It seems that the word “contract” has become a bad word as of late. It’s always seemed to have been a bad word in the martial arts industry.
Which seems strange because it’s how almost all business is done. It’s how you finance a car or mortgage your home. It’s how you purchase cable or satellite service, even some of your gym memberships.
A contract is:
a written or spoken agreement, esp. one concerning employment, sales, or tenancy, that is intended to be enforceable by law.
So a contract is just you giving your word to something and your word is all you got. Unfortunately, people don’t take their word very seriously and it leads to a lot of unworkability in the world.
They’ll make promises but want a back door in case they don’t fulfill it. They’ll also come up with well crafted, clever excuses or outright lies to cover their asses and to try to make themselves look better when they want out. Sound like any politicians you know?
I believe a lot of the reason contracts have such a negative stigma attached to them is because people don’t want to be held accountable and don’t want to have to keep their word.
Let’s look at a few of the differences between using contracts or not contracts in your business.
People can quit whenever they feel like
You don’t have to ask someone to commit to you
It’s an easier sell
People can quit whenever they feel like
People are not committed to you
No certainty about what you are going to make throughout the year
Very low average revenue per student
Student retention is more difficult
You have predictable cash flow
Most people who make commitments want to keep them
Student Retention is higher
High average revenue per student
It’s a harder sell
You have to have the tools to get them to see the value of your program
You are asking someone to commit to you
You have to deal with them if they want to quit
This is clearly not a exhaustive list, but it covers the basics. You have to find the balance that is right for you.
At our school we offer a combination. After a student’s initial trial period, they choose the program they’d like to continue training in and sign a contract. At the end of the contract they continue on a month to month basis as long as they continue training.
We’ve found that using contracts (or agreements as we call them) makes a huge difference. Our revenue coming in is steady, predictable and reliable. Our students stay longer, are committed to the program and become like family.
When a student, or parent of a student sees the value of the program and commits, it’s because they see what’s possible for themselves by training with us and the fact that it’s a contract is not big deal.
Contracts also happen to be entirely consistent with your program. You claim to be teaching integrity and perseverance so someone making a commitment and sticking to it is another valuable lesson there.
Students are giving their word to us that they’ll come and train hard and we are giving our word to them that we’ll be here and give them the best training and service anywhere.
Often times, instructors who don’t use contracts avoid them because they are afraid to ask for that kind of commitment from someone, have doubts about their own program or themselves, or have had bad experiences with contracts in the past.
It’s entirely your decision about whether or not to use contracts in your school. Personally, I believe you should have the confidence in yourself, your program and your school to ask for students to commit to a specified period of time.
Even if some may not like it, because they can’t come and go as they please, when you take it more seriously your students will too, and they will respect it.
About the Author:
Mr. Karstadt is the founder of 1 TKD Consulting and owns the longest running ITF Taekwon-Do school in Arizona, Karstadt Taekwon-Do in Phoenix, AZ with his father Master David Karstadt. He has been training since 1984, earned his Black Belt at the age of 8 and is currently an internationally renown intstructor teaching the culture, discipline, leadership and business skills of Taekwon-Do in classes and seminars to Instructors around the world. He has been a member of eight U.S. Taekwon-Do Teams and has traveled to 14 different countries competing in Taekwon-Do. He has won numerous medals at the World Championships and in international competition, most notably winning the 2004 World Championships in South Korea with two gold medals and the Men’s Team All Around Trophy. Mr. Karstadt currently resides in uptown Phoenix, Arizona with his wife and three children. Mr. Karstadt can be contacted by e-mail at firstname.lastname@example.org