How to Start a Yoga Studio
Yoga has many health benefits for the body and mind and has been growing in popularity for years. If you love yoga and are skilled at it, you may have considered opening your own yoga studio. It could be a rewarding way to earn a living and do what you love.
A yoga studio offers classes in various yoga classes such as hot yoga, restorative yoga, power yoga, Ashtanga, and many more. Some yoga studios specialize in specific types of yoga. Customers pay to attend the classes for the health benefits and the experience. Classes are taught by certified yoga teachers. Some studios also sell yoga apparel.
Running a yoga studio or any business will have its challenges. You need to be prepared and make sure that you know what you’re getting into.
One challenge many yogis face is straddling the line between the emotional aspects of yoga and the realities of running a business. Running a yoga business will require creating and following a plan and understand not everyone is going to like the decisions you will have to make.
According to IBIS World, 36.7 million Americans practiced yoga in 2016, and it was estimated that 55.1 million people would participate in yoga in 2020. According to Statista, 35% of those people practice yoga in a gym. In 2020 the yoga market was over $11 billion in spite of the pandemic.
Other exercise trends are growing more popular than yoga, but the yoga industry is still predicted to grow. Yoga consistently is on the list of top 20 fitness trends. Types of yoga that are trending are goat yoga, yin yoga, and aerial yoga.
The target market for a yoga studio is health-conscious individuals who are interested in the fitness and meditational benefits of yoga. You also may find a market with companies that want to offer yoga classes to employees to encourage a healthier work environment.
Skills, Experience, and Education Useful in Running a Yoga Studio
There are several specific skills and education that you will need to open a successful yoga studio.
- Become a certified yoga instructor. You’ll need yoga certification from a recognized organization like the Yoga Alliance.
- Business knowledge and experience. Having a passion for yoga is one part of a successful business, but you should also have some basic knowledge of marketing, finance/accounting, and human resources.
- The ability to offer a complete yoga experience. A yoga class is about more than just the exercises. You need to be able to create a full, positive yoga experience.
- Customer service. You’ll need to be able to build rapport with your customers so that you retain them as customers and gain repeat business and referrals.
Checklist for Starting a Yoga Studio
Starting a yoga studio can be an incredibly rewarding experience, but it’s important to make sure you’re prepared for the challenges ahead. Use this checklist to help get your business off on the right foot.
Step 1: Write your Business Plan
After coming up with the idea, the next step in starting your yoga studio should be to write a yoga business plan. The business plan will make you focus on some important aspects of the business, such as who your customers are, how you plan to reach them, projecting sales and expenses, your value proposition to use for marketing, and more. You’ll also need to do some research to calculate exactly what your startup expenses will be and what your ongoing expenses will be.
Not only will a bank require you to have a business plan if you need financing, but multiple studies have shown that having a good business plan increases the odds of starting a successful business. Writing the plan helps you to think through all the aspects of the business and then serves as a guide as you begin.
Related: How to write a business plan
Step 2: Name the Business
Finding the perfect yoga studio name can be challenging. Not only does the name have to reflect what you do and be appealing to customers, but it also has to be available to use. You can check your state’s website to see if the name is available and register your name. Your name should make you stand out, reflect your brand, and tell potential customers exactly what you do.
Step 3: Form a Business Entity
A business entity refers to how a business is legally organized to operate. There are four primary business entities to choose from, which include the sole proprietorship, partnership, corporation, and Limited Liability Company (LLC). Each type of entity has its own pros and cons, such as liability exposure, costs, and administrative requirements.
When deciding on which business entity is best for a yoga studio, it normally comes down to the sole proprietorship and Limited Liability Company.
A partnership opens the owners up to unnecessary personal liability because if a partner does something to get the business sued, or runs off with cash from the business, the other partners are personally liable to repay. The corporation can be a good choice because it separates the business assets from the owner’s assets. If the corporation is sued or certain business debts can’t be paid back, the owners aren’t personally responsible to repay them. The downside to the corporation is that it is more complicated than all the other entities and requires more administration than the LLC. If you plan on raising a lot of investment though, the corporation is usually the better choice.
That leaves the sole proprietorship and LLC.
The sole proprietorship is the least expensive and easiest entity to start which is appealing. The downside is the owner is personally liable should anything happen to the business, which is an important consideration. The LLC offers the ability to operate as a sole proprietorship with the liability protection of a corporation. Depending on the state, the cost to form an LLC runs from $40 – $500, which is pretty inexpensive for protecting the owners from business-related lawsuits and certain debts.
Related: Guide to forming your LLC
Forming an LLC sounds complicated and expensive, but using an entity formation service guides you through the process so you know it was done right.
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Step 4: Select your Location
First, map out what your studio space needs. Will you need one large room or multiple spaces to run several classes at once? Will your space need full locker facilities with showers, or will a simple changing room be sufficient?
The location of your yoga studio is critical and will affect the prices you can charge. If you want to target higher-income customers, you need to be in a more expensive part of town in a convenient location and high visibility. You will pay more, however, for your space.
There is also the option of renting space from another studio to get started to see if there is demand and to see if running a yoga studio is the right choice for you.
Related: Choosing a business location
Step 5: Apply for Business Licenses and Permits
You may need to obtain certain business licenses and permits. These permits and licenses can vary based on the state and town where the business is located. Some common local, state, and federal registrations for a yoga studio may include a sales tax permit and an Employer Identification Number if you plan to have employees.
Related: Common business licenses, permits, and registrations by state
Step 6: Find Financing
Coming up with a good business idea and having the skills to run it are one thing, but getting the funding from a lender or investor to start a yoga studio is another. In order to get a loan, the borrower(s) will need to have good credit and be able to invest 15-25% of their money towards the total start-up costs. Some entrepreneurs use their own funds, a home equity loan, or credit cards, but you are putting your funds at risk and will have payments that may or may not be more than those of a business loan.
Step 7: Open a Business Bank Account
Keeping your small business and personal finances in separate bank accounts is important to track the income and expenses of your business and identify trends.
Many banks offer free business checking accounts, so be sure to find a cost-effective option for your business.
Step 8: Get your Marketing Strategy in Place
A yoga studio will need to set aside a budget to cover marketing costs on a continuous basis. Common promotions for a yoga studio include word of mouth, flyers, social media marketing, and an online presence. Developing a website can be a significant expense, but it can also give your yoga studio greater visibility online.
Related: Low-cost ideas to market a new business
Every business is going to need a logo. Make a professional logo in no time with the free logo makers from BrandCrowd and Canva.
Step 9: Get Business Insurance
There are several types of insurance to consider when starting a yoga studio. A few of these include:
– General liability insurance can help protect you from third-party claims of bodily injury and property damage.
– Professional liability insurance protects you from claims of professional errors or negligence that result in a financial loss.
– Worker’s compensation insurance covers expenses like medical bills and legal fees that a business might face if an employee were ever hurt while working.
The cost to insure a yoga studio will vary based on a number of factors. To get the most accurate idea of what to budget for insurance, request quotes from multiple providers. When comparing the quotes, consider not only the premiums but also how the plan exclusions, coverage limitations, and deductibles compare.
Step 10: Hire Employees
You will need employees to help run your yoga studio, including other certified instructors.
In addition to salary costs, your budget will also need to include other employee-related expenses. Workman’s comp insurance, unemployment insurance, and paid time off are common expenses that a business will need to cover when hiring staff.
Also, be sure to budget yoga teacher training, so any teachers are up-to-date and can provide the best experience to your customers.
Related: Hiring your first employee
Step 11: Set up an Accounting System
Setting up an accounting system for your yoga studio is critical to the long-term success of your business.
Staying on top of taxes not only keeps the business out of trouble with the government but the numbers can be used to track and monitor trends and cash flow in the business and maximize profits.
How much does it cost to start a yoga studio?
Here are the typical costs you will face when you open a yoga studio.
– Costs to become a certified yoga instructor $50 plus $65 per year from the Yoga Alliance
– Lease or rent deposit – $500-$5,000 or more per month depending on the location
– Studio equipment (yoga straps, blocks, mats, etc.) and space renovations $10,000-$50,000 (some landlords will provide an improvement allowance depending on the length of the lease signed)
How much does a yoga studio owner make?
Prices for yoga classes can range from $15 – $40, depending on the location. The average yoga studio brings in monthly revenue of $13,495 per month, and the average yoga studio owner makes about $86,000 per year. It may take some time to get enough repeat clients to reach those levels.
Acquiring customers and keeping those customers is key to having a successful yoga business. Your location is a critical factor in getting customers, but the best locations are expensive. You will be putting in a lot of time and money to start your studio and to market it, and that money will be at risk if you don’t succeed. One way to combat this is to offer multiple styles such as Ayurveda, Bikram, Belly Dancing, Vinyasa, etc. If these specialties are outside of your experience, hiring another yogi could help expand the offerings of the business.
In addition to classes and workshops, consider having retail items to purchase like apparel with the business’s logo, yoga mats, books, water bottles, etc. This will help generate some additional revenue.
Are there grants to start a yoga studio?
It’s extremely rare to find a grant to start a yoga studio. If you search for business grants, you will come across a lot of scams and misinformation. Occasionally an organization will offer grants to start a business, however, be skeptical and don’t provide any sensitive personal information or pay money to get more information.
Legitimate federal grants can be found at Grants.gov and you can check on your state’s economic development office to see if they have any grants available.
What is the NAICS code for a yoga studio?
The NAICS code for a yoga studio is 611620, which is classified under Sports and Recreation Instruction.
The NAICS code (North American Industry Classification System) is a federal system to classify different types of businesses for the collection and reporting of statistical data.