What are the economics of small fitness studios, like yoga studios?
September 24, 2018 12:15 PM   Subscribe

A fitness studio near me is coming up for sale and that's got me wondering how profitable they are (in general) as a business. The business type is that they don't have exercise machines or open-gym hours, just classes in the early morning and throughout the evening.
posted by xo to Work & Money (5 answers total) 6 users marked this as a favorite
My impression as an end consumer of such classes/studios with a superficial/vauge interest in them as a potential business opportunity is that they arent really amazingly profitable, seem to require constant marketing to drive new sign-ups, most seem to be leveraging other peoples investments. and then there is classpass.

What do the folks selling it say about why they are getting out? id be surprised if they were totally candid but i think you'd be wise to inquire and give their answer a serious sniff.

Having been involved in the sale of a small business, you would be completely warranted in asking for profit-and-loss and cash flow statements for the past few years. Hesitation to transparently show a (legitimately) interested buyer the financial details would be a massive red flag.
posted by Exceptional_Hubris at 12:30 PM on September 24, 2018

I've had a lot of experience recently evaluating businesses for sale. If you are looking to buy this particular company, they should open up their books to you - everyone does - so you can look at how much they've actually made in the last 3 years. They may also be selling it through a business broker - if that's the case, the first step is to talk to that broker. They will be happy to tell you all about their profitability and other relevant information such as staffing, expenses, why it's priced the way it is, reasons it's being sold, etc.
posted by rada at 12:33 PM on September 24, 2018

So I've taught similar classes for decades. My experience is that you can do ok teaching classes like that as a primary job only in a place with universal health care. Without that its a part time, short term gig and you will have fairly massive turnover in staff which makes profitability very unpredictable. Instructors inevitably end up at a more corporate place or on their own or they quit. People will follow their favourite instructors around, they have the clientle typically and not the business owner. Even looking at the books won't help you if Jen and Pete recently went to the new studio down the block and took 80% of the customers. Or Alice got divorced and has to get a real job with benefits and her clients all went to someplace else.

You can make money as an owner operator but most people burn out after 8-10 years in my experience. And most are married to someone with benefits.
posted by fshgrl at 1:41 PM on September 24, 2018 [1 favorite]

I was on the board of for a nonprofit that worked on that model (just classes 6 days a week) and the only reason it was profitable was that there were 1.5 or recently, 2 paid employees and all of the rest of the instructors were volunteering their labor. Seconding looking into its books very carefully, and also investigate the current location - the lease terms, how much longer it has, what happens when it runs out and you may need to find a new place, etc.
posted by restless_nomad at 2:34 PM on September 24, 2018

Tony Gentilcore has written a lot about the business of fitness. This blog post , while it doesn't answer your question specifically, gets at a lot of the underlying issues. Just browsing through the other posts on his site tagged "business" will probably also be informative.
posted by asterix at 4:14 PM on September 24, 2018 [2 favorites]

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