Budgeting Tips for Opening a Yoga Studio

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Opening a yoga studio requires a magical mix of passion and practicality. There is much to celebrate about being a small business owner — becoming your own boss allows you to make a living from what you are passionate about.

The idea of opening a studio is exciting but can also be quite overwhelming! Here are some practical tips to help you along the way to building the business of your dreams.

Study Startup Costs

Commercial real estate prices vary greatly from city to city. Take a look at commercial real estate in your area, or look online at places like Zillow.com. This will help you get an idea of what your monthly rent will be. For reference: A simple, boutique studio that holds about 25 students, with a small retail and lounge area would be about 1100 square feet.

Budget for at least a few thousand dollars for the deposit on your lease, which will be dependent on the square footage of your space. Most commercial leases require a 3-5 year commitment, with a deposit of first and last month’s rent.

Consider legal fees you will incur to review lease documents, which can be anywhere from $500 - $1000.

Once you have secured a space, get bids from contractors to estimate how much will be spent on construction. This can start anywhere from $15,000 and can likely be more, depending on what work needs to be done, your design aesthetic, and how much the landlord is willing to contribute to get your space ready.

Once you have secured a space, get bids from contractors to estimate how much will be spent on construction. This can start anywhere from $15,000 and can likely be more, depending on what work needs to be done, your design aesthetic, and how much the landlord is willing to contribute to get your space ready.

High-quality mats and props are worth the investment for your clients to use over the years. Depending on what equipment you purchase, this can cost around $1,000 or more.

Managing Money, Time and Energy As Your Studio is Starting Out

Know what you are getting into financially by calculating your projected monthly recurring expenses. Keep these expenses in mind: rent, paying yourself, paying teacher/front desk staff, utilities, insurance, MINDBODY yoga management software, bookkeeping software, email program (often free until a certain amount of emails on contact list).

Other than the main overhead costs of rent and utilities, the next largest operating cost will likely be paying your instructors. Think of the best pay structure for them, whether it be an hourly rate, or per head rate, or a hybrid of both. Remember that you want your instructors to feel valued and motivated to work at your studio! As you know, clients become very loyal to their favorite teachers.

When planning your class schedule, think about growing class offerings as the community grows. Consider starting with a lighter schedule in the beginning, with classes at the most popular times. This way, classes will feel more full, as opposed to students feeling low-energy in empty classes and instructors feeling discouraged with low attendance. If you are an instructor yourself, it may be worth it to put yourself on the schedule to teach more classes in the beginning as the community is still growing.

When you’re starting out, you may want to keep costs low by managing most aspects of the business on your own. Remember that there is a fine line between trying to do everything and burning yourself out. There are so many things to keep up with, including managing instructors, keeping the studio clean, updating the website and social media, bookkeeping and staffing the front desk. Don’t be afraid to ask for help! You can hire college students, friends or offer work exchange to take care of simple tasks at the studio, which will save you lots of time and energy.

Developing Retail

Retail may not always seem like the biggest priority when opening a studio and trying to get people into your doors to start, but you can make up to 10% or more of your income on retail if managed well. Retail can also be slow-moving without proper education and awareness of product.

    Keep these tips in mind:

  • It’s convenient to sell basics like mats, towels and studio branded tops.
  • To help move product, train front desk staff with simple product knowledge, and include information about retail offerings on email blasts.
  • If you rent mats and towels for clients’ use, it is helpful to offer the same items in retail so they can try them out before purchasing.
  • Don’t Let Money Scare You

    Money can often be the most stressful factor in opening a business. Make sure to consider all expenses and be smart about your financials going into it. If your future studio is in a good location and serving a need in the community, it will grow and thrive and be worth the investment.

      When considering ways to raise funds for your business, remember the following:

  • Bank loans often have a high-interest rate around 10% and require monthly payments. Banks will review your current income, current debt, credit score and assets before offering you a loan, so it is not a guaranteed way of funding if your financials are not strong to begin with.
  • Asking to borrow money from friends and family can lead to uncomfortable situations. Instead, consider doing a crowd-sourcing campaign, like GoFundMe or IndieGoGo, where people can donate money to support your endeavor. You can offer things like class sessions or branded gear as small rewards for their generosity.
  • Take time to do the math and be honest about how much money you need to have for your studio. Plan out scenarios of how many monthly memberships and class packages you would need to sell in a month to cover costs and also pay yourself reasonably. Know that future revenue opportunities will also come from leading workshops, teacher trainings and retreats.
  • If you look at all the practical pieces and feel it can be done, then jump on the opportunity to open your own yoga studio! The yoga industry is booming and there are successful yoga studios and owners all around the world. With the right drive and mindset, there’s no reason you can’t be one of them!