So, you’d like to open a yoga studio. It’s easy to understand why. Given that yoga is an optimal way to counter the stresses of work, it isnt hard to imagine that practicing and teaching throughout the day, in your own corner of the world, could create a happier, more peaceful lifestyle. The moneymaking potential of opening a studio is encouraging, too. No one knows exactly how big the yoga market is, but with the number of yoga practitioners in the United States reaching the neighborhood of 15 million, many estimates place it in the hundreds of millions of dollars.
The question is whether you have what it takes. Starting any business venture requires not only determination but also close consideration of a large number of economic and personal issues. Especially with growing legions of studios already competing for the same students–along with fairly low barriers to entry–it has become more important than ever to identify every last variable before plunking down that security deposit.
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Yoga Studio Costs and Revenues
Bill Wyland, who owns and directs one-year old in San Francisco with his sister Savonn Wyland, created this financial checklist of what to expect when opening your studio:
rent and deposit
renovations (cosmetic and code)
mats and props
retail license (if desired)
phone and utility connection fees
teacher and staff salaries
banking fees (including interest payments on loans)
credit card fees (if you decide to offer this service)
water (if you provide bottled water for your clients)
renting the space
Do you have, for example, a tolerance for risk and uncertainty? You need to be willing to make sacrifices and even lower your standard of living until the business takes off. Are you good at managing money? Chances are that the capital you initially pool will have to carry you for at least one to two years, the time it takes many yoga studios to begin turning a profit. Finally, how tenacious are you? Are you prepared to be Chief Salesperson, along with Chief Handyman, Chief Administrator, and Chief Customer Service Person?
Because opening a studio necessitates a major life change, you’ll want to be as informed as possible before making your decision. For help in determining whether you should take the leap-and to assist you if you decide to move forward-Yoga Journal here presents the first in a series of articles offering constructive intelligence.
You’ve undoubtedly heard it before, because its true: the first, crucial step in charting your businesss path to success is writing a winning business plan, even if you arent seeking investors. Having a dream to be a business owner is laudable, but it’s advance planning that will turn that dream into a reality. After all, if you don’t understand what your expenses are going to be, it makes no sense to get started at all. A business plan can be a blueprint that will help you better how to select the right space, hire an appropriate number of employees, and determine how much risk you are able to take.
Still, perhaps the most important factor to keep in mind when authoring your business plan is that no matter how much planning you do, your costs will be a moving target. Jonathan Fields, a corporate lawyer-turned-yoga teacher and owner of two-year-old Sonic Yoga in Manhattan, smartly prepared three years of financial projections when constructing his plan. Because Fields had created and run a personal training business for two years prior to opening Sonic Yoga, he knew the importance of calculating even the unexpected. “I took into consideration everything from corporate structure to renovating a space to unforeseen costs.” And Bill Wyland, co-owner of Bernal Yoga in San Francisco, encouraged studio owners to view their business plans as an organic documents. “We had a formal business plan and knew what we needed to do, but as soon as the studio opened, we started to understand what worked and make adjustments based on the needs of the people who were coming.”
Indeed, while you’ll want to design your plan to incorporate a wide number of variables-an analysis of the market and a description of your marketing strategy, among others-one of the most important pieces of your overall strategy will be your best estimates of startup costs, revenues and expenses.
Begin by asking yourself how big a business you want to run. Its a crucial consideration, not least because the answer will determine how big a space you will need. Telari Bohrnsen, the owner of the 1, 700-square-foot One Yoga Studio in Minneapolis, says she postponed writing a business plan until securing her dream space, and shes thankful she did. “It took nine months to find the right location, but it was really important because I didnt know how much money Id need beforehand. If Id written a plan for a 500-square-foot space it wouldnt have worked. I would have had to rebuild the plan entirely.”
Because leasing and building out a space will be your biggest startup cost, it is imperative that you assess how much space you will need per student and where, exactly, it makes the most sense to open your doors.
Though there are no hard-and-fast rules, a good rule of thumb is to figure on needing roughly 21 square feet for every practitioner. This estimate takes into account a two-by-six-foot mat and still allows for one to two extra feet per person. (In cities, because rent is expensive and space is often limited, you may have to squeeze people into a slightly smaller area. Thankfully, urban dwellers are usually comfortable being in closer quarters than suburban students, who will expect their space.)
If your life is portable, compare market prices before making any decisions, as it will cost you much more to open your doors in some cities. For example, in New York City commercial property owners command an average of $80 per square foot, according to the commercial real estate advisory firm Grubb & Ellis. Meanwhile, Bostonians pay an average of $30 per square foot; folks in Portland, Oregon pay $23 per square foot; and in Oklahoma City, average rates are $8 per square foot. In post dotcom-bust San Francisco, rates that soared as high as New York City prices are now as low as $25 per square foot. In general, knowing your options will help you take advantage the market’s current opportunities.