Randy Reid, editor of Dojo Nation Times interviews mega -successful multi-school owner Master John Bussard- Enjoy!
DN: I want to thank you for taking time out of your busy day to share some of your history and philosophy with us!
Bussard: Absolutely, I’m glad to do it.
DN: So let’s start out with the main question. It seems like every time I open up my Facebook page, you have opened a new school. How many schools do you presently have?
Bussard: We only have 13. So, I think some of those pictures you are seeing are the schools going through the process so maybe it looks like I’m opening one all of the time. But it’s 13 locations now.
DN: Only 13…(laughs) How many have you opened in the last three years?
Bussard: Well, we’ve actually opened two locations in the last three years, but we also moved a location. We moved it from a center that was sort of a sub-par center to a really top center. So that would be a part of it as well.
DN: Cool. So to provide some background information for people who don’t know about your martial arts history, you were a student of a legendary martial arts Korean Master named Ki Whang Kim. Can you share a little bit about what training was like back in the day as well as your journey to where you became your own school owner?
Bussard: It’s interesting. I found Grandmaster Kim when I was a teenager. And at the time, he was sort of already a legend. He was kind of like the Mister Miyagi of Karate Kid fame. He was an older martial artist at that time. He had already produced many, many champions – Mitchell Barbrow, Mike Warren, and Albert Cheeks and all of these martial artists that had great success as competitors. So I came up in their footsteps. It was just amazing to be taught in that environment. In those days, we didn’t divide classes by children. In fact, we didn’t have many children in those days. It was primarily adults and all of the classes were an hour and a half. In a typical class, all the belts were combined. So, if there were 20 people in class, probably 12 of them were Black Belts. So as a student, you had to lick your wounds on a pretty regular basis because that was how we learned back then. They didn’t tell you that your defense was poor. They hit you to show you your defense was poor!
DN: I remember those days! What year would that have been?
Bussard: Well, I started training in 1979. And I trained with Mr. Kim until 1993 when he passed away.
DN: I see. So that’s when you opened your first location?
Bussard: Yes. He passed away in September of ‘93 and in September of ‘94, I opened my first school.
DN: And when you opened your first school, what was your primary goal?
Bussard: My biggest goal at the time was to develop this dream I had, which, like many people starting out, was to teach. I wanted to be a professional martial arts instructor. In all honesty, I was scared to death. As great of a martial artist as Grand Master Kim was, he was a terrible businessman. But I loved the martial arts so much that I continued to work for him. So when I started out with my first school, I was scared to death because in my head I was thinking here is this guy, a grandmaster, highest ranking Korean instructor in the United States and he wasn’t able to make a great living teaching, so how in the world was I going to? So I got some help first with the Educational Funding Company. Also, I started in 1994, and as you probably remember, that was the same year that Power Rangers debuted on TV, so that didn’t hurt!
DN: You’re right. We’ve had a really good ride for a lot of years with the support of the media. There was a time we could write karate on a window and get 150 students. I think it spoiled a lot of us because we really didn’t need to develop professional business systems. We just had business flooding to us. And then there have been a lot of people who got very big at that time. But you and I know some of the names of some really, really great people who over-expanded and got hurt. But you’ve gone on to be continually successful for many decades. Would you share an area that you are particularly strong in? Classrooms? Marketing? Staff training? Or do you think it’s a combination of being pretty good at everything?
Bussard: I think there are certain things that we are good at. The thing is, one of the things that I’ve discovered through the years is there are a lot of different philosophies and a lot of different ways to be successful in the martial arts business. One of the things that I used to do when I was coming up is I discovered a lot of things by accident. For example, there was a point in time when my school was a decent size, I probably had 150 students or so and I’d been open for a little over a year and things were going well. I was finally making a little bit of money; I think I was making about $40,000 a year. I was going to hire someone I knew. So, I knew he was a good person to bring in. The problem was he wanted a $25,000 salary and I’m only making $40,000, so that’s not going to work. I got some advice from my accountant, and she said you can’t afford not to hire him. She shared a great analogy with me. She said it was like a campfire: if you build a small campfire to keep yourself warm and you don’t put any wood on it, that fire is going to go out. You can put a little wood on it to just keep the fire going, or you can put a bunch of logs on and really have that fire grow. And I look at adding employees like adding that wood on the fire because that’s exactly what happened when I added that full-time employee. All of a sudden, the next year instead of making $40,000, I made $60,000. And because I was paying him $25,000 and added that wood to the fire and added that employee, the school was able to grow. And I said, wow it worked, let me try it again and see what happens. So I did it again and hired somebody else and the next year I made even more money. And that’s one of the things that we do. We don’t really sit back and look at the perfect time to expand. We obviously don’t want to expand when we are shorthanded. But we also understand it’s never the perfect time to expand. So we are always forcing ourselves to stretch and grow. And of course, that means we really have to focus on training our staff and that means bringing new people in and having new people in the pipeline all of the time. And again, another one of the things we sort of discovered by accident was the more schools that we had, the more prospects for more employees that we had. We had people training at two or three or four different locations, so we had a little bit of a larger pool to pull employees from. So again, that was something that if someone has one school they struggle to find staff. So for someone like me who was teaching for Grandmaster Kim, I wasn’t doing it for the money, but because I loved martial arts that much. And it’s hard to find employees that just want to work just for the love of it. If you bring someone in and they realize the school owner is going to make the majority of the money, there is no room for upward mobility here.
“There are a lot of different philosophies and a lot of different ways to be successful in the martial arts business.”
DN: Do you offer a profit-sharing plan for your guys?
Bussard: What we do is we have a 401K that is set up, and we have matching contributions. So whatever salary they make (and of course the higher up within the company, the higher their salary is) we match 3% of whatever their income is. So if the person is making $40,000 a year, the first $1,200 they put away, we match that $1,200. We don’t have a profit-sharing plan, but we do have a 401K with matching contributions. It’s a good lifestyle for them to be a part of.
DN: How many hours a week do you devote to staff training?
Bussard: It depends on the staff. For managers, every single Monday we have a managers meeting where we sit down and we go through the different challenges from the previous week, the victories from the previous week. We talk about our marketing. We talk about different events that are going on. We do the business training on Monday. We also do physical training on Wednesday. That’s instructor training. Not just for managers, but for anyone who teaches. We do that separately. And then at each individual school, it’s up to the manager. And the manager at the school has to know everything. They have to be a quality martial artist, good physical skills because if they don’t have those skills they can’t supervise the instructors properly. So they have to know what has to be taught and then they also have to have a good understanding of what goes on in the office. Because again, if we have a program director or office manager at the school, the manager still has to know things are getting done properly whether its enrollment processes or inventory or whatever it might be. The manager at each school trains their staff, so we have a corporate training that everyone goes through and then we have individual training that the managers do for their staff at their individual locations. The managers all have the understanding that the better your staff is the easier your job is. So they work hard to make sure they train their staff daily.
DN: Do you find it more difficult to train people for business /office systems than teaching them how to work the floor and be an instructor?
Bussard: That’s an interesting question. My opinion has changed throughout the years. I used to think that the instructor side was more difficult and then I got to the point that the office side is more difficult. What I’ve come to realize is not so much the position that’s difficult but finding the right person for that position. What happened to me is sometimes we take the square peg and try to fit it in the round hole. Maybe you have two different instructors at a location and both of them are very dedicated and love being out on the floor and neither one of them really wants to be in the office. But somehow we try to take one of them and try to twist their arm. Making someone do something that they don’t want to do means they’re not going to do it well, and it decreases their job satisfaction. And those are two separate functions. You don’t necessarily have to cross back and forth. That’s what we tried to do initially is have someone who is half program director/half instructor so they could be out on the floor when we needed them and be in the office when we needed them. Then we would find out they are really good in the office and not so great helping out on the floor or they’re great helping out on the floor but they are not very good in the office. So we’ve learned to match job titles with specific personalities or a specific set of skills.
“What I’ve come to realize is not so much the position that’s difficult but finding the right person for that position.”
DN: I know that we’ve had some dealings with Nick Sarillo–he wrote that book A Slice of the Pie–and one of the weekend seminars he does is just on proper hiring techniques and how important it is to get the right person.
So you’ve really had an interesting career as you’ve grown from one school to 13. You’ve probably had different challenges in different stages during this growth. Where did you find the biggest challenges? Was it going from one school to two or two to five or five to 10? Are there benchmarks in there?
Bussard: When I was starting out with one school, I realized in order to grow I had to sort of replicate myself. Initially my thought process was that I needed to find someone who can do the things that I do. I could then slowly back my way out of the school. Then I would open up another location and I would run it myself. So for the first three schools, that’s what I did. But one of the issues that I was facing was putting out fires that the managers at the other locations just couldn’t do. So it got to the point in time that I was trying to put out so many fires that it started to really impact me. At that point in time, I hired someone to be my second-in-command. That person had to deal with those things. So, in essence, everything ran through them and any problem that he felt deserved my attention would be brought to me. I was able to focus on growth instead of focusing on the problems. So having that second-in-command sort of taking over that position and allowing me the freedom to not only run a school but to work on growing additional locations helped me immensely. So I would say the toughest time for me wasn’t when we went from one to two to three but about the time I opened the fourth school was when we realized we had to revamp all of our systems to get them to work.
DN: So, one thing that’s really been picking up the last five, six, seven years is summer camps and after school programs. You’ve chosen not to do that. So why are you not involved in that aspect of the business?
Bussard: I think it’s just a different way to focus on the business. I have a lot of friends like Cassidy and different people around the country who are doing things differently and to me, that’s one of the greatest things because it just shows there’s not just one way to do it. There is a lot of different ways to do it and be successful. For me, we started out back in 1994 and we found this formula that works where we wanted the students to come to class twice a week. I didn’t want them there three to four to five to six days a week. I wanted them to come twice a week. I wanted them to come consistently. And we set up our schedules where we had very, very flexible schedules. We offered classes six days a week. We wanted to make it as convenient as possible for the parents knowing their kids might have religion, school or soccer or whatever and it would change season to season. We wanted to make karate as flexible for them as we could. So we set up our schedule that way and we’d grow our student body. It’s interesting because I went to Harvard Business school recently and one of the people I went there with was Tu Le and we sat down and talked a lot about it. It was kind of interesting because a lot of the people who run the after school program, one of the things that happen with them from what I’ve seen is they don’t have as many traditional students. They focus on the after school and get a large amount of their income from either after school or summer camps. But they don’t have a large traditional population; whereas my schools have a large traditional population because we have flexibility in the scheduling. So people are only coming 2 classes a week and our typical school has 350 students in it. If you look at some of these others schools they may only have 150 traditional students in it but then they have 50 after school and summer camp kids. It ends up being the same amount of gross revenue. So it’s just a different way to do it. But for me personally, I looked at and I thought about it. And obviously if what we were doing wasn’t working, I’d look at it a lot harder, but because what we are doing is working, I looked at it and said wow they’ve got bus costs and they’ve got insurance. And they’ve got to worry about accidents, and they’ve got to logistically figure out how to pick these kids up from school and then they have to have a separate room for them for after school so that’s a difficult process. For us, we have our space. We got there. The students come to us. The parents bring them and take them. And so on. So really it’s almost a different market. They are looking for almost like day care as a necessity. So those people are coming for that. That’s sort of a different type of marketing strategy than what we’re doing. We are looking for people who are looking for an after school activity. Just like they are looking for baseball or basketball or whatever it might be. We want them to have martial arts as one of their after school activities. So it is a great business. I don’t have anything to say about it. I love it, but it’s just something when I came up and we started, I found a way that worked for us. So we just didn’t see a need to change it.
DN: You are talking about Tu Le. He’s John Cassidy’s top franchise and he’s just done a spectacular job as a young man. In fact, we had him on the cover of one of the first Dojo Nation magazines. As you said, he’s doing really well with that business model and you’re doing well with your business model. I think that tells us that it’s not so much as the business model but your ability to manage and maximize that business model. And I think sometimes people tend to think the answer is in the product and if you sell bad hamburgers and then you start selling bad enchiladas and that’s not the way to look at it. You need to sell really good hamburgers. Then it doesn’t matter if you are selling really good hamburgers or really good enchiladas. You’ll be fine. Sometimes we’ve been told in our industry that although you have really bad hamburgers, we can fix that with our marketing. And you can’t. Or because you are doing bad hamburgers we should switch to enchiladas. It’s not. And we need to step back a little bit. Either the people embrace the product or they don’t base on our ability to deliver a positive experience regardless of the product. I feel the same way as you do. The after school/summer camp is a great model if that’s what trips your trigger and that’s what you want to do. Obviously, the guys at TopKick do an exceptional job at it. You do an exceptional job at your business model. Bringing up Tu Le again, you went to Harvard Business School this last year. I want to be the first to congratulate you from our industry to attend Harvard Business School to represent us. Impressive! Can you fill us in a little bit about the insights that you picked up? More importantly, as successful as you are, some people might have a tendency to sit back on their laurels and coast. What made you keep driving and seeking a higher level of education?
Bussard: I think in large it was because as large as we were, we actually got to the point where we were at 11 schools and we had over 4,300 students. And one of the things that happened is we had a little bit of a marketing glitch where we were using sort of the same marketing plan and we hadn’t really adapted to the Facebook advertising. We were using a lot of the old traditional things and we hadn’t really gotten into social media so we started to see our numbers drop. And we dropped back to about 4,100 students. This was last year, and so I knew that we were facing some issues. Our retention was about the same but we just weren’t gaining many new members. We were gaining members but not at the pace we had in the past. The typical schools would see five enrollments this week and three people quit. What we were seeing is we might have three people quit but were only able to get one or two enrollments. We knew that we had a problem and in a conversation with Tu Le, he had been up to Harvard Business School and he had taken a class up there. He and I met for lunch one day because they are on the other side of the river from me in Virginia. And I meet with him and John Cassidy and we sort of get together or separately a few times a year just to chat. And he had just gotten back from a class at Harvard that he had taken and I was telling him about this performance gap that we were facing. And he had suggested that I check out Harvard Business School and he had encouraged me to apply. And my initial response was that man I’m 53 years old, and I’m too old to go back to school. I felt like Rodney Dangerfield in that movie, you know. He said no, no, no. There are a lot of older people that go. And executives and it’s tough to get in, but he had applied several times before he got in. I think because he was so young. I think they want 10 years of business experience before they would let you in the door because it was an executive education program unless you are going up there for your MBA. You’re not going to get in right after college. They want you to have some experience. So he suggested I apply. I went up there initially just to take a class, and I was pretty excited just to be accepted to Harvard Business School and just to get in the door. I sort of looked at it like it was going to be a week of camp. Even though we were up there, I was just taking it all in. I was very gratified to do it. But as I got more involved in it, I realized there was a lot of benefits to be gained not just from the knowledge but the way that the classes were conducted. When we go to your typical conference, everyone lines up in these rows of chairs and someone gets up and gives a Power Point presentation or something where they are lecturing you. They are telling you what to do and you sit there and take these notes. At Harvard, the entire learning process was different. You read a case beforehand, and then you go in and sit in this sort of semi-circular sort of stadium seating. It almost looks like a horseshoe. And you’re sitting in there and everyone has read the same case and the professor’s job is to ask questions and to get conversations started about the case. And there were many times where I read the case and sort of had my opinion on what they should do whether it was the manager of the company or the owner of the company sort of stories that would come out. And you are in there with all of these people from different backgrounds and experiences and they say something that completely makes you change your viewpoint on it. So oftentimes you’d come out of the classroom with completely differently learning and thoughts on the case based on what you heard in the class. It was an amazing experience to go through. So after taking two classes up there I decided I wanted to take the next step and go for a degree. And I applied for their program for leadership development. I knew it was going to be a long tough road – lots of reading, a lot of time away from family and so on, and I got accepted. Fortunately, Tu and I got into the same program. He got accepted before I did. I begged and pleaded to get in the same class with him. And they said great. So we were up there together and got through the program together and class at the same time. It was really just an amazing experience.
DN: That’s really something. So how long will it take you to complete the course and get your degree?
Bussard: I’m done. I’m finished. We had to go through four different modules and each time was two weeks up there. There were two modules that were on campus. And then there were two modules that you had to do at home which were just tons and tons of reading and webinars and so on to prepare you for when you got to the school. I learned things about accounting and finance and things about business that I really didn’t know. And sort of my key takeaway was one of the reasons I decided to go, in addition to Tu encouraging me, was because we were facing that performance gap where we had started to take a backward step. In my mind I was thinking, maybe I need to learn more. Maybe I’m not the right person to continue to lead the company because we are getting into sort of this area that I don’t understand. Being able to go up to Harvard and studying Walmart and Amazon and seeing how they work and do things just opened my eyes up to the knowledge that I’d never been exposed to. It was about becoming a better leader and a better CEO for the company so that I could continue to lead us on a path of growth in the future. That’s really the most important thing that I got out of it.
DN: Wow, that’s impressive and it’s exciting and just as important is all of the staff that you are responsible for underneath you – their lives and their family’s lives. For you to put the effort and time and money and being away from family to be as good as you could possibly be as a leader, that speaks volumes to the team that’s underneath you. We’d all like to sit down on the beach all of the time, but if that’s all that you’re doing – you are coasting. And we know when you are coasting we have a tendency to fall over when you stop coasting.
So where do you see your business in the next five years?
Bussard: We are on a path of growth. It’s continual growth. I don’t see us all of a sudden jumping and opening five locations in a year. Typically what you will see is one location within a year; maybe two locations if it’s the right time and we have the right staffing available. But it’s just one of slow continual growth. That’s what we’ve done for the last 20-plus years. But it’s working and I don’t see us changing our strategy all of the sudden and get a bunch of investors and say we are going to try to open 10 locations next year. I don’t think that’s in the cards at all.
DN: It’s legendary how many businesses have over-expanded. When I think of over-expansion, I think of Krispy Kreme donuts. If they couldn’t make it selling those donuts by over-expanding then it can wreck anybody. Once again, as a leader you have the discipline not to put the company at risk through over-expansion; pretty cool and commendable to say the least. I appreciate your time. I know you are very busy and it is so nice to have someone at your level take time out to speak to the martial arts community. We have our givers and our takers in this profession. You are definitely one of the givers and to give up this much time and this much knowledge is very, very nice of you and we sure do appreciate it!