How to Avoid Financial Disputes with Your Gym Members

Member-owner relationships are a bit like marriages. You work hard to cultivate strong, long-lasting bonds. You do all you can to show you care and provide what your member needs. Despite that effort, you can still find yourself dealing with absences, arguments, and painful breakups caused by disagreements about money. Among married couples, financial disputes are the second leading cause of divorce. Likewise, uncomfortable conversations about missed payments can make members feel like your gym is not the right place for them. To avoid losing members, put a plan in place to prevent financial disputes and strengthen your relationships.

What can you do to avoid financial disputes with your members?

At Member Solutions, we have over 25 years of experience providing billing services and collecting member payments. Think of us as a financial counselor who wants to help alleviate some the strains money puts on your member relationships.

Follow these 5 tips to avoid financial disputes and keep your billing practices running smoothly:

1) Talk about your billing policies

Clear billing policies allow you and your members to stay on the same page. Put yourself in your members’ shoes. Would you enjoy surprise charges to your credit card? While surprises can be fun, financial surprises can damage your relationships.

Create a membership welcome packet that clearly details what your members can expect financially. Address the when and how of payment processing, late fees, cancellation policies, payments dates, and how members will be notified if fees change.

2) Be flexible when members have money problems

Eventually, one of your members will show up to your gym after months of racking up an unpaid balance and overdue fees. They’ll say they had no idea it was happening. They’ll ask you why you didn’t remind them and possibly tell you they can’t afford to pay.

While it’s important to enforce your policies, sometimes it’s important to find a middle ground. Ask yourself, “What’s best for my long term relationship with this member?”

Sometimes it’s in your best interest to give a member a break. You may decide to waive fees or set up a payment plan to get a member caught up. When you make an exception, let them know that you’re doing it because they are a valued, long-term member. Explain that your policies are in place because newer members—who don’t have strong relationships like yours—might try to avoid paying.

This method has a variety of benefits:

  1. You were likely going to receive no payment. Now that you have made an exception, you are likely to receive some compensation.
  2. You increase the odds that this member pays on time going forward.
  3. If this member is leaving, it’s more likely that he or she will return to your gym.
  4. The likelihood that member talks highly of your gym will increase.

Every gym owner is unique and has different opinions on this situation. All we recommend is that you consider the value of each customer on an individual basis.

3) Automate member payments and billing

Automated billing services virtually take you out of the dues collection process at your gym. All you have to do is set up client accounts, due dates, and payment amounts. Voilà! Your clients’ accounts will be billed automatically.

What does this mean for you? It means that you no longer have to directly collect member payments. This saves time on administrative tasks and reduces strain on relationships with your members.

4) Offer secure online payment processing

The convenience of online payments has obvious appeal for both businesses and members. However, when it comes to online payments, choosing a service with maximum security is critical. The last thing you want is for your or your members’ financial information to be compromised.

Choose a Level 1 PCI compliant provider to protect your business. Providers that follow these data security standards offer the highest level of protection against credit card fraud.

5) Enlist a professional team to bill your members

In addition to damaging relationships, tracking down member payments is confusing and time-consuming. Pursuing missing payments can take up to 10 hours every week. That’s time you could spend with your members, growing your business, or relaxing with friends and family.

Outsourcing to an affordable managed billing service that specializes in tracking down delinquent accounts can reduce stress and help preserve relationships. Billing professionals have an in-depth understanding of the payment processing business and are better able to troubleshoot issues with failed credit card payments or delinquency. In fact, members are more likely to settle monetary issues with a billing company than a gym owner.

If you decide to collaborate with a third-party billing provider, choose a team that will uphold your policies while still offering flexibility to your members. A good billing company will be able to advise you on when to make exceptions for members who are having trouble paying.

Overcome financial disputes to strengthen relationships with your members

Financial disputes are one of the main reasons relationships end—whether it’s between spouses, business partners, or band members who pursue disappointing solo careers. To beat the odds, you need to be proactive. Talk to your members about your expectations regarding payments. Be open to a financial partnership with your members. If you decide to partner with a billing company, choose a team with the same commitment to customer service and fairness that you do.

How do you manage the financial aspects of your member relationships? Share your comments below.

Guest Post: The Health of Your Gym

Guest Post: The Health of Your Gym

Warning: This is going to be a hard read if you’re eating.

It’s a bit ironic that facilities for our health can pose bacterial harm if not properly cleaned. Although places like gyms are not number one on the list of highly germ populated public locations, they can be one of the most common areas to contract bacteria.

Nobody wants to think about all these microscopic germs and particles that coexist among us, but to have a healthy fitness center inside and out, you must be properly equipped with both the knowledge, products and —oh your facility is well cleaned? Excellent! Now, how much do you spread that information around? It’s very well worth turning a quick spotlight on the cleanliness of your facility. Especially when the USA ranks number 28 out of the 188 healthiest nations despite being one of the most health data indulgent countries in the world.

So it wouldn’t be such a bad idea to remind the public you care about the shape of your gym right? Right! Here’s how to take advantage of a hygienic presence.

Provide Easy Access For Sanitation

You sneeze and there’s no tissue in sight. Here’s a worse situation. You sneeze into a tissue and there’s no trash container nearby! Avoid these minor inconveniences by providing disposable soaps, hand wipes or nonalcoholic hand sanitizers and easily accessible waste bins throughout your facility so your clients don’t have to interrupt their workout for long. They don’t have to be every two feet but a good presence of complementary products will give members a good impression of cleanliness in association with your business identity.

Establish With Your Members That You Have a Cleaning Schedule

Whenever that time for the full scrub overhaul of your facility comes around—that’s the chance to show off your results. Take a picture of your pristine facility and post it online. You could even incorporate fitness into the mix because who say’s scrubbing an entire building isn’t a workout? Or that just the act of cleaning is the only sign of a healthy gym?

Share pictures of upgrades, new installations, or even a photo of yourself arriving early! Fresh products, an active mind, and up to date materials express not just a business but a business owner who knows when to make the right decision.

Signs & Reminders

One of the most common of contagions caught at facilities of mobility is skin infection. (Gross I know, but stay with me.) The reasons for these skin infections are due to the unfortunate contact with deposits of leftover sweat on shared exercise equipment and or materials. (How are you doing? Good! We’re going get through this!) The best way this can be avoided is reminders such as: “Always Wash Hands After A Workout”, “Shower after A Swim Please” and “Remember Scandals On While Showering”.

Have any of these signs in your gym? Personalize them a bit, maybe station yourself in front of it for a quick selfie on social media. The more human involvement the better. Just no sweat!

Show That You’re a Good Example

The image of the business owner and staff is everything. Clean clothes, clean hair, etc. We’re not suggesting to have your staff share their selfies all over your social media but rather to have them included within photos of otherwise stagnant objects. Set up a new flyer? Have one of your staff smiling on the side or even holding the sign. There are numerous ways to apply human engagement and interactions to health and safety measures.

One way to ensure you have someone on the floor making it happen is by setting a reminder in our fitness center software. Set up a task for the staff member of your choice so there’s no confusion on whose job it is to post selfies with the clients!

Author: Claire Scro, Marketing Specialist.

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Webinar: Uncover the Hidden Profit Center Inside Gyms & Martial Arts Studios

Can you turn a profit on your billing expenses? Expert sales consultant and school owner Erik Charles Russell says yes.

Members love convenience. In this webcast, Erik Charles Russell shares how to create a new revenue stream by appealing to members’ desire for convenient billing options. Through this model, you can generate higher income from fewer members as you reduce administrative costs. What you’ll learn:

  • How to create a profit center from service and transaction fees
  • How to raise prices and retain current members
  • Why low prices do not lead to more members

Presented by Erik Charles Russell.

Erik Charles has been in the Martial Arts and Fitness industry for more than 25 years and is the owner of Premier Martial Arts and Fitness in Watertown, NY. In 2015, he published a book based on his successes called The Art of Selling Memberships. The book became an international best seller—hitting number one in three categories in the US, Australia, and Germany on Amazon.com.

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Webinar: Lead to Member: Thinking Long-Term with Your Website

Your website is a direct tie to your business’s bottom line. If it’s not converting your leads to long-term members, you’re losing out on important opportunities to grow. In this webinar, you’ll learn strategies from experts on how to:

  • Generate leads more effectively in your area
  • Use best practices for selling trial memberships
  • Overcome common sales objections
  • Convert leads into members

Presented by Tim Sarazen, Director of Operations at 97Display & Erik Charles Russell, Membership Sales Expert

Tim Sarazen is an expert in internet marketing at 97 Display, a fitness and martial arts website and marketing agency.

Erik Charles Russell has been in the fitness and martial arts industries for 25 years. Erik has coached, instructed, sold memberships, served as a program director, and owned multiple facilities. He has perfected a new method for membership sales and marketing that he has published in his book, The Art of Selling Memberships.

Branding, Websites, UX, & SEO: Use What We Learned to Benefit Your Business

Branding word cloud on chalkboard: design, value, strategy, logo, marketing, advertising, identify, trust.

Navigating the rebranding process and launching a completely new, optimized website wasn’t easy. But it gave the Member Solutions team valuable insight into the kind of planning, techniques, and development required. To help you out, we asked our marketing department, “What did you learn from our recent rebrand and the launch of our new site?”

Meetings: Use collaborative communication tools. Be open with your team.

CLAIRE, Marketing Specialist

Aside from a having a positive attitude, open communication and having various ways to communicate really helped. One strategy we used was creating a group chat on Skype where everyone could talk and submit their observations. Another was having smaller meetings in between our scheduled large group ones to discuss specific topics, like SEO.

UX: Create a website that offers a positive, intuitive experience for your customers.

CHRIS, PPC Manager

We only have a few seconds after a user arrives at our website to grab their attention. Wasting any of those seconds can turn a potential customer away for good.

People fall into the trap of trying to pack their website full of information, keywords, and resources. These actions are things you think should help, but they hurt the user experience instead. Knowing when, where, and how to provide information is as valuable as the information itself.

Branding: Bring in fresh perspectives. Grow through flexibility & willingness to learn.

CAITLIN, Brand Manager

It was interesting coming into this project as someone who doesn’t have long-standing familiarity with the product. Because of this, I could view the content with a fresh perspective and place myself in the shoes of a potential client. Tackling the project from this viewpoint allowed me to take a step back from the content developer mentality and remember the top priority of any website our team creates: our audience.

Be flexible. No matter how much you plan and plan again, processes and strategies evolve over time. You learn from mistakes, gain new insight, and even spark fresh ideas. It’s all part of the challenge and what drives continued growth—both professionally and personally.

SEO: Plan your website’s optimization from the start. Know your industry & involve key stakeholders.

MIRANDA, Brand Manager

Consider SEO up front. At the early stages of planning, consider how SEO will play into your website structure and content. As a vital part of your strategy, you need to make sure that any decisions you make will align with your SEO goals.

Collaborate during planning. Involve all key stakeholders and team members to gather information about what your customers want and look for. Each person has a different experience with your customers, so it’s important to get multiple perspectives on the structure and content you’ve proposed for the site.

Know your industry. Research key opinion leaders, your product category, competitors, and customers so you can appropriately reflect the current needs of your industry. Take the opportunity to address present challenges and preferences with your new website rather than simply updating the appearance of your old site.

Websites: Design for clear, branded messaging in a mobile format.

LAURA, Senior Graphic Designer

It’s not enough to create a new logo and call it a day. You must update your website as well. As a designer, I cannot stress enough just how crucial it is to make your homepage clean, visually interesting, and to have a clear message. Ask yourself, “What type of company am I? What do I want to say?” You may think you’re getting your message across to the right target audience, but in the end, you may be missing the mark.

You literally have 5 to 10 seconds to make your first impression when a new visitor lands on your site. If a prospect cannot figure out who you are and what your company does in that short window of time, you’ll lose their interest or worse, future business. They are already moving to the next thing.

If your site isn’t visually appealing and built to adjust to all the different devices out in the world, your prospects will lose interest and instantly move to a competitor. People are not surfing the web on a desktop computer anymore. In fact, not being mobile friendly will even affect your rankings in Google’s search engine. It is now known that their preferred configuration is mobile responsive sites.

Another other important aspect to remember is your opinion isn’t the only one that matters. Invite friends, family, coworkers, or someone in the same industry to look at your newly refreshed website and logo. Get an outsider’s perspective. Their opinion may be completely different than how you view your company.

Content: Be authentic in your tone & brand voice. Show your audience that you’re human, too.

JENNIFER, Marketing Specialist

Your website may be the first introduction someone has to your business. Think of how you would greet someone in person: authenticity and friendliness usually open the opportunity to build rapport. Today’s savvy consumers are going to take their business to companies that speak to them personally, that make them feel valuable as individuals.

Appropriately using emotion builds that value with your audience, even when they’re not ready to purchase. Human-voiced content should not only translate through your website but through social media and advertising as well. Blogging is a great way to create and demonstrate your brand’s sense of community. Categories are a subtle way to create authority in your areas of expertise.

Can You Continue to Fund Your Business Growth? A Look at Your Balance Sheet

Can your membership business continue to fund its growth? The balance sheet can answer this for you right away.

By knowing how to read a balance sheet, you’ll also be able to have a relevant discussion about it – or a discussion about the balance sheet of a business you’re interested in acquiring.

In addition, the balance sheet has two other uses: 1) Vendors and lenders can use the balance sheet in considering the creditworthiness of the business. 2) Owners and potential investors can use it to help determine the value of the business.

Let’s look at the balance sheet to get a picture of your financial health.


Getting to Know the Balance Sheet

First off, the balance sheet is a snapshot that helps you identify and analyze trends in the health of your business. The balance sheet reports on the financial condition of a business at a specific point in time.

Balance sheets are often shown with information from two or more dates, such as year-end information for the last two years.

Other key financial statements, such as profit and loss statements and cash flow statements, report financial activity over a given period of time.

Breaking It Down: How to Read a Balance Sheet

The balance sheet is made up of three parts:

  1. Assets — what you own
  2. Liabilities — what you owe
  3. Owner’s equity — the owner’s stake in the company

Take a look at the example balance sheet below. The company and amounts are fictional.

Balance-sheet-example-showing-assets-liabilities

 

All About Assets

Let’s look at the left column first titled Assets.

What are assets? Assets are the things that the business owns that have monetary value, such as equipment. The assets are listed in order of liquidity, which is how quickly the items can be turned into cash.

Here’s an explanation of each line item:

Current Assets — assets that can be turned into cash within one year of the balance sheet date. The most liquid asset of every business is of course cash.

Accounts Receivable — amounts owed to the business by customers who made recent purchases on credit terms.

Inventory — items purchased by the business for resale to customers.

Prepaid Items — items that have been purchased but will be used and expensed on the profit and loss statement in a future period. A good example of a prepaid item is paying an insurance premium six months in advance.

Fixed Assets — sometimes called Property, Plant, and Equipment (PP&E), fixed assets are not considered very liquid and are therefore excluded from the current assets. Except for land, fixed assets depreciate over a period of years. They are listed at their purchased amounts, less accumulated depreciation to arrive at their net amount. Land is thought of as never losing value and is therefore not depreciated over a period of time.

A Look at Liabilities

What are liabilities? Liabilities are what the business owes to the various creditors and vendors. Like assets, liabilities are shown in current and non-current sections.

Again, an explanation of each line item from the top:

Current Liabilities — those amounts that must be paid within one year of the balance sheet date.

Accounts Payable — monies owed to vendors and suppliers for items acquired on credit.

Wages Payable — owed to employees and taxes payable amounts due to governmental taxing authorities.

Unearned Revenue — an item that is often not well understood by non-financial individuals. Unearned revenue is money received by the business for services not yet rendered or product not yet delivered to the customer. A good example in the member-service industry is membership fees paid-in-full by a member for the next year. The money has been received but the service for which the member is paying has not yet been rendered. Examples would be a one-year Martial Arts membership or a six-month Personal Training package. The service is still owed to the customer and therefore the revenue is unearned and reported in the liability section.

What Financial Analysts Look for When Reviewing Your Balance Sheet

One of the most common ratios that analysts use when viewing a balance sheet is called Working Capital, which is defined as current assets less current liabilities. The current ratio tells the reader whether or not the company has the liquid assets required to pay its obligations owed during the next year. If current liabilities exceed current assets, the company has no working capital.

Current Ratio is another common ratio used which is current assets divided by current liabilities. Higher ratios indicate more liquid companies. It is possible to be too liquid as investors would view the company as sitting on idle cash that could be invested elsewhere.

Non-Current Liabilities — amounts owed to creditors beyond one year ahead. Non-current liabilities are also referred to as long-term liabilities. The most common long-term liability is bank loans which are paid over several years.

Owner’s Equity — this equals assets less liabilities. The equity is comprised of the investment made by the owners into the company and the earnings retained by the company (versus distributed to the owners as dividends).

When All Is Said and Done

So now you have a basic understanding of what a balance sheet is and what the terms mean.

Remember that the balance sheet only shows a snapshot of the company at one particular date in time. It’s a useful tool to ensure your business finances are properly managed — and it can help uncover the true worth of your membership business.

To get the complete story on the health of your business, you must review the balance sheet, along with the profit and loss statement and cash flow statement.

Profit & Loss Statements: What Every Business Owner Should Know

As an owner or manager of a business I’m sure you have heard of Profit and Loss (also known as P & L). But do you know what it is and understand its components?

It”s important to understand in order for you to talk knowledgeably with your managers, bankers, tax advisors, and investors. In this article, I”ll show an example of a P & L Statement and explain what the terms mean.

A Profit and Loss Statement or Income Statement is one of the documents that show the financial condition of a company. Other documents include a Balance Sheet, Cash Flow Statement, and the Statement of Retained Earnings.

Here is an example of a P & L and an explanation of each item:

ABC Example Company, Inc.

Profit and Loss Statement
For the Year Ended December 31, 2011

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The first section of the Profit and Loss Statement is the heading which shows the name of the company and the period of time for which the statement relates. Every Profit and Loss Statement is for a specified period of time. It is usually for one year but could be a week, month, quarter, or any other time period.

The first line of the P & L, after the heading, is Sales, or Gross Revenue. This is all the money reported for sales of products and services. The term gross is used in business to mean that the item is shown prior to deducting certain expenses.After expenses are deducted, the term used is Net.

Next are Discounts and Returns which must be subtracted from the sales to arrive at Net Revenue. On occasion, you will see these first three lines shown as one line which would read as Revenue Net of Discounts and Returns.

After that comes the Cost of Sales. These are costs which can be directly traced to the products or services sold. Examples of such costs are the purchase costs of items sold, labor associated with making the products or providing the service, and sales commissions.


Net Revenue Less Cost of Sales arrives at Gross Profit or sometimes called Gross Income.

Again, it is called gross because there are still some expenses that must be deducted to show the net profit or net income. Those expenses are called the Operating Expenses. These are the expenses that cannot be directly traced to the products or services sold. Occasionally you will hear these costs be referred to as Overhead Costs. Examples of operating expenses are owner and management salaries, marketing costs, utilities and the like.

After the operating expenses are deducted, we arrive at *EBITDA. This is an acronym for Earnings before interest, taxes, depreciation and amortization. EBITDA is a key indicator for companies that have a large amount of debt and/or property, plant, and equipment (fixed assets). This line shows the bankers and creditors how much money is available to run the business going forward. EBITDA is sometimes referred to as operational cash flow. This is generally not a line that you would see on the P & L of a small company with little debt or fixed assets.

Interest and taxes are self-explanatory. Depreciation is the term used to spread the cost of fixed assets over a period of several years. For example, a building is purchased for $500,000. Rather than showing this cash outflow as an expense in year one, the building would be placed on the balance sheet as a fixed asset and depreciated over say 30 years. So the depreciation expense that you would see on the Profit and Loss Statement would be 1/30th of $500,000, or $16,667.

Amortization is a similar term used to account for items over a period of time greater than one year. It usually refers to loans.

After interest, taxes, depreciation and amortization are deducted, we arrive at the last line which is called Net Income. This is sometimes called the bottom line. We started with Sales, which is the top rung of the company ladder, and as we deducted certain items, we descended the ladder to arrive at the bottom rung or bottom line.

I hope this brief explanation of a Profit and Loss statement helps you in all your future discussions regarding your business’s profitability.

Of course, should you have any questions, feel free to contact me at mconnor@membersolutions.com.

About the author: Michael Connor is the Director of Finance for Member Solutions. He is responsible for the financial reporting and budgeting process for Member Solutions as well as overseeing all cash flow and managing banking relations.

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

Planning & Preparation Tips for Opening Another Business Location

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

In my previous post, I recommended taking a long hard look at your business ― well before taking the plunge to open a second business location.

After your self-assessment, if you can honestly answer that your business is built on systems ― that your business would function efficiently and effectively without you being there — then, in my opinion, you are ready to seriously consider opening a second business place. In this post, I’ll cover some of themust-have elements to successful expansion and the benefits of running a multi-location business.

Based on historical information, owners opening another business location must lay out a very detailed business plan

I sit on a board of directors for CDR (Community Development Resources) and for the SBA … and I am still shocked at how many small businesses apply for a loan and do NOT have a business plan. The same is true with most martial arts schools and fitness businesses … they have an idea but not a true business plan. Some put together detailed class plans and curriculum, but then leave the business to chance. You can still have a profitable (though not maximized) operation in this way, but it will definitely be built around you, not the system or a plan, and this can be even more dangerous as it leads to false assumptions and beliefs.

As part of the business plan, the owners must carefully consider the actual budget.

A unique benefit to opening multiple locations in a surrounding area is the concept of cost sharing. For example, two locations that are somewhat close to one another can share:

• Advertising expenses
• Operational staff expenses (some duties can be handled by the same staff for both locations)
• Event and seminar expenses
• Insurance expenses
• Inventory expenses
• Legal expenses
• Accounting expenses
• And more

Of course, some of these areas depend on the actual ownership and business structure so be sure to check with your CPA and attorney in planning this process.

If the locations are not in a close proximity to share some of these expenses, the second location can still benefit from the historical data and records of the first in the business plan. Additionally, the first location can serve as a source for more staff, instructors, and support for the second location. Take advantage of what you know from your first location to provide for a very realistic and accurate plan for your new facility and location. The more planning and preparation that goes into the second location, the greater your chances of success will be.

The final area I will mention is the idea of capital. Though there are some cost savings in shared expenses and efficiencies we have developed through experience (also known as making costly mistakes in our past), we all get the idea that we will be able to do our next location “cheaper.” This is good in theory, but it rarely happens.

We need to be sure we have enough capital up front to really make things happen.

Lease space, utilities, build-out, advertising costs and other expenses are always on the rise. These areas offset many of the savings.

I opened my first part-time club in 1994 and my first full-time “school” in 1997. The cost comparison to my more recent openings or moving facilities to new locations is an increase of about 3-5 TIMES the amount it cost before! Then consider the potential cost of employee turnover which generally has a greater risk of occurrence with multiple locations.

Ask yourself what roles must be filled to make that new location fully functional. If you put a key person into a role at the new facility and that person quits, do you have a contingency plan? These can be alarmingly large costs of doing business, so I would generally recommend that once you figure your capital needs to make the second location happen, double it, or at least raise it by 50% because experience in multiple industries shows that this is generally the reality. This is not a negative thing, but rather a positive because when you are fully prepared for a new location and have the capital you need, you can fire off the marketing campaigns you need and do the things necessary to make it successful versus cutting corners and hoping that you somehow make it.

In summary, plan for the worst, budget for the worst, realize you will not likely be doubling your profits, and then get ready for a lot of work to make your next location a real success story.

I say these things not to be “Mr. Doom and Gloom,” but mainly because I know that when you prepare properly, you come out the other end a lot better off and can avoid stepping on the land mines that destroy all the hard work we have put in to get to where we are now.

Some people imagine becoming Black Belts and that when they are Black Belts they will be able to fight off one, and maybe even multiple attackers and never even get hit! Reality says that in a fight you are going to get hit, and it’s those of us who are prepared to deal with the hits and keep fighting who make it through. Business is much the same way. We are all going to take hits, we just need to be prepared and train our people to win whether it’s a fight or a sale or the grand opening of your next location!

One of my favorite quotes I will leave you with is from Rocky:

“The world ain”t all sunshine and rainbows. It is a very mean and nasty place and it will beat you to your knees and keep you there permanently if you let it. You, me, or nobody is gonna hit as hard as life. But it ain”t how hard you hit; it”s about how hard you can get hit, and keep moving forward. How much you can take, and keep moving forward. That”s how winning is done. Now, if you know what you”re worth, then go out and get what you’2013-10-17 18:50:44’re worth. But you gotta be willing to take the hit, and not pointing fingers saying you ain”t where you are because of him, or her, or anybody. Cowards do that and that ain”t you. You”re better than that!”

Rocky Balboa Speaking to his son in Rocky Balboa (2006)


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 is also a member of the Member Solutions Business Advisory Team and 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

10 Ways to Get Involved & Make a Difference During National Bullying Prevention Month

"Stop Bullying" written on chalkboard

One in three students report being bullied each week in schools across America.* And those that are bullied can experience long-lasting, devasting effects including depression, anxiety, loss of interest in activities and other health issues.**

Fortunately, bullying awareness, education, and prevention efforts are increasing. Communities are joining forces to put a stop to bullying.

October is National Bullying Prevention Month

We can all show our support and make a positive impact by participating in National Bullying Prevention Month. Here are 10 ways you and your staff can get involved and play an active part this October.

Read through the list, then let us know how you will support bullying prevention by commenting below.

1. Download the 10 Steps to Stop and Prevent Bullying List

The National Education Association (NEA) provides a 10-step list of how to stop and prevent bullying. Go here to download the list. Make copies. Pass it out to staff members, friends, and family.

2. Take the Pledge: Stand Up for Bullied Students

As part of the NEA’s Bully Free: It Starts with Me campaign, you can take a pledge and receive a poster and pin to display your support. Go here to take the pledge.

3. Go Orange on Unity Day

Go orange on Wednesday, October 22, 2014 to send a message of support. Wear an orange shirt, tie, pants, hat. Create an orange banner to hang up at your facility. Show your support by taking pictures and sharing them on the Unity Day Facebook Event Page. Check out PACER’s Unity Day page for more ways to get involved.

PACER also offers Unity Day posters to display in your facility. One poster is shipped at no charge. A pack of 10 is $10 shipping. Go here to order your posters.

4. Use PACER’s Activities for Youth

PACER has created a list of young student activities and resources designed to start a conversation and build students’ understanding of how to prevent bullying. Activities include a kids coloring book, a create a poster form and stick puppets with play discussions and scripts. Go here for the complete list.

5. Plan a School Event

PACER has put together a 5-step guide on how to hold a bullying prevention event. Hosting a bullying prevention event is a great way to take the lead and band together with your community to educate and build bullying awareness. Download the Unite Against Bullying – School Event Planning Guide here.

6. Host a Run, Walk, Roll Against Bullying Event in Your Community

Use PACER’s event planning toolkit to host a Run, Walk, Roll Against Bullying event in October or another time during the year. The toolkit is filled with timelines and checklists to help plan and promote the event. The toolkit also includes a sample registration form and press release. Get the toolkit here.

7. Utilize the Stopbullying.gov Kids Website

Stopbullying.gov/kids is filled with facts to educate children about bullying and what to do if bullied. The site also includes 12 animated kid videos with quizzes to reinforce learning points.

8. Download PACER’s National Bullying Prevention Center Information Flyer

This flyer can be used as a handout at events and activities you host in October and other times throughout the year. Download the flyer here.

9. Visit the Stopbullying.gov Cyberbullying Website Section

It’s just as important to know what children and teens are doing online. This site defines cyberbullying and provides ways to prevent and report cyberbullying. Visit stopbullying.gov/cyberbullying.

10. Print These Tips to Give to Parents

The health information website, Be Smart. Be Well., posted the article, Bullying: Habits2Have®. This article will help parents talk to kids and teens about bullying and cyberbullying.

Stay tuned for additional bullying prevention posts coming in October.

Kristen Campbell is a Marketing Specialist with Member Solutions.

*National Education Association
**Stopbullying.gov

How Will You Take a Stand Against Bullying? Comment Below.