How to Start a Yoga Studio and Secure Financing for It

From being a yoga practitioner to owning a yoga studio, seems like turning your passion into business. Starting a yoga studio and managing it is a dream for many yoga enthusiasts, but it can often feel overwhelming. It requires significant time, research, and resources to set up and operate effectively. If you are considering starting your own yoga business, get going in an informed manner. Learn how to structure and manage the studio and take the right steps for success. 

One of the most important aspects to consider is the yoga studio’s start-up cost. While the dream seems within reach, its funding can become overwhelming. It will have a major impact on your planning and financial strategy. Once you have the initial investment and working capital in place, you can plan for the most suitable business financing option.

Open a yoga studio with a clear understanding of the following: 

1. Have a Clear Vision

While you may come across a dozen different yoga business ideas, narrowing down to the first step. Start by considering three key factors: your goal, your aspiration, and what sets you apart from others. 

It is important to define your target customers and decide on the types of classes you will offer, such as Vinyasa, hot yoga, aerial yoga, or Iyengar. Additionally, identify your Unique Selling Point (USP) to attract and retain students. This could be through themed lessons, workshops featuring guest instructors, or offering refreshments via an in-house vegan smoothie bar. This clarity will help guide your business decisions and ensure your yoga business ideas flourish.

2. Conduct Market Research

To gain clarity, research about competitors who are excelling in the business. Understand the competitor’s positive and negative aspects, and learn what their customers appreciate. Note down the positive points and integrate them into your own business planning.

3. Make a Financial Plan

For sustainable growth, it is essential to understand where you need to allocate funds. Initially, the first expense will be related to opening the studio. Some common costs include rent for the studio space, electricity bill, costs of equipment, and salaries for staff, among others.

As the business grows, you can allocate funds for marketing and more. Your capital can come from various sources, including bank loans, investors, assets, and savings. 

4. Register Your Business

Another very important aspect of starting a yoga business is the registration. You need to register and obtain all necessary licences to run it. It is advisable to set up your yoga studio as a Limited Liability Partnership (LLP) or Company. This will make it easier if you ever need to transfer investments, such as rental deposits or interiors. 

Here are the primary business structures you can choose from:

5. Finalise the Location

Choosing a location can be one of the most challenging tasks when starting your own yoga studio. To make the process easier, there are a few factors to consider. First, ensure the location is appropriate as per your finances. 

Next, decide on the size of the space based on the number of students you want to teach per session. It is also important that the location is easily accessible and offers ample parking space. Lastly, choose a space that can attract the clientele you want. 

6. Market Your Brand

As a new business, marketing is key to growth. While a website and social media account is necessary, you can think about handing out brochures, advertising through billboards, and inviting friends and family for trial classes. 

You can also create awareness at corporate parks through health-related activities. Budget this into your initial costs and scale up marketing when needed.

With increased disposable income in Indian households, there has been a rise in new and innovative yoga studios. The industry is expanding rapidly and appears to be highly promising. If you are looking into how to start a yoga studio and keep it going for the long term, ensure that you start off by obtaining the correct licences.

The registrations and licenses you need to have include:

• Registration as per the business model, such as Limited Liability Partnership registration or One Person Company Registration

• Registration under the Goods and Services Tax (GST)

• Professional Tax registration (if your yoga studio hires employees) 

• Trade licence from the licensing department of your area’s municipal corporation

• MSME Udyog Aadhaar registration

• Registration under the Employee Provident Fund (if you employ more than 20 staff members)

• Employee State Insurance Corporation registration (if you employ more than 10 staff members)

Financial stability is crucial for achieving long-term success in your business. Plan where you need to invest to ensure you are not making mistakes that could result in losing money. Here are some key aspects you can consider:

Uses of a Financial Solution to Set Up a Yoga Studio

You can obtain funding through a business loan for a yoga studio if you require a substantial amount and do not want to deplete your savings. The loan can assist you in covering the following expenses:

• Cost for the Space: Renting or purchasing a suitable space for your studio can be expensive. The cost may vary depending on the location, size of the space, and the amenities it offers. 

• Ongoing Expenses: This covers regular costs such as monthly rent, utilities (electricity, water, internet), studio maintenance, and employee salaries, including compensation for instructors and administrative staff.

• Equipment and Décor: You can finance all the necessary yoga equipment such as mats, yoga blocks, straps, chairs, blankets, bolsters, meditation cushions, and any other props required for classes and workshops. 

  With enough funds in hand, you will be able to create a calming yet inviting ambience in your studio using the right flooring, lighting, paint, and wall art. 

• Marketing: Use it to finance advertising and promotional activities, including creating and maintaining a website and social media campaigns. Consistent investment in marketing will help make sure you attract new clients and retain existing ones.

A loan for a yoga studio from banks or Non-banking Financial Institutions (NBFCs) can give you a head start on your start-up. These loans are tailored to meet the needs of both new and experienced business owners. Here are the advantages you will gain:

• Quick Access to Funds: In most cases, the disbursal process for a business loan may be faster compared to other borrowing methods. 

• Minimal Documentation Requirements: You need fewer documents to secure a high-value loan, with some banks offering loans based on your credit history without collateral. 

• Flexible Repayment Tenures: By comparing different loans, you will find one with a repayment option that suits your financial situation. 

• Competitive Interest Rate: As the loan market is competitive, many banks offer lower interest rates to stand out. With a good credit score, you can further enhance your potential to get affordable financing.

You can now apply for a business loan with minimal documentation and secure a high-value loan on Bajaj Markets. Here is a list of lenders you can compare: 

Different lenders set different eligibility criteria that you need to fulfil to get approval. Take a look at some basic requirements:

• Citizenship: You must be a resident of India

• Age: Your age must be between 21 and 60 years

• CIBIL Score: You need to have a good credit score

• Employment: You should be an experienced self-employed individual

• Business Vintage: Your business must have been operational for at least 1 year

• Business Type: Your business should be registered as a partnership, LLP, or private limited company

• Income: Your business needs to have an annual turnover of ₹1.5 Lakhs or more, as per the Income Tax Returns (ITR)

You will also need to provide some paperwork to get approval for a loan for a yoga studio. Here is a list of the documents:

• Identity Proof: Passport, PAN card, Aadhaar card, voter’s ID, and driving licence

• Address Proof: Lease agreement, Aadhaar card, utility bills, and passport

• Income Proof: Bank statement (last 6 months), ITR, income computation, Profit and Loss (P&L) statement, and balance sheet (previous 2 years)

• Business Proof: Certified copy of the Memorandum and Articles of Association, Sole Proprietorship Declaration, and Partnership Deed

You can easily apply for a business loan in a few simple steps:

1. Click the 'Check Offers' button in the top right corner

2. Fill out the application form with your details

3. Click on ‘Check Your Offer’ to proceed

The government offers various schemes for micro, small, and medium enterprises (MSMEs). Since a yoga studio comes under the services sector, you can get support from the following schemes:

• Pradhan Mantri Mudra Yojana (PMMY)

This scheme by the Government of India provides loans to small and micro businesses. It offers micro-loans of up to ₹10 Lakhs for income-generating micro-enterprises in the non-farming sector, covering services like yoga studios. 

• Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE)

Small and medium businesses can also access loans without collateral through this scheme funded by the Government of India. You can get a guarantee cover of up to 75% of the credit facility, of up to ₹50 Lakhs. Here are the details:

• 85% cover for loans up to ₹5 Lakhs for micro-enterprises

• 80% cover for MSEs owned/operated by women and all loans to North Eastern Region (NER)

• 50% cover for credit exposure above ₹50 Lakhs and up to ₹1 Crore