What You Should Know Before Buying A Yoga Studio For Sale In Australia?

A few years ago, one of my colleagues in Sydney owned a beautiful yoga studio. She used to offer yoga teacher training and take yoga classes at her studio. As a young entrepreneur, she faced many issues in running her business. Also, as a single mom of two very young kids, she could not manage the studio 24/7.

The profits in the yoga business were lower than she expected due to challenging market competition. With so many yoga studios in and around, it was the biggest challenge she had to face in the yoga business. Soon, she became frustrated and worried more about the company and took up a full-time job. In less than two years, she took more interest in her career than running a yoga business and finally decided to sell her yoga studio.

Click here to find which yoga studio management software is the best

Yoga, spiritual and physical upliftment of body, mind, and soul, also demands the cost of efficiently running a studio. Yoga teachers also have to make a living. Yoga business profits vary from country to country and from city to city. In 1980, the Yoga business was in its infancy in the Western world.

There were few yoga studios, and the business was not lucrative. Yoga Alliance, a non-profit organization, was formed in the US in 1999. Yoga Australia, a voluntary, not-for-profit association, was incorporated in the same year, originally known as the Yoga Teachers Association.

These organizations helped unify yoga teachers and provide professional recognition. Globally, Yoga Alliance certifies around 14,000 new yoga teachers yearly, many with only 200 hours of training.

Therefore, Yoga studios are popping up everywhere, which means owning a yoga studio or teaching yoga for a business is not that profitable, and you need to do lots of hard work to set up a yoga business.

See the market research report on Pilates and Yoga Studios in Australia.

Yoga studio business for sale

There are many advertisements in print media, such as in newspapers and magazines and online sites, where you can find yoga studio businesses for sale. Here are a few online sites to visit if you want a yoga studio business for sale.

• Gumtree Australia
• BSale Australia
• Australian businesses for sale
• Business for sale
• Seek Business Australia

Also, try to join the online social forums and ask if any already established yoga studios in the neighbourhood are for sale. You can approach the owner to see if they are interested in selling. Many prefer business brokers to find a well-maintained and awesome-running yoga studio for sale. These agents charge extra money but give you peace of mind during the transaction between the buyer and seller.

How do you value a studio for sale?

Now that you have found a list of yoga studios for sale, you need to understand how to value a yoga studio for sale. This means you need to see whether the yoga studio or business for sale is worth buying. Here are the following points to look for before you opt to buy a yoga studio:

1. Should have paid their bills

This is the most critical aspect of any yoga studio for sale. Yoga studios must pay their utility bills, insurance, taxes and licensing fees. So ask the studio owners for the relevant papers showing that they are clear from payments or bills they had to pay before selling the studio to you.

2. Should own liability insurance

Find out whether the yoga studios have liability insurance. Yoga studios for sale should carry personal liability insurance, setting the bar high to protect the industry as a whole. Click here to find out why professional indemnity insurance for yoga practices in Australia is needed.

3. Clear their employee’s payroll taxes

Before buying a yoga studio, ensure all payroll taxes for employees have been cleared. Some boutique studio owners struggle with payroll costs in the first few years, so confirm whether there are any outstanding tax liabilities before purchasing.

4. Have copyright to play music

Many yoga studios play background music during classes. However, in countries like the US and Australia, playing music in a business without express written consent from the recording artist violates copyright laws. Yoga studios that allow instructors to play music in the background of the class must first obtain licensing permission from the label(s).

In Australia, yoga studios playing music must obtain a OneMusic Australia license, while in New Zealand, businesses must comply with OneMusic NZ regulations. Read more about copyright in Australia.

5. Must be at a suitable location

Yoga students searching for studios always want to attend a yoga class nearby. You are buying a yoga studio for business, and location is integral to running a business. Therefore, the studio for sale must be conveniently located and have easy access to transportation. Also, if you are taking a Vinyasa yoga class, it should be located away from traffic, noise, and distractions.

6. Should be well maintained

Before you buy, you also need to see that the yoga studio for sale is well-maintained and does not require maintenance charges. Besides the infrastructure, you should see whether the yoga studio help desk, advertising, bookkeeping, scheduling, and even online presence are working correctly. List things that need repair or maintenance, then value the yoga studio for sale.

How much do yoga studios make per year?

According to Studio Growth, the average yoga studio owner makes $7,227 in gross monthly income, which is about $86,000/year. The average yoga studio produces $13,495/month in revenue. Income is the amount left after the owner deducts expenses such as rent (15% on average) and payroll for teachers (27% on average).  

The revenue that a yoga studio earns depends on the location of the studio, class attendance, and various other factors. Find here how to calculate how much your yoga studio can make in a year.

How many square meters do you need for a yoga studio to succeed?

A typical yoga studio needs approximately 20 square feet, or 1.85806 meters, of space per person per visit. Therefore, a 500-square-foot studio room (approx. 47 m) (changing area, welcome area, restroom, office area—not included) can accommodate 25 students, and a 1000-square-foot yoga studio can accommodate 50 students. Click here to read more.

How much does it cost to buy a yoga studio in Australia?

Yoga studio costs vary from place to place, depending on the type of yoga studio you buy. Suppose a large yoga studio has a studio floor, sound system, DVD players, pianos, Screen TVs, computers, printers, projectors, furniture, telephones, filing cabinets, electronics, noticeboard staff uniform and more. In that case, the cost will undoubtedly be higher. The yoga equipment listed above is almost the same everywhere.

Other costs include yoga teachers’ salaries, local taxes, insurance policies, and other promotion and brand costs that you may have to pay.

According to profitable venture experts size Yoga Studio in Australia, costs also include the following:

• The fees to register your business name with ASIC are $34 for one year and $80 for three years.
• Legal expenses for obtaining licenses and permits, such as health department and business licenses and permits, fire department permits, Air and water pollution control permits, Sign permits, etc., as well as accounting services like CRM software, Payroll software, P.O.S machines, and other software, are $15,300.
• Marketing promotion expenses total $3,500, as well as flyer printing, for example, 2,000 flyers at $0.04 per copy, for a total of $3,580.
• The cost for insurance like general liability, theft, workers’ compensation, and property casualty coverage at a total premium is $30,400.
• The cost for remodeling the facility and construction of a standard yoga studio – $100,000.
• Other start-up expenses include stationery, which may cost $500, phone and utility bills, such as gas, sewer, water, and electric, and deposits, which total $6,500.
• The operational cost for the first three months, such as employee salaries, bill payments, etc., is $60,000.
• The cost for start-up inventory and yoga studio equipment is $200,000.
• The cost for store equipment like cash register, security, ventilation, signage – $13,750.
• The cost of purchase and installation of CCTVs: $5,000.
• The cost for the purchase of furniture and gadgets – $25,000.
• The cost for building and hosting a website – $600
• The cost for an opening party – $8,000
• Miscellaneous costs – $10,000

To successfully set up a medium-scale but standard yoga studio in Australia, you will need an estimate of one million dollars (AUD$1 million). Note that this amount includes the salaries of all the staff for the first three months of operation.

According to industry estimates from IBISWorld, setting up a small-scale yoga studio in Australia typically costs AUD$250,000–$500,000, while in New Zealand, costs range from NZD$200,000–$450,000 depending on location and size.

This amount includes the salaries of all the staff for the first three months of operation.

If you are interested in buying a yoga studio franchise in Australia, it may cost you AUD$120,000. The three popular franchises in Australia are Elemental Hot Yoga, KX Group, and Power Living Yoga Australia.

What About Buying a Yoga Studio in New Zealand?

If you’re considering purchasing a yoga studio in New Zealand, there are a few differences compared to Australia.

• In New Zealand, GST is 15%, while in Australia, it is 10%. This affects how you price classes and manage expenses.
• If you employ staff, you’ll need to register for PAYE tax with Inland Revenue (IRD).
• Yoga businesses in NZ are also covered under the ACC (Accident Compensation Corporation), meaning business owners pay levies to cover workplace injuries.

Yoga studio sale prices vary from location to location, country to country, and owner to owner.

Finally, look at studios listed for sale, compare their costs, infrastructure, location, business plan, and policies, and finalise a proper yoga studio for your business. If you find a yoga studio that you choose but may lack some other features, remember that you can transform things according to your taste and requirements with creativity. Good luck!

See also

How Much Should I Charge For An Online Yoga Class?
12 Tips To Start Your Yoga Business