Like many of you that read my articles about starting and scaling businesses, I make money predominantly on the internet.
Start up costs are low. Competition is high. Execution is crazy important to stand out. And my lower back is shot!
One of my favorite arguments for internet / SAAS businesses is the margins. You just can’t beat them!
And then my wife started going to this workout class.
I never thought much about my wife’s daily trips to the workout studio down the street from us, until she started mentioning the word “waitlist”.
Waitlist (or in other words too much demand or a scarcity of supply) always perks up my ears like a Border Collie hearing a squirrel.
So she gave me the download and I did some digging.
Y’all. CHECK THIS OUT
The workout studio my wife goes to is called Barre3. Here is the breakdown:
- On average, they have 30 people in a class.
- They have 8 classes a day.
- They have a number of different pricing packages but for the sake of this exercise, we’re going to say the average person pays $22 / class.
- The only equipment in the class is railings on the walls and these medium sized exercise balls (in other words, very low build out cost)
- These studios are super simple.
- There is one employee per class – the teacher/coach who makes between $20-40/class.
That means, this one location is doing an estimated $158,400/month in revenue with estimated monthly costs of $12,584/month.
Do the math. That’s a 92% margin.
Now this is probably one of Barre3’s top performing locations. But even if they were doing half the revenue compared to my estimates, it still would be a great business. This seriously got my gears turning. Like I’m not sleeping gears turning (I hate that!).
I’m not jumping into the barre space anytime soon but it definitely gives me ideas for businesses that can run with similar modeling.
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