How To Kick The Broke Martial Arts Instructor Habit In 12 Simple Steps

old run down dojo


Being chronically broke is a sickness that befalls many a martial art school owner. Typically, an instructor who suffers from this malady will either kick the habit and go cold turkey, or they’ll just come to accept it as a part of running a martial art school… and suffer needlessly.

Often, excuses are made for their affliction. “You can’t make money teaching ‘real’ martial arts,” has become my favorite lately (tell that to the Gracie family – I’m sure they’ll set you straight). “The economy sucks,” is another one that I’m sure I’ll be hearing well into 2020. “People are flaky,” “I’m in a weird town,” and “There’s too much competition,” are other perennial favorites.

How To Stop Being A Broke Martial Arts Instructor

But whatever the excuses an instructor makes for being broke, the reality is that it’s a self-inflicted disease. Part of it comes from mindset, and part of it is due to bad habits – but what it boils down to is choice.

Well, I’m here to tell you that kicking the broke-ness habit is just as easy as being broke. All you have to do is develop different habits that cause you to be flush instead of busted. And it just so happens that I’ve come up with a 12-step program for teaching broke martial arts instructors how to do exactly that.

Now, let me start with a caveat – none of these steps are really “easy”. Simple, maybe, but not necessarily easy. But if the headline had said, “Break the broke martial arts instructor habit in 12 incredibly difficult steps” would you have clicked the link? Maybe, maybe not, but in the spirit of honesty I want you to know this won’t be easy.

And while there aren’t any meetings to attend, this 12-step program does require you to exhibit a great deal of discipline, at least until you develop new habits. The 12 steps might seem a bit daunting at first, but if you start to get overwhelmed, just remember that you only have to take them one step at a time.

Shall we begin?

The 12 Steps To Cure Your Chronic Broke-itis

Step 1: Take Stock In Your Situation

assets and liabilitiesSure, you have to start with the end in mind… but you have to know where you’re starting from, first. Start by writing down all your assets (monthly income from membership payments, cash in checking and savings, and anything you own outright) and your liabilities (all your bills, debts, and anything you still owe money on). Know how much money you have coming in, and what your profit or shortfall is each month.

Also, take stock in how prepared you are (or aren’t) for any unexpected financial hiccups. Most people are just two paychecks away from bankruptcy, and they stay there because they never realize just how bad their financial situation really is. Remember, knowing where you’re really and honestly starting from is the first step to getting where you want to be.

Step 2: Prioritize

prioritiesFor a lot of martial art school owners, they suffer in broke-ness because their priorities are all screwed up. They’ll spend thousands on bringing in a big-name instructor for a seminar, and yet they don’t know where their rent money is coming from at the end of the month. That’s just self-imposed hardship, if you ask me.

So, stop spending your money on things you don’t really need. Start by taking that list of liabilities you made in step one, and cut out all unnecessary expenses. Be ruthless about this.

So what’s unnecessary? Basically, if it isn’t essential for turning a profit, get rid of it. Essentials are rent, utilities, phone, and your marketing. That’s it. Anything else can be jettisoned. Remember, on a sinking ship, the first thing that goes overboard to save the ship is the baggage. It’s amazing what you discover you can live without when you are living on the first and second rung of Maslow’s Hierarchy.

Also, stop hanging around other broke people! All those other school owners and instructors who are in the same boat? Those are the last people you want to be listening to and taking advice from. Find a new crowd of people to associate with – people who live the lifestyle you want to live, and who you can model your behavior after in order to improve your situation. I’m not saying you have to cut ties completely, I’m just saying that misery loves company, and it tends to be contagious. Expose yourself to people who are miserable as little as humanly possible.

Step 3: Budget

cut costsMake a budget and stick to it. You found out just how bad your situation really is in step one, and you cut out all the unnecessary stuff in step two; now, in step three you’re going to turn that into a budget for your business. As far as your money goes, you should have a place for everything and everything in it’s place.

Get in the habit of limiting your spending. The only expense that should scale in your business is your marketing budget; everything else should remain at a constant until you are well into the black. All other expenses should more or less stay constant while your profits increase.

Speaking of which, let’s talk about payroll. Up until you get well into the mid-one-hundreds in enrollment numbers, you only really need one other employee in a martial art school besides yourself… and that person can be part-time. Yes, it’s nice to have a slew of employees doing all the grunt work around the dojo, but you can’t afford that luxury when you’re broke. Wait until you’re flush with cash (and your classes are bursting at the seams) before you hire any additional help.

Step 4: Save And Reinvest Your Profits

Buffet's first rule“Reinvest your profits” is the first rule on Warren Buffett’s 10 Rules for Success. And, there’s a reason for that. A business runs on money like your body needs oxygen to survive. Starve a business of money, and you’ll asphyxiate it in short order. So, get used to reinvesting your profits back into your business.

And yes, saving your profits is the same as reinvesting your money back into your business. Every business should have cash reserves in case of an unexpected financial hiccup. Any business that doesn’t is playing with fire. And no, your line of credit doesn’t count (credit is never considered to be an asset, and once it’s used it becomes a liability – so try to live without it).

Step 5: Deal With Your Fear Of Making Money

fear of making moneyGet over your fear of making money. We all have baggage about money rattling around in our head space. Get over it. All that emotional and mental baggage is likely causing you to sabotage your attempts at improving your financial situation. Whether it’s a fear of what other people will think of you when you start making more money, or a fear that money will change you, GET OVER IT.

Money is a tool, nothing more. It has no inherent morality, and it can be used for good or evil. How you use your money is your choice; it is also your choice whether or not your money uses you. I’m sure you can make the distinction and control it on both counts. So, put on your big boy or big girl pants and get over your money hang-ups.

And if you make a load of money and decide you have too much – fantastic! You can give it away to your favorite charity or cause. See? You can never have too much money when you know what to do with it.

Step 6: Get Over Your Fear Of Asking For Money

getting paid is betterWhen my wife first started working in our business, she had a hang up about asking for money. She could handle people when they called on the phone, handle them when they came in for an intro, and handle all other manner of customer service interactions. But when it came time to ask for a check, she panicked.

Finally, I sat down and asked her why she was embarrassed to ask for her own money. I told her, “Why let someone else keep money that’s rightfully ours? We have bills to pay, too.” She looked at me, batted her eyes and said, “Hey, you’re right! I can’t believe I never looked at it that way.” Problem solved.

So, get over your embarrassment about asking to get paid. No one makes it in business with a hang up about asking for a check. Once you do the work, and once they sign on the dotted line, that money is rightfully yours. Stop being a wuss about it and ask for the check.

Step 7: Develop Good Fiduciary Hygeine

integrityYour business can’t turn a profit when you’re robbing it at every turn. Every time you pocket some cash before it hits your bank account is stealing from your own pocket. You might think you’re being smart by beating the tax man, but what you’re really doing is operating your business on shifting sand. No business can prosper when it operates on a sliding scale of morality. Deposit all cash (except for what remains in petty cash and the till) the same day.

The same thing goes with your contracts. The contract you got signed today is more valuable than the check you received for the client’s initial payment, because it’s going to pay your bills for quite some time. So, treat your paper (contracts) like gold, and your cash like checks. Enter your contracts into the billing system the same day you get them, and deposit ALL cash as if it were a check.

Step 8: Prioritize Marketing

Set a marketing budget, and make it the second check you write each month, right after your rent. I’m serious – write a check for your marketing budget each month, put it in a separate checking account that is only for paying marketing expenses, and spend every last penny before the end of the month.

take over the worldAnd how much should that be? I don’t know. All I know is that you need to enroll about 10-15 new students a month to have a healthy, growing school, and depending on your conversion ratio (leads to enrollments) you may need to spend a lot more or a lot less than other schools do. This is something you’ll need to figure out on your own and adjust on the fly when things are slow. The main thing is to get into the habit of prioritizing your marketing before other expenses.

Step 9: Know How To Close The Deal

What’s the quickest way to increase your return on investment on your marketing spend? Get better at marketing? Nope. It’s to get better at selling. If I spend $1,000 on marketing, resulting in 20 leads, and I only close five of them at $300 a piece, my immediate ROI (not LTV) is only $500. But if I close ten of those leads, I just quadrupled my ROI… and tripled my money back, to boot.

So, get better at closing the deal. Improve your sales skills by reading books on selling, and by practicing your phone and closing skills as well.

Step 10: Understand The Difference Between Busy And Productive

busy versus productiveBusy people go broke, stay broke, and die tired. Productive people turn a profit, and often in a fraction of the time busy people work. Then they spend the rest of their time doing things they enjoy.

Learn to recognize which tasks are a priority (column 1), which tasks are profit-generating (column 2), and which can be delegated or put off (column 3) until days when you have nothing to do in the first two columns. Never start your day with column 3 tasks – never!

The best way to train yourself to see the difference is to learn by experience. Start by focusing on marketing and selling every day when you go to work. Then, learn to create cash on demand. Work four extra hours each week on an added profit center that brings in additional income for your school, and make it a habit to do so each week. Before long, these things will become not just habitual, but natural… as will turning a profit.

Step 11: Become Customer-centric

customer surveyFigure out where your service is falling short, and fix it. Start by asking your customers where you’re screwing up. Set up a blind customer survey and solicit honest answers from people. Offer an incentive if you have to, but get your customers to tell you where you’re screwing up.

And for gosh sakes, don’t take any criticism personally. Constructive customer criticism is like gold, because it tells you where you’re letting money walk out the door. Taking it personally is for amateurs; professionals take it to the drawing board and fix it. That’s why they get paid like pros.

Step 12: Live Beneath Your Means

live beneath your meansOnce you start making money, continue living like you did when you weren’t. Instead of buying a new house or car, pay off the ones you have first. Pay down all your debt with your first profits, and live debt-free from that moment on. If you can’t pay cash for it, don’t buy it.

These are rules that many very wealthy people live by. Don’t be fooled into living on credit by some guru whose only success in business is selling information on how to be rich. Don’t take “how to get rich” advice from someone who was broke when they wrote their book. Instead, study what truly prosperous people really did to get there and what they do to stay there as well.

Questions? Comments?

Hey, I want to hear from you! Feel free to post your questions or comments on this martial arts business article below.


  1. Brad Rhame on January 16, 2015 at 2:45 am

    Great stuff! This list should be one of the first things school owners/business owners read everyday. Thanks for sharing

  2. Kye Holston on May 21, 2015 at 2:53 pm

    Fantastic advice! I’m looking for ways to increase student enrollment and close the sale more. These steps seem spot on with a lot of success books I’ve read and from what a lot of successful confidants have told me.

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