Female emPOWERED: Winning in Business & Life

Episode 315: Not All Revenue Is Created Equal: How to Build More Predictable Income in Your Studio

• Christa Gurka • Episode 315

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Are you tired of feeling like every month you’re starting from zero in your business? In this episode of Female emPOWERED, host Christa Gurka breaks down one of the most important lessons she learned while preparing to sell her multi-seven-figure studio: not all revenue is created equal.

Christa walks you through her Revenue Ladder — a framework that helps you understand where your income is really coming from and how stable it is. You’ll learn the five types of revenue that exist inside boutique fitness and wellness businesses, how to move up the ladder toward more predictable, recurring income, and why recurring revenue is the foundation of a business that’s sellable, scalable, and sustainable.

Whether you own a Pilates studio, yoga space, or private pay PT clinic, this episode will help you move out of the feast-and-famine cycle and start creating peace-of-mind profits every month.

💡 What You’ll Learn in This Episode

  • Why recurring revenue matters more than total revenue
  • The 5 levels of revenue quality — from transactional to contractually recurring
  • How to move from inconsistent class packs to predictable memberships
  • Ways to make leaving harder than staying for your clients
  • How recurring revenue increases the value and sellability of your business
  • Simple action steps to audit your current income and set 2026 revenue goals

🧭 Key Takeaways

  • Contractually recurring revenue (like long-term memberships or subleases) is the gold standard — it gives you predictable cash flow and peace of mind.
  • Non-contractual recurring revenue (auto-pays or subscriptions) is still strong, but retention systems are key.
  • Repeat or package revenue requires manual renewals — add automation or upsells to strengthen it.
  • Cohort and seasonal programs can be great entry points but should feed into long-term memberships.
  • Transactional one-offs (drop-ins, pop-ups, retail) should make up less than 5% of your revenue.

🧮 Christa’s Action Steps

  1. Audit your last 90 days of revenue. What percentage is recurring vs. one-off?
  2. Set a goal to have at least 50% of your income come from recurring sources in 2026.
  3. Incentivize upgrades — reward your team for converting package clients into memberships.
  4. Celebrate retention — spotlight clients who hit milestones or stay consistent.
  5. Forecast with confidence — use your predictable income to plan hiring, marketing, and growth.

🔗 Resources Mentioned

  • Fit Biz Strategies

  • Learn about Christa’s Inner Circle Mentorship for boutique fitness and wellness owners
  • Get the Revenue Ladder Audit Worksheet (coming soon to Fit Biz Strategies members)

🗣️ Connect with Christa

🔍 SEO Keywords

revenue ladder, recurring revenue for fitness studios, boutique fitness business tips, Pilates studio revenue, how to make predictable income, fitness business systems, value builder coaching, sellable fitness business, cash flow planning, studio memberships vs packages

Christa Gurka | Fit Biz Strategies:

Hello, hello, hello. Welcome back to another episode of the Female Empowered Podcast. I'm your host, Christa Gurka, and today we're diving into a topic all about revenue. Who doesn't love to talk about revenue? because one of the things I want. To teach today to talk about is how not all revenue is created equal. Two studios could bring in$10,000 a month and. Or a hundred thousand dollars a month. But one owner sleeps way more peacefully knowing exactly what will hit their bank account and when each month while the other is maybe living in the feast and famine cycle. Right? So what's the difference? The difference is the type of revenue they have running through the business. And I learned a ton about this when I was selling my business. And, I'm currently going through a program to be a, A certified value builder coach, which is teaching people how to increase the value of their business for an eventual exit or sale or strategic partnership. And so these are some of the things that we're learning in not. The program is in that not all revenue is created equal. So what we're gonna talk, we're gonna break down for you today, are the, the different levels of revenue quality from the most stable, the most lucrative, the most sought after by buyers and investors. From to the most unpredictable ones, right? And I'll show you how to climb that ladder so your studio stops going from zero every month and feast and famine and more to like, I know it's gonna hit my bank account. On the first of every month, and I know going into 2026, I'll have this much money, this much revenue just even just to start with. So let's get into it. Okay. The revenue ladder, as I like to call it, is a framework that helps you see where your income is coming from and how reliable it actually is. Alright, so I break it down into five different types of revenue categories, contractually recurring revenue, non contractually, recurring revenue, repeat revenue, actuarial revenue, and then transactional revenue. And as you move up the ladder, the stress for you as an owner and CEO is less or. The lower you are on the latter. The stress for you as a co is more because you don't have. Recurring revenue that you can count on and expect each and every month. So let's talk about what the gold standard is. So the gold standard is contractually recurring revenue. This is like the holy grail, okay? It's revenue that is secured by a long term contract agreement, maybe one year, maybe three years. All right? So a client. Maybe a company has committed to paying you for a set period of time, regardless of whether they use it or not. Think of, corporate wellness. So corporate company X, Y, Z. has a contract with you, an annual contract with you, where they're gonna pay you$10,000 a year to provide services for their team, whether those people use it or not, and they're locked into that contract, whether they spend a thousand dollars a month or whatever it is, it automatically renews until they cancel. Okay. And you as a business owner can forecast this revenue months in advance. So you know, if somebody signed a 12 month contract or a three year contract with you, you know that you're gonna have this revenue coming in, whether they pay monthly or whether they pay annually or bi-annually. You know, you're gonna have this big chunk of change coming in all the time. Okay. Another type of rev, contractual revenue is maybe you sublet a room in your business to a physical therapist or a chiropractor or a massage therapist, and they're. They're legally bound in a contract with a lease for you. So you will have this revenue coming in each and every month, right? Why is this a gold standard? Because when January 1st rolls around and you have, you are locked into a three-year contract, you already know what some of your year is gonna look like because you have this guaranteed revenue coming in. You're not replenishing revenue. You're building on what's. Already there. So it gives you leverage when you talk about things like budgeting, hiring new staff, selling the business, because buyers can now predict cash flow. Okay? The other thing that makes this type of contract really great is the stickiness. To change, right? The discomfort to cancel the contract. So think of our scheduling platforms. Why we, when we wanna migrate software is, it is really sticky because the cost of that. The emotional bandwidth and cost is really heavy. So we will be locked into these contracts for years and years and years, even if we don't love it, because the cost of leaving and going with a new company is really hard. So I don't know that we get that so much in our industry because people could go to another facility, but again, If they, one way you can make this happen is if your studio is so good at customer service, they provide you, there's a full-time front desk person that makes your schedules for you. There is, there's always people at the studio to help you. There's free parking involved if you leave and have to go to another facility. Maybe they don't have all of those add-ons and specialties, and so sometimes you're maybe it's a little expensive, but I don't wanna lose this or. Maybe I have a founding member rate and I don't wanna lose that membership, so I'm gonna stick with it for the long term. Okay. So that is what we call contractually recurring revenue. Now the next tier down, which is common in our industry, is non-contractual recurring revenue, which is really, even though some people are well, they have a contract, but it's months and months so it, they can cancel it within 30 days. It does auto renew. But they can cancel it, which is a good thing because they have to self opt out. So in other words, the revenue keeps rolling in unless someone takes specific action to stop it, right? So these are your monthly auto pays, your on demand subscriptions, all of these things. So your monthly. Eight session classes that renews every month, or your maintenance or your PT packages or your online class subscriptions, right? Clients like this because it's easy, it just auto pays every month. You like it because it gives you prediction, predictable cash flow. the problem is it's not bulletproof because clients can cancel any time. So they can cancel just with 30 days notice. That's why a solid retention program and engagement. Program in your business matters so much to make sure that you keep the churn low and you're constantly making sure that you're plugging the bottom of that funnel where people aren't just canceling monthly. Okay? Your job as the owner of your business is making staying easier than leaving, Maybe there's a switching costs. maybe if they cancel, when they re-up again, they have to pay a re-enrollment fee. And so maybe they don't wanna cancel. Maybe they'll just freeze it for a month or something to that effect. track your churn or retention ever, whichever way you want to look at it. Your retention should be 85 to 90%, and your churn should be less than 10%. So churn means people leaving. Retention means people staying. So you want your retention around 90%. So your monthly churn is less than 10% of your membership. But one of the things you can do here is think of ways that you can make leaving harder than staying. Maybe if they leave and they come back, it's a new price. Maybe if they leave and come back, they have to have a re-enrollment fee, or there's a cancellation fee for leaving. Something like that. So non contractually recurring revenue is great. Not as great as contractually recurring revenue, but it's really, really good and buyers love it. It's consistent cash flow. Okay, now you have what we call repeat. Revenue. This is where most studios start at least, and where a lot of clinics and boutique fitness and wellness businesses really live. They're selling packages, right? So they're selling 10 sessions, or eight sessions, or 12 sessions or one-off sessions, right? It feels good for PE because people do come back. But every time they finish a package, they have to manually decide to buy again. So technically you start from zero, maybe every month or every two months until they take the action again. Right? So. One of the drawbacks for this is, yes, it's great, but there's no, so we're in the monthly memberships, it's use it or lose it. With these, it could take them a year to finish their attendance sessions, depending on the expiration dates or whatever, two months or maybe they skip and there's no kind of incentive for them not to skip, and there's no incentive necessarily. For them to re-up, at least with a membership, they have to self opt out. But here it automatically comes to an end. So when you have this type of revenue, repeatable revenue, it's still good, right? Because you're selling your it. you're selling out in advance, you're getting some buy-in. But what's really important is that you have very. Robust systems and processes to get people to renew this package, right? Whether it's automated or manually what if someone's traveling or they get busy and they forget to come back for a couple weeks? What type of systems and processes do you have in place so that these are recurring as much as possible, but it's not automated, so it's not as great as. Recurring revenue. So how do you get some of the people that are in this type of revenue to go to a recurring revenue model? One? Well, one great way to do it is to train your team, whether that's your instructors, your clinicians, your administrators, your sales office to say to Jane, Hey Jane, I've noticed that you've really been coming pretty consistently twice a week. A lot of our clients that are as consistent as you find that they save money with our eight session per month. Auto pay. It renews automatically, but it it, you actually get it for a little lower price point per session and you get priority booking your, we open the schedule to our members 24 hours before it gets open to the general public. Would you like me to switch you over? So having your team be proactive and being Jane comes really consistently, let me see if I can upsell her into a monthly recurring membership versus a just a 10 class pack. Okay, so the next tier down is your cohort or season based programs, which some of us have. Okay. You think of a six week prenatal series or a new year, new you challenge or a, A postpartum program or maybe you just sell sessions and that's what, how I know some studios that they're we have a six week cohort. We used to do a cohort for Pilates, for neurologic conditions, and we ran it in six week increments. So cohort or seasonal based programs are the next tier down. It's consistent, once you get them they're gonna. Pay whether they show up or not. But you're always refilling the bucket with new people.'cause usually once someone does the series, they're not doing the series again a lot of times. Alright, so how can you turn these semi recurring offers or these little series into ongoing programs, right? How can you have an eight week program that renews. Every time automatically. How can you move up the ladder by having a one-time series of cohort just automatically re renew? And what do you have to do to entice and incentivize these people to be I want you to stay in this cohort, in this series for as long as possible. Okay. Or how do you move them from a series into a long-term membership, right? Maybe they go from a postpartum series and then now they go into a long-term membership into your class. So what does that process look like in your studio so that you're moving them from a not super consistent, type of revenue model to a very consistent revenue model. So if you think of it in terms of this is a great way to get them in. Maybe a lead magnet, an entry point, but then how can you move them up the ladder to that type of recurring revenue model, whether it's monthly or even better, six, 12 month, recurring contracts. And then the bottom of the tier are basically like your drop-ins or your pop-up classes or things that are very unpredictable one time. Once in a while it happens. So you might have a great month because you have all these drop-ins, but there's no consistent, there's no necessarily commitment for them to come back. So things again, your drop-in sessions, your one-off sessions, you do a pop-up class, how are you, this is the lowest most. Most least that doesn't make sense, least predictable form of revenue. And buyers definitely don't oftentimes even consider this the form of revenue. So if anything, this small portion of your business should be really small, 2%. 3%, right? If you're talking about your retail and your pop-up programs, they should be more value adds, someone gets to do something fun versus a large portion of your revenue and your business model. You do not want to build a business model around one-offs. It is. Really hard to predict, to project, to forecast, to budget, and so it really matters if you want to have a sustainable business where you're not always, always, always chasing new buyers. Okay? I will try to encourage to the best of my ability to have. A large percentage, hopefully 50% or more of your revenue in some sort of recurring, whether it be contractual or non-contractual recurring revenue. I also love that if you're doing month, monthly, auto pays that they renew on the same day each and every one month, whether that be the first of the month or the 15th of the month. That way on those days, you know you're gonna get$20,000 in your bank on that day. You can also. schedule, your credit card payments around that and things like that. So, you, you're managing your cash flow in a much more predictable, efficient way. So why does this matter? Why should you care about it? Well, high quality revenue predicts your cash flow. You can predict I'm going to get$50,000 on the 15th into my bank account. So I know that I'm starting from this amount and everything I do above that is just more, okay. It's better for hiring and planning per purposes, budgeting, forecasting more freedom and flexibility for you as an owner, and it certainly, certainly. Provides better value for prospective buyers and acquirers. Alright. Low quality revenue, those one-offs, those transactional types of revenues is you're always chasing new sales. There's no predictability. You don't know what's coming in, when they're gonna come back. If they're gonna come back. There's a lot more stress in your business. And unstable cash flow and inconsistent pay for yourself is one of the. Biggest reasons. Business goes out of sale, business goes out of sale. Business goes businesses close or go out of business, and it's certainly not the type of revenue buyers are looking for. When your revenue, when your intake income is based on recurring or some sort of contractual revenue, you buy yourself time. To innovate, to grow, or even say, I'm not, I'm gonna wait on this new customer conversion strategy until I get it really honed in.'cause I know that every, the revenue I'm bringing in each and every month is enough for me to hit my expenses and my, and my profit goals. So I'm just gonna, I'm not as stressed about. Launching this ad campaign or this lead generation campaign because you already know I'm getting this revenue in, I really wanna make this next. Initiative or ad campaign really, really viable and make it work really well before, really hone in on the nitty gritty and make sure it's as optimized as possible. All right, so what do you do with all of this information? number one, I would. Audit your current revenue. So look at your last 90 days or six month or even year to date. Look at, we're almost to the end of 2025. So look at your entire year. What percent of your income comes from either contractually recurring six month or 12 month contracts of people autopay or that month to month recurring type of revenue? Aim for something 50% of your base would be ideal. Then the next thing is, where does the rest of that revenue come from? How much of it is contractual? How much of it is cohort base? How much of it is repeatable revenue? your class packs? And then maybe set an initiative for the beginning of 2026 where you're I'm gonna take all of my 10 session, 10 class pack clients and see if I can upgrade 50% of them to a monthly auto pay. What kind of messaging and how you're gonna do that, whether you do it with a promotion, whether you do it with someone, talking to them when they come into the studio and emails and follow ups and text automations. But set an initiative for yourself where you're gonna try to take 50% of your repeatable revenue customers, people that are buying packs, and turn it into some sort of monthly recurring package or PLA or auto pay. All right. Reward, consistency. Celebrate members who hit milestones. Six months, 12 months. A hundred classes. 300 classes, most consistent client of the month. They are your stable revenue base, and people will want to be like them, so reward them. So they keep doing, it's like giving, I don't, this sounds horrible. I don't wanna, s. Compare our clients to dogs, but when your dog does something really well, your pet doesn't, you give'em a cookie. Do more of that, right? So when your clients do stuff that you want them to repeat, reward them, praise them. So other people can see it too.'cause they want cookies also. Okay, so I want you to remember, revenue isn't just about how much you make, but also about how secure your cashflow your income really is. How consistent is it? How much can you count on it at the beginning of every month or at the beginning of every year? Alright. How can you get from transactional type of revenue? To the top of more recurring and even contractual type of revenue, how can you do that? Set an initiative. Maybe one quarter, you're just gonna say, we're gonna try, we're gonna try to upgrade, convert 50% of our class packs into some sort of monthly me, membership, auto renew, maybe run a. A, incentive bonus that says if you could, right now you have, a hundred clients that are on 10 class packages. If you can convert 50 of those to memberships, maybe everyone gets some sort of a bonus. Your admin team, your instructors, everyone gets some sort of a bonus. objectively look at what that number should look like or a prize or going to dinner or taking an overnight somewhere. There's all sorts of stuff that you can do Upgrade and incentivize and, inspire your team. So I hope that was interesting to you. It was really interesting to me when I was learning this and how I was trying to, with some of the stuff we're doing in some of our higher ticket mentorship programs, where we're really helping these businesses that are looking for an eventual exit, whether it be this year or in the next. Three years, how can we make that money as recurring and consistent as possible so that when buyers do come in to look at it, they, they can look at the future and be we know that every month this company is bringing in$50,000, or every month we know this company is doing$80,000 and recurring revenue. They love it. It makes it really consistent for them. All right, so I hope you enjoyed this episode. It was kind of fun to record. I love teaching new topics and materials. that's all I got for now. So until next time, my friends, bye for now. I.