When I was coming up as a school owner, learning the craft of school management from my seniors (consultants in the "industry"), there were business people who taught a model for doing business that went something like this:
1. Get leads, sign leads on membership contracts that outlined the details of promised services and promised payments between the school and the student. Collect that money.
There's nothing wrong about that idea, right? That's just the business of spelling out what the school's going to do and what the student is obligating him/herself to.
But then, there were things we were taught that we wouldn't ever "share" with the potential student, like:
2. Your income resides in the money promised to you in those membership contracts; that's YOUR money; the student has promised to pay it --so come hell or high water, it's yours and you're going to get it.
The billing services we used back then, in my case EFC, were designed to get the contracts you sold, then to get that money to the best of their ability, whether the student was attending or not. Our position was, "Hey, you read the contract, we're doing OUR part, so pay the tuition (or we'll take you to court, ruin your credit, etc.).
So we had any number of people, including myself for a period of time, collecting money from people who were coming and enjoying the services provided, then some money being collected from people who weren't coming, but intended to, and then some money being collected from people who'd quit, didn't want to pay, but whose feet were being held to the collection fire.
Some school owners would get downright nasty and pushy about the situation --and some would take their collection process all the way to court. I've had owners brag to me, recently even, about how they've taken XX number of contract signers (also called "former students") to court --and never failed to get some money out of the deal.
Well, in hindsight, that's one screwed up system.
First off, a lot of instructors, myself included, often failed to live up to the specific and/or inferred promises of service we'd originally sold our lessons on. Truth be told, we made very few ultra-specific promises of service, other than we were skilled, knew exactly what we were doing, --and that we would show up for classes. On the other hand, we made students promise to pay for untaught lessons, whether they ever took those lessons or not (Again, our attitude, the entire industry's attitude was, "Hey, WE ARE DOING WHAT WE PROMISED, now it's your turn to pony up." We weren't, actually, always doing that great of a job, truthfully; but if a student sought to discontinue their relationship with us, BOOM, we had 'em!).
It's just a bad business practice to go about chasing people for services you've not delivered and that, for whatever reasons, they are not happy with or using. It's especially bad business for the self-professed "martial arts professional" to do it; as this is the business owner who isn't really an expert and an authority, 9 times out of 10, in 50% of more of what he or she professes (or infers) to teach (self-defense, fitness, philosophy, etc.). There are exceptions of course, but there are more unqualified and hardly-trained teachers in the martial arts community as there are in any other unregulated sales-based industry in the world.
Here's the correct policy:
You do not chase people for money. You just don't. Collect what you can from the people who use your services --and get your income from willing and able members --and leave the rest of them alone. Send them off with a smile. Wish them well. Let them remember you as someone who did the uncommon, who operated with a level of integrity worth noting, even if the people around you didn't.
Don't build any part of your business, your plan to make money, on the strategy of collecting money from unhappy people. Unhappy people spread bad news about your business, they hold grudges, they tell other people --and there's nothing good for you in any of that.
If you can't KEEP your students, then you don't get to charge them, period. Start your business with that policy --and you won't have to deal with collecting money from people under stress, people who didn't think you really delivered on the big promises of your advertising; and you'll never have to do what I did --the thing that finally made me wake up to the stupidity and selfishness of collecting on the contracts, written heavily in my favor, that I had made my students sign:
I had a family who'd joined my school, signed a $4000 contract to have all of their family in classes, then somewhere in their first month or two of lessons, quit. They also stopped paying for lessons --and weren't returning my phone calls or requests to pay; so I sent their contract to a collection agency. Eventually they were taken to court and I collected some small percentage, less than 50% as I recall, of their remaining balance. HA! I WON!
Then, some time later, I was sitting in a restaurant with my wife, and in walked this family. The kids were dressed poorly, the parents didn't look all that well off, and the father was helping his mother into the restaurant (it was Mother's Day) --and the poor woman was very ill and probably near death. The whole scene just hit me in the face, as I hadn't once considered what the world was like for these people. I wore the finest clothes, I drove a BMW 735 and a Porsche 911 Targa, I was in perfect health, had just returned home from a month holiday in Europe, and in fact, I had more resources than I had sense.
It hit me. I had never considered how it felt to this father and mother to have 3 children and an ill relative. I didn't think about anything but the contract I'd got them to sign. Under any other circumstances I would have jumped all over the opportunity to help these people, but instead, when they looked at me I wasn't "Tom Callos the martial arts master teacher," I was that guy who'd signed them up to a contract, then collected the money despite their family's situation.
That was not the person I wanted to be. I was better than that. I didn't need anyone's money THAT bad.
Neither do you.
Build your business on tuition you earn from students you can keep in your school --and let people who choose not to attend go. Consider it a part of your own spiritual training. Consider that these people aren't flakes or liars or people who simply didn't read the small print. Remember that they're people who have hopes and dreams; they're people who might have hit a bump in the road; and consider that you've not given them anything, really --and that collecting on untaught lessons is just bad business, whether you use a contract that justifies it or not.