What groups do the costs of opening a studio fall into?
Splitting the costs into three groups makes the budget readable. One-off setup costs are paid once before opening; monthly running costs repeat for as long as the studio is open; working capital is the cash set aside to cover the shortfall of the months before income covers costs. The third group is the one most often forgotten.
- One-off setup costs: paid once, before opening
- Monthly running costs: repeat every month the studio is open
- Working capital: cash set aside for the shortfall of the months before income covers costs
- An allowance for the unexpected: a separate line for where the estimates will miss
What are the one-off setup costs?
Setup costs are the money spent before the studio has sold a single class: preparing the space, equipment, the deposit and rent paid in advance, the formal setup, furniture and the front desk, and the launch promotion. Each of these is estimated by collecting quotes; at least two quotes per item, rather than a guess, give the budget its most reliable lines.
- Preparing the space
- Renovation, flooring, mirrors, lighting, ventilation and air conditioning, sound, changing rooms and showers. The item that varies most with the state of the space.
- Equipment
- Apparatus such as reformers, cadillacs, chairs and barrels, plus mats, balls, bands and small equipment; delivery, installation and spare parts go on this line too.
- Deposit and rent in advance
- The deposit the lease asks for and any months paid up front; rent paid while renovation is under way is also money spent before opening.
- Formal setup
- Setting up the company, licenses and permits, the first accounting work. Your accountant tells you which items apply.
- Furniture and front desk
- The reception area, lockers, seating, and the first purchase of towels and cleaning equipment.
- Launch promotion
- Signage, a photo shoot, a website, advertising before opening and promotional classes.
Some setup costs can be recovered (the deposit), some are an asset that can be sold (equipment), and some stay with the space (renovation). Marking which is which in the budget shows what would come back in a move or a closure.
Which costs repeat every month?
Most monthly costs are fixed costs, paid even in a month when no member comes: rent and service charges, bills, fixed salaries, accounting, software, insurance and maintenance. Instructor pay is fixed or variable depending on the pay model. The distinction matters, because the total of the fixed costs decides how many attendances the studio needs to avoid a loss.
- Rent and service charges: the amount in the lease and its annual increase clause
- Bills: electricity, water, gas and internet; heating and cooling change with the season
- Fixed salaries: reception, cleaning and instructors on a monthly salary
- Instructor pay: under per-class or per-participant pay it follows from the timetable and attendance
- Accounting, software, insurance and bank charges: the total of subscriptions and contracts
- Supplies, maintenance and marketing: with no past month to read, estimated in the first months
The same instructor pay goes under fixed costs if it is a monthly salary, and under variable costs if it is paid per member who attends. Writing one item on both sides makes the break-even point look higher than it is.
How do you put together an opening budget table?
An opening budget is a table with one line per item, and beside every line where its amount comes from. Put the item, its type, how it is estimated and the sum the table uses side by side. Fill the figures in from your own quotes and contracts; mark an estimated figure as an estimate and update it once it is confirmed.
| Item | Type | How it is estimated | Sum in the table |
|---|---|---|---|
| Preparing the space | One-off | At least two quotes for the renovation | Chosen quote + allowance |
| Equipment | One-off | Apparatus the timetable needs and a supplier quote | Number of units × unit price + delivery and installation |
| Deposit and rent in advance | One-off | The terms of the lease | Monthly rent × months in the lease terms |
| Formal setup | One-off | The list your accountant gives | Total of the listed items |
| Launch promotion | One-off | Planned channels and duration | Budget per channel, summed |
| Rent and service charges | Monthly | The amount in the lease and its increase clause | Monthly amount, new amount after the increase month |
| Bills | Monthly | Information from the previous tenant or the building manager | A different amount month by month, by season |
| Fixed salaries | Monthly | The staffing plan | Headcount × monthly salary + employer obligations |
| Instructor pay | Monthly | The weekly timetable and expected attendance | Classes × per-class fee, or attendances × per-participant fee |
| Software, accounting, insurance | Monthly | Subscription and contract prices | Monthly total of subscriptions |
| Working capital | Set aside | The shortfall of the months before break-even | Costs - expected income, for each month, summed |
The table is a template and contains no market prices: fill each line in from your own quotes and contracts. Mark the estimated lines, and close the budget with a separate allowance for the unexpected, for wherever the estimates miss.
How much cash should be set aside for the months after opening?
A new studio usually stays below break-even attendance in its first months, and the gap is paid out of cash. The amount to set aside is the sum of the monthly gaps between expected income and monthly costs. To work it out, find the break-even attendance first, then add up the gap month by month on a cautious assumption about how fast membership grows.
- Add up the monthly fixed costs: the monthly lines of the running cost table
- Find the break-even attendance: fixed costs ÷ what one attendance contributes to them
- Assume, cautiously, the attendance you expect in each month from opening
- Write down each month's gap: fixed costs - expected attendance × contribution
- The sum of the gaps is the least working capital to set aside
An example with placeholders: if the monthly fixed costs are F and one attendance contributes C, break-even is F ÷ C attendances. If the first month brings half of that, its gap is about F ÷ 2; if the second brings three quarters, its gap is about F ÷ 4. These gaps add up until attendance reaches break-even. Put your own figures in for F and C, and choose a cautious rather than an optimistic growth rate.
How many attendances keep you out of a loss: Studio Break-Even and Occupancy Calculator
Definition of the term: Break-even point
How many reformers should a studio open with?
The timetable you plan to sell decides the equipment count, not the budget. A group class cannot seat more members than there are reformers in the room; each extra reformer adds a seat to every group class but costs space, rent and investment. Sketch the weekly timetable and class types first, then choose the number that carries the expected occupancy.
- A group class cannot seat more members than the room has apparatus; the count is the most seats one group class can sell
- Each extra unit adds a seat to every group class, but costs investment, space and maintenance
- A private or duo session holds the whole room for its hour; a private-heavy timetable needs fewer units but more rooms
- Sketch the weekly timetable with its class types first, then choose the number that carries its expected occupancy
Comparing what a group class and a private session earn in an hour also shows how many units and how many rooms you need.
The sum that decides units and rooms: Group vs Private Class Profitability
How do you build a studio opening budget step by step?
The budget is built backwards from the timetable: first what you will sell, then the space and equipment that needs, then the monthly costs and the break-even point, and finally the working capital. This order prevents an opening where the timetable was fitted to the equipment instead of the other way round, and empty seats end up paying rent.
Write down what you will sell
Put the class types, the number of classes a week and the capacity of each into a draft timetable.
Choose the space and equipment to fit the timetable
Decide how many rooms and how many units the timetable needs, and collect quotes for each.
List the monthly costs
Write rent, bills, salaries, instructor pay and subscriptions into a monthly table, splitting fixed from variable.
Work out the break-even point
Find the class value from your prices, and divide the fixed costs by what one attendance contributes to get the attendance you need each month.
Add the working capital
Add up the gaps of the months before break-even and put them on top of the setup budget, together with an allowance for the unexpected.
The prices that set the class value: Pilates Class Pricing
How do you track setup and running costs in Dakik?
In Dakik every expense is recorded under a category such as Rent, Utilities/Dues, Materials/Supplies, Marketing/Advertising, Maintenance/Repairs, Taxes/Government Fees or Software/Technology/Subscriptions. Expenses that repeat every month are kept as templates; a template fills in the new-expense form but never records an expense on its own. The finance summary shows income, expenses and the net result month by month, so the budget can be read against what happened.
- Every expense is recorded under a category; instructor payments show separately as Staff Payout
- Expenses that repeat every month are kept as templates; a template fills the form, you record the expense
- The finance summary shows the month's income, expense categories and net result
- The Overview page gives the average weekly occupancy, so the break-even assumption can be read against real occupancy
What the finance screen shows: Finance Summary
Cash flow once you are open: Studio Cash Flow
How many attendances keep you out of a loss: Studio Break-Even and Occupancy Calculator
Frequently asked questions
Is it better to lease equipment or to buy it?
The two spread the cash over different times. Buying makes the setup budget larger but adds nothing to the monthly costs; leasing or buying in installments protects the cash at opening but adds a line to the fixed costs every month and raises the break-even point. Compare both over the same period by total cost, and check who owns the equipment when the contract ends.
Which formalities and permits does setting up require?
The company type, licenses, premises permits and tax registration depend on where the studio is and how it is structured. This guide gives no advice on them; talk to an accountant before setting up, and add the items they list to the budget as separate lines.
When does a new studio start making a profit?
A studio turns a profit in the month its attendance passes the break-even attendance. When that month comes depends on the fixed costs, the class value and how fast membership grows; there is no general timescale. Enter your own costs into the break-even calculator to find the attendance you need, and turn it into the number of members each class needs.
Does it make sense to start with a small studio?
Starting small lowers the fixed costs and therefore the break-even point, and shrinks the shortfall of the first months. The price is a ceiling on growth: once the room is full you need new time slots or a move. Asking for growth options in the lease, such as an adjoining space or an early exit clause, is a way to balance the two risks.
Which costs are most often left out of an opening budget?
The ones most often forgotten are the working capital, the deposit and rent paid in advance, the delivery and installation of equipment, the rent paid during renovation while nothing is earned, the instructors' promotional classes before opening, and an allowance for the unexpected. Writing them as separate lines makes it clear why the total grew.