They are nice folks, and I am sure they have good things to say and advice to offer - but it's important to keep in mind that they did not open the studio they now own. They bought into an existing studio. Opening a new studio from scratch and taking over a currently open studio are two very, very different beasts (economically and operationaly).

Both have there own challenges, for sure - and it might even be a great idea to do a series of articles on this topic - with Matt and Carrie in the take-over corner, and someone else in the actual new studio corner.

Hi Evan,
Yes, buying an existing studio is exactly the topic they are here to address. They found that buying an existing studio wasn't as "turn key" as many people might think. In many ways it was a lot like opening a brand-new business. Thanks for your comment!

Amy

Having done both (opening new studios and taking over existing) I can see where you are coming from in that buying an existing biz is not turn key at all. Infact, if there is one thing to learn about buying another studio - it's that it's not even remotely turn key. But also from experience, talking over an exisiting business is not at all like opening a new studio from scratch.

The economics of an existing business are far, far different than opening a studio from scratch. Taking over Kane, a studio that had a big built-in client base, a good chunk of revenue on day one, and entrenched culture and staff is an entirely different financial question than putting up a shingle and opening a place where you have to grow the client base, staff, and culture from nothing. Just ask your brothers and sisters at Apogee.

I wish Matt and Carrie well, they are great people. I wish the best for Apogee as well. But there are going to be far different challenges ahead for each.

Congratulations Matt & Carrie! I wish the you and your studio much success! My question is... Did you have to lease or purchase all new equipment or did the existing equipment come with the contract? If not, what did you do? Lease or Buy? Being you are STOTT certified, did you stick with the STOTT brand of equipment?

I've been in the industry for 5 years and have always dreamed of opening my own studio. However, so many people I've talked to that currently own or have owned a studio before express that if they had to do it over again, they wouldn't have opened their studio. They found it more profitable and less stressful to rent space and just be an independent contractor.What are your thoughts?

In addition, I do have a few finance-related questions.

1. How much money would you recommend a prospective owner should have saved or have on reserve for the first year of business?

2. Did you apply for a business loan, have investors, and/or use your own savings?

3. How did you go about scouting a location for your studio? What were the key factors you looked for? Square footage, demographics, location, etc.?

4. Did you hire any instructors prior to the opening of the studio or did you initially train clients yourself?

5. Did you make any money the first year of business or did you break even?

6. How long did it take to see the business produce larger revenues?

Thank-you for your advice. And I wish you and your studio continued success!

Nicole

I've spoken to a few studio owners about their venture...they tell me that the biggest expense is staffing/instructors. Is this true for you as well? Would you talk about what works for you with your instructors; are they employees or contractors? Do you pay them per hour/day/class? What is your pay schedule for your instructors?

Thanks for all the great questions! Keep them coming. Carrie and Matt will be responding starting this evening, so be sure to check back for their answers.

Amy

I am opening a studio within a well-established Physical Therapist's office. She is paying the lease on the space and I purchased the equipment.
I will be servicing her patients as well as members from a small gym located in the same building. I will be the only instructor, however this is in a very small rural town and people haven't been exposed to the Method, nor the relatively high cost. Any advice?

Hi Courtney:

Thanks for your well wishes! You pose a great question. We bought a few pieces of existing equipment with the sale of the studio. However, we planned to and eventually did purchase new equipment to outfit the space. We did this gradually over a period of several months (we did not lease any equipment, although that is definitely an option worth exploring). We decided to equip the studio with a combination of different brands to meet our needs. We have a wide variety of clientele at our studio—from the post-injury rehab client to the well-conditioned athlete. We purchased different pieces of equipment that we thought would offer the widest scope of programming possibilities for these client populations. For example, for Reformers, we purchased a few STOTT V2-Max Reformers as well as a few Balanced Body clinical Reformers (with the Infinity Footbar)--both have worked out very well for our clientele. As an educational center, we also wanted to offer students a chance to experience different types of equipment during their certifications to help prepare them for their careers as Pilates instructors. Overall, having a combination of different brands of equipment in the studio has really worked out well for us. When outfitting your studio, we definitely recommend choosing equipment not just based on a brand but also on the versatility it offers your studio.

Best of luck to you!
Matt & Carrie

Hi Nicole—

Thanks for your questions. We’ll start with the first one you posed—which is an excellent question on which we can only offer a very biased perspective. For us, the studio owner route has been ridiculously challenging and extremely rewarding at the same time. Being an owner of a studio brings its own *very special* type of stress—we don’t know that we would say it’s any more or less than the stress an independent contractor might feel, but it’s certainly different. At the end of the day, we are responsible not only for ourselves, but for the livelihood of our employees, and for the growth of our vision in which we are investing.

It’s a big commitment and risk, but we have always wanted to take on this type of work--and we’ve been very fortunate to have a strong support network in each other to overcome the tough times that come with it.

So before taking the plunge into buying a business, we definitely recommend evaluating what type of work you like (or are willing) to do (is it only teaching? is it crunching numbers? is it marketing? is it doing laundry? etc), what type of stress you’re willing to take on, what support network you will have, and what type of lifestyle you want to lead. You can be successful and make a profit as both an independent contractor and as a studio owner—but the shoe has to fit in order for you to truly be happy.

We’ll post a reply on some of your other questions shortly!

Hope this is helpful to you-
Matt and Carrie

Hi, Carolyn,

Thanks for your question. The answer to this likely depends on the size of your operation and your place of business. We have a fairly sizeable staff and we’re located in NYC—so our payroll and rent, etc. are both relatively large. But they’re manageable, as NYC offers a sizeable source of clientele.

We pay our instructors as employees, on a biweekly payroll. We know the topic of paying instructors as independent contractor vs. employees has been bounced around before on the Pilates-Pro forums; we advise asking your accountant/researching the regulations in your area on this issue.

Hope this helps!
Thanks,
Matt & Carrie

I am contemplating opening a home studio. I have children and want the scheduling flexibility and want to be my own boss. I foresee only being able to buy either a convertible reformer/cad or a reformer and cadillac with a chair and barrel. Due to space and start up cost restrictions I plan on only offering privates. In your opinion is it possible to run a profitable business from you home only offering private equipment instruction, or do you feel it is necessary to offer group mat classes.

I look forward to your feedback.

Anna

Hi Anna,

My children are 7 and 5 and I have a small studio at home which works really well. I do a few after school privates and Saturday mornings which the kids don't mind because it means theya re allowed to play their Nintendo DS's!!! The clients don't even mind a couple of interruptions and the dog sitting in on their sessions. I run a couple of small group matwork classes (up to 4) and have 3 stackable reformers which stand up against the wall when I don't use them so I can also do 4 person group reformer classes. I also hire the local hall 3 times a week for my larger group classes (up to 14 people)
I'm now trying to build up my clients during school hours but am making sure I keep Fridays free. It's easy to do too much when you can just walk into the front room and work.
Other pluses are not having to pay overheads, cooking the dinner while I am working or throwing a load into the washing machine between clients.
Good luck

Joanna
(Australia)

Hi, Lani.

Thanks for your question. Small rural towns do not necessarily equate to an anti-Pilates market, so don’t underestimate nor undervalue your situation. In fact, you’ve got a great set-up, and you should see your situation as an opportunity to educate your market and establish a high standard in your area.

After doing the necessary market analysis to understand your target audience and needs, we would recommend starting with a strong education-based marketing plan. Tell the story of Pilates—let your market know how the method will impact their lives and, thus, why they ought to give it a try (as opposed to just starting with a 2-for-1 special, etc). Hope this helps!

Best of luck to you,
Matt & Carrie

Hey again, Nicole:

We’re back to address a few of your other questions. We have not yet been in business for a full year, so we can’t answer all of your inquiries from first-hand experience. However, we can offer some thoughts and a few general parameters that we gleaned from our own research that you might find helpful:

1. How much money would you recommend a prospective owner should have saved or have on reserve for the first year of business?
It’s a good rule of thumb to have at least 3 months of payroll on hand as a cushion.

2. Did you apply for a business loan, have investors, and/or use your own savings?
Any of the options you mentioned are plausible (keeping in mind that it may be difficult to obtain small business bank loans at this time); a combination worked well for us.

3. How did you go about scouting a location for your studio? What were the key factors you looked for? Square footage, demographics, location, etc.?
As Amy mentioned, we took over an existing business—so the scouting of the location was already done for us. However, the studio’s location in Chelsea and its size played a huge role in our decision to buy the business. Key location factors that attracted us were the studio’s proximity to mass-transit, its situation in a high pedestrian traffic area, and the demographics of its neighborhood. Other benefits of the space: ample room to grow and an open floor plan. When we bought the business, we planned to renovate, so having an open floor plan that we could customize to our needs was very attractive. Another plus: the freight elevator opened directly into the space—which is key when moving equipment in and out.

4. Did you hire any instructors prior to the opening of the studio or did you initially train clients yourself?
We maintained the same (awesome!) teaching staff that was already in place when we took over the studio. To start growing, we also hired a few new instructors, in addition to teaching ourselves. If you’re starting from scratch, staffing a studio can be a hard balancing act. It really depends on the size of the operation you’re opening and the size of your market. If you’re starting out small, you can play it conservatively and build clientele on your own at first, but at some point (probably earlier than you think), you’ll need to staff up in order to dedicate more time to running and expanding your studio.

5. Did you make any money the first year of business or did you break even?
We’re still in our first year, so we can’t answer this question yet from personal experience, but we’re on target with our projections. If you’re just starting out, breaking even or turning a small profit in the first year is fairly typical. If you continue on the right track, bigger profit margins often arise in your 3-5th years in business, so stay strong!

Hope this info is helpful to you.
Best of luck--
Matt and Carrie

Hey Evan:

Thanks for your thoughts and well wishes. We appreciate them! We totally agree with your comments on the different challenges that come with buying a business vs. starting a new one. We hope to shed some light on the former for anyone contemplating such a move—and also touch on a few issues that are common to both scenarios.

Best wishes,
Matt & Carrie

Thanks Matt & Carrie,

I am to understand you run a first class operation at Kinected. Keep it up!

Matt & Carrie,

You mentioned to me that you did some research before deciding to buy the studio. Can you tell readers what kind of research you did? What are some essential things you need to investigate?

Thanks!
Amy Leibrock
Editor

Congratulations! I am going to start a business out of my home. Can you address liability insurance? I am very concerned about litigation that would drag our own property or my husband's assets into a suit.

Hi Rachel,

Matt & Carrie will get to your question soon. In the meantime, you might want to read this article from our archives about opening a home studio:

How to Open a Pilates Business at Home

Good luck with your home studio plans!

Amy

See an Attorney and set up a corporation (s-corp) and the corporation will then rent the studio space and pay for liability insurance, It not too expensive, mine is 1500.00 per year for my studio. Will vary from state to state)That way you and your spouse should be personally protected but you do need to make sure what you are responsible for as the home owner, and perhaps increase your home owners insurance as well.

Hey Amy—

Great question! In all honesty, you can’t do enough research before buying a business; the hard part of the quest is knowing when to put the breaks on your info gathering, learn what you need from your findings, and then follow your gut feeling.

A big area to research is, of course, the business itself. As a prospective buyer, you’ll want to learn everything that you can about the business under consideration—from its tax filings to its choice of water filters. This research investigation normally takes place during a part of the business/asset purchasing process called “due diligence.” Some key areas to look at during this process include: finances (e.g., income statements, balance sheets, tax returns), any leases and/or agreements the business holds, and business operations. Essentially, you should be able to look at a list of business revenue sources and expenses and understand the who, what, when, where and why of each entry. It’s definitely a good idea to have an accountant and lawyer—and any other advisors you may consult—assisting you with this process.

It’s also a good idea, if possible, to spend as much time as you can within the walls of the business you’re considering. It’s one thing to analyze a business on paper, and another to see it in living color. Understanding the culture of the business you’re considering will not only inform your decision to buy or not to buy, but will also help you with the transition process should you decide to proceed with the purchase.

The list of research topics goes on from here…from the best colors to use in a logo to the selection of employee benefits. It’s easy to get overwhelmed, so it’s important to keep in mind that buying a business is, in itself, a learning process.

Hope this helps!
Matt & Carrie

Hey Rachel:

Thanks for your question, and patience! Liability insurance is a very important part of operating your business. To determine which type of policy will properly cover you, you should contact your insurance company and let them know about your circumstances. Whether you’re set up as a sole proprietor, LLC, S-corp, etc., insurance companies usually have varying regulations as to whether certain types of home-operated businesses can be covered by homeowner’s insurance and/or require a separate liability policy (or policies). So it’s best to place the call to find out what type of policy will work for you.

Good luck!
Matt & Carrie

hi carrie and matt..

congratulations for your new studio.

I've been trying few different kind of pilates and planning to take a stott training, my approach to pilates is more as a therapy for postural correction. I understand that different kind of pilates suit different kinds of needs. With ur background, Could u give me some insight of why you choose stott and what you like about Stott method.I live in Indonesia and it's hard to get into conversation like this with instructors in my country.

many thanks,

Afi

many thanks,

Matt & Carrie,

I know that you recently did some renovations in your new studio. What are some key layout considerations that a studio owner should analyze?

Thanks,
Amy