Cents and Senseibility Value-Priced Martial Arts School

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Martial Arts School Business Plan

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Market Analysis Summary

Cents and Senseibility Martial Arts School will be owned and operated by Rolly BonTemps, 5th Degree Black Belt of the Can-Am Taekwondo Instructors and Schools Confederation.  Rolly BonTemps has been a Martial Arts Instructor for 10 years and has been studying the art of Taekwondo for 17 years. 

Currently positioned as Lead Instructor in Metroburb, Rolly BonTemps has been actively involved with all aspects of the business and is now ready to own and operate Cents and Senseibility Martial Arts School.  Since working in the Metroburb school, Rolly has developed a marketing plan that reaches out and actively seeks out membership.  Through this plan the Metroburb school has nearly doubled in membership over the past two years.  This school is now one of the top three single schools in the nation for membership. 

Rolly BonTemps has devoted himself to the teaching of Taekwondo because he believes it makes a difference in our young children's lives.  Through the instruction of martial arts the parents can visually see the difference in their child's daily behavior, attention span and their courtesy towards one another and the adult community.  Seeing children develop and fine tune their skills as they progress through the belt levels to Black Belt is not only a joy for the instructors, but also for the parents as they watch their child mature into a fine young adult.  An adult that walks with pride and gleam with self confidence. 

The Can-Am Taekwondo Instructors and Schools Confederation is one of the largest martial arts organizations in North America today.  Rolly BonTemps believes in it, is devoted to it, and plans to have the number one single school in the country.  By achieving this goal, the Cents and Senseibility Martial Arts School will have helped hundreds of adults and children achieve their goal of becoming  more confident in their actions and themselves.  This will also develop the future leaders and Black Belts of tomorrow.   

The demographic research has shown opportunity exists in our local marketplace.  There are no CATISC affiliated Taekwondo martial arts schools in the area.  A tremendous opportunity for growth exists in this market and Cents and Senseibility believes that our position as the potential leader in our marketplace is not an impossible task. 

4.1 Market Segmentation

National sources relating to sports in general and martial arts specifically, it is estimated that 15% of the U.S.  population have participated in some form of martial arts training during their lifetime.

It is estimated that 3% to 5% of the U.S. population are currently active in some form of martial arts training (the variation in numbers is a result of some surveys using Tai Chi, Kick boxing and Yoga as a martial art form, and some include school programs, where others do not).

Cents and Senseibility Martial Arts School will be located in a county with a population of 251,377 (Our County 2000 census).  The population of Our County broken down by gender is 50.1% male and 49.9% female; broken by race; 87.4% White, 19.6% Hispanic (Latino), 5.5% African American and 0.8% Asian.  The median age in the city is 44.1.  The Neighboring County has a population of 440,888 (Lee County 2000 census).  The population of Neighboring County broken by down by gender is 48.9% male and 51.1% female; broken by race - 87.7% White, 9.5% Hispanic (Latino), 6.6% African American and .08% Asian.  The median age in the county is 45.2. 

For purposes of this plan, we are going to address Our County (pop. 251,377, average age 44.1) with plans to expand to Neighboring County as we grow and prosper.  The Census results  indicate the following breakdown related to age groups for this area:

Our County Population   251,377      Neighboring County Population  440,888

Under 5 years old

13,441

5.3%

22,970

5.2%

5 to 9 years old

14,444

5.7%

24,224

5.5%

10 to 14 years old

13,677

5.4%

25,034

5.7%

15 to 19 years old

3,382

5.3%

22,501

5.1%

20 to 24 years old

11,708

4.7%

18,816

4.3%

25 to 34 years old

28,262

11.2%

46,491

10.5%

35 to 44 years old

33,458

13.3%

59,232

13.4%

45 to 54 years old

29,515

11.7%

54,833 

12.4%

55 to 59 years old

15,518

6.2%

26,820

6.1%

60 to 64 years old

16,459

6.5%

27,856

6.3%

65 to 74 years old

35,088

14.0%

60,563

13.7%

75 to 84 years old

21,060

8.4%

40,630

9.2%

85 and older

5,365

2.1%

10,918

2.5%

Results from a national survey on martial arts schools indicated on average, kids ages 4-14 account for 70% of the individuals participating in martial arts training.  Age groups 15-25, 26-49, and 50+ each account for approximately 10% of students enrolled in martial arts training.  (In comparison to the CATISC School where Rolly BonTemps has instructed the membership was as follows: ages 4-14 (53%), 15-29 (12%), 30-49 (28%) and 50+ (7%)).  Applying the national survey's age segment enrollment statistics to the Census data on the age groups of Our County, we estimate our target market to be around 51,000 potential students. 

The table below outlines our estimated breakdown of the potential market by the age groups.

Market Analysis
Year 1 Year 2 Year 3 Year 4 Year 5
Potential Customers Growth CAGR
Kids under 14 years 2% 29,093 29,675 30,268 30,874 31,491 2.00%
Young adults 15-25 2% 3,960 4,039 4,120 4,202 4,286 2.00%
Adults 26-49 2% 9,133 9,316 9,502 9,692 9,886 2.00%
Adults over 50 2% 9,349 9,536 9,727 9,921 10,120 2.00%
Total 2.00% 51,535 52,566 53,617 54,689 55,783 2.00%

4.2 Target Market Segment Strategy

The target market has been broken into four age segments, all within the city limits and surrounding area.  The strategy is based on the research confirmed by the statistics of the Can-Am Taekwondo Instructors and Schools Confederation and data collected as Lead Instructor from affiliated CATISC Schools. Parents want their children to learn karate to build confidence and to learn self defense, adults take karate for exercise and self-defense, and seniors take karate for social aspects and exercise.

While not specifically addressed, Cents and Senseibility Martial Arts School will be placing emphasis on the Hispanic (Latino) market as their population continues to increase in this area.  Cents and Senseibility will also be targeting addresses with ZIP codes in medium and higher income brackets within our market, but not specifically in this plan.

Target market breakdown is as follows:

  1. Parents of kids ages 3-14: This market, is projected to provide the largest  potential of students and offers the most potential for new members.  In accordance with the Can-Am Taekwondo Instructors and Schools Confederation statistics this group accounts for 70% of our membership of which 67% are male and 33% female. 
  2. Young Adults 15 -25: This market is projected to provide 10% of the market in accordance with the CATISC statistics.  This group of the market will be targeted to increase the membership.  The Cardio Kick boxing being offered is targeted to young adults as a fitness program. 
  3. Adults 26-49: This market is projected to provide 10% of membership in accordance with the CATISC statistics.  Cents and Senseibility will target this group to increase by 20% through Pilates Classes.  This generally attracts adult population.  Targeting this group will be to offer an alterative to health clubs and/or fitness centers.  In addition, this group "controls" the number one market, their kids.
  4. Adults over 50: This is our unknown market.  This group only accounts for 10% of the membership in accordance with the CATISC statistics.  It is felt that our traditional martial arts services may be too rigorous and may not meet their "social" and "exercise" needs.  However with the introduction of Pilates Classes this market may increase in participation and provide additional membership.

4.2.1 Market Needs

Based on a needs analysis taken at Rolly BonTemps' current location in Metroburb, it was found that our survey was comparable to that of the national survey, reflecting similar results.  Our marketing efforts will be addressing the needs of these groups in the order given:

  1. Kids 3-14 ( as outlined by both the kids and their parents): self-confidence, fun, exercise, discipline, self-defense and socialization. 
  2. Ages 15-25: exercise, self-defense, self control, concentration.
  3. Ages 25-35: exercise, self-defense, stress reduction and weight control and participation with their children.
  4. Ages 35 +: exercise, stress reduction and socialization. 

In the mid-1960s there was a boom in martial arts studios, partially brought on by the success of Bruce Lee movies and the TV show 'Kung Fu'.  In the mid-1980s, interest in martial arts moved towards offering children's programs.  In the mid-1990s it was estimated that 5 to 10 million Americans were active in some form of martial arts training.

Recent trends such as the popularity of the movie "Crouching Tiger, Hidden Dragon" not so suprisingly caused a mini-surge in the number of new applicants.  In addition, martial arts for kids has shown a trend towards more activities and less "traditional" training.  It has been noted that today's kids have a lower level of patience, want to be involved in "movie" type karate styles (i.e., "Matrix", "Shanghai Noon", "Karate Kid" and "Power Rangers") and are more demanding of their time. 

Another trend is that larger health/fitness organizations are moving into the martial arts field and a general consolidation is occuring.  Companies such as Bally Total Fitness and Gold's Gym are offering kick-boxing, teabo and other forms of group "soft" martial arts training such as yoga. 

Finally, there is a push in the health/fitness industry to attract the 'over 50' crowd.  Fitness clubs have a difficult time applying their muscle building, fast-paced fitness programs into this market.  However, the 'over 50' group is expected to be marketed to more aggressively, as fitness/health clubs realize the potential of the "baby boomers" and the fact that baby boomers have both the time and money to pursue outside recreational activities. 

4.2.3 Market Growth

The U.S. Census (2000) shows that our region is experiencing tremendous growth.  More families are moving into the our community area than ever before.  Our region is experiencing a boom in adults ages 30 to 50 with young children, who can afford the ever increasing cost of homes in the area. 

A national survey taken indicated there are approximately six million Americans actively involved in martial arts training.  The survey indicated that a 14% growth rate was expected in the upcoming years as Americans move towards a more healthy lifestyle. 

As our area was once known for elderly retirement communities, the trend is turning towards the younger families and children moving into the area.  This could be a result of the cost of living, causing many seniors on retirement income to move to more affordable locations. 

4.3 Service Business Analysis

The business of owning and operating the Cents and Senseibility Martial Arts School is similar to that of running a health/fitness club—membership is everything.  The 'do-jahng' (Taekwondo facility) is the teacher and place of learning, and can be looked at as a place of experience, an elder.  The word 'do' (way) 'jahng' (area) means "the area in which we learn the way." Respect is given to the place where this training takes place.  This respect is not to the do-jahng as an object, but to remind students to keep their minds right, attitudes proper, and take care of the facility in which they train. 

Martial arts falls under the SIC (Standard Industrial Code) 7999 - Amusement and Recreational Services.  Under this heading we find groupings from Astrologers to Card Rooms, from Carnival Operations to Yoga.  In other words the code is too broad to provide solid analysis benefit, but it will be addressed in our comparative ratios analysis at the end of this plan. 

The martial arts industry consists primarily of thousands of small independent schools, most belong to one of hundreds of loosely organized martial arts associations (usually divided by style type).  The Cents and Senseibility Martial Arts School is proud to be affiliated with one of, if not the largest, martial arts organizations in the United States today, with over 1,500 Taekwondo Centers and 300,000 active students and growing. 

Other industries should be considered in any competitive analysis.  The health and fitness club industry (Bally Total Fitness, Gold's Gym) and the non-profit (YMCA, YWCA and local schools) are in competition for the same group of potential customers. 

4.3.1 Competition and Buying Patterns

The nature of the business of a Taekwondo Center is to offer a facility with martial arts training.  Membership is everything and turnover (attrition) in the industry can be high.  Several reports place the average turnover of a do-jahng at 40 to 60%.  Selection of a do-jahng by a potential member is, in-part, done by the style of martial art (taekwondo, karate, judo, kung-fu or kick-boxing) the member wishes to participate. 

However, selection of a do-jahng by a new student is more basic in nature.  Based on past experience, generally a do-jahng selection is based on the following (most popular first):

  1. Friends/family attending
  2. Location
  3. Cost
  4. Facility environment
  5. Class schedule (times)
  6. Friendliness of instructors (personal attention)
  7. Class size

However, the marketing plan developed by the Can-Am Taekwondo Instructors and Schools Confederation and perfected by the owner of Cents and Senseibility Martial Arts School, Rolly BonTemps (5th Degree Black Belt), has generated more memberships for the school he has been affiliated with than all the advertisements and word-of-mouth put together.  This marketing plan actively recruits and goes out after membership and does not wait for the membership to walk into the do-jahng.  This marketing plan will be discussed within this Business Plan. 

Potential members are most aware of a do-jahng's physical existence because:

  1. The marketing activities (50%)
  2. Friends and family (25%);
  3. Drive/walk by storefront (15%);
  4. Yellow Page/media advertising (10%)

4.3.2 Competing Martial Arts School's and Health Clubs

Two martial arts schools have been identified as being the most competitive with our location.  All have a physical facility (dojo), both offer traditional martial arts training.  Both offer competitive pricing and are open Monday thru Saturday (closed Sunday).  In addition, each head instructor is well versed in his/her field.  Both facilities are located approximately 7-10 miles from locations being sought after for the Cents and Senseibility Martial Arts School.

At this time there are no major health clubs in the immediate vicinity of our proposed location.