BJJ Academy Dreams: Money Management
BJJ Academy Dreams: Money Management
Welcome back to yet another installment of BJJ Academy Dreams, where I give you valuable insight into what it takes to start and run a successful academy of your own. If you’re been training long enough, you’ve already started dreaming of the possibility of making your passion – jiu-jitsu – your career.
As exciting as the idea is, it can also be daunting. Where do you even start? Will you be successful? What do you do if [insert random fear here]?
For nearly 16 years, I’ve trained at and visited hundreds of different academies, all over the world. I’ve taken note about what works and what doesn’t. I’ve created this multi-part series called “BJJ Academy Dreams” to give you tips and ideas that will help your academy thrive… so you can share your passion for jiu-jitsu to others.
In this episode, we'll be covering how to manage your financial situation to ensure that your doors stay open for the long run.
Sources of Income
There can be no discussion on managing your BJJ academy’s financials without first addressing your sources of income. This is business management 101: in order to operate, you need to pay the necessary expenses to operate, and to pay those, you need to have money coming in. Simple. Even if you have no intention of making any money, you need to at least cover the bare minimum to keep you out of the red.
The biggest source of income for most jiu-jitsu academies – both those that are created as for-profit businesses as well as non-profits – is student tuition. I’ve seen many different iterations of this. One of the most common “menu” is to have a single amount for adult students, and a reduced amount for kids, charged monthly, with discounts offered for families, students and military service members. Some academies offer a reduced rate for women as well, to help build their women’s program. Some require 3-month, 6-month, or even yearly commitments, with fines for early termination of the “contract.” My best advice is to keep it as consistent across all students as possible, both to ensure a sense of “fairness” as well as to avoid the administrative headaches that come from having 20 different rates.
But tuition doesn’t have to be the only source of income. In addition to having branded academy uniforms or a “gear shop” (which I’ll discuss separately), you can also organize your academy as a non-profit in order to access local or national sports and recreation grant funding. Fun fact: there’s a lot of “free money” out there for programs that improve the health and wellness of various populations.
Sponsorships
Related to the discussion on student tuition are scenarios in which you might not charge tuition, or at least charge a reduced tuition in special cases. Nearly every academy I know offers “free training” to certain practitioners; either sponsored athletes, black belts (the academy’s own, or generally any visiting or community black belt), or even a select group of kids from underserved or economically-depressed neighborhoods.
I think all of this is great, and is an important part of the jiu-jitsu culture. Heck, it’s pretty standard in a lot of sports. However, as a business owner, you need to make sure you manage this well, and fairly. If you have too many “sponsored athletes” for example, your bottom line – and hence, your ability to keep the academy sustainable and running for the benefit of all of your students – may be compromised.
Of course, it’s your academy and you can manage your sponsorships however you wish, but I would encourage you to set expectations for these free memberships. For example, you can have sponsored athletes teach a certain number or times per month, or help with general cleaning duties around the academy certain days of the week. With your underserved kids, you can have them commit to cleaning duties, some sort of public service in the community, or require them to maintain their grades.
Academy Uniforms and Gear Shop
As mentioned before, another source of income for your BJJ academy can be your academy uniforms and your academy “gear shop.” This source does a double-duty, in that it brings in additional petty cash, as well as serves as a marketing tool (the more your students walk around in an academy t-shirt, the more people in the community will be interested in seeing what you’re all about).
Whether you’re affiliated with a major Brazilian Jiu-Jitsu team, or you’re flying solo, you can usually stock your shelves at wholesale prices, then retail for a profit. If you’re not interested in making money off your academy uniform, and you want to make the gis, no-gi gear and apparel affordable for your students, you can even offer them your own wholesale deal.
Just keep in mind that managing your academy uniform stock and gear shop does, however, add another layer to plan for. If you have an academy uniform, you’ll need to ensure you always have the necessary sizes for your new and old students. Additionally, consumer culture has primed us for those periodic yearly sales. You’ll need to ensure that you know when those dates are – or just the ones you want to take advantage of – put in your restock orders well ahead of time.
Coach Pay
This is a biggie, and different academies will do this differently. However you decide to do this as your own academy, ensure that both parties are happy with the arrangement, and you periodically check in to make sure this “satisfaction” hasn’t changed.
It’s not uncommon – especially with smaller academies – to exchange coaching for free training. This is much like a sponsorship in a sense. For those academies just starting out, and haven’t quite met the minimum paying student body to break even, this is a great option for keeping expenses down. However, I will caution that this can be tricky to maintain. The balance can quickly tip in favor of one party or another. For example, scheduling conflicts or work/family obligations will make it so that a coach is getting a lot of free training with very little coaching responsibilities. Conversely, you might have a coach that’s teaching three to four times per week (this happens a lot with kid’s class coaches), and they’re putting in far more hours as coaches than a typical monthly membership is worth.
In my opinion, one of the best ways to ensure that everything is fair is to pay your coaches for the time they spend teaching, and either deduct their tuition from that or have them pay their memberships just as everyone else does. This way it becomes a purely transactional relationship, and there’s no saltiness on either side if work/life/injuries disrupt the training/coaching balance.
Your jiu-jitsu academy invariably means more to you and your students than just a business. But at the end of the day, it is a business, and you need to consider how to manage your finances to ensure that you keep the doors open, both for the health and well-being of yourself and your students.
If you haven’t already, check out the first three installments here: