How to Start a Martial Arts Studio

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Quick Reference

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, Jujitsu, 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.

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.

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.

Costs 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
  • Initial marketing such as Facebook ads or search engine optimization for your website, $500 -$1,000

Steps to Starting a Martial Arts Studio

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
Free sample business plans

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 a 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.

RelatedComparison of Business Entities

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 business bank and credit card accounts makes it easier to track the income and expenses of the business.

Step 8: Get your Marketing Plan in Place

A martial arts studio will need to set aside a budget to cover marketing costs on a continuous basis. Common promotions for a martial arts studio include social media marketing, online advertising, demonstrations, and events. Developing a website can be a significant expense, but it can also give your martial arts studio greater visibility online.

Related: Low-cost ideas to market a new business

Step 9: Get Insurance

A martial arts studio needs several types of insurance for full coverage:

General liability insurance can help protect you from third-party claims of bodily injury and property damage.

Professional liability insurance protects you from claims of professional errors or negligence that result in a financial loss.

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.

Property and casualty insurance protects you if your equipment is damaged.

Martial arts studios may also need insurance specific to the business due to the potential for injuries.

Insurance policies will vary. 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: Common types of insurance a business may need

Step 10: Hiring 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 accounting for your business

How Much Can You Potentially Make Owning 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.

Things to Consider Before Starting a Martial Arts Business

Running a martial arts studio or any small business will have its challenges. You need to be prepared and make sure that you know what you’re getting into.

The costs to run a martial arts studio are significant. You will need to calculate your ongoing monthly expenses and how many members you will need to at least break even every month. Acquiring customers will be a challenge and require ongoing marketing.

The other challenge is that a martial arts studio must maintain the highest safety standards. If someone is injured, you will have liability, so you need to consider this risk.

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.

Finally, you will face competition, so you will have to make your business stand out and provide a high-quality experience.

All of these factors constitute the risks of starting a martial arts studio. You will be putting your money on the line and risk losing it if you are not successful.

Talk to other business owners for tips on starting a business and do your homework to determine costs. Visit other martial arts studios to see how they run their business, what equipment they have, and what classes they offer.

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