Space & Light Studios: Cost-Volume-Profit Analysis and the Business of Yoga

The aim of this case study is to explore the link between Space & Light Studios: Cost-Volume-Profit Analysis and the Business of Yoga. The purpose of this investigation is to examine the relationship between Cost, Volume, Profit and CAC (Corporate Average Cost) as it pertains to a business enterprise. This case study also introduces the cost-volume-profit model to facilitate the understanding of the Business of Yoga. This can be used as a guide in developing a model to help your Enterprise understand how to construct a cost and benefit analysis when considering licensing agreements or buying new equipment.

The idea behind this model is to help an enterprise to see the relationships between cost, volume, profit and CAC (Corporate Average Cost). Understanding the relationship between these variables is critical to the business decision making process of any enterprise. One can argue that any Enterprise wants to find ways to reduce costs while increasing the profits as well as decrease their acquisition costs while increasing the profitability. However, it must be understood that profit is not the only outcome.

An Enterprise must seek to understand the sources of its revenue so that they can maximize their revenue and minimize their expenses. An Enterprise must choose the appropriate value to be provided to their clientele to increase profitability while reducing or eliminating the cost of providing the service. You have to realize that cost reduction is a long term process while profit is the short term process.

An Enterprise must determine the relative benefit of an investment on a monthly basis while trying to find the best profit margin. You must always consider whether or not you are getting the most return for your money in today’s economy. This will be the key to ensuring that your business enterprise remains profitable over the long haul. The business of yoga is not only about revenue generation; it is also about the control and management of customer revenue.

As an enterprise expands and contracts your Company must change with it. This means that there will be new customers and new types of opportunities for your Company. There are a variety of opportunities available in the yoga business including fashion design, production, catering, event planning, media representation, merchandising, sales, and more. Yet, you must remain consistent with your business practices to keep your business healthy and growing. You cannot go back and forth between these opportunities.

All enterprises must continuously evaluate their customers’ needs and provide solutions to those needs. You must continue to find new ways to provide value to your customer base and your business as an enterprise evolves. The goal of any Enterprise is to grow your market share while reducing your competitors’ market share.

With an Enterprise’s marketing strategy, the goal of any marketing campaign is to grow your market share, so you have to continually evaluate your marketing communications. The goal of each message, whether it is direct mail, internet advertising, email, or brochures, is to generate quality leads, which means it must be effective. Your marketing communications must be real and relevant. They must be created to drive qualified leads to your Company’s sales, web site, and leads.

Lead generation is not an exact science, there are many factors at play. Realistically speaking, advertising experts estimate that only about ten percent of leads are closed through traditional advertising. A lead, when first generated, may be more responsive than the number of calls or direct mail pieces you would place. When evaluating your marketing activities and strategies you must also remember that every day is different.

When it comes to advertising, you have to learn from your competitors, and continually improve upon your efforts. If you’re not making more from your advertising or if it is not meeting your expectations, you must ask yourself why. The cost-volume-profit model provides an interesting and fun way to find answers to these questions.

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