INTRODUCTION
While
most Uechi instructors can
run a hobbyist dojo at a break
even point or at a slight
profit; it however takes considerable
planning to get a commercial
operation off the ground.
This article will explore
the costs of opening a commercial
or ‘pro’ dojo.
For
the purpose of this article
I will refer to the following
terms frequently. These terms
are only for reference and
do not imply a cavalier attitude
towards the instructors of
what I call the ‘hobby
club’.
Hobby
club – A club running
in a shared facility such
as a community hall, public
school, YMCA, etc.
Pro
club – A club that is
operating in a leased or owned
private facility.
This biggest question to be
asked by a Uechi instructor
when they decide to open a
full time, commercial venture
is in fact can they afford
it? That is to say, can the
fees obtained cover costs
and profits?
The
quickest way to look at this
is to calculate your expenses
and to factor in your student
fees. For example; if your
rent is $1500 and you student
fees are $60 per month; then
you need 25 students to break
even.
This looks simple enough doesn't
it?
But
there is a flaw in this calculation
for it does not show the true
operating cost at all. The
$1500 rent example may very
well be the bulk of the monthly
expense, but is not the total
sum.
This
total monthly operating cost
if overlooked could result
in financial ruin for the
best of clubs in six months
to a year.
When calculating your total
operating costs of say a rented
building, did you include
in your first monthly payment
the security deposit? Or if
you purchased the building
are the closing costs tallied,
deed transfer tax added, fuel
adjustment noted?
These simple (yet often present)
fees on their own can do severe
damage to a club’s savings
account even before the new
operation begins!
When
looking at your total monthly
operating costs you must include
expenses such as light &
heating, cleaning supplies
and toiletries, phone and
internet lines, instructor
salaries & advertising
costs to name a few.
As
well and perhaps more importantly;
when you open a professional
club you could also have insurance
premiums, occupancy taxes
or interest payments on loans.
You must have a clear view
of all of these potential
costs.
Use
the checklist below to get
a clear picture of what your
initial and monthly obligations
are when considering opening
a commercial, professional
Uechi-Ryu dojo.
| Dojo
Expense Checklist |
| |
|
| Initials:
|
|
| |
|
| Real
Estate Purchase: |
Projected
cost: |
| |
|
| Agent
fees |
$ |
| Closing
costs |
$ |
| Fuel
adjustments |
$ |
| Deed
transfer tax |
$ |
| Property
tax |
$ |
| Occupancy
tax |
$ |
| Other
costs |
$ |
| |
$ |
| |
$ |
| Rental
or term lease: |
Projected
cost: |
| |
|
| First
and/or last months rent |
$ |
|
Security deposit |
$ |
| Other
costs |
$ |
| |
$ |
| |
$ |
| Building
& other essentials: |
Projected
cost: |
| |
|
|
Dojo equipment purchase |
$ |
| First
aid kit(s) |
$ |
| Cleaning
supplies |
$ |
| Toiletries |
$ |
| Initial
ad run |
$ |
| Office
equipment purchase |
$ |
| Uniforms
and gear stock |
$ |
|
Locks & Security system |
$ |
| Insurance
premium |
$ |
| Other
costs |
$ |
| |
$ |
| |
$ |
| |
|
| Monthly
expenses: |
Projected
cost: |
| |
|
| Mortgage
or rent |
$ |
| Insurance
premiums |
$ |
| Association
dues |
$ |
| Lights |
$ |
| Heating |
$ |
| Water |
$ |
| Telephone |
$ |
| Internet |
$ |
| Advertising |
$ |
| Security
fee |
$ |
| Instructor
fees |
$ |
|
Interest on loans |
$ |
| Other
costs |
$ |
| |
$ |
| |
|
| Total:
|
$ |
In closing, moving into a
'pro' club with your own sign
hanging outside (another initial
cost!), can be a dream best
explored...as long as you
are fully aware of any and
all costs before you sign
the lease or purchase and
sale agreement.
Use
the checklist above, modify
as needed and run a cost analysis
to see if you can afford to
open professionally. Once
done it is necessary then
to consider if you have the
time to commit to such a club.
Good luck.
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