Sunday, September 11, 2011

Designing and Building a Studio

The information and advice I put down here is based on my 9-month travel across the US visiting a variety of Bikram Yoga studios and learning everything I could about building, operating and teaching at a Bikram Yoga Studio. It is also based on our own experience creating and now operating a studio for one year. Other people may have other advice, or design their studio a different way. This is just how we did it. And we have been told ours is the one of the best studios around - in regards to design and room operation.

STEP 1: FINDING GOOD PEOPLE

Even if you know your city like the back of your hand, get yourself a really good commercial real estate agent. We were lucky enough to find one who has bull dog determination and she was able to negotiate for things that we did not even know to ask for. Your agent will be able to provide you with very specific demographic information in the area, and although the swanky shopping area looked really good to us, the demographics showed that the surrounding area did not have the population we needed to support a studio. Our agent found us a building that was perfect – it had no interior supporting structures (meaning no columns in the practice room – this is HUGE), it had a lot of existing material that we could re-purpose for our own needs (like toilets, doors and lights), lots of parking (no parking is a show stopper) and the location was perfect.

Now, there are two ways to go with location. Actually three. The first is to buy a building or land and build to suit. If you have a LOT of cash (or access to money), this can be a great way to go, especially if this is a second career. Because when you are ready to retire, you can sell the yoga business and hold on to the building and charge rent! But know that you will be responsible for maintenance and a lot of up front costs. The second is to lease an existing building and build to suit. This is what we did. We paid for the entire construction, but we got a HUGE discount on monthly rent. We had about $300k upfront costs, but our monthly nut is pretty reasonable. The third option is to work with a new development and have them pay for most of the buildout. Your rent will probably be higher (You will always pay for the buildout cost in the end, know that), but you will have less up front costs to manage. If you do option 2 or 3, make sure in the lease you indicate that the heater, humidifier, mirrors and anything else that you can negotiate for (and that you pay for) is chattel; meaning, you can take it with you when you vacate the property.

When you negotiate for the lease, make sure you consider the CAM (common area maintenance) fees. Although your rent might be stable for 5 or 7 years, your CAM fees can fluctuate wildly, especially if you are the only tenant in a large strip mall. Usually the CAM is shared by all tenants, but if all the other tenants move out, you’re holding the bill for snow removal, lawn maintenance, taxes and insurance. So, look closely at that.

We got a 5-year lease. We wanted a 7-year lease, but we got a lower rent for less time. If you have a common utility meter (we started out with that, but they converted to separate because they could see huge problems thanks to our constantly pointing it out), make sure you establish a good way to split costs.

We had an unoccupied restaurant next to us and I had them put in the lease that they would not rent to a deep fried restaurant. They took it out of the lease, claiming they were assuredly do their best to rent to an upscale, healthy business. We got a deep fried place next door. Now they have been very kind, but the stink of deep fried food is not exactly what you want when you come out of yoga. And BE CAREFUL where you put your ventilation. Luckily we situated our vents as far away from the restaurant as we could, but every now and then, when I open the damper, the scent of fried shrimp can come wafting into the practice room. Damper is immediately closed.

Your real estate agent costs you nothing – she will help you for a full year after you lease to solve any problems with the landlord, and if you’re lucky, she will practice your yoga (give her a six-month unlimited package).

Then find yourself a really great architect and contractor. You can use some people in the Bikram Yoga industry, and that may be great for you. We chose to go local in order to have contacts for maintenance and warranty work. It totally paid off. Our heater went on the fritz just last week over the Labor Day weekend, and we got the machine serviced for free. We interviewed 3 architects, and we chose the woman who did the original work on the building before we moved in (it used to be a grocery store). We could see that she had built a beautiful structure before, and frankly, she listened the most to the vision we wanted to create and she understood what we wanted to do. She built some amazing plans, and really pushed the engineers hard when they either over designed or under designed the room. She had a lot of experience, and she knew the local laws and was able to make a few shortcuts that saved us a lot of money. She also understood that we wanted something beautiful, but that would last and require not a ton of effort to keep clean. So she designed it that way.

We also interviewed 3 contractors and chose the one that could get the work done faster than the others (they were also the least expensive). It ended up taking four weeks longer to build out, but other studio owners tell me that that is pretty good – other studios have gone 4-5 months over schedule.

Oh - and the best help around? A good partner. My husband is a CPA - he is our company's CFO and general sanity checker. His support and balance is invaluable. If your spouse is not your business partner, talk to Lisa Ingle. She and Steve have the best partnership I have seen and they make it look easy. But they have a fabulous strategy that works.

So that’s the first installment – get good help. Next will be the list of must have’s in design.

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