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 covering all aspects of your business. The business plan 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, 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

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

Services for customers

The most important thing to decide before you start a yoga studio is the services that you will be providing to your customers. It is important because all subsequent components of your business plan 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.

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.

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 CustomersGrowthYEAR 1YEAR 2YEAR 3YEAR 4YEAR 5CAGR
Adults (Above 18)48%22,33432,34443,66552,54466,43210.00%
Children (6-18)18%11,43313,34416,55318,74520,54513.43%
Professionals34%18,32219,45520,65522,86724,43315.32%
Total100%52,08965,14380,87394,156111,4109.54%

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.

Strategy

Like marketing analysis, sales strategy is also an important component of any business plan 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 SalesYear 1Year 2Year 3
Yoga 1/Beginner187,330260,320258,240
Yoga 2/Intermediate802,370815,430823,540
Yoga 3/Advanced539,3207702301,002,310
Vinyasa Yoga265,450322,390393,320
Gentle Yoga1,435,3201,250,4301,762,450
TOTAL UNIT SALES3,229,7903,418,8004,239,860
Unit PricesYear 1Year 2Year 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 CostsYear 1Year 2Year 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

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 1Year 2Year 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 1Year 2Year 3
Plan Month123
Current Interest Rate10.00%11.00%12.00%
Long-term Interest Rate10.00%10.00%10.00%
Tax Rate26.42%27.76%28.12%
Other000

8.2 Brake-even Analysis

Yoga Studio Business Plan - Brake-even Analysis

 Brake-Even Analysis 
Monthly Units Break-even5530
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 1Year 2Year 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/Sales30.00%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 ReceivedYear 1Year 2Year 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
ExpendituresYear 1Year 2Year 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   
AssetsYear 1Year 2Year 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 CapitalYear 1Year 2Year 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 1Year 2Year 3Industry Profile
Sales Growth4.35%30.82%63.29%4.00%
Percent of Total Assets
Accounts Receivable5.61%4.71%3.81%9.70%
Inventory1.85%1.82%1.79%9.80%
Other Current Assets1.75%2.02%2.29%27.40%
Total Current Assets138.53%150.99%163.45%54.60%
Long-term Assets-9.47%-21.01%-32.55%58.40%
TOTAL ASSETS100.00%100.00%100.00%100.00%
Current Liabilities4.68%3.04%2.76%27.30%
Long-term Liabilities0.00%0.00%0.00%25.80%
Total Liabilities4.68%3.04%2.76%54.10%
NET WORTH99.32%101.04%102.76%44.90%
Percent of Sales
Sales100.00%100.00%100.00%100.00%
Gross Margin94.18%93.85%93.52%0.00%
Selling, General & Administrative Expenses74.29%71.83%69.37%65.20%
Advertising Expenses2.06%1.11%0.28%1.40%
Profit Before Interest and Taxes26.47%29.30%32.13%2.86%
Main Ratios
Current25.8629.3932.921.63
Quick25.428.8832.360.84
Total Debt to Total Assets2.68%1.04%0.76%67.10%
Pre-tax Return on Net Worth66.83%71.26%75.69%4.40%
Pre-tax Return on Assets64.88%69.75%74.62%9.00%
Additional RatiosYear 1Year 2Year 3
Net Profit Margin19.20%21.16%23.12%N.A.
Return on Equity47.79%50.53%53.27%N.A.
Activity Ratios
Accounts Receivable Turnover4.564.564.56N.A.
Collection Days9299106N.A.
Inventory Turnover19.722.5525.4N.A.
Accounts Payable Turnover14.1714.6715.17N.A.
Payment Days272727N.A.
Total Asset Turnover1.841.551.26N.A.
Debt Ratios
Debt to Net Worth0-0.02-0.04N.A.
Current Liab. to Liab.111N.A.
Liquidity Ratios
Net Working Capital$120,943$140,664$160,385N.A.
Interest Coverage000N.A.
Additional Ratios
Assets to Sales0.450.480.51N.A.
Current Debt/Total Assets4%3%2%N.A.
Acid Test23.6627.0130.36N.A.
Sales/Net Worth1.681.290.9N.A.
Dividend Payout000N.A.