Know Your Mix: Where Your Active Count and Your Gross Actually Come From
Most school owners can tell me their gross. Fewer can tell me their active count. Almost none can tell me how much of their gross comes from their basic students, how much from their black belt students and how much from their leadership students.
That third number is the one I want you to find this month, because it tells you how much growth is sitting inside the school you already have.
Three Numbers, Then One Division
Start with your active count — students actually training — and break it into three groups:
- Basic — students in their first program, not yet renewed.
- Black belt — students who have renewed into your black belt program.
- Leadership — students in your leadership or instructor-track program.
Then take your total monthly gross — everything, including testing fees, equipment and events — and work out how much of it comes from each group.
Finally, divide total gross by active count. That is your student value: the average revenue each active student brings in per month. I have written about why active count and student value are the only two numbers between you and a million-dollar school. The mix is how you find out which of the two to work on first.
A Worked Example
These are illustrative figures, not a real school and not a pricing recommendation.
| Program | Students | Share of students | Monthly tuition | Tuition income | Share of tuition |
|---|---|---|---|---|---|
| Basic | 130 | 65% | $179 | $23,270 | 56% |
| Black belt | 55 | 27.5% | $239 | $13,145 | 32% |
| Leadership | 15 | 7.5% | $329 | $4,935 | 12% |
| Total | 200 | $41,350 |
Add $6,000 a month in testing, equipment and other income and the school grosses $47,350. Divided by 200 active students, its student value is about $237.
Now look at what the table tells you:
- Only 35 percent of this school’s students have renewed. Seventy of 200 are in black belt or leadership. That is the first thing I would work on.
- Leadership students are 7.5 percent of the student body and 12 percent of tuition. Every student who moves up a level raises student value without a single new lead.
- Move 20 basic students into black belt at a $60 difference and the school earns $1,200 more a month — $14,400 a year — from students who are already on the mat.
Two Ways to a Million-Dollar School
There are two things you have to do to be a million-dollar school, and I call them the jab and the cross: active count and student value. The mix tells you which punch you are missing.
A school with a high student value and a low active count needs enrollments and retention. When it fixes active count, the revenue arrives fast, because every new student is already worth a lot. I have watched schools with a student value around $400 struggle on active count. Fix that side and those schools run at $100,000 a month.
A school with a low student value — say $200, because a lot of students are still on an old rate, or family discounts have crept in, or nobody has renewed — needs more than 400 students to reach a million dollars a year. That is a lot of students, a lot of floor space and a lot of staff. I would much rather you had 200 students and were a million-dollar school. At 200 students, that takes a student value of about $417.
The owner who knows their mix knows which of those two schools they are.
How to Run the Numbers This Month
- Count every student who trained at least once in the last 30 days. That is your active count.
- Tag each one basic, black belt or leadership.
- Pull the month’s total gross and split tuition by program. Put everything else — testing, gear, events — in its own line.
- Work out each program’s share of students and share of income.
- Divide total gross by active count for your student value.
- Do it again next month. The trend is what matters.
If you want to see where you are headed, compare this month’s mix to the same month last year. More students in the upper programs means the school is stacking. Fewer means your renewals are leaking, and the next thing to look at is when students leave.
Questions School Owners Ask
What is student value in a martial arts school?
Student value is total monthly gross divided by active student count — the average revenue each training student brings in per month. It is one of the two numbers, with active count, that decide a school’s gross.
What percentage of a martial arts school’s revenue should come from upgrades?
There is no single right percentage, because it depends on how long the school has been open and how it prices its programs. The useful question is whether the share is rising. A school renewing its basic students steadily will see more of its income come from black belt and leadership programs every year.
How many students does a martial arts school need to make a million dollars?
Divide $1,000,000 by 12 and then by your student value. At a $200 student value you need about 417 active students; at $400 you need about 208. Raising student value lowers the number of students you need.
Know your mix. It is the difference between guessing where growth will come from and knowing.
Grand Master Jeff Smith is the first PKA World Light-Heavyweight Kickboxing Champion, who defended the title seven times and retired 32–1 with 16 knockouts. He earned his black belt under Grand Master Jhoon Rhee in 1969 and served as Senior Vice President of the Jhoon Rhee Institute from 1970 to 1985. He is Chief of Instruction for Mile High Karate and co-author, with Grand Master Stephen Oliver, of Extraordinary Teaching. Read more from the Martial Arts Professional columnists.
