Starting a yoga business is an exciting, and sometimes even daunting, venture. You have the passion for yoga, which is the first step, but you also need insight into what other studios have done to build successful businesses. One commonality thriving studios have is a solid financial foundation.
Not a finance expert? No problem, we’re here to help. For the second year in a row, we surveyed studio owners from around the world to determine what they’re doing to build financially healthy businesses. In our Yoga Studio Benchmark Report, we break studios into two groups, “Centered” studios are those that generate more than $7,000 per month in net revenue, and “Off-Balance” studios are those that lose money each month.
One key thing Centered studios have in common is a large student base. The median student base for Centered studios is 700, while Off-Balance studios only have 100 students.
While it may sound obvious, it’s worth saying: the more students you have, the more money you’ll bring in each month. If you’re planning to open your own yoga business, follow these three tips from Centered studios to help grow your student base.
1). Avoid Discounts
Centered studios provide incredible instruction, allowing them to charge for the value they deliver to their students. It’s critical for you to stand behind your service and be confident in the value you provide to each and every student. With that said, you must be strict with discounts. Never use discounts to get a student into the door. This devalues the service you’re providing and can cause you to miss out on a good chunk of revenue over time.
Centered studios charge an average of $227 for an unlimited membership, while Off-Balance studios only charge $90. With discounting, these prices decrease to $161 and $65, respectively.
2). Encourage Referrals
Yoga is well known for being a communal discipline, and engaging with their community contributes to the growth of both Centered and Off-Balance studios. One way to grow your studio is by engaging with your community through a referral program. Both Centered and Off-Balance studios get more than 35% of their new students from referrals.
Referral students are great for several reasons as they:
- Pay more per membership
- Have a higher lifetime value
- Are more likely to refer more students
- Stay with your studio longer
Use your current students to drive additional loyal students, allowing you to grow your student base and create a positive, healthy community of practitioners.
3). Focus on Selling Memberships
To build a strong student base, you need to focus on developing loyal students who make a habit of attending your classes several times per week versus relying on drop-ins to pay the bills. 36% of Centered studios’ student-base are on unlimited memberships, and 54% of their student-base is on some type of membership (unlimited, 1, 2 or 3x per week) compared to drop-ins and punch passes. With a student base of 700, that’s $57,204 in revenue per month from unlimited memberships alone!
Not only will membership sales help increase your revenue, it’ll help improve your community as well. These dedicated students will add to your community, versus having classes full of drop-ins or individuals who bought a deal on Groupon or LivingSocial. Building on the first tip, we strongly recommend against offering deals on discount sites, and Centered studios would likely agree as only 15% of them get new students from these types of sites.
So there you have it. If you’re planning on starting a yoga business, you need to have a strategy to help you grow your student base in order to eventually join the coveted group of Centered studios. Looking for additional insights from financially thriving studios? Download your free copy of our Yoga Benchmark Report.