How Can I Lower my Studio’s Expenses?
Things are tight right now. Your studio is facing a completely unexpected financial hurdle. The good news is everyone else is, too… so you have a lot of options.
Most countries and states have programs available to help small businesses, and EVERYTHING can be negotiated.
Now is the time to guard your cash flow. You want to lower your expenses as much as possible, so you have the assets you need to run your yoga studio. Most businesses fail, not because they have nothing of value, but because they lack cash flow.
Truth → Lowering your studio’s expenses is the first step.
Your biggest expenses are rent, any business loans or debt you’re carrying, and your payroll. There may be some wiggle room. It never hurts to ask.
Let’s talk about rent.
Your landlord may be willing to work with you on the rent. That might mean they’re open to negotiation or payment flexibility, especially if they’re getting a break on their own mortgage. Get on their radar now.
Truth → Ask BEFORE you get to a place of desperation.
Don’t burn through your entire rainy day fund and then ask your landlord for a break. Go to them NOW, before every other tenant does. Be professional and clear about what you need.
Emphasize that you’re working hard to make things work long term. Your studio’s success will be a win for both you AND your landlord. Come from a place of teamwork and long-term partnership.
Give your landlord the opportunity to be the hero. They might be more open to negotiation than you’d think, especially if you’re one of their anchor stores. Finding another tenant can be challenging in the best of times. Right now, businesses aren’t looking for physical spaces to rent.
Bring the best version of yourself to the table, keep things professional, and get the conversation started. The worst they can do is say, “No.”
Everything is open to renegotiation.
If you have business loans or other debt, now is the time to talk about refinancing. Interest rates are incredibly low due to economic instability, and many countries have assistance programs in place.
Truth → Banks are willing to work with you more than ever before – that goes for personal loans and mortgages, too.
Your business may also qualify for a new, low-interest loan if you need it. These programs are new, and the infrastructure isn’t always there to process applications. Get your application in as soon as possible if that’s something you want to take advantage of.
Restructuring your payroll
Payroll is another huge expense for your yoga studio. It’s going to shrink somewhat as you transition to online classes because you won’t be running as many classes each day. You won’t necessarily have much for your front desk or cleaning staff to do. But that may not be enough.
You want to stand by your staff and help them as much as you can, but you simply won’t be able to pay them as much as a few months ago when the studio was fully operational.
Truth → The most important thing you can do for your staff is make them feel supported and cared for.
You’ll probably have to cut pay for online vs. in person classes, but those classes also require less prep-work and time talking to students. That pay cut might make sense when you explain it as if they were hourly employees.
No matter what happens with payroll, make sure your staff know you care about their success. Keep the conversation going and control the narrative.
Check your recurring expenses
While you’re lowering your studio’s expenses take a look at your recurring payments. Autopayments can fly under the radar, especially if they’re lower amounts. Now is a great time to make sure you’re still using all those services regularly and they’re essential to your business right now. These expenses are typically smaller, but they can add up.
None of this is easy. Things are changing so quickly in the world right now. Making sure your studio changes along with it is hard work. Remember to prioritize your mental health as you make these hard choices. Take a moment to exhale. You can do this.
Struggling to adjust your studio to social distancing rules? Confused about what to do next to keep your studio running? Get The Ultimate Studio Survival Guide during Social Distancing so you can respond with confidence and keep money coming into your studio during this time. Take action now to get our special PAY WHAT YOU CAN pricing. Click here to get started!