Before You Sign a Studio Lease: Run These Numbers First
Finding a space can make a studio suddenly feel real.
You walk in, picture the equipment, imagine the classes, start thinking about lighting and finishes, and it becomes very easy to fall in love with the space before asking whether the business inside it actually works.
But a beautiful studio with the wrong economics is still a bad business.
Before signing a lease, I would work backwards from a few basic numbers.
1. What is your real usable capacity?
Square footage alone tells you very little.
A 1,500 sq. ft. space does not mean you have 1,500 sq. ft. available for clients.
You may need reception, bathrooms, storage, circulation space, changing areas, mechanical rooms and possibly treatment or staff areas.
What remains is your revenue-producing space.
Then ask:
How many clients can comfortably fit into the actual class area?
Not the absolute maximum.
The number that still allows the experience to feel like the studio you want to create.
If your concept requires 20 people per class to work financially but the room comfortably fits 12, you have a problem before you've even opened.
2. What percentage of revenue will the rent consume?
This is where an attractive location can become dangerous.
Don't ask only:
“Can I afford this rent?”
Ask:
“What level of monthly revenue does this rent require?”
Your rent exists alongside payroll, software, insurance, utilities, cleaning, merchant fees, maintenance, marketing, supplies and all the small operating expenses that accumulate once the doors open.
Build three scenarios before committing:
Conservative.
Expected.
Strong.
If the business only becomes comfortable in the strong scenario, I would question the space.
A lease shouldn't require everything to go right.
3. What happens when the studio isn't full?
This may be the most important calculation.
Don't build the business around opening-week enthusiasm or your maximum capacity.
Run the model at:
30% occupancy
50% occupancy
70% occupancy
What happens?
Can you pay your fixed expenses?
At what occupancy do you break even?
How many active members does that translate into?
Those numbers tell you far more about the viability of a space than its square footage does.
The space should fit the business, not the other way around.
One of the easiest mistakes to make when opening a studio is starting with:
“I found the perfect space. What can I put in it?”
I would reverse the order.
Define the concept.
Understand the business model.
Estimate your capacity.
Build the schedule.
Model the revenue.
Then decide whether the space supports it.
Because once the lease is signed, many of your biggest operating constraints are already locked in.
And changing a spreadsheet is considerably cheaper than changing a studio.
Planning a studio?
I work with founders from early concept through pre-opening — including business model, pricing, capacity, space planning, operations and launch preparation.
