← Pilates Business Podcast
Pilates Business Podcast
One Studio, Multiple Income Streams: Thinking Bigger in a Small Space
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What if your studio's growth problem isn't actually about the space that you have, but more about the way that you're thinking about revenue? A lot of studio owners believe there are only two ways to grow. Number one, teach more classes. Number two, raise prices. Unfortunately, eventually both of those will hit a ceiling. There are only so many hours in the schedule, there are only so many reformers in the room, only so much energy that you can physically give. And that's when, when many studio owners start to feel trapped. The studio is busy, but the business still feels constrained. Growth feels capped, and every revenue increase potential seems to require more input from you. So today I want to talk about something that is, I think, often overlooked heavily in conversations that we're having today in the industry and that is how, how to think bigger financially, even inside a small studio. Because if you're like many of the studio owners that I work with, sustainable growth is really important to you. And I want you to know that that doesn't always come from adding a square footage and expanding your space. Sometimes it can come from developing your business model too. Well. Hi there, I'm Sarah Glanfield. I'm a business and marketing strategist just for boutique fitness stud owners like you. If you're ready to be inspired and make a bigger impact, you're in the right place. All you need are a few key strategies, the right mindset, and some support along the way. Join me as I share the real life insights that will help you grow a sustainable and profitable studio. This is the Pilates Business Podcast. Welcome back to the Pilates Business Podcast. I'm Saran Glanfield. I'm the founder of Spring3 Studio Business Consulting. And I have been coaching and working side by side with the boutique fitness studio owners, especially in the pilates world, since 2014. So, well, over a decade now that I have been in the room with, with studio owners, looking at the data, working through the challenges that they have faced with in every single part of the world and every single part of the last decade plus. And that has involved a lot of evolution in our industry and it's required a lot of evolution of business models as well. And I think today's conversation is especially important for any boutique fitness studio owner who feels like they've hit a bit of a ceiling in their business. And sometimes this looks like a lot of different things. It can look like your classes feeling a little bit fuller, perhaps filling up, perhaps there are some wait lists, maybe your schedule is full, but you're still sort of on that hamster wheel, and you're wondering, why is my business more profitable? Maybe you're paying yourself, maybe you're not. Maybe you're paying yourself a little bit, and you wish you were paying yourself more. I have yet to meet a studio owner who is sitting there thinking that this is, you know, this is wonderful, and everything that they ever wanted from their income. I think we always want a little bit more out of our business. You want to squeeze the lemon a little bit more, right? And so one of the biggest things that we see, I mean, and I talk about it often on this podcast, is as your business evolves, a lot of things have to evolve with it, right? And sometimes these things happen naturally, sometimes these things happen, and it's obvious to you. And sometimes it takes a little bit more awareness, a little bit more time, a little bit more development, a little bit more care, perhaps a little bit of, you know, patience in some cases in order for the pieces to all kind of continue to rise and elevate alongside and in alignment with the direction that you want to go. And I think that often this is one of the biggest shifts that happens, mindset shifts that happen as an entrepreneur. You know, you start out and there's this sort of pretty obvious direction you want to head in towards. And then once you kind of get there, you get close. You're already thinking about what's beyond this. And that's when we see there's like, the next, you know, 10 or 15 or 20 doors start opening. And when you go through each and every one of those doors, there's another set of doors that we. That. That appear that we have to sort of decide which one we want to walk through. And I think in the early stages, growth is very linear, right? You want more classes, right? That means more revenue. You want more clients, that means more revenue. You want more of hours of teaching, that means more revenue. And these are very sort of straightforward and simple in the beginning, which is why I think in the early days, it's actually kind of straightforward in terms of where to focus. But eventually that kind of slows in sort of its sort of. It starts. Stops working quite so well in terms of where to focus. Because, yes, all of those things still hold true, but you start to reach some limits, perhaps in terms of the number of hours, the number of clients, or the number of classes you can offer. And when it does, a lot of owners assume immediately that they need to add a second location, they need a bigger studio, they need to add square footage, and in some cases, that Absolutely. Is that the right way to go? But not always. And that's, I think, again, where we kind of, we, we, we see some doors that are obviously open there or appearing in front of us, but we don't often see some of these other doors that appear there and that we could also put, perhaps take a little peek into and explore. Right. Because when you step through some of these other doors, they may also take you to an, in a direction that you want to go in as well. And so perhaps the business doesn't actually need more square footage yet. Perhaps it needs a little bit more sophistication in terms of the business model. And that's a very, very different conversation. Because one of the biggest traps in boutique fitness is building a business where all the revenue depends on one thing. And I think when all the revenue depends on you teaching inside of one room at one specific time, then that is going to create a lot of limitations in your business very, very quickly. Physical limitations, emotional limitations, and yes, also financial limits, too. And this is where I think we start to experience as, as a business owner, this strange contradiction where the studio looks very successful from the, but from a business owner perspective, internally often feels quite exhausting to sustain. And even the idea of continuing along that path is one that perhaps might fill you with sort of that feeling of overwhelm and chaos. Right. And you know, it's often because you're busy, busy, busy, going, going, going. And we haven't developed the business model yet to give you the space that you need back. Right. Because in the beginning, yes, you're going for it. It's simple, it's straightforward. It's get, get people in the studio, get hours booked on the schedule, get spots booked in classes, but that is, over time, we have to develop where you're spending your time. You have to develop the business model as well. Because if you are busy, busy, busy, busy, but the business is so fragile because you're doing everything and it relies solely on you, then it's a fragile business. Right. And a fragile business is not going to withstand what this industry is, is what is happening in this industry right now and what is going to continue to happen in this industry. So I want to challenge you today to think a little bit differently about your business and about where you're taking it. And I want to move out of this. Just, just do more perspective. This just add more, do more, do more, do more and think about your business from an ecosystem perspective. The strongest, most robust, most successful CEOs that I work with who have Grown from strength to stre every single year are ones that have built and invested in developing this internal ecosystem. They are not relying on one income source alone. They have assets in their business. And the assets in their business often look like great people. They also look like great systems, they also look like great marketing and then they also look like great internal culture. Great experience. And they've been layering in, I would say this sort of or layered revenue for, for years. We've got revenue that they've developed over a long time where based off of the client experience over a number of years. They've got revenue that is designed to increase the lifetime client value. They've got revenue that supports profitability without requiring that endless schedule expansion. Right. And this is not, by the way, about turning your studio into a chaotic business with 20 random offers. In fact, I often have to pull people back from a lot of these ideas because I don't want your business to be chaotic. I want it to be efficient and strategic. So it's about building a business with intentional revenue streams that support your core brand and your client journey and the results that you want your clients to get. Because when you think bigger about your business, it's not just about thinking bigger in terms of studio square footage or the number of locations that you have. I think we can all think bigger when it comes to our business, even the ones with the smallest footprints. And I think it's just up to you to perhaps stop thinking about the size of your business in terms of your class count or the number of spots you have in your classes and how full they are. But, but in terms of all these other ways that you could be potentially building your business and generating revenue and knowing when those opportunities are worthwhile exploring. So let's start at the beginning and let's talk a little bit about the foundational issue because a lot of studios are built and are encouraged to be built around a membership model. All right, now I'm all about recurring class revenue. I love recurring revenue in your business. And while memberships can be incredibly powerful, I also have seen studios that have suffered tremendously from trying to build a membership based business when the rest of their business is not designed to do so. And that is quite difficult to watch and see. And it's also sort of a huge shift in, in sort of in everything in the world of the studio owner when they realize that they've been trying to build something that is just impossible to actually build with the what they have and what they're doing in the studio. So Memberships are incredibly powerful. I love the recurring revenue when it makes sense for the business model that you have now, even in those businesses which have strong memberships and is a membership model and they sell memberships and they're a membership aligned business in that they're both. This studio is designed for memberships. I would still say that relying too heavily on that one revenue channel creates vulnerability in the business because I think that, you know, we have to be making thinking about where our business is, you know, the way the weakest link is in the business. Always as a business owner, as a studio owner, as an entrepreneur, you should be looking at strengthening the weakest part of your business. And so if you want to solve a financial challenge, it gets solved in the same way. Adding more classes. If you need more revenue, you're going to add more classes. If you want to grow payroll, you're going to add classes. If you want to offset churn, you're going to add classes. And eventually the schedule becomes crowded and fragmented and exhausted. And I think what's important is just because the schedule is full does not mean the business model is optimized. I've had to do a lot of sort of modeling financially for many studios and especially those that have memberships. And it's often incredibly traumatic to see the breakdown of some of the classes and how slim and sometimes non existent the margin is on some classes. And so even though it looks like you've got a full and busy studio, it doesn't necessarily bring you, that's those, you know, nice healthy margins that we want. It often creates a lot of operational strain, owner burnout, that sort of inconsistent profitability and often limited scalability as well. And, and so we want to be really smart. I guess what I'm getting to here is we want to be really smart about how we build a business. And even though we hear a lot of people say this is the one way to do it and the only way to do it and the best way to do it, it doesn't necessarily mean it's the best way for you. And so if every single time you want to grow your business it depends on one solution, then it becomes even more dangerous when alongside that you're, as an owner, you are already stretched in terms of your teaching because revenue growth then becomes directly tied to you and your, your availability and your ability to show up. And that is just not sustainable. So at some point as you evolve your business, as you grow your business, you want to ask yourself, how do we make this business business financially stronger? Without simply increasing the number of classes and the number of hours taught. And if you can answer that really thoughtfully and in a way that is aligned, then it forces you to think beyond just the activity and actually think about your business more strategically. And I think this is where a lot of studio owners sometimes get nervous because when they hear multiple income streams or they hear the words financially robust or they think about financially stronger, then you know, they start to picture a lot of different, you know, income streams, multiple income streams, chaos side hustles glued onto the business, you know, adding a massage room or a lashes room in the back or all of these add ons, right? And trying to price all these add ons in different memberships and buckets them all together. And it starts to get complicated really, really quickly. But smart revenue expansion is not about being random at all. And I think we have to be, this is where, you know, if we think about those doors that we have, right, There's a lot of doors you could go through. When you think about how do we, how do we add multiple revenue streams into our business? And it's not about just adding multiple revenue streams, it's about which of those many, many doors. Let's say there's 20 fit and, and that is about alignment. Because if you can find additional revenue streams, I would say even the best additional revenue streams will actually strengthen the client experience instead of distracting from it. And sometimes this is what I see happen, right? So often we'll find that adding on this other revenue stream often actually pulls revenue from an existing very profitable offering and moves it into often a lower price point or an alternative revenue stream that often has a lower margin. We don't want that, that's not good for your business. So it all has to align and it has to be additional, right? So we're not pulling from one and moving it into another. We are maintaining the revenue that we have and finding ways to add more. So for example, a workshop that will deepen education is going to be additional, it's going to be add on, it's going to enhance the experience of your clients. Private sessions, a lot of clients will love, actually prefer private sessions and will increase that personalization and often increase the results they get. And oftentimes, you know, as you're a studio who works alongside your clients for many, many years and in many, many cases, you know, we will find that from time to time they may be seeking those one on one experiences as well. Retail can reinforce that association they have with your business, that identity they have, the lifestyle that you're creating for them. Teacher training is another revenue stream that can be incredibly fruitful. It can help to strengthen your offering within your studio as well and make sure you've got some fantastic teachers who are teaching and perhaps homegrown teachers who are teaching in your studio. Events are phenomenal. We talk about them a lot inside of Thrive, about how to host events, how to collaborate within events, and really how to use events to create a sense of belonging. All of that helps to enhance that lifetime client value which we know is so important. So the pattern here is that adding on these revenue streams shouldn't feel like extra selling constantly. Right? We're not looking to discount something, to add something, to do these deep discounts and deep promotions. It is about and naturally extending the brand experience. And I think that's why some studios are able to really easily and really successfully increase revenue without making clients feel like they're constantly being marketed to. Right? Because the offers feel cohesive. And I think this matters because in the world that we're in today, we know where we have some really sophisticated clientele. Our audience is more savvy than they've ever been. Not just about their health and wellness, but about their metrics around their health and wellness and about what they should and shouldn't be doing at their particular stage of life. And so clients want depth, they want expertise, and they want more. Typically, when they are in a boutique fitness space, they're coming there because they want that personalized service and attention and care and expertise. People aren't just checking the box of workouts anymore. They're not going to. The people who come to your studio aren't the ones who also go to the gym and sort of walk around the gym for an hour and a half trying to figure out what to do. Right? They're looking to come and move their bodies in a particular way. They're looking for particular results. They want a particular experience. They want that community, they want that impact of that. They want the growth, they want the identity, they want that connection. And I think the studios that understand this create far more opportunity for sustainable revenue expansion, not through high pressure sales or, or mega deep discounts, but through relevance to their ideal clients. Now you're probably thinking that you need a massive epic space at street level with tons of foot traffic to add on some of these additional revenues. But I think that what I really want you to take away is that a small studio is not automatically a small business. It's. That's, I think, quite an important distinction to make some Some owners will unconsciously cap their thinking because perhaps their physical footprint feels quite limited. But revenue is not determined by square footage. It's determined by business design. And we often analyze this when we do our analysis financially of the studios that we work with. And what we find is that in boutique fitness, because the value is not in the space itself, the value is in the impact, it's in the expertise, it's in the community, and the experience that is attached to the brand. We often find that those smaller studios actually have advantages because they have a stronger connection, they have higher touch relationships, they have more personalized experiences, and they have a really a much clearer identity within their community. And those things are incredibly valuable in today's market. And many owners under leverage them when it comes to opportunity growth. So instead of asking, okay, how do we maximize every square inch of space in this studio? The better question might be for you. It could be, how do we maximize the value that we have inside of this, this entire ecosystem? I think that's a slightly different mindset, right? And I think that depending on your background and how you come into this and how you approach business, you might fall into one of those two kind of sets of questions, right? Because while we, yes, we want to make sure that we are aware of the revenue that we're generating from the space that we have and what that each of those spots in class is generating and each class is generating, we also want to think about how do we, as a totality of our entire business model, be able to generate more revenue. And that often comes from optimizing what we already have, optimizing the client journey, optimizing retention, driving higher lifetime value from our clients, being really strategic about our price point and our pricing and our pricing model and our packages, and then being really smart about the experience that we're giving our clients. So not just simply squeezing more classes into the calendar. And I think what I know about working with so many studios for so long is that you are really incredibly creative when it comes to so much about business. And it's one of the things that just makes it's so wonderful to get to work with studio owners so closely because you know, you know your business really well, you know the way that you want to interact with your clients, you know how you want to the relationships you want to build with them, the connection you want to have the community and the energy and the vibe you want to have in your studio. And so the more you can focus on solving for more of that, the stronger your business will be. And I think for some people, they get pulled into this way of thinking that is just about adding more classes, adding more, more and more. And often that is ultimately what caps you. So allow your creativity to really flourish where you can. And this is one of the ways that I encourage you to do that. Now, I think there is another, deeper reason that this conversation matters though as well. And I think that, you know, what we have to be aware of is that additional revenue streams are not only about making more money. They're not just about putting more money in your pocket at the end of the day so that you can go on a really lovely vacation. That is so well deserved. It's also about building your business into a business that is both sustainable. So in that. And what I mean by that when I say sustainable is that it is something that is going to continue to exist, but also it's robust. And when we add revenue streams to the business, and they are revenue streams that are also sustainable and robust and then they make your business more resilient, I think that matters enormously in boutique fitness today, because when all of the revenue depends on one channel, the business does become quite fragile. And so what happens is then that those seasonal dips, they hit really hard, they feel rubbish, make you panic, they make you wonder if this, what you're doing is right. We often see that instructor turnover hurts a lot more as well. Any sort of economic shifts create a lot more stress, and any sort of schedule disruptions often become really impactful from a financial perspective. But when you've layered in additional revenue streams really nicely over time in a way that is strategic, then it creates a lot more stability in your business because it distributes the pressure of the business. Right? The overheads associated with running your business are distributed across different revenue streams. And I think this changes so much for studio owners because when you have that resilience to your revenue, the business really stops feeling like it's surviving month to month based entirely on attendance. It's. They often allow us a bit more flexibility, for sure, a lot more creativity, a bit more breathing space. And it also allows you to feel more fulfilled by your business. And I think, you know, we often overlook this element as a business owner, but it's very important that you, as the leader of your business feels fulfilled by what you have built. And I think that when we allow ourselves to create this business and we allow ourselves to be creative in our business, then we often see there is a transition from that as, as a studio owner, from being a sort of self employed instructor into becoming that true leader of the business. And it's not because the business has become corporate, but it's because you have started to design your business very intentionally instead of just constantly reacting to what you're seeing happen day to day in the studio. And I think that's the evolution that has to happen beyond that first sort of stage of growth in the business. And honestly, it is one of the most important shifts for long term sustainability, profitability and robustness of your business. So let me recap for you because there's a lot that I've covered today. I want first of all, big takeaway is that your studio's growth is not defined only by your square footage. And raising revenue does not always mean more classes, more exhaustion, more chaos or immediate expansion or additional locations. Sometimes that next level of growth actually just comes from thinking a little bit differently about your business model and building smarter revenue, layering in those revenue streams and being very intentional about where your revenue is coming from. I will always say revenue streams that deepen the client experience, that strength and retention that improve profitability and create more stability for the business long term. That's what you're looking for. Because the goal for you as the leader of the business is not just to stay busy. You will always find the busy work. It's always going to be there. It's never going to stop. Actually, the goal is to build a business that is sustainable whether you are in the room or not, that is scalable and that is also supportive of you and what you want from your business. If you're listening to this and you're thinking, I know there's more potential in my business, but I'm not sure how to structure growth strategically, then that's exactly the kind of work that I do inside of my business coaching program. Thrive Inside a Thrive we help boutique fitness studio owners to build stronger businesses through smarter strategy, stronger systems, clear positioning, better retention and sustainable revenue growth so you can grow without also creating more chaos for you. So why don't we talk about it, hop on a call and learn more about whether this is the best next step for you at spring3.com forward/thrive. And if this episode resonated with you, send it to someone else that you know, another studio owner who might be feeling a little bit financially capped by their current space. Because sometimes that next next level of growth isn't just about getting bigger and adding more square footage. It's about getting smarter. So thank you so much for listening today. I will catch you in the next episode. Did you love this episode and want more? Head to spring3.com and check out my free resources that will help you run a profitable and fulfilling studio business. And before you go, one last reminder. There is no one way to do what you do, only your way. So whatever it is that you want to do, create or offer, you've got this. Thanks again for joining me today and have a wonderful rest of your day.