Now that the dust has settled with the Well City Challenge Pitch Competition, I want to go over a few details about what Strides is and what my goals are for this company.
Also, I specifically wanted to address questions that I received during the Well City Challenge Pitch competition about pricing and profitability.
Before we go any further, please note that any information detailed in this post (or any future post) is subject to change. I will be participating in the Well City Challenge Accelerator this spring and this concept/model may pivot before the final version is launched.
Before we jump into profits and pricing, let’s start with a few frequently asked questions:
What is Strides? Strides is a running-based fitness community that helps you get in shape, improve your heart health and boost your mood. Our workouts are open to all fitness levels — including walkers.
What can I expect at a Strides workout? Currently, we have three different class models. Our premier class will combine running/walking intervals and finish with circuit-based total body training. Our other class options will include speed intervals, core training, and long-distance runs. All in-person sessions will range from 45–60 minutes.
Is Strides a non-profit? No. Strides is a for-profit business with a commitment to improving the health of our members. Think of Strides as more of a B Corp. Certified B Corporations are “businesses that meet the highest standards of verified social and environmental performance, public transparency, and legal accountability to balance profit and purpose”.
If classes are outdoors, what happens when it rains/snows? We’ll always run in sprinkles and even showers but NEVER storms. Members will receive credits for any class that is canceled due to weather.
Is Strides the same as City Fit Girls? No. While we anticipate some member overlap, Strides and City Fit Girls are different businesses with different goals.
What is your vision for Strides?
- To help make Philadelphia a healthier city.
- To lower the barrier to entry to running through coaching and support.
- To serve populations that are often left out of fitness due to pricing and location.
- To promote and utilize Philadelphia’s vast network of outdoor spaces.
How Long Will It Take Strides to Be Profitable?
Strides is a for-profit business. That means for Strides to stay in business, the company has to make enough money to cover operating expenses without utilizing donations. From day one, our goal is to be able to cover expenses and turn a profit while ensuring our sessions are affordable and accessible to all.
How is that possible? The challenge that traditional group fitness studios run into when it comes to pricing and profits is expensive overhead. This is why group fitness classes can range from $20-$30/session. Let’s explore some of these expenses:
- Expertise: When you take a group fitness class, the price often reflects the cost the studio/gym pays the instructor. Depending on the location, that could be anywhere between $15-$50 (or more) per session in Philadelphia. That means paying coaches $30/session for 30 sessions/week would cost $900 each week and $3,600/month for instructor wages.
- Administration: Walk into your favorite studio and what do you see? Usually a check-in desk, a front desk staff member at $15/hr, towels, and other amenities. You also use a booking system like Mind Body ($129/month) to register for the class. These costs add up quickly.
- Rent: Depending on the location of a studio, that could be another $1,000-$10,000/month.
- Utilities: Think water, electricity, gas, phone, internet, and more.
- Misc: Credit card processing and banking fees, continuing education, insurance, maintenance, membership/professional organization dues, music licensing fees, marketing, etc.
- Profit Margin: When setting a price for any product, there is a break-even amount and there is a profit margin. Profit margins can range from about 15–80% depending on the business. In fitness, if the break-even cost to produce the class is $15 and the profit margin is 40%, the class will cost $21. So when you see your favorite studio running a promotion, know that the price is cutting into their profit and closing in on break-even (and in some cases, leading the studio to lose money).
So what does this have to do with Strides’ pricing and profits? The overwhelming majority of our business will be virtual and outdoors utilizing a combination of public and private outdoor space. This model will cut out half of the total operating expenses mentioned above.
Not only will this give us flexibility with pricing, but this also will increase the likelihood that we are profitable from day one.
What types of memberships will Strides offer? Strides will offer three subscription tiers in addition to drop-in classes. Although exact pricing has not been finalized, here are the proposed monthly membership tiers (remember, this is ALL subject to change):
- Virtual Membership: Includes unlimited virtual access to Strides workouts via Final Surge. This will be the cheapest option with the potential to serve the most people. Although it won’t include the in-person training component, members can utilize the app’s features including built-in message boards to share cheers, photos, questions, and more. Members will also be able to access videos, documents, and other attachments from their coaches to support each workout.
- 8 Sessions /Month + Virtual: Includes 8 in-person sessions + unlimited access to Final Surge.
- Unlimited Sessions /Month + Virtual: Includes unlimited in-person sessions + unlimited access to Final Surge.
But how much will each membership cost? One of the reasons that I can’t get too specific about pricing is because we haven’t determined all of our operating costs yet. Once I have a clear estimate for total operating expenses, I will share more specific proposed pricing for each membership tier.
When will memberships become available? Once I complete the accelerator, I’ll have a better picture of where things stand for launching but my goal is to launch the Virtual Membership by summer and if all goes well, host an in-person pilot in the fall.
That’s it for now! The Well City Challenge accelerator will kick off in April and I’m sure there will be changes made to this plan over the coming months.
Thanks for reading and stay tuned for more Strides updates in the future.