Following your passion and owning a yoga studio will leave you with little extra time on your hands. Things like finding amazing teachers that fit in with your culture, planning flows for your classes and handling the administrative tasks required to keep things flowing smoothly, are just a few of the many priorities competing for your time each day.
The one priority you can never let slip is staying on top of your studio’s finances. Building a solid financial foundation for your business is the most important component of owning a thriving yoga studio. To help build a financially-centered studio so you can continue to serve your students for years to come, follow these three success tips from financially sound studios from around the world.
1). Understand Your Finances
Chances are, you didn’t open your own studio because you were passionate about finances, and that’s okay! While it may not be your passion, running a successful business comes down to being able to manage your budget. Doing so will help you maintain an average monthly profit that will keep your doors open and your studio thriving.
Centered studios have an average monthly profit of $13,493, compared to Off-Balance studios, who average a monthly loss of $2,058. It’s easy to get caught up in the day-to-day tasks of managing your studio and supporting your community of students that properly tracking the money going in and out of your business may not get your full attention. Don’t let this happen. Keep a detailed record of your studio’s revenue and expenses, and ensure you’re tracking exact, not estimated numbers. Don’t forget to factor in every source of revenue, including drop-in fees, punch passes, memberships, workshops, retreats, retail, teacher training and so on.
2). Charge for the Value of Your Service
As a business owner, you should stand behind your service and be confident in the value you provide to your students. If you do this, your service should be priced at its value and never discounted. Centered studios charge $227 for an unlimited membership while Off-Balance studios only charge $90. When you include discounts, these numbers drop down to $161 for Centered studios and only $65 for Off-Balance studios.
Avoid offering discounts to students to get them in the doors. It devalues your service, reduces your overall revenue and can make students who pay full-price for memberships to question why they’re spending so much.
3). Grow by Engaging with Your Community
It’s important that you’re consistently investing in marketing strategies that will help you get your name in front of prospective students. An excellent way to do this is by engaging with your student base and asking for referrals. Both Centered and Off-Balance studios get more than 35% of their new students from referrals. Referral students are great because they:
- Are an affordable way to get new students
- Tend to pay more per membership
- Have a higher lifetime value
- Are more likely to refer additional students
- Stay with your studio longer
In comparison, only 15% of Centered studios and 11% of Off-Balance studios get new students from discount sites including ClassPass, Groupon and LivingSocial. Remember, discounting your services is not the best way to get new students that will stay with your studio for a long time. Look for opportunities to make your current students advocates for your studio by referring their friends, colleagues and family members.
Interested in learning more about what successful studios are doing to build financially healthy businesses? Download your free copy of our 2017 Yoga Studio Benchmark Report: Second Edition