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Opening Another Business Location? Consider This First

Client Question: I’m thinking of opening another location. What are the most important considerations to keep in mind before taking this big step?

Before taking this step, Martial Arts business owners must take a very serious look at their operations. They must ask themselves if the first location is built around them or if it’s built around systems. If the answer is that it is built around them, then I would suggest making some changes before opening another location … otherwise, the level of stress and burden does not simply double, it goes up exponentially. Additionally, if the business is built around “you”, it is kind of difficult to be in two places at once and you will either end up with one location failing or possibly both!

In order for Martial Arts school owners to make the jump from one to multiple locations, everything must function as a business … and a “successful location” does not mean it functions as a “business.” Let’s look at this a bit further …

FIRST THINGS FIRST

Michael Gerber, in his book, E-Myth Revisited, does an excellent job of describing how many people build themselves a job but not a business. I highly recommend this book to everyone considering multiple locations. If you are unsure of the answer to the question about your business being built around you or around systems, then I will simply ask you this … Can you leave your business right now and have everything still operate essentially the same with you not there for a day, a week, a month?The answer to this question (if you are honest with yourself) will tell you where you are.

Some may say, “Well, I would need another instructor or sales person if I wasn’t there” … and that’s fine … so if I put another instructor there, would your operations continue? Or do operations rely on the position being filled by you? If it relies on you, then it’s not a system, it’s your job, but there is hope … you can start today and build systems so you can step away or even promote yourself out of being tied down to the business. This opens up a tremendous opportunity for growth much like franchises do for their franchisees.

I am in a position where I can answer this question with an absolute “YES, I can step away and leave.” In fact, as I update this article, I am sitting under a cabana in Mexico with my wife and friends about 10 ft. from the pool and maybe 50 yards from the ocean. I say this not to brag, but as evidence or proof that it is possible – because, at one time, I was one of the WORST offenders of micromanaging and having the attitude of “I have to do it all because I can do it better”. Back then I was chained to my business and limited myself in many ways. Some may then point out that I”m working in Mexico, but that”s just because I enjoy it, not because I have to … and meanwhile all of my businesses are running, making money and growing.

A common trait among martial arts business owners is that we are passionate and willing to work very hard and long hours. This is both a strength and eventually a weakness. One of the reasons most owners work so many hours is because they know they can do things best (like I mentioned that I used to do). They do not delegate tasks for fear that others will not do it as well as they do, and they have so many things to do that they cannot afford to take the time to effectively train other staff. This is an ongoing problem that leads to burnout and frustration for many. Years ago I realized and accepted the fact that even though someone I train may not be able to accomplish as much as I do, eventually we can accomplish much more as a team.

Think of the math.If you have five staff members each accomplishing 80% of what you could do, that is still 5 X 80% = 400% of what you could do by yourself.

This is the mentality we need to take to move from being “achievers” to “leaders” in our businesses and is a must to move towards the goal of multiple locations.

I mention all of the above first in answering this question because far too many people in every business field (not just martial arts) have taken the step to open a second location and it has turned into stepping on a land mine rather than taking the step towards “doubling their profits,” which is what most people believe will happen.

In the majority of these cases, the likely cause of the problems was the fact that the business was too dependent on the owner or one key person, and systems were not in place to help others be successful in executing the business operations. Essentially it was a personality based business. Though personality is important, if you base your entire business on this, you are not building an asset you can sell. You are also not building a system to duplicate because we allow ourselves to overcome the shortcomings of our business through our own individual skills and relationships.

If as an owner, you can honestly say that your martial arts school is built on systems and that you could walk out on your staff and the school would still operate effectively, then we can move on to the next step in consideration of a second location.

This is not usually the case, especially for those out on their own. More often schools who work with an organization or a franchise have additional support for this, but in every case, an honest assessment here can save a school owner piles of money and grief from making a bad decision before they are ready by letting them know there is more preparation to be done.

In my next post, I’ll cover additional benefits and necessary planning steps to opening a new location. Until then, take a hard look at your business and honestly answer the question:

Is your business built around you or is it built around systems?

About the author: Jeff Dousharm began his martial arts training over 22 years ago with Senior Grand Master Bert Kollars, one of the founders of Tiger Rock Martial Arts International. He’s a 7th Degree Black Belt and a certified instructor in different programs ranging from Taekwondo to CDT. He currently operates seven Tiger Rock Academies in Nebraska and Florida, www.tigerrockmarialarts.com.

Jeff also owns several companies outside of the martial arts field including Tomorrow”s Online Marketing (websites, SEO and online marketing), Paradigm Impact Group (speakers, professional development and business consulting), J. Victorian Development (commercial properties), Point Blank Tactical Safety and Firearms Training, and a few other startup companies being launched in 2012. He can be reached at JDousharm@windstream.net or Jeff@paradigmimpactgroup.com