Create a self sustaining business
“We’ve come from Pilates school, and you don’t learn how to run a business” said Bernadette when she and her business partner called looking for help to understand their business financials. “We just want to work with our clients doing Pilates. Then came all this other stuff!”
Does this sound familiar?
As Pilates has changed and grown over the past 20 years this growth has enabled many Pilates Practitioners to create a business for themselves.
There are different Pilates business models, and each has the potential to be viable and financially self-supporting:
A sole Practitioner operating across several different studios is the simplest operating model to earn income with low costs.
A sole Practitioner operating from a home studio will have more costs and certainly has the potential to be self-supporting and pay themselves a salary.
Then there are a variety of Pilates Studio business models and with increasing complexity comes increasing costs, which impacts the financial viability and feasibility of the Pilates business.
I’m the first to completely agree that there are many ways to measure the success of your Pilates studio – client improvement, strength and mobility impact, postural differences and so much more.
The thing is, that running a successful business hinges on its financial viability and in the simplest terms this is:
More money coming in than is going out. Do the fees charged to clients cover all the costs + pay the owner a fair salary?
How do you assess if your chosen business model is financially viable and will be self-sustaining?
5 Steps to calculate the financial viability of your Pilates Business:
1. Calculate the total of all the costs for the coming 12 months-2 years
2. Create a schedule for how many sessions and what mix of sessions you want to offer in that 12 months, 2 years – be sure to factor in Public Holidays and school holidays and your own holidays
3. Review your pricing schedule to determine how much to charge clients for each of the different types of sessions and what packages you will offer
4. Determine how much you want to pay yourself as the lead Pilates Practitioner and business owner?
5. Run the numbers: Is the total income greater than the total costs?
This is the financial business model that every business uses to calculate viability and profitability.
Think of it as similar to your Pilates Reformer; when you swap the springs that changes the exercise and results in a different outcome for your client. As you tweak the various components of your business you change your financial outcome.
I recommend that business owners review these 5 steps on an annual basis and take into account any further additional expenses occurred.
I suggest these “Healthy Financial Habits”:
Set up separate accounts for business and personal finances. Even for the most basic business model, it is Best Practice to have separate accounts. It makes it much simpler when it comes to keeping track of all costs and income.
Keep your accounts up to date. Whether using a handwritten spreadsheet or an Excel document or Xero or MYOB, get into the habit of keeping your accounts up to date.
I like to think of keeping your accounts up to date a bit like your clients' Pilates Practice. It’s OK to skip a few days and it’s hardly noticeable. The longer the break, the more it takes to get “back into it.” Keep up to date – weekly, or fortnightly – and definitely no longer than monthly.
Develop a Business Mindset; it’s super important to think like a businessperson and think of someone you admire – maybe in Pilates or in another line of business. What makes them successful? How do they define success – and I’m guessing that while they run a financially viable business, success is more than money.
As well as having a self-sustaining business, what else constitutes success for your Pilates Studio for you?
3. Get your Pricing right. Pricing can be an extremely emotive topic. There are four aspects to pricing:
i.Get super clear about the value you provide, be able to fully articulate that value and know deeply how what you do impacts your clients. “Own it and price accordingly”
ii. Annually review your prices and have the confidence to ask for and charge that amount.
iii. No discounts and no “mates’ rates” and no contra. Each of these devalues your offering.
iv. Put your prices up on a regular basis. Over and again clients I have worked with have held back from putting up their prices, for a variety of reasons and when they do their clients tell them “It’s about time you put your prices up”.
4. Understand the numbers: There are a few basics to know: profit and break-even are essential and being able to track cash flow means you’ll never run out of money.
With a few tweaks based on the information above you’ll be on your way to building more viability into your Pilates business.
Ingrid is the Founder of Healthy Numbers – a training, coaching, and consulting business for existing business as well business startups and entrepreneurs. She is driven by her passion for helping people create and maintain financial well-being and especially through business ownership.
Ingrid has also written a book called 'So You Want to Start a Business; The Seven Step Guide to Create, Start and Grown your Business".