So you want to start your own pilates studio? As a pilates enthusiast, you already know the many benefits this form of exercise offers. Pilates strengthens the core, improves flexibility and posture, and helps prevent injury.
With the rising popularity of pilates, starting a studio can be a rewarding and profitable business venture. However, like any new business, there are important legal and regulatory requirements to consider. This guide will walk you through the key steps and considerations for legally and successfully starting your own pilates studio.
Choosing a Business Structure
One of the first decisions you need to make is choosing a business structure for your pilates studio. The business structure you choose will impact taxes, liability, and other legal and financial factors. Here are some common options to consider:
Sole Proprietorship
A sole proprietorship is the simplest business structure. There is no legal distinction between you and the business. While this offers simplicity and flexibility, you will be personally liable for any debts, lawsuits, or claims against the business. Sole proprietorships are best suited for very small, low-risk businesses.
Partnership
A partnership involves two or more people sharing ownership of a business. There are two main types: general partnerships and limited partnerships. In a general partnership, partners manage the business and share personal liability. A limited partnership designates general partners who operate the business and limited partners who have financial liability limited to their investment. Partnerships can provide more resources than a sole proprietorship.
Limited Liability Company (LLC)
An LLC offers personal liability protection like a corporation with the tax simplicity of a sole proprietorship or partnership. Profits and losses pass through to the owners, avoiding double taxation. LLCs require more formal documentation and record-keeping than sole proprietorships. Overall, an LLC is a popular choice for small business owners seeking liability protection without the complexity of a corporation.
Corporation
A corporation is a legal entity separate from its owners. Shareholders have limited liability, but corporations require extensive record-keeping and are subject to “double taxation” with corporate and personal taxes. Corporations are better suited for larger, more complex businesses.
For a small pilates studio, a sole proprietorship, partnership, or LLC are most appropriate. Consult a lawyer or account to determine the best structure based on your specific business plans and situation.
Registering Your Business
Once you select a business structure, you will need to take steps to formally register and establish your business:
- Choose a business name. Your pilates studio’s name should be unique and reflect your brand identity. Check your state’s business name database to ensure it is not already in use.
- File for an Employer Identification Number (EIN). This unique number identifies your business to state and federal agencies. It is used like a personal social security number.
- Apply for licenses and permits. Each state and municipality has its own requirements. Common permits include a sales tax permit and a business license. Zoning permits may also be necessary if clients will be coming to your studio location.
- Register your business. Finally, complete the registration process under your chosen business structure. For an LLC, file Articles of Organization. For a corporation, file Articles of Incorporation.
Zoning and Location Considerations
If you will operate out of a physical studio space, an important early step is determining if the location and building comply with zoning regulations. Be sure to:
- Check municipal zoning rules for permitted property uses. You may need a special permit to operate a pilates studio.
- Ensure there is adequate parking available at the location.
- Look for a building suited for exercise with enough studio space, high ceilings, and appropriate flooring.
- Comply with any state and local building codes and accessibility requirements.
Consider traffic patterns and visibility of the studio location as well. Finding a convenient, accessible, and appropriately zoned space is key for attracting clients.
Insurance Needs
Insurance coverage is essential to protect your new business. Recommended insurance policies include:
- General liability insurance. This covers any third-party bodily injury or property damage claims that occur in your studio. It protects you in the event of an accident.
- Professional liability insurance. This covers any claims of loss due to a mistake, error, or negligence. It provides protection in case you are sued for not taking appropriate care.
- Property insurance. Insure equipment and other pilates studio property in case of damage or theft. Business interruption insurance can offset lost income if the studio must close for a period.
- Workers’ compensation. Required in most states if you have any employees. This covers medical care and lost wages for any work-related injuries.
Shop around for quotes and customize your policy limits and deductibles. An insurance broker can advise on appropriate coverage.
Equipment Needs
A pilates studio needs specialized equipment to offer clients a full range of pilates exercises. New studios often invest between $10,000-$30,000 in proper pilates equipment such as:
- Reformers
- Cadillac/Trapeze Table
- Chairs
- Barrels
- Springs and other accessories
Consider both budget and your target clientele’s needs when outfitting your studio. Purchase high quality apparatus from reputable pilates equipment suppliers. Be sure to have adequate floor space for the equipment with proper safety margins. You may also want to invest in yoga mats, small props, and storage racks.
Staffing and Payroll
If you plan to hire instructors or other staff, you will take on additional legal obligations as an employer. Key requirements include:
- Complying with state and federal labor laws for minimum wage, overtime, breaks, workplace safety and anti-discrimination.
- Withholding federal, state, and local payroll taxes and withholding Social Security and Medicare taxes.
- Providing workers’ compensation insurance.
- Reporting new hires to the state.
- Filing required returns and forms such as Form W-2, Form 940, and Form 941.
Consider hiring a payroll processing service to handle these complex requirements. Alternatively, thoroughly research employment compliance requirements in your state.
Taxes and Licensing
Running a pilates studio also comes with a variety of tax obligations including:
- Federal taxes – Self-employment taxes, income taxes, and (if applicable) corporate taxes.
- State taxes – State income taxes, franchise taxes, potential sales tax collection and remittance.
- Local taxes – Business licenses, zoning permits, payroll taxes, and gross receipts taxes.
- Industry-specific taxes – Healthcare facilities may pay additional healthcare taxes.
Thoroughly research federal, state and local tax requirements for businesses in your area.
Consider hiring an accountant, at least in the first years, to ensure full compliance. Failing to meet tax obligations can result in penalties and interest charges.
You may also need to obtain specific business licenses:
- State professional or occupational license if required for pilates instructors.
- State sales tax permit to collect and remit sales tax.
- City business license or tax certificate.
- Zoning, building, and health permits.
Studio Policies
Well-crafted studio policies set client expectations, minimize disputes, and protect your business. Policies to consider include:
- Scheduling and cancellation policy – Requirements for appointment scheduling and consequences of late cancellations/no shows. Enforce a cancellation fee.
- Payment terms – When payment is due, acceptable payment methods, and policies for late payments, declined credit cards, etc.
- Studio rules and etiquette – Any expectations for client conduct, attire, hygiene, etc. while at your studio.
- Safety and liability waivers – Forms that release you from liability for client injuries, within limits. Have clients acknowledge studio risks.
- Privacy policy – How you handle and protect client information. Get release to use any testimonials or images.
Publishing clear policies sets expectations. Have clients sign policy acknowledgements and liability waivers. For safety and risk management, consult a lawyer when drafting policies and waiver forms.
Final Steps to Opening
Once you have checked all of the legal and regulatory boxes, here are a few final steps:
- Stock up on any remaining studio supplies – exercise bands, mats, towels, cleaning products, and marketing materials.
- Complete a thorough studio cleaning and safety check.
- Hire and train qualified instructors.
- Plan your grand opening! Promote the event on social media, local sites like Patch or Nextdoor, and with signage and flyers. Offer special deals to attract new clients.
- On opening day, welcome clients with a short tour highlighting your beautiful studio space, top-notch equipment, and enthusiastic instructors.
With careful planning and preparation, you will be ready to achieve your dream of successfully opening your own pilates studio. Stay focused on delivering an excellent client experience, while managing the back-end legal, tax and regulatory responsibilities. If you stay organized and reach out for professional support when needed, your new pilates business will be off to a strong start. Congratulations and good luck!
FAQs
What qualifications and training do I need to open a pilates studio?
While requirements vary by state, most require studio owners and instructors to have comprehensive pilates training and certification through a reputable program. A pilates studio owner does not need to be an instructor, but a strong pilates background is recommended.
How much does it cost to start a pilates studio?
Start-up costs often range from $25,000-$150,000. Key expenses are location rent and build out, specialized equipment, instructor training and insurance. Ongoing costs include rent, payroll, equipment maintenance, taxes and marketing.
What should I name my pilates studio?
Choose a name that reflects your brand identity and conveys a positive, motivating image. Include keywords like “pilates” for SEO. Get creative, but ensure the domain is available. Check state registration databases for name availability.
How can I promote my new pilates studio?
Use social media, search engine optimization, local ads, word-of-mouth and special intro offers to spread the word. Partner with nearby businesses for cross-promotion. Delight clients to generate referrals.
What insurance does a pilates studio need?
A pilates studio should carry general liability, professional liability, and product liability insurance at a minimum. Workers compensation, property insurance, and business interruption insurance are also recommended.
What are common mistakes new pilates studio owners make?
Insufficient startup funding, poor location, buying the wrong equipment, hiring unqualified instructors, underestimating costs, and deficient marketing planning are some big mistakes to avoid.
How can I ensure profitability for my pilates studio?
Focus on retention by providing excellent service and building client relationships. Offer variety and properly train instructors. Optimize appointment scheduling. Start small and reinvest earnings to fuel growth.
