PART I: Understand the Wellness Industry
Making a Living in Wellness
Building a successful and sustainable wellness business is far from easy. This industry, which began in earnest in the late 1970s, has been subject to changing consumer tastes, rapidly evolving technologies and unpredictable disruptions ever since.
The modern wellness movement has occurred in three distinct waves, each driven by the arrival of a new generation of adults coupled with key advancements of technology. Staying grounded in the timeless principles of the wellness experience — movement, nutrition, mindfulness and social connection — while staying flexible in how best to deliver these outcomes to our clients.
Even in the United States less than 6 percent of U.S. adults earn a living owning any business and less than 0.5 percent are employed in the wellness industry. When you launch your own wellness business, in the early stages, you will likely find yourself working 60 – 80 hours per week and drawing little or no cash from your business.
The moment you begin offering wellness experiences, your services will not just be competing with other classes and appointments offered in your neighborhood. They will also be pitted against the nearly infinite array of choices we all have to fill our time. Your greatest competition as a wellness entrepreneur is the couch and the latest video game or series on Amazon Prime.
The Seven Dimensions of Wellness and Maslow’s Hierarchy of Needs
Wellness is personal. It is about people helping people, and that truth is why the wellness industry exists.
Growing at more than twice the rate of the rest of the global economy, the combined value of the wellness industry pre-COVID-19 surpassed $ 4.5 trillion in 2019.
The next ten years will surely to produce more wellness industry growth than the past two decades combined — regardless of economic recession, social distancing and virus-related fears.
Many of the wellness business models that were flourishing in the years leading up to COVID-19 simply won’t work anymore.
The Seven Dimensions of Wellness:
- Physical Well-being: Keeping our bodies healthy and working optimally for as many years as possible
- Emotional Well-being: Having the capacity to cope with the stresses of life
- Social Well-being: Staying connected with our community, having the ability to maintain meaningful relationships and finding love
- Intellectual Well-being: Keeping our minds sharp and continually enhancing our wisdom and knowledge of the world
- Environmental Well-being: Living in clean, nontoxic surroundings and protecting our planet
- Occupational Well-being: Finding work that feeds our mind, body and soul
- Spiritual Well-Being: Discovering the purpose and meaning of our lives
The postwar economic expansion of 1946–2020. The progression produced a steadily increasing number of middle-class and affluent people across the world, culminating in an historic “tipping point” in 2018, when for the first time in human history, there were more middle-class or affluent people than there were poor people (Brookings Institute, September 27, 2018). This is important because it is the middle class and affluent who are afforded the opportunity to pursue the higher levels of Maslow’s hierarchy, and chief among those is wellness.
The Generational Lens
It takes at least one generation before rising economic standards translate into changed consumer behaviors, and two generations before those changes are fully realized.
By combining this generational lens with our understanding of Maslow’s hierarchy of needs and the progression of information technology, we can identify the forces that fueled our industry’s astounding growth from 1980 to 2020.
The wellness industry as we know it today began in 1980 and grew in three distinct waves, each larger, more far reaching, and more beneficial than the last. The First Wave was driven by Baby Boomers and enabled by personal computers, the Second Wave was driven by Generation X and enabled by the Internet, and the Third Wave was driven by Millennials and enabled by smartphones and cloud technology.
Baby Boomers did largely agree in the 1980s on two objectives: healthy living and making money.
In the 1970s the fitness industry had consisted mostly of small sweaty gyms designed for body builders, as well as YMCAs and JCCs focused mainly on youth sports. In the 1980s, the industry innovated to meet rising Boomer demand, catering to both men and women; they incorporated group exercise classes, swimming and racket sports and leveraged the leading technology of the day — personal computing — to scale like never before.
The First Wave of wellness also fueled an explosion of innovative workout equipment, including Precor, Stairmaster, Cybex and Nautilus.
Joseph Pilates began teaching his method in New York City in the 1930s and 1940s. Pilates did not expand into the general population until innovative entrepreneurs began to expand the practice in the early 1990s.
Similarly, the practice of yoga had been imported from India to the West decades prior.
In 1994, Johnny G and John Baudhin founded Mad Dogg Sports to accelerate the adoption of their invention — Spinning.
The First Wave of wellness is also when therapeutic massage and other spa treatments began to move outside of the luxury resorts and retreat centers.
The Gen – X personality is commonly characterized as more independent, individualistic and pragmatic than Boomers. Whereas the First Wave of wellness was characterized by homogenized brands and large, multi-purpose health clubs, the Gen-X-led Second Wave was driven by specialized practices and locally authentic independent studios.
During the Second Wave of wellness our world was hit with multiple crises — the dot-com bust and recession of the early 2000s, the 9/11 attacks and War on Terror, the Financial Crisis of 2007 and 2008, and the long, slow recovery of 2009 – 2010. Rather than slowing the Second Wave down, each of these challenges actually stimulated wellness industry innovation and growth.
On the business side, corporate layoffs caused tens of thousands of new wellness entrepreneurs to enter the market with new businesses. At Mindbody, we called these people the “Corporate Refugees”, and their energy, resources and business acumen vastly increased the supply of high-quality local wellness experiences. Several of the boutique brands launched by corporate refugees would go on to become some of the most successful wellness brands we know today.
Millennials prioritize experiences and social connections over material possessions. There are plenty of Millennial entrepreneurs, particularly in technology, but as a percentage of their total numbers, this generation has started far fewer businesses than Gen-X-ers or Baby Boomers.
Millennials love variety and authenticity. More Millennials align with the principles and ethos of the wellness movement than Baby Boomers and Gen-X-ers combined.
In the 2010s the wellness industry began to morph to meet Millennial tastes. The decade saw the emergence of whole new categories of boutique wellness classes and services, including BootCamp-style workouts and High Intensity Interval Training (HIIT), along with a resurgence of indoor cycling, led by Soul Cycle, FlyWheel, Rush Cycle, Cyclebar and others.
The ability to connect heart rate monitors and exercise machine outputs enabled boutique fitness studios to offer a new form of immersive experience.
Wellness had indeed gone mainstream and global, and was worth more than $ 4.5 trillion in 2019.
The Future of Wellness in a Post-COVID World
Seven post-COVID societal truths.
People’s desire to improve their physical well-being will be greatly amplified by the COVID-19 pandemic. The demand for mind and body practices, massage therapy, and meditation will increase, especially for home delivery models.
As business, education and government organizations reduce their reliance on commercial office space, the demand for wellness services in those commercial zones will go down. Reduced demand for commercial office space will increase commercial office space vacancies and decrease commercial rent rates. Increased adoption of work from home and virtual meetings will increase the value people place on offline interaction and group activities in their leisure time.
The principal advantages of virtual wellness are convenience, cost and physical safety. Less obvious and even more important is emotional safety; people will be able to avoid the body shame and embarrassment they may feel when they have their first face-to-face wellness experience.
Most brick-and-mortar wellness businesses will become hybrid wellness businesses. Brick-and-mortar wellness businesses without virtual extensions will find it difficult to survive.
People will be choosier about the people they socialize with. People will be willing to pay a higher premium for wellness experiences that involve fewer people. Tribalism will increase.
High-quality video feeds, heart rate monitoring and workout machine tracking will make a high-quality connected wellness experience accessible to hundreds of millions of middle-income and lower-income people.
Peloton® and Mirror® will soon find their offerings commoditized by hundreds of thousands of connected independent practitioners.
Rapid advancements in medical science and public health, combined with the increased adoption of wellness practices, will vastly increase average lifespans.
Wellness practices for seniors will grow massively in the decades ahead.
PART II: Prepare Yourself for a Hero’s Journey
First Things First: Identify What You Love, Get Certified and Work in the Industry
Don’t skip this essential step. There is no substitute for becoming certified or licensed in your craft and gaining hundreds or even thousands of hours of direct client experience.
As a wellness entrepreneur, you have much to do and much to learn. There is no more effective way to kick off that learning than to work in the industry.
Customers don’t care where you came from or what school you went to. All they care about is the quality of the products and experiences you provide them.
Five Essential Traits of Successful Wellness Entrepreneurs
What are some characteristics you must uncover and develop in yourself before you proceed with your business plans:
- Authentic Enthusiasm: A great passion and zeal for what your business will deliver, informed by actual experience.
- Grit: The ability to sustain your enthusiasm and strengthen your commitment when faced with inevitable setbacks.
- Agile Thinking: The habit of alternately zooming your focus in on the key details of your business and zooming out to stay in touch with the big picture.
- Effective Decision Making: The habit of routinely leveraging your head, heart and gut to make great decisions.
- Adaptability: The willingness to adjust your approach when faced with new realities.
Entrepreneurs’ enthusiasm for their business won’t guarantee their success, but a lack of enthusiasm will most definitely prevent it. Treat the time you invest getting certified and working in the wellness industry as a golden opportunity to deepen your authentic enthusiasm.
Nothing meaningful in life is easy. And the most meaningful things require the most work. When you are working on things that matter most, the effort shouldn’t deplete you. If it does deplete you, maybe you are in the wrong relationship or running a life script that someone else wrote.
Whatever your life history and circumstances, recognizing the grit blockers in your life and having the courage to remove those blockers to become who you truly are will strengthen your grit and improve your life.
There is a subtle but important thinking habit that every successful entrepreneur possesses. They have the unique ability to alternately dive into the details of their business and then come back out and see the big picture, and then dive back into check the details.
To develop the habit of mental agility, first assess which frame of mind you most easily operate in. The agile thinking skills of successful business leaders and entrepreneurs are universal.
To make the best decisions you will need to quickly discern important truths, and to do that you will need to think with your head, heart and gut, all at the same time.
Your head represents your conscious mind. You “use your head” to measure things, gather facts and identify options.
Why do you want to run a wellness business and how hard are you willing to work to drive its success? These are questions of the heart.
In decision making, the gut represents your intuition, or what brain scientists would call your subconscious. Some people would call this bias, and it is, in a sense. Your gut enables you to evaluate complex questions quickly and effectively.
A successful business is not a work of art, like Michelangelo’s David, where its keepers are concerned only with preserving it exactly as the master created it. A successful business is a living and breathing organism, and that organism will either adapt to its changing environment or die.
Enthusiasm, grit, agile thinking, effective decision making and adaptability are the five essential traits of a successful wellness entrepreneur.
An over-obsession with your own physical fitness may just be vanity, and that could distract you from your business and even be off-putting to your customers.
Josh York is founder and CEO of the at-home personal training franchise GYMGUYZ.
A business degree is not necessary for business success. There are few, if any, four-year undergraduate degrees that would materially improve your skills in all three of these areas. A science degree is not likely to improve your communication skills or teach you business. The business degree won’t allow you to go deep into human physiology or the science of wellness, and a humanities or social sciences degrees won’t teach you either.
Five Financial Metrics Every Entrepreneur Must Know
You don’t need to learn accounting to be a successful entrepreneur, but you must understand and watch closely five financial metrics in your business:
- cost of revenue,
- gross profit (or gross margin),
- operating expenses and
- net profit.
Revenue isn’t good unless you’re earning a profit.
Cost of revenue (also called “cost of sales” or “cost of goods sold”) is what it actually cost you directly to earn your revenue, and it is really important. To have a wellness business that lasts, your cost of revenue must be less than half of what you collected in revenue for that class, service, or product.
To have a wellness business that lasts, your gross margin must be greater than 50 % and preferably greater than 60 %.
Operating expenses are every expense other than your cost of revenue that you must pay in order to keep your business open. Keep your overhead low. That way if you have a terrible sales month, you will minimize how much cash your business consumes that month. Your business will live to fight another day.
To have a wellness business that lasts, your net profit should be at least 10 % of your revenue.
Sustainably profitable wellness businesses are able to consistently deliver a positive net profit after paying their owners the fair market value for the work they are doing in the business.
Embracing the Holy Grail: Sustained Profitability and Value Creation
Drawing a regular salary from your business may seem like common sense, but it is rarely practiced by small business owners. This is because for most entrepreneurs their businesses and their own psyches quickly become linked. Their businesses feel like their children. And, if their child were hungry, no parent would feed themselves first. But this is not your baby. This is your business, and in business you must feed yourself first for at least two very important reasons.
Natural laws of business:
- First, making your business pay you will force you to make the hard decisions that lead to sustained profitability.
- Second, by consistently drawing money from your business, you will keep your head, heart and gut in the game.
In addition to the natural law of businesses not lasting without being able to pay their owners, there is a second law of business that wellness entrepreneurs should never forget: If your business cannot run without you, it will never be worth anything. Successful wellness entrepreneurs, on the other hand, create sustainably profitable businesses designed to continue generating a net income for their owners, even after their owners are no longer working. This is called “passive income”, one that continues regardless of the effort of its owners.
To be sustainably profitable, a wellness business must do three things really well:
- Develop a distinctive habit-forming wellness experience that appeals to large numbers of people. We will call this an “addicting experience”.
- Create a value delivery model that reliably reproduces that addicting experience to thousands of people — without the creator present.
- Earn a high gross margin of at least 50 %.
Value creation has a simple economic definition and a much more interesting holistic one. From an economic perspective, value creation describes the actions a person or a team takes to increase the value of a product, a service, or an entire business.
As a wellness entrepreneur, the key principle to remember when you are thinking about value creation is that “value” is in the eyes of the beholder. Every stakeholder of the business — its founder, owners, staff, customers, and community — will define the value they received from that business in their own terms.
Write down the first things that come to your mind when you read these questions:
- In my personal life, I want my wellness business to give me:
- In my professional life, I want my wellness business to give me:
- In the first year after my wellness business starts, I need a steady income of at least $ __________ per month.
- When my wellness business is fully successful, I expect to earn at least $ ___________ per year.
- After I shut down or sell my business, and pay off all business – related debts, I want to walk away with $ _____________________.
- During the course of its operational life, I want my wellness business to create these values for our other stakeholders:
- Our Clients:
- Our Staff:
- Our Neighborhood:
PART III: Conceive Your Business
Select Your Mentor, Lawyer and Accountant
As a wellness entrepreneur, you will need to think of your lawyer and accountant as you do your dentist. You will either spend a small amount for regular proactive care now, or you will be in for a painful and expensive root canal later.
If you are creating a digital wellness business, there will be agreements to execute with software and web developers, hosting agreements to negotiate and consumer privacy laws and other regulations to adhere to.
Key questions your partnership agreements must answer include:
- How much capital is each partner contributing?
- If one or more partners is contributing “sweat equity” (their work and their ideas create their ownership), what period of time do they need to contribute before that ownership is real?
- What roles will the partners fill in the business, and who is in charge?
- If the partners are co-equal, how will important decisions get made?
- How much effort is each partner required to contribute to the business to maintain their ownership or leadership status in the business, and what happens if a partner decides to leave the business?
- If all the partners agree to shut down the business, how will the remaining assets and liabilities of the business be distributed?
Define Your Target Market
Clients are the most important element of any business. Without clients you don’t have a business at all.
When you position your business to serve too broad an audience, you end up trying to be everything to everybody — and pleasing no one.
The only way to draw clients to your business, get them talking about you and keep them coming back is by carefully crafting habit-forming experiences that appeal to their needs, desires and tastes. You cannot do that without precisely defining your target market and knowing those clients as deeply as possible.
Target markets today are defined by the personalities, motivations and needs of the people who typify that market. You will identify your target market clients by their tastes, preferences, life choices and willingness to invest time and money into your type of wellness experience.
Your target market clients must define a group large enough to fuel the thriving business you are envisioning and distinct enough to focus on. It is also important to consider the disposable income and philosophies of your target market group.
- What kinds of clients will enable me to most easily achieve my wellness business purpose?
- What kinds of wellness activities do my target market clients engage with today?
- What is the typical annual household income of my target market clients?
- What other kinds of experiences do my target market clients currently spend their money on?
- How much do I believe my target market clients would be willing to spend each month?
- How many engaged target market clients will I need to generate the following monthly revenue in my business?
Here are some good rules of thumb on the numbers of target market clients most wellness businesses need to last:
- For an independent wellness professional: a target market of at least 2,000 potential clients in your service area yielding a foundation of at least 100 regular clients.
- For a retail boutique wellness business: a target market of at least 10,000 potential clients within commuting distance from your business.
- For a virtual wellness business: a target global market of several million people.
Evaluate Retail versus Home-Based and Virtual Business Options
A value delivery options can be placed in one of six classes:
- Class I: Home-based wellness delivery
- Class II: Third-party wellness delivery
- Class III: Virtual wellness delivery
- Class IV: Retail wellness delivery
- Class V: Hybrid wellness delivery
- Class VI: Multi-location wellness delivery with owner-operated or franchise models
YouTube has a program called AdSense. But you need to have at least 1,000 subscribers and 4,000 hours of subscriber watch time in a trailing twelve-month period to qualify for the program. You will need at least a thousand times that activity to make even a meager income off of it.
The only effective way for most wellness practitioners and entrepreneurs to make a living off of virtual wellness delivery is to restrict access to your on-demand and streaming video content behind a paywall.
Lay Your Foundation with Your Competitive Advantage
Most wellness businesses end: when its owners no longer possess the will or the capital to continue the Hero’s Journey.
To create a wellness business that lasts, you need to build competitive advantage into your plan. This means that your business has one of the following:
- A cost advantage.
- An experience advantage.
The most successful wellness businesses have both.
A competitive cost advantage is a powerful thing in business, and you should strive to design cost advantage into your business plan from day one.
To understand how to price something, you will first want to understand the prices for the same or similar services in your neighborhood.
To prevent cannibalization, a discount or promotion needs to be either attached to a limited set of offerings perceived as lower value by your customers or reserved for a different class of customer who would not normally pay full price.
There are four common examples of effective discounting in the wellness industry:
- Introductory offers.
- Reengagement offers.
- Dynamically priced offers.
- Aggregator offers.
there is no reason for anyone to run a commoditized wellness business. Instead, you should differentiate the experience you deliver by appealing to the preferences, needs and values of your target market client, and you do that by focusing on how you make your clients feel.
Our happy feelings are governed by four chemicals naturally produced inside each of us:
- serotonin and
To design a wellness business that attracts and retains long-term clients, you need to learn how to trigger them in your target market clients.
- Dopamine is our reward chemical.
- Endorphins are our natural pain killers.
- Serotonin is our confidence chemical.
- Oxytocin is our social bonding chemical.
Today, all manner of feel-good triggers involves unhealthy choices and in many cases those triggers are intentionally designed. Everything from junk foods to flavored tobacco products, to gambling casinos, to violent action movies, to pornography, to social media — all are intentionally designed to trigger our neurotransmitters in a habit-forming way.
Authentic wellness practices require commitment, time and effort, and many of them are truly difficult to start.
Let’s face it: most wellness experiences are downright intimidating the first time. This is why the wellness industry is still largely serving only a small minority of people. Even today, more than three out of four people are not yet engaging with wellness businesses.
Think about the impact of our senses:
- Smell – When you think about the scents you want in your space, be mindful of your own scent and that of the people you employ.
- Sight – Color is an important component of sight. Light is the medium that transmits the color and other details of a space to our eyes. Hire an architect and lighting specialist with proven retail experience to lay out your space and plan your lighting design.
- Touch – There is no excuse for fitness or wellness equipment that is not spotlessly clean.
The exciting news for anyone entering the wellness industry is that few wellness businesses operating today are truly nailing it with differentiated experience delivery.
PART IV: Plan Your Business
Create a Vibrant Company Culture with Purpose and Core Values
Companies with a truly vibrant culture infused with purpose, leadership and values have a huge advantage over their competitors.
As human beings we crave purpose in our lives, and businesses that last must give us that or our hearts will soon move on.
- The purpose statements have in common:
- They address a fundamental need of large numbers of people and in doing so make the world a better place.
- They are distinctive.
- They are authentic.
- They are succinct.
- They are timeless.
When writing them, think about:
- What is motivating me to focus my career around the wellness industry?
- What kinds of people do I want to serve?
- What do I understand about these people that isn’t obvious?
- I’ll know I’m fulfilling my purpose when …
Write a purpose statement of not more than 20 words; 8 – 12 words is ideal.
These four qualities will make your core values meaningful and impactful to your business:
- They connect to your purpose.
- They are authentic.
- They are distinctive.
- They are practiced.
Leading lives that harmonize responsibilities, relationships, recreation and rest.
Design Your Role
As entrepreneurs, we define the culture we want our companies to have and we take actions to shape our business in that direction. But the cultures we create will not remain static. A company is an organism, and it must evolve and grow to thrive. You will know it is working when your team embraces your culture and begins to take your business beyond where even you imagined it could go.
Your motivation measures how much energy you are willing to devote on a daily basis to your wellness business. At the high end of the motivation spectrum are those ambitious people motivated by achievement.
Your time horizon expresses the length of time in years that you are willing to devote to the wellness business you are planning to build.
Short-term achievement-oriented entrepreneurs are people who tend to have high creative capacity. They have a unique ability to intensely focus on hard problems and they often come up with breakthrough ideas that excite them.
Such lifestyle businesses include most independent wellness professionals, who vary their work schedules to fit their personal needs.
This is a key point. If the life of freedom-oriented wellness entrepreneur appeals to you, keep your personal life as simple as possible and embrace the immutable truth that nothing worthwhile is achieved without effort.
How the four most common entrepreneurial personas are positioned in the Motivation and Time Horizon matrix:
- Brand Creators. These are the founders and CEOs of global or regional wellness brands.
- Neighborhood Business Owners. The proprietors of successful local wellness businesses still make up the majority of the industry today.
- Independent Professionals. These are wellness practitioners who either flex their hours weekly to balance their personal needs or work intermittently to earn the income they need to support their freedom-oriented life.
- Serial Entrepreneurs. These are another rare breed who have the knack for quickly identifying, formulating, and launching successful businesses.
If two operating partners differ widely in their desire to achieve and their willingness to work hard, their partnership will soon be strained.
Select Your Integrated Software and Payments Platform
Regardless of the size of your wellness business, you will need a business management software platform to manage your customer relationships, take their online bookings, and associate those bookings with their purchases.
To be “integrated” means that your business management and payments platforms talk to each other.
The key capabilities that any wellness business software should have are listed below:
- Client relationship management
- Staff management
- Class scheduling
- Appointment scheduling
- Enrollment tracking
- Integrated online booking
- An integrated paywall-protected virtual wellness platform
- Contracts and autopay software
- Point of sale and inventory management (POS/IM)
- POS/IM hardware devices
- Robust dashboards and reports
- A business-facing mobile app for iPhones and Androids
- A consumer-facing branded mobile app
- Full integration with your payment platform
There are dozens of payments processors around the world positioning themselves as suitable for wellness businesses. But when looking for the best one check:
- Full integration with your software platform
- Real-time tracking and reporting of all payment authorizations, batch settlements and deposits
- Card Present and Card Not Present capabilities
- Contactless payment and e-wallet capability
- Clear and easy fee reporting
- Chargeback defense
When you choose an integrated software and payments platform provider, you aren’t just betting on their current capabilities; you are betting on their capacity to continue improving those capabilities for many years to come.
In the most important truth of the information age: If you aren’t paying for the product, you are the product.
Trying to save money by using free or really inexpensive software tools could end up being one of the most expensive mistakes you ever make.
You’ve surveyed the market of software providers and none offer precisely what you are looking for. You have three alternative paths to choose:
- Modify your business model to work with the existing readily available software.
- Build a custom software app that integrates with an existing software platform via API (“application programming interface”).
- Build your own complete custom software.
In software, bugs are an unavoidable fact of life. The best software in the world developed for billions of dollars by the tech giants still has bugs.
Software developers are the hottest commodities in the world right now, and they will be for decades to come.
Assemble Your Business Plan
The process of creating your business plan deck will be one of the easiest steps in your entrepreneurial journey. The deck should be succinct and should consist of no more than 10 – 12 slides.
- Your first slide will include a simple recitation of your purpose statement, explaining your vision and mission for the business.
- On your second slide, you will summarize the wellness industry expertise of you and your co-founders.
- On your third slide, you will include a summary of your market research, indicating that you understand your target market, their tastes, and their willingness to spend money on the products and services you will offer.
- This fourth slide about your competition will be the most complex to assemble, and it is utterly essential.
- On your fifth slide, you will reiterate the voiceover you gave on slide 4, adding a bit more data and detail to explain how your differentiated experiences and cost structure will give your wellness business a competitive advantage over key competitors.
- On your sixth slide, you will help the reader visualize your experience delivery model. If you are opening a brick-and-mortar business, a studio floor plan with a few sample photos of the experience dropped in will be highly effective. If you are creating a virtual wellness business, then simple wireframe mockups and screenshots of videos, as well as links to your YouTube Channel, will help bring your vision to life.
- On your seventh slide, you will describe the main classes, appointment-based services, and related products you plan to sell.
- On your eighth slide, you will describe the different packages, bundles and memberships you will offer and the resulting average price per service, cost of delivery, and gross margin you expect to yield for each service category.
- Based on your analysis in slide 8, you will create in your ninth slide a financial forecast of your first twelve months of operation and how much cash your business will burn before it achieves break even.
- Your tenth slide will deal with your exit strategy.
Select your most compelling and original ideas and convey those in short bullets. Use the title box at the top of each slide to simply state your intended message on that slide. Some of the best presentations I’ve seen are simply written in black and white. A few well-chosen graphics and authentic photos (not stock photography) depicting the wellness experiences you will deliver are good.
PART V: Launch Your Business
Launch Your Website and Establish Your Online Presence
When business owners “market” their businesses, they are taking conscious action to attract new clients and keep them coming back.
Customer personas are not real people. They are fictional archetypes representing the key traits of the hundreds or even thousands of people you want to attract into your business.
Before you create your website, you’ll want to create three or four personas, which collectively define your target market.
The first thing to remember about your website is that it is a cornerstone of your online presence. Here are some guidelines specific to wellness businesses:
- Keep it simple.
- Conform to established norms.
- Leverage clear and compelling calls to actions (CTAs).
- Keep online booking and purchasing never more than one click away.
- Sell gift cards.
- Have dedicated pages for pricing, introductory offers and membership.
- Include high-quality photos and bios of you and your team.
- Make your introductory offers truly compelling.
- Include a video tour of your business and video testimonials from happy clients.
- Verify after every update that your website is still “mobile responsive”. Verify after every update that your website still loads fast.
In short, a Facebook page is essential for any wellness business. It lays the groundwork for highly effective advertising campaigns down the road and it is free.
Instagram is an extension of Facebook, with an emphasis on visual content, which can be helpful for business and advertising.
YouTube is a place to upload and store videos that you want to share with the world for free.
Twitter is an excellent platform to share your expertise, wisdom and passion for your craft.
Secure Your Financing
We took Mindbody public in 2015, raising over $ 400 million in the public markets before taking the company private again in 2019 with an acquisition by Vista Equity Partners for $ 1.9 billion. No, that doesn’t make me a billionaire. Far from it. But as an entrepreneur it gives me great pleasure to know that the thousands of investors and employees who believed in us made large returns on their investments and after many years of living at or near the precipice of financial ruin, my family and I don’t have to worry about money anymore.
Wellness businesses don’t require as much cash as technology startups, but they are still economic engines and money – or “capital” – is the fuel they run on.
For most wellness businesses it takes a year or more of planning and building before that first dollar is earned and another year before you can generate enough gross margin to cover your operating expenses.
Create a spreadsheet to carefully tally your actual expected costs by month for a full two years (covering the twelve months before your business launches and a full year of operation thereafter). Be sure to include the following:
- Attorney, accountant and consultant fees
- Business license fees
- State LLC or incorporation fees
- Website and technology platform startup and monthly subscription fees
- Construction of tenant improvements (for a retail business)
- Equipment and supplies
- Twelve months of operating expenses
- Cash reserves of at least three additional months of operating expenses after the business is reliably cash flow positive
- Sufficient personal cash reserves to cover your own living expenses until the business can afford to pay you
- Then, after all that, add a cushion of another 10 % to your total cash requirements for the “oh s…” moments that will inevitably occur.
For most non-home based wellness businesses in the United States, your total startup costs will be somewhere in the range of $ 300,000 to $ 600,000.
Three categories of business financing are available to most wellness businesses: friends and family, commercial banks, and private investors.
- Friends and Family Lesson # 1: Ensure they know what they are getting into.
- Friends and Family Lesson # 2: A borrower or a lender be, not a partner.
- Friends and Family Lesson # 3: Get it in writing.
“The bank will only loan you money if you can prove you don’t need it.”
While the personalities of PE/VC firms vary widely, you can count on all of them to have these traits in common:
- They will all require you to form a C-corporation before accepting their invested capital.
- They are all looking for exceptional returns on their investment.
- They consider themselves to be experts in creating business value, will require regular reports from you.
- If they are an Angel Group or VC, they will want a 10 – 20 percent equity ownership stake in your business and numerous “protective provisions”.
- If they are a classic PE firm, they will want a controlling stake in your business or will want to own your business outright.
Grow Your Clientele with Paid Marketing That Works
For brick-and-mortar wellness remember that:
- You will always have room for more clients.
- You will always need to bring in new clients.
In the startup phase when growing your business and clientele is most urgent, you should plan on devoting about 20 percent of your early revenue goal to paid advertising. After your business has become sustainably profitable, you can reduce that investment to about 10 percent of revenue.
A successful search engine marketing (SEM) strategy involves three components: keyword phrases, the content of your ad, and your advertising budget.
You will want to try A/B Testing in which you test a number of variations of an ad to determine which one performs better.
More than 74 percent of Facebook users are high-income earners and Facebook’s advertising features allow you to target people in ways that Google cannot.
The highest user traffic on Facebook occurs midday Wednesday and Thursday, which makes these times ideal to promote your business.
Awareness means that you want people to become aware of your brand. Consideration means that you are looking for people to access your website. Conversion means that you want the person to buy something.
Many wellness professionals are beginning to look at podcasts as a vehicle for espousing their theories, methods and wisdom.
Here are some recommendations from the Mindbody Marketing Team to improve your marketing efforts:
- Practice consistency and patience.
- Know some of the things you try won’t work.
- Leverage multiple marketing channels.
- Don’t stop when it starts to work.
- Be willing to make mistakes, try something new.
- Quantify the results.
- Set SMART (Specific, Measurable, Achievable, Realistic, Timebound) Goals.
- Create a simple marketing plan.
- If you have substantial business goals and a marketing budget of at least a few thousand dollars per month, it may be time to hire a public relations firm.
Fuel Your Business with Effective Leadership
Effective leadership isn’t about you. It’s about them — the people you are leading.
PART VI: Keep Your Cup Full
Staying Well as a Wellness Entrepreneur
As wellness entrepreneurs, this combination of intense emotional involvement and perpetual responsibility can become overwhelming.
The single biggest determinant of how long any business will last is how long its founder or founders remain passionate and energized by it.
Your success will depend in part on the unique ability that you bring to your wellness business. Your unique ability activities will fuel your success.
- So be sure you are focusing the vast majority of your work in your business on your unique ability activities.
- Your excellent activities are probably essential routines of your business. As your business grows, however, these will be the activities you gradually hand off to others.
- Your competent activities are probably also essential to your business. Designate someone else to take over these tasks as soon as possible.
- If you have anything listed as incompetent activities, you need to ask yourself an important question: Why are you doing these things at all?