03/ 30/ 2006
by Shannon McRae
Lisa Johnson sobbed. It was Christmas Eve 2001, and Johnson and her husband were within $5 of bankruptcy. Six months pregnant, she'd been hospitalized eight times already. Her health was suffering-and so was her business. She was broke, exhausted and anxious about her unborn child, but even at that low point, Johnson never considered herself a failure.
Two-and-a-half years before that miserable Christmas Eve, Johnson opened the first Pilates studio in Back Bay, a swanky Boston neighborhood. She didn't have a single customer when Studio Elle Pilates opened on June 15, 1999. But by the Fourth of July, her appointment book was full. "I was ahead of the curve, and I got lucky," Johnson says. "I was in the right place at the right time."
Business was healthy for the first few years. Pilates (a type of exercise that uses core muscles of the body to build strength and flexibility) was the latest craze in the fitness world, and exercise-loving customers paid $60 for private 55-minute classes. But when a difficult pregnancy forced Johnson to quit teaching, she didn't have enough instructors to fill the gap. In four months, she lost $40,000. "I didn't know how we were going to pay rent-anybody's rent-mine or the studio's," she says.
This wasn't Johnson's first trip to the brink of failure, though. It was, in fact, a disastrous business decision that led to the opening of Studio Elle Pilates in the first place.
In the mid-1990s, Johnson was a dealmaker. She and a partner started a computer sales business-he handled the equipment, she negotiated the sales. "I was a shrew," she admits. "It was all about how much money I could make. I was one of ?those people.' "
But one day Johnson discovered a dangerous truth about the way her partner was running the business: "It was something that could have put us both in jail, and I was completely unaware until after it happened." After giving her business partner an ultimatum (pay up and let me out of this business-or else), Johnson suddenly found herself with a little cash and no job.
The exercise industry always had interested her, but she "never thought you could make any money." Still, she wanted to get far away from computers, so she took an $8-an-hour job as a personal trainer at a local health club. After a few months of experience, Johnson started accepting more home-based training clients. Soon, her schedule was full. She often drove 200 miles a day to see clients. The business stretched her thin, yet Johnson says she got fat: "I kept eating at McDonald's because I was always in the car!
"The business was wearing me down, and I wasn't making the money I'd hoped to make," she says. So she started researching Pilates, an exercise concept that was just getting attention in the United States. She flew to Canada for a certification course, and three hours into the class Johnson had what she calls her epiphany. "This is what I need to do with the rest of my life," she remembers thinking.
Putting past business failures behind her, Johnson borrowed $10,000 from her mom and rented a tiny studio space. Business went so well that after one year, she moved Studio Elle Pilates to a larger location in Brookline, Mass., a suburb just outside of Boston.
Then, uncertainty set in. On Sept. 10, 2001, Johnson and her husband learned she was pregnant. The next day, Sept. 11, completely unnerved the mother-to-be, along with the rest of the world. And it was downhill from there-her sickness, the decline in business and the resulting financial strain.
But the strength and flexibility that make Johnson an excellent Pilates teacher are also what make her a successful small-business owner. After her Christmas Eve meltdown, Johnson and her husband hung on (with some financial help from her in-laws) until early January, always a profitable time for the fitness industry. Early in the new year, she started feeling better and resumed teaching. Life slowly returned to normal.
During those low points, Johnson says she never doubted herself. Instead, she remembered something her grandmother always told her: "Learn how to type. If all else fails, you can always get a job."
"I can type 100 words a minute, just like my grandmother," Johnson says. "I know that I'm not going to starve to death. I can make my own way. I'm always willing to work harder to fix whatever is wrong."
Her grandmother's advice isn't the only lesson Johnson takes from the past. She constantly evaluates her decisions and gleans lessons from her mistakes.
For instance, when she took on a partner at Studio Elle Pilates for a brief period, she did a criminal background check first.
The computer business that wasn't on the up-and-up, the home-based training business that wasn't profitable, the brush with bankruptcy: Johnson considers them all failures. "But I don't consider that a negative label," she says. "Did I screw up? Yeah." But each failure teaches her: "I won't do that again," she says.
Today, Johnson's business is strong, growing at about 30 to 40 percent each year. Her child is healthy, and she paid back her mom's startup loan (with interest). The studio offers eight classes a week and could easily double that number, if she could find qualified instructors.
Setbacks still occur regularly though, even in her successful business. "The Web site was my latest failure," she says, referring to the amount of time it took her to launch a more professional-looking site. Then there was the equipment she bought for classes that weren't making enough profit. She finally replaced them with more profitable classes.
But these failures don't discourage Johnson. She considers them a natural part of entrepreneurship. "You're going to have problems," she says. "I'd like to see a flawless business owner."
When those inevitable setbacks occur, Johnson remembers advice she picked up along the way: Do money tasks first. "When you're down and everything is ready to collapse, focus on revenue-generating business," she urges. And brush up your typing skills."
