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Balancing the yoga business

Photo Credit: JAIME VALDEZ - YogA Pod Portland students get down with Pod manager Lara Gratsinopoulos in a heated Vinyasa level 2 class on a recent summer day.The proof that there’s a whole lot of yoga going on in Portland is visible on NW 14th Avenue between Marshall and Quimby Streets.

Within four blocks there will soon be three places to practice the ancient Indian art: LA Fitness, a mainstream corporate gym; Yoga Pod, a new franchise from Boulder, Colorado; and (when it opens in September) Planet Granite, a California climbing gym whose vinyl banner reads “Climbing Yoga Fitness.”

Portland has dozens of yoga studios, as well as gyms and rec centers offering yoga.

It’s just following a national trend.

A Yoga Journal survey found that in 2012, 20 million Americans were doing yoga, up from 15 million in 2008.

“But that undersells what’s really going on,” says Richard Karpel, President of Yoga Alliance. This is a DC-based nonprofit which sets standards for yoga teachers and tries to inject some business savvy into what used to be a cottage industry.

“America hit a tipping point recently, there’s been an explosion of interest,” Karpel told the Tribune. The number of aspirational yogis — people who didn’t practice yoga but expressed an interest — went from six million in 2004 to 18 million in 2008 to 104 million in 2012.

His organization hears from 100-150 schools every months looking for registration, 15 percent of them being abroad.

It’s no surprise that, with a bit of corralling on social media from the motivational group World Domination Summit, the world record crowd of yogis was achieved in Pioneer Courthouse Square on July 11 of this year. A total of 808 people showed up.

The lead yogi that day was Jill Knouse, who has been teaching in Portland for eight years, after a revelation when she quit a lucrative but miserable finance job in San Franciso and moved here cold.

“You can make a living in Portland teaching yoga but you have to do way more than just single lessons,” says Knouse. As well as headlining as events like Yoga Rocks the Park, which are good marketing for her brand, she runs yoga retreats in Mexico and Hawaii. Most importantly she offers 10-week Elevate Yoga trainings which she compares to a Masters program for yoga teachers. They learn more about the philosophy behind yoga and how to be professional. It’s business savvy for an often impractical audience.

According to jillknouseyoga.com:

“Significant time and focus is dedicated to developing your ‘trademark’ or, we like to call it, your snowflake qualities. Hone in on what makes you unique, so that you can differentiate yourself from the abundance of yoga teachers flooding into the marketplace every year, every month, every day.”

Most yoga studios survive financially by providing 200-hour trainings which are approved by the Yoga Alliance.

The expenses are simple: rent on the space, utilities (104 degrees hot yoga can be pricey), insurance and payroll. Teachers are often the cheapest link in the chain: in Portland they make from $25 a class (which is really two hours with preparation) up to $100 at the high end for private, in-home tuition.

Photo Credit: KIRSTI HOLLEY PHOTOGRAPHY - Jill Knouse, one of Portland's best-known yoga teachers, teaches yoga and the business of yoga, as well as leading exclusive retreats and popular  events such as Yoga Rocks the Park.Jeff Hemrich, along with another investor Joan Gratton, paid Yoga Pod of Colorado a franchise fee of $35,000 to bring that min-chain to Portland in July 2104. Yoga Pod laid out the studio’s style — the color scheme, the two room setup, the welcoming attitude — while Hemrich picked the manager, Lara Gratsinopoulos, and the location. He looked at rents from $18 per square foot to $38.

“Northwest 14th Avenue is really busy and has that bike lane, and Overton is a though route to NW 23rd,” he says. “And with all the growth going around there, and the fact that you don’t have to circle the block for parking like in the south end of the Pearl, it will attract a lot of people.”

Hemrich has been practicing yoga since 2005 but is not a teacher. He drops by the

studio most days, to greet staff, take classes and clean.

“My job is to pound the pavement and let people know we’re here. For example we’re doing a partnership with Icebreaker, across the street, because they’re starting a line of yoga clothing.”

Aside from the build out of the previously vacant new building his biggest expenses are rent and payroll. And that’s one full time staffer. The rest are “karma yogis,” that is, they staff the front desk in return for membership. One of them, TK Lee, is training for an ultra marathon on the Pacific Crest trail by commute-running 24 miles round trip from Vancouver, and taking three yoga classes a day.

Hemrich expects retail — mats, tank tops, water bottles — to only amount to 5 percent of annual income.

“I think getting to 200 memberships would start doing a good job,” he says.

At $130 a month after Sept. 1, ($90 until then) the rates are competitive.

“The franchise people, Gerry and Nicole Wienholt, told me by years three to five I should be able to pull in $500,000 a year. I expect total revenue to be $200,000-$300,000 a year depending on on expenses.”

Others are less optimistic about yoga as a business.

“The people really making money in yoga are Lululemon and those selling clothes and equipment,” says Karpel of the Yoga Alliance in DC. “It’s not a capital intensive business, but you are limited by space and time, only so many people can come in from 9 to 5.”

Karpel likes seeing mainstream characters like LeBron James talking up yoga. He sees a need to diversify.

“To continue the growth it needs to get more men, and other ethnicities and lower income people. Now it’s 80 percent female. At some point we’re going to run out of white women.”

Matt Huish was a fixture of the Portland yoga scene at the Yoga Shala in 2001, until he left for New Mexico in 2008. Now he teaches in Seattle, but is glad he is not running his own space in Portland or anywhere else.

“From my perspective it’s not a way to get rich, we almost went through bankruptcy,” he says. “The rising rents, intense competition for classes and the Groupons, completely cut down the amount of pay a teacher can make. The market’s flooded, everyone is doing trainings.”

He also repeats what many have said about group coupons and online deals: they’ve lowered expectations. He sees a lot of green, new teachers and students wanting superficial fitness yoga, which treats symptoms rather than root causes of unhappiness.

“It’s kind of like being an entertainer, making people feel good,” Huish says. “All you can eat yoga for ninety bucks a month, it’s ridiculous, you can’t afford to pay a teacher a living wage. People end up wanting a yoga class for five bucks. I think it’s worth a little bit more than a cup of coffee and a scone.”