Something in the world of floating have you stumped?
Show Highlights
“When should I start making money?” is a deceptively simple and anxiety inducing question that every business owner has to face. Sometimes the answer is straightforward. There are lots of franchises that have near endless amounts of market research and profitability trends that point to a sensible timeline of when and how much you can expect versus a given investment.
Float centers aren’t like that, unfortunately. There’s simply not enough data out there to create predictability in a market. The good news is that given the relatively low overhead excluding opening costs, float centers have the potential to be profitable almost immediately. Graham and Ashkahn break down this question and provide some tips on the issue.
Show Resources
FTS Product – Float Center Business Plan
Listen to Just the Audio
Transcription of this episode… (in case you prefer reading)
Graham: Today’s question is, “when should my float center be profitable?”
Ashkahn: Hmm.
Graham: I mean, probably as soon as possible, right, like ideally before you open-
Ashkahn: Got to get food.
Graham: … you’re turning a healthy profit.
Ashkahn: If you’re making a choice between profitable now or later, yeah, I would usually go with now.
Graham: And “should”, isn’t it … I mean, I guess “should” is sort of the defining word there, right? Like obviously as any business owner, you’re just trying to make your business as profitable as possible as quickly as possible while not compromising your base morals.
Ashkahn: or sometimes, by compromising them.
Graham: I think depending of the company.
Ashkahn: But yeah, you know, there’s expectations from banks if you’re taking out a loan, or investors, they’re often expecting certain types of businesses to not be profitable for X amount of time.
Graham: Yeah, I guess that is true.
Ashkahn: And there seems to be like industry standards for other industries as well.
Graham: Yeah, just not this one.
Ashkahn: Just ’cause it’s small, you know, like there aren’t as many float centers as there are restaurants for us to pull like huge, huge aggregate data numbers on. So, let’s talk about being profitable.
Graham: So you were just focusing on different words in the sentence until it makes sense, that’s good.
Ashkahn: No, here’s really just the thing, I think, the point I want to make. Are we talking about being profitable like you’re making more money each month than you’re spending? Or are we talking about profitability including making up for the startup costs that you spent to open the business in the first place?
Graham: Right. In my mind, I guess we were talking about profitability of ongoing month-by-month making more money than you’re spending.
Ashkahn: Okay. Great.
Graham: The straight like P & L profits.
Ashkahn: So in that case, it seems at least from talking to other float centers, our experience, and stuff like that, it seems like float tanks are pretty decent compared to other industries in terms of how fast they can become profitable.
Graham: Yeah, and I’d say the operative word there is “can.” So let’s talk about that word for a second.
Ashkahn: It’s like a small tin that can hold things-
Graham: Get out of here.
Ashkahn: -sometimes food materials.
Graham: Shut the front door. So it’s because the cool thing about float tank centers is that they totally are able to achieve an early profitability. Like when we opened, we were booked pretty solid. Like our first few months, those months were profitable for us. In not a lot of other businesses you can do that, or with restaurants it takes a lot of settling in it seems like. You really don’t expect to be profitable with a restaurant for a few years often. But a lot of centers also are unable to fill their tanks and don’t get profitable right from the very beginning.
Ashkahn: So yeah, if things are going well, I think float tanks tend to be ahead of the curve compared to other businesses, which is nice. When we talk to float centers that have been around for a while and kind of had really good launches and stuff like that, they generally are profitable in their first month.
Graham: Did you say lunches?
Ashkahn: Launches, launches, yeah.
Graham: Launches, got you, okay. Yeah, I’m there. We’re on the same page.
Ashkahn: Right usually … yeah, “A good lunch is what gets you to a good launch,” is what I always say. So that’s really cool, that’s like the cool thing about the float industry, that’s probably what you’re shooting for. You’re not going into opening your business being like, “I’m probably not going to do a great job for the beginning.”
Graham: Yeah, yeah, exactly.
Ashkahn: So yeah, you definitely have the possibility of turning a profit pretty quickly, which again, compared to other industries is often not what people are even expecting a business to do.
Graham: I guess there’s another part of that, too, which is a lot of people are working in the business themselves.
Ashkahn: Right.
Graham: And for calculating profitability, whether or not you’re including your own wages or salary or dividends into that is, yeah, maybe questionable. Even whether you’re paying yourself what you would pay for an employee, if they were taking on all of the roles and responsibilities that you have, is an interesting one. Like to a certain extent, we didn’t really know how profitable Float On was as a company until we personally were out of there, you know, and we actually have regular staff and independent contractors that can fill in all of those little filler roles and just do hours that we were sort of taking onto ourselves, you know.
Ashkahn: Yeah, ’cause it really is. I mean, payroll is just such a huge part of your expenses. So, like being the person who’s running the shop and kind of having that cost be flexible or kind of hurting you personally and not hurting the business, in terms of you not taking that much money home. Those make it so that there’s a huge, huge reduction in your expenses on the books.
Graham: Yeah, so I guess just something to be cautious of. Like even if on the books you’re profitable, it’s worthwhile thinking of what you’d have to pay hour-wise to other people coming in if they were taking on all of the roles that you were doing, and whether you’re still profitable without yourself in the business. I guess the business by itself, not including all of your kind of unpaid owner hours that inevitably creep in there.
Ashkahn: Yeah, and things, you know, even if your schedule is full right at the beginning, you’re probably still going to be able to increase the amount of income you’re making as time goes on. ‘Cause often when people are launching and they’re doing a great job marketing and they’re getting their schedule full, they’re doing it through not selling a lot of full-price floats. They’re either, they’ve run some sort of big discount, maybe it’s Groupon, maybe it’s some other kind of big discount thing they’re doing to get their name out there. Maybe they’re giving away a ton of free floats, they’re floating all their friends. These are the things that help you have a good launch and help you get your float center full and help you do that marketing. That’s the stuff that starts to pay off some months down the line when those people decide to come back and pay full price and decide to actually come and float.
Graham: Yeah, for sure. There’s kind of this reinforcing cycle of keeping your tanks full that we’ve noticed. You know, like chances are if attendance starts dropping at our float center and we don’t do anything to correct it, that attendance kind of keeps going down or stagnating at a certain relatively low point. That’s just because you’re not generating as much word of mouth when you’re not having people come into your tank. So in addition to being able to hit profitability early on and actually fill up your tanks, if you do that, you’re in a really good position to just have that snowball forward and continue to the next month also fill up your tanks and also be profitable. So it is really worthwhile thinking about how you’re going to make a really big impact.
Like one of the things that I encourage float centers to think about nearing opening, is just what can you possibly do to make sure that you can, in that first month as much as possible, just have totally booked-out tanks? I mean in my mind, even if all of them were free floats, that’s still such a good investment in your marketing just to get bodies in those thanks so they can start discussions.
Ashkahn: So how soon should you be profitable?
Graham: As soon as you can.
Ashkahn: Yeah, hopefully pretty soon. Like you definitely have the ability with the float center to be profitable right away, day one. Day one you should spend more money than you spent that day, you know?
Graham: That pre-opening you know, I mean, ’cause you sell floats before you ever open up, too.
Ashkahn: You can, you can do, you have pre-sales and stuff like that.
Graham: And I also, just as a random insert tip, I like the idea of selling memberships at a discount prior to opening, too. I got that from The Float House guys kind of gave a good talk on that one year. But the idea of pre-selling memberships is just such a good in to having that sustainable revenue coming in kind of from the very beginning, rather than one-offs. So, random tip.
Ashkahn: Yeah, and good luck.
Graham: Yeah, good luck. And if you have your own questions and want to send them our way, definitely do. Go to floattanksolutions.com/podcast.
Recent Podcast Episodes
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With the push from Justin Feinstein at LIBR to get more float centers involved in research, many float center owners are chomping at the bit to push studies forward on the benefits of floating. But where do you start and how do you make it happen?
Graham and Ashkahn discuss this idea and how to do research right, as well as some of the things that might be helpful OR harmful to the world of floating in the eyes of the scientific community. There’s a lot of nuanced things to know about proper research and if you go in overzealous without considering how established science is done, it can harm the reputation of the practice.
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Definitely an essential episode for anyone to listen to before going into their build-out phase.
Floating in National Media – DSP 298
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The Real Tips on Building Your Own Float Tank – DSP 297
Someone wrote in and asked, again, despite the repeated warnings of the previous episode covering this topic, how to build a float tank properly.
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How to Handle Other Float Centers Spying on You – DSP 296
Graham and Ashkahn talk about how they deal with other float centers spying on Float On.
Basically… they don’t. The float industry is a really open community and a lot of information is generally freely available. If someone is spying on a float center, that could be a result of poor communication skills or a lack of awareness of what information is actually out there. The guys share their advice on how to talk to someone who might be in that situation and how to move forward, hopefully as friends instead of rivals.
Latest Blog Posts
Reflections from the Rise Float Gathering
Over this past weekend, a good chunk of the Float Tank Solutions and Float Conference crew ventured to St. Louis, MO for the first ever Rise Community Float Gathering. Beyond our excitement to see old friends and meet new ones, we were thrilled to be able to attend a float event that we didn’t have to plan.
When it comes to float tanks, we often deal with a lot of the “what” and the “how” of things – what do I need to do to open a float center and how to I make everything work? We write blogs and put out content. We spend our days thinking about conference flowcharts, water chemistry, detailed business plans, soundproof insulation, etc.
Rise, on the other hand, focused on the “why?”
The Story Behind the Float Marketing Forum
Over the past few years, primarily through feedback received from conference attendees and through industry survey responses, float center owners struggled with and wanted a solution to one thing… marketing. It makes sense – if there’s one thing every center needs (besides salt), it’s a solid flow of customers in tanks.
After some brainstorming with Ashkahn, we’ve decided the best solution for this year was to host a series panels covering key marketing topics that will provide the biggest impact in growing your float center business.
Introducing: The Float Conference Marketing Forum.
Announcing the 2nd Ever Start-a-Center Giveaway WINNER!
In what was one of the most difficult decisions that we had to make as a team… and after sorting through nearly 200 entries… we’ve decided upon a winner in our second ever Start-a-Center Giveaway.
Read more to learn who we’ll be guiding through the process in starting a float tank center in their community.
Gut your space before construction!
One line we don’t think you should cross is this: as much as possible, when building out your float center, gut it completely. Start from scratch.
At least then the mistakes you make are your own and your building will hold fewer surprises down the line. There are many benefits that you may not think of immediately. In this post, we’ll guide you through some of them.
