The importance of a Business Plan
Making a Business Plan will help you stay on track; here are a few of the benefits:
- Clear direction. Know where you are going and stay on the path.
- Know your objectives and goals, so you can measure, grow and celebrate.
- Strategies, exactly how you are going to get where you want to be.
- Hire and keep people who can help, not just other teachers, but if you need help with advertising, website, renovating, etc.
- Borrow or get an investor, a Business Plan will allow you to go to the bank and get some funds or find somebody who wants to be part of your business. I do not recommend either, but here’s the opportunity for you to consider.
- Invest where it is important and will generate the most revenue, and manage the funds you have.
- Grow, you will be able to measure and decide if changes are necessary to get where you want to be.
- Know what is going to happen at the end, you may have different ideas about your business, but knowing what you want to do at the end of your yoga career will help you develop the plan. You could sell your business, you could grow and open more studios, you could retire and close, you could leave it to your children or someone else.
What your Business Plan should include
This is a summary of your whole Business Plan, you may choose to do it at the end and it basically has to answer who are your students, where is your studio, what is your studio about, how and why do you want to do it.
If you decide to draft it before the whole Business Plan, then use your own words and just be creative, you will notice it helps to clarify and organize all your ideas.
This is a simple phrase stating the whole purpose of your Home Yoga Studio. Your main focus is what you want to achieve. This should be inspiring for you at any time you look at it. You may even want to keep it close where you can see it often and feel inspired again. Try to reduce this phrase as much as possible, use very few words. I explain more about this in this chapter ‘Defining your studio’s identity’
The business name has to be unique and you will not be able to register it if somebody else is already using it. Plus you do want to stand out, so find a name that represents what you and your studio are about. Read more here ‘Name, logo and corporate image’
Make sure that you Google it to make sure it’s not being used already, and that the name is really special and unique, otherwise your students will not find you in the search engines. The hard part is that you still want to convey what your studio is about, so maybe the word ‘yoga’ has to be in it.
Make sure that the domain name is also available. In my case, the domain name ‘yogaforlife.com’ was already taken, so what I did is add ‘Australia’ at the end, to make it special. My website reads: www.yogaforlifeaustralia.com.
Define WHO are your students – make a detailed profile of the students you want to target (the location of your studio will be a very important factor – see below).
I have found very helpful that I am actually part of my target market, so it’s easier for me to attract my students: 85% women 30-50 years old, with a minimum high-school level of education, we speak the same language, most of us have children and partners, we do all the housework, we share many topics of conversation, we understand and care for each other, etc. so this has also created a great level of loyalty. I explain more about this in this chapter ‘Defining, finding and reaching your market’
Location of the Studio
When you are defining your target market, Location is very important, most likely your students will find you because you are close to them; they will not travel far for a yoga studio that just opened. So get to know your local area (and demographics), if there are many offices and corporations, you could include a lunchtime 45-minute yoga class, if there are a lot of new mums, them mums and bubs class, if they are older, maybe chair yoga? If there are schools in the area, probably a yoga class for mothers right after drop off…
The best way to find your competitors is to Google yoga in your area. Find your competition, Bikram yoga studios, Lululemon store (could compete because they offer free yoga classes but could also help a lot if they promote your studio and even make you their ambassador), big gyms with yoga classes, other small yoga studios, community premises, churches and scouts halls that offer yoga, natural therapies places who also offer yoga, etc.
So to stand your own against your competitors, answer these questions:
- What makes you special and different?
- Why are the students going to come to you instead of them?
- Which are your competitors’ target markets?
- Is there a niche for you to exploit?
- Is there a group of people who has not been catered for?
I suggest attending a class of each one of your competitors, get to know the place, observe the people who teach, the people who attend, the prices, the timetable, the ambience, the style of yoga. This will help you define how you will stand out from the others.
Don’t dread or fear your competitors, they can only make you better. If you offer something that none others have, people will come and love your studio. In my case, there’s a big gym close to my studio that offers yoga classes, but I know the names and something about the lives of ALL my students, so that makes my studio a special place with PERSONALISED attention, and my students love this and they keep coming!
In your Business Plan it’s important to define what services you want to offer:
- Name of service: Pre-natal, mums and bubs, chair yoga, restorative, workshops, events, beginners…
- Style of Yoga: Vinyasa, Power Flow, Ashtanga, Iyengar, Kundalini, Yin…
- Prices: Unlimited yoga, class passes (10, 20 50 classes), first time offer (i.e. 30 days for $30), casual classes
- Timetable: how many classes per week, days, times, duration, style, level of skill required.
- Equipment: required and provided, yoga mats, water, bolsters, blocks, straps, blankets…
- Additional income revenue: massage, yoga mats, healthy snacks, water, candles…
I explain more about this in this chapter ‘Products and Services’
Start up expenses
Ideally you have some money saved so you won’t need anyone’s help, however if this is not the case, this document will help you get some funding. We will talk about funding in the next item.
Here are the initial expenses you will have to consider:
Yoga mats. I provide these for free, I reckon it’s something nice I can do for my students, and I have a place at the studio where the students can leave their own yoga mats. Some studios charge $1 per mat per class… it’s up to you.
- Props: bolsters, cushions, blankets, blocks, towels, lavender eye pillows, straps. I provide all of those, but I made the lavender eye pillows myself: ⅓ lavender, ⅔ sushi rice, works wonders! I found a place where I can buy the yoga props at wholesale prices, but if you are a handy person you might bring out the sawing machine and do it yourself!
- Equipment: credit card terminal, computer, printer, phone, sound system, software. I already had most of these gadgets so now they are part of my business – and I can even depreciate them at the end of the financial year for tax purposes. All I really paid for was the credit card terminal, I did this through PayPal who provides the service for a commission and the terminal only cost me $100.
- Cleaning supplies for the yoga mats, the bathroom and the studio itself plus cleaning services. You can save some money by making your own: Cleaning spray for yoga mats: 750ml water/10 drops of eucalyptus essential oil, which is also antibacterial. Our students clean their own mats after every class with the spray and wipes before they roll them up.
- Furniture and fixtures. I explain more about them in this chapter‘Studio design, Decoration and Equipment on a Budget’
- Name and Business registration. Jump online and search your own government’s pages to find out how to register the name of your business, usually it’s just one online form and payment. It’s not very expensive and will cover you for a few years. I did not register a Business, I am trading as Julia Toral (sole trader), I think this is the easiest way to start, however I recommend you get some expert advise regarding this issue, it might be better for you to have a proper business registration, it depends on your own personal circumstances.
- Website: design, development, hosting and domain name. You can actually do this on your own, there’s no need to know how to write code to design a website. There are so many tools online. My personal favourite is WordPress. It’s a blog-style of site and it’s easy to manipulate, feed, add and change content… It has heaps of templates and themes (predesigned website looks) to choose from. For hosting and domain names there are a few providers, I have mine with 3ix, there are so many out there, it’s just a matter of choosing the most economical, however they all provide exactly the same. You might even get the design of your website for free! Also if you are going to use images and photos from the web make sure that they are not only free but also royalty free. A good website is pixabay.com, or you could infringe copyrights and get into a lot of trouble. You might want to read my blog ‘Doing my own website for my Yoga Studio!’ and ‘Website Design and Content’
- Printing and design: logo, flyers and timetables. I have the huge advantage to have a sister who is a graphic designer and after years of playing with colours, logos, photos, I asked for her help. In 2012 finally I got one that I love, however, this is something that you want to get right, after so much inconsistency I now understand the importance of a steady, uniform image, it brings seriousness and permanence to the idea the people form of your business. You might want to read my article ‘The name and design of the image of my Yoga Studio’. The one thing I keep spending on is in my flyers; I have a flyer dispenser outside the studio with flyers for people to take home, that way they can get all the information even if I am not there to open the door. The basic information in my flyers is: contact details ( I do not provide a phone, it wasted a lot of my time, but people can contact me through my email and I am quick to reply those), timetable, prices, and very important: a phrase with something like, ‘please check our website for changes and updates’, this is very important because you might have to close for a day, or change a class or a price, and people are not going to be happy if they are not warned.
- Marketing and advertising: You can read more in ‘Advertising and Promotions’
- Cross promotion with other local businesses: hairdressers, massage, chiropractors, small retail shops, the local cafes, the community boards at churches, supermarkets… the list is endless.
- Creative ideas for outside signage, I saw one yoga studio with a bicycle chained to a post at the corner of the main road and a big sign saying Yoga with an arrow on it… I don’t think you need a permit for that!
- Free local directories, just Google them!
- Local school newsletters
- Lululemon, I became an ambassador for two years and they were very helpful promoting my studio, plus by teaching classes there for a month, twice a year I became known in the Lululemon community. I also got a lot of free awesome clothes from them… They are a great company.
- Professional services: Accountant and lawyer. I do all my bookkeeping myself so I only pay an accountant at the end of each financial year to review and submit my taxes. I do not have a lawyer but it could be wise to actually have a professional revise some of your contracts, permits, insurances, registrations and deals with third parties.
- Insurance and liability. We have talked about this in the previous module ‘Insurance and Liability’
- Rent, utilities, property tax, internet and phone: this is important even when you are establishing your business at home, 33% of your house expenses should come from your business.
Your monthly and annual budget, plan and projections.
Cash flow is the key here. One thing is what you need to open your door to yoga students and another one is the money you will need to keep open.
Because you are opening your studio at home, you will be saving a lot of money on a monthly basis, since you were already paying rent, mortgage, property taxes, utilities, etc.
However some of those expenses might increase due to the studio and students and it is important to consider them.
Here’s an idea of the expenses you need to consider:
- Lease, mortgage and property taxes: consider ⅓ of those as part of your business expenses, but also remember to reduce them from your household ones.
- Internet and telephone: again consider ⅓ of those as part of your business expenses and reduce them from your household ones.
- Utilities (electricity and gas): this is important since you might notice an increase, depending on the weather conditions but if you need to cool or warm up the room this might have a huge impact in your bills.
- Website hosting and domain name: this is a yearly expense but it is important to consider it, and have enough to pay for it at the end of the year.
- Insurance and liability, also an annual expense to consider.
- Maintenance: just to upkeep the garden, the carpet, painting… Keep your yoga space looking great!
- Marketing and printing, don’t forget to keep your flyers updated with the latest prices and timetable.
- Professional fees: don’t forget your bookkeeping, accountant and lawyer if you have one. This might also bee an annual expense.
- Cleaning services… up to you.
- Office supplies.
- Professional training and devolvement: all the courses and first aid updates, etc.
All these expenses are tax deductible, so you might be actually saving some money in the end!Also, we are not considering a wage for you, but I keep this simple and just keep the net profits (after tax). Read more here ‘Money handling and bookkeeping’
Once you have come up with your start-up expenses and budget then you will know if you have enough to get started. If you don’t here are a few ideas from where you can get some:
- Contributions from family and friends
- Bank loan
- Credit card: please don’t do this! One of our first and biggest mistakes!
- Partner or co-owner, I wouldn’t suggest this idea either, because you will soon realise that the profits of the small business are not enough to feed two families, especially at the beginning.
- Angel investors, you’ll get all of the money and quickly but they will take a huge chunk of your profits.
- Crowd funding, you’ll be able to get funds from a lot of people around the world from here, plus you have no long term commitment, have a look at what this is about at crowdfunding.com, I have not tried it myself but sounds very interesting.
Strengths and weaknesses analysis:
Also known as SWOT analysis.
Recognising your weaknesses and your threats will in the end help you turn them into opportunities. Take you time and write them down, remember that this Business Plan is mainly for you, so be honest…
You can even ask a friend to help you see some of those if you are not being objective.
Some ideas are:
Location, premises, experience, target market, relationships, skills, low overheads…
Home based, small, depends on one person only, family inconvenience, noise…
Yoga itself, demographics of the area, level of income of the area, support from council and/or local authorities…
Gyms and other competitors, economic crisis, yoga is considered a ‘luxury’…
This section provides a checklist of legal and business issues that you should address in order to insure the viability and sustainability of your yoga business.
You might want or need to consult expert professionals for the following issues:
- Insurance and liability, we have talked about this, feel free to go back to the last item in the previous module ‘Insurance and Liability’
- Business registration: you can be a sole trader like me, however do consider this before you do: if you do not establish a legal business then you are liable for everything regarding it.
- Trademarks and copyrights: your images, your logo, your brand, your blog, your website content…
- All legal forms: registration form for new students, contracts for casual and regular teachers (when you get them), contracts for third parties services (if you ever require them)…
This is simple: How do you get the people that want or need to do yoga though your door?
- Start telling people you know about your new studio, post it on Facebook, Twitter…
- Give your friends a discount on their first purchase or a couple of free classes for them to try yoga and see your new studio
- Do a Grand Opening! I even invited my guru Swami Shantananda and she came, she gave a speech and we did a short meditation with her, it was great. Invite everyone.
- Write a newsletter and start building databases of people who are subscribe to it.
- Put out posters on the local shops that will allow it.
- Cross promotion, we already talked about it, but what I did is I offered the local businesses a free pass for their important customers. I put up some of their flyers in my studio too; this is about helping each other.
- Get your flyers to your nearest Lululemon and introduce yourself.
- Get your website started.
- Consider all social media: Facebook, Twitter, Instagram, Snapchat… and open a business page.
- Put an ad in all local schools’ newsletter, they are usually very cheap and offer a discount to the parents.
- Signage, remember what I said about the bicycle before, just get creative so you don’t have to pay for it. Also, I have a notice board outside with the timetable and the latest news.
- And remember; deliver an awesome class, word of mouth remains the strongest, most permanent and real promotion of your studio.
The Business Plan will give you a strong foundation for your success,
so please, please, please write one!