August 31, 2011: Yoga & Pilates Studios
Sometimes we might overlook a great opportunity because we think the field is too crowded for new businesses. But smart entrepreneurs don’t let the fear of a little competition stop them, even if the competition is established, and you’re the new biz on the block. (Look at how phenomenally well Five Guys Burger & Fries is doing launching decades after McDonald’s.)
So at first glance the yoga and Pilates studios market might appear to be too saturated to have room for new players, but according to a new report from market research firm IBISWorld, there’s a lot of room for growth. IBISWorld estimates there are already more than 25,500 yoga and Pilates studios open for business today. Despite that number, they’re projecting a 5-year average annual revenue growth rate of 5 percent, to over $8 billion, and profit margins are expected to increase from 12.2 percent this year to 12.7 percent by 2016.
The sunny projections are partly a result of a change in how the industry targets consumers. It’s more profitable to sell customers monthly or annual membership fees, rather than offer by-the-class prices. This makes the customers happy because they’re paying less per class, but helps enhance the business owner’s bottom line by attracting committed consumers.
If this business appeals to you, check out the existing competition in your area. What can you offer they don’t? Traditionally most yoga and Pilates customers have been women. But Yoga Journal magazine says men are increasingly embracing yoga (nearing 30 percent participation). And some studios are actually offering doggie yoga or classes for people and their pets.
Be sure to supplement your studio’s income by selling related products, like clothes, books, DVDs, lotions and candles, and accessories like mats, weights and stretch bands.