Today's Daily Tip
How to Open a Yoga Studio, Part 6: Making MoneyMany yoga devotees insist that the pursuit of money is the antithesis of the values that yoga espouses. Yet if you are starting a studio, you want to do more than help your students connect the body, mind, and soul. You want to stay in business.
Whether you have grand ambitions or are content to maintain a studio on a small scale, your core revenue generator will be your classes. In urban areas such as New York and San Francisco, many studios now charge between $15 and $16 for people dropping into single classes, and a wide variety of packages for students wanting package deals. (Yoga Works in L.A., for example, charges $15 for a single class, $150 for an unlimited month of classes, and $750 for six months of unlimited classes.)
Your best strategy for setting your prices is to find out what competing studios in your city are charging, determine whether you are offering comparable services, and then set your fees accordingly. "I never want to raise prices," says Cyndi Lee, founder of OM yoga center in New York. "But when I see that other studios are charging more for less than what we offer, it becomes an issue. Plus, reality forces your hand sometimes. I have a big beautiful space, I employ a lot of people, I have high costs… and I want to stay in business."
In short, many studio owners charge what the market will bear. At minimum, they figure out what their fixed costs are and ensure that what they are charging students will cover those expenses (as well as allow them to live!).
One word of warning about prices: it is hard to adjust them once they've been established. Says Maty Ezraty, founder of 15-year-old Yoga Works in Los Angeles, "Charging is one of the reasons yoga is a hard business to run. You can raise the amount of classes 25 cents, but it won't work, so you have to raise it by increments of dollars. Yet you can't raise it by a dollar every year; there's only so much people will pay for a single Yoga class." Ezraty has raised Yoga Works's pricing every three to five years, depending on the economy. OM, which is five-and-a-half years old, has inflated its prices once, from $13 to $16 a class.
Other sources of revenue often include one-on-one programs, workshops, and retreats, all of which range in price depending on where they are held, by whom, and for how long. At OM, a two-hour-long workshop might cost $45 or, if a major name like Rodney Yee or Judith Lasater comes in to teach it, $250. (A word of warning here, too: guest teachers can be expensive. Some will not work for less than a fixed fee or revenue share or both, and they typically demand that their travel expenses be paid, according to studio owners who have invited them to teach.) The advantage to you in hiring them is that they can both raise the profile of your studio and introduce your students to a style of yoga that you might not offer regularly.
Once you've really gotten up and rolling, you might consider turning to retail as well, from books, to videos, to clothing lines. Selling products can be an enjoyable and lucrative way to grow a brand. Just hold off on launching anything until you have established a business that can financially support a learning curve. Says Ezraty, whose retail store is one of her favorite parts of the Yoga Works experience, "I love the store, but it isn't a good idea for most yoga studios. There's a lot of theft. If you pick the wrong merchandise, it can cost you thousands of dollars." She adds, "It's a fun part of the business, but I don't know that it's a smart part of the business."
Constance Loizos is a San Francisco-based writer whose work has appeared in more than a dozen magazines, including Inc., Fast Company, and San Francisco Magazine. She is currently writing a book about businesswomen.