Economic and Financial Viability for the Implementation of a Pilates Studio in Pirapora-mg

Dalyla Silva Lemos de Souza; Carlos Eduardo Pereira do Nascimento

DOI: 10.22167/2675-6528-202602804

Article derived from a Final Course Work (TCC), with content based on the student’s original work and adapted to the editorial format of the E&S Magazine with the support of the ResumeAI tool, an artificial intelligence solution developed by Instituto Pecege for textual synthesis and organization.

Abstract

A study assessed the economic-financial viability for the implementation of a Pilates studio in the municipality of Pirapora, Minas Gerais. The research was characterized as a case study with a quantitative approach, based on cash flow projection for the first five years of the venture’s operation. The initial investment, operational costs, estimated revenues, taxation under Simples Nacional, and classic investment analysis indicators such as Net Present Value (NPV), Internal Rate of Return (IRR), Profitability Index (PI), and Simple Payback were considered. The estimated initial investment was R$ 82,541.10. The results indicated a negative NPV of R$ 36,787.83, an IRR of -1%, and a PI of 0.55, demonstrating economic non-viability in the originally projected scenario. Additionally, the Simple Payback did not occur within the five-year analysis horizon, evidencing the non-recovery of the investment in present value terms. However, sensitivity analysis revealed potential for viability through adjustments in strategic operational variables, notably in service price, number of clients served, and operational expenses. It was concluded that, although the venture did not prove viable under the initial analyzed conditions, modifications to these parameters can contribute to its economic-financial viability.

Keywords: Investment Analysis; Entrepreneurship; Cash Flow; Pilates; Economic Viability.

1. Introduction

The increase in life expectancy, as pointed out by the World Health Organization (WHO, 2015), and the changes in the Brazilian age pyramid, observed by the Brazilian Institute of Geography and Statistics (IBGE, 2013), drive a growing concern with quality of life and health. This pursuit of well-being over time leads people to modify their daily habits (Rodrigues et al., 2022). With the aging process, the human body undergoes several changes, such as loss of balance (Santos et al., 2021), reduced strength (Pícoli et al., 2011), and decreased gait speed and muscle endurance. When these changes are associated with sedentary behavior, individuals’ functionality and independence can be significantly compromised (Azzolino et al., 2021).

In this context, regular physical activity practice across different age groups becomes essential to minimize or delay such changes (Liposcki et al., 2016; Pillatt et al., 2019). Among the available modalities, Pilates stands out as an effective alternative, promoting physical conditioning, muscle strengthening, improved balance, motor control, and general well-being (Yu et al., 2023). Developed by Joseph H. Pilates in the 1920s in Germany, the method is based on controlled and continuous movements that recruit multiple muscle groups in an integrated manner (Serviço Brasileiro de Apoio às Micro e Pequenas Empresas [Sebrae], 2026).

In Brazil, Pilates was introduced in the 1990s by the ballerina Alice Becker, initially disseminated among dancers and artists. With the progressive recognition of its benefits, the practice expanded to the general population, being widely used in different health and fitness contexts (Sebrae, 2026). Its individualized approach contributes to the promotion of a more functional and independent lifestyle (Taşpınar et al., 2023). In recent years, there has been a significant increase in the popularity of Pilates, with a 277.6% rise in check-ins between 2019 and 2024 (Wellhub, 2024).

Given this scenario of growth in the practice of Pilates and its relevance in promoting health, functionality, and quality of life, specialized studios are consolidating as part of the market for services focused on well-being (Global Wellness Institute [GWI], 2023; Wells et al., 2012). The expansion of the offer of guided physical activities accompanies the appreciation of preventive and health promotion practices, especially among the adult and elderly population (American College of Sports Medicine [ACSM], 2022; WHO, 2020). In this context, the city of Pirapora, located in the north of the state of Minas Gerais, has an estimated population of 55,606 inhabitants in 2022, of whom 35,603 (about 64%) were in the adult age group, between eighteen and sixty-four years old (IBGE, 2022). Regarding the offer of fitness services, Pirapora has nineteen establishments, but only seven actively offer Pilates (IBGE, 2025), indicating an investment opportunity in a scenario of low specific competition.

However, even in the face of this apparently favorable scenario, it becomes essential to conduct a detailed analysis of the economic-financial viability for the implementation of a new venture. Studies indicate that the success of a business depends on solid planning, capable of reducing risks and guiding strategic decisions (Dornelas, 2023). In Brazil, approximately 38% of companies cease their activities in less than five years due to a lack of adequate planning (Sebrae, 2023), which highlights the importance of a rigorous prior evaluation.

The absence of a specific economic-financial feasibility study for a Pilates studio in the Pirapora-MG region represents a practical and theoretical gap, justifying the relevance of this research. Thus, the present study aims to evaluate the economic-financial feasibility of implementing a Pilates studio in the municipality of Pirapora, Minas Gerais.

2. Material and Methods

The present study was characterized as a research of an applied nature, with a quantitative approach, and adopted the case study design, according to the methodological guidelines of Gil (2002) and Marconi and Lakatos (2017). The methodological objective was to identify the economic and financial viability for the implementation of a Pilates studio in the municipality of Pirapora, Minas Gerais.

To this end, the cash flow of the venture was projected for a five-year analysis horizon. This projection included the necessary initial investment, operational costs, equipment depreciation, tax structure, and estimated revenues. The selection of variables and the structure of the analysis were based on classic models for evaluating economic-financial viability, according to specialized literature (Assaf Neto, 2014; Ross et al., 2015).

Data collection was predominantly carried out through secondary sources, following the guidelines of Gil (2002) and Marconi and Lakatos (2017). Official databases, institutional documents, and market references were consulted. Among the main sources, data from the Brazilian Institute of Geography and Statistics (IBGE), the Brazilian Service to Support Micro and Small Enterprises (Sebrae), and the Federal Revenue of Brazil stood out.

Additionally, legislation pertinent to the activity and guidelines from international organizations, such as the World Health Organization (WHO), were considered, especially regarding health promotion and the practice of physical activity. Data on implementation costs, acquisition of equipment, furniture, and consumables were obtained through direct surveys with specialized companies in the sector, based on updated market quotes.

The author’s practical experience in internships and professional activities in the area also supported the estimation of values, seeking to reflect the operational reality of the venture. The values raised were compared with secondary data and reference parameters provided by institutions supporting entrepreneurship, such as Sebrae, and specific case studies, such as Oliveira (2018). This source triangulation procedure aimed to increase the consistency and reliability of the estimates.

The initial investment required for opening the Pilates studio was raised, covering renovations, space adjustments, equipment acquisition, furniture, and other essential items. The financial resources, totaling R$ 82,541.10, came from equity, distributed between fixed assets and working capital.

Working capital was estimated at R$ 21,471.21, corresponding to three months of monthly operating expenses, a premise adopted to finance the initial operating cycle of the venture (Assaf Neto, 2014; Gitman, 1997). Expenses for renovations and space adjustments were classified as non-depreciable initial costs, in accordance with Law No. 8,245/1991 (Brazil, 1991) and the accounting criteria of the Accounting Pronouncements Committee (CPC, 2009).

The studio’s operational conditions were defined based on local market research. Monthly fees were estimated between R$ 170.00 and R$ 200.00 for plans with at least two weekly sessions. Two main packages were established: a standard plan (two weekly sessions) priced at R$ 190.00 and an intensive plan (three weekly sessions) priced at R$ 280.00.

The studio’s operation was designed from Monday to Friday, from 8 am to 12 pm and from 2 pm to 6 pm, with 50-minute sessions and ten-minute breaks for sanitization. A mix of plans was adopted for financial projection, with 70% of clients on the standard plan and 30% on the intensive plan, a premise based on the local offering and the author’s experience (Dutra, 2011; Mello, 2021).

The estimation of the minimum number of patients was performed through Cost-Volume-Profit (CVP) analysis, using the weighted average contribution margin. The monthly financial break-even point was determined by the ratio between fixed costs and the average contribution margin, according to managerial accounting (Assaf Neto, 2014; Gitman, 1997).

The studio’s maximum operational capacity considered up to eight daily sessions and reduced classes of up to four students per session, totaling 160 weekly attendances. With a weighted average attendance of 2.3 weekly sessions per patient, the maximum capacity corresponded to approximately 69 active patients.

The premises for the financial projections included a 5% annual growth in the number of students during the first five years of operation, a conservative rate based on entrepreneurship literature (Dornelas, 2023; Hisrich et al., 2014). Operational costs were projected based on the variation of the Índice Nacional de Preços ao Consumidor Amplo (IPCA), released by IBGE (2026), which showed accumulated inflation of 3.81% in the reference period.

The revenues were designed considering the monetary update of prices by inflation and the real growth of the business. The venture was framed in the Simples Nacional (Brazil, 2006) as a microenterprise, with taxation under Annex III of Complementary Law No. 155 (Brazil, 2016), applying an initial rate of 6%, due to the relationship between payroll and gross revenue (R factor) greater than 28%.

The cash flow structure considered operational, investment, and financing flows, according to the methodology of Ross et al. (2015). The economic feasibility analysis was conducted by determining classic financial indicators: Net Present Value (NPV), Internal Rate of Return (IRR), Profitability Index (PI), and Simple Payback (Ross et al., 2015).

For the calculation of these indicators, the Minimum Attractiveness Rate (TMA) was defined at 14.13%, composed of the Selic rate in effect in February 2026 (12.13%, Central Bank of Brazil, 2026) plus a risk premium of 2%, as proposed by Camargos (2017).

A sensitivity analysis was performed to evaluate the impact of variations in critical project factors on the final outcome (Carvalho et al., 2014). The parameters altered were total operating expenses, number of clients, average ticket, attractiveness rate, and investment value, with individual variations of ±20%.

For each scenario, the NPV was recalculated, allowing the identification of the variables with the greatest influence on economic viability. A second sensitivity analysis was performed to determine the minimum adjustment required in each variable for the venture to reach economic equilibrium (NPV = 0), supporting decision-making (Janoselli; Furlan, 2016; Gitman, 1997; Oliveira, 2018).

3. Results and Discussion

The economic-financial viability analysis for the implementation of a Pilates studio in Pirapora-MG began with the detailed projection of the necessary investments. The total initial investment estimated for the venture was R$ 82,541.10, covering both fixed assets and working capital. Of this amount, R$ 61,069.89 were allocated to assets, while R$ 21,471.21 were designated for working capital, calculated to cover three months of monthly operating expenses. This approach aims to ensure liquidity and operational continuity during the initial phase, as recommended by Assaf Neto (2014) and Gitman (1997).

The investments in reforms and space adequacies, which totaled R$ 23,000.00 (R$ 6,000.00 for labor, R$ 14,000.00 for materials/services, and R$ 3,000.00 for licenses), were classified as initial non-depreciable expenses. This conservative classification is justified by the nature of improvements in a rented property, which do not guarantee reuse or compensation at the end of the contract, in accordance with Law No. 8,245/1991 (Brazil, 1991) and the accounting criteria of the Accounting Pronouncements Committee (CPC, 2009). The equipment and organizational structure, in turn, were subjected to annual depreciation calculation based on Federal Revenue rates (Brazil, 1998).

Among the essential equipment for the studio, the following stand out: a Pilates studio kit worth BRL 26,714.00, six small balls (BRL 148.92 each), six large balls (BRL 654.00 each), two sets of resistance bands (BRL 43.28 each), six magic circles (BRL 239.94 each), two sets of mini-bands (BRL 101.98 each), two sets of Swiss ball stands (BRL 113.80 each), six mats (BRL 123.72 each), six flex rings (BRL 546.00 each), and one stall bar (BRL 736.00). The estimated useful life for these items was ten years, with corresponding annual depreciation, totaling BRL 4,822.54 in equipment depreciation.

The structure and organization of the space also demanded significant investments, including three mirrors (R$ 2,160.00 each), one air conditioner (R$ 3,890.00), one organizer shelf (R$ 320.87), five chairs (R$ 1,005.22 each), one office desk (R$ 596.30), and one water cooler (R$ 675.86). These items, also with a ten-year useful life, generated a total annual depreciation of R$ 864.81. It is important to note that the depreciation values, although relevant for accounting analysis, do not represent a financial outlay at the time of implementation and, therefore, were not incorporated into the initial investment total for cash flow purposes.

The operational costs for the studio’s operation were detailed. The monthly Effective Operational Cost (COE) was R$ 7,157.07, while the annual Total Operational Cost (COT), which includes non-recurring expenses such as professional council annual fees and permits, reached R$ 87,061.84. Monthly fixed costs include R$ 198.44 for cleaning and hygiene supplies, R$ 191.97 for disposable materials, R$ 2,950.00 for rent, R$ 600.00 for electricity and water, R$ 150.00 for internet and telephone, R$ 66.66 for scheduling/management system, and R$ 3,000.00 for pró-labore. Expenses for council annual fees (R$ 577.00) and permits (R$ 600.00) are annual.

The revenue projection was based on a mix of service plans, with 70% of clients opting for the standard plan (two weekly sessions for R$ 190.00) and 30% for the intensive plan (three weekly sessions for R$ 280.00). This distribution was established based on the author’s experience and local market research, considering the influence of factors such as price and perceived value on consumer choice (Dutra, 2011; Mello, 2021). The monthly financial break-even point was estimated at 36 clients, resulting in a projected monthly revenue of R$ 7,830.00, slightly higher than the monthly operational costs.

The studio’s maximum operational capacity was calculated considering operation from Monday to Friday, with up to eight daily sessions and reduced classes of up to four students per session, totaling 160 weekly attendances. With the projected plan mix, the average weekly attendance per patient was 2.3 sessions. Thus, the maximum capacity corresponded to approximately 69 active patients. The break-even point of 36 clients represents a utilization of 52.2% of the installed capacity, leaving a margin of 47.8% for expansion, which is consistent with the premise of gradual growth in new businesses (Dornelas, 2023; Hisrich et al., 2014).

The projected cash flow for the first five years showed progressive revenue growth, starting from R$ 93,960.00 in the first year and reaching R$ 132,146.15 in the fifth year, driven by an annual growth rate of 5% in the number of students and the monetary adjustment of prices by inflation (IPCA of 3.81% per year). After deducting Simples Nacional taxes (6%), net revenue evolved from R$ 88,322.40 to R$ 124,217.38. Total operating costs also grew, from R$ 87,061.84 to R$ 101,107.79, following projected inflation, which limited the expansion of profit margins.

As a result, the annual net profit grew from R$ 1,260.56 in the first year to R$ 23,109.60 in the fifth year. Despite this gradual growth, the venture showed low generation of results in the initial years. The recovery of working capital in the fifth year raised the final cash flow for this period to R$ 44,580.81. However, the present value of future cash flows, R$ 45,753.27, proved to be lower than the initial investment of R$ 82,541.10, indicating an economic unviability under the projected conditions, according to the analysis by Assaf Neto (2014).

The economic and financial viability indicators confirmed the project’s unviability in the original scenario. The Net Present Value (NPV) was negative at R$ 36,787.83, meaning the project would not generate enough value to remunerate the invested capital at the Minimum Attractive Rate (MAR) of 14.13%. The Internal Rate of Return (IRR) was -1%, remaining significantly below the MAR, characterizing financial unviability, as the expected return is lower than the opportunity cost of capital (Ross et al., 2015).

The Profitability Index (PI) was 0.55, indicating that for every R$ 1.00 invested, the project would return only R$ 0.55 in present value. A PI lower than 1 classifies the venture as economically unviable (Assaf Neto, 2014). Additionally, the Simple Payback and Discounted Payback did not occur within the five-year analysis horizon, demonstrating that the initial investment would not be recovered in the considered period, even when considering the time value of money (Ross et al., 2015). These indicators, together, reinforce the economic-financial unviability of the project under the initial analyzed conditions.

Given the unfeasibility found, a sensitivity analysis was performed to identify the most critical economic variables. Variations of ±20% were simulated in total operating expenses, number of clients, average ticket, and initial investment (CAPEX), keeping other assumptions constant. This methodology allowed for the evaluation of the impact of these variations on the Net Present Value [NPV] and the identification of the points of greatest influence on the project’s viability, according to the approach of Carvalho et al. (2014) and Janoselli and Furlan (2016).

Sensitivity analysis revealed that the venture is more sensitive to variables related to revenue generation and cost control. Variations of ±20% in the number of customers and the average ticket produced the largest range in the Net Present Value [NPV], of R$ 141,225.24. Total operating expenses also showed high sensitivity, with a range of R$ 127,359.18 in the Net Present Value [NPV]. In contrast, the initial investment had less influence, with a range of R$ 28,581.20 in the Net Present Value [NPV], evidencing that the business viability depends more on the ability to generate revenue and control costs than on reducing the initial investment.

To achieve economic equilibrium (NPV = 0), the sensitivity analysis indicated that the average monthly price per student would need to be increased to R$ 240.16. Alternatively, the minimum number of clients should be expanded to 40 students, or the annual operating expenses should be reduced to R$ 77,002.68. These results reinforce the importance of strategies focused on increasing demand, reviewing pricing policy, and optimizing operational costs to improve financial viability, in line with observations by Oliveira (2018).

The reduction in initial investment, although less impactful, could also contribute to feasibility, requiring a decrease of 44.6% to reach economic equilibrium. These findings suggest that the financial sustainability of the studio is directly conditioned by rigorous occupancy planning, the definition of an adequate pricing strategy, and continuous control of operational costs. Feasibility can be achieved through structured adjustments in these variables, whether isolated or combined, which highlights the importance of economic-financial feasibility analysis as an essential tool for decision-making.

4. Conclusion

The present study evaluated the economic-financial viability for the implementation of a Pilates studio in the municipality of Pirapora, Minas Gerais. It was verified that, in the originally projected scenario, the venture presented economic and financial unviability. The financial indicators revealed a negative Net Present Value (NPV) of R$ 36,787.83, an Internal Rate of Return (IRR) of -1%, and a Profitability Index (PI) of 0.55. Additionally, the Simple Payback did not occur within the five-year analysis horizon, evidencing the non-recovery of the initial investment in present value terms. These results indicated that the project would not generate sufficient value to remunerate the invested capital at the established Minimum Attractiveness Rate (MAR).

However, the sensitivity analysis revealed a potential for the venture’s viability through adjustments in strategic operational variables. It was observed that the service price, the number of clients served, and operational expenses were the factors with the greatest impact on the business’s sustainability, requiring modifications for the NPV to reach equilibrium. The financial sustainability of the studio is, therefore, directly conditioned by rigorous occupancy planning, the definition of an adequate pricing strategy, and continuous control of operational costs. This study contributes by offering an analysis applied to the local context, which can support decisions of professionals interested in implementing similar ventures in Pirapora-MG. As limitations, it is acknowledged that projections of revenues, costs, and demand may not reflect future reality, and the specific case study nature for Pirapora restricts the generalization of results to other contexts. It is suggested that future research explore different operational scenarios and business model optimization strategies.

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