Just this month, a coaching client shared she was on track to achieve her annual revenue target. For the first time ever. After many years of studio ownership.

She knew because we have spent the better part of this year organizing her numbers. Tracking revenue, transitioning clients to auto-pay, untangling overhead costs and coming to terms with the gap between what she was earning and what she needed to earn.

None of this came naturally to her. Like the rest of us, she got into studio ownership the old-fashioned way: as a popular teacher with entrepreneurial dreams, it was a natural next step.

Our work together began earlier this year. The studio was clearly busy, but behind the scenes, it was disorganized and confusing. Bookkeeping was successfully outsourced but reports were done manually and didn’t link to a shared software (like Quickbooks or Xero) for easy access. She also had more than a few of those clients who hold more sessions than they actually attend. (See Your Studio Is Full. So Why Isn’t the Money There?) And a recent software migration compounded her financial mystification.

Eight months later, her numbers are clear. She can see her successes with stable, recurring revenue, knows where she stands year-to-date, and is able to see other aspects that need attention, outlined in a way she could act on.

This is what I want for every studio owner.

But before I continue to the math

I want to call attention to the notion that numbers get in the way of the mission.

A teacher I love and respect once told me (with the kind of certainty that can only come from believing you’re entirely right) that my consulting practice was evidence I had stopped taking the teaching seriously. She meant it as a criticism. Her logic, as far as I could follow it, was that a dedicated teacher couldn’t also be this adept in the business side of things.

It’s an unreasonable logic. But I hear whispers like this all the time in our industry.

It goes something like this: focusing too intently on the financial side of the business is somehow at odds with the reason we opened a studio in the first place. The refrain being: The service is what matters most. The numbers are icky, greedy, the wrong approach.

That couldn’t be further from the truth. It’s a hill I’ll die on. Of course, if I die on that hill, it’ll be with a cushy savings account because I am worth it. But I digress.

What I have learned after 24 years of teaching and 17 years of studio ownership is this: being an exceptional teacher is how you take care of clients and how you model your vocation to apprentices. That much is true. But getting comfortable with the numbers is how you protect that service, your ability to take care of those clients and grow the next generation of teachers.

You can have it both ways.

A studio that doesn’t know where it stands financially cannot make good decisions about its future. Full stop. Math isn’t the enemy here. It’s what makes your mission sustainable over the long term. So you can still be here in another ten years, doing the work you love with the clients who need it.

Now back to the numbers

Start with your annual revenue target. If you set one in January, use that. If you didn’t, take last year’s gross revenue and apply a growth rate percentage (see below) that fits your your situation.

Scenarios at mid-year

Here is a working example for a studio with an annual revenue target of $300,000:

• Annual target: $300,000

• Monthly target: $25,000

• First-half target (January–June): $150,000

Scenario A — On track:

• First-half actual revenue: $152,000

• Revenue needed July–December: $148,000

• Monthly average needed: $24,667

If fall is one of your busy seasons, your schedule should handle this comfortably.

Scenario B — Behind (a common pattern in late summer):

• First-half actual revenue: $135,000

• Gap at mid-year: -$15,000

• Revenue needed July–December: $165,000

• Monthly average needed: $27,500 (+2,500 above original target)

In Scenario B, the studio needs to earn an additional $2,500 to realize the annual target.

Achieving that monthly premium looks different for every studio. For most of us, it’s some combination of package-to-monthly-membership conversion, a modest rate adjustment and welcoming back 2-3 clients who traveled over the summer. The difference accumulates quickly across a full schedule over four months.

About rate adjustments, memberships and win-backs

• Rate increases are easier in September than they are in June: In the early fall, many clients are setting their routines and are least resistant to change. October is harder. November, forget about it. Patterns are usually solidified and there’s more friction with looming holidays and such.

• Look at package clients with standing weekly reservations: Introduce a 2-3% increase on packages but calculate a similar or slightly reduced per-session rate for a committed membership. A membership almost always bumps up monthly revenue. If they are booked out through end of year, it’s worth the conversation. Factor in suspensions for the holidays, and most clients are game to switch.

• Romance those new intro clients: Greet them warmly, book them with your superstar instructor and follow up. Most of these warm clients know if they’ll continue long-term after the first session. Make it an exceptional experience. Offer a standing time through year-end and present the most compatible pricing option.

• Reach out to lapsed clients worth engaging: The ones who summer in Tahoe are likely back home now. Offer their existing schedule with a pricing option to match. Then look further back for clients who haven’t returned since last holiday season. Life gets in the way! Invite them back to a routine.

All this to say, the goal here isn’t to spend September staring blindly at spreadsheets and hustling for business. Give yourself an hour of dedicated attention to this year’s numbers. Doing so will protect you from four months of guessing and stressing.

And my client, the one who is organized and on target for 2026? She didn’t spend hours every month on this. She organized it so she could run a single monthly report and adjust a thing or two based on what she found.

That alone will be enough. And stay tuned for next month where I’ll share some of my tried-and-true approaches to finishing the year strong.

In the meantime, if you need a second set of eyes on your numbers, I’m here to help. I have a complimentary 20-minute call standing by for you with no obligation to meet beyond that. Talking numbers is a form of therapy. Let’s support each other.

Paid subscribers, see below. I have a handy calculator for you to crunch these numbers to your heart’s content.

And thank you for reading.

-Amanda

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Many of us set intentions at the start of the year. Lofty ideals around work-life balance, a specialized course or some update to your studio. Mine run the gamut. I’m always looking toward refinement. Making it easier, steadier; investing more in my team, digging deeper into my own studies. All to keep the inspiration alive for our clients.

I also look at my numbers.

Never in a trillion years did I see myself as a spreadsheet person. Putting numbers in, googling formulas and making calculations happen. Then to be able to read it, understand it and make decisions from it!

All that from someone who arrived college with a Smith-Corona typewriter.

My grade school years were filled with dance training and competitive tennis, both of which I liked but didn't love. I was an average student, but I absolutely stunk at math.

I always loved writing and literature. A reluctant introvert, I knew a career in Journalism was for me. I then spent nearly 15 years as a professional writer, moonlighting as a Yoga and Pilates teacher to stave off the sedentary nature of my work. Which meant I arrived at studio ownership knowing how to do exactly three things: write, move and teach.

Numbers were not on my radar at all.

I mention all of this because it proves that you don’t have to be innately skilled at math to make it work for you. All you need is to make a bunch of financial mistakes with a young business that you have to climb out of. That’s how I learned.

Everything was very basic for me in the beginning. I modified an Excel template for budgeting. It had three columns: expected income, bills that were due and what was left over. I did this weekly to keep my anxiety at bay.

Today, my spreadsheets are very different. Out of sheer necessity, I have become quite proficient. Nerdy even. I simply love data because it’s not emotional. It doesn’t lie to me. I can wordsmith my way around just about anything. But math? Nope.

Which brings me to September, my favorite month of the year as a business owner. It's when I take what Q1 and Q2 told me and put it to work. With four months remaining in the year, it’s usually enough time to make adjustments.

All to say, I know how easy it is to get lost in the shuffle of a business year and forget to measure against the thing you set out to accomplish. So whether you have a goal that’s drifted or never set one at all, September is the perfect moment to reset for a strong finish.

In the next issue, I’ll take you through how to build a second-half target from scratch, and how to course-correct if what you find is not what you were hoping for.

-Amanda

You feel it months before you act. Something shifts in the studio: the energy changes, the air feels charged. A dynamic that was not there six months ago has settled, and nobody is naming it. Certainly not you. Your instinct is solid, but you decide to wait, manage around it and hope it resolves.

Instincts are funny things. You know something is up, but you can’t name it explicitly. Or maybe you can, but you won’t. But it’s there. And avoiding it is usually expensive.

Early on, I had a teacher who was exceptional on the floor. She lit up a room and clients adored her. Although she was early in her career, she became the star of my studio, booked out and waitlisted.

She also gradually became a management problem. Not all at once, but incrementally. The kind of behavior that is easy to rationalize in isolation, until one day you are staring down another conflict together and wondering how it evolved here.

I’ll tell you how it got there. It was because of me. Small moments were ignored and instincts were suppressed because she was that good with clients. And at the time, I believed that mattered most.

Eventually, we arrived at a conflict I couldn’t ignore. So I brought it up. I meant it to be casual, but it landed as an admonishment. She resigned four days later. I was heartbroken, embarrassed and terrified of the fallout. And then I was angry. Sitting with it, I knew it was all on me. I allowed the dynamic to fester because of what I tolerated.

And of course my team saw it, too. There was a quiet but mounting toll that my team absorbed as I tolerated something I shouldn’t. The standards I held everyone else to were revealed as negotiable. It turned my leadership into a question mark.

As a learn-by-failure kind of person, I usually have to suffer a bit before something actually sticks. Most situations shouldn’t require that. But if you catch the pattern early enough and do something about it, the suffering is optional.

It’s been many years, and I’ve since nurtured a small but tight team. I’ve gotten better at listening to those early instincts and getting ahead of certain behaviors.

The telltale for leaders is avoidance. Something off-putting happens at the studio and we look the other way, thinking it’s a singular event or something taken out of context. For one of my coaching clients, it was bracing for staff meetings because one person reliably made it harder than it needed to be. And for another client, it was adjusting her own schedule at the studio to avoid another’s behavior.

Of course, it impacts business. Astute clients might notice a changing dynamic in its early stages. And like you, they aren’t saying anything. But they are communicating in other ways. They cancel. They switch teachers. Some just leave altogether.

All the while, our best team members are watching how we handle it. They’re recalibrating their sense of what the standards are based on what we tolerate.

Naturally, the mental energy a studio owner spends managing around this person is exhausting. The low-level vigilance carried into the studio every day is not free. It’s just not visible on the P&L. Every month you wait, the cost compounds.

Most of us eventually act at some point, and when we do, the sequence is straightforward: a compassionate conversation, email follow-up, perhaps a performance improvement plan (PIP) with specific targets and clear consequences if they are not met.

But when someone does leave, I often recommend letting the vacancy sit for a moment. The empty seat often has something to say about what the business needs. Have a listen. Let it resurrect the instincts you initially intuited. What might work better? What standards need refining?

Every element of your business has a season, and that goes for your team, too. So next time something feels off, listen and observe. Look for patterns. Let your instinct guide you toward the conversation you have been avoiding.

-Amanda

For years, I took draws to pay myself. In good months, I paid myself well. Slow months, not so much. This approach felt responsible at the time because I believed I was building something. “Reinvesting,” as it were.

What I was actually doing was treating my own compensation as optional.

I ran my studio as a sole proprietor for way longer than I should have. When I eventually applied for S-corp status with the IRS, the structure required me to pay myself a reasonable W-2 salary. Essentially, paying myself what I would pay someone else to do my job.

I started small, maybe 40k. It was a big step for me as a studio owner to have a regular paycheck on direct deposit. It wasn’t quite enough for my expenses, but I supplemented with draws whenever the studio had a good month.

Still, for the first time, my salary was a line item on the bookkeeping report. And it changed everything for me, including how I priced our services.

So when a coaching client tells me she’s fully booked but financially unstable, I have a specific sequence that we walk through to secure her spot on payroll.

Here’s the breakdown:

Expenses

Not all expenses are fixed. Some are habits, like the subscription that made sense two years ago, or a vendor relationship that hasn’t been renegotiated. Soft costs accumulate quietly. This is a good place to start because it is the one place you have immediate control.

Payroll

I covered payroll ratios in Issues 3 and 5. For a boutique studio with a teaching team, payroll and instructor costs should max out at 40% of gross revenue. If you are above that range, a painful but necessary shift needs to happen.

Rent

And this is where it gets hard. Industry benchmarks for boutique fitness put rent at under 15% to 20% of gross revenue. When your lease runs above that threshold, it can hamstring you for years. Unfortunately, I have been there.

In this case, the only real lever is revenue.

Pricing

Many studio owners set rates by what the studio down the street charges. But competitors are increasingly made up of private equity and well-funded franchise networks. Austin is filled with them. Those studios offer rates that reflect their overhead, not mine. Benchmarking against them is a trap. An independent studio simply cannot compete with pricing that reflects a regional or national budget.

So I recommend a different exercise: pricing based on your overhead and owner pay. This is a completely different exercise than benchmarking against competitors. And for most studio owners, the number it produces can lead to sticker shock.

But there is a way to get there. I’ve done it myself many, many times, and I’ve stepped others through dramatic changes as well. So if you’re struggling to get yourself onto payroll consistently, take heart.

This summer, I reworked Somaspace’s pricing from a new perspective. I let our expenses get very lean, took a hard look at occupancy costs and built in a payroll budget to accommodate a teacher’s well-earned pay raise. Maybe I’ll get one, too.

I’ll share my methodology next week, including the revenue target I arrived at and the research behind it.

We’re nearing our busy season in Austin, and that’s always a good time to look at pricing. If you’re there, too, let me know how it’s looking.

-Amanda

I counted every pickle in a five-gallon jar at the start and end of each shift. It was 1992. The glass jar sat atop the concessions counter at our dated, small-town movie theater, and it was my job to know exactly how many pickles were in it.

I was 16. I made $4.25 an hour. And like every other teenager in the world, I did not see the point.

My responsibilities were simple. At the start of every shift, I counted everything and wrote it down. The cups and popcorn buckets. The hotdog buns. The Jolly Ranchers. And of course those pickles.

At the end of every shift, I counted again. The difference between the two numbers ideally matched what we sold. I then reconciled the inventory against the cash in the drawer. If they didn’t match, I counted again or found out why.

Unofficially, I became the person responsible for closing out the register and signing off on inventory at the end of my shift. Training was informal, and I had no title for it. But I took it seriously.

What strikes me now, more than 30 years later, is how directly that work translates to what I do in my boutique studio every day. We provide a service, and that service is paid for by a client. The teacher is then paid. Overhead is covered. Every hour sold has to be accounted for.

This is where some studios struggle. In my experience, it’s rarely the teaching that’s the problem. It’s the counting. Who bought what, when, whether any of it is still owed. Whether the month-end numbers are telling an honest story.

Like the concession stand’s pickle, candy case and cash drawer, a boutique studio has packages, contracts and payroll obligations. Plus it has that bank account that has to line up at the end of the month. Kind of like my pen-and-paper inventory sheet. The math may be more complex, but the discipline is exactly the same.

If you are in the early days of studio ownership and you feel underprepared, think back to the job that seems unrelated to your studio work. The one where you counted things, tracked things, handled money, kept a space running, served someone who was hard to please or showed up when you did not feel like it. The fundamentals from that job are the same ones this work requires.

At 16, my concessions job didn’t feel useful at all. What’s the lesson in counting pickles? But as it turns out, I was learning to close the register.

If you had a minimum wage job and still call upon the skills it taught you, I would love to hear about it.

-Amanda

Our studio manager gave notice on a Monday. By Wednesday, I had decided not to replace her role.

Of course I’m disappointed. I love this person dearly, and over the past two years, she has assisted me with documenting every operational detail of my studio. But despite my disappointment, I am genuinely excited for her future.

Still, the prevailing reaction when a right-hand team member leaves is usually panic. But not me, not this time. Rather than anxiety, I feel opportunity.

This is partly due to having been around this block a few times. Resignations are a normal and natural part of the business lifecycle. In the past, I took them personally and left the meeting deeply gutted. But it’s different these days.

All of this happened nearly three weeks ago, and we have just two more days together.

In the time since her notice, we built an abbreviated, instructor-specific SOP from a longer one, created QR codes for opening and closing duties, shift-end tasks and late cancellations, held a team meeting that went better than expected and coached our instructors on using the app for client management.

The transition is well underway. It turns out to be a smaller effort than anticipated because everyone is leaning in together.

That result is not nothing. It is the result of teamwork: an old-fashioned notion in this era of AI-generated employees and volume-happy private equity studios.

It is also the thing that makes a studio like mine different from many of the new ones cropping up around Austin.

The part I have been circling around

Our Q2 numbers told part of the story. The other part is this: my studio is in a deliberate evolution. Not a response, and not a retreat. Rather, I’ve made an intentional decision built on an honest read of what is happening in this industry and the climate Somaspace was built for.

The boutique fitness market is being reshaped by private equity at a scale most independent studio owners are starting to feel. Studios that have been lean for years are being outspent on marketing, facilities and the appearance of scale.

The instinct is to compete on those terms. I am choosing not to.

The decisions being made at Somaspace right now require patience and a willingness to move differently than the market expects. But we’ve always been an outlier. And in all honesty, the next steps pass my gut-check.

The insight brought by a resignation

Before our studio manager resigned, we had already started moving the desk off the desk and into the studio, particularly for our intro clients.

The conversations that came from that shift were different. An instructor converting an intro client to a long-term pricing option is different from a follow-up from the front desk. Moving this conversation back to the instructor is a natural next step, as that’s where the relationship begins.

This is not a new idea. Many studios still operate this way, and it’s how Somaspace ran things from 2015-2022.

So why did we make a shift in 2022? The desk role grew largely from my desire for more support. It gave me much-needed space to host more GYROTONIC® coursework and build a studio coaching business. It also provided the simple luxury of help. Help with all the things: process documentation, team coverage, client management and just being my eyes-and-ears when I’m off-site.

But it also created a distance between the instructor and client. It detracted from our high-touch approach. And our instructors became increasingly oblivious of the actions needed to ensure their paycheck.

Redistributing those responsibilities is allowing us to course-correct. And with the admin payroll burden removed, it’ll help our margins considerably, too.

For the studio just starting out

If you’re in the early days of studio ownership with no front desk, I understand exactly what your days look like. You are doing everything: teaching, following up, scheduling, checking clients out, answering texts.

Most people treat this as a phase to outgrow as quickly as possible. But after 17 years of trial and error, I say stay the course. It might just be the best model for financial sustainability.

That’s all for this week. We’ll see what the next one brings.

If you found this content valuable, please consider following me on Substack, liking my article, sharing it on social media or forwarding to a friend.

-Amanda

Every quarter, I close the books and sit with three categories: what worked, what didn’t and what is outside my control.

Q2 had something in all three.

The good

Going into Q2, we had a specific goal: convert five package clients to 12-month contracts before June 30. We hit it. Overall package client count dropped by ten, but five of those ten converted to contracts. The other five represent genuine attrition: clients who stepped away for summer or a move, and one who ghosted.

The contract conversions matter more than the raw number suggests. Package clients pay when they buy. Contract clients pay every month. Five clients moving from one model to the other is a structural improvement, not just a retention win.

The bad

Leads held steady from Q1. Intros sold dropped by 50%.

Before making assumptions, I had to ask a few other questions first. Are we capturing leads that are actually spam? Are our automations stale? Is it even easy to purchase an intro from us?

That gap between Q1 and Q2: the same number of people expressed interest, but only half as many purchased an intro. This tells me the problem is in the transition from lead to new client, not in how we are finding people. A lead who does not convert is not a lost client (yet.) She is still a lead, ideally one conversation away from coming onboard.

Intro-to-long-term conversion was also down sharply. Upon learning this, I leaned into a specific adjustment I had been considering for a while.

At Somaspace, we moved client management and sales to a front desk role in late 2023. So our front desk has been closely associated with the sales process since that time: following up on leads, presenting packages, closing and scheduling.

But our front desk does not teach and is not present on the floor where the actual experience happens. An initial sales conversation coming from someone other than the teacher can land as abrupt, no matter how well-scripted.

The new model shifts those intro-period sales interactions toward the teachers. Connection before commerce. A teacher who is aware of a new client, who asks how the first session felt, what they are hoping to work on, whether they have questions, is having a different conversation than a post-session sales pitch from the desk. The relationship starts first. The pricing conversation follows.

It is too early to know if it is working. I will report back in Q3.

The ugly

Gross revenue was down approximately 14% compared to the same quarter last year.

Despite the immediate anxiety it produced, that number deserves context.

Consumer sentiment in the United States fell to its lowest point on record in April 2026, according to the University of Michigan Consumer Sentiment Index. That’s below the levels recorded during the 2008 financial crisis.

Boutique fitness is being squeezed from both ends: budget gyms are picking up price-sensitive clients while high-end clubs are capturing the clients who want to spend. The middle, where most independent studios operate, is feeling it.

According to Bain and Company’s spring 2026 luxury market study, bookings for dining, leisure and entertainment are up over 30% this year. People aren’t spending less. They are spending differently, and this quarter they spent it on vacation rather than their standing Tuesday session.

A 14% revenue drop is not a small number. It is also not the same story as losing 14% of your clients. Our active roster is largely intact. The revenue drop is a combination of slower new client conversion, seasonal attrition and an external spending environment that is genuinely difficult for premium service businesses.

I chose to not panic. I looked at the data, compared it to Q1 and asked what was mine to solve and what was not.

What I actually pull for a quarterly review

• Gross revenue, month by month, compared to the same quarter last year

• Total active clients by the definition I described in the last issue (How Many Clients Do You Actually Have?)

• Package holders versus contract clients

• Leads in, intros sold, conversions to a long-term option

• Payroll as a percentage of revenue

• Operating expenses as a percentage of revenue

Those six numbers tell most of the story. The rest is context. You can build a simple version of this in a spreadsheet or pull it from your scheduling software reports. It does not need to be complicated to be useful.

My takeaway

Q2 was instructive. The numbers confirmed some things I have been watching for a while about where this industry is heading and what that means for studios like mine. That is a longer conversation, and I am already having it with myself. More on that later.

If something here was useful, send it to a studio owner who could use it.

More on the question I am sitting with soon.

-Amanda

Most studio owners know how many sessions are on the schedule, and we generally have an accurate idea of utilization. But active clients? That’s a nebulous, changeable number depending on how you define it.

Three ways to count

Attendance is the easiest number to pull from most scheduling software: unique clients who showed up in a given period. Unfiltered, this will include intro clients, a client’s sister visiting from Vermont, and prospects whose relationship with the studio is one conversation away from being over. Attendance is a useful marketing metric. But it’s not a reliable picture of your client base.

Subscribers or members is the next easiest report; essentially, clients on autopay. This is a cleaner number for predicting cash flow, but it excludes a meaningful category of clients who simply prefer packages over contracts. A client on her third consecutive 10-pack, booking the same Tuesday and Thursday slots for two years, is not in your membership count. But she is absolutely an active client.

Then there is the category most scheduling software cannot surface for you at all.

The clients your software misses

We have a couple of drop-in class clients at Somaspace who hold standing reservations, average 4 sessions per month and have been with us for over a decade. They do not hold contracts. They do not buy packages. They are not in the subscriber count. They appear in reports as drop-in clients, which sounds transient.

They are anything but.

When I calculate our active client count, I include them. That means a small amount of manual work, cross-referencing attendance patterns with what I actually know about how these clients interact with the studio. It is not complicated, but it requires looking past the report.

How the client interacts, not just how they pay

What most owners miss when they count clients is the behavioral dimension. A steady 10-pack client who renews consistently, holds a standing time and has been coming for three years is as embedded in your business as any contract holder. A drop-in client with a decade of consistent attendance is more stable than a new member who signed a 12-month contract last month.

The question is not which pricing option they prefer. The question is whether this client has a genuine, recurring relationship with your studio.

That question requires knowing your clients well enough to answer it. The studios where owners (or their managers) can do that tend to be the ones where clients stay for ten+ years.

Pull your active client count this week, however your software defines it. Then ask whether that definition captures how those clients actually interact with your business.

The number might be smaller than you expected. Or it might include people your software would never have flagged.

Would love to hear what you find.

-Amanda

It’s July. If you’re a studio owner, you know what that means.

Your schedule likely has gaps that were not there in April. The same clients who waitlisted in January are in Italy, on the coast, at the lake, or wherever people go for the month when they have that option. The studio is quieter. The energy is different. And somewhere in the back of your mind, anxiety is building.

Over the years, I have experimented with closures, rate adjustments and scheduling changes to minimize the impact of a slow season. Since COVID, summers in my studio have become increasingly quiet. In Texas, it’s hot as blazes, and many of our clients have second homes or family in cooler parts of the country. So they leave for a month or two, returning in late August or after Labor Day.

Last year, we experimented with closing for two weeks: the week of Christmas and the week of July 4th. In both instances, payroll was significantly reduced, but hard costs like rent, software and insurance remained. The July closure in particular was confusing for clients. So we nixed that this year.

Approximately 65% of our revenue comes from 12-month contracts. In the months leading up to mid-summer, this source of recurring revenue is the very definition of financial stability. But come July, it falters. Steady clients clear their schedules to leave town.

I built freeze provisions into my 12-month contracts because I know what to expect. A client who has to pay through a monthlong vacation will resent doing so. A client who can pause while traveling and come back to their usual schedule and fees typically comes back. Freezes are still the right call in my book.

But the right call does not make July’s numbers look better. The freeze stops the client’s payment. But it doesn’t stop those hard costs. My teachers are on flat hourly rates, and my front desk is salaried. Payroll lightens slightly when sessions thin out, but not enough to offset what the fixed costs keep taking.

The takeaway is not that closing is wrong. The takeaway is that the bulk of your costs are not variable, and they continue to stack up in July in a way that feels like a downward trend even though it’s just seasonal.

This July, we didn’t close. Our teachers are thoughtfully staggering their vacations. Clients are out in the world enjoying their families. This is the part of studio ownership that requires a plan and the patience to see it through. So I’m experimenting with new ideas to ease the pinch of our summer slowdown.

Here’s what I’m doing:

• I’m refining rates and rethinking our offer suite:

  • We don’t discount for summer, as I believe it trains clients to wait for one. It also opens the door to the upside-down payroll ratio I covered in-depth in Issue #5, About That Payroll Ratio….

  • But I do refine our rates based on financials from Q1 and Q2. And in our case, it looks like this:

    • Slight reduction for our semi-private group classes

    • Slight increase for our private appointments

• We’re starting our win-back outreach now, not in September:

  • The window where a lapsed client is still thinking about returning closes faster than you realize. For us, late July/early August is the right moment to prebook them for a post-summer return.

  • I’ve organized multiple segments of lapsed clients based on method, service and lifetime value, each set to receive a unique message and return offer.

• I filled the downtime with actual downtime and vision planning:

  • I took a few days off and celebrated my 50th birthday on Grand Cayman.

  • I revised existing job descriptions and posted them. I’m anticipating needing one or two new teachers this fall.

  • I’m organizing my teacher training calendar. I like to draft it a year out.

  • I’m scrutinizing my KPIs and our expenses. The privates-based studio world is changing rapidly, and I’m in the early stages of making foundational changes to my business.

  • And on that note, I’m nit-picking my studio’s revised business plan. We have a major evolution planned at the start of 2027.

July is slow, but it’s usually not the start of a downward trend. It’s a seasonal slump. But it’s also an invitation to breathe, to catch up on what's been neglected and to plan for what comes next.

So if you have some extra time, enjoy a few personal days, then do some planning. The efforts we make in the next three weeks can help determine how September feels.

Amanda

You signed a lease. Bought equipment. Sold your first package. Made a few rent payments.

Somewhere in that sequence, you stopped being just a teacher and became a business owner. But you probably didn’t feel it happen because you were too busy.

Most teachers-turned-owners run their studios from the wrong seat for years. I know I did. Not because we are careless, but because we come to this role through a deep passion for our vocation.

In my earliest years, charging what I needed felt dirty and incongruent with being “of service.” That mindset eventually came back to bite me and inspired a complete overhaul of my studio.

Yet, I still see a resistance to the business side of teaching.

A teacher who worked with me for years once told me, not long before she left, that the studio had become too “well-oiled.” It wasn’t intended as a compliment. And even though I knew better, it stung.

But business isn’t personal. To serve a community of clients over the long term, the math has to math. The systems have to provide structure and boundaries. What would really sting is closing a failing business.

The job that came with the lease

Teaching is our first role. It’s our technical work. We’re well trained for it and, over time, we build a loyal clientele. Opening a studio is a natural next step.

But business ownership is a distinct job from running a studio. Most of us don’t have a business degree. And for a while, that’s quite alright.

Once we open our own space, our secondary role becomes everything else. Pricing decisions. Scheduling decisions. Financial decisions. The systems that make the studio run while you’re teaching or living your life. The reporting that tells you whether the business is working well enough to pay the overhead and keep you employed.

Most new studio owners do the teaching part very well and avoid the business part as long as possible.

And often, from the outside, the business part looks easy. Just sell a 10-pack and keep clients scheduled. Rent gets paid. Income is protected. No well-oiled systems needed here.

If only.

Feel versus formula

As teachers, we often make decisions based on gut instinct. What seems fair. What the client can afford. What will keep things running smoothly.

Business owners make decisions based on math. What the business needs to charge to cover costs and earn an income. What the numbers require, regardless of what feels comfortable.

Neither is wrong. But when you make owner decisions from the teacher seat, the math suffers quietly. Until it doesn’t.

You’ve been in the teacher seat when you priced a package based on what felt reasonable rather than what the studio needed to bring in. When you kept a client at an old rate because the conversation felt too hard. When you added a service to the schedule because you love teaching it, not because the revenue justified it. When you hired someone because they were available and you needed help, then paid whatever they asked for because you were grateful they said yes.

These are not failures. They are what happens when a skilled practitioner opens a business without switching seats.

Where to start, regardless of where you are

You don’t need to stop teaching. I still teach, and most studio owners I work with continue to teach. Working with clients keeps you credible and connected to what you are selling.

But what you must do is carve out protected time to work on the business rather than in it. Even one hour a week spent in the owner seat changes the decisions you make.

Pick one day and one hour of that day, block your calendar.

Make a cup of tea and pull a report from your scheduling software.

Look at attendance. Utilization. Unearned revenue. Retention. Sit with it and let it tell you something. If you don’t know what to look for, ask a colleague or message me.

The issues that will come up are specific to your stage of business. In the earliest days, the biggest question is: what does the studio need to earn from day one? Down the road, the questions become more complex and often involve the livelihood of other teachers.

All the more reason to begin sharpening your business lens from the start.

Wherever you are in the arc, it’s never too early to see your studio as a business. Because well-oiled is not a corporate thing. It’s a solvency thing.

I’d love to hear from you if any of this landed. Or please share with someone who could use some direction.

-Amanda

My studio’s payroll ceiling is 40% of gross revenue. Too much beyond that and I feel the squeeze every pay period. Too far below it, and my team is most certainly undervalued. So there’s a sweet spot. 40% is mine.

I outlined my basic approach to calculating this percentage in a previous issue (Fully Staff. Still Squeezed).

But of course the devil is in the details. So here are the specific steps I take to calculating my payroll ratio.

Gather the following using an average across a period of time, like a quarter or previous year.

• Gross revenue: Total monthly income from all services before any expenses. Use an average across three or more recent months for a more stable read.

• Payroll: Total payroll for teachers, front desk and yourself, whether W-2 or 1099. Include fees and taxes.

• Operating expenses: Add up monthly lease plus utilities, insurance, software, supplies, merchant fees and anything else that runs the business month to month.

To find your payroll ratio, divide your total payroll by your gross revenue.

When looking at payroll ratios, I measure against four thresholds.

• Under 30%: A ratio this low may mean you are undervaluing your staff, not paying yourself or both.

• 30% to 40%: Ideal city. The business has margin and the payroll is not driving the decisions.

• 40% to 50%: This is a dangerous range as revenue growth alone isn’t likely to fix it.

• Above 50%: This is red flag territory and usually requires a combination of structural changes across the business.

These are just guides. No one studio is perfect. But if you’re way upside down and teetering toward the 50% mark, there is some work to do.

In my coaching practice, I have assisted studio owners with restructuring payroll. So it’s possible! Yes it’s a terrifying notion, but when it’s needed, it’s needed.

One of the most effective structural moves I have used with studios in the 40%+ arena involves how teachers are classified and compensated. Reclassifying instructors is more nuanced than a pay reduction and more durable in practice. It is also the most complex piece of this conversation.

I’ll cover that in an upcoming article.

Until then, take a peek at your payroll ratio and let me know what you find.

-Amanda

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A new client quit on us last month.

She emailed us with a list of reasons and requested a refund on her unused sessions.

Her complaints were specific.

I read them, sat with them and called her.

Not emailed. Called.

A complaint sent by email is almost always an invitation to a conversation the person did not know how to start. If you reply in kind, you have accepted the format. You’ll then spend three emails saying what one phone call resolves in five minutes. And you will lose ground in every exchange.

The call went well. She was polite but direct. I listened, and some of what she had to say was fair. None of it was personal. And by the end, I understood one thing clearly: she is not the right client for our studio. Not every client is.

The refund calculation was simple. She had purchased a 10-pack, using four sessions of it. I took our drop-in private rate and multiplied it by the four sessions she had attended. That is what she owed for the time she used. I refunded the difference.

The logic: the discount in a 10-pack is the reward for committing to the volume. If a client exits that commitment early, the sessions already used revert to drop-in pricing. She paid a fair rate for what she received and got the rest back. No one leaves feeling taken advantage of.

But the math wasn’t the hard part. What’s difficult was resisting the urge to hold on to her business.

A client who is not a good fit will cost you more than the refund. She takes a time that belongs to someone who will stay. She could bring friction into the room. And if she stays unhappy, she will eventually leave (and usually not quietly).

Letting her go gracefully, with money back and a warm good-bye, costs less than keeping her.

This understanding does not come easily in the early years. The revenue feels too important to give back, and the complaints feel too personal. But the math is usually wrong. A client who was never going to work out is not revenue. It’s a liability you have not yet recognized.

The next day, I followed up with her, replying to her original email. I expressed my gratitude for giving us a try, and I recommended studios with a different approach and equipment better suited to her preferences. Her reply was immediate, warm and gracious.

And this week, her spot was filled by a promising new client.

Amanda

P.S. Next week, paid subscribers receive the payroll diagnostic calculator referenced in my last article. Subscribe below if you haven’t already.

There is one ratio that will tell you more about your studio’s financial health than almost anything else on your books: your total payroll as a percentage of gross revenue.

This number has a ceiling. For an appointment-based business, that ceiling is 40%. Below it, the business has room to breathe. But above it, you’ll feel the squeeze every time you run payroll.

Three buckets, one number

Most of us miscalculate our payroll expense because we only count what we pay our teachers.

Payroll has three components: teacher pay, front desk pay and owner pay. All three belong in the calculation.

Leaving out owner compensation is the most common mistake. Maybe you can’t afford to pay yourself once all of the other bills are paid (common). Or maybe you don’t need the money (rarer). Either way, it makes the ratio look manageable when it is not. You are still a cost to the business. If you are not counting yourself, you are not reading your own numbers accurately.

The 3x rule

I have a secondary benchmark for payroll health: each teacher on your roster should generate at least three times their own compensation in revenue. If a teacher earns $3,000 a month, the sessions they teach should produce at least $9,000 in monthly revenue. This is true for hourly teachers and especially so if they are on salary.

Most studios have at least one teacher who is not hitting that threshold. Not that she is necessarily underperforming in the room. But the economics are out of alignment, and it compounds over time.

Admin or front desk pay is different. This is a non-revenue earning role so you can’t use the same benchmark, but in many studios of a certain size, it’s indispensable for smooth operations.

Why studios end up over the ceiling

The payroll problem rarely starts with a bad decision. It usually starts with a desperate one.

Here’s a common scenario: new clients are rolling in but you’re short-staffed. A good teacher became available, so you paid what she asked. She’s a dream with your clients, and her schedule is now waitlisted. She asks for a raise. But it’s financially out of reach for you, so she leaves. You attempt to absorb the vacancy among your existing team but end up rehiring at the same (or higher) rate. And the ratio climbs a little higher.

I’ve done it myself at least a dozen times. It feels good to reward someone who thrives in your studio. But it’s not a happy ending. There is a ceiling on what you can pay, no matter how talented and popular that teacher is.

Getting the ratio back under the ceiling is one of the most complex problems I have worked through in my studio. It’s gut-wrenching, borderline humiliating and calls into question every dream I’ve had as a studio owner. It’s also the most grueling-yet-necessary work I provide for my coaching clients. There is no single lever. But there are specific moves, in a specific order, that bring the number back to range without gutting the team.

What’s coming

This is the first of two articles on payroll. In two weeks, paid subscribers will receive a diagnostic calculator that calculates your ratio across all three buckets, benchmarks your number against the thresholds I use with coaching clients and shows you specifically where the pressure is coming from.

If you want to run the math now, it is straightforward: add up everything you paid in instructor payroll, admin payroll and your own compensation last month. Divide by last month’s gross revenue. That percentage is where you stand.

Paid subscribers can upgrade below. The calculator goes out June 12.

Amanda

P.S. If you just opened a studio and work solo, this isn’t your math today. But I have something coming for you in Issue 6.

Here is a scenario I have walked through with nearly every studio owner I work with.

Client A holds three sessions per week. In a 50-week year that is 150 sessions on the books. But by the end of the year, the client’s actual attendance averages 1.25 sessions per week, or 62 sessions attended.

The gap is 88 sessions. At $100 per session, that is $8,800 in unrealized revenue. From one client. In one year.

Multiply that across your roster. The schedule is waitlisted on Monday but by Friday, it looks like Swiss cheese. The industry calls this a utilization problem. I call it a cash flow problem that hides in plain sight.

Why packages make it worse

When a client buys a session package, two things happen that feel fine in the moment:

1. Cash comes in up front.

2. The client books out on your schedule.

It feels like revenue and full utilization. But it’s not. That money is unearned revenue, and it’s a liability until the sessions are delivered.

Back to Client A: despite the three-session commitment, the client has a last-minute trip, a personal appointment she forgot about, a sick kid, etc. She cancels. Her three weekly reservations dwindle to a much lower average, and her 10-pack is drawn down over two months. The new package purchase is delayed, creating a financially lumpy month and a source of revenue you really can’t rely on.

Adding to the issue, most studios treat that upfront cash as available income and pay expenses from it. Smart operators put it in a drip account and release it as sessions are earned. The difference shows up at payroll, and that’s where it can get painful.

What a recurring model actually solves

Client B is on a fixed monthly auto-pay and holds the same number of weekly appointments. Life still happens and she misses some sessions, but this time it’s different. She’s on auto-pay, which means the studio’s cash flow is tied to the schedule she committed to rather than her actual attendance. And as a result, she usually reschedules rather than cancels.

Utilization is steady.

Cash flow, even steadier.

It works because you get paid on the same day each month, whether the client keeps their weekly sessions or not. They pay for the reservation. Revenue becomes something you can plan around. The renewal conversation disappears entirely.

This is not about making the studio harder to leave. It is about protecting your income, decoupling it from attendance variance. Attendance will always vary. Life happens. The client who came three times a week in January might come once in March. With a package model, that shift hits your cash flow directly. With a recurring model, it does not.

A note worth making: the recurring model has its own friction points on rollout. Client vacations, extended illness and months with an extra week all create questions a package model never had to answer. But none of them are dealbreakers. A contract with clearly defined freeze terms handles most of them.

Where to start

Pull your active client list. For each recurring client, find two numbers: how many sessions per week they hold and how many they actually attend. The ratio of attended-to-available is your utilization rate. The gap between the two is your unrealized revenue.

That data tells you the revenue you actually made versus the revenue you expected to make. The gap is usually significant. And if I’ve learned anything in my 17 years as a studio owner, your bank account will reflect it long before you know where to look.

Run the numbers first. Then reply and tell me what you find.

Thank you for reading!

Amanda

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I am writing this for boutique studio owners and service-based professionals who charge for their time. Personal trainers, physical therapists, acupuncturists and concierge physicians. If your business runs on your hours, this is for you.

I write about the operational and financial problems that show up in these businesses. The problems you probably didn’t train for.

I opened my boutique studio in Austin in 2009, and I’m still running it today. So the advice here comes from someone who is still on the floor, leads a team of teaching professionals, and oversees the desk.

The studios I work with come to me when they’re doing just okay. They are busy. The schedule is full and the clients are happy. But money is tight. Their team isn’t bought in, and it’s starting to show. Somewhere between a full schedule, the break room, and the bank account, something is off kilter.

It is almost always one of three things:

• a cash flow model that depends on clients showing up at the rate they committed to,

• a team that gets the job done so long as it’s on their terms, or

• a payroll ratio that has quietly climbed past the point where the numbers work.

Often it’s a bit of all three.

None of these are motivation problems. They are structural. And structural problems have specific causes and specific fixes. Mindset may matter, but that’s after the leaks are fixed.

That is what I am writing about. I aim to be here every Thursday. And if you have a specific problem that needs addressing, I’d love to hear from you.

Amanda

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