The yoga industry has greatly expanded in the past years, and is expected to hit $6.5 billion in 2011. Between 2006 and 2011 it experienced tremendous growth, with an average annual sales growth of 9.5%. A large number of yoga businesses have been started because of entrepreneurs. Entrepreneurs are ambitious leaders who take risks by investing their own money to create new goods or services. In the case of Micah and Desi Springer, they took a risk in opening up a yoga company, which ended up pulling in great profit for them. They started their company in their basement, and later expanded and bought a small building to hold classes. Yoga businesses don’t have to spend an outrageous amount of money on fixed costs, which are costs that don’t change such as rent or purchasing a building. Yoga buildings and spaces are often small because people like a quiet and intimate atmosphere when practicing yoga. They have low operating costs as well, consisting mostly of electricity bills and teacher wages. Because they have such a low and simple operating cost, they can easily hire people by thinking at margin. They can easily add one more additional unit if necessary. If the business is doing well and there are many more people coming in to take classes, they can hire one more teacher, or they can hire 4 more teachers based upon the increase in customers. This is exactly what they did. As entrepreneurs, the two girls started out with just themselves as teachers. As their business grew, they hired the number of teachers they needed to to keep up with demand, adding more teachers as more customers came. Their company now employs 40 teachers. The story of the Springer sisters is a great example that demonstrates entrepreneurship, fixed and variable costs, and marginal thinking.
- Christina B