Budo & Business:
Dispelling A Myth . . .
by Gary Gabelhouse
In my conversations and interactions with martial
artists over the years, I have consistently observed
that budoka equate business, business executives and
commercial success with a number of distasteful and/or
negative attributes . . .
Many budoka associate a kind of anti-dojo kun with
successful business and business executives. This
is a myth-and a tragic myth, in that this perception-this
discriminatory view of business and good business
executives, can forever limit the budoka with regard
to the growth of a prosperous, yet traditional dojo.
In my nearly thirty years as a business owner and
business executive, I have had the opportunity to
work with many extremely talented and successful business
executives. As well, I have worked within the corporate
cultures of many successful businesses-both large
and small. The things I find in common with regard
to successful executives and successful businesses
are antithetical to the prevalent budoka view. I find
. . .
. . . the list of positive attributes can go on and
on. The corporate cultures and the business leaders
who manage them, are made up of good people who have
a penchant to work hard, smart and are not afraid
of commercial success.
Sure, there are always bad eggs. But those are the
exception, not the rule when it comes to successful
businesses and business leaders.
Another element of the myth of budoka perception is
that one can sell only shallow and/or flashy martial
arts to the buying public. The consumer only wants
a quick, painless black belt. The consumer only wants
a trendy gimmick such as Tae Bo or Kardio Karate.
The consumer only wants fast results and the ability
to kick a mugger's butt after watching a video purchased
Likewise, it is often perceived that traditional,
deep and fundamental martial arts, is something that
one cannot successfully sell to the buying public.
The consumer does not want countless repetitions of
blocks, punches and kicks. The consumer does not want
the countless repetitions of kata. The consumer doesn't
want to sweat. The consumer doesn't want to ache all
over and take one stair at a time in the morning.
The consumer doesn't want to attend a school of no
These perceptions are inaccurate. The key is education
of the consumer and the consumer market . . .
In business, one learns quickly there are two elements
of a sale. Two things happen before money is spent
on almost anything:
One must educate before one can close the sale. One
cannot even ply the sales trade until the education
job is done first-and done with excellence.
Traditional martial arts, as most other goods or services,
cannot be just sold. First, the consumer must be educated
about traditional martial arts-its benefits and positives.
After that is done-and only after that is done, then
one must convince the consumer that his/her dojo is
the best to realize those benefits-the sales effort.
In summary and with regard to the budoka myths of
business . . .
Business is not an evil and arcane practice and business
people are not evil slicksters with no moral fiber.
Business is a noble pursuit that requires skills that
are in sync with the values budoka find admirable.
If one includes an education element, traditional
martial arts can be successfully sold to the consumer.
Just About Ready For Business . . .
Before I go much further, I would like to clarify
the following recommendations are based on two premises:
Your quality of martial arts instruction is, overall,
good; The higher the quality of instruction, the more
dramatic the results from the following recommendations.
Your dojo or potential dojo is in an area with a large
enough population to support a dojo.
On average, there are only 3-4% of the population
training martial arts. If your would-be dojo is located
in a town of 100, you will likely be competing for
three or four students. Likewise, if your trade area
(generally, a 10-20 mile radius from where one lives
and/or works) has a population of 1,000, you will
likely be competing for thirty or forty students.
Let the Field Goal Kickers Kick the Field Goals
. . .
I cannot even begin to count the number of head instructors
and Sensei who have told me, "I'm not a very good
business person." Well, that's no surprise! Most people
are not very good business people. Successful business
executives have a number of talents and skills not
generally present in most people. Truly talented business
executives are rarer than hen's teeth. Rather, the
skills and talents of these executives are rare. These
unique talents and skills allow them to succeed…where
others fail. They are able to negotiate even the most
laborious of business duties and LOVE it…where others
give up…and fail. They are able to think laterally
and innovate where others plod forward…and fail. They
are able to conceptualize a complex problem and clearly
and simply execute the best solution where others'
vision is clouded.
Yet, when it comes to running a business, or in this
case, running a dojo as a business, the head instructor
will often just put his or her shoulder to it, and
set themselves up for failure.
A classic example, my teacher was fumbling the business
end of the dojo, and was just hanging on for years-sometimes
paying out money from his Marine pension in order
to keep the dojo door open and to teach us. During
a particularly turbulent time (financially) at our
dojo, a dojo brother of mine came over to talk with
me one night. In a passionate way, he taught me a
great deal about what should be happening in the dojo
and with our teacher in particular.
Agitated, he asked me, "Do you have anything to make
I showed him to the cupboard and he started taking
out flour, sugar, baking powder, cinnamon, etc.
He said, "Our teacher knows how to make the best cookies
in the world. Let him make cookies. He's no good about
buying ingredients at a sharp price. He's no good
at selling his cookies. He's no good at packaging
cookies. He's only good at making cookies. Let him
make cookies, and you do the rest."
I understood. My teacher was best at teaching martial
arts. I should just let him teach, and take on the
business of the dojo-the things he was no good at.
You should let the field goal kickers kick the field
goals. Let the business executives manage the business
of the dojo.
The first thing I recommend is for you as head instructor,
take an asset assessment of your dojo--I'm talking
about the people and professional skills of your students
and/or their parents. If you do not personally have
a natural ability and attraction to business issues,
and/or you do not absolutely LOVE the business side
of the dojo, I would find the most successful business
person in your dojo and appoint them as Business Director,
as my teacher did.
Even if you are business-oriented, I would contend
it be in your best interests with regard to Budo,
to appoint someone as Business Director. You, as the
head instructor and "spiritual center" for your dojo
must NOT focus over much on these secular things.
I am not being funny here, for I feel there is great
peril in one doing so. Because I have taken the responsibility
to do so, my teacher does not have to look at everything
through a commercial filter. He still looks and sees
students--not clients. He still looks at Shomen in
our dojo and sees his responsibility to teach as he
was taught--he does not see a capital expense for
which to amortize our income. He still looks for all
of the answers on the floor, not in the balance statement
and his net worth.
I cannot state strongly enough that the first step
of commercial success is, in my opinion, found in
commercial abdication by the head instructor immediately
followed by the enlistment of a commercial leader
amongst the students or parents. If you do have a
business mind and want to give it a go without abdication
and managing the job out--enter with great caution,
for therein lies an enigma that poses a threat to
your teaching and your learning-a conflict with Budo--in
Find the best business acumen in the dojo. Then, both
of you sit down and go over your goals, objectives
and develop answers to the following questions:
What is your average, monthly income, accounting for
dues, testing and other fees?
What is your monthly cost of operating the dojo-not
accounting for any wage taken by the head instructor?
This includes the following:
Advertising Commitments (i.e. Yellow Page Ad)
What is the income you would like to see for yourself
What is your total operating costs, including the
What is shortfall (if any) between your current, monthly,
average income and that you need to realize your targeted
Given your dues amounts and taking into account your
monthly short-fall (if any), how many new students
must you have paying dues in order to balance your
With the answers to these questions, you are now ready
for the second phase of transitioning the dojo to
a business that is not in conflict with budo.
Marketing: The Business Life or Death of the Dojo
. . .
Peter Drucker is a business pioneer and considered
by many to be the father of business management. I
met Mr. Drucker and talked with him in his summer
home in Estes Park, Colorado. What he told me (actually
quoted it from one of his books) changed my life as
a business executive.
Paraphrased . . .
There are two and only two real functions in business-innovation
and marketing. everything else are just costs.
The innovation in budo is already manifest-by masters
of old and today's budo pioneers who continue to evolve
their arts, building on tradition. As well, you the
head instructor may also add to the innovative equity
of the art. Innovation is what creates the product
that is then sold (given to those who seek out) in
order to meet a need. The innovation (product) the
dojo conveys to students (customers) who have a need,
was created in the crucible of budo. All surviving
arts have significant innovation and have need basis,
since they have survived through generations of changes.
Customer Need Innovation
Need for Self Defense Martial Art
Need for Personal Growth Martial Art
Need To Get Fit & Have Fun Tae Bo or MA
Since innovation is generally manifest in a traditional
martial art, marketing is the key to the success of
the traditional dojo. A traditional dojo will generally
live or die (financially) based on its marketing.
Marketing is communication to consumers, selling them
on becoming a dojo member. Good marketing finds high-potential
prospects for students and then conveys a message
that makes them want to join.
Market research is the cornerstone for marketing.
To that notion, I'd next recommend you survey your
students, and try to find out why they're there in
the dojo and not somewhere else. If you don't have
a dojo yet, here are some national statistics about
why people train martial arts:
Reasons for Training Martial Arts
Personal Growth 56%
Since you likely need to add students, find out where
and how they first became aware of the dojo. If you
don't have a group of students to survey, here are
some more national statistics that may help:
Where/How First Aware of Dojov
Source % Dojo Members Citing . . .
Word of Mouth 67%
Storefront/Window Specials 20%
Telephone/Media Advertising 13%
In another national survey of dojo members, the following
were the priorities with regard to what attributes
were important to them with regard to them continuing
to be members of the dojo:
Importance of Dojo Attributes
Attribute Importance Rating*
Quality of Instruction 3.00
Dojo Reputation 2.73
Friendliness of Students 2.73
Price-Value of Dues 2.67
Time In Business 2.47
(No) Contracts 2.33
* 4=Critically Important; 3=Very Important; 2=Somewhat
Important; 1=Not Important
Marketing is a never-ending job, much like painting
the Golden Gate Bridge. You have to keep doing it
over and over, due to the fact that new students generally
quit. In our studies of martial artists, only 20%
of those who had trained in martial arts, are still
training. Basically, you have a high churn rate, regardless
of the quality of the instruction. One should just
get used to the fact that a significant number, if
not most new students will quit. As frustrating as
it may seem, you must continually build your dojo
membership. This requires chronic marketing. After
years of marketing, we now have recruited so many
members, even with most quitting, those that have
stayed are large enough in number to be successful
in terms of meeting our financial goals and objectives.
Even then, we are generally marketing in the face
of this apparent stability.
When marketing a dojo, one can often get discouraged
from what appears to be poor results. One needs to
change how one thinks about the marketing process
and what is successful and what is not-from a business
perspective. My teacher one time said he was disappointed
in that a special offer I ran only brought in six
students. In my discussion with him, I said, "We will
keep them for about one month, and half of them will
quit. Another two months, and all but one will quit.
One will likely be here for at least a year. At $50
per month, that was $1,050 in dues we didn't have
prior to the special. My point is, a new student is
potentially, worth a lot of money-between $500-$1,000
per year (depending on location). When you are chronically
generating new students-one here, three there-the
dues add up.
When looked at from a cost-of-sales standpoint, the
good business executive knows it sometimes costs money
to make money. If one had to buy an advertisement,
or otherwise spend cash (try to avoid cash expenditures
whenever possible), and the result was a few new students,
the cost of student acquisition was probably a good
value-providing a good return on advertising investment!
So, marketing is critical in the business success
of a traditional dojo. And the marketing need not
compromise the budo imperative. One need not embellish
or misrepresent a traditional art in order to sell
it to the market. I have found marketing materials
can be generated free of charge (donated by a printing
company whose owner was identified in the dojo asset
assessment) and generally do a good job in communicating
to your target population.
In our years of marketing, we have found some things
to work, and some things to not work. Keep in mind,
our dojo is only one traditional dojo in a Midwestern
community of 250,000 people with three universities
and colleges. Things that work for us may fail for
a Dojo in Southern California. However, here are some
things to consider . . .
Marketing Things That Tend To Work
Coupon Books: We are chronically in the coupon books
that are sold, often by charities, in the community.
We offer a coupon for one months free lessons. We
generally generate between fifteen and twenty students
per coupon book. Those student then convert as normal.
The key is the bang we get for absolutely no buck.
Coupon books are free. Great media-no cash spent.
Yellow Pages Ad: This is the only paid media our dojo
does now. It does work. Most other paid media we have
tried does not work for us. It is true, as evidenced
in our studies the yellow pages are often the first
place where students become aware of your dojo.
Storefront Signage: If at all possible, get a dojo
sign up and visible for passing consumers. If your
dojo is in a heavy-traffic area, such as a strip mall,
or on a major street, advertise your specials and
events in the windows for all passers by to see.
Free/Charity Self Defense Seminars: Work with a Food
Bank and give a FREE self-defense course to the community
(participants bring a food item). This has worked
incredibly well for us. We have converted many students
from our self-defense seminars. Also, get the local
TV stations to cover it--we get literally thousands
of dollars of free TV time by doing these kinds of
activities. This is a win-win-win. The participants
receive, for all consideration, a free self-defense
seminar. The charity receives donations. The dojo
receives new students and the associated dues.
Gi & First Month Special: This traditional, special
approach has worked well for us. In Lincoln, Nebraska,
we offer a gi and one-month's karate lessons for $39.95.
Lightweight gis are really inexpensive. We generally
advertise this with posters in our dojo window as
well as flyers distributed throughout the community
by our students.
Summer Specials: In May of each year, we offer 3 months
of classes for youth at a fixed rate ($90 for the
summer in our case. Regular dues are $45). This offers
parents some summer activities for their children.
New Student Competition: We stage a competition within
the dojo and points are given to students if they
enlist a new student. Points vary and increase with
the duration the new recruit stays. The competitions
are generally run over a three-month period. The competition
winner gets a new gi.
Buddy Nights: We have, every third Wednesday, what
we call a Buddy Night. Students can bring a friend
or relative to train at no cost. The Buddy Night training
sessions are modified to accommodate brand new students.
Flyer Posting Party: Every three to six months, we
have a posting party. We meet at the dojo and students
are assigned certain areas of the community where
they will post the general dojo flyer. We divide into
groups and can canvas the city in a couple of hours.
We meet back at the dojo and go to the home of the
host (generally the Business Director) for a post-posting
party. This activity increases the awareness for the
dojo and requires no budget (the flyers are donated.
Benefit Tournament: Twice every year we stage a benefit
tournament. Over the years, we have worked with the
Special Olympics, the Shriners Hospital Fund, Santa
Cop, and a number of other charities. A pre-determined
percent of the net profits of the tournament are donated
to the charity. We generally gross about $3,000-$4,000
from the event with costs of facilities and trophies
being about $1,000. Sometimes the facility is even
donated. We then split the gross profits with the
charity. We generally get about $2,000 and the charity
gets the same. EVERYONE WINS!
Seminars: We stage seminars at our dojo for the general
martial arts community. This generates extra revenue
to augment dues. The seminars tend to be related to
the martial arts, but are not conflictive with regard
to Ryu ha or styles. For example, we have had the
following types of seminars and had good attendance
from other dojo and styles: Tea Ceremony / T'ai Chi
/ Yoga / Chi Gong / Neurology Seminar (conducted by
a dojo member who is also a neurosurgeon).
Youth Lock-ins: For youth members of the dojo we stage
overnights or lock-ins. We try to stage these events
around times when parents have trouble finding baby
sitters-Valentine's Day, New Year's Eve, or around
school holidays. Students are encouraged to bring
friends and relatives. This activity generates additional
revenue and recruits new students.
Demonstrations: We conduct numerous demonstrations,
and these tend to generate interest in the dojo (be
sure to have flyers to give interested people at the
demonstration). Places to do demonstrations are wide
and varied. For example, each year we have a half-time
demonstration at a State University basketball game.
We also do a demonstration at the State Fair. We have
done demonstrations at Asian Cultural Festivals at
the University. Special retail events also offer a
demonstration opportunity. Demonstrations do generate
interest and you must be armed with dojo information
in order to capitalize, so to speak, on the opportunity.
These marketing-oriented activities serve to recruit
for new students as well as generate revenue that
can supplement dues. With an aggressive marketing
program as outlined here, the dojo should receive
enough income so as to not have to be a black belt
factory, or otherwise be in conflict with the spirit
While these things have tended to work to generate
new students and new revenue, there are some marketing
activities we've tried that didn't work for us . .
Marketing Things That Tend To Not Work
Free local shopper newspaper ads tend to not work
Free local sports newspapers tend to not work for
Newspaper ads tend to not work for us.
Radio ads tend to not work for us.
TV ads are too expensive (We get good TV exposure
Marketing can bring in new students, yet student retention
is also critical in the business success of a dojo.
Here marketing has hardly any impact. The program
of the dojo and the training experience dictates one's
student retention. However, there are some things
that can be done to increase student retention.
If you're like us, you lose the largest percentage
of new students within the first three months of training.
There are some program-oriented things you can do,
as head instructor, in order to lessen this loss WITHOUT
Let me state that, in my opinion, and in the opinion
of my teacher, contracts are not necessary and not
even desirable. True, we have discount dues if you
pay for three months in advance. Yet, this option
is generally exercised only by our long-time students.
We do not hold anybody's feet to the fire and lock
up their money in a contract. However, we have found
the following to be critical in minimizing new-student
Beginners' Classes: Have the new students possibly
warm up with everyone, but have a senior student take
the new students (usually one month or less) and work
basics with them, as well as their first kata. It
is best to have the same seniors work with the new
students to provide consistency of instruction. Perhaps
at the end of class, the beginners can, again, join
in the activities of the total dojo. After a month
the new students can be mainstreamed into the regular
classes. This reduces frustration and intimidation
for new students. Frustration and intimidation are
often the main ingredients in a new student's quitting
Beginners' Classes II: We've found that when a group
of beginners enter the dojo, they form a bond that
is relatively strong. They are basically forming a
support group with each other. Such groups tend to
have less significant quitting compared to new students
without the benefit of beginners' classes.
Extend Positive Energy: If you are teaching budo,
your students will have no problem with this. However,
we all need reminding. Simply, have all your dojo
be friendly and acknowledge new students. Sometimes
I do see a new student standing stiffly with that
deer-in-the-headlights look. Around him or her students,
comfortable with themselves, sometimes ignore the
new student or don't pick up on his or her need for
affirmation or just a smile and a word. Also, as dutiful
students, we should always talk with new students
and ask the basic questions . . . "Did you have fun?"
"We'll see you tomorrow, won't we?" A business practice
I learned in the human resources industry is to ask
your employees to come back tomorrow. In the dojo,
ask new students, in an affirmative manner, whether
they will come back. It's harder to quit, when someone,
especially the head instructor, voices an interest
in them showing up, again.
Business and budo can mix. As head instructor, remove
yourself from the conflicts of teaching and running
the dojo as a business. Assess the people assets of
the dojo and select the best business talent to be
Business Director for the dojo. Sit down and answer
the basic business questions, and set the levels of
students required to financially meet the needs of
the dojo plan. Let the Business Director market-no
slick, dishonest or flashy marketing-just marketing
basics albeit chronic marketing. Market to add new
students to your dojo and to add new revenue sources.
Teach and execute programs in the dojo to retain those
students-and their dues.
About the Author:
Gary Gabelhouse is Chairman and Chief Executive Officer
of Fairfield Research, Inc. which is a market research
and consulting firm in the entertainment and media
industries. Prior to his acquisition of Fairfield,
Gabelhouse was Executive Vice President and a member
of the Fairfield Board of Directors. Prior to his
involvement with Fairfield, Gabelhouse was Senior
Vice President and member of the Board of Directors
for SRI Research, SRI/Gallup, Gallup of Canada, and
what is now the Gallup Organization.
Gabelhouse trains Okinawan Goju Ryu Karate-do under
John Roseberry, Hanshi. Gabelhouse is the Business
Director for Roseberry's Sho-Rei-Shobu-Kan Martial
Arts Center in Lincoln, Nebraska. Gabelhouse's interests
outside of the martial arts or business include mountaineering,
bonsai cultivation, fishing and fly tying, oil painting,
landscape gardening, writing and watching his 21 year
old daughter play rugby. Gabelhouse has been married
to his wife Cindy since 1975.
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