Money's Too Tight...

Organising yoga classes is challenging – managing a yoga studio is bloody hard work! Some would say it's a lot of work for very little financial return.

So before we delve into the murky world of class prices and the overall finances behind running a studio let us look at one very important factor that will determine whether you read the remainder of this article.

Several years ago I hosted a talk at the yoga show in London looking at ‘How to Teach Yoga for a Living’. At some point I opened the floor up to questions and without fail the number one question was ‘How do I balance a ‘spiritual’ practice (yoga) with making money?’ Many of those asking were experienced teachers who had been teaching for many years and yet still struggled with this most basic of concepts.

So there are two things to consider:

First, a business is set up to make profit. That is the basic definition and principles for a commercial operation. If you do not want to follow this then you are essentially operating on a charity / ‘not for profit’ basis or teaching as a hobby. It does not matter which you choose but you must be clear in your head before proceeding. Also bear in mind that the latter also have running costs and expenses involved.

It was very clear from the discussions that most teachers felt there was ‘peer’ pressure not to make any money as a yoga teacher and while the students may be driving around in fancy cars the teachers are expected to live on the poverty line. If teaching yoga and inspiring others is your passion then you can only continue to do this if you can meet your living costs, paying bills with money left over to continue your own development and training and have the financial freedom to have space in your day. Otherwise it is highly likely that you will burn out and give up yoga completely.

So let us assume that you either have a studio or are thinking of starting one. Much of this will also apply to setting up classes as an individual.  In essence the pricing structure is at its root a simple equation:

Money IN ‘v’ Money OUT

However there is a great deal of preparation and planning required to arrive at this point and you will be required to consider many factors including Social, Geographical, Supply and Demand.

While there is no one fast or guaranteed success pathway there are several tried and tested steps that can help minimise the risk and give you the best chance at succeeding.

Although I have laid these out as a series of linear steps, much of the work can be done in parallel.

This is a two-pronged approach, looking both outside and inside your business.

First you need to identify what classes or studios are set up in your area and determine what they are offering. Although some of this can be gleamed from websites or even the phone it is much better to go in person or send a friend.

Try to be impartial and ensure you are comparing ‘like for like’. How convenient is the space to reach? What facilities do they offer? (i.e. Parking, Changing Room, Showers, Mat Hire etc.), How experienced are the teachers?, What styles of yoga do they teach?, How many classes do they offer? What if anything is unique about their set up and what they offer (later you will be required to do this for your own business, it is referred to as a Unique Selling Point USP).

The added advantage in attending the classes / studio is that you can get a sense of how busy the classes are and how much of a community spirit exists.

Compile all your data in a spread sheet for easy access and future analysis.

At the same time look at your monthly running costs. Sit down and document everything from wages, rent, utilities, rates, stationary, printing, advertising, marketing, studio equipment, repairs, computers/printers and everything else you think you may need. If you are not sure, then estimate the costs, it is better to estimate on the high side. Once you have a final figure add approximately one third on to your total to allow for discrepancies.

The next step is the critical one.

Start by determining how many classes you intend to teach. Next, having gathered as many facts as you can about the classes / studios operating in your area you should have a reasonable idea of the number of students you can expect to attend your classes.  I recommend that you start by halving whatever figure you arrive at until you have been running for 6 months (remember it will be much easier to reduce your class prices in the future than to increase). Finally divide your monthly running costs by the estimated number of students who will attend each month. This will give you an average class price per head. You can of course adjust this figure dependant on what your target profit margins are set to.

Now check how your average class price compares with what everyone else is charging in your area. Your price will ideally be placed in the middle to upper range. If it is, then this is a good start. Try to avoid making your classes the cheapest in the area, this rarely works long term in creating a strong quality brand.

At this point you can now fine-tune the individual class prices dependant on the length of the class and perhaps even the experience of the teacher. However remember to ensure that the overall income figure still meets your expenses or higher.

If your estimated class price ends up being substantially higher than others in your area then you will need to re-evaluate. Since your class price is linked to required income to cover your costs then if you reduce your class price you must either increase the numbers attending your classes, reduce your overheads or ideally both. Nevertheless this is a dangerous position in which to start since even your numbers are based on average class numbers in your area and much of your expenditure will be fixed or influenced by factors outwith your control.

If you offer something truly unique then you may get away with charging a higher price but this is rare.

In a nutshell I’m suggesting that you base your decisions on hard, tangible facts rather than pure emotion, as is so often the case in yoga.

Essentially it is important to treat the yoga teaching and business aspects separately. By all means run your business with integrity and the ethos of the yoga practices but don’t lose sight of the need run a successful business.

In future issues we will look at tools and key points to help you develop in your yoga career and businesses as well as looking at refund policies.

Above all have a clear vision for your studio and stick to it. Ensure that you do the ONE thing each day that will help your business thrive and grow. Focus on what you SHOULD do and not what you COULD do!

Om Tat Sat.