Starting a Studio and Selling Merchandise

May 31, 2010

Hello Al,
I am in the middle of building my studio business and am knee deep in my business plan. I originally tried to launch a jewelry and apparel line but realized the margins and finances did not make sense unless I outsources everything to china or India. I am going to continue with this venture and sell the items in the store front of the studio, but it will not be my main focus for business. My background is in marketing, branding, and media sales and I have recently completed a 200 hour teacher training. While I love yoga and want to continue to practice, being a teacher is not my main goal for opening the studio.

I have purchased your online class MP3 package and am interested to learn how your class compliments the things I have not learned yet. My biggest concern is projecting the amount of revenue the studio can bring in and how fast it can do that. I will need investors or an investor to finance the adventure so I need to make sure my pro-forma is as close to real as possible. I have found an incredible space, but it is pricey and this is why projecting future earnings is crucial . My idea is solid, and I have narrowed it down a bit so I can tackle the first year and then add on as I continue year after year…however, I struggle with being overzealous and would like to approach this with guts and intellect. I have tried to be coached by my yoga teacher, but I am not sure our personalities are compatible for this venture. She is very knowledgeable in starting a studio but I am fairly sure I have more business experience than she does.

Your class seems to be a good fit and your knowledge is right on course with what have been doing and teaching myself. Do you offer personal business coaching? What is your background? I know your classes will help me, but having someone like you on my advisory board may also make investors feel more confident since I am new to the yoga industry.
I look forward to hearing your feedback and hope to continue learning from you in the future.
Warmest Regards,
Colee

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Hi Colee,
Congrats on entering a studio venture. I’ll give you the summary of what I’ve found over the years of working with numerous studios:
1. Don’t sell merchandise, except what your teachers actually use in classes (unless you can afford a full-time retail manager). And definitely not to start with. However, every studio should sell the things teachers use in class: mats, music, props, etc. And sell them at high retail prices – don’t try to compete with online stores. People buy from your studio because it makes them feel good and they like you – not because of price.

2. If there is an existing studio you can buy, it will usually be way cheaper than starting from scratch. Plus, it gives you a great baseline to make financial projections from.

3. Your top 2 sources of students will be word of mouth and the internet. Number 3 will possibly be drive-by/walk-by if you have a good location. If you took the money you saved on rent for a prime location and invested it in internet marketing and a referral program, could you get more business than by just having a good location? Usually the answer is Yes.

4. If you question compatibility with your potential partner now, don’t be partners. 9 out of 10 partnerships fail. Most very painfully. If you can hire a someone with a skill for $30 per hour or less, and will not need it for more than the first couple of years, hire someone – don’t partner with them.

5. Don’t expect to make a consistent profit for the first two years. If you don’t have the capital, then wait until you do. There are certainly exceptions, but I can’t recommend that unless you’ve successfully launched multiple studios in the past. If you’ve ever seen a new business close down withing a few months of openneing, most of the time it’s because they didn’t have enough money to start with.

6. A yoga studio is a business that happens to provide yoga as it’s service. If you like business, it might be right for you. If you want to focus on your own yoga practice, then running a studio might not be the best choice. A business must do two things to be successful:
a. It must be true to it’s mission or purpose
b. It must make money (or it can’t do #1 for very long)

Good luck with everything!

Coach Al

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