Student count, square footage and gross revenue are the three numbers school owners brag about, and all three mislead. What matters is what reaches your bottom line after rent and overhead, and what that income buys you in lifestyle and long-term security. A school grossing $30,000 a month with $15,000 net beats one grossing $180,000 a month with $3,000 net.
Key Takeaways
- Active student count is the most exaggerated number in the industry; one owner counted twelve years of enrollments as his active base.
- Five schools with $2,700 average rent grossed what three schools with $6,500 rent did, and the higher-rent operation needed a $45,000 cash injection.
- An owner who built and paid off his own building nets close to fifty percent on an unremarkable gross.
- Money serves two purposes: affording what you want now, and building security against a downturn or a medical emergency.
- Net income, not gross, is the measure. $30,000 gross with $15,000 net beats $180,000 gross with $3,000 net.
- A home is about the only personal possession with real investment value; a new car loses 20 to 25 percent the moment it leaves the lot.
The Three Numbers School Owners Brag About
It’s interesting to listen to a group of school owners brag about their schools, according to three measurements: number of students, school size and gross revenue. Let the lying begin.
Active student count is the most exaggerated number of them all. For example, I asked an acquaintance that owns a very small school his active student count. He said it was 1,400; however, that was the number of enrollments the school had generated during its first twelve years!
I pressed him further and asked how many active students he had. The owner replied that he had 450 students currently enrolled, but, to him, that was any student whose program had not expired.
Why Gross Revenue Deceives
I compared my school’s financials with the financials of a very successful friend, who owned multiple schools grossing $35,000 to $40,000 each. My five schools grossed what his three did; however, my average rent was $2,700 compared to his $6,500. While my bottom line was rather good, he had to put $45,000 into his operation to keep it running smoothly.
“The lesson is don’t let impressive numbers or an impressive facility fool you.”
Another friend runs a school with an adequate, but not spectacular, gross; however, he built a building several years ago, and now owns it outright.
He pays no rent or mortgage, and has plenty of equity. His nice little school now nets close to fifty-percent. The lesson is don’t let impressive numbers or an impressive facility fool you.
What Is the Quality of Your Lifestyle?
What’s the quality of your lifestyle? Are you doing what you enjoy, and do you take time for hobbies, travel, family and entertainment? It’s easy to become obsessive about working and striving for more money, but money only helps you in two ways.
First, it helps ensure that you can do and have the things you want, right now. Are you able to afford those toys that are important to you? Do you acquire expensive possessions to impress others or because you appreciate those possessions personally?
Second, you need money to build security for your future. What if your school suffers an unexpected downturn? Are you financially strong enough to weather the storm? What if one of your kids has unexpected medical expenses, or if you have a medical emergency?
What Is Your Net Income?
What’s your net income? How much is remaining after everyone has been paid? If you generate $30,000 per month, with $15,000 net, then you are incredible! Generate $180,000 per month, with $3,000 net, and, well, nothing personal, who cares?
How Much Net Worth Have You Built?
How much net worth have you built and how much do you save? Do you have equity in your home? What about equity in the building that houses your school? How are your IRA, savings and/or investments?
Remember, about the only thing that you can buy that has any real, personal value is a home. All other personal possessions, with a few exceptions, will depreciate. The minute you drive a new car off the lot it loses at least 20 to 25 percent of its value.
When you start reviewing your assets and computing your net worth, you’re focusing on what has real investment value. Home furnishings, art and jewelry have only utilitarian or sentimental value, once you’ve left the stores where you purchased them.
Two Books Worth Reading
A good book to read is The Millionaire Next Door by Dr. Thomas Stanley. This book teaches some great lessons in wealth accumulation. Another good book to read is Financial Self-Defense by Charles Givens.
Frequently Asked Questions
What is the most misleading number in the martial arts business?
Active student count. Owners routinely quote total enrollments over the life of the school, or count every student whose program has not formally expired, rather than students actually training.
Is a bigger school with higher gross revenue more successful?
Not necessarily. Five schools at $2,700 average rent can gross what three schools at $6,500 rent do, and the higher-overhead operation may need tens of thousands of dollars injected just to keep running.
What net profit should a martial arts school aim for?
An owner who has paid off his building and carries no rent or mortgage can net close to fifty percent on an ordinary gross. The number that matters is what remains after everyone has been paid, not what comes in the door.
How should I measure my own financial progress?
Look at net income, net worth and savings: equity in your home, equity in the building that houses your school, and your IRA and investments. Personal possessions other than a home mostly depreciate and do not count toward real investment value.
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Grand Master Stephen Oliver, MBA, is a 10th Degree Black Belt and the Founder and CEO of Mile High Karate and Martial Arts Wealth Mastery, one of the martial arts industry’s leading coaching and consulting organizations for professional martial arts school owners, BJJ academies, and MMA gyms. A martial arts school owner since 1975 and business coach since 1985, Oliver has spent more than five decades building, operating, and advising successful martial arts schools. He also serves as CEO and Chairman of NAPMA (the National Association of Professional Martial Artists) and Publisher of Martial Arts Professional magazine. A Georgetown University cum laude graduate, he earned his Executive MBA through the Executive Program at the Daniels College of Business at the University of Denver. He was promoted to 10th Degree Black Belt in April 2026 and inducted into the Tae Kwon Do Hall of Fame in August 2026. Learn more at MartialArtsWealth.com and StephenCOliver.com.
