Get out your stretchy pants and start practicing your One-Legged King Pigeons; we’re opening a Yoga studio. While conventional wisdom might lead you to believe that this market is completely saturated our research says otherwise. With a total industry worth $5.7 billion there’s always room for one more. With the proper location and demographic, this could be very lucrative. Besides, you get to look at hot chicks in stretchy pants all day long. Some people would actually pay to do that.

Overview

There’s always room for another Yoga Studio. In fact, according to the latest “Yoga In America” survey, spending on Yoga and Yoga related equipment is up almost 87% since the last survey done in 2004. The same study found that roughly 6.9% of Americans practice Yoga on a regular basis. Furthermore, nearly 8% of Americans say they are very interested in trying Yoga and another 4.1% say they would try it within the next year.
Much of this can be attributed to the perceived lifestyle that comes with being an active Yogi but there are other forces at work here. In a study done by the AAFP (American Association of Fat People??), they found that 58% of Americans are overweight or obese. That’s an astonishing statistic. The majority of Americans are fat–amazing. Because of this, Yoga has become increasingly popular as a low-impact, high calorie-burning exercise regiment recommend by doctors and nutritionists nationwide.

The Plan

Yoga studios are one of only a few retail businesses which require almost no fixtures of any sort. As a matter of fact, you basically need a completely empty room with some nice laminate flooring, a sound system, and a small reception area. The most important thing is going to be a good location and lots of visibility. You want people to know you are there. I would suggest spending the majority of your time hunting down a good retail store front on a busy street, preferably in an urban area. If you’re an existing Yoga instructor looking to branch out on your own it’s going to be even easier as you already have a group of students loyal to you.

The Numbers

Startup Costs

• Lease - 800-1000 sq ft studio - $3000/mo
• Yoga Mats - = $1000
• Commercial space renovation - $20,000 (probably overkill but better to be safe then sorry)
• Advertising - $10,000
• Sound System - $1,000
• Utilities - $100
• Working Capital Reserves - $40,000 (approximately 1 year with zero income)

Total startup costs - $75,000

Let’s take a look at an example and do some numbers.

The Market

Downtown San Diego is a perfect example of a growing urban location. According to sandiegodowntown.org the downtown population has increased nearly 20% since 1999 with an additional 10,000 condos coming online within the next 3 to 5 years. That’s a healthy growth rate which should be able to sustain new businesses for years to come.

In a quick Google maps search I’ve located three Yoga studios within the confines of what’s typically referred to as “downtown”. In theory, there should be enough active Yogis downtown to easily support 4 separate studios.

Location “E” is a category spammer and not even a Yoga studio so they don’t count. Right now we’re looking at B, H, and D. We’re going to make some assumptions based on the information from the articles I cited earlier.

Downtown San Diego Population according to sdlookup - 27,494
Number of active Yogis downtown - 6.9% of 27,494 = 1897

Typical rates for downtown Yoga studios are as follows.

• $14 for a single class
• $52 for 4 classes
• $96 for 8 classes
• $130 for unlimited classes per month

Let’s assume that only 20% of active Yogis carry a monthly unlimited membership. Two times a week isn’t quite enough if you’re hardcore so most people will pay the additional $34 for the freedom to go however many times a month they’d like. If you can muscle your way into the current market and steal 10% of it through creative advertising and hustling you should be able to collect almost $5000/mo in membership dues. That level of business alone will pay the bills and if you can generate 50 monthly recurring unlimited memberships that should gross around $6500. Once you’re comfortably operating in the black you can focus your attention on marketing and grabbing new customers as residents start filtering into the new condos all around you. Ultimately, your income will be limited only by the number of classes you can hold in a day and the size of your studio. In theory, a typical studio should be able to accommodate 200 members taking classes 3 times a week assuming you held 8 classes per day for 7 days a week with 30 students in each class. This could potentially gross about $26,000/mo. I’d wear stretchy pants for $26k/mo.

Time Requirements

At first you will be doing the majority of the work conducting several classes a day and handling all the administrative duties that go along with the studio. Expect to be working 10 hour days. However, I suspect that after you get to a level of 30 to 40 members you’ll be able to consider hiring an additional instructor willing to work on a per-class basis. This will ease your load significantly as each class you outsource will give you an additional hour to hour-and-a-half to yourself each day.

Conclusion

While the Yoga market is not something new, there’s still plenty of room for new players. With a relatively low barrier to entry and minimal capital requirements a Yoga studio is something that can be started with around $75,000 in initial capital (less if you’re an existing instructor with a fairly good sized student base). The key to opening a successful Yoga studio will be location and visibility. In other words, if you build it, they will come.