Unusual Yoga Studio Business Model With Unusual Problem

[DouglasRThompson]

My studio has a rather unique business model: I charge my teachers monthly rent to use the studio. The more classes they teach, the more rent they pay. Their rent pays for the rental cost of the space, the utilities, and some advertising. It's kind of like a co-op, except I maintain control.

The students, when they sign up for a class, pay their checks to the teacher! This gives the teachers an incentive to do some marketing. The more students each teacher gets, the more money they make. And, the best part is, I don't have to handle money, maintain a payroll, hire an accountant, send out W-2 forms, etc.

While this is all well and good, I do have a unique problem: I would like to begin offering on-line registration from my website, and let the students begin using credit cards to make their payment.

Does anyone know a way to do this without having each teacher create a Merchant's account? I would like this to be easy for my clients, as well as easy for my teachers. And if I am the only one with a Merchant's account, then I have the burden of keeping track of money, distributing it, and I'm not sure what the resulting tax concequences might be.

Ideas anyone?

Namaste,
Douglas

[Administrator]

I'm not really sure why you want people to be able to pay you directly.

This creates massive problems for your model.

It now involves you in tracking issues and dividing up the pie.

You also have tax issues and merchant account fees.

Perhaps you can explain better why you want to be able to charge people
directly.

And if each teacher has their own merchant account, they are all going to need their own equipment.

Perhaps you can explain it better.

Peace.

Harlan

[DouglasRThompson]

Thank you. You paraphrased my concerns about tax issues, etc.

The reason I would like to begin offering on-line payments is that based on what I have learned talking to other studio owners, this tends to increase business. There are so many people that want to use credit cards, and if they can register and pay at the same time they read about upcoming sessions on the website, they will more likely do so.

Once you give someone time to think about things, they often change their minds. The idea is, "Strike while the iron is hot."

Currently, almost nobody pre-registers for classes, even though we mail out class schedules with registration forms, and have registration forms on our website. They simply show up the first week of class (or even the second week,) and register then. The only people that pre-register are new students.

This makes it hard to do any planning.

And this is why I am trying to find a simple solution that will allow students to register on-line and pay via credit cards.

Thanks in advance for your thoughts.

Be @ Peace,
Douglas

[Administrator]

OK, here are my thoughts. Remember, I am not a lawyer nor do I play one on TV.

In fact, we don't even own a TV.

But that's another story.

Here's the coming trend...

Yoga studios are going to face massive competition.

As our good friend Jonathan Field revealed...the biggest issue facing
yoga studios is...retention.

Jonathan has shown that most yoga studios retain only 18% of their clients from year to year.

Ouch.

That means constantly spending time trying to acquire new clients.

Double ouch.

Or, yoga studios can study another market which is much more successful.

Health clubs.

They get paid whether you show up or not.

In fact, some clubs even prefer people not show up - but keep paying.

Smart yoga studios are moving towards continuity pay.

So if I were a studio owner, I'd be concerned with two things:

Number one: Getting more students to join continuity payments. That insures a regular income.

Number two: Because I'm concerned with continuity and retention, I would pay according to attendance.

You as studio owner get to keep the difference between those who pay and those who show up.

Shanti.

Harlan

[yogalicia]

Hi - I recomment Paypal. It is easy to set up and each teacher can have payments go directly to them via their email addresses. If you have a studio website with teacher profiles, you could link their emails right there for clients to easily make payments. Users can use credit, debit and also e-checks right from their bank accounts.