Episode 345: Your Business Isn’t Broken — Your Model Might Be Outdated

Are you working harder than ever, yet your business still feels harder to run?

In this episode of the Female emPOWERED Podcast, Christa Gurka explains why the problem may not be your marketing, your pricing, or your team—it may be your business model.

As the Pilates, fitness, and wellness industries continue to evolve, many business owners are discovering that the systems, memberships, staffing structures, and client experiences that worked five years ago simply aren't working anymore. If cancellations are rising, memberships are freezing, retention is slipping, or filling your schedule feels harder than it used to, this episode will help you determine whether it's time to update the foundation of your business. 

In This Episode, You'll Learn:

•  The warning signs that your business model may be outdated 
•  Why clients are "quietly quitting" and what to do about it 
•  How client expectations have changed since 2020 
•  The shift from traditional memberships to modern membership models 
•  Why unlimited memberships may no longer be profitable 
•  How technology impacts the client experience 
•  When to pivot your business model—and when to stay the course 
•  The key metrics every studio owner should track before making changes 
•  The foundational systems every successful business needs 

Key Takeaways

✔️ More marketing won't fix an outdated business model.

✔️ Rising cancellations, freezes, and declining retention are often signs of a deeper issue.

✔️ Today's clients expect flexibility, personalization, and convenience.

✔️ Small independent studios can outperform larger competitors through client experience and connection.

✔️ Before making major changes, look at your data—not your emotions. 

Ask Yourself:

•  Is my business model still serving today's client? 
•  Have my memberships, pricing, and policies evolved with the market? 
•  Am I making decisions based on facts or feelings? 
•  Do I have the systems and processes needed to support long-term growth? 

Ready to Upgrade Your Business Foundation?

Learn more about Fit Biz Accelerator, Christa's 12-month implementation program designed to help boutique fitness and wellness business owners build scalable systems, stronger teams, and more profitable businesses.

🌐 Fit Biz Accelerator

Connect with Christa

📲 Instagram: @ChristaGurka

🌐 Christa Gurka Website

SEO Keywords

Pilates studio growth, business model innovation, boutique fitness business, studio owner strategies, Pilates memberships, wellness business growth, client retention, fitness business systems, Pilates studio profitability, boutique fitness marketing, business operations, Christa Gurka, Fit Biz Accelerator.

Transcript

Speaker 0:12

Hey there, everyone. Welcome back to another episode of the Female Empowered podcast. I'm your host, as always, Christa Gurka, and I'm so glad that you are here today because this is one of those episodes that I think many of you may have been waiting to hear. A few episodes back, and I think it was like episode 338, we talked a little bit about whether the small independent Pilates studio could survive the Pilates boom, and the response to that episode was so massive. So many people DM'd me to say, I hear you. I get it. I'm glad that there's hope. I know I have to differentiate. I know I have to build these systems, but my business right now feels like it is running on a sinking foundation, a foundation that was poured five, eight, 10, even two or three years ago." And most of you, what you're realizing is that it's no longer working for you, right? You just set up your business on a foundation that is no longer Again, like working for you. So basically, think about it as like the foundation's now being recalled 'cause they have found that there's some defect to it, and you have to think of pouring a new foundation for your business. And that's exactly what we're gonna talk about today. And what I really want you to understand is your business is probably not broken, but your business model, the actual structure of how you sell, how you deliver, how you schedule, how you retain your clients, might need an upgrade. Because when a business model is outdated, no amount of hustle, no amount of new marketing, no amount of working a sixth day in a row or adding an extra hour in your day, no new website is gonna really fix that. What you have to do is pour a new foundation. You have to update the model itself. So today, what we're gonna talk about is we're gonna cover four things. One, signs that your model no longer fix- fits today's infrastructure or client. Two, old membership versus new membership and what clients are expecting now. Three, every... The shift that most businesses now need to make. And four, knowing when to evolve or when to double down on what you are- you've already got. All right? So are we ready to get started? I am. Here we go. Number one, signs that your business model no longer fits today's clients. An outdated model rarely, like s- comes up and says, "Oh, I'm here. I'm outdated. I need you to fix me." What it usually does is it sneaks up quietly, little by little signs that you may have ignored, little this, little that, and all of a sudden, you're sitting in a system and you're like, This no longer serves me." Cancellations are starting to pick up. Membership freezes are starting to pick, p- pick up. People are not necessarily angry They're just quiet. Remember that I don't know if it's still happening now, but it was called quiet quitting a while ago, maybe a year ago, two years ago. This is what's happening now to clients. Clients are quietly quitting your establishment, so you're seeing this uptick in cancellation, the uptick in membership freezes, the uptick in no-shows. All right? A schedule maybe that used to be f- full all the time now needs more leads, more marketing to stay full. Your conversions might be dropping from new lead conversions to retention. People say that they love you, but no one's really staying and buying. People are asking for things that you don't normally offer. Maybe they're asking for something different. And this is when you know that it's time to possibly change the model that you are delivering. Cause this is what an outdated model really looks like. It shows up slowly. It sneaks up on you quietly, the same way having mediocre team members or mediocre service sneaks up on you quietly. And the cost of tolerating that. All right? So- When you start to see these things happen, when the numbers are showing you cancellations are up, no-shows are up, your schedule is harder to fill these days, right? Your conversions are dropping. This is when you have to take a look at your business and at your business model and figure out if the business model needs to change. So let's talk about ways that you can do this. One, maybe you were a... did offer group classes for a while, but the group classes were six or seven reformers, five, six or seven reformers, and now you're try- you're seeing that because of the influx of big box studios where they're having 10, 12... The gym that I go to, Lifetime, is about to open with 20 reformers. All right? Now that middle ground of six, seven reformers is no longer working for you. So maybe you take a pivot to be that small semi-private studio, and you cut down to four reformers, right? And you're really gonna sell private and semi-private sessions. That is a way that you can understand the business model that I was operating before is no longer serving me, right? You have to figure out how can you stand apart in this environment that has more noise, right? People have more options. So that is one of the things, right? Do you need to adjust your memberships? Your drop-ins. Do you need to add a class package, right? Do you need to add a very specific... for example, if you are seeing that a lot of people are freezing their membership, maybe that worked for you before, but now what you need to do is you need to implement a more rigorous or more in-depth freeze policy. You can freeze for two weeks twice a year, or you can freeze for one month twice a year, and it automatically reinstates the next month. So maybe before you were able to get away with having a pretty easy breezy, freeze or cancellation policy, but now that's no longer serving you, and what you have to do is figure out what- problem you have to solve in order to make the business model now serve you. Another thing that you can look at is the type of team that you're hiring. All right? For years, decades, our industry operated on 1099s. That's how it was. You were a 1099, you're an independent contractor. I am seeing more and more that business model no longer serves this industry, especially the small independent studio. Having W-2s and employees that are bought in to your specific mission, vision, and values is going to create a stronger infrastructure. It is going to create a better brand, a better experience, better longevity, and less chaos and stability. And so hence having less people work more hours and teach more classes could be the business model you need to now adapt to Because having your instructors run from studio to studio, again, once again, it's just no longer serving you. And so when it's no longer serving you, you need to create a model that will serve you. rent has gone up a lot, so maybe you need to be creative about your pricing structure now, because the pricing that you had pre-2020 is once again, no longer serving the expenses that you have. When we hold on to offers or schedules or packages or structures or policies because we initially built them and they worked for a period of time, and we're not willing to change them, then we get stuck. The longer we hold on to these, the more uncomfortable the whole thing gets and the harder it is for us to change and pivot. So just look at certain types of the things that, that could be holding you back and might need to have some amendments, some optimization, or just discontinued altogether. When now when we look at membership models, the gold standard pre-2020 was 12-month contracts. That was the gold standard. That is no longer the gold standard. Most people nowadays, most clients do not want 12-month memberships. They want a little variety, they want some flexibility, and they want some personalization. So now the unlimited membership, especially now with the Pilates specif- speaking specifically because of Pilates, is no longer serving our business model. Even with a, an expensive membership, even an unlimited membership that costs five hundred dollars a month, if your clients are coming seven days a week, and possibly you're allowing them truly unlimited, they can come more than once a day. So let's say they're coming ten times a week, all right? That means that they're coming probably 40, 42 times a month, So even if they're paying $500 and they're coming roughly 40 times a month, they're paying $12 a class. I can tell you, you cannot survive on that type of revenue cost per class. You just can't, So if you're a Pilates studio, maybe getting rid of these unlimited memberships is the smart way to look at your business now, and having 4, 8, 12, 16, right? Not unlimited. Now, I'm only speaking about Pilates. I'm not speaking about yoga or barre, where you can always have a few more people in there. I'm speaking specifically about Pilates, Especially those of us that have limited amounts of space, right? So the long-term, 12-month unlimited membership worked because clients didn't have a thousand options pre-2020. They expected to fit into your structure. Today's client wants something different. They want tiered options, they want flexibility, and they want more personalization for what they want to do, Modernization does not necessarily mean cheapening, decreasing your... Or it doesn't mean cheap, really, What you need to figure out is how the modern client wants to buy, So y- and also making sure that you're pricing it for your current expenses, And again, this is where you want to make sure that not only do you have the right type of memberships for the clients that are coming in, but you also need to have a stricter cancellation or freeze policy. And deciding to move them to month-to-month options, or even three-month options, is now the new gold standard versus 12-month contracts, 12-month contracts, the other thing that I don't think a lot of people realize is, yes, it's recurring revenue, but if you go to sell your business, oftentimes you have to give some of that money back because you're not the one that's gonna serve those classes. So having, l- the buyers wanna know that they're gonna get new cash flow soon All right? So it's just something else to consider in, in your service offerings if when you're looking to build a business that is for sale. So another thing that new clients are looking for is the use of tech. How can you use technology to help them get the best experience? How can you use a wait list? How can you use a scheduling platform? How can you use an app that makes it easy for clients to schedule, to cancel, to change their appointments, to see what's available to them? People are busy, and once again, they have a lot of options. So if the customer journey, especially for new clients, is not easy for the customers, they will go find another place to take their classes. So making sure that you make your customer journey experience and your customer journey in general, your customer experience really streamlined really easy, is going to be important for this current client, this current buyer. And at the same time, if you service a different demographic, an older demographic over 60, they still very much value the personal connection. So having someone at your front desk that can answer questions in real time and not be a robot, Having someone be able to answer the phone, having someone that can walk them through how to use the app. So the other important thing is recognizing who your client is and what they are specifically looking for. What is it that they're specifically valuing, and how can you make that what your business offers so that they feel special, they feel like there's personalization specifically for them? And this, my friends, is where I can tell you where small independent studios will destroy franchises. From intake forms to movement screens to milestone check-ins, the client should feel like, "This place is me. This place values me. This place knows me. This place is make, makes me feel special when I come in and when I leave." And that is one way that big box gyms will never be able to out-replicate the smaller independent studios So now, what are we gonna talk about now? When to know when to pivot and when to know when to double down on what's already working. And these are really hard decisions, right? The people that get it right succeed. The people that get it wrong sometimes just have to go back to the drawing board. Not every shift actually needs to happen, You should be evolving when the data tells you, not when you're emotional, not when you're bored, not when you're copying, not when you're reacting to something, Triggers that tell you it may be time to evolve, just like we've said, retention is dropping. You're getting the same repeat requests over and over again, so that might mean you need to pivot, optimize, go back to the drawing board. You feel like you're working harder for the same amount of revenue. Your clients are going to your competitors. Your team might be coming up with new ideas or bringing things to you that you don't see all the time Signs when it's not time to evolve are when you're reacting to a bad month. You're blindly copying what someone down the street is doing. Or if your basics, your underlying things, your mission, vision, and values haven't been dictated. You have no systems in your business. You have no processes. You don't have a good hiring structure. Those need to come first, and then you can... That really is changing your business model, when you have to put together a model that actually is sustainable, and replicable, and not owner-dependent. So if you have those systems in place, great. If you have none of those systems in place, ask yourself these questions. Do I have core values? And I don't mean in your head. Written down with behaviors associated them that everyone on your team could articulate and tell you exactly what the behaviors are that are expected of them. Number two, do you have a system, a process for how you onboard new customers? Emails, in-studio touch points, follow-ups. How do you sell to them once they've come in for their intro offers or their evaluations? Three, do you have a hiring process and an onboarding process for your new hires that is the same every single time you bring a new person on, and somebody else could run without you there? And four, do you have a system, a scorecard, a spreadsheet to track your metrics, and you track them regularly, weekly, and you understand the story behind that? So if you answer no to those four questions, that's what you need to work on first. Because if you don't have this, all the other stuff you do are gonna be for naught because you're gonna come back and your foundation's still gonna be sinking. So you need the foundation. When new Pilates people come into the studio, we don't start them with a teaser or walkover. We start them with footwork. Why? 'Cause they need to build a foundation. If when you get a new client that has acute back pain, we don't start them with deadlifts. No, we start them with pelvic tilts or stabilization or dead bug, right? Because why? They need a good foundation. So you need to have these foundational items in order to be able to even ascertain if your business model is broken or not. So if you do have those things, then what you're gonna look at is you're gonna look at these things, so year to date, January through May of twenty twenty-six, and you're gonna compare them to January through May of twenty twenty-five. And what you're gonna look at is your client retention rate. Is it worse than last year? Is it better? Is it steady? You're gonna look at the average LTV, which is lifetime value of your customer. Again, is it the same or is it worse? You're gonna look at your cancellations and compare them to this time last year. Was it the same or is it worse? What about your schedule utilization? Do you have the same utilization you had this time last year, or is it better or is it worse? If three or more of these things... actually, those three are... those are four things. Actually, one more thing. I want you to look at your conversion rate from intro to membership. So it's, you're gonna look at your overall retention, you're gonna look at your cancellations, you're gonna look at the lifetime value of your clients, the schedule utilization, and your conversion rate from intro offers or evaluations to plan of cares or intro offers to long-term memberships. If three or more of those are less or worse off than you were last year, you might need to look at what you need to change or optimize in your business model Not every shift actually has to happen. Remember, just because the industry is moving in a direction does not mean you have to move with it tomorrow. You could double down on some of the things that are what the data is telling you. So look at your data. Look at what the metrics are telling you. Listen to what your clients are saying. Listen to what your team is saying. Don't necessarily look at what your competitors are doing, because you don't always know what's going on behind the scenes. You don't know if they're profitable. You don't know if they have m- venture money behind them, or they just got a big influx of capital. You don't know if their team is happy. You don't know if their clients are happy. Oftentimes, you only see what on Instagram. So you can see what's out there, but I would always take that with a grain of salt, 'cause you don't really always know what's going on behind closed doors. I say this all the time. People in my mentorship groups hear it, and the people... and I'm sure you've heard it on the podcast. Feelings are not facts. You could feel a certain way, but you need to pull the data. You need to look at your retention rates. You need to look at the lifetime value of your customers. You need to look at your schedule utilization. And you need to have a solid foundation, which means you need to have your core values built out, that every person on your team can articulate what those values are, and they can tell you the behaviors that are associated with that values. And what does that mean? That means when I say customer commitment is one of your core values, they can say, "Oh, what does this mean in real life? What does this look like when you're abiding and you're aligning with that core value?" All right? You need to know what your systems are. They need to be repeatable and replicable by every single person on your team. And, and you have to have the right people to run the systems sometimes the business is not a tear down and start from scratch. Sometimes it's just tweaking a little bit. It's like renovating a room versus tearing down the whole business And that is something you can do by looking at the data, and also by reaching out and asking for help. All right? I'd rather you reach out and ask for help and learn to update the model rather than throw away your dream. And at the time of this recording, we are just about wrapping up applications for my Fit Biz Accelerator, which is a 12-month program with 12 women business owners that teaches them the exact framework, the exact system, the exact processes I used to get my business, my Pilates studio, and physical therapy practice ready for my seven-figure exit. Not only do we teach the systems and the processes, we teach you how to implement and execute them, because as we all know, that's the hardest part. We can learn all we want, but if we don't have someone guiding us, giving us the framework, and then teaching us how to implement it and how to troubleshoot in real time, most often we... it doesn't get completed. I'm basically like your project manager on your home reconstruction, and I'm there making sure that the contractors and the workers are doing the job so that your house is done in under budget and in the ab- right amount of time that you were promised. So we are probably closing applications very soon. So if this is the work you know you need to do, I invite you to head on over to www.christagurka.com/accelerator and get your application in. You do not have to do this alone. You actually shouldn't do it alone. You have built something real, And you deserve to update it, to renovate it, to bring it up to code with someone who has actually done it and can guide you in the right directions and can help you find the leaks, 'cause if you don't know what to look for, how are you gonna find the leaks? I would love to help you build a business that fits the version of you that you actually are today. All right, my friends, that is it for today. Take this one in, sit with it, pull your numbers, and if you need help, you know exactly where to find me. Until next time, my friends, bye for now.