One of the first steps a nutritionist will have a client do is to keep track of every piece of food they eat and every ounce of liquid they consume. It puts calorie intake into perspective and can help a client realize they could have went without the two afternoon snacks in order to reach their goal weight, or they could have consumed a little more protein on certain days.
Your yoga business can take a few pointers from the nutritionist’s office in this case. Keeping track of your spending and your revenue is an undertaking with just as much importance as any other aspect of your studio. Ashley Dahl, the executive director of 8 Limbs Yoga Center in Seattle, Washington, explained that just like with nutrition, making changes in your budget can greatly enhance the longevity and lifespan of your business.
“I think new businesses can underestimate the value of really watching expenses,” said Dahl. “That’s where having clarity around where the money is going can be very helpful. Like with office supplies, people can be spending a lot, and then when they see the impact that it has on the studio, like not being able to do an upgrade, it can help to prioritize.”
But the question remains: where do you start if you don’t have an MBA or have taken any financial classes? While your intentions may be to have a strong budget that you monitor, it can be difficult to know how.
Dahl encouraged to see budgeting in the same way you would look at your practice. You wouldn’t start a new student in a complicated sequence; you would start small and build them up.
“Sometimes it can help to set an intention with practice, and that can be applied to budgets as well,” said Dahl. “Ask yourself, ‘How can I benefit from this? What would I like to get from this?’ It shifts from a should and an obligation to an ally and a useful tool.”
At 8 Limbs, that intention comes from being committed to fully supporting the livelihood of their teachers and staff. To do this, they know they must have a clean budget to track their expenses. “Not a lot of us want to spend time budgeting, but we do want to care for our teachers and staff in that way, so that helps provide that motivation,” said Dahl.
Planning your budget out ahead of time is where you can save yourself in terms of stress. A budget should be operated on a calendar year, January through December, and the summer months are the best time to start considering what will be in store for the coming year.
“In the summer, you can get a sense of what is coming on the horizon and if there are trainings or studio upgrades you might need to invest in,” said Dahl. “Starting in mid-fall, start playing around with actual numbers. You can start drafting what you expect the expenses to be, what are the implications for revenue, and then by the time you are hitting December you have a budget in place.”
After that budget is in place, monitoring it is key to increasing the longevity of your studio’s life. Dahl suggested a monthly check-in to see where you are, what marks you have hit and if you need to move around funds in certain areas.
“Monthly monitoring gives you an opportunity to see if you are on track or not and leaves time to adjust,” said Dahl. “It’s like if you are in a pose and you are thinking, this isn’t feeling quite right, and you have to make a modification. When you start to budget regularly, the stress starts to reduce and you begin to realize how normal it is to have to make adjustments, rather than thinking you got it all wrong.”
Profit goals are different for every studio — some want to see that number smaller as they don’t want to benefit from a personal passion, and some see a larger number as a means of success. Whichever way your studio operates, you still want to see a larger profit number on your budget sheet.
“What I think is important to keep in mind is when budgets break even, all you are doing is paying everything that literally needs to get paid,” said Dahl. “People sometimes don’t understand that it’s the profit that helps one to maybe replace bolsters that are getting overly worn, or if there’s a leak in the roof that needs fixed. We need profits for these times.”
A budget can be a great addition to your studio’s business plan. If utilized correctly, you are essentially getting an inside look at exactly where every dollar of your expenses is going. It can be a map guiding you into the best ways to generate revenue and save you money in the long run.
“You just need to generally see how your money is playing out to get a sense of if you are spending a reasonable amount of it in certain areas,” said Dahl. “You want it to be a useful tool.”