Crazy as it is, the overall economy is the starting point of any yoga studio owners understanding of how well their studio is doing. If you have a great local economy and your studio is suffering you’re probably doing something wrong. On the other hand, if you have an economy that is doing poorly but your yoga studio is burgeoning, you’re probably resonating in a good way with your community. Regardless of the state, good or bad, it’s imperative to see the truth of the economy so that your expectations and decisions are based in reality. We would love to always say business is booming, but sometimes that just isn’t so. There are ups and downs. Keep in mind that different cities and states will be performing much better or worse than others at any given time. It’s your local economy that you want to know about.
Talk to people. Listen to what they are experiencing. Are they happy? Happy people spend disposable income more freely. Or are they cautious, pulling in their purse strings? Observe store openings and closings in your area. Look for signs of expansion or contraction. Do not use the stock market as a barometer of the economy! It used to be an accurate reflection of the economy, but since the financial crisis of 2008 it has not been reflecting what is really happening on the street. Someday, with great hope, it will be a useful referencing tool again. But for the time being I suggest looking to what is tangible in your community.
These are extraordinary times. If you survey a hundred studio owners you probably will find that half of them believe we are in an inflationary environment and the other half believe we are in a deflationary environment. The fact is both of them would be correct. We are experiencing both inflation and deflation at the same time. Studio owners space rents and product costs have been rising at a fast clip in many geographic areas. On the other hand, many students are not seeing their wages rise enough to pay for higher class rates. Ouch!! That’s what you call a squeeze. Some studio owners right now are finding that raising the class rates to meet costs just drives students to the next studio who’s offering promotional discounts.
Running a studio is an endless series of questions to be answered. The success of each and every decision is reflected in how students feel about you, your studio, and whether or not they will continue to be a customer.
So what’s a yoga studio owner to do in this economy? First off, recognize that starting a business in a weak economy is not necessarily bad. In fact, I believe it is good because all economies turn around, and if you’ve structured your business to succeed when times are tough you will simply blossom as times start to turn. With that said, the best yoga studios do the same thing in tough times as they do when going gang busters. They control their costs.
Warren Buffet, arguably the worlds greatest investor, says he looks for businesses to invest in that have a built-in moat. As a yoga studio owner your moat to protect your studio may be a combination of things, an established brand, an ideal location, stellar teachers. But the most effective contributor to your yoga studio moat is a low cost structure. Controlling your costs makes you as defensible as you can be in any environment. Some options to save money are to reduce square footage if a space is not paying for itself or sublet to a complimenting business. Get more boutique products on consignment. And find more competitive contractors to deal with.
My Best Studio Management Software is a perfect example. It’s arguably the most powerful software available to yoga studio’s yet it costs much less, and with lower POS rates, the savings can be hundreds of dollars a month.
Education, clear vision and a willingness to make the right choices is the path to happy studio doors swinging wildly! If you have an experience to share, maybe something that worked or didn’t work for your studio, please send me a note.Jeff@Mybeststudio.com