Osu! Solid advice, Spirit. You should be giving seminars on dojo management!
To the above I would add the observation that customers are looking for as much bang for the buck as they can get. Wallets can only stretch open wide enough to accomodate a few discretionary expenses. Your competitors are not only karate dojo but commercial gyms, ballet studios, yoga studios, team sports. This shouldn't mean that students get a black belt up front, but you should consider making the dojo a one stop experience (exercise equipment, training advice, lot's of children's classes, pro-shop) immaculately clean facilities and a communal environment. Where children are concerned, parents will be anxious about safety so stress safety-new and clean pads and head-gear, well lit and clean locker room, high intructor to children ratios.
Also, look the part of whatever it is you're selling. If you're promoting karate as a way to lose weight, you've got to look like a swim suit model. If you're targeting the children's market, you better be able to relate to the kiddies. If you're going after the tough knockdown community, a few legit trophies on the mantel and a bat breaking demo every now and then goes a long way to building consumer confidence.