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How to Start a Martial Arts Studio

How to Start a Martial Arts Studio

Are you a master of martial arts? If you have martial arts expertise and you’d like to teach your skills, starting your own martial arts studio may be right for you. You can start a new career and be your own boss.

Business Overview

A martial arts studio offers various types of martial arts classes, usually to both children and adults. Martial arts are popular for their many benefits, including self-defense, exercise, stress relief, and practicing coordination. Parents often enroll their children in martial arts classes so that they can reap the benefits early in life.

Industry Summary

According to IBIS World, the market size of the martial arts studio industry is $8.7 billion as of 2021 and is expected to increase by 6.7% during 2021. For the last five years, it has increased 2.1% per year. The demand for martial arts classes is expected to continue to increase. It is somewhat vulnerable to economic fluctuations in the overall market because it is not considered a necessary expense.

Industry Trends

There are different types of martial arts such as karate, Jiu Jitsu, Krav Maga, Tae Kwon Do, Kung Fu, Aikido, and Judo. Some studios focus on one particular style, while others offer several types. This choice should depend on the interests of your clientele and access to skilled trainers. 

Self-defense classes are continuously a trend in the martial arts studio business. Tai Chi for its meditation benefits, boxing, and mixed martial arts are also trends. It is important to keep up with what is trending in popularity in the martial arts market so that you can meet customer demands.

Kids martial arts lessons and summer camps are an increasingly popular offering as parents look to reinforce positive reinforcement and self-confidence through the discipline of martial arts training. 

Target Market

Your target market will be people interested in self-defense as well as health and fitness. Parents of kids of all ages are also a large part of your target market.

Be sure to have classes that are convenient for your customers and not just yourself. For example, youth classes should be after school and on the weekends, while adult programs should be held in the mornings, at lunchtime, and after work.

Skills, Experience, and Education Useful in Running a Martial Arts Studio

There are several specific skills and education that you will need to open a martial arts business.

  • Certification. While not required, being certified brings credibility and a better understanding of teaching the form of martial arts you are offering.
  • Experience. You should have martial arts expertise and preferably experience teaching martial arts.
  • Business knowledge and experience. You will need to have some basic knowledge of marketing, finance/accounting, and human resources.
  • Customer service. You’ll need to know how to structure classes customers want to come back for. Being the best instructor alone doesn’t always equate a profitable business.

Checklist for Starting a Martial Arts Studio

Opening a martial arts studio can be a daunting task. There are so many things to consider – from the type of martial arts to offer, to the hiring and training of instructors, to the marketing and promotion of your business. Use this checklist as a guide to help you get started on the right foot.

Step 1: Write your Business Plan

After coming up with the idea, the next step in starting your martial arts studio should be to write a business plan. The business plan will make you focus on some important aspects of the business, such as who your customers are, how you plan to reach them, projecting sales and expenses, what makes you better than your competitors, and more. You’ll also need to do some research to calculate exactly what your startup expenses will be and what your ongoing expenses will be.

Not only will a bank require you to have a business plan if you need financing, but multiple studies have shown that having a good business plan increases the odds of starting a successful business. Writing the plan helps you to think through all the aspects of the business and then serves as a guide as you begin.

Related: How to write a business plan

Step 2: Name the Business

Finding the perfect martial arts studio name can be challenging. Not only does the name have to reflect what you do and be appealing to customers, but it also has to be available to use. You can check your state’s website to see if the name is available and register your name. Your name should make you stand out, reflect your brand, and tell potential customers exactly what you do.

Related: Tips and ideas for naming a martial arts studio

Step 3: Form a Business Entity

A business entity refers to how a business is legally organized to operate. There are four primary business entities to choose from, which include the sole proprietorship, partnership, corporation, and Limited Liability Company (LLC). Each type of entity has its own pros and cons, such as liability exposure, costs, and administrative requirements.

When deciding on which business entity is best for a martial arts studio, it normally comes down to the sole proprietorship and Limited Liability Company.

A partnership opens the owners up to unnecessary personal liability because if a partner does something to get the business sued, or runs off with cash from the business, the other partners are personally liable to repay. The corporation can be a good choice because it separates the business assets from the owner’s assets. If the corporation is sued or certain business debts can’t be paid back, the owners aren’t personally responsible to repay them. The downside to the corporation is that it is more complicated than all the other entities and requires more administration than the LLC. If you plan on raising a lot of investment though, the corporation is usually the better choice.

That leaves the sole proprietorship and LLC.

The sole proprietorship is the least expensive and easiest entity to start which is appealing. The downside is the owner is personally liable should anything happen to the business, which is an important consideration. The LLC offers the ability to operate as a sole proprietorship with the liability protection of a corporation. Depending on the state, the cost to form an LLC runs from $40 – $500, which is pretty inexpensive for protecting the owners from business-related lawsuits and certain debts.

Related: 3 steps to forming your LLC
 

Forming an LLC sounds complicated and expensive, but using an entity formation service guides you through the process so you know it was done right.


Some popular LLC formation services include:


IncFile - $0 plus state fees & free registered agent for 1 year!

IncAuthority - $0 plus state fees & free registered agent the first year!

ZenBusiness - $49 plus state fees & free registered agent for 1 year!

Step 4: Select your Location

There are successful martial art schools that operate out of a simple garage all the way to dedicated studios. Some may even rent a small space to get started to see if there is interest in their classes.

Regardless, your studio should be in a convenient location with easy access for your target customers. You should also avoid being near another martial arts training facility so that there is less competition in your specific area. A studio in a high-traffic area will cost more to rent, but it can also generate walk-in business and general public awareness.

A facility with an already existing bathroom and shower, or even better, a locker room, will be an asset many students will be looking for – and save you considerable money over having to add one.

Related: Choosing a business location

Step 5: Apply for Business Licenses and Permits

You may need to obtain certain business licenses and permits. These permits and licenses can vary based on the state and town where the business is located. Some common local, state and federal registrations a Martial arts studio may need include a sales tax permit and an Employer Identification Number.

Related: Common business licenses, permits, and registrations by state

Step 6: Find Financing

Coming up with a good business idea and having the skills to run it are one thing, but getting the funding to start a martial arts studio is another. In order to get a loan, the borrower(s) will need to have good credit and be able to invest 15-25% of their money towards the total start-up costs.

Related: Finding the money to start a business

Step 7: Open a Business Bank Account

Keeping your business and personal finances in separate bank accounts is important to track the income and expenses of your business and identify trends.
 
Many banks offer free business checking accounts, so be sure to find a cost-effective option for your business.

Step 8: Get your Marketing Plan in Place

Acquiring customers will be a challenge and require ongoing marketing.

Common promotions for a martial arts studio include social media marketing, online advertising, and direct mail. demonstrations, and events. Offering demonstrations, hosting competitions, and bring-a-friend promotions are great ways to bring more people into your studio.

Related: Low-cost ideas to market a new business

Every business is going to need a logo. Make a professional logo in no time with the free logo makers from BrandCrowd and Canva.

Step 9: Get Business Insurance

The other challenge is that a martial arts school must maintain the highest safety standards. If someone is injured, you will have liability, so you need to consider insurance to protect the business. A couple of common types of coverage include:

– General liability insurance can help protect you from third-party claims of bodily injury and property damage.
– Worker’s compensation insurance covers expenses like medical bills and legal fees that a business might face if an employee were ever hurt while working.

The cost for a martial arts studio insurance will vary based on a number of factors. To get the most accurate idea of what to budget for insurance, request quotes from multiple providers. When comparing the quotes, consider not only the premiums but also how the plan exclusions, coverage limitations, and deductibles compare.

Related: What types of insurance does a martial arts studio need?

Step 10: Hire Employees

You will need employees to help you run your martial arts studio, and your teachers should be certified instructors.

In addition to salary costs, your budget will also need to include other employee-related expenses. Workman’s comp insurance, unemployment insurance, and paid time off are common expenses that a business will need to cover when hiring staff.

Related: Hiring your first employee

Step 11: Set up an Accounting System

Setting up an accounting system for your martial arts studio is critical to the long-term success of your business.

Staying on top of taxes not only keeps the business out of trouble with the government but the numbers can be used to track and monitor trends and cash flow in the business and maximize profits.

Related: Setting up the accounting for your business

The thought of accounting can be intimidating for a lot of new entrepreneurs. There are a number of ways of handling bookkeeping, from DIY to hiring a bookkeeper. These include:

- Pen and paper - Low expense, but difficult to track.
- Spreadsheet - Low expense, but easy to make errors.
- Accounting software - Medium expense, but owner typically inputs expenses. Some great accounting software programs include Freshbooks or Wave Accounting.
- Hire a bookkeeper - Higher expense, though very affordable at $100-$200 per month in most cases. A dedicated bookkeeper will probably save money because, in addition to handling all of the bookkeeping (so you can focus on the business), they also provide personalized tax advice and ensure the business is in compliance.

Find bookkeepers in your local area or use a service like 800Accountant.

How much does it cost to start a martial arts studio?

Here are the typical costs you will face when you open a martial arts studio.
– Setting up a business name and corporation costs approximately $200
– Business cards, brochures, postcards for marketing $200 – $300
– Website setup $100 –$200 for a basic, do it yourself website, $1,000 – $2,000 for a professional site
– Equipment including mats, a ring, safety equipment $1,000 – $2,000
– Deposit for the studio lease, utilities, and more $500 – $1,000
– Leasing space for your studio (dojo) $750 – $2,500 for one month
– Studio space preparation (walls, reception area, locker room, etc.) $3,000 +
– First year of liability insurance, worker’s compensation, and property-casualty insurance $600 – $1,000

How profitable is a martial arts studio?

Customers of a martial arts studio generally pay an annual membership fee plus a monthly fee for a certain number of private lessons or classes. If you have 300 students that give you average revenue of $150 per month, you can make $540,000 per year before expenses.

Additional revenue can be generated by selling uniforms, kick pads, gloves, and more.

Are there grants to start a martial arts studio?

It’s extremely rare to find a grant to start a martial arts studio. If you search for business grants, you will come across a lot of scams and misinformation. Occasionally an organization will offer grants to start a business, however, be skeptical and don’t provide any sensitive personal information or pay money to get more information.

Legitimate federal grants can be found at Grants.gov and you can check on your state’s economic development office to see if they have any grants available.

What is the NAICS code for a martial arts studio?

The NAICS code for a martial arts studio is 611620, which is classified under Sports and Recreation Instruction.

The NAICS code (North American Industry Classification System) is a federal system to classify different types of businesses for the collection and reporting of statistical data.

Related: What is a NAICS code and how to find yours