Scott and Brandy did $830,000 net last year on more or less $1.3 million gross.<\/p>\n\n\n\n
That is a Brazilian jiu-jitsu school. It is 2,400 square feet. It is on the second floor<\/em> of a shopping center, and the center has parking problems. They have about 340 active students.<\/p>\n\n\n\n Hold that picture, because I want to put it next to the one the industry keeps selling you.<\/p>\n\n\n\n Every year I watch the same performance. Somebody gets on a stage or posts a screenshot, and the headline is seven figures.<\/p>\n\n\n\n “I often see people running around the industry bragging about million-dollar-a-year schools. But most of the ones that I’ve seen outside of our group are \u2014 they’ve got 10, 15,000 square feet, they have 20 or 30,000 a month in overhead, they have 50 or 100 people working for them, they have 20 different programs going on. I’m not interested in that.”<\/p>\n<\/blockquote>\n\n\n\n I said that on our coaching call last week and I meant every word of it. Not because those owners are bad people. Because gross revenue is a vanity metric and I have never once been able to spend it.<\/p>\n\n\n\n Let me name the comparison so nobody has to guess. Dave Kovar has a big 13,000 square foot school. Great guy, great reputation, real contribution to the industry. On the numbers I’ve seen, that school was maybe running 5% net.<\/p>\n\n\n\n “The schools that we have that are doing 80,000 to $100,000 a month are running 50% or more to the bottom line.”<\/p>\n<\/blockquote>\n\n\n\n Run that out. A school grossing $1.2 million at 5% nets $60,000 for the year. Our schools at $80,000 to $100,000 a month are grossing roughly $960,000 to $1.2 million and putting $40,000 to $50,000 a month in the owner’s pocket. Same top line \u2014 one of them makes $60,000 a year, the other makes half a million.<\/p>\n\n\n\n One of those owners has 50 employees, 20 programs, and 13,000 square feet of rent, HVAC, insurance, cleaning, and mats to replace. The other has 2,400 square feet and one curriculum. Which one has the business, and which one has the job?<\/p>\n\n\n\n Here is the mental picture I’m trying to break:<\/p>\n\n\n\n “What people have a tendency to think is schools that are doing 80 or 100, or 120, or 140 a year have, like, this huge facility, and they’re in this perfect area, and so forth.”<\/p>\n<\/blockquote>\n\n\n\n They don’t. I’ll walk you through the ones I know best.<\/p>\n\n\n\n Tim Harrison.<\/strong> Tim’s school is not in, like, a perfect anything. It’s a nice facility in a normal retail shopping center, 2,800 square foot. Inside, it’s immaculate. It’s beautiful. That’s the pattern \u2014 ordinary box, extraordinary interior. Nobody drives past and thinks “flagship.” They walk in the door and think “these people are serious.”<\/p>\n\n\n\n Krista Wells, Mercer Island.<\/strong> About 2,000 square feet in a retail strip with an apartment complex over the top of it \u2014 mixed use, middle of town. Krista went from somewhere down in the teens during COVID to $80,000 to $100,000 a month. Same building. The facility didn’t change; the operation did.<\/p>\n\n\n\n Heidi, Cottage Lake, suburban Seattle.<\/strong> About 2,000 square feet in a normal grocery-store-anchored shopping center. Heidi went from zero to $60,000 a month within 24 months. Zero. Twenty-four months.<\/p>\n\n\n\n Jason Purcell, Queen Anne.<\/strong> I’ll give you this one \u2014 Jason’s school is in a super high-end, nice neighborhood with lots of kids. A genuinely good market. And I’ll also tell you what I told the group: Jason has too much square foot for where he’s at right now. He’s doing tremendous work \u2014 Master Jeff Smith pointed out that Jason did 153 months in a row \u2014 and he’s still carrying more building than his current numbers justify. That’s how easy it is to overbuy space, even for good operators in good markets.<\/p>\n\n\n\n Scott and Brandy.<\/strong> $1.3 million. $830,000 net. 2,400 square feet. Second floor. Bad parking. 340 active.<\/p>\n\n\n\n Notice what is not<\/em> on that list. Nobody has a 12,000 square foot showplace. Nobody is on a corner lot with a monument sign. Two of them have parking or access problems the industry would tell you are disqualifying. And every one of these schools out-earns, at the bottom line, the seven-figure operations people brag about at conventions.<\/p>\n\n\n\n Here’s the operational heart of it. If you take one thing out of this article, take this.<\/p>\n\n\n\n “I just had a conversation with one of our members, and his average revenue per student is only about $130 still. Well, each of those schools I can tell you their average revenue per student is plus or minus $400, $350 to $450 a month average revenue per student.”<\/p>\n<\/blockquote>\n\n\n\n Let me run the arithmetic out loud, the way I do it on the phone.<\/p>\n\n\n\n Scott and Brandy: $1.3 million a year. Divide by 12 \u2014 that’s about $108,000 a month. Divide that by 340 active. You get about $319 per student per month.<\/p>\n\n\n\n Now take our member at $130. Give him the exact same 340 active students. 340 times $130 is $44,200 a month. Call it $530,000 a year.<\/p>\n\n\n\n Same student count. Same rent. Same mats, same insurance, same front desk. One school grosses $1.3 million and nets $830,000. The other grosses about $530,000 and nets a fraction of that, because the fixed costs don’t shrink just because your tuition did.<\/p>\n\n\n\n Flip it the other direction if you want the number that really stings. To hit $1.3 million at $130 per student, you’d need about 833 active students. Eight hundred and thirty-three. In 2,400 square feet. On a second floor. With parking problems.<\/p>\n\n\n\n You can’t do it. And that is exactly why the low-revenue-per-student schools end up in 13,000 square feet with 50 employees \u2014 they’re trying to solve a pricing and program problem with real estate. All they’ve done is buy more overhead to service more students at a margin that was never going to carry it.<\/p>\n\n\n\n So when an owner tells me he needs a bigger building, my first question isn’t “how many students do you have.” It’s “what’s your average revenue per student.” Because $130 to $400 is not a 3x improvement in enrollment. It’s a 3x improvement in the business, using the students you already have, in the building you’re already paying for.<\/p>\n\n\n\n I’m not going to hand you a pricing chart in a blog post \u2014 that depends on your market, your programs, and your upgrade path, and it’s exactly what we work through at the live meetings. But know the target. Plus or minus $400. If you’re at $130, you don’t have a marketing problem yet. You have a math problem.<\/p>\n\n\n\n “That’s the kind of what you want. You want a simple operation, as little brain damage as possible. There’s no reason to have more than one curriculum.”<\/p>\n<\/blockquote>\n\n\n\n I’ll grant the exceptions before somebody emails me about them.<\/p>\n\n\n\n “We’ve had some big schools that maybe have two curriculums running for whatever reason. A lot of times I’ll see a Muay Thai school that wants to have a BJJ program or a BJJ wants to have a Muay Thai program or something like that.”<\/p>\n<\/blockquote>\n\n\n\n Fine. Those two live next door to each other and the student overlap is real. That is the whole list of exceptions I’ll defend.<\/p>\n\n\n\n Every curriculum you add is a separate lesson plan, rank structure, testing cycle, set of certified instructors, scheduling fight on a mat you only have one of, and marketing campaign to fill it. Twenty programs is not twenty income streams. It’s twenty ways to be mediocre and twenty payrolls.<\/p>\n\n\n\n And there’s no reason to have huge overhead. $20,000 or $30,000 a month means you’re clearing $240,000 to $360,000 a year in expenses before anybody eats.<\/p>\n\n\n\n What you do need running all the time is the marketing:<\/p>\n\n\n\n “You’ve just got to have the Parthenon going on all the time, and have those pieces going on.”<\/p>\n<\/blockquote>\n\n\n\n The Parthenon is how I’ve described new-student generation for decades. A Parthenon doesn’t stand on one column. It stands on a row of them, all bearing weight at once. After-school enrichment programs, PE-teacher-for-the-day, back-to-school and meet-the-teacher booths, blockbuster movie events, charitable fundraiser flyers, paid advertising, referral systems \u2014 those are the columns. Knock one out and the roof holds. Try to hold the roof up with one and you’re an algorithm change away from a very bad year.<\/p>\n\n\n\n Simple operation. One curriculum. Small footprint. Every marketing column loaded. That combination is what produces 50% to the bottom line. It’s not complicated. It’s just not what anybody’s selling you.<\/p>\n\n\n\n I’ve been doing this since 1983, and the failure modes are boringly predictable.<\/p>\n\n\n\n “It’s very predictable. You start getting momentum on the marketing, and then you get comfortable with your new student flow, and then you start gradually taking your foot off the gas, and then all of a sudden you can’t figure out why you’re not getting enough new enrollments. And you discover you’re just not doing enough stuff to generate new enrollments. That’s a very common syndrome.”<\/p>\n<\/blockquote>\n\n\n\n Grow, grow, grow \u2014 get comfortable \u2014 coast \u2014 panic. The lag is what fools people. You stop doing school programs in September and the hole doesn’t show up until December, by which time you’ve forgotten what you stopped doing. That’s why the Parthenon has to be on a calendar, not on a mood.<\/p>\n\n\n\n This one is worse, because it feels like success.<\/p>\n\n\n\n “The mistake is ‘I’m perfectly staffed.’ I’ve now got this head instructor who’s great, I’ve got this program director who’s great, everything is going well.”<\/p>\n<\/blockquote>\n\n\n\n Krista is the case study. She’d gone from down in the teens during COVID up to $80,000 to $100,000 a month. She had the perfect instructor and the perfect program director. Within about two weeks of each other, both decided they were going to go do something else. She had to replace both full-timers at once, at the top of her growth curve.<\/p>\n\n\n\n And it wasn’t a fluke. Krista’s school, Katie Gilbert’s school, and Jason Purcell’s school all three went through the exact same cycle with staffing.<\/p>\n\n\n\n Master Jeff Smith put the fix better than I could:<\/p>\n\n\n\n “That’s why it’s so critical to have your instructor training program developed, so when you do lose some of your key staff members, you’ve got somebody waiting to take their place.”<\/p>\n<\/blockquote>\n\n\n\n He also named the reason it keeps happening, and it’s counterintuitive:<\/p>\n\n\n\n “People start making so much money being a head instructor or whatever, then a lot of times they think they can do it themselves, so maybe they go off and do that.”<\/p>\n<\/blockquote>\n\n\n\n Read that again. Your best instructors leave because<\/em> you succeeded. You paid them well, you gave them real responsibility, and the same entrepreneurial itch that got you into this got into them. Punishing that is stupid. Planning for it is free.<\/p>\n\n\n\n “Once you get your staff in place, and your growth starts going up, remember, they might not be there forever, so you better have somebody ready to take their place.” \u2014 Grand Master Jeff Smith<\/p>\n<\/blockquote>\n\n\n\n Bench strength is not a luxury of the big school. It’s what keeps the small, high-net school from getting knocked back down.<\/p>\n\n\n\n Yanguang Shi \u2014 we call her Sherry \u2014 sat in on the Million Dollar School meeting in Seattle as a fly on the wall. Her school isn’t there yet. What she reported back was the most useful thing on the call.<\/p>\n\n\n\n “Even though we know many of the structures in place for Master Oliver’s system, there’s still people in the million-dollar program that are still struggling with a lot of the basics. Like, they had to go back and relearn how to run an intro class, or how to run a booth event.” \u2014 Yanguang Shi<\/p>\n<\/blockquote>\n\n\n\n Million-dollar operators. Relearning the intro class.<\/p>\n\n\n\n “Just because you’re at a million-dollar school doesn’t mean your problems end.” \u2014 Yanguang Shi<\/p>\n<\/blockquote>\n\n\n\n Master Smith calls these happy problems: “If I have a million dollar school and I have problems, I call those happy problems.” He’s right, and it’s a generous way to put it.<\/p>\n\n\n\n I’d say it harder. Frankly, the bigger you get, the bigger your problems. I heard a CEO of a billion-dollar company say that if he’d known all the problems he was going to have on the way, he probably wouldn’t have done it. What happens is that at every level, you’re ready to deal with bigger-level stuff. The problems don’t get smaller. You get bigger.<\/p>\n\n\n\n Which is why the excuse-hunting has to stop. Sherry visited all three Seattle schools and came back with this:<\/p>\n\n\n\n “There’s no perfect scenario, there’s no perfect location. Everyone’s location had some issue, so it doesn’t really matter, I think. Those things can be overcome. And we can all get there.” \u2014 Yanguang Shi<\/p>\n<\/blockquote>\n\n\n\n Every one of those locations had a problem. Jason has water in three directions and a ferry ride on one of them. Krista’s on an island. Scott and Brandy are upstairs with bad parking. They all make more money than the guy with the perfect corner lot.<\/p>\n\n\n\n Revenue per student is only half the math. The other half is whether that student is still there in month eighteen. And here’s what Sherry saw in Seattle that she brought straight home:<\/p>\n\n\n\n “The first group class, which is the second intro \u2014 they treat those students like, I call it the golden egg. Like, when the golden egg walks in the door. They cradle it. All the instructors immediately go there, they introduce themselves, they know their names, they carry her over to the mat, and then they introduce her to all the students, they play that name game. They handle her with care, like kid gloves.” \u2014 Yanguang Shi<\/p>\n<\/blockquote>\n\n\n\n Then her honest assessment of her own school: “which is something our school wasn’t really doing. We just kind of threw them in there.”<\/p>\n\n\n\n Connect this to the revenue-per-student number, because they are the same conversation.<\/p>\n\n\n\n A student at $400 a month who stays 24 months is worth $9,600. That same student, thrown into a group class where nobody learns her name and nobody walks her onto the mat, quits at month three and is worth $1,200. You did not lose $130. You lost $8,400 \u2014 and you have to go buy her replacement at full price, out of your marketing budget, forever.<\/p>\n\n\n\n Every instructor on the floor moving toward the new person the moment she walks in costs you nothing. Zero dollars. It is the highest-ROI operational change available to any school owner reading this, and the million-dollar schools do it religiously \u2014 which is exactly why they’re million-dollar schools.<\/p>\n\n\n\n So let me tell you where I’m actually pointing these schools.<\/p>\n\n\n\n “A lot of these schools \u2014 my goal for them is for them to be 2 million within a year or so. Again, in 2,400 square feet or 2,500 square feet, something like that.”<\/p>\n<\/blockquote>\n\n\n\n Two million dollars. Out of the same second-floor unit with the parking problem. Out of the same grocery-anchored strip center. Not by adding a second location, not by adding a fifth curriculum, not by signing a 13,000 square foot lease and hiring 50 people.<\/p>\n\n\n\n By raising average revenue per student toward $400. By keeping one curriculum and low overhead. By running every column of the Parthenon all year instead of coasting after a good quarter. By building bench strength before the head instructor quits. And by treating every new student like the golden egg she is.<\/p>\n\n\n\n That’s the whole model. It is not glamorous and it does not photograph well, which is precisely why the people bragging loudest are not the people making the most money.<\/p>\n\n\n\n If you’re at $130 a student in a building you can’t fill, you don’t need a bigger school. You need a better one.<\/p>\n\n\n\n Is a million-dollar martial arts school actually profitable?<\/strong><\/p>\n\n\n\n Not necessarily. Many million-dollar schools run 10,000 to 15,000 square feet, $20,000 to $30,000 a month in overhead, 50 to 100 employees and 20 programs. One well-known 13,000 square foot school was running roughly 5% net. Martial Arts Wealth schools doing $80,000 to $100,000 a month run 50% or more to the bottom line in about 2,400 square feet.<\/p>\n\n\n\n What is a good average revenue per student for a martial arts school?<\/strong><\/p>\n\n\n\n Plus or minus $400 a month \u2014 a $350 to $450 range. That is what the high-net schools in our group run. A typical school runs about $130. At 340 active students, $130 produces roughly $44,000 a month; the same 340 students at $319 produced $1.3 million a year and $830,000 net for one of our BJJ schools.<\/p>\n\n\n\n How much square footage does a high-profit martial arts school need?<\/strong><\/p>\n\n\n\n Far less than the industry assumes. Scott and Brandy do $1.3 million in 2,400 square feet on a second floor with parking problems. Tim Harrison’s school is 2,800 square feet in an ordinary retail center. Krista Wells and Heidi each run about 2,000 square feet and do $60,000 to $100,000 a month.<\/p>\n\n\n\n Should a martial arts school run more than one curriculum?<\/strong><\/p>\n\n\n\n No. You want a simple operation with as little brain damage as possible, and there is no reason to have more than one curriculum. The exceptions are narrow \u2014 a Muay Thai school adding BJJ, or a BJJ school adding Muay Thai. Every additional curriculum adds overhead, staffing and complexity without adding revenue per student.<\/p>\n\n\n\n Why do martial arts schools stall out after a growth spurt?<\/strong><\/p>\n\n\n\n Two predictable cycles. First, owners get momentum on marketing, get comfortable with new-student flow, gradually take their foot off the gas, then cannot figure out why enrollments dropped. Second, owners decide they are perfectly staffed \u2014 then the head instructor and program director quit within two weeks of each other, as happened at Krista Wells’ school.<\/p>\n\n\n\n Everything above came out of one hour on a coaching call. The people are real, the square footage is real, the net numbers are real.<\/p>\n\n\n\n Our next Quick Start<\/strong> meeting is October 1st and 2nd<\/strong> here in Colorado \u2014 fly into Denver International, DEN. The 1st is at my home in Evergreen, the 2nd at the small hotel we use here. Leadership Mastery runs October 2nd and 3rd<\/strong>, so on the 2nd you’ll overlap with most of the million-dollar school owners, because they come to every meeting. Ask them their revenue per student. Ask them their square footage. Ask them what happened when their head instructor quit.<\/p>\n\n\n\n And bring your staff \u2014 not only can you invite them, you’re encouraged to. When you go back and tell your team what other schools are doing, they tend not to believe you. When they hear it directly from the other owner’s mouth, it’s much more believable and much easier to get implemented.<\/p>\n\n\n\n Get registered for Martial Arts Wealth Mastery<\/a> and I’ll see you in Evergreen.<\/p>\n\n\n\n \u2014 Stephen Oliver, MBA, 10th Degree Black Belt<\/em><\/p>\n\n\n\n Book a call and see whether Martial Arts Wealth Mastery is a fit for your school<\/a><\/p>\n\n\n\n“I’m Not Interested in That”<\/h2>\n\n\n\n
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What the Real High-Net Schools Actually Look Like<\/h2>\n\n\n\n
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The Number That Decides All of This: Revenue Per Student<\/h2>\n\n\n\n
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One Curriculum, Low Overhead, and the Parthenon Running All the Time<\/h2>\n\n\n\n
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The Two Ways I Watch Good Schools Stall Out<\/h2>\n\n\n\n
1. You take your foot off the gas<\/h3>\n\n\n\n
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2. “I’m perfectly staffed”<\/h3>\n\n\n\n
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The Problems Don’t End \u2014 They Just Get More Expensive<\/h2>\n\n\n\n
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The Golden Egg: The Retention Half of the Equation<\/h2>\n\n\n\n
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Two Million Dollars in 2,500 Square Feet<\/h2>\n\n\n\n
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Frequently Asked Questions<\/h2>\n\n\n\n
Come See the Numbers in Person<\/h2>\n\n\n\n
Related Reading<\/h2>\n\n\n\n
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