Episode 336: The small business decisions that are costing you six figures

The Small Business Decisions Quietly Costing Your Studio Thousands

Are hidden financial leaks costing your studio thousands each year? In this episode of the Female emPOWERED Podcast, Christa Gurka reveals the everyday business decisions that quietly reduce profits for boutique fitness studios, Pilates studios, physical therapy practices, and wellness businesses.

From inefficient scheduling and outdated pricing to overused discounts, underperforming offers, and wasted prime-time hours, Christa explains how small choices made repeatedly can have a major impact on your bottom line.

You’ll learn how to audit your business operations, improve profitability, simplify your offers, and make smarter decisions based on data instead of emotion. If your business feels busy but profits still feel too tight, this episode is a must-listen.

In This Episode, You’ll Learn:

•  Why small business decisions matter more than big dramatic changes 
•  Scheduling mistakes that lower studio revenue 
•  The hidden cost of outdated discounts and package pricing 
•  How to maximize your most profitable hours 
•  Why simplifying your services can increase profits 
•  5 questions to ask before making any business decision 

This Episode Is Perfect For:

•  Pilates studio owners 
•  Boutique fitness studio owners 
•  Physical therapy practice owners 
•  Wellness entrepreneurs ready to improve profit margins 
•  Business owners who feel busy but not profitable 

Listen Now

If you're ready to run a more profitable, efficient, and sustainable wellness business, this episode will help you uncover the leaks and start making smarter moves today.

Transcript

Speaker 0:13

Well, hello there everyone. Welcome back to another episode of the Female Empowered Podcast. I am your host Christa Gurka, and today we're gonna be talking about something that I think almost all of us business owners do without even realizing that we're doing it. And that is making small decisions every single day that seem harmless in the moment. But when you add them up, month over month, day over day, year over year, several years, they can be costing our businesses tens of thousands, even hundreds of thousands of dollars because most issues, most business owners, we don't lose money. Well, sometimes it happens in one dramatic decision, but not often. It usually happens in these small decisions we make day over day, month over month, week over week, year over year. And we don't even realize it. We don't definitely, I don't know anyone that wakes up one day and is like, guess what I'm gonna do? I am gonna go and lose a hundred thousand dollars today by making this one decision. No. instead what usually happens is we don't have the capacity or the bandwidth to make decisions properly. 'cause we're not really looking at the numbers or looking at it objectively. And it's things like leaving prime time spots on your schedule. Unbooked, it's continuing to offer, promotions and packages from pre 2020. It's letting a weak. Insufficient schedule, continue to operate. 'cause you're afraid to make one of your staff members or team members upset. It's saying yes to convenience over profitability. And these business decisions happen slowly and quietly over time, and you really stop seeing them. And that's why today I want you to, I want to help you recognize. Where these leaks might be hiding in your business and more importantly, what you can do about them taking a little bit of sip of water. Okay. So are we ready? Are we ready to talk through this? you may. Get through this episode and realize, you know what? I don't need more clients. What I need is better decisions. I need to have better outcomes around the demand, the time, the schedule, and the offers that I already have in my business. So, number one. S what are we gonna talk about? First, we're gonna talk first about the true cost of all of these, like little tiny bitty decisions, right? one of the mistakes I see a lot of the business owners make is thinking that, again, like I said, like one big decision. They're like one big decision away from failure or success, but really. It's not like, oh, am I gonna open a second location? Am I gonna hire more people? Am I gonna start running ads? It's these little tiny micro decisions that are the foundation of our business that we have to get better, that we should work on getting right before we move on to the macro decisions. Because our business is built on hundreds of small decisions we make every single day. Just think of all the decisions you made today before 9:00 AM. And that's not even including the ones for your life. Making breakfast for the kids, getting them out the door. Did you sign the, the permission slip? do you have to send money for teacher gifts now that it's almost the end of the year? What are we doing for summer? Are we gonna be open for July 4th? Are we gonna be open for Memorial Day? If we not gonna be open for Memorial Day, are we gonna close? Do we cancel those clients? Like all of these decisions, time and time and time again. And if you think about it. If a decision, if you lose, let's say $200 a week, just from poor scheduling, just $200 a week, that could be one decision, okay? That could compound into over $30,000 a year. That's a lot of money. Okay? Sometimes revenue in isn't the problem. It's we're leaking too much out of the bottom of the bucket, right? This is why your business can look and feel busy and still feel like there's not enough money left over. All right. It's not a revenue problem, it's a how the business is being run problem. So let's talk about some of these decisions that I want you to audit in your business and see if you can find the leak. So the first one is ca class scheduling inefficiencies or basically scheduling inefficiencies, whether you're an appointment-based studio or a class-based studio. Okay. Inefficient scheduling is the number one thing I see. In boutique fitness businesses and wellness practices. Okay, so from a class perspective. Let's say you have like one class that has two people in it. Another class that has three people in it, a noon class that nobody attends, a four o'clock class that's filled and it has a wait list, right? Big gaps. Also in an appointment base schedule, like let's say you are loaded with staff from like one to four, but that's not your busiest time of the day. Right. Or let's say that you have, you need people to be in at seven. You have a lot of people that are asking for 7:00 AM appointments, and you don't have someone that can serve that appointment time, right? Because you want to accommodate everyone. You keep adding a variety of more scheduling options, but more options do not always create more revenue. Sometimes they, what they do instead is just like spread the same number of people out thinner. You get more diluted. Right. So from a class-based perspective, if you think of this, if you have a class with three people in it, I mean, if you, sorry. If you have three classes with three people. That's nine people in total. But if you bin all of those people into one class, if you have enough room to have, if you have eight or nine reformers, now you take those two other lower performing classes off the schedule, maybe fill them with private sessions one-on-one, maybe some of those three, or you fill it with a semi-private session with those three people that were in there. What does that do that well, that increases the energy in the room for that class that's filled now with eight or nine people. It improves your instructor efficiency. They usually can teach better to the energy. That's better. It reduces your payroll cost 'cause you're paying them for one class instead of three, and it creates. More space for profitable hours elsewhere. So in other words, maybe you can take some of those three people that were in each of those three classes and sell them into a semi-private session or even at a private session. Okay? Because if you think about it, let's say three of those people in that class are paying $30 each. That's $90 for that class. But you can sell a private session for like 120, right? You're gonna be more profitable in the private session. Than having three people in a group class. And then if you look at, look at it from a payroll perspective, imagine if you pay an instructor like $45 to teach a class, okay? And you run a class with only two people in it, and each of those people is paying $30, you're paying your instructor 45, you're getting 60. That's not very much, and you have to use that 15. Right, that $15 to pay your rent, your ads, your marketing, all of that stuff. Whereas if you combined it into one class, you're gonna pay that instructor $45 and now you have eight people in a class. You're getting 240. So now your, your profit is $200 us. Okay. So that is something you want to think about. You wanna think about these little micro, so I'm gonna actually do it on my little handy dandy whiteboard. So if you're listening to this podcast, you're not gonna be able to see it. But if you're watching me on YouTube, I suggest go watch my YouTube channel. 'cause you can see a lot of these examples. So if you have 8:00 AM, 9:00 AM and 10:00 AM right? And you have 3, 3, 3 people, okay? So this class three, six, this is $90. Okay, you're getting $90 and you're getting $90, right? You pay out 45, so you're left with $45, okay? $45 to pay your rent, all that other stuff. Now, let's say you combine all those three classes and you can get eight people into one eight. Each of them is paying $30, right? So that's $240. For this class minus the $45 you're paying your instructor, and that equals 90, no, sorry, $195. This is way better, okay? This is way better to have leftover than $45, okay? This is where an inefficient schedule could be leaking. Now, if you did this, let's say, let's say this was happening three times a week. Right, and you are looking at, so this is happening, so you're losing, right? Let's say, so minus 45 is $150, so you're losing $150 three times a week. Okay? So that's, let's do this math. So one 50 times three. Okay, so that is $450 and that's happening 52 weeks a year. That's $23,000 you're losing in a year, just in this one example. Okay? So an inefficient class schedule could really be costing you tens of thousands of dollars in a year. Okay? So one of the things, the action step you wanna do for this. Is you want to look at your class schedule or your appointment schedule for the last, I don't know, three or four months, 12 to 16 weeks, which of the, which part of your schedule is operating below your minimum profitable attendance? Now, if you're like, what's my minimum profitable attendance? Well, that is something you should know. You should know how many people, how many buts and seats I need in each and every class to be profitable. Okay, where can I, and then I want you to say, where can I consolidate the week classes? The week hours, and expand on the straw one. Strong ones. Your business should not be built around convenience for one or two people. It should be built around what's sustainable and profitable in the long term overall. Alright. Area number two, the discount creep. I hate discounts. I hate discounts. I hate comps because I think people generally think, oh, if I just discount it, they'll come in and that's how I get more people. But no, then you're selling your stuff for low, less amount of money, and you only have a limited amount of capacity, so you're killing yourself. You're biting, what's it? You're biting your nose to spite your face. I don't know what the phrase is, but anyways, you're not making the best decision. All right. And this could cost you definitely five and six figures in discounts that you do not need to be giving out. They really sneak into your business. I see this all the time with old founding member rates. Okay? I'm not opposed to founding member rates, but they should be for a limited time. So if you're gonna give a founding member, if you're starting a new service or you're. Opening a new location and you're like, I wanna give founding members, they should be for like six months, not forever. Because again, we have a limited capacity. It's one thing if you had a gym that you can always have more people. And founding member rates are great, but when you are selling services and you're selling like a bike or a mat or a reformer, then the founding members should be short-lived. All right. Teacher discounts. Teacher discounts are great. And I don't mean teacher like, Like a elementary school teacher. I mean, teachers like Pilates instructors have only certain times of the day where they can use their teacher discount. You don't wanna take your most profitable times, your busiest times 9, 8, 9, 10, and morning and fill it with instructors that are paying you 50% off. Same with friends and family rates. All right. Another one is people that are grandfathered in. So maybe they don't have a founding member rate, but you haven't raised their prices in four years. 'cause you're like, they've been with me since the beginning. This is really hard for them. Great. Fine. But those people can only come at certain times of the day. They can only be in certain classes, not your prime time. All right. Unlimited memberships where you can have people take back to back classes. There's no cap. I am not a big believer in unlimited for Pilates based studio unless you have 50 reformers, which does not happen in our industry. Okay, because you're selling the people that buy unlimited come. Here's the problem, the people that buy unlimited. Come. Even if it's $600 a month, they're gonna come every day and sometimes twice a day. Okay. At Pilates in the Grove, we had people that were coming 60 times a month. Okay? So they were coming 30 times and a few days of the week they were coming twice. So let's say even we had that people were taking. Every day. 30 days. So that's 30. And then three times a week they were coming twice. So that's another 12. So let's say they were doing 42 times a week. 42 times a month. Okay. Even if you're selling it for like $600 a month, which is a lot divided by 45 visits, they're still getting their session for $13, you cannot be profitable on $13. Or most of us can't be profitable on $13 unless you don't have rent or overhead or something like that. Okay. So it's one of the biggest things I see where you have a majority of people that are still on really outdated memberships or packages. Right? And it's where I see you don't really have a pricing problem. You have a discounting problem. They're you're giving margin away without even realizing it. It's again, why I'm not a big believer in Black Friday specials. Okay, because now you're, oh, let me sell all these packages. Great, and you get all this cash influx right before the end of the year, which by the way, then you have to pay taxes on, but now you're just discounting your services and so now you're selling the same service. You're paying your instructors the same amount, but you're taking less money in. It's not a smart business decision. Okay, so let's give an example. Say your regular, a regular package is $200. But because of a discount, the average person's actually paying 180. So you're thinking, oh, it's only $20. Right? It doesn't sound like a big deal, but if you have like a hundred clients that are getting a $20 discount, that's $2,000 a month that you're leaving on the table. $24,000 a year. Again. So if you have inefficient class schedule and now a discounting creep, that's, that's like 50 grand a year that you are leaving on the table. 50,000. Okay. What about comps? When you have to comp somebody because of a mistake one of your team members had, or because your instructors aren't being accountable or something like that, that also creeps up, right? So you have to find the real issue, you behind the issue, and you have to fix that. Right. The same way we look at as a pt, we're getting to the root cause of the problem. We have to do the same thing with our business. What's the root cause of the problem? So what I want you to do for this area is figure out every package that you're selling, every membership, every discount, every person who's paying a non-standard rate. And I want you to look into it and say, why does this discount still exist? So sorry, my dog Duncan just went, started barking like crazy. So I don't know if you can hear it or not, but anyways, what would happen to the clients if I removed this? And do I know this to be real or am I just imagining it's a story I'm telling myself in my head because I'm afraid to ask. Okay, and can you change these like founding members or people that have been grandfathered in forever? How can you improve on this discounting issue? You? Okay? Area number three, prime time hours. Are your prime real estate and you're not maximizing them, okay? So you're not maximizing and optimizing your prime time hours, right? For most businesses, for a lot of Pilates studios and even PT practices, usually, early morning, seven to 12, and then afternoons, four to 7:00 PM. Most Pilate Studios, I will tell you most, this is a generalization. I actually have no, data to support this right now, but most of us, it's mornings, evenings are still good, but they're a little less than our mornings. But the weekends are prime real estate. Saturday and even Sunday. It. Okay, so what happens? Where do we see the leak in the business they're making? Businesses are making low profit decisions during high peak times. So maybe they're spending like a 9:00 AM and they have an intro class on the schedule. No, do not have an intro class in your prime time? Have an intro class in your downtime, like one o'clock. Okay. Having a low demand service, take a prime time. Giving a staff member their preferred schedule, even though that doesn't fill a room. So if you have an instructor, right, or a PT that's working those prime times, but they can't keep people on the schedule or they can't get people in a full class, they shouldn't have those prime times. Those prime times go to the, the. Best service. Deliver the people that can produce. Alright. Keeping an outdated class format in your best hour. Like we did this for a while. We had a bar class on the schedule and we really did it because this instructor loved teaching it. And eventually, like very few people came. But the people that did come, and I say few, like three, four, maybe. The people that did come loved it, the instructor loved teaching it, but I was like, we can't teach it at this time anymore. We have to. If you wanna continue to do it, I'm happy to let you do it, but we have to do it at a time that's not gonna take you away from another group class or take up time where we could have a full reformer class. It's just monetarily not financially responsible to continue to do this. And that's what being a business owner is, is making these hard decisions. Okay, so Tuesdays at one or 2:00 PM is not gonna be as valuable as Tuesday at 9:00 AM So how are you going to check your schedule? Right, you can do this. There's actually a lot of, reports in, in softwares like MINDBODY and moments and stuff that you can run a report. That's what are the highest demand time slots? What have been the most profitable, which service is currently producing the most profit or which teacher, instructor practitioner is producing the more most profit. Okay, so I want to talk a little bit about some strategies here. Okay. So let's say you have a private session and you cannot, because you have a private session, you cannot run a group class at the same time. And it's in a prime time slot, so your private session maybe will generate a hundred dollars, but you can have five reformers at the same time. With everyone paying $40 and you could fill $200, that's a decision you have to make where you have to be like, either I have to get two, another private session at the same time, or I have to change this to a class so that I can be pro more profitable during my prime time. All right, so you have to stop asking, how can I fit more people in the schedule? How can I fit more people into the business and start saying, how can I redesign my best hours to create more impact, more access, more revenue, more profit? Now I wanna give you another example. Okay? What about when there are people that are. Your business is full and you're like, I can't, I'm at capacity. Like we can't fit any other business in here. We'd have to hire to do that. Okay? So when your business is already full, the answer is usually not more hours. The answer is using your highest demand hours a little bit differently. So let's talk about this in terms of you don't have a demand problem. You have a capacity problem. So. What about when you have privates? Okay? But you have people that want spaces. So you have the clientele, but you don't have the staff and you don't have the hours, right? So what if, what if. You took that private at noon and you turned it into like a pod or a semi-private, right. So maybe that's like, so instead of getting a hundred dollars for that one private, you can charge 75 each person. Or maybe even. 60 each person. Okay? And now you can get three people in there and you're gonna make 180 instead of a hundred. Your instructor makes more, the client gets the opportunity to may pay a little less. Right, and the studio has more profit. So sometimes if you're looking at a capacity problem, or let's say you have an instructor who she, she's already teaching or he's already teaching 30, 35 hours a week, and they have no, they, they're now hitting their ceiling, right? We can look at that and say, and you're like, I don't really wanna raise prices for these people, which is one lever you can pull, but another lever, lever. Could be that you're like, okay, let's take some of your clients that you think could work really well together and create a pod, right? So you can say, at this hour, I'm not gonna do a private anymore. I'm gonna do a pod and each person's gonna pay $60 instead of $120, right? So you get 50% off, but now for, you get four people in there, you, you're making $240. Okay, so your instructor can double her salary. She gets the same amount of people in, and then you can take those other hours and you can do other stuff in those non non-prime time hours. Okay. For PTs, let's say, you know, let's say you're charging $200 an hour for a private pay pt, and sometimes a price is an issue for people. Longevity wise. So what if you had, oh, at three o'clock in the afternoon, we have our low back group session. Okay, so instead of $200, okay, each person's gonna pay 70 and you can get four people and a PT runs it. All the people are doing relatively similar exercises. These people usually don't need manual therapy anymore. They just need some guidance and programming. Okay, $70 times four is $280. You now have made $80 more. So it's another way to get people continued buy-in, right? So they're like, well, $70 is a huge savings versus 200. I don't think I need the one-on-one anymore 'cause I don't need the manual work because you can do this little pod. Okay, so you can have like a low back pod. You can have an osteoporosis pod, you can have a a knee pod, right? You can have a return to performance, athletic performance mobility pod. Maybe some people need mobility and you can have knee people, hip people, all of this stuff. And it also creates a sense of community. Okay? It's a great way to give like. You start your, you know, you have an assessment, it's $200. You do four to six sessions of one-on-one, that's $200. Now you can go down to our pods and now you can be in our fitness or wellness program. So it's like a graduated, plan of care. It creates buy-in from your people. It's a great, think outside the box, smart decision making for smart business owners. Okay. I have lots of I ideas and examples when it comes to that. Lots, lots, lots, lots. Okay. How about, this is another thing we talked about. How about if you can use your most in demand team members a little differently? This is exactly what I was talking about. So instead of if they're capped out, right, so maybe combine some of their privates into pods, even if it's two people, right? So let's say a private is a hundred and a hundred dollars, $120 for this person, and now you can buy it in with two people and each of them is paying 80, they're saving money and you're making more money. And the instructor's making more money and she can get more people in and off of the wait list. So just think outside the box. Okay, so another one, another area that you could be leaking. Money is outdated. Offers that need to go, they need to be off of your, offer suite off of your value ladder. It's something that nobody buys anymore. It's a class format that used to be popular, but it's no longer profitable. A service that has really high effort and low profit or a membership tier that needs to be, discontinued. So think of like unlimited, really, people, if you're a Pilate studio, not yoga, I think yoga does great and even spinning. If you have 50 bikes, I think that's fine. But if you're a Pilates reformer studio and you have. 10 reformers or less, and you're offering unlimited. I want you to look at your unlimited and see if it's actually hurting your business. You might think it's helping your business because you're like, wow, they're $500. I'm getting, you know, I have five people on them. That's $2,500 a month, but it could be hurting your profit if they're paying 12, $15 a class. Okay. Do you rely heavily on ClassPass? Do that. Does that need to be discontinued? Do you have a service that is not profitable to you? Does that need to be discontinued? Sometimes these outdated offers, you think you're giving people more options, but it's causing more confusion for them, more complexity, more work for your team. It's way easier to have. It's less is more, right? It's way easier to have a few offers and very specific pathways of like who is best for each offer. The businesses that scale best do it with fewer things because they're able to do fewer things better. The fastest way to improve a business is not by adding something new. It's by simplifying and optimizing what's currently working. I like to use the example, 'cause this is me. things in your closet. Have you ever cleaned out your closet and you look at something and you're like. Yeah, I haven't worn that in a year, but I might wear it one day. I haven't worn it in five years. Someone came and we were cleaning out my closet and I had, I kid you not, it was my, it was yellow and it was my suit that I bought when I graduated from PT school in the 19 hundreds. By the way, when I, that I used on interviews. First of all, I think the skirt was like knee length. I think the, the jacket had shoulder pads in it, and my friend was like, why do you have this? I'm like, I don't know. I might use a suit one day. She's like, first of all, if you did wear a suit ever, you would not wear this suit. So get rid of it. Get rid of it. Why are we holding onto things that no longer serve us? Get rid of it. Simplify. Optimize, right? Instead of offering 12 different ways to work with you, make it three. Instead of offering 12 different membership options, make it three. Alright. Simplify to optimize. Simplify to optimize. I'm gonna say it again. Simplify To optimize. Alright. So what I want you to do now is for every offer you have in your business. I want you to think one, is it profitable and not? Oh yeah, it's profitable. Like do the numbers. How much does it cost you to service this? How much do you get left over? This is, again, for teacher training. People are like, oh, it's super profitable. I'm like, is it though? How many hours are you actually teaching? Is it profitable? Don't just think it's profitable 'cause you got 40,000, but how much is it costing you to deliver? What is the opportunity cost? Okay, is the offer in demand and are people willing to pay for it? Does this offer support the direction you want to go in your business? Is it moving you closer to that goal or farther away from that goal? And if you were building this business today from scratch, would you include this offer or would you be like, no, that's too much work. I'm not gonna do it. All right, so before you make new decisions in your business, I want you to ask yourself these five questions. Okay? Does this make us more profitable, less profitable? That's what we were talking about. And don't just say yes, I think it does. No feelings are not facts. I want you to look at the numbers. You have to look at the numbers. Does this create more simplicity or complexity? That's the other thing. Are we making our business harder than it needs to be? Does this use your best hours and best people wisely and most efficiently are is this offer, is this service using your best hours and your best people, the most efficiently? Is, are your decisions based on data or feelings? Feelings are not facts. Feelings are not facts. Is this decision going to get me closer to my goal or farther away from my goal in the next 12 months? So 12 months from now, whatever decision I make right now, am I gonna be closer to my goal, whatever that goal is, or farther away from my. Because again, six figure problems are often created by these tiny decisions we make day after day, week after week, month after month. So take a step back and clearly look at your decisions. Look at them, understand them, evaluate them, scrutinize them. It's important. It's important. Is it hard? Yes. It's hard. But you're a successful business owner. You're a smart business owner, and smart business owners look at their business in this way. They look at their decisions in this way. That's what makes 'em successful, and that's what I know you want for yourself and for your business. I know this. All right, so if today's episode made you realize that there may be a few hidden leaks in your business, first of all, yay. Good. Okay. Awareness is the first step. Okay. And second, I want you to remember that this is not about being bad at business. It's not. It's about being too close to your own business sometimes where you actually can't see the forest through the trees. You actually can't see what's happening in real time. And sometimes we even forget about these decisions. We're like, oh yeah, I never checked. I was supposed to change that pricing structure six months ago. And it's still the same. What feels normal to you might actually be costing you a fortune. How many. Patients or clients have you looked at where they're crooked and they're like leaning to the right, so the right shoulders drop and their head's now leaning to the left and they think they're perfectly straight, and you're like, you really think you're straight here and they can't see it. They don't feel, they feel normal. That's how you feel in your business. But feelings are not facts, ladies. They're not. All right. If you want help identifying these kind of micro decisions. I'd love to offer that help to you. You can join our FIT BZ monthly community for $99 a month. I can guarantee you that after a year in the community, if you do the work, if you watch the modules, if you show up for the calls, and if you take action on the things you find, you'll spend. A thousand dollars in the, you know, a year 99, whatever. A little over a thousand, maybe 1200, I think if it's monthly. Okay. I'm not good at math, don't at me. I guarantee you you'll find more than $1,200 worth of leaks in your business. Okay. If you watch the videos, if you do the work, if you show up and you make, take action on the things that we find, you will find 10 times the amount of leaks in your business and you're, you'll plug that hole. I'm telling you it'll happen. It will happen, and I would love to be the person that helps you do that. All right, so that's all I got for you, my friends. For today. It was a lot. I hope you enjoyed this episode. As always, you can DM me over on Instagram. I'm @christagurka. I'd love to hear what you thought, what you're struggling with, right, and until next time, my friends, bye for now.