Running any sized Pilates studio on a membership as opposed to session fee model
I have owned or part-owned a number of Pilates studios since 2002, and before that health clubs since 1994. I also continue to have commercial interests in Pilates studios linked to clients for who I either provide consultancy services or staff training arrangements.
Prior to 2011, the business models of my studios followed a pay-per-session basis with multiple methods to book sessions ranging from pay-as-you-go, to discounted block sessions with a time limit on use of the sessions.
I have found that converting from sessions to a membership style immediately delivers 20-25% more turnover than a pay by session basis. This is because it generates more regular attendance from clients, particularly in previously quiet months like December and August, and in addition, it smooths turnover and reduces cash flow issues.
It is an easier model to tell clients a story that is about themselves and personalising Pilates to their bodies.
We know from research that clients who combine Private one on one Pilates sessions with classes have a higher retention rate than clients who buy blocks of sessions, or pay by the session.
We can further enhance retention, by offering a fixed-price membership. Whilst the membership price increases annually, the client retains their starting membership price throughout their time at the club, provided they never stop a payment or cancel their membership. If they do cancel or stop paying and then choose to rejoin - they start up again at the current membership rate. At any one time, this system has been shown to carry as much as 20% of the membership, who for one reason or another are not currently attending their allocated sessions.
Memberships which include privates and classes allow us to tell a story of delivering better results for individual clients.
Memberships allow us to book the same class time for a client throughout the year - clients have to cancel and attend class at another set time on weeks when they have diary clashes. This means that we do not need an extensive timetable whilst we grow membership. It is better to fill classes and have fewer classes and fewer instructor hours, and then put on new classes as needed, as opposed to the pay-by-session system which requires a fixed timetable and no guarantee of attendance numbers in any class.
The membership system can cover studio styles of totally varying sizes and instructor preferences, and indeed I recommend this method for small home studios as well as large studios. However, a word of warning, it is my experience with Pilates that small studios are generally more profitable than larger studios, and whilst I have worked with studios up to 6,000 square feet, I do not recommend anything above 2000 square feet. I have had great success with a commercial business that aims to generate value as well as a lifestyle of between 1000 and 2000 square feet.
The largest studio I have owned had a floor area of 6000 square feet comprising 3 class studios and 3 private session studios, a turnover of £380,000 per annum run on a pay-per-session basis, and was only marginally profitable on a salary bill of £70,000 per annum. It was just too big to fill, without large expenditure on a sales team and this resulted in poor client retention. I now feel that to be profitable with a members-style business plan, a maximum manageable studio in a high population affluent catchment area is approximately 2000 square feet.
You will see below that a home studio organised on a membership basis can deliver a fabulous income in just 3 or 4 days a week and fit around a family OR deliver a magnificent work/life balance
Studio models that have worked with membership
The smallest studio has been a 600 square foot, owner run, no employee other than the owner, lifestyle studio based at the owners home with turnover capped on purpose just below the VAT threshold, to maximise profitability and with no intention to expand. Current turnover is £83,000 with a £250.00 per month annual membership offering two own programme classes each week, and in addition 12 free of charge 30-minute private sessions annually. £78,000 of the turnover comes from 26 memberships (membership is currently full with a waiting list) and the remaining turnover from additional private sessions billed at £30.00 per half hour to members, and £40.00 per hour to non-members. The studio runs 50 weeks of the year and covers instructors’ work for 4 weeks of the year to allow the owner 6 weeks of leave. The studio is open on bank holidays. The owner teaches 15 hours per week with a 3.5-day working week Tuesday to Thursday, and Saturday morning. The studio generates an annual income of between £45,000 and £55,000 per annum.
The largest studio I have found to work effectively had a main studio of approximately 800 square feet, one secondary larger private studio, slightly more than 500 square feet, and a treatment private session room between 350 and 400 square feet. Staff were each employed for 10 -15 hours a week and self employed for a minimum of 10 hours a week in addition to employed hours. The studio had a timetable capacity at maximum membership, of 60 reformer/tower classes a week, 60 circuit style personalised semi private sessions a week. It had a classes membership of £120.00 per month offering one class per week, and 4 one on one private session a year. A private session membership of £150.00 per month offers a personalised programme, semi private (circuit style) 4 to a group, once a week and a one-on-one private session once a month to revise the programme and work on individual needs. The option to pay for additional one on one treatments or private sessions with staff (paying the staff directly in their self-employed hours). The club runs 50 weeks per annum. The aim is for minimum 300 class members (realistic capacity 480 members, nominal capacity 600 members) generating a net of VAT £360,000, serviced by 7 part-time employees equivalent to 2.5 full-time staff (£110,000 salary bill). A private session membership goal of 175 (realistic capacity 250 members) generating a net of VAT £262,000, serviced by 7 part-time employees equivalent to 2.5 full time staff (£110,000 salary bill). Rental incomes from privates of £37,500 net - Gross turnover of approx. £800,000 per annum.
My preferred membership model is a Single Studio with 8 – 10 stations supported by a private session studio with a floor space of 1000 - 1500 square feet, and a gross turnover of £480,000 per annum based on an apparatus investment of £40,000 net of VAT. This turnover is generated from a membership of 350 members supported by a salary bill of £130,000. An annual membership of £1,440 paid annually in advance, or £130.00 per month paid monthly, where the membership offers a single apparatus class each week, a single one-hour private session with the owner / Senior instructor, once a year around the birthday of the client. In addition 4 quarterly 30-minute private sessions with the class instructor to get to know the client’s body better and work on specific weaknesses seen in class.
In this article I have referred to a preferred employment model of part-time as opposed to full-time employees where employees are expected to combine employed hours of 10 – 15 hours a week with self-employed hours, in which they teach private sessions or perform body work on clients of some kind - to understand how and why this works best please see our article titled “Staff recruitment and staff retention problems in Pilates Apparatus studios : Consider a combined employment and self employed contract for your staff”
Chris Onslow - Pilates and Fitness Business Consultant
Chris Onslow, has run Pilates focussed businesses since 1998. He and his team specialise in supporting Pilates entrepreneurs and business owners. With a rich history of owning and running successful Pilates studios in the UK, and supporting others in Europe and the Middle East, Chris has broad expertise in maximising profitability and optimising operational efficiency. His agency provides top-tier advice on selecting new, pre-owned, and hireable Pilates equipment from renowned brands such as Align-Pilates, Balanced Body or Stott-Pilates/Merrithew. As the founder of Mbodies Training Academy, Chris continues to revolutionise Pilates education, offering premier online and hybrid CPD and qualification courses for Pilates apparatus instruction and special population CPD. Discover more about how Chris can support your Pilates Business or home exercise choices at www.pilates-consultant.co.uk