22 Top Reasons Why Yoga Studios Fail

If you are looking for answers to the question, “Why yoga studios fail?” then you are perhaps considering starting or investing in a yoga studio business. According to IHRSA, 81% of start-up fitness studios fail in the first year! We can assume that the failure rate for start-up yoga studios is similarly high.

Given the high failure rate of new yoga studios, asking “why yoga studios fail?” puts you ahead of the studio owners who have not considered the challenges of running a yoga studio.

This post is part of a series of guides and articles providing in-depth information about how to start a yoga studio. Head to the main article to find a list of articles and guides covering the topic.

Why Yoga Studios Fail

So, why do yoga studios fail? Yoga studios fail due to a combination of reasons, such as:

Lack of delegation
Failure to handle competitive threats
Not able to attract new students
Difficulty retaining existing members
Not consistent in your yoga studio offering
Classes are not fresh and challenging
Not being able to attract and retain good yoga teachers
Losing your passion for yoga
Treating your yoga studio as a hobby and not as a business
Not being able to manage cash flow
Not prioritizing legal contracts and company accounts
Wrong location or rent is too high
Not knowing your business KPIs
Failing to identify and follow trends in the industry
Lack of business partnerships
Expanding to multiple locations too quickly
Failure to manage your brand and customer reviews
Lack of a community
Bad business partner
Failure to manage your expectations and plan accordingly
Not utilizing commercial debt when necessary
Not investing in automation and software when necessary

In this article, I will explore each of the reasons for the failure of yoga studios. Additionally, I will provide simple ways by which you can avoid these pitfalls. Just being mindful of the reasons for failure and how to overcome specific challenges, you are setting yourself up for success. So let’s get into it!

NOTE: Don’t let the failure rate of start-up boutique studios scare you away. A well run yoga studio can be immensely profitable. I have written an article on whether yoga studios are profitable. Please give it a read to clear away any doubts about the viability of a yoga studio as a successful business venture.

#1 Yoga Studios Fail Due To Lack Of Delegation

Every first-time founder has to go through the complicated process of learning to delegate. When you start your yoga studio, you want everything to be perfect. You do everything from teaching the classes to running marketing campaigns to cleaning the restrooms.

Doing everything by yourself sounds like a great way to maintain high quality. However, if you are unable to delegate and replace yourself, you are setting your yoga studio up for a long, slow, and painful demise.

If you hear about busy yoga studios closing after 3-6 years, then the most likely reason is the failure of the studio owner to delegate effectively. Doing everything by yourself leads to burnout and limits the growth opportunities for your yoga studio. Learn to hire people who are better than you to work on your business.

I highly recommend the book, The E-Myth Revisited, which tackles the subject of working on your business and not becoming an employee within your studio. As a business owner, you should be mentally prepared to step back and delegate tasks.

For example, you can no longer teach five classes a day, even though you love teaching! So you should hire yoga teachers. If you are not an expert on digital marketing, then you should hire a freelance marketer and so on.

Next time you find yourself always busy but not making much progress, then realize that you are falling into the trap of not delegating and not hiring.

#2 Failure To Deal With Competitive Threats

The boutique studio industry is booming. Cities like London and New York have hundreds of yoga studios offering innovative new concepts to attract customers. Consumers are no longer loyal to any single facility and visit multiple studios and fitness facilities.

As a yoga studio owner in today’s world, you must think and act strategically. One of the main reasons for the failure of yoga studios is the failure to respond to competition. If you don’t develop a strong brand with a reliable customer acquisition process, then your yoga studio is bound to fail!

Even if there are several yoga and fitness studios around your facility, you can succeed and beat your competition. You can do this by focussing on two crucial elements:

Knowing your ideal customer profile
Building your brand

If you can build a brand and know exactly who your customers are and where you can find them, then you can stop worrying about competition. You can raise your prices while the competitors lower theirs, and customers will still come to you.

#3 Yoga Studios Fail Due To Unreliable Customer Acquisition Process

One of the primary reasons for the failure of new yoga studios is the inability to attract new customers. Intuitively most yoga studio owners know this fact.

As a new yoga studio, a regular stream of new members is vital for your survival. As you develop a loyal customer base, your reliance on new students will diminish. However, In the early stages of your yoga studio, reliably getting new customers is the lifeblood of your business.

Fixing the process of reliably attracting new customers is also the most straightforward problem to solve. Most yoga studios are local businesses, and you can follow a simple blueprint to identify what tactics work to reach your ideal customers.

You must continually test the different channels of customer acquisition until you find a reliable channel. Then it would be best if you doubled down on using that channel to acquire customers. Most yoga studio owners spread their marketing activities across different channels and never see focussed results.

For example, in my wellness business, SEO works best to deliver new customers reliably. However, when I first began my wellness business, my website had no authority, and Google ads were the primary channel to acquire new customers.

To successfully acquire new customers, focus on identifying the key channels, and then double down on your efforts. As a local yoga studio, your primary channels for customer acquisition will be:

Local advertising (Google maps, flyering)
Advertising (Digital and offline – Google ads, Facebook ads, Yelp)
Events
Social media (Instagram)
PR & referrals

#4 Yoga Studios Fail Due To High Customer Churn

One hidden factor that leads to the failure of yoga studios is high customer churn. To be a profitable yoga studio, you will need to develop a loyal customer base.

Customer retention and churn are crucial metrics that determine how quickly you can grow your yoga business or whether your yoga studio will fail.

Research shows that existing customers are 50% more likely to try new products and spend 31% more when compared to new customers. It is much easier to retain customers and sell to them than attracting new customers.

If you are good at attracting new students, but not many of them re-purchase class packs or memberships, then you have a massive problem. It is essential that you religiously track your customer churn. A churn rate of 5% to 7% is standard, and anything over 10%, and you must start taking action.

Primary ways in which you can reduce churn:

Use automation to remind students to renew memberships or purchase class packs
Make booking classes and checking schedules online simple
Organize events and class series (e.g., advanced practice week) to engage your members
Run experiments and track churn till you are well below 10% churn rate monthly
Offer exceptional customer service

Reducing churn is a function of understanding what your members want and giving it to them in an engaging manner — for example, adjusting your class timings to meet the demand of your students.

Another critical factor in reducing churn is using the right software that automates member engagement. At StudioGrowth, we have built tools that help you reduce churn and keep your students engaged. Do give it a try and I promise you will love it. I have put my heart and soul into building this software.

#5 Not Consistent In Your Offering

Not having a consistent offering is a big reason for the failure of new yoga studios. Imagine you go to a restaurant, and you have a fantastic Indian meal. The next day you return, but this time the restaurant is serving Italian cuisine. This inconsistency will throw you off, and you will perhaps never return to that restaurant.

Similarly, your students come to your yoga studio because you give them something which they expect from you. Often I have seen yoga studios offering a myriad of classes. There is no consistency in their offering. Furthermore, similar class types take place randomly across the week instead of being scheduled at the same time every day.

Make sure you know what your members expect from your yoga studio. Then work hard in consistently delivering that. You have a higher chance of succeeding if you specialize rather than offering classes for every single yoga modality.

#6 Classes Are Not Fresh And Challenging

As mentioned previously, to be a successful and profitable yoga studio, you will need to establish a loyal customer base. You can survive for 2-3 years and even flourish by primarily focussing on new members. However, without having repeat students, your yoga studio is destined to fail.

If your classes are not fresh and challenging, then your students have no reason to visit again. There are other yoga and fitness studios that they can visit. If you have teachers who run through the same routines and asanas daily, then you will soon see a lack of engagement from your students.

Group yoga classes cannot provide individual attention to each student. However, the sessions must challenge and engage every student. A simple example to consider is how group fitness classes use different weights and exercise to mix things up but target the same muscle group weekly.

Mindfully add variety and challenge to your sessions, and this will go a long way in increasing loyalty among your members.

#7 Hiring Good Yoga Teachers

Apart from having a bad business partner, not hiring good yoga teachers is the main reason for the failure of yoga studios. I often see yoga studios succeeding due to a single star yoga teacher. This situation is equally bad as the success of your yoga studio to tied to an individual star yoga teacher.

Hiring good yoga teachers is hard. I have faced this issue in my wellness business, where the success of my wellness business is dependent on hiring the best therapists. I hate hiring, and it is a very time-consuming task. At one point, I saw myself ignoring the hiring process, and my business was at the brink of failure because of this.

You will need to build a reliable hiring system that you can turn on anytime you need more yoga teachers. Some of the ways you can use to hire good yoga teachers are:

Pay above-average rates for teaching classes.
Ask for and reward referrals. Most good yoga teachers know other excellent teachers.
Keep a warm pipeline of yoga teachers (use StudioGrowth)
Test and identify channels where you can hire yoga teachers easily (Indeed, Gumtree, Referrals, Teacher training)

One successful way to always hire excellent yoga teachers is to run teacher training courses. Running teacher training sessions not only adds a new revenue stream but also gives you access to several bright new yoga teachers who will willingly teach for you and in your style.

#8 Losing Your Passion For Yoga

As a yoga enthusiast considering starting a yoga studio, losing your passion for yoga will be the least of your worries. However, yoga studios do fail because the owner loses interest in the business of yoga.

With a new start-up yoga studio, you will immerse yourself in the world of yoga 365/24/7. Imagine teaching yoga classes daily, running your books, handling customer issues, hiring teachers, solving marketing challenges, etc. Now imagine doing this non-stop every single day.

Without regular wellness breaks and a real passion for yoga, you will find it hard to be passionate about making your yoga studio succeed. It is crucial to imagine yourself 3, 5, and 10 years down the line doing the same thing every day.

Do you feel you can remain passionate about the yoga business? If the answer is no, then you should reconsider opening a yoga studio.

To maintain your passion for your yoga studio, make sure to take regular breaks, perhaps every four months. Learn to delegate effectively and ask for help when needed. The moment you feel you are burning out, seek advice.

#9 Treating Your Yoga Studio As A Hobby And Not As A Business

Often yoga teachers start small home yoga studios to teach yoga. Or you have a yoga teacher hiring a yoga studio space to teach classes sometimes. These are great ways to begin your journey into owning your yoga studio.

However, often these endeavors or side-hustles remain just that, a side hustle. Eventually, with limited success, the home yoga studio is shut down.

To overcome this reason for the failure of yoga studios, all you need is a shift in mindset. Opening and running a home yoga studio or teaching yoga part-time is perfectly fine. However, you will need to treat this endeavor as a business.

Adopt a professional attitude. Start maintaining your books and track your income, expenses, and forecasts. Measure your progress against monthly and quarterly goals. Build and execute a marketing plan.

I had started my wellness business while still employed. At one point, I reached the ceiling in terms of revenues. It took a mentor of mine to explain this concept to me. The moment I shifted my mindset, my business snowballed.

#10 Unable To Manage Cashflow

If you are a new business owner, you will need to understand the concept of cash flow clearly. Yoga studios fail because passionate yoga instructors start them with minimal business and finance knowledge. Not managing the cash flow of your yoga studio is a guaranteed way to have your yoga studio fail.

To manage your cash flow, first spend time understanding cash flow. It represents available cash at any given point in your business. For example, in my wellness business, bookings paid by cash add to my cash flow. Similarly, a gift card bought adds money to my company today. However, I will need to pay my therapists when the gift card redeems at any time in the next year. I need to plan and manage cash accordingly.

Consider a scenario where you are not on top of your cash flow. You have all your expenses scheduled for the first of any given month. However, all your member subscriptions charge on the fifth of the month. You also don’t have an overdraft facility setup.

Your costs, such as rent, salary payments, software licenses, refurbishing, etc. leave your bank account the same day. However, you do not have enough money in the bank to cover these expenses on that particular day. This example is a classic scenario of not managing your cash flow.

In today’s world, you have several apps that help you manage your income, expenses, and cash flow. In the U.K., banks provide apps with detailed analytics that give you a good view of your cash position. Now you don’t have an excuse not to be on top of your cash flow.

#11 Not Prioritizing Legal Contracts And Company Accounts

I have seen yoga studios and businesses in general failing because the owners did not pay close attention to legal contracts with vendors, employees, and shift workers.

A typical scenario is when contracts renew, and yoga studio owners blindly sign the contracts. I have seen cases where landlords have included clauses in lease renewal agreements to their benefit. Another common scenario is not providing airtight contracts to yoga teachers and staff. You’d be surprised at the number of yoga studios operating on a trust basis without any agreements in place.

All you need is a bad actor to include malicious terms into a contract or a workplace accident to bankrupt your business.

Always hire a lawyer to draft your legal contracts or review your vendor and lease agreements. In today’s world, you can hire legal advice for reasonably cheap. You have services like Legal Zoom that help with all legal matters related to businesses. Do not risk it and get legal help where necessary.

If you have no idea about bookkeeping, head over to Upwork, and hire a freelance accountant who will do your books in a matter of days. Additionally, you have several financial apps that will help you with bookkeeping, expenses, and filing taxes.

Always prioritize company accounts and legal contracts. We tend to do things last that we dislike the most. If you want your yoga studio to succeed, learn to prioritize these admin related tasks.

#12 Yoga Studios Fail Due To Choosing The Wrong Location And High Rent

Another factor that plays the most crucial role in the failure of yoga studios is choosing the wrong location for your studio. Yoga studio owners intuitively know this fact and hence spend significant time identifying the right place to open their yoga studio.

Where yoga studio owners go wrong, is in selecting places with too high a rent/lease which they cannot afford comfortably. Yoga studios spending over 50% of their revenues on rent is not uncommon.

Choosing a wrong location or paying too high a rent is a death sentence for your yoga studio. Yes, your yoga studio will survive for a few months to a few years, but eventually, your studio will fail.

I have written a detailed article on choosing the right location for your yoga studio. In the article, I cover the key points you should consider before you select the right place for your yoga studio.

#13 Not Knowing Your Business Metrics

If you have read the article this far, it will be reasonably apparent to you that without underlying business acumen, the chances of your yoga studio failing is very high. Most yoga studios fail because well-meaning yogis start them without basic business knowledge.

Business knowledge is common sense, and tracking your progress can be simplified by measuring simple metrics or key performance indicators (KPIs). The KPIs can be anything vital to your yoga studio, such as new customer sign-ups to monthly revenue to profit and loss.

If you don’t track and measure yourself against these KPIs, you will have no idea in which direction to steer your yoga business. For example, without KPIs in place, you will never know when to continue investing in your yoga studio and when to start focussing on profits.

Some simple KPIs to track for your yoga business could be:

New students added in the month
Total revenue generated
Net profit/loss for the month
Membership churn
Student satisfaction

You have various apps and tools that can quickly help you manage your numbers and even provide simple dashboards displaying your main KPIs. I have spent a lot of energy and focus on building StudioGrowth. It has a detailed dashboard that shows all your KPIs. We offer a free 14-day trial. Do give it a try, and I promise it will help you be on top of your numbers.

#14 Yoga Studios Fail Due To Ignoring Industry Trends

As a savvy yoga studio owner, you should have your finger on the pulse of the boutique studio industry. Gone are the days of the communal yoga center. Yoga has become a multi-billion dollar industry. Such massive amounts of money have attracted well funded and savvy business owners into the space.

We have all seen the death of the communal yoga center operating out of local community halls and libraries. To stay relevant and succeed, you should understand and adapt to the current trends in the industry.

For example, consumers today prefer going to several yoga and fitness studios. Due to this, class-packs have become popular, and yearly membership purchases have declined. However, as a yoga studio owner, it is more beneficial and logical for you to sell annual and monthly memberships. Doing so is ignoring the current trend among consumers.

If your yoga studio is only selling monthly and annual memberships, you are alienating the vast majority of students who prefer purchasing classes and sessions in packs.

As a savvy yoga studio owner, you should sell class-packs and also focus on engaging your students and sending them reminders to purchase additional packs on expiry. This approach is a far better strategy than pushing memberships in an environment where monthly/annual memberships don’t meet the needs of your students.

To stay on top of the trends in the industry, follow yoga industry blogs. Listen to podcasts of people working in the yoga and fitness industry. While you are at it, subscribe to my blog. I write about topics related to establishing and growing yoga or fitness studios.

#15 Lack Of Business Partnerships

Lack of business partnerships will in itself not kill your yoga studio. However, it will add up, leading to the failure of your yoga studio.

Consider a scenario where you have leased a space for your yoga studio. You would be able to fill up your yoga studio during peak hours, such as mornings or evenings. However, a couple of rooms in your studio may be empty during the day. This lack of usage leads to underutilization of space and negatively affects your profits.

To overcome this challenge, you could partner with a massage therapist or a physiotherapist to rent your space and conduct their business during off-peak hours. Such business partnerships are mutually beneficial and very helpful during the start-up phase of your yoga studio.

Alternately, you could be just starting your yoga business by renting studio space hourly or by the day from other yoga studios or fitness studios. In this scenario, forming business partnerships in the early days of your yoga studio business is crucial for survival.

As a start-up yoga studio founder, always be mindful of the business partnerships you could form. Such relationships will play a significant role in making your yoga studio successful.

#16 Yoga Studios Fail Due To Expanding Too Quickly

The most logical way to scale a yoga studio business is to open new locations. However, opening new yoga studios quickly in different areas can lead to the failure of your yoga studio empire.

The success of any yoga studio is highly dependent on the location and the student demographic that it serves. If your single location yoga studio is thriving, opening a new place and following the same blueprint, although the logical approach, is not always the ideal recipe for success. It is often the recipe for failure.

The new location will attract a different type of clientele, or perhaps your current clients who your brand attracts will not favor the new yoga studio.

You should never open a new yoga studio until your first yoga studio is profitable enough to support the start-up phase of the new locations. Alternately, you should have raised significant investment to expand appropriately.

Take a slow and measured approach to expansion for your first 3-5 yoga studios. Once you have nailed the brand and identified the ideal customer profile and how to reach them, you can expand exponentially. Remember that in the early stages, failure of even a single yoga studio can kill your entire yoga studio empire.

#17 Brand Management And Customer Reviews

Your reputation and your brand are sacred and must be protected and nurtured. The brand of your yoga studio is how your students and members perceive your yoga studio.

The customer reviews for your yoga studio on public platforms such as Google, Yelp, and Facebook can make or break your yoga studio business.

Often consistent bad reviews will lead to the eventual failure of your yoga studio. Have you ever used the services of a business that had regular negative reviews?

Yoga studio owners who use social media are good at building a brand. However, very few yoga studio owners are good at managing the brand.

The simplest way to manage your brand and customer feedback and reviews is to use a tool to automate the collection of feedback.

I would recommend you check out StudioGrowth. We have inbuilt mechanisms to collect reviews and even push positive reviews out to platforms like Google Places, Yelp, and Facebook.

#18 Yoga Studios Fail Due To A Lack Of Community

Today, the business of boutique studios is highly competitive. Additionally, consumer behavior has changed from consumers being loyal to a single facility to trying various fitness and wellness concepts.

You can be sure that your students also go to other fitness studios and wellness centers apart from your yoga studio. Yoga studios owners who do not realize this fact are bound to fail.

Due to the trends mentioned above, not having an engaged community of students and members can lead to the failure of your yoga studio. You cannot build a successful and profitable yoga studio solely based on sign-ups from new students and members.

Some of the ways you can build an engaged community around your yoga studio are:

Give your students and members a place to connect and communicate. This place could be something as simple as a closed Facebook group, a Whatsapp group, or a mobile-optimized forum like Discourse.
Share stories and successes of your students with other members. Instagram is a great place to share such stories and motivation.
Be the face of your business. Put yourself out there so that your students and members can connect with you. You could provide yoga and wellness tips in bite-sized video clips shared on Instagram or your Facebook page. How many other yoga studio owners do you think are doing this? Very few.

Most yoga teachers are amazing at forming a connection with their students. Make sure a similarly secure bond forms between your students and your yoga studio brand.

#19 Yoga Studios Fail Due To Bad Business Partners

Starting a new yoga studio is a hard and lonely journey. Due to this, it is not uncommon for yoga teachers to partner up with their friends and colleagues to start a yoga studio. At the beginning of any new venture, things are exciting, and people tend to be more accommodating when working with their business partners.

However, like any other start-up venture, one of the top reasons for the failure of yoga studios is founder disputes. Due to this, it is crucial to have appropriate founder agreements and contracts.

I have tried starting businesses with friends and colleagues in the past, and things have never worked out successfully. Disputes and resentment often arise if the founders are contributing different amounts or are in different stages of their lives.

Having a co-founder for your yoga studio can help you scale your yoga business faster. However, make sure you can work effectively with your business partner and have the relevant founder agreements and contracts in place.

#20 Managing Your Expectations

As you go on the journey of building your yoga studio business, you will have specific goals and milestones for your yoga studio. If you are structured and have a well thought out business plan in place, then you will know precisely when your yoga studio will be profitable and how much investment you will need.

First-time yoga studio owners tend to fail because they fail to manage their expectations and plan accordingly. For example, if you forecast that you will not be profitable and not be able to pay yourself a salary for eight months, then you will need to have a plan for survival!

Often it takes longer than projected for any new start-up yoga studio to deliver the expected financial results. As a savvy yoga studio owner, you must manage your expectations and, most importantly, be prepared to support yourself, your family, and your yoga studio until it can pay you the income you need.

One of the key reasons my first business failed is because I did not manage my expectations and plan accordingly. I expected the venture to be profitable in six months. When that did not happen, I had to close down the business and take up a job.

My wellness business is now thriving because I planned accordingly to support myself for years without taking any income from the company until the business was in a position to pay me.

#21 Not Using Commercial Debt

Most boutique yoga studios tend to be bootstrapped by passionate yoga teachers. Personal savings, bank loans, and contributions from friends and family fund the initial growth of the yoga studio.

Having worked in venture-backed companies and also bootstrapping my wellness business, I am a big fan of bootstrapping small businesses, and yoga studios fall in this category.

However, new small businesses such as yoga studios are at a high risk of failure. One way to mitigate such risk is to use commercial debt when appropriate.

For example, you want to run an SEO campaign that will propel your yoga studio to the top of Google search. For this, you need a few thousand dollars.

Most yoga studio owners will postpone such expenditure if they don’t have the cash flow to invest. However, commercial debt and borrowing is an excellent way to cover growth expenses.

Not all debt is bad. Debt that you will use to grow your business is mostly good. To obtain commercial debt, you can speak directly to your bank. Alternately, there are several peer to peer lending platforms that are an option.

#22 Not Investing In Automation And Software

There are two scenarios that I commonly see when a new yoga studio starts operations.

First, in a new yoga studio, the owner uses a combination of excel and word documents to manage their customers, class attendance, etc. and things happen manually.

Second, the yoga studio owner purchases Mindbody to manage their yoga studio operations. Mindbody has such a strong monopoly in the industry that it is the default go-to software for any new inexperienced yoga studio owner.

Both these approaches can cause your yoga studio to fail.

Doing things manually at the beginning is perfectly fine. However, to truly focus on things that matter, you need to automate tasks and use software to your advantage. I was able to triple my revenues after I implemented a real-time, automated booking software in my wellness business. Yoga studio owners who are afraid to invest in software will eventually see their yoga studios failing.

Regarding Mindbody, if you are a small yoga studio owner, you do not need complicated, bloated, and expensive software to run your business. You need simple tools to manage your members, sell memberships, and class- passes, and engage your community.

As a new yoga studio owner, it is perfectly fine to manage your business in excel and word documents in the beginning. However, the moment you begin to see some success, invest in simple class management software for your yoga studio.

I started StudioGrowth to solve the challenges I faced as a wellness entrepreneur. I built the software to be simple, lightweight and designed it to help new yoga studios grow successfully.

StudioGrowth offers tools to manage the day-to-day operations of your yoga studio. We provide tools to engage your students and tools designed to enable explosive growth. We have a FREE 14-day trial. Do try it!

Conclusion

Starting a new yoga studio is a risky affair. The normal career path of some yoga studio owners tends to be something like this:

yoga student => yoga teacher => yoga teacher trainer => yoga studio owner

Although this path prepares the studio owner to be a successful yogi, it does not train the person to be a savvy business owner. Be mindful of the reasons for failure I have identified. Get help when you feel overwhelmed. This approach will go a long way in making sure your yoga studio is successful.

This post is part of a series of posts providing in-depth information on everything you need to know to start a yoga studio. The other posts in this series include:

I write abouT establishing and Growing your boutique Fitness/Wellness Business. I promise no spam, i hate spam.

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About the author

Naz Ahm is the founder of StudioGrowth and has spent a decade growing start-ups and venture-backed companies. He writes about sales, marketing, and growth, especially in the fitness and wellness industry.

Naz has an MBA from IESE Business School and started his journey in the wellness industry when he set-up an on-demand wellness business. Naz currently resides in London, U.K.

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