Cash flow the key to survival!

The famous "Aflac" commercial with Yoga Berra, when he states - "They give you CASH, which is just as good as money.

Sooner or later all business run out of cash!  To survive they have go out and borrow money. But to borrow  you must have the ability to repay the loan.

This year we have just witnessed the collapse of the entire Housing Market. People, who last years were millionaires on paper are now Bankrupt me mortgage market. Companies on paper worth hundreds of millions of dollars are being forced into Bankruptcy - or forces out of business. Why? They all ran out of cash and no one will lend them money at any interest rate.  The corporate bonds they used to put up for collateral have no value!

What does that make "Karate Paper" (Contracts) Karate Contracts have never had any commercial value. Over the years we saw dozens of Companies who thought they could loan money (at a high discount) and make money! Everyone of them went out of business!

Fact 1 out of ever 3 Karate contracts is BAD the instance it is signed.

Almost all Health studios have given up trying to sell contracts.

 Yet many of the "Karate Business Gurus" Karate collection companies,  never want you to Cash Out your students. They call it IMMORAL! Why? Their worn out logic: You can't wear two hats - teach karate and then have the audacity to ask you students to pay for it. But you can ask a parent to sign a $2,000-$4000 contract for a eight year old kid for a leadership program! 
If I sold that type of contracts - I would sure turn them over to a Billing Company! I would not be able to look a parent in the face and ask them every month for payments that will turn their son/daughter into a leader in every aspect of their life. Let alone when they get punched in the face and cannot defended themselves - no matter what color of belt you have given them.
 IF YOU CASH OUR YOUR STUDENTS  - the "Billing Companies"  will go out of business! Ever time you cash out a student its money they will never get!

Karate Paper (contracts) is not money. Try to take it to the store - or - bank - or anywhere and try spend it!

Business Rule: The time value of Money!
95% of your operating expenses re-occur every 30 day! The rent of the studio (and your own home) usual come due the first of every month! Utilities must be paid or they are turned off.

What produces immediate cash flow! Monthly payments, down payments if you use contracts, cash outs (should be about 20% of your students), Retail sales! Every retail sale is immediate cash!

Lost cash flow (Retail Sales); The more you have to sell-- the more you will sell!

For most studios what went wrong?
They used to buy their retail products with a credit card. But rather then them using money they made off retail sales and replenishing their stock, they used the money for their own personal items. THEY MAX OUT their credit cards and now they cannot buy retail products. Every sale lost is money you will never get.

In order of Priority for retail sales:
Gi's (Uniforms)
Rank Belts
In season:
"T" Shirts (During the warm months students may wear an official studio "T" shirt!
(The more designs and colors you carry the more you will sell)
Tank tops (to be worn outside the studio)
Muscle "T's"
Winter:
Sweat Shirts
Pull over Hoddies
Zipper Hoddies

Teaching aids you can purchase for Tracys at a discount:
Written Quick Reference ($20 profit every time you sell one)
Colored belt Picture Manuals ($20 profit every time you sell one) You should sell one with every belt promotion)
Dvd's (Up to the rank they are being taught (Profit $25 - $35 for each set sold)