In my last article, we looked at alternative business formats for studios on a budget. In this article, we”™re going in the opposite direction with blended yoga business formats that require some serious investment, but might also hold a substantially improved outlook and opportunity for strong profitability.
The Retail Studio
Most yoga studios are set up in either upper floor or off-the-beaten-track locations. We all know the reason: rent. Rare is the studio that can support Class A retail rent with classes, trainings and workshops alone. Plus the deposit is usually way higher (six months vs. one to three) and the buildout is almost always more expensive. So, most just avoid retail locations altogether.
However for a well-funded studio, this might be a mistake. If you can afford a retail location with a high traffic count in a center with an anchor tenant that draws your target client on at least a weekly basis (like a high-end supermarket), it might be worth the expense, provided you leverage the exposure and turn it into revenue.
How? By setting up a full-scale retail operation. Devote a significant amount of window and “front of the house” space to creating a retail environment that will appeal not just to your regulars, but to a broad spectrum of passersby. That means carrying not only yoga gear, but general lifestyle gear and apparel, active wear, spa and personal care products, books, CDs and DVDs, maybe even fashion, kids or other population-specific items.
You”™ll also need a bit of experience in understanding how best to set up a storefront and retail area to draw people in and then maximize sales. And, to ensure smooth operations and facilitate sales and upsells, it would be a great idea to have a designated retail staff, even if it”™s only one person, part-time, and make sure your computer system can handle both studio and higher-volume retail operations.
Also don”™t forget that you”™ll need to invest in a substantial amount of retail inventory and keep the shelves constantly stocked, which helps sell your merchandise. You”™ll also want to designate someone as your retail manager/buyer. These two activities take a lot of time and while you might love to do them, it is very difficult to run a full-scale retail operation and manage a busy service business at the same time.
If this sounds like a lot of work, it is. But the dividends can be substantial. A thriving retail business will bring in a parade of new potential service customers and your regular class and workshop attendees will be far more likely to purchase items every week if exposed to a fully-stocked, well-arranged retail selection. Day spas make the majority of their profits on products, but it”™s the services that provide an opportunity to “sell” the product. It can be a real win-win, but you”™ll need a lot more cash to get it going and keep it going.
The Yoga Spa/Wellness Center
A second “high-ticket” approach, and this may well be bundled with the retail operation, is the yoga spa/wellness center. You”™re seeing a lot of variations on this theme pop up all over the country right now.
Why? Because like the model above, an intelligent blend of classes, private services and products can create a wealth of cross-selling opportunities and each individual profit center can act as a feeder for the others.
Exhale is an interesting example of this. They set aside a significant amount of space for yoga and Core Fusion™ classes, which draws a high volume of people through the place every week. These are often the same people who are open to and interested in both spa and wellness services and products. Services include facials, massage, acupuncture, structural integration, private yoga/therapy and a wide variety of more specialized treatments and services. Products include a combination of private label and established personal care and spa brands that are often upsold during treatments.
Adding in a private services suite requires additional space, inventory, personnel management and highly specialized service providers. Getting the balance right is critical in terms of rent, space allocation, retail inventory, service menu and class offerings. It”™s often a delicate balance and some seem to be getting “righter” than others.
If you”™ve already got the space though, and your classes are not regularly maxing out your practice rooms, you might want to think about a more modest renovation to turn practice space into private service space and begin offering a basic menu of massage modalities.
The other major benefit is the opportunity to bundle classes, products and private services in your marketing campaigns. For example, you could offer new monthly yoga members a complimentary private service and 25% off their first retail purchase. Get creative.
While not everyone has the funding to bring to life endeavors like these, in the increasingly competitive world of yoga, especially in the major metropolitan areas, the more you are able to differentiate yourself and satisfy numerous needs in one place, the better off you”™ll be.
And of course, whatever you do, remember we are in the business of yoga, but it is absolutely critical to keep the yoga in the business. Lead with heart, then build from the numbers.