Table of Content

    Do you want to start yoga studio business?

    Do you want to start a yoga studio business? Well, you can easily start this business with lower investments and can make it successful provided that you plan it successfully and have a passion for yoga.
    Before starting a yoga business, the first step you should take is to develop a comprehensive business plan yoga studio covering all aspects of your business. The business plan yoga studio will form the basis of your company’s future policies and will also help you in startup. So, to help you write an effective business plan yoga studio, here we are providing the business plan for a yoga studio business startup named ‘Kelly Yoga’.

    Executive Summary

    2.1 The Business

    Kelly Yoga will be located at a ten minutes’ drive from the main residential district of San Diego. The business will be owned by Kelly Jill, a famous American yoga trainer.

    2.2 Management

    The company will hire a staff comprising of trainers, assistants and sales executives, all of which will be trained for one month prior to onboarding. Company management and staff is the thing that will make your business successful so make sure to plan it before you think about how to start your own yoga studio.

    2.3 Customers

    Kelly Yoga will be a licensed yoga studio where people of all age-groups will be taught yoga at different expertise levels by the best trainers in the United States.

    2.4 Target of the Company

    Our business targets are as follows:

    Yoga Studio Business Plan - 3 Years Profit Forecast

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    Company Summary

    3.1 Company Owner

    Kelly Yoga will be owned by Kelly Jill, an experienced yoga master. Kelly has been teaching yoga in various institutes across the United States for more than 20 years.

    3.2 Why the Business is being started

    Kelly is extremely passionate about learning and teaching yoga. She has been doing yoga since her childhood and has devoted her entire life to it. Her venture is not only aimed at making profits in this industry but she also aims to extend her reach to as many people as possible.

    3.3 How the Business will be started

    Before you think about how to start a yoga business, you must make a yoga studio business plan model. Kelly Yoga will be located at a ten minutes’ drive from the main residential district of San Diego. The business will be started in a facility which was previously used as a dance studio that’s why just a little work needs to be done so as to convert it into a yoga studio. In addition to the usual inventory, the company will procure stocks of yoga training aides and clothes for selling in the store inside the studio. The costs for startup are as follows:

    Yoga Studio Business Plan - Startup cost

    The startup requirements are as follows:

    Start-up Expenses  
    Legal $75,500
    Consultants $0
    Insurance $62,750
    Rent $22,500
    Research and Development $42,750
    Expensed Equipment $42,750
    Signs $1,250
    TOTAL START-UP EXPENSES $247,500
    Start-up Assets $0
    Cash Required $322,500
    Start-up Inventory $52,625
    Other Current Assets $222,500
    Long-term Assets $125,000
    TOTAL ASSETS $121,875
    Total Requirements $245,000
    START-UP FUNDING $0
    START-UP FUNDING $273,125
    Start-up Expenses to Fund $121,875
    Start-up Assets to Fund $195,000
    TOTAL FUNDING REQUIRED $0
    Assets $203,125
    Non-cash Assets from Start-up $118,750
    Cash Requirements from Start-up $0
    Additional Cash Raised $118,750
    Cash Balance on Starting Date $121,875
    TOTAL ASSETS $0
    Liabilities and Capital $0
    Liabilities $0
    Current Borrowing $0
    Long-term Liabilities $0
    Accounts Payable (Outstanding Bills) $0
    Other Current Liabilities (interest-free) $0
    TOTAL LIABILITIES $0
    Capital $0
    Planned Investment $0
    Investor 1 $312,500
    Investor 2 $0
    Other $0
    Additional Investment Requirement $0
    TOTAL PLANNED INVESTMENT $695,000
    Loss at Start-up (Start-up Expenses) $313,125
    TOTAL CAPITAL $221,875
    TOTAL CAPITAL AND LIABILITIES $221,875
    Total Funding $265,000

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    Services for customers

    The most important thing to decide before you start a yoga studio is the business services that you will be providing to your customers

    Note

    It is important because all subsequent components of your business plan yoga studio depend on your provided services that’s why it must be considered before opening a yoga studio business plan development.

    We will provide following types of yoga classes:

        • Yoga 1/Beginner: Yoga 1/Beginner is an introductory class for those people who are new to Yoga. This class emphasizes on the basic alignment of standing poses and will mainly focus on poses to stretch and strengthen the shoulders, back, and legs.
        • Yoga 2/Intermediate: Yoga 2/Intermediate emphasizes on refining the standing poses learnt by the students in Yoga 1. This class teaches them basic sitting postures, shoulder stand, and basic back bending poses.
        • Yoga 3/Advanced: Yoga 3/Advanced further refines the techniques learnt by students in Yoga 2. This class teaches them back bend poses, headstand, forearm balance, and full arm balance (handstand).
        • Vinyasa Yoga: Vinyasa Yoga teaches a vigorous flow style of yoga that synchronizes movement with breath. It offers a balance of endurance, strength, and flexibility, for challenging the fitness enthusiasts.
        • Gentle Yoga: Gentle Yoga is the lightest level of yoga and is even less vigorous than Yoga 1. Gentle yoga is often prescribed to people with muscle stiffness, weakness, muscle/joint pain, or fatigue. The class teaches gentle stretches and breathing along with simple movements designed for systematically increasing the range of motion of major joints.

    Marketing Analysis of yoga studio business

    The most important component of a yoga studio business plan is its accurate marketing analysis because it decides whether your startup will become a success or end in failure. That’s why an accurate marketing analysis must be carried out before developing a yoga business plan. If you are starting on a large scale then it is better to seek the help from the marketing experts who will also guide you through various yoga studio marketing strategies and will help you in developing yoga marketing plan. On the other hand, if you are starting on a small scale, you can take help from this yoga studio business plan template or other yoga studio business plans available online.

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    5.1 Marketing Trends

    This yoga studio sample business plan also presents industry and market trends of this business which will provide you a clear demonstration of the market potential of this industry and will determine whether this industry is feasible for startups. The trends in yoga industry can also be taken from different yoga business plans available online. According to IBISWorld, there are more than 34,600 yoga studios or private yoga trainers in the United States as of 2018. The industry is growing at an estimated rate of 10.6% per year with annual revenue generation reaching above $11 billion. The industry is responsible for employing more than 137,000 people across the United States.
    According to a 2015 study, around 37 million practice yoga in the United States. This is up from 20 million just three years ago, which means the number of people practicing yoga has nearly doubled in just three years. This increase is attributed to the increased health awareness among people since various studies have outlined how beneficial yoga is for human body. These stats show that this industry is feasible for startups provided that you plan your business successfully.

    5.2 Marketing Segmentation

    Marketing segmentation shows the various segments or groups of our prospective customers. Our target market is mainly the residential community living nearby at the 10 minutes’ drive from our studio. Our experts have identified following target groups for our services:

    Yoga Studio Business Plan - Market Segmentation

    The detailed marketing segmentation of our target audience is as follows:

    5.2.1 Children (6-18):

    The first group of our customers will be the children living in the vicinity of our studio. Children are sent by their parents for learning Gentle Yoga due to its immense health benefits. Many children who are injured or suffering from muscle problems also practice yoga as a part of their medical treatment. However, the number of children learning yoga is very small as compared to the adults or senior people that’s why this group will not have a significant contribution to our sales and revenue.

    5.2.2 Adults (18+):

    The second and the biggest category of our customers includes teens and individuals who themselves want to learn yoga for any reason and are aged above 18. The individuals lying in this group are likely to learn all 5 types of classes offered by us. Women will form the major part of this group since according to a 2015 study, 72% of the yoga practitioners in the United States are women. Another aspect by which this group will contribute to our revenue will be the sale of yoga training aides, yoga clothes, shoes and mats from our store.

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    5.2.3 Professionals:

    The last category includes those individuals who have a passion for yoga and want to learn it at the advanced level. This group will be trained at a completely different level under the direct supervision of Kelly. This group will also contribute to sales from the yoga store since they will be practicing yoga in their homes.
    The detailed market analysis of our potential customers is given in the following table:

    Market Analysis
    Potential Customers Growth YEAR 1 YEAR 2 YEAR 3 YEAR 4 YEAR 5 CAGR
    Adults (Above 18) 48% 22,334 32,344 43,665 52,544 66,432 10.00%
    Children (6-18) 18% 11,433 13,344 16,553 18,745 20,545 13.43%
    Professionals 34% 18,322 19,455 20,655 22,867 24,433 15.32%
    Total 100% 52,089 65,143 80,873 94,156 111,410 9.54%

    5.3 Business Target

    Our business targets are:

        • To become the best yoga studio in San Diego
        • To achieve the net profit margin of $10k per month by the end of the first year, $15k per month by the end of the second year, and $25k per month by the end of the third year
        • To balance the initial cost of the startup with earned profits by the end of the first year

    5.4 Product Pricing

    Product pricing is one of the most important factors to decide the success of a startup. For the purpose of encouraging sales, we have priced our services slightly lower as compared to our competitors. We will basically offer three types of packages to choose from:

        • Monthly membership for $500 per month
        • Semi-annual membership for $2500 per six months
        • Yearly membership for $4000 per year

    The membership fees of Yoga 3 class will be 30% more since the students in this class will be trained directly be Kelly and other master trainers in the United States. The pricing of yoga-related products available in our store will be the same as in the market.

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    Strategy

    Like marketing analysis, sales strategy is also an important component of any business plan yoga studio so it must be thought through before starting your venture. In case, you don’t know how to make an effective sales strategy for your business, you can take help from this free yoga studio business plan template or other sample plans available online.

    6.1 Competitive Analysis

    Although we have a tough competition but we have entered the market with several competitive aspects. Our prices are reasonable and comparatively lower than the most of our competitors. We have an excellent team comprising of the best yoga trainers in the United States and our biggest competitive advantage lies in the power and dedication of our team.

    6.2 Sales Strategy

    We will attract our customers towards us by various efforts, such as:

        • We will arrange seminars and awareness sessions on the importance of yoga and the accompanying health benefits
        • We will arrange transportation facilities for our members and students
        • We will advertise our yoga studio in magazines, newspapers and social media
        • We will offer discounts on the membership for the first three months of the launch

    6.3 Sales Forecast

    Yoga Studio Business Plan - Unit Sales

    Sales Forecast      
    Unit Sales Year 1 Year 2 Year 3
    Yoga 1/Beginner 187,330 260,320 258,240
    Yoga 2/Intermediate 802,370 815,430 823,540
    Yoga 3/Advanced 539,320 770230 1,002,310
    Vinyasa Yoga 265,450 322,390 393,320
    Gentle Yoga 1,435,320 1,250,430 1,762,450
    TOTAL UNIT SALES 3,229,790 3,418,800 4,239,860
    Unit Prices Year 1 Year 2 Year 3
    Yoga 1/Beginner $140.00 $150.00 $160.00
    Yoga 2/Intermediate $600.00 $800.00 $1,000.00
    Yoga 3/Advanced $700.00 $800.00 $900.00
    Vinyasa Yoga $650.00 $750.00 $850.00
    Gentle Yoga $140.00 $120.00 $100.00
    Sales
    Yoga 1/Beginner $214,800 $274,000 $333,200
    Yoga 2/Intermediate $120,050 $194,500 $268,500
    Yoga 3/Advanced $50,110 $71,600 $93,000
    Vinyasa Yoga $139,350 $194,600 $249,850
    Gentle Yoga $62,350 $72,300 $82,250
    TOTAL SALES
    Direct Unit Costs Year 1 Year 2 Year 3
    Yoga 1/Beginner $0.70 $0.80 $0.90
    Yoga 2/Intermediate $0.40 $0.45 $0.50
    Yoga 3/Advanced $0.30 $0.35 $0.40
    Vinyasa Yoga $3.00 $3.50 $4.00
    Gentle Yoga $0.70 $0.75 $0.80
    Direct Cost of Sales
    Yoga 1/Beginner $98,300 $183,000 $267,700
    Yoga 2/Intermediate $66,600 $119,900 $173,200
    Yoga 3/Advanced $17,900 $35,000 $52,100
    Vinyasa Yoga $19,400 $67,600 $115,800
    Gentle Yoga $27,700 $69,200 $110,700
    Subtotal Direct Cost of Sales $294,100 $699,400 $1,104,700

    6.4 Sales Monthly

    Yoga Studio Business Plan - Sales Monthly

    6.5 Sales Yearly

    Yoga Studio Business Plan - Sales Yearly

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    Personnel plan

    In case, you are starting your yoga studio but you don’t know what staff is required for starting a yoga studio, you can take help from this yoga studio business model sample plan.

    7.1 Company Staff

    The company will initially hire the following staff:

        • 1 General Manager for managing the overall operations
        • 2 Administrators/Accountants for maintaining financial records
        • 3 Sales Executives responsible for marketing and discovering new ventures
        • 6 Trainers for providing yoga training to members
        • 8 Assistants for undertaking day-to-day tasks
        • 2 Drivers for providing transportation facility to members
        • 3 Cleaners for cleaning the studio
        • 1 Front Desk Officer for acting as a receptionist

    7.2 Average Salary of Employees

     Personnel Plan      
    Year 1 Year 2 Year 3
    General Manager $42,000 $59,000 $76,000
    Accountants $85,000 $95,000 $105,000
    Sales Executives $85,000 $92,000 $109,000
    Trainers $135,000 $155,000 $185,000
    Assistants $60,000 $63,300 $70,000
    Drivers $63,300 $70,000 $76,700
    Cleaners $76,000 $93,000 $110,000
    Front Desk Officer $35,000 $42,000 $59,000
    Total Salaries $343,300 $380,300 $440,700

    Financial Plan

    Finally, you will have to develop a detailed financial plan outlining the development of your company over the next few years. If you’re starting on a smaller scale, you can take help from this yoga studio business plan example otherwise you will have to seek help from financial experts. The financial plan of Kelly Yoga is as follows.

    8.1 Important Assumptions

     General Assumptions      
    Year 1 Year 2 Year 3
    Plan Month 1 2 3
    Current Interest Rate 10.00% 11.00% 12.00%
    Long-term Interest Rate 10.00% 10.00% 10.00%
    Tax Rate 26.42% 27.76% 28.12%
    Other 0 0 0

    8.2 Brake-even Analysis

    Yoga Studio Business Plan - Brake-even Analysis

     Brake-Even Analysis  
    Monthly Units Break-even 5530
    Monthly Revenue Break-even $159,740
    Assumptions:
    Average Per-Unit Revenue $260.87
    Average Per-Unit Variable Cost $0.89
    Estimated Monthly Fixed Cost $196,410

    8.3 Projected Profit and Loss

     Pro Forma Profit And Loss      
    Year 1 Year 2 Year 3
    Sales $309,069 $385,934 $462,799
    Direct Cost of Sales $15,100 $19,153 $23,206
    Other $0 $0 $0
    TOTAL COST OF SALES $15,100 $19,153 $23,206
    Gross Margin $293,969 $366,781 $439,593
    Gross Margin % 94.98% 94.72% 94.46%
    Expenses
    Payroll $138,036 $162,898 $187,760
    Sales and Marketing and Other Expenses $1,850 $2,000 $2,150
    Depreciation $2,070 $2,070 $2,070
    Leased Equipment $0 $0 $0
    Utilities $4,000 $4,250 $4,500
    Insurance $1,800 $1,800 $1,800
    Rent $6,500 $7,000 $7,500
    Payroll Taxes $34,510 $40,726 $46,942
    Other $0 $0 $0
    Total Operating Expenses $188,766 $220,744 $252,722
    Profit Before Interest and Taxes $105,205 $146,040 $186,875
    EBITDA $107,275 $148,110 $188,945
    Interest Expense $0 $0 $0
    Taxes Incurred $26,838 $37,315 $47,792
    Net Profit $78,367 $108,725 $139,083
    Net Profit/Sales 30.00% 39.32% 48.64%

    8.3.1 Profit Monthly

    Yoga Studio Business Plan - PROFIT MONTHLY

    8.3.2 Profit Yearly

    Yoga Studio Business Plan - PROFIT YEARLY

    8.3.3 Gross Margin Monthly

    Yoga Studio Business Plan - GROSS MARGIN MONTHLY

    8.3.4 Gross Margin Yearly

    Yoga Studio Business Plan - GROSS MARGIN YEARLY

    8.4 Projected Cash Flow

    Yoga Studio Business Plan - Projected Cash Flow Diagram

     Pro Forma Cash Flow      
    Cash Received Year 1 Year 2 Year 3
    Cash from Operations
    Cash Sales $40,124 $45,046 $50,068
    Cash from Receivables $7,023 $8,610 $9,297
    SUBTOTAL CASH FROM OPERATIONS $47,143 $53,651 $59,359
    Additional Cash Received
    Sales Tax, VAT, HST/GST Received $0 $0 $0
    New Current Borrowing $0 $0 $0
    New Other Liabilities (interest-free) $0 $0 $0
    New Long-term Liabilities $0 $0 $0
    Sales of Other Current Assets $0 $0 $0
    Sales of Long-term Assets $0 $0 $0
    New Investment Received $0 $0 $0
    SUBTOTAL CASH RECEIVED $47,143 $53,651 $55,359
    Expenditures Year 1 Year 2 Year 3
    Expenditures from Operations
    Cash Spending $21,647 $24,204 $26,951
    Bill Payments $13,539 $15,385 $170,631
    SUBTOTAL SPENT ON OPERATIONS $35,296 $39,549 $43,582
    Additional Cash Spent
    Sales Tax, VAT, HST/GST Paid Out $0 $0 $0
    Principal Repayment of Current Borrowing $0 $0 $0
    Other Liabilities Principal Repayment $0 $0 $0
    Long-term Liabilities Principal Repayment $0 $0 $0
    Purchase Other Current Assets $0 $0 $0
    Purchase Long-term Assets $0 $0 $0
    Dividends $0 $0 $0
    SUBTOTAL CASH SPENT $35,296 $35,489 $43,882
    Net Cash Flow $11,551 $13,167 $15,683
    Cash Balance $21,823 $22,381 $28,239

    8.5 Projected Balance Sheet

     Pro Forma Balance Sheet      
    Assets Year 1 Year 2 Year 3
    Current Assets
    Cash $184,666 $218,525 $252,384
    Accounts Receivable $12,613 $14,493 $16,373
    Inventory $2,980 $3,450 $3,920
    Other Current Assets $1,000 $1,000 $1,000
    TOTAL CURRENT ASSETS $201,259 $237,468 $273,677
    Long-term Assets
    Long-term Assets $10,000 $10,000 $10,000
    Accumulated Depreciation $12,420 $14,490 $16,560
    TOTAL LONG-TERM ASSETS $980 $610 $240
    TOTAL ASSETS $198,839 $232,978 $267,117
    Liabilities and Capital Year 1 Year 2 Year 3
    Current Liabilities
    Accounts Payable $9,482 $10,792 $12,102
    Current Borrowing $0 $0 $0
    Other Current Liabilities $0 $0 $0
    SUBTOTAL CURRENT LIABILITIES $9,482 $10,792 $12,102
    Long-term Liabilities $0 $0 $0
    TOTAL LIABILITIES $9,482 $10,792 $12,102
    Paid-in Capital $30,000 $30,000 $30,000
    Retained Earnings $48,651 $72,636 $96,621
    Earnings $100,709 $119,555 $138,401
    TOTAL CAPITAL $189,360 $222,190 $255,020
    TOTAL LIABILITIES AND CAPITAL $198,839 $232,978 $267,117
    Net Worth $182,060 $226,240 $270,420

    8.6 Business Ratios

     Ratio Analysis        
    Year 1 Year 2 Year 3 Industry Profile
    Sales Growth 4.35% 30.82% 63.29% 4.00%
    Percent of Total Assets
    Accounts Receivable 5.61% 4.71% 3.81% 9.70%
    Inventory 1.85% 1.82% 1.79% 9.80%
    Other Current Assets 1.75% 2.02% 2.29% 27.40%
    Total Current Assets 138.53% 150.99% 163.45% 54.60%
    Long-term Assets -9.47% -21.01% -32.55% 58.40%
    TOTAL ASSETS 100.00% 100.00% 100.00% 100.00%
    Current Liabilities 4.68% 3.04% 2.76% 27.30%
    Long-term Liabilities 0.00% 0.00% 0.00% 25.80%
    Total Liabilities 4.68% 3.04% 2.76% 54.10%
    NET WORTH 99.32% 101.04% 102.76% 44.90%
    Percent of Sales
    Sales 100.00% 100.00% 100.00% 100.00%
    Gross Margin 94.18% 93.85% 93.52% 0.00%
    Selling, General & Administrative Expenses 74.29% 71.83% 69.37% 65.20%
    Advertising Expenses 2.06% 1.11% 0.28% 1.40%
    Profit Before Interest and Taxes 26.47% 29.30% 32.13% 2.86%
    Main Ratios
    Current 25.86 29.39 32.92 1.63
    Quick 25.4 28.88 32.36 0.84
    Total Debt to Total Assets 2.68% 1.04% 0.76% 67.10%
    Pre-tax Return on Net Worth 66.83% 71.26% 75.69% 4.40%
    Pre-tax Return on Assets 64.88% 69.75% 74.62% 9.00%
    Additional Ratios Year 1 Year 2 Year 3
    Net Profit Margin 19.20% 21.16% 23.12% N.A.
    Return on Equity 47.79% 50.53% 53.27% N.A.
    Activity Ratios
    Accounts Receivable Turnover 4.56 4.56 4.56 N.A.
    Collection Days 92 99 106 N.A.
    Inventory Turnover 19.7 22.55 25.4 N.A.
    Accounts Payable Turnover 14.17 14.67 15.17 N.A.
    Payment Days 27 27 27 N.A.
    Total Asset Turnover 1.84 1.55 1.26 N.A.
    Debt Ratios
    Debt to Net Worth 0 -0.02 -0.04 N.A.
    Current Liab. to Liab. 1 1 1 N.A.
    Liquidity Ratios
    Net Working Capital $120,943 $140,664 $160,385 N.A.
    Interest Coverage 0 0 0 N.A.
    Additional Ratios
    Assets to Sales 0.45 0.48 0.51 N.A.
    Current Debt/Total Assets 4% 3% 2% N.A.
    Acid Test 23.66 27.01 30.36 N.A.
    Sales/Net Worth 1.68 1.29 0.9 N.A.
    Dividend Payout 0 0 0 N.A.

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