Imagine that you are a small business consultant, and an entrepreneur who wants to own a yoga studio comes to you for a consultation about how to price the classes. The studio will be located in a middle-class/upper-middle-class area near a retirement community and an elementary school, so retirees and mothers are part of the target audience. The entrepreneur has done her research and decided that since most yoga classes in the area are held in gyms, this studio will be specifically designed for yoga. Thus, he is counting on this distinct feature to make his business stand out. The monthly studio expenses will run $1,000, and each class will require paying a yoga instructor $30. Classes should be an hour and a half, and research shows that classes between noon and 4:00 p. m. are poorly attended. The studio has enough space to run two classes at a time. There is space for 12 people per room, but attendance is likely to be six to eight other than on Saturday mornings when they will be full. Mondays and Tuesdays tend to be a bit slower than average. The business owner needs to pay himself $2,000 a month to keep the business open. Given the information provided, explain to the business owner how much to charger per class, what kinds of discounts to offer for multiple-class purchases, and the kinds of payments he should accept. Your response should be in the form of a presentation. You can videotape your explanation as if you were speaking directly to the business owner or create a PowerPoint or other slide-based presentation with no more than 20 slides and the narrative that goes with the slide in the notes section. If you choose to do a video, the visual and audio must be clear. If you choose a slide-based presentation, the slides should be visually appealing, have some images, and text that is easy to read. No matter which you choose, your presentation should contain the following:
1. Explain how to use the information provided to determine how much to charge per class for the business to break even (i. e., pay all bills and salaries).
2. Explain how to structure discounts so that they encourage customers to spend money and keep the business profitable. Be sure to consider supply and demand in your pricing structures.
3. Explain the payment policies that you would recommend for the business and the types of payment it should accept.
All aspects should have clear and logical explanations.