It takes guts to walk away from a successful career in one industry and start fresh in another. That uncertainty is even more pronounced when the new career is the martial arts and the individual in question is nearly 33 and a complete novice at running a school. This is exactly the situation New York City's Mario Guerrero found himself in. However, Guerrero's hard work, shrewd thinking and open-minded attitude has enabled him to beat the odds and put him on track for profitable school ownership in an amazingly short time in an amazingly tough city. Now he owns three of them!
Mario Guerrero, the owner of Manhattan Tae Kwon Do, came to the martial arts industry in a somewhat unusual fashion. He didn't come up as a SWAT or STORM member or as a junior instructor spearheading a school for his teacher. Nor did Guerrero enter the industry as a mature practitioner fulfilling a lifelong dream to teach the martial arts.
Guerrero sought out taekwondo after graduating college and, while he trained diligently over the last 15 years, twice his training was interrupted by career assignments, once a three-year stint in Asia and then a two-and-one-half-year hiatus travelling throughout Europe.
Teaching martial arts as a livelihood wasn't even on Guerrero's radar screen almost up until the day he opened his doors. Prior to abandoning it, Guerrero had carved out a high-powered corporate career. As a business manager for the magazine distribution arm of Time/Warner, Guerrero had the corner office, a comfortable six-figure income along with the perks that go with it, and the opportunity to travel - all before he was 35 years-old.
According to Guerrero, one day he simply decided that he didn't want to do it any more. So, to the dismay of his boss, co-workers, girlfriend and others in his life, he simply stepped away.
"One day I walked into my office and I realized, 'My God, everyday I do the same thing and I really don't do anything.' That day, I walked into my boss's office and said, 'Look, I'm giving notice; I'm out of here!' He said something like, 'Are you crazy?' I looked at him and said, 'You're probably right about this,' but that's what I did.
"When I told my girlfriend, she echoed the same sentiment as my boss. 'Why are you leaving this secure life? Even if you are successful, you'll probably end up making less than you do now.' Again, I said, You're probably right.' She left me, too."
Taking the Plunge - Without a Net!
Now unemployed - albeit voluntarily - Guerrero started looking around for a way to make a living.
"I was walking around Manhattan as I often do, thinking, 'What can I do with my life?' I can be a financial guy and do tax returns or maybe I can teach martial arts. I've never done it before, but I stumbled upon a place here at 76th and Broadway. I thought, 'This would be perfect for a martial arts school.' There wasn't a school in this neighborhood to speak of," notes Guerrero. "The closest guy was a mile up and he's incredibly successful in a bad neighborhood.
So I decided to give it a try. 'If it goes bust,' I thought to myself, 'I'll just start over and get myself another corporate job.'"
With superb business skills, but no staff and having never taught a child, Mario Guerrero plunged into an industry that - at least in the short run - is notoriously inhospitable to new entrants. What's the upshot? Obviously, Guerrero wouldn't be profiled on these pages if he hadn't beaten the odds. Indeed, not only has he beaten the odds, he's turned them in his favor in a remarkably short time.
After only three full years, Guerrero's Manhattan Tae Kwon Do is as profitable as many mature schools that have been around for a decade or more. Moreover, Guerrero has recently expanded his first school and, along with a partner, purchased an established school on the Upper East Side. Already, that school's early numbers seem to indicate a similar growth curve.
Knowledge is the Key
Guerrero realized from the outset that the best way to become successful in this industry is to learn from those who have already proven themselves and proven what works. Consequently, Guerrero became a proverbial knowledge sponge, eagerly soaking up as much advice, guidance, and as many program ideas as he could. He maintains that the ideas and strategies he's received from industry heavyweights have made all the difference to his business.
"Dawn Barnes, Barry Van Over, Dave Kovar, Greg Silva - I've got to honestly say that, without them, I probably wouldn't be in business today. Let me put it this way. In my first location, for my first twelve months, I made revenues of one-hundred-twenty-six-thousand dollars. In my second year, my revenue was three-hundred-twenty-six-thousand dollars. And in my third full year, my revenues exceeded four-hundred-twenty-five-thousand dollars. The only difference between year one and year two was Barry Van Over's ABC's of Success" and School Talks" (available from MAIA). That's the stuff I use every single day."
Guerrero continues, "Basically, that's how I taught myself to teach kids, by listening to Barry Van Over, Greg Silva, Dave Kovar. One of the reasons why kids come here instead of the guy who's located a mile away and a whole lot cheaper, is that we use Dawn Barnes's approach. I'm not here yelling at the kids, 'NO, NO, NO!' Many times, our parents send their kids to us after they've had a bad experience at another school."
"I firmly believe that you can learn this industry by watching and listening to the information that's out there. I've got enough material in my library to fill my apartment. Just today, I was having trouble with something so I just put in a tape to watch and refresh myself as to why I'm not closing sales. I went to the first MAIA SuperShow and I go every year. I've been to UP [United Professionals] and EFC [Educational Funding Company] events and I send most of my staff. I've budgeted twenty-five-thousand dollars this year for staff development, just to get people to learn stuff. I'd rather spend it on that than just about anything."
Pressing the Flesh and Forging Partnerships
To increase his visibility, Mario Guerrero utilizes both a neighborhood approach and an evolving Internet presence.
"I spend a lot of my time pressing the flesh," he says. "I walk around wearing my Manhattan Tae Kwon Do t-shirt. I talk to anybody who will talk to me and I tell them what I do. I know every owner of every business in my neighborhood and I know that every business in my neighborhood
has my flyer."
This old-fashioned marketing occasionally yields serendipitous results. Guerrero's school was picked by 20th Century Fox as a primary location for the movie, Little Manhattan. "I'm not sure how they found me, but they did.
I closed down the school for ten days and let them film at my school and they paid me twenty-two-thousand dollars [to let them use my location] for those ten days."
Says XMA founder Mike Chat, who was involved with that film, "Mr. Guerrero was such a gracious host and really helped get me acquainted with the neighborhood as we had recently relocated to the Upper West Side in Manhattan. The guy is out-standing and has a great facility!"
Guerrero extends this neighborhood-marketing concept by setting up mutual discounts with local businesses. "I worked out an agreement with this spa near me. Every time someone goes in for a treatment, he or she gets a pass to come here for a free lesson. In turn, the spa gives a discount to my people. We're targeting the same people so we work together. People feel comfortable with referrals. Basically, I have everybody's brochure, menu or discount and they do the same for me."
Guerrero readily acknowledges that the elbow-to-elbow concentration of businesses in Manhattan makes this feasible. However, he also believes that, with some imagination, the concept can be extended to less urban locations.
"I think anyone can use it. If you're in a strip mall, you can offer a five-percent discount to the frame store next to you and they can offer a five-percent discount to your place. People love discounts and the feeling that the businesses they patronize are somehow connected."
Another important marketing tool for Guerrero is his Internet site. Moreover, Mario Guerrero believes that it's not enough to merely have a site, one has to continually tweak it to maximize its effectiveness.
"The Internet site you see now is probably version number seven and I'm going to keep changing it," he says.
"I just teamed up with Century Direct and I would say that I've spent a lot of time and a good amount of money making sure that if you do a search on Google and you're in New York looking for martial arts, you're going to find me. My phone rings constantly. When I ask, 'Where did you hear about me?' most of the time, if it's not a referral, they say it was through the Internet.
"My personal opinion is that, in major cities, few people are using the Yellow Pages, but everybody uses some type of search engine. It isn't easy, but you've got to get yourself listed on the first five to ten spots on the first page [of a search] for people to find you. I talk to other school owners about this. I'll ask them to sit down at their computer and type in martial arts and the name of their city or town and tell me if their school comes up. Ninety percent of the people I ask to do this say, 'Yeah, it came up on the fifth page.'
"If you're on the fifth page, nobody's finding you. Somehow, someway, you've got to get listed on that first page. You can pay for it like I do or you can do a lot of back-end work, getting yourself listed in a lot of directories and cross-linking with other people."
A Different Approach to After-School Programs
For someone who had never taught a child prior to opening his doors, Mario Guerrero has orchestrated quite a transformation. He and his staff presently teach after-school kids from 18 area schools. That said, Guerrero's approach is unlike many after-school programs in that the kids don't necessarily have to come to him. While he does offer a limited after-school program at his school, more often he teaches after-school martial arts to kids at their respective schools.
According to Guerrero, "Basically, I'll get a call from the after-school director of XYZ school, and he or she will ask me if I have a teacher that can come in and teach our program at their school. I say, 'Sure, how many kids are we talking about? What's the schedule? What are the instructor's responsibilities?'
"Then we work out a financial arrangement. We get a minimum of one-hundred-twenty-five dollars to show up, teach a class and leave. I then pay the teacher. They pay me a flat fee, whether it's eight kids in the class or twenty.
I get my money from the school, not the kids. I'm responsible for the teacher. If the instructor calls in sick, I find a new instructor."
Guerrero offers another option for programs where the number of students is undecided.
"Some schools tell me that they can't afford one-hundred-twenty-five dollars because they don't know how many kids are going to show up. I say, 'Okay, give me ten or fifteen dollars per kid, per class.' If two kids sign up, I will teach them for twenty dollars or thirty dollars.
"I took one school from seven kids when they were paying me ten dollars each to thirty-two kids, so then they were paying me three-hundred-twenty dollars. I don't charge test fees and they buy the uniforms at cost."
Guerrero sees a secondary benefit in his after-school work.
"The way I look at it, I'm building my brand, getting my name out there. I'm also keeping a teacher employed that might otherwise be working a nine-to-five job. I have a fifty-fifty revenue split with my teachers; the more that I make, the more they make. For instance, at the school where I was making three-hundred-twenty dollars, that teacher loved making one-hundred-sixty dollars to show up for an hour."
Guerrero's final after-school approach entails picking up and bringing the kids to his school - but only once a week.
"On Fridays, the one day I don't teach, I go to two schools and pick up thirty kids and bring them to my school. I'm within walking distance to both schools so one adult picks up at one school and one adult at the other. I teach them for an hour and the parents pick them up. We charge five-hundred-fifty dollars per semester for seventeen classes."
Going Beyond Tuition
Notwithstanding the profitability of his after-school programs, Guerrero has been able to augment his tuition revenue substantially. His additional income streams range from the mainstream (i.e., birthday parties, speaking engagements, etc.) to the creative (i.e., juggling classes for singles groups). What they have in common, however; is that they also generate numerous referral opportunities.
"I'm a firm believer that at least a third of my revenue should come from somewhere beside tuition," he says.
"I do a lot of speaking. My basic rate is one-hundred-twenty-five dollars for whatever I do. This year, I've spoken to the Girl Scouts, at the Learning Annex and I've spoken at synagogues. The class I did with Big Brothers/Big Sisters was a perfect forum.
"Essentially, they pay me to promote my school. No matter what I speak about, I'm wearing my t-shirt and handing out my business cards. I think that I'm giving this stuff away. If you ask a professional consultant to speak to your group, he or she will charge you five-hundred dollars just to show up. If you bill yourself as someone who has the confidence and knowledge on subjects related to martial arts and self-defense, people will pay a premium for that."
Guerrero notes that he does not teach technique, but rather awareness to his seminar groups.
"You want to go in and talk about common-sense precautions, trusting your instincts and how to overcome the things that make people unable to protect themselves. That's where the benefit is and that's why they call me back or come to my school."
Birthday parties are another two- for-one for Mario Guerrero.
"I have a fifteen-kid minimum and I'm booked every weekend from September to May, every Saturday and Sunday - sometimes two a day. I know I'm going to see at least thirty kids every weekend and they all walk out with a pass to come back for a week of free training. Number one, the birthday parties generate incredible revenue. Number two, at some point those kids will come back and use that one-week pass."
Not all of Guerrero's promotions are directed towards children. One of his most creative partnerships is with a large NYC singles club, Social Circles.
"I try to forge relationships with any group of people that I feel might be contenders for my school. Social Circles has about three-thousand members in New York City. Basically, if you're single and want something to do, you can join their group. Every day of the month, there's some event you can go to. I taught martial arts and juggling to their members. So once a month, they'd send me twenty to twenty-five people from their group and I would teach them a martial arts class and a juggling class."
Guerrero Has His Own Manhattan Project
Mario Guerrero's plans to open three more schools in the Manhattan area within the next several years.
"The five-year plan is to open five schools in five years," he states confidently. "This city can support it. Take Starbucks, for example. They did the demographics and determined that they can support a store on the ground floor paying three-hundred-thousand dollars a year rent and still put another store two-hundred yards away. Close to me, there are three large fitness facilities within one block. Who says you can't do the same thing with martial arts schools?"
Rather than competing with each other, Guerrero sees a synergy with five schools within a relatively small radius. And an opportunity for co-op advertising.
"As far as marketing, we could say that no matter where you live in Manhattan, we have a school near you. Right now, I'm trying to implement the UP [United Professionals] system. If we can get to the point where all the schools are teaching the same thing, exactly the same way, we can invite people to come to one or come to all."
Guerrero acknowledges one significant drawback for his Manhattan project is the astronomical rent.
>"Rent is the biggest obstacle to opening up in Manhattan. You have to be ready. For my flagship school, I pay over seven-thousand dollars a month for two-thousand square feet - and I'm on the third floor! The rent is a big nut to carry, but I want the schools close together so they can work together. That way, no matter what school I go to and give a School Talk" or what after-school program the kids are in, I can say, 'Look, if you want more of this, I have a school close to you.'
"Right now, we teach eighteen after-school classes from the bottom of Manhattan all the way to the top. It's not like I can say, 'Hey if you want to take the martial arts, go to my schools,' because most of the kids aren't near me now. But with five schools, I could add a lot of these kids. Let's say they are having a great class in the after-school program and want to do it on weekends as well. With additional schools, I'll be able to tell them, 'Hey, we're in your neighborhood.' I'm laying the groundwork now through the after-school programs."
"If You Build It, They Will Come"
Shortly before this issue was going to press, another amazing thing happened. Just ten months after purchasing a second school, and without the staff, you guessed it, Guerrero has opened a third location in Midtown Manhattan. The new school will be his flagship location, the largest of his growing chain, 3,100 square feet, set in a new 46-floor residential tower located in the middle of Midtown Manhattan in the Times Square area. According to Guerrero, it will have the best floors (Swain mats), great facilities like locker rooms with showers and towel service, and everything in it is brand new and state of the art.
"Since the two other schools are staffed with great people and I'm confident they don't really need me there anymore, I plan to go to the new location full time. It will be like starting over again. I'll teach all the classes, do all the intros, and one-hundred percent of the marketing. The only difference this time around, I have all the cumulative knowledge of the industry heavyweights like Barry Van Over, Dave Kovar, Bill Clark, - thanks to the Martial Arts Industry Association!"?
Does Mario Guerrero have an aggressive agenda? Absolutely. Does he expect some bumps in the road as he expands? Of course. That said, Guerrero intends to keep learning and utilizing the developing strategies the martial arts industry offers to individuals with open minds.
And why not? By doing so, in less than three years, Guerrero has taken this acquired knowledge and his business savvy to multi-school prosperity beyond his original expectations. All things considered, perhaps Mario Guerrero's decision to leave the corporate world behind wasn't so darn crazy after all.Andrew Breen is a Massachusetts-based freelance writer. He can be contacted at ANDYBTKD@aol.com