Starting from scratch: Standing up your business infrastructure

So you've decided you want to start your own business, or you know that as an independent contractor it's time to make a few things more official, and bring things to the next level.

Awesome, it's business time!

 

Getting started can seem overwhelming because it's difficult to know where exactly to start sometimes, but also because thinking about forming a business, getting things online and everything else all at once can seem overwhelming. But remember, even sending a human to the moon is a series of individual tasks completed in a particular order.

So let's go, get that business started!

Forming your business with your state

The first thing you want to do is search for your state's Secretary of State office. For example, information about forming an LLC in the state of New York can be found here: http://www.dos.ny.gov/corps/llcguide.html

The secretary of state website is pretty much always where things start. You'll search the state database to make sure the name you wan't isn't already taken, and then you can form your business by filling out the right application. Usually the fee is somewhere between $300 and $600. 

Obtaining an FEIN

Once you've filed with the state, you'll have your business name, so you can proceed with getting your Federal Employer Identification Number from the federal government. This can be done very easily online at the IRS website here: https://www.irs.gov/Businesses/Small-Businesses-&-Self-Employed/How-to-Apply-for-an-EIN

The reason this is the second step is because in order to obtain an FEIN you'll need to have your business name. 

Establishing Bank Accounts

At this point you officially have a business, so it's time to set up bank accounts. I recommend  getting a business checking account, business savings account, and business credit card. Often times, the simple act of opening a business checking account will qualify you for a business credit card. 

Now at this point you have a legal entity with a Tax ID, Bank accounts to collect revenue, and you're registered with your state. (Note: Depending on your city and the business you're starting, you might need to obtain a city business license as well, so spend a moment to search that. But the heavy lifting if you're establishing you're yoga business is probably done now, from a legal standpoint anyway.)

Taking payments, Tracking Revenue and Recording Expenses

Now that you're a business, one of the most important things you need is for it to be easy for people to pay you. Head on over to http://squareup.com to get a square account so you can easily take credit card payments in person. Then, head on over to http://stripe.com and set up an account there. A slew of web services, including our own Tula Software, integrate with Stripe to power payments. Having a stripe account will allow you to easily take payments online in a number of ways. 

Next, go get some accounting software. I recommend http://lessaccounting.com because it's easy to use and hooks up nicely to most banks.

Stand up a website

Now you'll want a website to showcase your business. We generally recommend Squarespace as they're easy to use, mobile ready and have great themes. Of course you have another of other options such as http://wix.com and Wordpress, but we're particularly fond of Squarespace. You can also secure a domain through Squarespace, but I recommend getting one that you control directly through http://hover.com.

If you're going to be using Tula, you might want to check out this video about building a website for your yoga studio with Squarespace and Tula. 

At this point you have all the primary foundational elements you need to run and operate your business: A legally formed business, the ability to take payments, a bank account and website. Of course, as you get going you'll end up using a whole host of things I haven't outlined here, but this will get the initial infrastructure of your business going. Good luck and feel free to leave any questions in the comments and we'll help as best as we can!

 

On Mindbody, Classpass and the battle to become the Uber of fitness

Over the past few weeks I've received numerous phone calls from Investment Analysts, who work for Institutions investing in public companies, wanting to get my opinion about Mindbody. As you may be aware mindbody IPO'd back in August. 

My standard reply has become that I'm not really in the business of providing industry analysis to investors looking to allocate tens of millions of dollars in capital, but if they want to join me on Strengthen your studio, our podcast about the business of yoga, it would be an interesting discussion and I'd love to have them as a guest.

Then they tend to not want to talk to me anymore so I thought  post on the matter would be nice.

While mindbody provides software and payments processing to small businesses in the "health, beauty and wellness" space, what's most notable about them right now is that lately they have been pushing the mindbody connect app very heavily.

They've gotten so aggressive with pushing the app that it's downright intrusive and degrades the student experience for their customers. Visit the schedule of a company that uses mindbody, they interrupt the flow and ask you to download their app. If you register for a class at a business that uses mindbody, they send you a text message asking you to download the app.

Why is this?

It's one thing to want to provide an app as an option for people to interact with your system. We do the same thing. But why would mindbody care so much about people using and downloading the connect app? Why do they care if you register for yoga class or book a massage via the company website, or via their connect app?

The answer lies in their S-1 filing and understanding what's going on in the technology industry as it relates to investment dollars and company valuations. Throughout mindbody's S-1, which shows they are losing about 50 cents for every dollar in revenue ($70 million in revenue, $35 million in losses), and that they make 37% of their revenue processing credit cards, they repeatedly refer to themselves as a "marketplace". Over and over again, they pound the drum that they are the worlds largest marketplace connecting wellness providers with practitioners.

As a company with $70mm in revenue, $35mm in losses, has never been profitable and is currently valued on the public markets at somewhere around $750 million, being a b2b SaaS company is simply not enough for mindbody anymore.

Small potatoes people! 

What's big now in the tech investment world is Marketplaces.  Everyone wants to know what's going to be the next "Uber of __" or the next "Airbnb of ___". 

Which brings us to ClassPass. 

What ClassPass is trying to do is to become the Uber of fitness. For a monthly membership fee, ClassPass members can visit any participating gym/studio/box up to three times per month. Why I believe this matters in the mindbody discussion is because classpass, who has been around for only 2 years, is currently valued in the private markets at $400 million, on reported revenue of $60 Million. Because they're private, what we don't know is whether they're profitable, or if they're losing money, and if so, how much.

But in any event, private investors are assigning more than half the value, and they're only $10 million less in revenue than mindbody, who has been around since 2004.

I don't think these numbers have gone unnoticed by mindbody, and I think the stage is being set for mindbody to attempt to compete with classpass, and in the process start competing with their own customer base. I also think acquisition is possible but I don't know that mindbody can afford classpass at this point. 

However it plays out, mindbody will, I believe, quite literally attempt to turn their customers into a product.

I should take a moment to point out that we're now in full on speculation territory here. These are my opinions and my readings of the tea-leaves, not some insider knowledge I have. But the opinions are informed by S-1 fillings, news reports and observing real things happening with real products.

And of course the other reality: If mindbody wanted to put their customer's needs ahead of their own, they'd already not be doing a lot of the things they are doing.

Remember the question: Why does mindbody want their customer's customer to use the Mindbody connect app so badly? Why do they care how a student books a class at a yoga studio? The ClassPass valuation makes that question a little easier to answer, doesn't it? As a public company with a fiduciary responsibility to their shareholders, I simply don't think mindbody can ignore all of this, and it explains the groundwork they're trying to lay down.  

At $60million in revenue ClassPass would have about 50,000 customers. That's a lot of customers, but one thing I've learned about serving these businesses is that you get access to a lot of individual practitioners for every customer you serve. If you assume an average of at least 1,000 students for every individual studio, mindbody probably has access to over 70,000,000 individual students/practicioners. Add in students from churned customers for whom they still have data and the number is probably threefold.

If Mindbody came out with some sort of 'Mindbody Pass' and they got one tenth of one percent of their active student user base to convert, they'd have 70,000 paying student customers.

This, I think, is whey they're pushing the connect app so hard.

Now again, it's important to keep in mind this post is being written by someone who worked with a team of people to build an entire system to compete with mindbody, primarily because I thought their calendars and account setup process were disrespectful.

So I'm very very biased.

But as far as I can tell, mindbody is a company that scaled too early with broken per unit economics, is currently selling dollars for fifty cents, has never been able to turn a profit, IPO'd because they couldn't raise more money on the private markets with the valuation they wanted, and are laying the groundwork to steal customers from their own customers because they have a fiduciary responsibility to maximize shareholder value. 

The very existence of ClassPass serves as a constant reminder of the "opportunity" mindbody has, as long as they're willing to turn your studio into an uber driver.

Strengthen Your Studio: A conversation with Brendan Gibbons of Devotion Yoga

If you've been thinking to yourself that there might be a few small things you could do to improve the finances at your yoga studio, you'll be hard pressed to find a better way to spend 30 minutes than by listening to this conversation with Brendan Gibbons of Devotion Yoga.

Brendan shares a slew of great tips that can help your studio - ranging from customer service at the front desk, pairing down your pricing options, and focusing on memberships. Brendan has helped Devotion Yoga more than triple their memberships and has helped put them on a more solid footing and you can do the exact same thing with your studio with a bit of intention.

Check out the discussion below, or subscribe to the Strengthen your studio podcast in iTunes.

Building a beautiful website for your yoga studio with Squarespace and Tula Software

I've been wanting to do this for a while now: a casual walkthrough of how to set up the initial infrastructure and framework for your website. In this video I walk through how you can use Squarespace and Tula Software to build a great looking website where your customers can view your calendar, sign up for events, make payments and manage their accounts - all while staying on your website.

Check out the video below:



Introducing Series Registration

We're really excited to announce another update to our registrations system today - the ability for students to register for an entire series of events.

Prior to today people could either register for an individual event via the calendar, or they could make a purchase via our payment forms, and then register for the classes that pass is good for. Registering for a group of events however - such as a course like a beginners series - was sub-optimal for students and occasionally confusing for studio owners.

Now every event series you create, whether it's a regular class or a special event, will come with a dedicated series registration widget and link. Just like with individual classes you determine whether payment is required or not, and we handle the purchase options accordingly.

How it works

To begin using this new feature, you simply create a series of events as usual. Now however you'll see a new link when viewing the Event Series page that says "Series Registration". Clicking that link will expose a registration widget and link just like we provide for custom payment forms and calendars. In other words, using the same pattern you're already familiar with.

Copy/paste the link for quick access, or embed the widget into your website for a custom feel.

Guest access and logged in access

Of course, this wouldn't be a feature built by Tula if we didn't go to great lengths to ensure that both returning students with accounts, and new students without accounts, could both interact seamlessly with everything. Whether payment is required or optional, and whether your student is logged in or not, they can quickly and easily sign up and make a payment without ever leaving your website.

We're thrilled to be able to provide this new powerful feature for those of you that have been asking for it, and check out the short video below to see the full feature in action.