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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 . . .

Quick Talkers
Money Grubbing

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 . . .

Great Listeners
Nurturingv Philanthropic

. . . 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 for $19.95.

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 graduation.

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:

Sales Effort

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 cookies with?"

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 my opinion.

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:

Maintenance Supplies
Office Supplies
Organizational Fees
Advertising Commitments (i.e. Yellow Page Ad)
Training Equipment

What is the income you would like to see for yourself (head instructor)?

What is your total operating costs, including the targeted wage(s)?

What is shortfall (if any) between your current, monthly, average income and that you need to realize your targeted wage?

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 budget?

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.

Innovations Defined
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%
Self-Defense 24%
Fitness 18%
Other 2%

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 of budo.

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 for us.

Free local sports newspapers tend to not work for us.

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 free-see above)

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 HAVING CONTRACTS.

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 loss:

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 the dojo.

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.

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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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martial arts business, martial arts instruction, business and the martial arts

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