1.0 Executive Summary
The purpose of this business plan is to showcase the development of a yoga studio based in Marquette County, Michigan. Yoga Studio LLC (“the Company”) was found with the intention of providing a wide range of instruction that include standard yoga classes as well as hot yoga. Full scale revenue generating operations are expected to commence in the fourth quarter of this year.
Operations
The primary driver of the Company’s revenue will come from membership fees that will be charged to clients on a monthly basis. This is extremely important as it will create a recurring stream of revenue that will allow the business to satisfy its operating costs on a monthly basis.
The Company will also generate revenue from drop-in passes. This is important, secondary revenue as it will creek greater exposure among people that want to try yoga at the studio without committing to a monthly membership.
The third section of this yoga studio business plan will further document the operations of the business.
The Financing
The Founder intends to make a $50,000 investment into the business. No debt capital will be used to establish these operations. Primarily, the funding will be allocated toward:
• Location development
• Furniture, fixtures, and equipment
• Working capital
As the business will produce highly recurring streams of revenue from its operations, the Company would be able to easily secure additional rounds of capital if additional yoga studios are to be developed. The Company would also be a strong candidate for a working capital line of credit to further its operations. This document assumes that the Company will use its retained earnings to further its growth objectives.
The Future
Over the next five years, the Company will make ongoing reinvestment into its marketing campaign, so that becomes the preeminent yoga studio within the Marquette County area. The Company will also expand the number of associated yoga instructors on site that can render specialized disciplines of this practice.
Market Overview
Revenue Forecasts
2.0 The Financing
2.1 Funds Required
As noted earlier, the Founder intends to make a $5,000 investment. The funds will be allocated as follows:
2.2 Management and Investor Equity
The Owner holds a 100% interest in Yoga Studio LLC.
2.3 Exit Strategies
In the event that it is financially prudent to do so, the Company will be able to easily sell the yoga studio to a third-party. As noted in the executive summary, the recurring streams of revenue from operations will allow the business to find a buyer relatively quickly. The sale of the yoga studio is not expected to occur for a significant period of time.
3.0 Operations
As noted in the executive summary, the Company will provide a wide range of yoga classes among varying disciplines. The location will provide services to individuals of all skill levels throughout the course of the day. Morning and evening classes will also be available among people that have time constraints.
The Company intends to charge $100 per month as a flat fee for unlimited access to classes at the yoga studio. As compared to the income of the target market area, this fee is affordable and will allow for rapid client on boarding.
Drop in passes will be priced at $15 per session. In addition to the secondary revenue center the Company will also produce income from the sale of yoga apparel, small snacks, and bottled beverages.
4.0 Overview of the Organization
4.1 Registered Name
Yoga Studio LLC. The Company is registered as a limited liability company in the state of Michigan.
4.2 Commencement of Operations
The yoga studio will commence operations in the fourth quarter of this year.
4.3 Mission Statement
To provide exceptional, yoga, instruction, and affordable price.
4.4 Vision Statement
To operate as a well-respected yoga studio with the Marquette County market.
4.5 Organizational Objectives
• Properly onboard yoga instructors that will provide their services on site.
• Adhere to all laws and regulations regarding yoga instruction.
• Maintain an expensive online presence that uses both search engine optimization and targeted social media.
• Continue expand the number of locations operated by the Company.
• Continually integrate new types of services that complement the primary focus of yoga.
• Expand the scope of the Company marketing campaigns on a year on year basis.
5.0 Market and Industry Analysis
5.1 External Environmental Analysis
This section of the yoga studio business plan will focus on the current economic climate, the industry, the competition, and the customer profile.
As of this year, the economic climate the United States is moderate. As a result of changing trade policies, there has been a moderate degree of volatility introduced. It should be noted that this will have a limited effect on the Company’s ability to generate revenue given that many people view their participation in yoga as an essential part of their lifestyle. The fees that will be charged are affordable even during a challenging economic climate.
5.2 Industry Analysis
As of this year, there are 37,000 yoga studios in operation throughout the country. These businesses generate $14 billion revenue. This industry is expected to enjoy a compounded growth rate of 4% in the coming years.
5.3 Customer Profile
Yoga has become popular among the wide spectrum people. As such, is stuff difficult to determine the exact demographics of people that will come to studio as this will span a wide range of incomes, ages, and geographical distance to the location. Generally, these individuals will have a household income in excess of $70,000 per year.
5.4 Competitive Analysis
The Company will face significant competition as it establishes its operations in Marquette County. The Company intends to maintain a strong differential factor given the fact that multiple yoga disciplines will be offered from the Company’s easy-to-reach location. The Company intense to onboard numerous highly trained yoga instructors to render services.
6.0 Key Strategic Issues
6.1 Sustainable Operations
Yoga Studio will have sustainable operations as a result of the following:
• Control of operating costs a function of revenue will allow for ongoing expansion of operations.
• Limited competition among yoga studios that offer the disciplines discussed earlier.
• The business will enjoy a substantial degree of economic stability.
6.2 Basis of Growth
The Company will expand via the following methods:
• Continued expansion of the number of locations operated by the business.
• Expansion of the types of yoga disciplines offered on site.
• Extension of operating hours to accommodate a greater number of evening and weekend classes.
7.0 Marketing Plan
7.1 Marketing Objectives
• Implement numerous forms of marketing prior to the launch of the yoga studio.
• Maintain an expansive presence on all social media pages.
• Implement content driven campaigns that will increase the efficacy of the Company search engine optimization.
7.2 Revenue Forecasts
7.3 Revenue Assumptions
Year 1
• First year revenue will reach $357,000.
Year 2
• Revenue will reach $378,000.
• Gross profits will reach $369,000.
• Total income will increase by 6%.
Years 3-5
• By the fifth year of operation, total revenue will reach $451,000.
• Gross profits will reach $428,000.
7.4 Marketing Strategies
The Company will use numerous marketing strategies that will allow the business to effectively create a strong brand name in the Marquette County market. This will include maintaining a high visibility storefront so if the business can be found quickly. The Company is currently working with a commercial real estate broker or find a suitable location.
The Company will maintain an expense of online presence that includes a proprietary website as well as a present on all social media platforms. It should be noted that the Company’s online presence will be established during the buildout of the yoga studio. This will create significant regional market interest during the time that the location is being finalized. The Company will offer discounts on monthly membership among the early enrollees.
The Company will also establish ongoing relationships with healthcare professionals in the target market area. This will allow the business to receive referrals among physical therapist, kinesiologists, and physicians that recommend yoga as part of a healthy lifestyle.
The business will also contribute to regional charities to position the Yoga Studio as a community minded enterprise. This will include donations to groups that advance the practice of yoga.
8.0 Organizational Plan
8.1 Organizational Hierarchy
8.2 Personnel Costs
8.3 Roles and Responsibilities
President – this position is held by the Owner. In this capacity, they provide yoga services directly to the general public well also implementing policies that guide that continued growth of the business. The president will also coordinate with the Company, CPA and attorney to ensure adherence to all regulations. The president will draw an annual salary of $50,000.
Studio Manager – This position will report to the President. In this capacity, they will manage the day-to-day operations of the business, including supervising the work of associated yoga instructors. This individual will also directly operate as a yoga instructor during the course of the day. Ongoing candidates for this position will have at least three years of professional yoga experience. This position will pay $42,500 per year.
Administrative Staff – these individuals will directly report to the president. They will be responsible for ledger, entries, accounts, payable management, accounts, receivable management, report, creation, and other administrative tasks that are part and parcel with operating a yoga studio. Ongoing candidates for this position will have at least three years of general management experience. An associates degree in business administration or accounting will be required at minimum. This position will pay $32,500 per year.
Staff Yoga Instructors – These individuals will directly render yoga instruction to the Company clients. This will be a per hour-based position with bonuses that are available based on the number of attendees. This payment scheme will allow you instructors to earn more than their hourly wage which will encourage him to provide an exceptional experience to the business’ clients. The base rate for providing yoga instruction will be $25 an hour plus $2 per participant.
Support Staff – These individuals will ensure the cleanliness of the location, front of house operations, and related matters. This position will report to the Studio Manager. A high school diploma will be required at minimum. This position will pay $16 per hour.
9.0 Financial Plan
9.1 Underlying Assumptions
• The Yoga Studio will have a compounded annual growth rate of 9%.
• The Founder/President will invest $50,000 into the business.
9.2 Financial Highlights
• Highly recurring fumes of revenue from the Company’s monthly fees.
• Substantial secondary income from drop-in passes, apparel, sales, and related income.
9.3 Sensitivity Analysis
The Company’s revenues are only modestly sensitive to negative changes in economy. Many people view their participation in yoga is an absolute necessity, and they will continue to pay the monthly fees that are associated with this activity. The business will have controllable operating costs that will allow the Company to remain profit at all times.
9.4 Source of Funds
9.5 Financial Proformas
A) Profit and Loss Statement
B) Common Size Income Statement
C) Cash Flow Analysis
D) Balance Sheet
9.6 Breakeven Analysis
9.7 Business Ratios
Appendix A – SWOT Analysis
Strengths
• Strong demand in the Marquette County market for yoga studios that operate among extended hours.
• A highly experienced owner and yoga instructor that will be able to properly manage his business on a day-to-day basis.
• Limited competition among yoga studios that provided all of the disciplines within this activity.
Weaknesses
• Ongoing competition from more established studios in the market.
• The Company will need to engage in a wide-ranging marketing campaign, which can be expensive.
Opportunities
• Continued extension of the Company’s operating hours especially as it relates to weekends.
• Continued hiring of yoga instructors that can provide their services on site.
• Expansion the number of locations of the Company operates.
Threats
• Ongoing issues with inflation could cause the operating cost of the business to increase.
Appendix B – Risk Analysis
Development Risk – Low
The primary development risk face by the business is to establish the location in Marquette County. The marketing plan discussed earlier will be implemented as soon as the location has been secured.
Financing Risk – Low/Moderate
Management intends to invest $50,000 into the business to establish operations. The risk relate to this investment are offset by the recurring nature of income produced.
Marketing Risk – Low
Beyond the high visibility retail storefront that the Company will maintain, the Company will engage in numerous marketing strategies that will create significant awareness for the yoga studio. This will include extensive direct outreach with physical therapists and kinesiologist that can provide referrals.
Management Risk – Low
John Doe is a highly established yoga instructor that will be able to properly develop this business to profitability. He will focus on year-on-year income growth.
Valuation Risk – Low
The valuation risk is offset by:
• Limited operating cost once sure that the business is able to reach profitability quickly.
• The recurring nature of revenue will allow for effective budgeting on the yearly basis.
Exit Risk – Low
As noted earlier, there are no longer range of plans to sell this business to a third party. However, this could be easily completed should be financially approved to do so.