Illustrative example. This is a practice engagement built on sample data to show how we work. It is not a real client, and all figures are illustrative.
The decision
A boutique fitness studio was considering a premium Reformer Pilates & Recovery tier: six commercial reformers, delivery and assembly, accessories, and a studio buildout. The owner wanted to know whether it would pay for itself, and how long that would take.
The answer
$45,000
Upfront investment
14.0 months
Payback period
$3,802/mo
Net benefit at steady state
84.7%
24‑month return
Recommendation: proceed. The expansion breaks even in month 14 and adds about $3,802 a month after that, before counting anything it does for retention or referrals on the base membership.
The assumptions behind it
- 80 members adopt the premium tier at steady state, at $75 a month.
- Adoption and the class schedule both ramp up over five months instead of filling on day one.
- Instructor, maintenance, and utility costs scale with the schedule, so early months aren't charged for unused capacity.
- Discounting at a 20% hurdle rate only moves payback from 14.0 to 15.9 months.
What could change the answer
Payback is most sensitive to one number: how many members actually want the premium tier. At 60 members instead of 80, payback moves out to about 20 months. That's still inside two years, but with much less room to spare. Our advice was to test demand with an intro offer or a waitlist before committing to all six reformers.
