Soft heart = no money

[Cliff Hargrave]

I really learned alot about people in my attempts to run dojos.

I have had people tell me they had some kind of personal problems and asked if it was ok to me late on tuition. I agree and then they would never bring it.

I have had parents who were late on tuition drop their kids off and drive away without coming in. I just don't have the heart to tell a kid they cannot practice because their parents didn't pay.

I have ordered equipment for people who never seemed to have the money and I got stuck with it.

I have gotten hot checks.

When I closed my last school I had alot of moeny that people owed me.

I am beginning to think that a billing company isn't so bad after all.

[Mandeigh Wells]

Honestly Cliff....it seems like you missed the whole point of teaching martial arts...you are supposed to do it for the love of it, martial arts teachers don't need to eat, they just need to turn up to class every week, not take holidays and make up the short fall in rent out of their own pockets......you really didn't know that?
;) (tongue lodged firmly in cheek)

Mandeigh

[Cliff Hargrave]

Originally posted by Mandeigh Wells
Honestly Cliff....it seems like you missed the whole point of teaching martial arts...you are supposed to do it for the love of it, martial arts teachers don't need to eat, they just need to turn up to class every week, not take holidays and make up the short fall in rent out of their own pockets......you really didn't know that?
;) (tongue lodged firmly in cheek)

Mandeigh

Yea, but what what about the Tea Kwon Do guy I know that drives the Lincoln Navigator and has over 500 students?:D

[Abbax8]

Cliff, you may already have figured this out, and if so sorry. I believe the style you teach is hardcore, at least that's the impression I get from your posts. The fact is most people, kids, teens and adults, don't enjoy being hit hard, smashed into the floor and having joints twisted in ways God never intended. Don't ask me why, I just write it off as a character flaw in the general population. People, kids . teens and adults do like to workout, do flashy moves, get constant recognition by being promoted. In most McDojo that is what you see. The MA is questionable as to effectiveness, but the business side is solid. I teach judo at a school that is primarily TKD. I will defend the instructors, they do teach and effective form of self defense. Many of the TKD students watch my class, and several often join for a few weeks or even months, then it is back to TKD. Why? Slower rank promotions is one. To hard is another. Randori, uchikomi and nagekomi (throwing practice) was just to much. They prefer to punch and kick air. I'm not putting down TKD so please save the flames, I'm only repeating what I have been told by kids, teens and adults. Only a small percentage of the population do MA, and even smaller do the more reality type training.

Peace
Dennis

[Cliff Hargrave]

Well I taught the kids straight karate, complete with kata and little tape stripes on the belt. The adult class was a little harder but not anything "hardcore".

[Jeff Burger]

I was in the same boat for along time Cliff.

I dont like to be the bad guy and I want to be able to trust people.

I dont think paying a billing agency is the answer. People are still going to ask YOU for a favor.

Besides what do you say to them..."well its not up to me its the company...if that can works...fine...say it....cause it is the company.

Got time to read a book? "Thick Face Black Heart"

I entered the game with a handicap.
One of my big goals was to help kids.
You find out quick people will take what they can leave you hanging and never even say thank you.

The next thing I realized was...NO MARGIN NO MISSION.
You cant help people via MA if you dont have a martial arts school.

Where we are at now is our K.I.C.K. (Karate Inspires City Kids) program a 501c3 non profit charitable organization.
It wasnt easy getting and and its not easy maintaining.
It allows people to give us tax deductable donations. There is the private sector, state and federal money.
We are still learning and growing.
My goal is to make classes FREE to kids. Currently we can pay for their competions and offer some scholarships (full and partial).

Jeff

[Jim]

Cliff, the other way to look at it is (almost) free training for yourself. That's the way I justify it (to the Missus). Seeing that her teaching (of gymnastics) brings us a suitable income, she expects that there is no reason I can't do the same with martial arts classes. The fact is that people will pay a LOT of money for their kids to do gymnastics and musical tuition, but MA's is still not that high on the priority list unless they're constantly having personal difficulties.

Just my 2 cents...

[fightgrrl]

Gymnastics has a whole nother graceful athletic mystique I guess.


Cliff - I totally understand where you've been - we have given away so much for students who just take it. Even with the non-profit status and fundraising, we have had a few students who still don't hold up their -no money, just participation- end of the bargain.
SO- this year - PARENTS are expected to participate in fundraising and team activities. Last year we had a lot more parent participation and raised a lot more money than in previous years. I am hoping that the parental requirement for scholarship students will continue this pattern.

Maybe for your kids programs in the future you can somehow get parents more involved. I have found that when parents more fully understand our program and realize how it really benefits their kids they are much less likely to "forget" to pay.

We have also done the order now-pay later thing and it just doesn't seem to work. We'll order plain white gis, but now other equipment has to be prepaid. It took almost a year to get rid of a few extra pairs of boxing gloves we had ordered for adult students and they aren't cheap.

[Jeff Burger]

I actually modeled some of what I do after a gymnastic studio.

I have a friend in Ohio, he and his wife run a olympic level gymnastic studio.

She could not keep her doors open off just her top level people.
Its the everybody can do programs that allow her to keep the school open and give her time to work with her best people an make that time affordable to them.

Cliff I work my other job tommorrow so Ill probably have time then to send you some ideas that have worked for me in the past.

Jeff

[Jinzai]

Wow, I am really enjoying reading everyone's posts!

I must agree, it is hard finding a balance between giving people what they need, giving them what they want, and making a living doing it.

No matter what anyone says, if you are charging for your classes you are running a business, and you must manage it like any other business or you will fail. No two ways about it.

As for collecting tuition - after a few years of dealing with deadbeats, I started using a billing service and never looked back.

We also made sure we were charging a decent rate for our services. However, if folks couldn't afford our regular rates, I would offer them a scholarship and cut their tuition down to a rate they could afford. Not something we advertised; just on a case-by-case basis to help people who didn't have a lot of money.

Anyway, I can appreciate what you folks have said about trying to make a living while keeping the quality high in your classes.

The tact I used in my studio was to make the entire first year of training a really fun, uncomplicated introduction to training.

Then, once a student had been in for a year, they had to make a decision to enter into more serious training, or stay in the basic class.

No one ever stayed, but I lost a lot of students when they got the cold hard shock of more serious training thrown in their face.

Although this system forced us to spend a lot of time "cleaning up" our students' technique and form after their first year, it did allow us to keep our doors open, make a decent profit, and turn out a few good black belts along the way.

On a related note, Jeff made a comment I can really relate to:

"I entered the game with a handicap.
One of my big goals was to help kids.
You find out quick people will take what they can leave you hanging and never even say thank you."

Ditto on that. My biggest challenge with using the "soft first year" system was parents who would get all bent out of shape when their kids didn't pass an exam later on in the program (yes, I actually failed paying students, lol). Never mind that I was teaching their kids valuable life skills and getting results in their grades at school and behavior outside of class. Sheesh!

It's kind of funny (and sad) but no matter how hard you try, you'll always have one group saying you're too easy, and another saying you're too hard on them; you just have to suck it up and not worry about losing students. "To thine own self be true." Words to live (and teach) by.

One more thing I'll add and then I'll end this post:

I have never seen a school with a huge enrollment (say, 300+ students actively training) that didn't turn their school into something other than a "way place" in the process of getting to that level. Every school I have seen that passed the 250 mark did something to make their program simpler for the masses. The good news is that you can find a balance between teaching good martial arts and making a living, if you know what you are doing, and you don't need 350 students to do it (regardless of what you might have heard to the contrary).

[Jeff Burger]

That "soft first year" is something I do (or thought I was doing).

I dont ask for everything perfect from the get go.

Personally I think my kids look pretty sloppy....but looking at whats out there on the tournament circuit we look pretty good.


Jeff

[Jinzai]

That's funny, Jeff. Same here. I would get upset about my students' performances, then go to a tournament event and change my tune. I am not putting anyone down, but in comparison, our kids looked pretty dog gone good.

[jdawg]

speaking of money, do any of you require a contract (the 'C' word) or enrollment agreement that requires a time period for membership? if so, how long?

for those that dont require contracts, how do you maintain the status of everyone as far as accounts payable goes? i guess this is more of an issue in a larger school, but i am curious as to what everyone else does.

at my school, we require a 12 month enrollment agreement with the first 30 days "risk-free". it means that you have a month to decide whether or not our style is for you, then you are enrolled for the rest of the year.

i dont know how i feel about contracts. its a sticky situation. my school is over 250-300 students, so to keep up with everyone on a month to month basis would require a full time account manager. its hard to ensure that the school can maintain its large size, especially when leasing space is long term, while enrollment can sometimes fluctuate. any thoughts on this?

[Jinzai]

Jdawg,

Oh yeah, we definitely used contracts in my studio. I personally believe that it stabilizes your income, and that it is a must to do so in our litigious society. Laying down in black and white what you will and will not provide for the tuition you charge is an important aspect of protecting yourself, should you be sued (and if you stay in business long enough, you will be sued eventually).

Another way to look at it is that your students are paying for the privilege of having a guaranteed spot on your floor. It is often helpful to remind your clients that you have to pay the light bill and rent regardless of whether or not they come to class, and that you are going to be there teaching every night, regardless of whether they take advantage of their membership privileges.

If you are having difficulties with the concept of making your students pay for a "membership" versus for "instruction received", think about it in these terms: it is your students who are coming to you for your expertise - you are the expert in your craft. Would they go to their doctor or dentist or lawyer and say, "Oh, I would like to set an appointment to see you every Tuesday and Thursday for the next year, but if I decide to miss an appointment, I don't feel I should have to pay for it." I think not...

Having said that, I will say that I have known a *few* successful studio owners that did not use them, but in my opinion they were doing a tremendous disservice to their most dedicated students. Shouldn't every student be expected to meet certain requirements in consideration of the privilege of training - the first and most important being the commitment to train diligently? Personally, I don't like spending my time teaching people that might not be around next month, and I think it is grossly unfair to the other more serious students to do so.

As for people who are "just looking", one month is plenty of time to decide whether or not they want to stay. So, I would advise you to use membership agreements and keep offering your 30-day guarantee.

Just remember that although requiring membership agreements will keep your cash flow steady, it is up to the instructor/owner to keep retention and attendance high (you can't have one without the other). To do this, you have to keep offering a quality service and be consistent in your delivery of that service in order to keep your students satisfied and coming to class.

I hope this helps. Good luck!

[Jeff C.]

I'm an idiot when it comes to making money through martial arts, thus I teach at a Boys and Girls Club where I have no overhead.

So, I can't contribute anything to the already brilliant answers here, but I will say that I have learned this:

People always know what they want. Few of them seldom know what they actually need.

Jeff Cook
Wabujitsu

[Jeff Burger]

"People always know what they want. Few of them seldom know what they actually need."

Thats a near acho of what I have been saying with trying to build the new school.
"You gotta find a mix between what they need and what want."
They want what they like, but thats often not what they need to progress.
The stuff they need to progress is often things they dont want.
The trick is getting them to realize they need to go outside their comfort zone to progress.

Too many people are looking for the MAGIC CHEESECAKE as I call it.
They want great results quick an easy and that just doesnt happen.

Finding the mix between what I want an what I need.
I need to pay rent an utilities.
I want to do serious martial arts.
Most students are not very serious. They want to get in shape, learn a little self defense...
I could not keep the school open on serious martial artist.
But general classes allow me to have a space where I can have extra classes for those who are serious.
Hopefully people will see those who are serious an want to be like them and start taking the steps to be serious martial artist themselves.

Something else I have been thinking about is contracts.
I have to sign one for the lease.
I have called people who quit to find out why.
The biggest reason often went something like this......
Well I missed a couple classes at the beginning of the month an figured Id just start again next month. Then the next month came I figured I was too far behind.

So Im thinking about offer a better price with some privates for 3 months or 6 month memberships.

Jeff

[Yang Shen]

Our school is the flip side to commercial studios. Money can be relative, to one person $400 dollars can be spent going out to eat, to someone else $400 dollars maybe the weekly paycheck.

I offer one class each week to the public for all ages and abilities free, contributions accepted. Last Saturday the class had 15, those who contributed left behind more then I would charge for the whole class.

The more advanced classes are held at a training hall were rent is paid. I adjust my cost of tuition in ratio to number of students if I charge just 20.00 per month I can pay bills/hidden cost and the remaining is profit or reinvested.

I can choose to float a student for free or not charge a parent in adult class that has three or more kids enrolled. When enrolment surpasses space requirements per class I add another class time. Then I manage the yin yang (coming and going) money aspects

I do not seek to make money with training but things happen. I have many in the kid’s class now whose parents have been through the “contract schools” belt testing, equipment purchases and so on.

For me “contract schools” increase my enrollment. Commercial studios with large enrolment, contracts can be used to help manage, increase, steady profits, keep students in class and help get that Lincoln navigator sometimes with no respect to individual needs and development. If a kid or adult does not like playing the piano forcing them does no good.

It is purely a matter of self-development of real people. When money becomes a factor in my opinion, get out. We do our selves an injustice and those who put their trust into our teachings.
A skyscraper begins with a pile of dirt. If we go out and spend to set up a school with hopes of “making it” that can be like having a building with no foundation.

“A journey of a thousand miles begins with one step”, start small and grow then our foundation cannot be pulled down and what we learn along the way only increases our skills. So that basement or park we started in becomes a training hall down town out of need not want. If we use what we have we are already rich.

If life is about money there are way better and more profitable situations to be involved in. Some of the best teachers I have met have no signs pointing the way.

The flip side to this is of course the MC Dojo and completely possible as in any business venture.

[Lisa]

It's kind of funny (and sad) but no matter how hard you try, you'll always have one group saying you're too easy, and another saying you're too hard on them; you just have to suck it up and not worry about losing students. "To thine own self be true." Words to live (and teach) by.



How true this quote is. I have seen it first hand but from a parent's point of view. I have seen parents come and go at my the MA school I belong to. Some because they wanted a "pure" form of a style, some because their children were not being promoted in a timely manner (in their own opinion) and some because they thought the instructor too hard, too soft, or play "favorites" with certain individuals.

All along, IMHO, our instructor has kept his integrity in tact. His love for what he does is what keeps him going. His love for children especially is what makes his school great. Talk about a "soft heart." His attitude is come, have fun and train ;)

[JohnApoc]

Jeff,
I think you just said the most important thing

Its the "everybody can do" programs that allow her to keep the school open and give her time to work with her best people

Realisticly, that is probably the best model to use when designing a martial arts school. The school I was going too is McDojo all the way; the more agressive students were always told to back down. The McDojo lost all their serious students and kept all the obese kids. They have money, but the school is a joke. The trick would be to keep the serious students and the McDojo lovers.

Right now I take BJJ, and they have the opposite problem. If you can't take the beatings; you are welcome to leave, and nobody is going to call you to come back. In BJJ you either have it or you don't. I think some of the white belts we lost could have made it through the rough times with some pep talk, but the brazilians just don't see it that way. I keep thinking there must be a happy medium somewhere.

[Ewok85]

The two ma's i've enjoyed the most i haven't had to pay huge amounts for. SK is run with the idea that the teacher is not to make money, so most of the time its free or just enough to cover hall costs. Kendo is run by a uni club so we only pay to join/insurance and then we just turn up.

Teaching and knowing that you are doing something good for someone else is a bonus in itself.

[nosh276]

My master requires 6 month contracts at 100/ month. As a college student whose parents refused to help I couldn't afford it. I called him up and asked if there was anything I could do. Now, I clean the school twice a week in exchange for free lessons. Other students may clean once a week or once every couple of weeks for a discount. He also makes other arrangements. I've been back at TKD for 4 weeks now cleaning and training. I just tested and passed to be an instructor trainee. Now my master is my boss as well. I couldn't be more pleased. Cliff I don't know if you require these contracts or not, but if you don't they're definitely something you need to look into. Soft heart doesn't have to equal no money.

[nosh276]

That tae kwon do guy driving a lincoln? Bet he uses contracts. He might be a hardcase to.

I knew a guy that had a successful school financially. Lot's of students.

His secret? Embarrass people. If a student had not paid? The teacher would corner him in front of the class and say "where is my money". Really rude.

I know cause he did it to me. I went on vacation and I told him so. He was one of those guys that signed people up, then left. He let the students teach. After you signed, you never saw or heard of the guy again.

I come back from vacation and am walking back to the changing room. He walks up to me in front of about 60 people and says "where is my money? You owe me money". I said I will talk to you later, I was embarrassed. Then he says "No you owe me money". That angered me.

I very firmly said "I told you I was going on vacation. I just returned. I will pay you". Because he could tell I was being honest, he backed down.

Still, the whole situation was humiliating. I quit.

Woah that's a bit too harsh for my taste. It's obvious what his priority is.

[Jeff Burger]

"His secret? Embarrass people. If a student had not paid? The teacher would
corner him in front of the class and say "where is my money". Really rude."

Just wrong.
I hope you would have quit right then and there.

Jeff

[Ewok85]

But why does teaching a ma = making money?

[Jeff Burger]

As with any other skill the answer to that question is.....since before there was money.

Jeff

[jukado1]

I feel sorry for anybody trying to gain an idea of how to charge for martial arts training from this thread, because there are so many good ideas! my suggestion would try to implement as many as possible. I would have a base program, and nothing wrong with a billing company, with contracts, but with the contract have a reasonable buy out written in. say one or two months at the rate they would pay if their contract was at the lengths their quiting, the longer the contract the lower the per month charge, if a student says, NO i don't want to be on contract, fine, have a monthly rate higher then what it would cost on contract. and on occasion you will have a student who can not train on any kind of consistent bases, charge them for a ? 10 ? lesson program, with no refund and no expiration. the more options you have, the more students you can have, otherwise some people may not be able to afford every program.

[Rudy W. Timmerman]

I've had my own school since 1973, and since that time I have tried just about everything there is to do in school management. My experience with a funding company was that they would fax me to let me know one of my students was delinquent... as if I did not already see that in the financial report. They NEVER collected a penny for me, and all they would do is write a few letters that I could have sent myself. Since the rest of their benefits really did not warrant the expense, I quit using them.

Today, I ask my students to bring me twelve post dated cheques, so I don't have to go chase them every month. The good ones pay, the others still use the same tactics our thread originator described. In the end, all we can do is throw these people out, because they neither care for YOU or for the art. Sad thing, and really hard to do for a guy who truly cares about his students; however, I have been taken to the cleaners just once too often to allow this to go on. Funny thing is that none of the people I supported (with free lessons, certification that I paid out of my pocket, etc. etc.) have
ever thanked me. That was reserved for the paying customers who truly appreciated my services. Not bitter, just wiser (but it took one heck of a long time to wise up:(

BTW, I do run a non profit school. This does not mean the bills get paid by elves, and if they don't get paid guess who gets called:)

[Jeff Burger]

Hello Rudy

I run a non profit and would enjoy picking your brain a bit.

Currently we offer free promotions and diplomas, no initiation fees, free tournaments, some full and some partial scholarships. When scholarships run out we allow some to work it off.

Lately I have not guaranteed free promotions, diplomas and tournaments.
I make them take part in team events to get these things.
Reason being is some people will just take and take and never give back and that attitude spreads ( hey they arent doing it so why should I).

Sadly its most often the people who need financial help who refuse to put in any effort ( probably why many of them need financial help in the first place).

Part of what we are trying to install in kids is a good work ethic.

Jeff

[nosh276]

Part of what we are trying to install in kids is a good work ethic.

Jeff

I started back at TKD 4 weeks ago. I am paying for my lessons by cleaning the school twice a week. Now, I'm going to teach as well, so that I may earn some money. I had to quit my last job because of discrimination.

[Rudy W. Timmerman]

Hello Jeff:
Precisely what I found, and anymore I refused to be part of promoting poor work habits and general laziness. When I saw that the folks for whom I bent over backwards would not even bother to help clean the place, I figured I was on the wrong track.

Mind you, I do have a great group of people, but it seems to be the ones who take advantage of our good (soft) heart who just don't get with the progam of martial art etiquette and discipline. I now let the loafers find another way to amuse themselves, and parents of loafers can find another source for babysitting.

One of the things I do of late is work with the local school boards. I simply sent them a letter offering free lessons for any student they recommend. This way, I no longer decide who needs financial help, the schoolboard has an opportunity to reward some of their harder working (but financially strapped) students, and we all benefit from helping one another (which is why I set it up as non profit in the first place).

We also offer free classes to groups such as battered women, police, and custom and immigration as a public service. In addition, I work with some service groups such as Rotary etc. They sure appreciate the help, and my students learn about civic pride and responsibility.

[black-gi]

Only a "hand picked" few can make money and martial arts work together. I am not a hard *** about money because I know it gets hard but I dont like being taken advantage of like the examples Cliff gave. As far as ordering stuff I do it the first Monday of the month and remind people just about every single class because I make them pre-pay for items. If I get the money on Tuesday, it has to wait till next month. I don't know about the U.S. but here I also suggest to parents about the gov't subsity (sp) if there are having trouble. Bottom line, people will do it no matter when or where you have your school.


Jason Bryant

[TimWHansma]

I really like this topic.

It has helped give me a whole new appreciation for what happens in that little office the Hanshi spent so much time in.

As a person for whom 5 bucks is still a lot of money, I appreciate why tuition consistancy and contracts are vital.

How would it be if my employer came to me and said," Tim, I know you worked hard, but I don't have your money this month...Maybe next week,"

No way.

I used to think Contracts were harsh- what if something happened, School took priority, I got injured, or there were too many good shows on television? ;)...You were stuck with up to 11 months more of fees.

In retrospect, if someone is going to trust you enough to teach you martial arts- to have the discipline to use their teachings in an appropriate and judicious fashion...the small discipline of paying the pre-agreed upon fee in a timely and consistant manner is a small one- and a sign of respect to one's school.

Also, I agree... the disgruntlement of Students teaching the class you were expecting to be taught by the Teacher you signed up with- and what is little more than intimidation by your sensei when there was a misunderstanding on payment could not only be embarassing, but also damage the teachers standing- losing him students in the long run.

I like the ideal of a MA school as not only a place to learn MA instruction...but also as a miniature community. It is much easier to be not only meet the financial obligation of ones contract, but also just get more out of the time spent during class and training if there was a sense of unity and pride in ones school. The reality that by flaking out on ones obligation means that all of your fellow students and your teacher feel the burden- there is less money for upkeep, for equipment, for rent- not to mention if your teacher is not an independantly wealthy millionare...or lives off of a spoon of rice a day- it is not fair to him.

Well, I only meant to put in 2 cents, but I seem to have plopped down a whole roll- as usual.

[Rudy W. Timmerman]

...I used to think Contracts were harsh- what if something happened, School took priority, I got injured, or there were too many good shows on television? ;)...You were stuck with up to 11 months more of fees...


I used to use a collection service to handle my accounts and give me some marketing advise; however, I found I did not have enough control over stopping payments for good reasons, and my reputaion as being a fair and reasonable person suffered. This caused me to quit and use a twelve post dated cheque system. Now, when someone moves or has another good reason to stop payments, I can simply tear up their cheques.

FWIW, When people try out my classes, I have them stay free for two weeks. this give me an oportunity to check them out a wee bit, and they get to see how our school works. I then sit down and explain our fee system to them. I point out that we give them a discount based on one year volume, AND I point out the clauses that would allow them to end the agreement. So far, this has worked fairly well, and I have NO problems stopping the payments for someone who truly should not pay me anymore. On the other hand, I don't have to chase folks at the start of each month to get their dues.

[DragonMind]

This caused me to quit and use a twelve post dated cheque system.
What steps do you take if someone simply closes that account? On at least the first one, you are likely to get hit by your bank for depositing a bad check.

[nosh276]

I'm experiencing the soft heart= no money from another side right now. My school is going under, I havn't been paid in, well, this is the fifth week. I have no money, but I do have bills. I'm still teaching. It's been pretty hard.

[Rudy W. Timmerman]

What steps do you take if someone simply closes that account? On at least the first one, you are likely to get hit by your bank for depositing a bad check.

That would depend on the circumstances; however, closing an account on which a check has been written is a crime, so the law would be on my side (at least in Canada). Uttering a worthless check for payment without money or an account to cover the funds is really frowned upon.

In any case, it is not much different when this is done to an agent you hired to collect your dues, you still get the same chargeback. After that happens, I take a close look at my options to recover the loss. Frankly, sometimes it is best to just let it go. IMHO, the best way to prevent this is by having a very good enrollment talk where you might pick up some ideas if the applicant is worth the paper you write on.

[DragonMind]

That would depend on the circumstances; however, closing an account on which a check has been written is a crime, so the law would be on my side (at least in Canada). Uttering a worthless check for payment without money or an account to cover the funds is really frowned upon.
Here in Florida it is also a crime but not one taken very seriously by the authorities. They tend to view it more as a civil contract matter than a crime. I agree that there is not a lot you can do, but wondered if you had some special trick to share with other MA business owners. Thanks for your response.

[Rudy W. Timmerman]

Hello Barry:
I do use a form letter that I send, and in the letter I point out the seriousness of the crime and how it will affect their credit worthiness. If that does not work, it is often not worth pursuing the matter because of the cost and time involved. Sort of depend on the amount and the ability of the offender to pay. No sense flogging a dead horse (or in this case a deadbeat). Sorry I don't have a better trick for this problem.

[Jerusalem]

Here's a few things that I've seen done over the years that I've been around school owners:

This was a pretty lucrative school that I decided to look into after a period of non-training. I went in to talk to the instructor about classes. He took me into his office, sat behind his desk, and then Popped in a demo tape for me to watch while he read the paper 2 feet away from me!! I left and never went back. (I still shake my head at that one)

Another instructor I knew put on a business seminar for the local instructors and "soon-to-be's". He went over various strategies for schools. But one of the more tricky ones he had was to get a PO box and "start" your own billing service. Complete with payment booklets (which apparently are quite easy to get ahold of), form letters for people who don't pay on time and all the trimmings. This, he explained, was a way to get students to pay while not looking like the 'bad guy' for asking for money all the time because it's all coming from the 'collection' company. Thus, you get some of the bennies and don't have to pay for a company. The next part he talked about was really shady though. He was very adamant about contracts, because it allowed you to collect from people even if they weren't taking classes since breaking a contract can look bad on your credit...some people will just continue to pay rather than just back out or pay it off. I ended up leaving that 'school' on rather bad terms...but that's another story.

I'm really lucky to be where I am now. I have a lot of respect for my instructor and he cares a lot for his students. He even teaches every class himself. Though I disagree with that somewhat, I understand that he does it out of respect for his students. And how rare it is (at least in this area).

[wingchundo.girl]

I have found that contracts are helpful. I give students (clients) three options. If a customer does not want to sign a long term contract, which is 6 month, 9-month, or 12-month, they can sign up for as little as 3 months, but only in advance and at a premium. $5 more a month. We also do an intro, which may be a free week or free month depending on the promotion. By the end of the intro they know for sure if they want to join our school.

They can do a monthly coupon, we print those ourselves; or they can go electronic transfer, or advance pay. Of course electronic transfer is the best due to no late charges, no mailing for them, and we get our money on time.

Another advantage to electronic transfer is that for some reason when people quit (without informing you) the money keeps getting transfered out. Even when we make our missing you calls, they insist they are still coming back. So after I've called them twice and they still haven't cancelled, the ball is in their court. For some of them, it's like a membership to them, like bally's. They keep the EFT going knowing that they can walk back in at any time. At this point, I consider this passive income.

Also when a client wants out of a contract, I let them go. They just sign an addendum form saying they are quitting. My opinion on this is, if the student doesn't want to be here anymore, then we don't want them to be here either, plus I'm not going to force them to continue to pay. As long as they are up to date, have notified me within 3 weeks, and has been with me for at least six months, I let them go. No hard feelings, no enforcement of contract. It allows us to part as student/instructor and some of them do come back. By enforcing the contract, I create an instant change in our relationship to a highly negative one. Even to this day, they will refer us.

As far as those that abuse the privilege, like not paying for a few months. They obviously cannot train and they usually don't show up anyways. I may get perplexed and frustrated, but not sorry. We were obviously not right for them which means they were not right for us. If they return, they pay in advance.

If someone passes a bad check, usually someone in the first few months of their contract, that is part of running a business. If they come in and make good on it, that's fine, but I keep a close eye on their payment schedule.

Our track record has been very good. I get 99% payment every month from our clients for the past 10 years. My school's atmosphere is more like a family community. So my clients treat my school like they are coming to a second home. This good energy keeps them on time on their payments.

Liz Ambrose

[kmtsd]

I think most school owners want to change lives and teach...but as a business owner you also have to eat.

Some of the more successful school owners I know use a billing service...others sign contracts-and collect most of the money up front. For example a 3 month contract for $300 -charge 200 down, then 50 each month...nonrefundable... what happens you end up keeping some money from people who only go 1 or 2 months and you end up chasing some others when its time to renew the contract. Less risk to you...and people will more likely continue to train because they already paid for it. Offer 1 month "trial" for new people only then they have to sign a 3 or 6 month contract-paying most of the contract up front.
Now some schools REQUIRE one year contracts-I think that is unreasonable...it can be an option-with a discount when paid up front.

Another way school owners make "most" of the money is through testing---there was another thread on this not too long ago.