You have found the perfect business idea, and now you are ready to take the next step. There is more to starting a business than just registering it with the state. We have put together this simple step guide to starting your martial arts studio. These steps will ensure that your new business is well planned out, registered properly and legally compliant.
STEP 1: Plan your Business
A clear plan is essential for success as an entrepreneur. It will help you map out the specifics of your business and discover some unknowns. A few important topics to consider are:
- What are the startup and ongoing costs?
- Who is your target market?
- How long it will take you to break even?
- What will you name your business?
Luckily we have done a lot of this research for you.
What are the costs involved in opening a martial arts studio?
Some of the basic equipment you will need to start your business includes:
- Mats to keep students safe while they train (prices range from $150-$300 for individual quality mats)
- A ring to facilitate one-on-one sparring (basic rings can be as cheap as $100 but require additional matting)
- Training equipment specific to your martial art, such as target pads for Taekwondo or strike shields for practicing kicks. Some martial arts may require a speedbag for students use during practice (kick pads are approximately $13, strike shields are $37, and speedbags are $35)
- Students require uniforms, though you should make them order their own (prices vary; Taekwondo uniforms, for example, are approximately $30).
- Sparring gloves and sparring foot protectors tailored to your martial art (sparring gloves are $40 per pair and foot protectors are $22 per pair)
- Taekwondo and other martial arts may require head guards, shin pads, and body armor (head shields are $40, shin pads are $30, and basic chest protectors are $40)
- Make sure you have an easily-accessible first-aid kit (basic kits are $30, though you may want to pay more for more options)
What are the ongoing expenses for a martial arts studio?
Most of your day-to-day expenses consist of the utilities for the space you are renting. The primary monthly expenses include rent, insurance, and marketing. Incidentally, it is worth spending more on marketing when you first get started to help established your business within your community. For this business, make sure you have sufficient liability insurance, and periodically revisit your insurance plan as your number of students grows.
Who is the target market?
Surprisingly, the best clients tend to be adults. This is because they are often eager to find a good studio with a supportive staff and are typically very dedicated. However, the bulk of your clients will be younger students recruited from your ties to their schools and communities. While many will inevitably drop out, those who stay will form the bulk of your continuous clientele.
How does a martial arts studio make money?
The standard business model for a martial arts studio is to charge an annual membership fee and monthly fees for a set number of meetings per week. Additional meetings or private sessions are charged at an additional cost.
How much can you charge customers?
This business typically does not charge costs for one-time visits. Rather, members typically pay an annual membership ranging between $60 to $100. Additionally, they typically pay between $45-$99 a month to meet for three or more group classes a week. Regular private instruction for the same amount of meetings typically ranges between $75-$149 per month. At your discretion, you may decide to offer discounted rates for children or offer special bundles allowing members unlimited sessions within a certain time frame. Students are typically expected to buy their own uniforms.
How much profit can a martial arts studio make?
For someone starting a small martial arts business on their own, studio veteran and business writer Mike Massie estimates that you can make an average of $13,125 per month, with a 50 percent profit margin.
How can you make your business more profitable?
To help the studio grow, you may consider investing in additional equipment relevant to your martial art. This may include special dummies to practice certain forms of grappling, battle rope, a regular punching bag, etc. As the business grows, it may be worth considering adding more space to accommodate more or larger classes.
What will you name your business?
Choosing the right name is very important. We recommend checking if the business name you choose is available as a web domain and securing it early so no one else can take it.
STEP 2: Form a legal entity
Establishing a legal business entity such as an LLC prevents you from being personally liable if your martial arts studio is sued. There are many business structures to choose from including: Corporations, LLC's, and DBA's.
You should also consider using a registered agent service to help protect your privacy and stay compliant.
For most small businesses forming an LLC is a great option, but if you still want to weigh all your options check our our article, What Structure Should I Choose for My Business?
STEP 3: Register for taxes
You will need to register for a variety of state and federal taxes before you can open for business.
In order to register for taxes you will need to apply for an EIN. It's really easy and free!
You can acquire your EIN for free through the IRS website, via fax, or by mail. If you would like to learn more about EINs and how they can benefit your LLC, read our article, What is an EIN?.
STEP 4: Open a business bank account & credit card
Using dedicated business banking and credit accounts is essential for personal asset protection.
When your personal and business accounts are mixed, your personal assets (your home, car, and other valuables) are at risk in the event your business is sued. In business law, this is referred to as piercing your corporate veil.
Open a business bank account
- This separates your personal assets from your company's assets, which is necessary for personal asset protection.
- It also makes accounting and tax filing easier.
Get a business credit card
- This helps you separate personal and business expenses by putting your business' expenses all in one place.
- It also builds your company's credit history, which can be useful to raise money and investment later on.
STEP 5: Set up business accounting
Recording your various expenses and sources of income is critical to understanding the financial performance of your business. Keeping accurate and detailed accounts also greatly simplifies your annual tax filing.
STEP 6: Obtain necessary permits and licenses
Failure to acquire necessary permits and licenses can result in hefty fines, or even cause your business to be shut down.
State & Local Business Licensing Requirements
Certain state permits and licenses may be needed to operate a martial arts studio. Learn more about licensing requirements in your state by visiting SBA’s reference to state licenses and permits.
For information about local licenses and permits:
- Check with your town, city or county clerk’s office
- Get assistance from one of the local associations listed in US Small Business Associations directory of local business resources.
Most businesses are required to collect sales tax on the goods or services they provide. To learn more about how sales tax will affect your business, read our article, Sales Tax for Small Businesses.
Liability waivers are essential since the practice of martial arts can potentially cause harm. Here is a sample form from World Martial Arts Academy USA, Inc.
Recommended: Rocket Lawyer makes it easy to create a professional release of liability form for your martial arts business when you sign up for their premium membership. For $39.95 per month, members receive access to hundreds of legal agreements and on call attorneys to get complimentary legal advice.
Certificate of Occupancy
Martial arts studios operating out of a physical location typically require a Certificate of Occupancy (CO). A CO confirms that all building codes, zoning laws and government regulations have been met.
If you plan to lease a location:
- It is generally the landlord’s responsibility to obtain a CO.
- Before leasing, confirm that your landlord has or can obtain a valid CO that is applicable to a martial arts studio.
- After a major renovation, a new CO often needs to be issued. If your place of business will be renovated before opening, it is recommended to include language in your lease agreement stating that lease payments will not commence until a valid CO is issued.
If you plan to purchase or build a studio:
- You will be responsible for obtaining a valid CO from a local government authority.
- Review all building codes and zoning requirements for your business’ location to ensure your rink will be in compliance and able to obtain a CO.
STEP 7: Get Business Insurance
Insurance is highly recommended for all business owners. If you hire employees, workers compensation insurance may be a legal requirement in your state.
STEP 8: Define your brand
Your brand is what your company stands for, as well as how your business is perceived by the public. A strong brand will help your business stand out from competitors.
How to promote & market a martial arts studio
Good promotional tactics include sponsoring local children's sports teams, creating after school youth programs, and providing demonstrations at local schools. You could also consider offering family classes for parents and kids to learn side-by-side.
Recommended: Get started with local advertising for your business with a $300 credit from Yelp.
How to keep customers coming back
Martial arts studios are not seasonal in the strictest sense, but they gain the most students shortly after schools begins in the Fall. Affiliating your dojo with local schools and universities is a great way to bring in new customers. Offering student discounts and free promotional practices is a great way to let students get a feel for your studio before they actually sign up for a membership.
STEP 9: Establish your Web Presence
A business website allows customers to learn more about your company and the products or services you offer. You can also use social media to attract new clients or customers.
Start A Martial Arts Studio In Your State
Select your state below for an in-depth guide on completing each of these steps in your home state.
This business is good for individuals who are passionate about martial arts and enjoy working with young people, as they will comprise the majority of your clients. While running your own studio does allow you more flexible hours, being profitable will likely require you to work into the early evening to accommodate those who can only train after work or school. You may also consider working on weekends to better capitalize your client’s free time.
What happens during a typical day at a martial arts studio?
The primary activity of a martial arts studio is to offer different martial arts sessions to different groups throughout the day. These activities are typically split by age and by martial art (if the studio is able to teach more than one), with additional time on certain days for private lessons.
What are some skills and experiences that will help you build a successful martial arts studio?
While a formal education is not required to run a martial arts studio, you can supplement your existing knowledge by pursuing a Bachelor's Degree in Martial Arts or a related field. Alternately, you may wish to formally study Business Management or Marketing in order to help run and/or promote your business. It is worth it to become a member of the United States Martial Arts Association in order to become part of a network that can provide guidance and support, especially as you are getting started.
What is the growth potential for a martial arts studio?
A small scale martial arts studio requires very little space: with 2,000 square feet or less, you can keep rent and utilities low while providing more individualized attention to students. A larger scale martial arts studio may occupy a warehouse or large retail location and be able to accommodate almost twice as many students, but the rent and utilities will be commensurately higher and you must hire more instructors to both teach classes and provide the same sense of individualized attention.
TRUiC's YouTube Channel
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One of the greatest resources an entrepreneur can have is quality mentorship. As you start planning your business, connect with a free business resource near you to get the help you need.
Having a support network in place to turn to during tough times is a major factor of success for new business owners.