Wednesday, March 30, 2016

Julies Yoga Studio Expansion

It's been awhile since we checked in on Julie and her yoga studio expansion plans.  Julie is just a few weeks away from the grand opening.  She overcame a few obstacles during that time which we will briefly discuss.

Julie had to take a decent amount of time to determine where she should open her second location. She wanted to keep it within a reasonable travel distance from the first location, and in an area where she could expect the same type of clients she currently has.  Throughout the process she found some decent locations but the costs of renovating or rents were too high.  She eventually settled on a location where the yearly rent was a reasonable $19,200/yr, and renovation estimates came in at favorable numbers. The new location has plenty of residents in the 25-45 age group that have been her best customers.  How did she know they were her best customers?  She utilized MAD Consulting's analysis to help identify them(I know, it's not always flattering to brag!).

The renovations came in just a bit above the original estimates to $19,000 due to a variety of factors. Some changes were made to a few designs requiring more labor, and additional upscale finishes were added. Also the necessary software systems came in a bit higher than anticipated which edged up her equipment expenditures to $11,500. Julie remained unfazed during the entire process. She knew if needed she could contribute additional capital to the project. However that was never a necessity.

How is that possible?

With good planning and advice from yours truly she executed a successful pre-sale for new members 3 months in advance. Julie received up front commitments from 42 new members at a reduced rate of $125/mth for the first year. The first month was required to be paid upfront, and the remaining months would be charged subsequently after the opening. That money was used to offset the expansion shortfalls.

For now Julie is excited as she awaits the opening day.

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