Cash Flow Forecasting for Your Yoga Business

“Cash is king” is a well-known saying. Cash may be considered even more essential right now, as many yoga businesses are feeling more than a pinch of pressure, given the current economic prospects and uncertainty for the future.


Retreats cancelled or postponed, social distancing regulations in place making any physical classes impossible and with no direction as yet as to how things will resume when they do, it is an uneasy time for many. Naturally, some sort of normality will resume at some point – but how much will have changed?

The government have helped the financial situation in the short-term by supporting businesses with employees and the self-employed, but once the handouts dry up, it will be down to studios and teachers to build up their class schedules again. This could take some time.

As a business owner, in times of change, one thing is certain. Understanding the flow of cash in and out of your business is crucial to surviving, as well as feeling financially in control.


What could change?

Even what may seem like negative change initially, will likely also create some positives too. I’ve already heard from lots of studios how their online classes are busier than ever – which just shows the commitment of yogis to their practice and that social distancing rules are not going to get the better of them being able to continue learning.

Here are some of the hurdles that studios could face though:

Yoga students feeling the pinch too

If the economy is set on the fairly gloomy path that is predicted, for a while the general public may not have as much disposable income. Yoga studio membership could be a dispensable item as a means to save money. Particularly for those students that know enough yoga to do their own home practice alongside free YouTube or “Live” videos. Therefore, as a studio owner or yoga teacher, price reviews and promotions may be necessary to entice new and existing students back to class.

Social distancing rules may continue to throw challenges

Social distancing could require smaller classes and more cleaning in-between classes, which could reduce footfall into the studio. This needs to be factored in to pricing too, as a studio may even need to increase prices to make the same profit as before, or think of creating ways to generate more income.

Competition of online classes

The sudden surge of online yoga classes, could also play a part in the decision-making process of a yoga student. If studios and teachers keep up their online schedule as well as return to physical classes – which many will – the choices for a yoga student just opened up dramatically. They can choose to train with any of the best or most highly respected yoga teachers in London, the UK and globally, from the comfort of their own home.

The competition could just have fired up. On the flip side, if you keep up an online class schedule, your audience just got much bigger too.

Of course, many yogis are loyal to their studio and have made solid connections with teachers and students in the classes  – this can’t be taken away. A lot of yogis will be itching to get back to class too and many will be keeping up their practice with paid online classes.

These are unchartered waters and it will take time for the situation to unravel – there is no clear path. However, it is all food for thought and it certainly pays to consider now what could be on the horizon and plan ahead.


Understanding your financial position is the first step

The first step to feeling more in the driving seat of your business, is to understand where you are right now. This can be achieved by looking at historical data and establishing patterns and trends with a view to then forecasting ahead to what the future could hold.

Established yoga studios are likely to have some sort of monthly or quarterly management accounting to understand how their business is functioning financially.

For many independent yoga teachers though, their financial performance monitoring may simply be knowing that there is money in the bank.

Getting to know the detail of your financial figures can make a huge difference to being able to make more educated decisions around pricing, promotion and the future of your business.


Cash flow forecasting for your yoga business

Whether you are a yoga studio or teacher, you can take part in an exercise known as “Cash Flow Forecasting”. If you are established and have filed self-assessment or company tax returns, you may have an understanding of your Profit & Loss Account and Balance Sheet, but not all businesses prepare a regular Cash Flow report.

It is though, one of the most useful reports to have at your disposal, as it gives valuable insight into your business, including where savings can be made (cost cutting) and where opportunities to maximise your income lie. Most importantly it shows if your business is at risk of going under, or if you are cash-rich and therefore can feel confident that you can ride any storm.

The majority of businesses will find that they have some cash available to see them through a slump in activity, but this buffer wont last forever. A Cash Flow Forecast can indicate when the reserves would run out.


How to get started

I Yoga London have prepared a simple Excel template to get you started on creating your own Cash Flow Forecast.

Please note this may not be suitable for larger yoga studios with many different tiers of pricing – although, you could still work with it as a starting point. Also, the template may not provide the complete picture – it is aimed to be a guide. 

Things you will need:

  • Your prices for each type of income. Type being, for example, drop in class, monthly membership.
  • Number of members, per month This is to calculate the total membership income.
    • If you have many tiers of membership, it is ideal to have this per tier, so your figures will be accurate.
  • Number of drop-ins, per month. To calculate income from drop-in.
  • Number of Class Pass users each month.
  • Details of outgoings, such as premises costs, staff wages, cleaning etc
  • Dedicated time to pull this together.

Email to Request Your Cash Flow Forecast Template >


Additional help if required

We have aimed to make the spreadsheet as user friendly as possible, so you can take the reigns and do most of it yourself.  But we recognise that preparing a Cash Flow Forecast isn’t always straightforward and sometimes questions come up.

That is why we are offering some additional support.

If you would like to send your Cash Flow spreadsheet in for review, we can look for any errors and give you steering on what the numbers may be revealing. Don’t worry, everything is 100% confidential and the workbook will only be viewed by me or select people in my team that need to assist.

Alternatively, we have available 10 X 30 minute telephone call slots to help with any questions over the phone.


For help and support, please email hello@iyogalondon.co.uk – we are happy to help you get more insight into the financial future of your yoga business and to help you make more educated decisions during this time of change.