Setting yoga class costs is like achieving the perfect warrior pose—creating a strong foundation with a balanced and mindful approach. You want your clients to pay a fair price for the services they receive without undercutting your profit margin.
Additionally, perception is everything when you’re offering health and wellness services. Pricing should be high enough to instill confidence in your clients but not so high that they feel exploited.
This comprehensive guide will teach you how to set yoga class pricing—including how to calculate fair costs and different pricing strategies to consider based on your unique situation.
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Factors Impacting Your Yoga Class Cost
When it comes to developing price points for your yoga classes, there is no one-size-fits-all solution. Many different things can affect the cost of your yoga classes, so before you start, you should consider the following factors.
What Is Your Location?
Is your area already saturated with yoga studios and other wellness services, or is your yoga business the first of its kind where you live? Is the median household income on the higher side of the national average or lower?
These questions are the first things to ask yourself when deciding how to price your services. For instance, if your yoga studio is among several in the area, you’ll need to keep your prices competitive while still turning a profit.
Additionally, if you live in an affluent area, your clients will be both capable and willing to pay a little more per class. However, if the median income is lower, you’ll want to adjust your price points accordingly. You don’t want to charge more than your clients can afford.
Who Is Your Competition?
As mentioned above, scoping out the competition is important in setting the right yoga prices for your business. Your pricing structure should be on par with your competition and commensurate with your services.
Though you should strive to stand out from your competitors, most yoga studios thrive on offering a basic set of services, such as drop-in yoga classes, specialty packages, and personal sessions. Knowing what other yoga studios charge for these foundational services gives you a better idea of what people are willing to pay and where to start with your pricing structure.
What Unique Services Do You Offer?
Competition can also help you focus on what differentiates you from other local yoga studios.
For instance, you and your competitor may offer adult-only yoga classes at a similar price. Perhaps they also offer kids’ yoga classes for certain age groups, while you offer restorative and toning practices for young mothers. Since the restorative classes are unique to your yoga studio, you can charge a little more for them while remaining competitive.
You can also apply this strategy to providing perks like yoga mats, blocks, and bolsters. Many clients will gladly pay a little extra for convenience, and you can roll the cost of these items into your class fees.
What’s Your Overhead (Rent)?
The cost of running your business is another essential component of setting the right prices. Before you can collect a profit, you need to make sure you can pay for the following:
- Rent or a mortgage on your space
- Employee salaries (yoga teachers)
- Cleaning and maintenance services
- Supplies (mats, blocks, bands, etc.)
Calculating your annual overhead costs shows how much revenue you need to break even. From there, you can adjust your yoga class prices to meet your desired profit margin.
How Great Will Demand Be?
Yoga is becoming an increasingly popular activity for stress relief, improving circulation, getting better sleep, and many other health benefits. It’s accessible to people of all ages and most abilities because it can be customized to each person’s needs. These factors have led to a greater demand for in-person yoga classes—which could be great for your bottom line.
If there’s high demand for yoga classes and very little competition in your area, people will be willing to pay higher prices for something they can’t get elsewhere. However, if supply and demand are more evenly balanced, you’ll need to keep a close eye on the competition to stand out and remain relevant.
An Important Consideration: Set Your Profit Margin
Setting your profit margin dictates how much you can charge for your services and how much you’re capable of earning. Though your profit margin should be realistic, it’s also important not to underestimate your value.
Most newly established businesses start with a goal profit margin of 15% to 20% and raise it as the company grows and becomes more profitable. To calculate what this looks like in actual numbers, you can make good use of the following formulas:
Your overhead costs will inform the rest of your numbers, so it’s essential to calculate them first using the following formula:
Overhead costs = Marketing costs + Maintenance costs (rent, utilities, cleaning, etc.) + Employee salaries + Taxes
With numbers plugged into the formula, your monthly overhead costs may look like this:
$32,000 (overhead) = $5,000 (marketing) + $7,000 (maintenance) + $13,000 (salaries) + $7,000 (taxes)
You can use the resulting overhead total to calculate your desired profit margin with a second formula:
Net profit margin (%) = [(Revenue – Overhead Costs)/Revenue] x 100
If you set your desired profit margin at 20% and plug in your overhead costs and taxes, you can solve the formula this way:
20% (profit margin) = [(Revenue – $32,000)/Revenue] x 100
Revenue = $32,000 / (1 – 0.2) = $40,000
Revenue = $40,000
Once you have your ideal revenue number, you can divide it by the number of days you’re in operation per month to see your daily revenue. That daily number will then inform what you charge per class or service.
Several Possible Pricing Strategies
After calculating what you need to earn monthly to meet your desired profit margin, it’s time to determine a pricing strategy. Each has advantages and disadvantages you’ll need to consider when choosing the best one for your business.
A few of the most common strategies are detailed below.
Begin With Your Costs And Then Add A Percentage
This strategy is the most common among new business owners because of its simplicity. You just add your monthly overhead costs to your desired monthly profit margin, then divide that by monthly hours of operation to get what you should charge per class. It’s easy to track and adjust according to your business’s needs.
However, this strategy doesn’t account for client perception. If you go with this direct pricing method, you’ll need strategic advertising that clearly shows the value you provide to your clients.
Plan To Start Low And Then Raise Rates Slowly
This strategy—called market penetration strategy—works especially well for small yoga studios in areas with lots of competition. Clients are typically inclined to pay more for established, well-reviewed studios than new ones they know nothing about—but they may try out a newer yoga studio if their potential losses are small.
With this strategy, the idea is to initially set your yoga class prices lower than other studios. As you gain clients and a good reputation, you can slowly raise your rates over time.
The biggest disadvantage to this market penetration is that your initial profits will be very low. Depending on how fast your business grows, you should prepare for a profit deficit for your first year or so.
Estimate Your Clients’ Perceived Value
This strategy works best for businesses in more affluent areas with plenty of startup funding since it depends on your clients perceiving your business as luxe. In this case, the atmosphere you provide justifies charging higher rates. That means everything about your business—from the aesthetic of your yoga studio to customer service—should be catered toward giving your clients a truly upscale experience.
When successful, this strategy can yield high profits quickly, allowing you to continuously upgrade your clients’ experience and increase your earning potential. However, be aware that providing a luxe experience costs more money upfront.
Some Possible Pricing Models
Once you’ve determined a pricing strategy, you can choose a pricing model for selling your services to clients. We’ve outlined the most common models below.
Hourly pricing models are based on what you charge for an hour-long yoga class. This is a very common pricing model because it’s easy to gain a return on your investment this way. You can also attract more clientele this way by varying your rates.
For instance, you might charge a base fee for beginners’ group yoga classes or drop-in sessions and a higher rate for specialty yoga classes, such as:
- Private yoga classes
- Advanced yoga classes
- More experienced yoga teachers
- Hot yoga classes
To get your hourly rate, divide your total overhead costs by your billable hours per day, including your profit margin. You can then use that number to determine what to charge each client for an hour-long class.
By Individual Or Class/Group Session
The main difference between pricing by session vs. by hour is that all of your sessions—regardless of length—are the same price. For instance, you may offer a $30 hot yoga class regardless of whether it’s 30 or 60 minutes long. This could be a good idea for very niche yoga classes where you make the session more expensive, even for shorter session lengths.
In a membership pricing model, clients pay a flat fee for a certain amount of access to your services. To get the correct rate for membership fees, multiply the number of sessions clients can access by your hourly rate and add an additional convenience fee.
While some yoga studios charge a membership fee for unlimited access to their studio and services, this can lead to a loss of revenue if you miscalculate how often clients are likely to use your services. The best way to protect your bottom line while offering value to your clients is to split your membership into tiers with different levels of access. For instance, a mid-level tier might include up to 25 group yoga classes and 25 private yoga lessons per month, while a higher tier would provide additional access to specialty yoga lessons and other wellness services.
Corporate Package Pricing
Package pricing—also called bundling—is a great way to attract new clients and make current clients feel valued. The idea is to sell multiple class packages that are less expensive than the total cost of the individual services. Clients will enjoy getting more for their money, and you’ll still be able to make a profit.
This strategy is also a good way to advertise your lesser-known services. For instance, if your infrared sauna is underused, you can bundle a certain number of 30-minute sessions with two more popular services. As the sauna becomes more popular, clients will either purchase another bundle or individual sessions.
You can also bundle together specific services catered to a particular clientele. For instance, you may choose to bundle children’s yoga with restorative yoga and massage for mothers of young children.
The biggest risk with bundling is that your individual services sales may suffer and affect your bottom line. One way to avoid this is to rotate bundles every few weeks or months so that clients have to purchase certain things individually during certain times of the year.
How To Set Your Yoga Class Cost the Yogapreneur Collective’s Way
Do you want to learn more about these and other innovative pricing strategies for your yoga studio? Would you like access to a network of yogapreneurs just like you who can offer insight and support as you launch your business? The coaches at the Yogapreneur Collective have experience helping yoga studio’s like yours set profitable class pricing that will help them scale their business.
Book a free strategy session today to learn how to price yoga classes and so much more.
Yoga Class Pricing FAQ
Should You Price Differently Based On Teacher’s Qualifications?
Experience and expertise bring value to your business, as experienced yoga instructors are often more versatile than their less-seasoned counterparts. More experienced yoga instructors also instill more trust and confidence in your clients. Since people are willing to pay more for higher-quality services, you’ll be able to raise your yoga class costs as your yoga teachers become more seasoned. As long as your overhead remains the same, this is a good method for increasing your profit margin over time.
Have You Thought About Liability Insurance?
Liability insurance is extremely important for every business, particularly those that offer physical fitness and wellness services. If a client or employee is injured or has a medical emergency in your studio, liability insurance will protect you financially and legally. Many plans also cover property damage.
Should You Offer Discounts?
The short answer to this question is yes—discounts are a tried-and-true strategy for attracting new clients and building brand loyalty. The trick is to fold discounts into your pricing strategy so clients can enjoy them without perceiving your services as cheap or subpar.
Some of the strategies discussed above—e.g., bundling and tiered memberships—offer easy ways to do this. Just be sure to evaluate and adjust these strategies frequently to ensure both you and your clients are getting the best value.