Just because I think its an interesting business model.

I know a guy that uses contracts--sort of.

Prospective students have to come to at least 5 classes---they prefer 10, no charge--if they decide to sign up they either sign a 6 month contract or pay "X" amount UPFRONT (maybe $300---been awhile since I checked) no refunds.

He explains it to the prospective students like this---my paraphrase:

"Brand new students take up much more of my time---and that is time I have to take AWAY from my long term students, so I need to make sure that I'm not wasting my time with people that are not serious......"

When the 6 month "trial period" is up---students go stright to a "handshake" agreement on a month to month deal---you show up you pay for the month---you can train as often as the doors are open.

Most people tend to just pay the whole amount upfront.

And most people stick it out--the average length of time for a student in his school is appox 5 years---with about 50% of them starting around age 13.
About 20% of his students are from a local college.

He also only uses White, Green, Brown, Black belt ranks---and you have to be 18 years old min to test for he has a decent size group of students that take their Shodan test when they come back from college on summer break---about 35% of those people keep coming back to train over the summers while they are in college as well.

Like I said, an upfront cost to cover the time where people need the most time and attention (in his opinion) and after that a simple handshake.

Guy does not use his school as his sole source of income---he has a pretty good job--runs his own contracting company.
He teachs because he likes it--and the monies generated get shuffled into an investment account........last time I ran the numbers he had at least 10K or more a year free and clear to invest--may not sound like much--but think of it over say 5-10 years plus of time---and that is all "extra" cash, did not come out of his pocket.

Think of what an extra 10K a year added to a retirement account could do....esp since its "extra" and would not be coming out of your standard of living.

Like I said, just think its interesting.

Edited by cxt (02/03/08 01:20 PM)