Last December, I announced that my one-word mantra for 2017 was “GROWTH.” Specifically, growing my business by either opening another studio, acquiring another studio, and increasing our retail sales by selling more workout apparel. And since it’s about a week from the end of the year, I can confidently report that I accomplished NONE of these things! Was 2017 a total failure? Of course not. Here’s why …
After evaluating these three choices, I realized that there were actually some better options out there.
Selling More High Margin Services
In addition to selling classes at my Pure Barre studios, we sell performance workout apparel including leggings, tanks, tees, and anything else you might need during a heart pumping, sweat streaming workout. And that’s a great complement to taking class—clients are always going to need the right apparel to enhance their experience in the studio. But … there’s this thing called margin. Gross margin is defined as the total sale minus its cost of goods sold, divided by the total sale, expressed as a percentage. Put more simply, the gross margin of a clothing sale is much less than the gross margin of a sale from our classes. Put even more simply, it costs us much more to sell clothing than it does to generate income from classes.
After careful evaluation, it makes more sense to think of new and innovative ways to sell more classes and generate revenue from other high margin services or products that have a very minimal cost of goods sold, rather than chase lower margin sales from clothing. Selling clothing will remain an important part of my business, but we will be focusing our time on creating more high margin sales opportunities.
In fact, we’ve just rolled out Pure Barre Elite, which will allow clients to purchase 2 special classes each month including an Intensive class which is usually 75 minutes and focuses on a particular part of the body, like thighs, seat, abs, or arms for more intensive work. The 2nd class will be a more instructive class called Classic Elite, which will give clients more understanding of the Pure Barre technique through hands on corrections and tips on form. Both classes will keep our most loyal clients challenged and learning throughout the year. A win/win for everyone.
Diversifying My Income
Financial advisors continuously advise their clients to diversify their investments to mitigate risk, so it only makes sense to diversify my sources of income as well. Building the audience to www.shesonhertoes.com has allowed me to earn some additional income from book sales and soon from the course I’m writing called How to Hire a Rock Star Team (It should be ready in a few weeks!)
Starting a New Business
Finally, after considering my options of growing the studios by either opening a new location or acquiring an existing one, I have come to the conclusion that I’d rather start a brand-new business. There are a few reasons for this: 1) I’d really like to start something from scratch and develop the business plan, branding, and building of my own unique concept. 2) I have a new interest (It’s complementary to fitness!) and I think it makes a great business idea. 3) Since my team is doing an amazing job running the studios, I have the time to work on something new.
What is this new idea? I’ll tell you about it next week. I’m really excited about this new challenge!
Until then, I hope you have a Merry Christmas! And … stay on your toes!