Solid Systems for Your

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Solid SyStemS for your

martial artS BuSineSS

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*Click Section Titles Below to Navigate Through eBook

SeCtion 1: introduCtion to BuSineSS SyStemS...3-5

SeCtion 2: the main SyStemS of a martial artS BuSineSS...6-7

SeCtion 3: Student referral SyStem...8-12

SeCtion 4: martial artS Billing SyStem...13-15

SeCtion 5: ConCluSion & additional reSourCeS...16-18

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SOLID SYSTEMS FOR YOUR MARTIAL ARTS BUSINESS | MemberSolutions.com – 888.277.4409 – [email protected]

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introduCtion to BuSineSS SyStemS

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“

Work

on

your Business, not

in

it

.

”

As a Martial Arts school owner, there’s a good chance you are taking on many responsibilities and many roles to keep your business running: teacher, event coordinator, marketer, salesman, computer guy — just to name a few. There’s also a good chance you’re weighed down by all these functions — functions to operate your business, instead of functions to guide and grow your business. That’s the gist of the quote above. to build your business, you need to work on it, not in it.

Much like the concrete foundation of a new house, a sturdy business foundation is necessary to build your business. Building a solid business begins by establishing effective systems.

Creating business systems will not only increase efficiency, they will ultimately free up your time. With systems you will be able to step away from the job and not be tied down to it every day. You will have time to focus on high-level work that directly contributes to your bottom line. With systems, you can work ON your business, not IN it.

In Michael Gerber’s popular book, e-myth revisited: Why most Small Businesses don’t Work and What to do about it, his main message is this: organize your business around business functions … not around people … not around yourself. “Let systems run the business and people run the systems.” says Michael Gerber. “People come and go but the systems remain constant.”

What is a “System”?

In the context of a business, a system is a set of processes, procedures or actions taken that produce a specific, desired outcome or result Think about that for a while. You might very well have a “system” in place at this moment for selling memberships, marketing your business, running events, scheduling classes, hiring staff, but are they effective? do they consistently produce a specific, desired outcome or result? That is the key difference between what can appear to be a system and what truly is an effective business system. A true system is one that produces a particular, preferred result repeatedly regardless if you or another person performs the function.

Challenge:

is your Business Built around you or is it Built around Systems?

Ask yourself the following question and answer it honestly:

Can you leave your business right now and have the business operate essentially the same without you there for a day, a week, or even a month? Could your business run smoothly in your absence?

SeCtion 1: introduCtion to BuSineSS SyStemS

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Just as you strengthen each muscle in your body for optimal health and fitness, you have to develop strong systemsaround each business function deliver optimal success and productivity for your business.

What if i’m a one-man show?

Earlier we talked about developing systems so that your business can run independent of you. But what if you’re a one-person business without a staff? There are still plenty of systems you can establish so that you streamline processes and free up your time for business development, work less, and prepare for a day when it’s not just you anymore.

SeCtion 1: introduCtion to BuSineSS SyStemS

Challenge:

how many true Systems do you have?

Tomorrow, or a day in the very near future, make a pact to write down all the steps you take to complete each task throughout one business day.

Next to the task, write down the time it takes to complete the task. Use one sheet for every main task such as answering phone inquiries, conducting classes, running staff meetings, completing payroll, billing and invoicing students, cleaning your facility — whichever tasks fall on your plate.

You could even go a step further by recording yourself performing the task through a screen capture software such as Camtasiaif the task is done on a computer screen.

this exercise will accomplish two great objectives:

1) You’ll have your systems documented to evaluate effectiveness.

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Student enrollment SyStem

Student retention SyStem

BuSineSS operationS SyStem

the main SyStemS of a martial artS BuSineSS

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SeCtion 2: the main SyStemS of a martial artS BuSineSS

As you might imagine, there are hundreds of systems, subsystems and stages that can be developed for any one business. This eBook does not attempt to cover all for a Martial Arts business. We will cover a specific referral system and billing system that are proven to work. It’s up to you to determine which systems and subsystems should get immediate attention, and which systems you need to put in place.

In a very broad context, membership-based businesses, such as Martial Arts schools, have three main systems. Of course there are subsystems within each, but it helps to keep things organized by first recognizing the three broad system categories.

#1 Student enrollment System.

The Student Enrollment System includes marketing, following up on your marketing, and membership sales. There are many subsystems within the student enrollment system such as lead generation, lead follow-up processes, membership sales processes, and trial memberships.

“I’ve found that many Martial Arts school owners that I consult “dabble” in marketing,” says Shihan Allie Alberigo, Founder of Taking It to the Next Level. “They throw in a little bit here and a little bit there. They see something in a magazine or out in the marketplace, start a campaign, build a website. They “dabble” in these efforts, never really officially having a concrete marketing and sales system. More importantly, they don’t have a solid way for measuring results from their marketing efforts.”

this eBook will cover a very important element within a student enrollment system – referrals. Client referrals and word of mouth can be very powerful sources of lead generation for all businesses. Further on, Shihan Allie will share his referral system that has worked throughout the years to generate 50-60% of his new student enrollments.

#2 Student retention System.

You can’t grow your school without keeping the students you have.

many martial arts schools fail to grow because of the revolving door syndrome — the pattern of replacing old students with the new. This pattern of new students coming in the front door and existing students leaving out the back, inhibits a school from ever making any headway and growing a solid student base. Focusing on retention is extremely important to ensure long-term success of a Martial Arts school. Within a retention system are many components that can make a big difference in your retention rate. Some of those include attendance tracking, promotions, testings, upgrades, retail sales, and special events. By keeping your trainings, programs and curriculum exciting and goal-driven, you keep students engaged and interested — and keep them coming back to your dojo again and again.

#3 Business operations System.

A system for running your business includes many components that could be grouped under your (#1) student enrollment system and (#2) student retention system.

For example, you’ll have a process in place on how to follow up on phone inquiries and how to make missed trial calls which both help to generate leads and create new sales opportunities.

Within operations you’ll also have calls to make to existing students to develop a communication network with students and parents which help to solidify retention. Going further into the operations grouping includes areas of human resources such as hiring, training and staff development, as well as finance including billing, payroll and collections. this eBook covers the results of outsourcing your billing and collections to a third party and its positive impact on business development and student retention.

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Setting up a Student referral SyStem

By Shihan Allie Alberigo

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As was covered in Section 2, one of the primary systems within a membership-based business is its Student enrollment System.

All businesses — membership-based or not — need to constantly market themselves and attract new customers. But that doesn’t mean that the marketing has to be done by sending out direct mail postcards, emails, print advertisements, and other traditional advertising means.

How happy would you be if you could take all the money you’re currently spending on marketing and advertising and either cut it in half or eliminate it altogether? I’m sure your answer would be ... “Very Happy!” I’m also sure you’re probably skeptical and saying to yourself, “what’s the magic bullet here?” … “what could possibly save me a fortune, get me to actually curb back my traditional marketing and consistently bring in new leads for my school?”

the answer: referralS. Let’s take a look at this first: The goal of any membership business or organization is to create a constant flood of new member enrollments. A referral program will act as that central engine for those new enrollments. A referral program can continually bring in leads on a daily, weekly, and monthly basis — year after year. But before we get started, remember this: it is vital to have great customer service and programs within your school, because only satisfied students and members are going to refer others to your establishment.

“

no matter what kind of advertising you do, no

matter how much money you spend marketing,

your

referrals

will always be your

best

and

easiest

way of acquiring new students.

”

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Before getting into the necessary components of an effective referral program, it’s important to keep these two pointers in mind:

1) a referral program is not maintenance free. You have to work hard at acquiring referrals and keep people engaged in order for it to work. Again, it goes back to great customer service, great programs and curriculum, and a great school culture. Once those are established, your students and members will eagerly refer others to your school.

2) you need to market your referral program just as you would any other program or offering. I see this so many times. Martial Arts schools that have a program, an event, a Facebook page, think that their students are magically going to know that it exists.

Every school owner needs to be a true marketer — meaning use every opportunity to “get the word out about all that you do”. Build awareness of your referral program. Educate your members about your referral program.

let’s Build a Student referral program

The first step is to develop a program that you can live with. In other words, sit down and brainstorm to come up with a clear referral program from start to finish. For example, in my school, for every core membership that is referred, the referring person gets some sort of prize. My referral program is based on different program options. I have two membership lengths — a 3-month trial membership and a one year membership. The 3-month membership is a one-time only trial membership. In other words, after the person signs on for 3 months, they can’t do it again; they must move into a one-year membership.

the nuts and Bolts of my referral System

SCenario #1 - If an existing student refers someone who takes the 3-month trial membership, the referring member gets a list of different prizes.

1st Member Referred — A School T-Shirt

2nd Member Referred — A $20 gift certificate to our school store to be put towards whatever they want (i.e. Parents’ Night Out, gear, etc.)

3rd Member Referred — School Jacket (valued at $65.00)

4th Member Referred — A complete set of fighting gear (valued at $110) 5th Member Referred — Your choice of prize from the items listed above

SCenario #2

If a referring member refers someone who signs on for the 3-month trial membership, then renews into one of our yearly programs, they get a credit point for that referral. No cash prize. The key is to make sure your referring member knows what happened and that they received a credit point.

SCenario #3

If an existing student refers someone and they immediately join for a year, we give the referring student the same set of prizes as in Scenario #1, plus they get $50 in cash for them to do what they please. Each member that refers a yearly member also gets a referral point towards the grand prize which is an entire year for free. In other words, I give away a free year to every student who refers five members that join our schools for the year.

SeCtion 3: Setting up a Student referral SyStem

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C.d.B. — the Cost of doing Business

Chances are you think giving away a free year to every student who refers five members is crazy expensive. But I look at it as C.D.B. — the cost of doing business. In essence, this is marketing dollars that are now being well spent.

here’s an example:

If my contract value is $100 per month, $1200 per year (which is a lower-end average in our industry), and a student refers five members, then I receive $6,000 in contract value and I give away $1,200 to the winner — which, in reality, didn’t cost me anything other than the prizes. If you take into account variables like prizes and $50 in cash prizes, I may end up spending an additional $300.

Bottom line: i receive a $6,000 gross, with expenses of $1,500, that nets me $4,500.

6 pointers for Setting up a rock-Solid referral program

tip #1:your referral program should remain consistent.

People enjoy things that they can count on and appreciate it not changing on a regular basis. One mistake I have found within many Martial Arts schools is that their referral program continually changes. This will only create a cautious client. Anything that creates skepticism will stop them from referring members due to the change in rules and results.

“

you can test-market this as much as you

like, but i have found, the more

consistent

your

referral program,

the more people you will get.

”

tip #2: no matter what you pick for your prizes, make sure you think like a client of your school.

I have done it all — raffled off mini bikes, holiday vacations, weekend getaways, tickets to plays, gift cards to restaurants. The real goal is to use any type of specialty prize as an added benefit to your program.

tip #3: Some may say that money is not a good thing to give away. i disagree.

Here is my logic: if I am offering an Xbox or one of the latest gaming systems, will all parents value that prize? What if they don’t want their children playing video games or what if they already have what you’re offering?

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SeCtion 3: Setting up a Student referral SyStem

tip #4: develop a handout to educate your members.

Create a flyer that completely describes the referral process and how it benefits them. Remember W.I.I.F.M. — this is the question they are all asking “what’s in it for me.”

tip #5: Start asking your clients for referrals.

It’s just as important to ask people for referrals as it is to educate them on your referral program. Many business owners shy away from asking for referrals. They think it is too forward, and too pushy. I completely disagree. I advocate asking for referrals. People will tell you if you are being too pushy. Give them the opportunity to shut you down. If they do, ask them why they feel that way.

tip #6: Qualify and educate your members. that is the key to success.

Why not pick up the phone and take an hour to make calls to your members to let them know about your referral program? The discipline and reality of calling regularly is that eventually you will get through to everyone. We have a dad in my school who is a retired police officer. So far he has recommended eight people. Out of the eight, only two have signed up. We need to follow up with the movers and shakers. Let’s say this parent has many more to refer. We have to make every effort to help him achieve success. After all, he is doing his part, isn’t he?

I hope that I have given you a good starting point for building your own referral system. I have run my school for over two decades and can say that at minimum 50-60% of my business is from referral marketing. My goal for you is to start slow and follow each step and eventually build this up to the point where it is your lowest-cost marketing effort with the greatest return.

“

i have run my school for over two decades and

can say that at minimum

50-60% of my business

is from referral marketing.

”

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martial artS Billing SyStem

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In a perfect world, all of your students would attend all classes and all would pay on time. Unfortunately tuition billing is far from perfect. In order to optimize your revenue, meet your expenses and nurture the teacher-student relationship, you need to remove yourself from the billing and collections altogether and have a third party act on your behalf.

Outsourcing your billing gives you an established system that’s ready to serve your business. With a quality provider, you will immediately have a significant edge in revenue, organization, and help in retention. An effective billing system can also make all the difference in an increasingly crowded and competitive marketplace by providing consistent cash flow and reducing attrition.

“

i do my own

billing

… all’s good.

”

Most self-billing systems are set up for “pay as you go” membership types. This structure enables a consumer to walk into a facility, pay a flat fee and participate in a session or class. Pay as you go really is not a membership type, but rather a usage fee. Pay as you go can be used effectively to introduce a prospect to your Martial Arts class, but it requires no student commitment, which negatively impacts retention.

More so, when students of self-billing schools miss class, they also fall behind in their tuition, which leads to more absences and eventually attrition. the domino effect — missed payments, more absences, and a shrinking student base — is more prevalent in self-billing schools because attendance is directly associated with how tuition is paid and collected.

“

When students of self-billing schools miss

class, they fall behind in their tuition, which leads

to more

absences

and eventually

attrition.

”

SeCtion 4: martial artS Billing SyStem

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SeCtion 4: martial artS Billing SyStem

What are the components of an effective billing system? Where do i start?

Our experience shows that the most effective billing system is one that blends structure and control with flexibility and human interaction. On one end there is a secure, technology-driven billing system that is designed to facilitate collections and accelerate resultant cash flow. At the other end is a live call center with representatives that are trained to professionally bill and collect receivables. This careful balance of technology and human touch helps Martial Arts businesses realize greater revenue capture and bottom-line profits — and ultimately greater retention.

retention is Key to growth

As was discussed previously, membership-based businesses must do two things and do them well in order to thrive: 1) enroll new members and 2) retain the members they have. It’s essential to retain your students to ensure your business’ longevity. After all, nothing is more expensive than replacing lost students. For every student you lose, you need two new students to grow.

“

for every student you lose, you

need

two new students

to grow.

”

A third-party billing system such as Member Solutions is designed to contribute to a healthy retention rate. here’s how: Tuition is handled differently than it would be if done in-house. It is treated separately from attendance. Students who miss class have the same responsibility as those who attend to pay a “scheduled payment.” Additionally, third-party billing systems are designed to promote positive member payment behaviors, such as paying regularly and on time. When members pay more regularly, they are more likely to attend classes, which leads to strong retention.

outsourcing your Billing also leads to more referrals

Remember the last section on referrals? Outsourcing billing to a third party can help with that too. The student and the school owner no longer have to have uncomfortable billing conversations and students can openly resolve monetary issues with a billing company without embarrassment.

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ConCluSion & additional reSourCeS

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As you’ve learned, well-thought-out and established business systems are vital to the long-term success and growth of a Martial Arts facility. Systems can make all the difference in taking your business to the next level. Now that you are aware of their importance and have been introduced to two proven systems, it is time to put this new knowledge into practice and take your

business to new heights.

additional resources

important Systems for your martial arts School

Shihan Allie Alberigo

Listen in to this one-hour audio recording to learn more about effective Martial Arts business systems. Shihan Allie Alberigo covers the necessary and proven processes he’s implemented in his own schools and ones he recommends to all school owners for continual success.

Click here to listen to the recording.

how to run a rock-Solid referral program

Shihan Allie Alberigo

In this audio recording, Shihan Allie Alberigo details his referral system that yields 50-60% of his new student enrollments. He also covers how to keep referral programs hot and exciting – and how to advertise a program.

Click here to listen to the recording.

how Well is your engine running?

Click here for a Success engine pdf that breaks down the many systems of a successful Martial Arts school. This resource is provided by dojo digest, www.dojodigest.com.

about Shihan allie alberigo

member Solutions advisory team member

Shihan Allie Alberigo is a father, Martial Artist, Martial Arts Instructor, industry coach and consultant with over forty-four years of Martial Arts experience. He has over thirty-five years’ experience as a professional full-time Martial Arts instructor. Shihan Allie Alberigo is the owner of world-renowned L.I. Ninjutsu Centers in Long Island, New York which has recently celebrated its 20-year anniversary. Shihan Allie Alberigo is also the Founder of the industry’s first step-by-step approach to consulting,

taking it to the next level. Taking It to the Next Level is a complete business education and coaching program broken down into proven Martial Arts business systems — the same systems that Allie has used in his own schools.

Systems include income generators, staff management, student teaching, program management, rewards and referral systems, and more. Allie works alongside Taking It to the Next Level clients to set goals, create accountability, and achieve results.

Click here to learn more and Join the program today.

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about member Solutions

Since 1991, Member Solutions has built its business on an unwavering commitment to serving business owners and staff in the sports, health, and fitness industries. Thousands of Martial Arts schools rely on Member Solutions full-service billing, member management software, and business support to operate more efficiently and realize optimal business growth. Member Solutions also provides best-practice tools and consulting resources through its robust Consulting and Networking program. This eBook is one of the resources provided to Member Solutions clients through its Consulting and Networking program.

As part of its Consulting and Networking program, Member Solutions has assembled a top-notch Business Advisory team comprised of Martial Arts visionaries and sought-after business consultants. The Advisory team members provide written content, host monthly educational webinars, and conduct one-on-one consultations.

put our full-Service Billing SyStem in your Corner

Thousands of Martial Arts businesses throughout the U.S. and Canada rely on Member Solutions billing and servicing system. The system is proven to increase business cash flow and profits. Not only will you benefit from greater tuition collection, you’ll gain more time to focus on enrolling new students and delivering great service … the real drivers of your success.

Key features include:

• Full-Service account management • Easy online contract entry

• Member account activity email alerts • An online member payment center

• Real-time financial, member and activity reports • Hundreds of business-growing consulting resources

CliCK here

or Call 888.277.4409 to get a custom demonstration today!

SeCtion 5: ConCluSion & additional reSourCeS

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Solid Systems for Your