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Need advice from Yoga Teachers
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Indigo Jill
Posted 2006-07-29 12:52 PM (#60238)
Subject: Need advice from Yoga Teachers


I'm opening a yoga studio this fall and am working on my business plan/business model. I am not a teacher - I'm a practicioner and I'm opening a studio to fill a need as there are no studios within 40 miles of where I live. Anyhow, I am trying to figure out how to structure my teacher compensation. I am thinking of a 50/50 split - I provide studio space and equipment, student processing, marketing/advertising, scheduling etc (all the "business" things that I love to do) and I split the class sales with the teacher. I am calling the set up a "collaborative business model". The teachers contribute their expertise and I provide the business part.

My question for the teachers (or other studio owners)...what do you think about this set up?? The average class price is $14 - the space will hold a max of 11 students. It's great if they fill the class (make $77) but conversely, they may make very little if only one or two students show up. Do teachers typically like just a flat fee? How much is the "normal" flat fee in your area??

Any advice would be appreciated!

Indigo Jill
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mishoga
Posted 2006-07-29 2:30 PM (#60252 - in reply to #60238)
Subject: RE: Need advice from Yoga Teachers



Expert Yogi

Posts: 1738
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Location: right where I'm supposed to be
I am compensated for some classes, like in a gym-a flat fee, but I also rent space.

You might want to consider renting space to instructors too. A flat rate per hour. This works good if a teacher, instructor has a following. They'll come in with a full class and you get a minimum of what you think is acceptable.
Might also be an option that could work alongside having teachers with a split payroll.

Just a thought. I personally like renting and I will always draw at the least 14 per class, with more students most of the time. I charge $8.50 per class and I make a nice profit while paying rent too. Students are happy because the facility is perfecto and the class is so inexpensive.

As always, just one small voice amongst many

Mish
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YogaMommy
Posted 2006-07-29 5:49 PM (#60268 - in reply to #60238)
Subject: RE: Need advice from Yoga Teachers


A split is nice, but sometimes that's hard to do in a new studio, especially if the teacher doesn't have a following yet. If there aren't studios within 40 miles, teachers probably won't have a following at the beginning because you'll be getting people new to yoga.

I work at a few places, and get paid differently at each place.

One place gives me a flat fee per class, and a larger flat fee if more than 5 people show. The second place gives me a flat fee, and $2 per head over 5 people. The third place, I get 60% and the studio gets 40%. That's in a very established studio, that's been around for 25 years and has a great following.

At all places I work, I still get paid if nobody shows, although usually a slightly lower rate than if students show.

Carole
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tourist
Posted 2006-07-29 6:18 PM (#60277 - in reply to #60268)
Subject: RE: Need advice from Yoga Teachers



Expert Yogi

Posts: 8442
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When I worked with the local rec centre we did a 60/40 split. Now we are a student run non-profit and we pay hourly. This allows us to run classes with lower registration (the higher level classes, pre-natal etc.) and not have competition for the fuller classes. We have a scale depending on cert. level.
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yogabrian
Posted 2006-07-29 7:05 PM (#60283 - in reply to #60238)
Subject: RE: Need advice from Yoga Teac


Coming from a studio owner, I would say this:

I HIGHLY recommend you become a pracitioner and at least an instructor in yoga. It will greatly help your efforts of keeping your studio successful and not a money pit. Also you never know when you may lose an teacher (yoga teachers tend leave for extended period a great deal) and need to jump in to teach their classes.

I personally like splits of the profit of the class as a business owner. Work hard get paid well. Work poorly and don't get paid. Works for everyone. Nice and simple.

I do not pay for those customers who are still on intro offers. Also, make sure that you hire teaching staff as independant contractors who carry their own insurance, but do also insure yourself for EVERYONE who works for you.

Find out who the top teachers are in your area and hire them. Let them teach and leave them alone to do what they do best. However don't let them become Diva's and start calling the shots. Be fair and generous, but remember that you are the boss and you can replace yoga teacher if need be. As hard as it will to replace a good teacher.

Don't expect to see a return on the studio for the first 2-3 years. Try to break even first.

Good luck! Finish that business plan, then have someone read it, then rewrite it, again and again , and again. Go to http://www.score.org for help. Great free resource for small business owners.

Edited by yogabrian 2006-07-29 7:05 PM
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yogabrian
Posted 2006-07-29 7:12 PM (#60284 - in reply to #60238)
Subject: RE: Need advice from Yoga Teac


Jill,

I just read your blog, I suggest that you wait a little while before opening a place. Running a studio is ALOT OF WORK.

Here is blurb I wrote from another thread on the same subject.

Before you attempt to open a studio, is is helpful to know about both types of studio owners
There are 2 main types:

1) Owners who teach most the classes and run the studio.

2) Owners who have lots of money and don't teach but run the business end.


Type 1 is where most of us start out. I feel that is an invaluable step for learning the business of yoga. There is a lot to know just about running a business much less knowing the complexities of the yoga business.

You will have to teach a bulk of the classes, work usually 7 days a week, clean the studio, do the accounting, deal with teachers who don't show, everything basically. To do this you must be teacher and a business person. Eventually you can build the business up, train or hire some teachers and eventually step back and let it run itself.

Type 2 is the business person who wants to open a studio and has EXPERIENCE in running a business. Usually the have practiced yoga for sometime and has the contacts and the money to start everything.

The type 2 who has no experience in running a business, no contacts with the local yoga community and no capital to support the studio for the first 2-3 years is doomed to fail IMO.

I would highly recommend getting certified and starting in the type 1 category. You may need to cover classes as an owner for a teacher who pulls a diva act and quits right before a class. You really need to understand the part of the yoga business that most don't see.
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Indigo Jill
Posted 2006-07-29 9:03 PM (#60294 - in reply to #60238)
Subject: RE: Need advice from Yoga Teachers


Thank you SOOOO much everyone for your valuable responses. I so appreciate all of your insights and am grateful you have taken the time to share with me. What a great board! Although I don't feel like I'm lost business wise, I'm not a teacher so don't have that perspective to rely on in this endeavor. Your info is helping me greatly.

I do have business experience - have been an entrepreneur for the last several years and my most recent business was a "yoga to go" business that, although was (and still is) successful, I exited due to a conflict of interest with one of my business partners. I had partnerships in my last two businesses that didn't "fit" and realized that going solo may be the best thing for me (my choice of business names - One.Yoga - has a multi-layered meaning ). My strength/background is in the marketing/branding of services so I believe that, based on my previous successes, I should find out how to make this endevor profitable too. My greatest advantage, and the reason I am pursuing this at this time (besides the fact that I am a passionate student without local services), is that my studio space, although small (11 +1 teacher max!), is rent free - don't even have to pay utlities!. The only start up costs I have is renovation (bamboo floors, adding window, operational material, advertising, etc.) I plan on this being the first Studio in the area and expanding into larger spaces through the years - but having the business pay for the growth.

I have been searching for yoga my whole adult life but I didn't know it. I feel like I am "home" if that makes sense and feel like I must do this. It's calling me. Yes, I want to make a profit (one of my guiding principles is that we need to recognize and accept profitablity will ensure our future survival) but I'm more focused on getting yoga into the lives of as many people as possible. I truly believe it can change the world ...for the best!

K...thanks for letting me "chat" I am also interested in starting a small listserv/email group (Yahoo group maybe?) of yoga studio owners. Is anyone interested??? Email me at jill@oneyogastudiosouthwalton.com or jillgaupin@mchsi.com if you are!

Many many thanks again.

Indigo Jill


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Posted 2006-07-29 9:06 PM (#60295 - in reply to #60238)
Subject: RE: Need advice from Yoga Teachers


Hi Jill,

I'm going to try and stay focused only on the question you ask. As my teacher says "we should not deprive a person of their experience".

In putting together your business plan are you preparing a break even analysis?
(You are also to be commended for doing a business plan in the first place. Not only will it clarify things for you but will serve as a map for your forward direction).

The 50/50 split you mention is very generous if you're doing the marketing, paying the bills, doing thepaperwork, cleaning, ordering etcetera.

Here's what I know about pay structures in the Seattle Area.

Fitness Centers - typically flat hourly anywhere from $35 up to $40 or more. The cheaper membership ratea re the less the rate (usually). Taxes are taken out before checks are cut by payroll folk.

Space Rental - this can be a straight percentage split. The space holder usually does a wee bit of marketing, publication in their flyer, a posting on the bulletin board, and not much else (web space too sometimes). The last space I had an arrangement with was a 60/40 split and they handled the payroll and the studio issues on their own.

Another space rental was a monthly $135 per class. That breaks down to about $34 per class session (90 minutes). You do all the marketing on your own (except for pubs in their flyer and their web site).

Studios typically pay Base and Head. The more experienced teachers, with strong followings, were able to negotiate around this or deeper into it. It would not be uncommon for a teacher to get $20 per class as base and $2 per head for any head over 4 or 5. Obviously a class of 11 at $14 brings class revenue of $154. The teacher for that class would get $32 ($2 over 5) or $34 ($2 over 4). $42 and $44 dollars at $30 base and $2 head. This $30 base is sound. Start the head count at every head over 4. That gives your teacher the opportunity to earn $14 dollars per class and provides some incentive to market on their own.

A 50/50 would put $77 in the teachers pocket for a full class and while I'm all in favor of higher pay it's a lot to pay out when you are handling the web site, the design, brochures, business cards, and whatever other collateral materials you are publishing. Plus you've got insurance, licensing, taxes, maintenance, cleaning...yada yada yada

Even with a teacher that has a following, 11 students isn't that large a class compared to the 25-30 teachers with followings have here and prolly in SF and NY and other large cities. So your revenue limit is $154 without raising class prices. That's it. No more. So where do you go from there as a business owner?
You can always increase the rates for teachers, give bonuses, throw a potluck or something to treat the staff. But if you go 50/50 you will not be able to backpedal to cover your expenses.

Am I making sense?




Indigo Jill - 2006-07-29 9:52 AM

I'm opening a yoga studio this fall and am working on my business plan/business model. I am not a teacher - I'm a practicioner and I'm opening a studio to fill a need as there are no studios within 40 miles of where I live. Anyhow, I am trying to figure out how to structure my teacher compensation. I am thinking of a 50/50 split - I provide studio space and equipment, student processing, marketing/advertising, scheduling etc (all the "business" things that I love to do) and I split the class sales with the teacher. I am calling the set up a "collaborative business model". The teachers contribute their expertise and I provide the business part.

My question for the teachers (or other studio owners)...what do you think about this set up?? The average class price is $14 - the space will hold a max of 11 students. It's great if they fill the class (make $77) but conversely, they may make very little if only one or two students show up. Do teachers typically like just a flat fee? How much is the "normal" flat fee in your area??

Any advice would be appreciated!

Indigo Jill


Edited by purnayoga 2006-07-29 9:11 PM
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Posted 2006-07-30 7:18 AM (#60332 - in reply to #60238)
Subject: RE: Need advice from Yoga Teachers


Jill:

One of the things you may consider is paying a teacher a 'flat fee' up to a certain number of students. THen, once you surpass that number, you can do a 'split' or give a little more per person.

as an example, one studio where i worked could hold 69 students and classes average (now) about 30. The teacher gets paid a flat fee for the first 17 students, and then $2 for every student over 17. The flat rate for this sort of teacher was $40, and then for the next 13 students, she earned $26, making her total to be $66 for that class. If at the next class she only had 18 students, she would earn the flat rate plus $2 and earn only $42. It certainly gives the teacher the incentive to promote him/herself as well as your studio.

my recommendation, then, it to set this up. How much do you need to earn per class to maintain your business? This will set the mark at where you set the 'flat fee.' If you need 7 students to make your cost, then you tell the teacher that she'll earn $X until seven and then $X for every student over seven. While a 50-50 split for any student over seven would be great, a smaller fee is also appropriate--particularly if you're covering all of the costs.

I'll try some math though, and i'm sorry if it is errant.

If it is $14 per student and your max students is 11 per class, then if you max out you'll earn $154 per class.

Next, calculate costs per class--rent, utilities, your salary, and the teacher cost divided by the number of classes taught. At new studios, teachers in this area (philly) earn $35 until the classes reach a certain size, and then they're bumped to a flat $50, and if they have a discernable following, then they move into this structure. So, lets assume that the starting flat rate is $35. Lets assume that other costs per class equal $65 per class for a total of 'needing' $100 per class in order to 'break even' or basicly support yourself.

dividing $100 by $14, you discover that you need at least 7 students to cover your costs.

imo, profit sharing shouldn't really come into play until you've met this basic number. the teacher should get a flat rate until then, and then after--when everyone is making profit--should the profit-sharing come in. so, the teacher will get $x for every student over 7. Now, that $x could be the 50-50 split for every student over 7, or less depending upon how you want to structure things.

So, assuming that the teacher earns $35 for the first seven and $7 (50-50 split) for every student until the class is maxed (11 students or 5 students above the base price). Over 7 students, the teacher would earn between $42 and $112 per class.

For an independent contractor like me, this is a great business deal. as long as our personalities 'gelled' i would be happy to work for you and promote these classes to earn more money.
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