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Words from industry experts to make the most of your events and performances.

5 Ideas for Increasing Your Studio’s Profitability

words by Misty Lown

As a studio owner, you already know that generating revenue is one of the keys to growing and stabilizing your business, but the true key: your studio’s profitability. The reality is that every great mission needs money in order to do the meaningful work that fulfills its purpose! And it’s important to understand the difference between revenue, which is the gross income your business generates, and profit, which is the income your business has earned after covering its expenses.

No matter how much revenue your studio generates, it’s the profit that makes it possible to continue doing what you do year after year. It’s the profit that will allow you to achieve long-term business health so that you can continue to create jobs, serve your community, and earn a living.

In my experience, there’s more than meets the eye when it comes to increasing profitability. It’s not just about knowing your numbers; it’s about making the right choices with the numbers you know! It is my belief that every studio owner can and should feel empowered to take charge of their business’s financial future. And optimizing its profitability is instrumental in that power.

Keep reading for my 5 Ideas for Increasing Your Studio’s Profitability:

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Control Expenses, Part I
Profitability doesn’t just come from increasing income; it comes from having a keen eye on your expenses. One of the most productive things you can do to increase your profit margin is to get as lean as possible with your expenses. Trim anywhere possible. Go line by line through your accounting software and be prepared to make some phone calls to negotiate your bills. And of course, if you don’t already have a budget, create one … and stick to it!

Control Expenses, Part II
If you are paying down any debts, prioritize those payments and increase their frequency if you can. Eliminating debt as quickly as possible will free you up from paying interest of course (an expense no one wants!) and will also free you up emotionally. The more progress you make on paying down debt, the more in control you will be when it comes to your profitability.

“What Gets Measured Gets Managed”
This famous quote by Peter Drucker can influence your profitability in a big way. Take the recital for example: If you track and measure every expense and compare it to the income, what is the profit? Whether it’s large or small, this number will show you where to put your time and energy to improve that margin. It works the same for any class, program, or event. Measure your expenses and your pricing to manage financial success.

Analyze the Products You Sell
From dancewear and shoes to costumes and t-shirts, evaluate the wholesale cost and retail price to determine if you can make changes to increase profitability. You may need to spend less or charge more, or you may need to consider reducing or increasing the number of items you sell. Don’t just keep the status quo because it’s easy; do the work because it’s worth it!

Use the Compound Effect
Remember that profitability is likely to happen as the result of many small actions, taken one at a time. Stay encouraged that every step you take to control spending and increase revenue will lead you down the road of increasing profits. Keep taking those steps even when it seems like it’s not enough…the compound effect requires patience for a payoff.

Keep in mind that profitability has to do with many factors, which means there are many ways to improve it! Dig into your finances, understand what you can control, find creative solutions, and most importantly, keep doing the work it takes to know your numbers.

Looking for more great ideas to help your studio’s profitability? Check out the following articles:

The “Expert Advice from Misty Lown” series is brought to you by More Than Just Great Dancing™ and TutuTix.