burning through lots of cash or going out of business. Often times in our industry, it also means you support your hobby of running a school with your day job. I had very little money when I was 23, and no other source of income for my wife, myself, and my full-time instructor. This thing had to create cash, and in a hurry.
Second, “If you build it they will come” may work in Kevin Costner movies but no where else. It’s more like: you build, advertise, promote, beta the bushes, knock down doors, hone your sales skills, close everyone who comes within three feet of you – and hustle, hustle, hustle they will come.
Facilities are important to properly support a large student body but almost irrelevant in growing one to begin with. I’ve seen way too many schools rent a huge space, spend every last cent on mats, bags, mirrors, inventory, and state of the art training gear – then wait and hope for someone to come and train.
Third, get enrollments, a good first impression is important. To create prospects, good demographics are essential, and a highly trafficked center or high visibility doesn’t hurt. However, you grow your school by generating prospects, having strong closing ratio to enrollments and good student retention. These are affected by marketing, sales, and teaching skills. Nothing much else matters.
Fourth, create cash flow in a hurry. The model of a low down payment – long monthly payments – no cash enrollments of renewals means you are going to either burn through lots of cash or go out of business. Every school I opened had positive cash flow in month one. How do you create positive cash flow? Big down payments, cash enrollments, cash renewals. Nothing else.
Fifth, be good at what you do before opening the doors. You’ve got to know how to market your school, how to handle the introduction and the enrollment process, and how to flip them quickly into renewals. One-the-job training means you are going to either burn through lots of cash or go out of business very quickly.
Sixth, control your expenses. Many start-up schools (and even more established schools) ramp their expenses up way beyond what is reasonable for their revenue and their active student count. Someone needs to do the selling, and someone needs to teach the classes. It is very difficult for that to be one person. Beyond that, you don’t need much staff early on. And when you add staff, they should be inexpensive (i.e. someone to answer the phones or clean the bathrooms).
Seventh, reach out to your community. There is an excellent trend in our industry to grow through referrals alone. Now that’s great if you have 300 active, but if you had 1, or 25, or 50, that’s not going to get you to 100 in 6 weeks, or 300 in 5 or 6 months.
Finally, plunge ahead boldly. Tentative efforts lead to tentative results. Make a decision to be committed to success. Then apply 100% of your energies to accomplishing that goal.
