Studio fills the physical therapy gap

After 10 years as a staff physical therapist, Kristin Procopio was ready to exercise her independence as an entrepreneur.

The result is Studio U, a private workout boutique in Minneapolis' Uptown area that Procopio said fills a unique niche in the Twin Cities by offering physical therapy, Pilates and personalized training all in one location.

Procopio, a licensed physical therapist who also is certified as a Pilates instructor and personal trainer, believed that clients who had run out of insurance-covered physical therapy sessions would be willing to pay out-of-pocket to continue treatment at Studio U.

She figured that those clients then would move on to Pilates work or personal training at her studio.

She hoped that those additional offerings would motivate other clients -- those whose symptoms returned when they had failed to exercise on their own after completing physical therapy -- to continue working out at her studio.

"I saw a gap from when people left us, even though they were feeling pretty good, and how they maintained feeling good," Procopio said, recalling her time in the Park Nicollet health care system.

"I saw the possibility that, if only people would pay for their health care services a little bit and trust the professionals and come in, they could maintain what they had gained."

And, so far, that wager has paid off.

"They came in, and I'm seeing a great response."

Procopio expected to end 2008 with close to $225,000 in revenue, up 40 percent from the year before. She opened the studio in October 2006 with proceeds from the sale of a house.

Revenue has grown every month, even as the economy has soured.

"I believe that's because I have clients who are intelligent and see the value of keeping themselves healthy," Procopio said. "So far, people just keep coming in."

Some may visit less frequently or opt for group classes instead of private sessions, she said.

Studio U's rates for Pilates classes are in line with what studios typically charge, and package pricing is available for every service, Procopio said. Group classes range from $18 for mat classes to $40 for equipment classes, she said. Clients need to take three individual sessions, which cost $70 to $80 each, before joining group classes. The physical therapy evaluation costs $110.

If business tapers off, Procopio said she could focus on in-studio group classes and possibly ramp up corporate classes, which Studio U has done in the past.

Otherwise, Procopio would like to look at opening more studios.

"I would love to see more out there," she said. "But I wouldn't want to lose the personal feel that I have here."

For now, she may consider expanding the space at her current location, and perhaps adding nutritional or other services.

While at Park Nicollet, Procopio concentrated on sports medicine and integrating Pilates and personal training into her practice. She also taught private Pilates classes for three years at Calhoun Beach Club before opening her own studio.

The studio last year retained 50 percent of the clients it had in 2007; many come from doctor referrals and a growing number from word-of-mouth referrals, Procopio said.

She has four independent contractors working at the studio, three instructors and a physical therapist who also teaches Pilates. Procopio has expanded her space to include two private studios and one for group classes.

Each studio has Pilates equipment, and one also features the Power Plate, a high-tech machine that uses vibration technology to strengthen muscles and improve flexibility. Procopio said Studio U was the first in Minnesota to offer the Power Plate.

Although Procopio skipped writing a business plan, the usual first step for new entrepreneurs, she got advice from her husband, who works in finance. She put a lot of time into deciding where to open Studio U, choosing Uptown because it's close to the city's lakes, which draw runners and walkers who might need her services, and it is close to a large population of baby boomers and other potential clients.

Procopio sees physical therapy as the foundation of her Studio U practice. New clients get an evaluation of their strength, flexibility, posture and muscular balance, and undergo physical therapy to rehabilitate joints and muscles. Clients then proceed to Pilates to increase their core strength and later to personal training to help them reach fitness goals.

Studio U client Jane Thompson said she has gained strength and flexibility and has lost 3 inches from her waist size since she began working with Procopio three times a week in March.

At that time, Thompson faced back surgery and suffered unrelenting, searing pain from injuries suffered years ago in a car crash. Over the summer, she said she was pain-free for the first time in years.

With her improved fitness, Thompson said, she also has been able to discontinue blood pressure medication she said she had taken for years. Procopio also helped Thompson, a licensed psychotherapist, make changes to ease the physical toll of her long workdays.

"They really meet people where they're at," Thompson said.

The expert says: Dileep Rao, who teaches entrepreneurship and venture financing at the University of Minnesota's Carlson School of Management, said Procopio needs to answer several questions before determining whether to grow in her current space or open new locations.

Among those are: Is she charging enough and earning a reasonable return on her investment? How fast should she grow based on her resources and those she can raise? And what is her long-term competitive advantage?

Procopio also needs to understand her customers and segments. Rao suggested finding out more about the numbers in each segment, including where they live and how far they would drive, to identify potential new locations, the size of future studios and how best to market to those customers.

Competitors are likely to jump into this market. "This should act as a spur to help her decide how to dominate this market and not be a small player after identifying this market," Rao said.

Procopio should develop a financial model of her business so that she understands her growth potential, Rao said, and she needs a financial plan to help her decide on and obtain the right type of financing and to control her growth.

Todd Nelson is a freelance writer in Woodbury. His e-mail address is todd_nelson@mac.com.