Yoga Studio Business Model: Compare Options & Build a Plan

Feb 29, 2024

✍️ Author: Sinead O'Connor

🧘 Reviewer: Michael Jay


 

Are you an experienced yoga instructor looking to open your own yoga studio? Or maybe you’re a new teacher hoping to understand how different studios work.

 

Either way, this article will help you understand various yoga studio business models, how they work, and who they are for, including guidance on creating your yoga studio business plan and answers to many of your questions.

 

Table of Contents:

Understanding the Business of Yoga

If this topic causes a bit of discomfort, you’re not alone. Most yoga instructors don’t go into this profession because they are looking to get rich. Most of us are inspired to share the gifts of yoga to help people in our communities with their wellbeing.

 

However, if you’re opening a yoga studio, you’ll need to understand what you need to set yourself up for success for years to come. Owning a yoga studio can be an overwhelming effort but also one that can be very rewarding.

 

We’ve outlined the three keys to success below:

 

  • Research – before opening, successful yoga studio owners spend countless hours learning about how to open a studio, including how to reach their target client base, where the best locations are, and what classes and programs will set them apart from the competition to fill a need in their community.
  • A detailed business plan – this will be your guide for opening and beyond. Sticking to your plan and adjusting as needed will be critical to your success.
  • Understanding that yoga is very different than traditional business, and you’ll need to get comfortable with networking, negotiating, managing staff, and the financial side of operating your yoga studio.

Download Our Yoga Studio Business Plan Template

What to Include in a Business Plan

Like many yoga instructors, you might wonder what a business plan is and why you need one. Financial and other stakeholders use this formal document to help decide whether to lend money or invest in you.

 

Once you’ve secured funding, your plan should layout the roadmap to launching your business successfully. Below are the key components to include in your yoga studio business plan:

 

  • Executive Summary 
  • Product & Services 
  • Business Operations & Structure
  • Target Market
  • Location Breakdown
  • Sales & Marketing Strategy
  • Financial Analysis
  • Funding Plan

Executive Summary

An executive summary gives readers an overview of your overall yoga studio business plan without reading through the entire plan.

 

Some consider this the most important part of business plans because you need to hook your readers so they will want to learn more and, ideally, invest in your yoga studio business. These tips will help you get started:

 

  • Keep the wording concise and use language targeted to your audience.
  • Follow the topics in the same order as your overall plan.
  • Include the justification for your business, your recommendation, and a conclusion.

Products and Services

As the name implies, this is where you’ll have the chance to showcase your products, including yoga classes, workshops, yoga teacher training, complimentary services, and possibly retail and beyond. You’ll want to include the following:

 

  • The highlights and features of each offering along with pricing information.
  • Your specific experience and expertise in language that both yogis and non-yogis can easily understand.
  • While this section isn’t an advertisement, you’ll want to be client-focused when describing your products & services.

Business Operations & Structure

In this section, you’ll describe the daily activities that will support you in meeting the expectations in your yoga studio business plan while identifying goals. You’ll also want to include which business structure you’ll operate under. There are five main options:

 

  • Sole proprietorship
  • Partnership
  • C-corp
  • LLC (limited liability corporation)
  • Non-profit

 

This section will ideally include the following details:

 

    • Staffing plan, including training and development
    • Operating hours and schedule
    • Equipment, supply, and technology needs – this includes yoga studio management software

Market Overview and Target Market Analysis

Your target market is who you think your clients will be. Start by researching the yoga studio market in your area. Once you understand the market, zero in on your target market.

 

Thoroughly research your target market to ensure you get all vital information.

 

  • Why would they look for services like yours?
  • What sets you apart?
  • What are their motivations/hopes/fears/pain points?
  • Are there other yoga studios in the area?
  • Are major construction projects planned for the future that could be temporarily disruptive?

 

Below are additional, important considerations to include:

 

  • Demographics, including trends, of the area to ensure the population and location can support your goals.
  • Competitive analysis, including how your yoga studio will fill a need in the community.
  • What is the local area like? Be sure to spend time in the area to get a feel for the culture and activity. Have the businesses been around for a long time? Play tourist for a day or two.

Location Breakdown

For yoga studios, location is one of the most important considerations. You could have an amazing studio, but if it’s in the middle of nowhere, it won’t be easy to entice your clients to visit regularly.

 

If you have a location selected, explain why it’s a good spot in this section. Or, if you don’t have a location secured, you can share what you’re looking for in a location. These items are some of the most important considerations:

 

  • The best locations are in densely populated areas with few yoga studios.
  • Convenience of location, including parking and public transit information
  • Local trends – is the area growing, maintaining, or shrinking?

Sales and Marketing Strategy

Sales and marketing are parts of the business of yoga that cause worry as this often isn’t a skill that comes naturally to many yoga instructors. Don’t worry. This skill can be developed and honed over time, and you’ll learn a lot.

 

Your investment of time and money in these efforts will be well worth it in the long run. A multi-channel approach will be vital to reaching your overall target market. This list will help to get you started:

 

  • Social media, including ads – there are an overwhelming number of platforms today. We recommend starting with one or two you are most comfortable with
  • Print – Hanging flyers at local businesses is still an effective way of advertising. Some will allow you to leave cards or even a newsletter. How about delivering flyers to homes in the area? Apartment and other property managers can help your distribution efforts, too.
  • Email – Over time, you’ll build up a list of client (and potential client) email addresses. Share your class and other program offerings with them. A monthly newsletter is another great way to share your offerings while giving your community additional info that interests them.
  • Presale Campaign – Having a presale for something like a ‘Founder’s Membership’ that offers extra benefits to those who sign up before you’re actually open is a great way to generate interest upfront and bring in some cash flow.

Use Our 2024 Yoga Marketing Plan Checklist to Nail Your Marketing Strategy

Financial Analysis

The financial piece of any business causes stress and discomfort for most. Ensuring your financial analysis accounts for all possible costs and small details is paramount to running a successful business.

 

Start-up and operating costs are some of the most common expenses that can be overlooked.

 

In addition to some of the more obvious costs – lease deposits and payments or rent, staff compensation, equipment, utilities, marketing, etc. there are also insurance, licensing, permit, and legal fees. And what about a grand opening celebration?

 

Additional considerations include:

 

  • How much will you pay yourself and your team? Offering fair compensation will go a long way in hiring and retaining top instructors and other staff. This will help you determine your pricing.
  • While you can develop your financial analysis and plan on your own, it is a worthwhile investment to hire an accountant or business consultant to ensure you have a comprehensive financial plan.
  • How will you retain customers? What percentage of business do you want to come from repeat clients vs new.
  • Once you know your costs, you can determine your pricing strategy. With classes costing anywhere from $10-$30, you’ll want to research your area to ensure you’re charging appropriately for your classes, memberships, and packages.

Funding Plan

Once you’ve done your financial analysis and understand your start-up and ongoing financial needs, you’ll make your requests in this section if you seek funds from a financial institution. If you’re a small business, you’ll likely start looking at SBA loans.

 

These requests should be tailored to each lender, and below are the different types of SBA loans available in order of popularity:

 

  • Debt funding – this is where you agree to repay your lender payments (typically monthly) with interest, similar to a car or home loan.
  • Equity funding – in exchange for money, your lender will be repaid with profits and ownership.
  • Grants – these are common with non-profit yoga studios and do not require re-payment.

Comparing Yoga Studio Models

If you’re an experienced yoga instructor, you’ve likely attended various yoga classes in various settings. Have you thought about the business models of each? This section will help you better understand different models so you can select the one that’s right for you.

 

Traditional Yoga Studio Model

A traditional yoga studio has a set brick-and-mortar location (or multiple locations for chains) and typically has a team of yoga instructors and operational staff. This is the most popular model for in-person yoga classes.

 

  • This model is the most complex since it tends to have larger teams and facilities, which means higher overhead costs and risk.
  • This model can support various classes, workshops, and training as they often have multiple studio spaces, and with a larger team, you can offer more variety.
  • To be successful in the model, it’s crucial to develop a strong sense of community to keep your clients coming back.

Pros

  • You can earn a comfortable living while being in charge of all major decisions and programming
  • Even though the work can be difficult, it can also be gratifying as you can become a staple for your community’s wellbeing
  • You can easily offer additional products and services – a retail section, coffee/juice bar, and spa services are just a few examples

Cons

  • Higher overhead and start-up costs can lead to stress during slower times of the year.
  • Larger operations can have more of a “corporate” feel, which may deter clients looking for a more personalized, community-based yoga studio.
  • Whether you own or lease your studio, you’ll need to expect the unexpected – if your heat goes out in the winter, you’ll need to work to resolve issues to keep your business running.

Who It’s For

A traditional model is best for yoga instructors who live in a densely populated area, are less risk averse, and can easily access the start-up capital needed to set themselves up for success. Having an entrepreneurial mindset will be a huge benefit.

 

Traditional models can be more profitable for yoga studio owners, and they typically have a staff of yoga teachers, a studio manager, and other operational staff. Multiple people often own traditional studios and may have an advisory board, especially if it’s a chain.

 

Collective Yoga Studio Model

As the name suggests, this model features a collective of people with similar or complementary offerings who own a studio together. In this case, it could be multiple yoga instructors and those who offer massage, Reiki, acupuncture, and other services. This model has many benefits, including the community building that happens when working with people with shared goals and values. Below are more highlights and the pros and cons.

 

  • Operating costs and activities are divided amongst the members by leveraging each person’s experience and interests
  • Each member could have a separate business, or it could be one combined business
  • Each member has specific timeslots for their classes and other programs

Pros

  • By dividing costs and operation activities, the financial burden is lighter, and each member will have more time to focus on their classes and other offerings.
  • By having multiple members, you’ll have an instant community that will continue growing as each member will attract diverse clients.
  •  Clients will have more offerings to select from, building loyalty over time.

Cons

  • Potential for disagreements and interpersonal conflicts when financial or other issues arise.
  • Limited studio time can make offering all your classes and programs more challenging.

Who It’s For

The collective yoga studio model is best for yoga instructors who want a communal work environment while reducing the time spent managing aspects of the yoga business. It’s also great for risk-averse yoga instructors who may have a limited amount of business experience.

 

Collective model yoga studios are best suited for larger cities whose population can support a busy yoga studio.

 

Rental Yoga Studio Model 

This is typically a solo yoga instructor who doesn’t have a set location but wants to teach in an in-person setting. They rely on finding places to rent space for a single class, retreat, or workshop.

 

  • Networking is even more critical in this model, as you’ll need to do a lot of outreach to find locations that meet your needs. Your current network and knowledge of your local area can help you get started.
  • Many yoga instructors partner with other business owners with complimentary offerings (think yoga & acupuncture, reiki, sound healing, etc.), which can help mitigate costs while building your client base.
  • This model requires a lot of advanced planning until you find a natural annual cadence, as some locations book months in advance.

 Pros

  • Renting space from various locations is a great way to test the waters of being a studio owner, which could lead to leasing or owning a more permanent space.
  • By design, you’ll meet a variety of people, including new clients, as a result of this model, so building your community may be easier.
  • You can leverage your creativity by teaching in various locations and offering customized classes for each. How about a yoga retreat near or far? The options are countless.

Cons

  • Constantly moving around to teach your yoga offerings can leave you feeling scattered, and if you have a lot of equipment, you’ll need a place to store it between classes and other events.
  • Building a consistent client base can be more difficult without a consistent home base for classes.
  • One-off classes and events may draw a more significant number of clients, but there may not be a lot of returning clients.
  • Managing the business pieces of your yoga studio from home can be difficult, so you’ll need to be disciplined to stay on track.

Who It’s For

This model is the least risky option, so it’s good for yoga instructors with little or no business experience and newer yoga instructors still getting a feel for where and how they want to teach. It’s also great for those who are comfortable networking and who enjoy coming up with new ways to share the gifts of yoga.

  Risk Level Start-Up Capital Individual Financial Burden Community-Oriented
Traditional Yoga Studio High Yes High Yes
Collective Yoga Studio Low Yes Low Yes

Rental Yoga

Studio

Low No Low No

How to Choose the Right Model for You

You may have had an idea of the best model for you, but now, after reading, has anything changed? If money were no object, which model would you select? If your long-term goal is a traditional yoga studio, you may want to start small and go with the rental model. Your continued research will help to point you in the right direction. You may want to try some of the following:

 

  • Try taking classes from various studios with various models so you can determine what you like or don’t like.
  • Talk with other studio owners about their start-up stories. They’ll have sage advice on the do’s and don’ts – this could also lead to partnership opportunities.
  • Consider hiring a consultant to get objective advice; regardless of the model you decide on, this is a worthwhile investment.

Invest in Business Management Software

Regardless of the model you select for opening your yoga studio, you’ll want to give yourself the gift of time and ease by investing in business management software. With OfferingTree you can have an all-in-one space to focus on what you do best – teaching yoga and related programs.

 

Yoga Studio Business Model FAQs

Ideally, this article, along with your expertise, has provided the information needed to decide which yoga studio model is better for you and how to get started with your business plan. Understandably, you might have some additional questions. These are some of the more common ones:

 

Are Yoga Studios Profitable?

People don’t typically decide to teach yoga and open yoga studios to make a lot of money, but with hard work, yoga studios can be profitable. This will depend mainly on the number of classes and programs you offer and your pricing strategy. The key to success is following the operating activities you’ve outlined in your business plan while sharing the gift of yoga that is authentic to you.

 

How Much Do Yoga Studio Owners Make?

Since most yoga studios are privately owned, there is a limited amount of information on this topic. Still, generally speaking, the average compensation is in the $50,000-$60,000 range, with some studios barely breaking even and some earning over $1,000,000 annually in revenue. You’ll leverage your business plan (and creativity) to keep your revenues at the necessary levels to meet your goals.

 

Build Your Yoga Business with OfferingTree

Opening your yoga studio can take enormous effort, but with our business management software, we can reduce the time you need to spend on the business of yoga. Watch an on-demand demo or, better yet, sign up for a free trial, and we’ll show you how simple this part of your business can be.

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