Opening a yoga studio is a fun but challenging endeavor that requires a healthy mix of passion for the practice of yoga and practicality for running a business. But there is nothing more rewarding than being your own boss in a field that you love! For many passionate yogis or yogini’s the real challenge for them is the business side of owning a yoga studio and the hardest part usually centers around finances. This article offers budgeting tips for opening a yoga studio to ensure your yoga studio’s success and longevity!
Your Start-Up Cost Budget:
Getting your startup costs right is the most complex and important part of starting your yoga studio. There are many factors to consider when creating your start up cost budget for your upcoming yoga studio, because these factors differ from one studio and city to another. So its important to research, research, research.
Questions to Consider:
Do you want to lease or buy the property? How big will your studio be? How big of a buildout do you plan to do? Do you want to throw a big grand opening celebration? These are some initial questions to ponder when starting to create your budget.
Must Have Line Items in Your Budget:
When creating your start up budget for opening your yoga studio, be sure to include costs of lease or mortgage payment for your building, doing your buildout, furnishing and decorating the studio and equipment for yoga. You also need to ensure you budget for licenses, permits, insurance, and employee salaries and expenses. Additionally, you absolutely need to include advertising costs, deposits for all utilities and monthly electric, water, internet, pest control, business management expenses, legal fees and your salary.
Your Studio Location:
When trying to figure out your physical space, keep in mind that commercial real estate prices vary drastically from city to city. Spend some time looking online at commercial real estate in your area on sites like zillow.com This can give you a better idea of what your monthly rent/mortgage payment will be. It is best to budget a minimum of several thousand dollars for the deposit, if you are leasing. However, that will ultimately depend on what city you are in and how many square feet you are leasing. Also, keep in mind that most commercial leases will require a minimum 3-5 year commitment, first and last months rent, and a deposit.
When making your start up budget, be sure to include a line item for legal expenses to have your lease documents reviewed, which can range anywhere from $500-$1000. You don’t want to miss this step, trust me! You may even want your attorney to help you set up your business entity with your state and local government. Either way, include that in your budget as well, which has a renewal fee each year.
Build Out Of Your Studio:
Once you’ve signed your lease or closed on your commercial purchase, its then time to get bids from several contractors to get an accurate estimate of how much you will need to spend on construction/buildout of your studio. On the low end, this will typically start around $15,000. However, this cost can certainly be far higher, depending on multiple factors such as how much, if any, demolition needs to be done to the building, what you want to do with the space and how much your landlord is willing to contribute towards your buildout costs.
Furniture, Decor And Equipment For Your Studio:
What kind of equipment and how much do you need? Most studios need to invest in yoga mats and other props, sound equipment, computer, etc. In my experience, it is worth it to invest in high-quality mats and props that will last for years. Now, when it comes to furniture, this is usually a lower cost for yoga studios than most businesses, but you still want to budget for a reception area, reception desk, perhaps a sofa and chairs. And if you plan to have retail in your studio, you’ll need to budget for retail furniture.
Decoration for your studio is a personal preference and something you can work on over time, once you’ve opened your space. But you should at least budget for some artwork or other decor to create the vibe you aspire to provide your clients. Determining your equipment needs is an important step in your budgeting process.
Recurring Monthly Expenses:
Next, you need to calculate your estimated recurring monthly expenses. Some of your main expenses to keep in mind include your rent, your salary, payroll costs for teachers and front desk staff, insurances, utilities, studio management software, newsletter subscription costs, web hosting fees, graphics fees to either hire someone or monthly costs to use a simple software like canva to do it yourself; and social media scheduling software fees.
Staff Pay Structure:
Other than the primary overhead of rent and utilities, your labor costs will be the largest expense you have to consider. Research and determine the best pay structure for your staff. Will it be an hourly rate, a percentage split, a per head rate, or flat rate per class?
If you are a yoga teacher yourself, consider teaching most of the classes in the beginning as you are growing your yoga community. That can help you keep your labor costs down and allow you to hire qualified staff when your studio can support that expense. You want to be sure you pay your teachers well, so they enjoy coming to work at your studio. But you must also keep your costs low at the beginning to ensure your studio will thrive long term.
Once you discern your particular start up costs, then calculate the first six months of monthly expenses. This will ensure you calculate the accurate amount of capital you need to get the doors open and keep them open during the first six months you are working to grow your business into a lasting part of your community landscape.
After you’ve collected all of that information, you can begin creating your yoga studio business plan! When drafting your plan, be sure to consider what kind of business model you plan to work from, your financial forecast, personnel organization, your target market, marketing and advertising strategies, products you plan to carry in your retail store, and more.
You also need to select a yoga studio software to ensure you are most effective with managing all the moving parts of your business. And there a few other things to include in your budget: Cost to build your Website, signage for your studio, flyers, posters, and your grand opening.
Now that you’ve done your research and determined exactly how much you need to get to grand opening day and cover the first six months of recurring expenses, it’s time to consider ways to raise funds for your business. A bank loan is a great way to acquire the start up capital you need for your future yoga studio, and there are excellent financial resources online. A bank will need to review your current income, debt, credit score and assets before offering you a loan, so do start gathering all the necessary information before you apply.
You can also get more creative with your start up capital by doing a crowd-sourcing campaign to help offset some of the start up costs. Using platforms like IndieGoGo or GoFundMe allows friends, family, clients and even strangers to donate money to support your startup costs. In exchange for their donation, you can offer classes, privates or branded studio gear as a thank you for their help to bring your dream of opening a studio to fruition. And then there is the option to borrow money from family and friends. Although, I don’t personally recommend it.
It can be really helpful to draft out different scenarios of exactly where your revenue will come from in order to cover all of your monthly overhead. Consider how many class packages, monthly memberships, private sessions and retail you need to sell each month to be profitable. And include future revenue opportunities too like teacher trainings, yoga retreats and workshops.
Once you’ve done all your research and you feel confident in your costs and your ability to do all the work needed to open your doors, get going! It’s time to start your yoga business! The Yoga industry is worth over 88 Billion dollars worldwide and expected to grow to 215 Billion dollars by 2025. With so much room for growth there is no reason you can’t become a thriving yoga studio if you have the right mindset, drive and preparation!
If you’d like more assistance from me, I do mentor yoga studios around the world, and I’d be delighted to help you bring your dream of becoming a yoga studio owner to fruition. Click here if you’d like to set up a complimentary consultation.
It is a lot of work to run your own business, but there is simply nothing more rewarding than being your own boss doing something that you love! I wish you the absolute best of luck.
About the Author:
Krista Shirley is the founder and owner of The Yoga Shala in Winter Park, Florida. She is also the owner and founder of Olotita and Nysa by Olotita in Orlando, Florida. Krista took her first yoga class at a local gym during her freshman year at Rollins College. completed her 200-hour teacher training at Centered Yoga in Ko Samui, Thailand before beginning her yearly pilgrimages to Mysore, India to study at the Ashtanga Yoga Institute (now Sharath Yoga Centre). Ms. Shirley received her level II authorization in 2009 and returned from India to open The Yoga Shala. Krista teaches traditional Ashtanga yoga in the Mysore method with a focus on body mechanics and proper breathing. She emphasizes mindfulness, presence and intention.