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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Graham and Jake take on talking about Tankless or “On Demand” water heaters today. They break down a lot of the benefits of them compared to storage water heaters like the fact that they provide a nearly limitless source of hot water, require less energy consumption, etc. They’re not perfect though, and any float center considering one should look closely on how best to implement them. Jake shares some of the pitfalls of them as well as how to maximize their usefulness.
Should Float Centers use Light or Heavy Gauge Studs? – DSP 269
Still no Ashkahn today. He’s taking a couple of post-conference days to himself.
Jake and Graham are on the scene though to answer construction questions, though. Even the straight forward ones, like today. Jake informs us which to choose when doing construction, light or heavy gauge studs when constructing a float center, while getting a little sidetracked when comparing wooden and metal studs.
Construction to Make Your Life Easier – DSP 268
Graham and Jake cover a wide range of construction tips to make running a float center easier. Everything from making sure you have extra storage to installing mop closets with sinks in them for dealing with heavy duty chemicals.
The advice is pretty much a shotgun approach of tips, tricks, and hard lessons learned throughout the years.
Draining Float Tanks into Septic Systems – DSP 267
Graham and Jake tackle the difficulties of draining float tanks and how that process can differ based on different municipalities, different water treatment systems, or whether you’re using a septic system or not.
Water treatment typically involves whole contained ecosystems and highly concentrated epsom salt water can impact that pretty drastically. The guys provide good tips for each type of system and what to be prepared for if you’re operating in a rural area with a septic system.
The Difference Between STC and Decibels – DSP 266
Post-Conference Ashkahn is still out of the recording studio, but fortunately Jake is keeping Graham company in there.
Graham and Jake break down the differences between decibels and STC ratings, two very important to understand when figuring out soundproofing. There’s a lot to digest in this episode, but fortunately the guys keep it easy to understand by providing a broad level overview of the different concepts.
Latest Blog Posts
The Float Tour Blog – Issue #28
Home sweet home! After so many months on the road, it was strange being back here in Portland. We were exhausted, excited, and a little travel weary. The first night back, I slept in my own bed for the first time in three months and the world just melted away.
Having travelled across the United States, I’m reminded of how insular Portland is. We are aggressively fixated on keeping things local. Local beer, ketchup, bikes, pet food, pillows, phone cases… it’s part of our charm. We want to reward people for living here and being a part of the community. It’s so pervasive that, after living here for so long, I kind of forgot that Secret Aardvark hot-sauce isn’t available everywhere, and that most cities don’t even recycle, let alone compost.
The Float Tour Blog – Issue #27
Our northern neighbor – a sister city, of sorts – Seattle is the largest metropolitan area in the Pacific Northwest. It’s the land of Microsoft and Kurt Cobain, and the culture here embraces both simultaneously. It’s tech business professional in the front and rock n’ roll grunge in the back. This blend creates a perfect storm of high energy business life and high energy nightlife, making relaxation a valuable commodity. Floating helps fill the void left by nightmarish traffic and overcrowded restaurants.
Given that it’s so close to home, the float centers in Seattle are a lot more familiar to us. Our visits here were more like a high school reunion than they were like the first day of school. During some of our visits, we were picking up conversations right where we left them.
The Float Tour Blog Issue #26
Vancouver is the largest metropolitan area in Canada, and third largest on the West Coast. It’s a major hub for international trade, with one of the largest ports in the world, giving it a large migrant population, mainly from Asia, the Middle East, and Australia. It’s also been a long-time home to the Canadian film industry, and has even been nicknamed “North Hollywood.” Dozens of film and television productions from major studios film here every year.
Vancouver is very much an international city. It has large boroughs dedicated to varying cultures, including one of the largest Chinatowns in the world. The society here is more receptive to new ideas, always looking for the next big thing; it’s not surprising that floating has blown up in Vancouver as much as it has.
In the last 3 years, 10 float centers have opened up, most of them being larger 4–6 tank centers. The really interesting thing is how they all opened within the same short amount of time about 1 ½ to 2 years ago, within months of each other.
The Float Tour Blog – Issue #25
We finally made it back to the West Coast! We went through the Canadian Rockies and were overwhelmed by the beauty of it all. We drove through hours and hours of winding mountain roads, fertile valleys, and tiny towns so picturesque they looked like movie sets. It was so captivating, in fact, I suspect Graham and Ashkahn may have secretly replaced themselves with robotic doppelgängers to hike throughout Banff.
This post will focus on the smaller communities in B.C. that are bringing floating to new people every day. We also get to visit Canadian manufacturer Pro Float. They’re relatively new to the scene, just opening up earlier this year – another exciting sign of the growth in the industry.
