Dance studio owners must fill many roles to keep their classes running. It can be very rewarding to build a career out of dance and to have the opportunity to foster a love for the art in a new generation of dancers. However, studios are businesses, and running a business requires payment from clients in the form of dance tuition and other fees.
Discussing finances can be an uncomfortable topic, even for seasoned business owners. However, in order to keep a dance studio running, owners need to be able to collect dance tuition on time from their students. When those payments aren’t coming through when they’re supposed to, studio owners will have to have conversations with their students or with parents to rectify the situation.
Fortunately, there are steps that dance studio owners can take early on to mitigate some of these conversations and problems related to late payments. With the right planning and communication, studio owners can create a system that works for everyone involved.
State Expectations Early
One of the most important things for any business owners to do before providing a service is make their expectations known from the start. Studios should have their prices and policy information clearly visible on their websites. When students enquire about classes or programs they should be given an information packet that has a clear, direct section dedicated to dance tuition payments.
While that should be more than enough to help keep students informed, the fact of the matter is that some people simply won’t read those kind of documents carefully. They’ll skim the parts that appeal to their interests and miss what they really need to know.
That’s why owners will need to verbally reiterate the structure to people as they sign up, and possibly even make a quick reminder announcement on the first day of class about payments or any other key policies that they don’t want anyone to miss. Remind students of where they can find this information so they can look back to it when they need to.
Dance tuition information should also be emphasized in class contracts. Use a bold emphasis for the numbers and make sure that the client signs all the right paperwork. If you want, you can even go a step further and ask that they specifically initial next to the payment due date information. If you say it enough and put it in writing your clients won’t be able to use “I didn’t know” as an excuse to try and shirk their responsibilities.
Give People Options
Providing payment options for your students can encourage them to pay on time. Many times people who pay late aren’t trying to do anything malicious but are simply busy and lose track of the date easily. By making it as convenient as possible for people to pay, you can avoid the well-meaning “Oh, I meant to do that!” from your students and their parents.
An easy way to do this is to accept different methods of payment. Invest in mobile payment technology, like card swipers that can be plugged into a smartphone or tablet. According to a Bankrate survey, 9 percent of Americans report that they don’t carry cash on a regular basis. An additional 40 percent don’t carry more than $20 in paper money. Forgetful students who are forced to remember a trip to the ATM may be more prone to late payments than if they could just slide their card when they come in.
Though checks are decreasing in popularity, you should still accept them. Most banks will allow you to deposit a check right through your smart phone, so it doesn’t need to be an inconvenience for you.
Another way to provide options is to give people a choice of how much they pay and when. You could reward people who pay for a full year’s worth of classes upfront by offering a small discount for a lump sum payment instead of paying month to month, or even for paying six or three months in advance. This could benefit you in a few ways.
For one thing, it can help stop those forgetful payers. They can write one check and not have to think about it again. It will also give you some extra cushioning in case several students stop paying on time during the year. Having that safety net from early payers can help keep late payments from doing any damage to your business while you work to collect from them. They may need that little incentive to do so, though, so small discounts that won’t break your bank can help incentivize them.
You can also use websites that will allow people to automate their payments. Some of these programs will send out due date alerts on your behalf, or you can also choose to send an email to all of your students yourself.
How to Collect Dance Tuition When They’re Late
It can be awkward to confront late payers, because sometimes people just can’t afford it. If a student starts the year with a good job and then suddenly gets her hours cut, she may find herself suddenly unable to hold to her agreements on time.
There are a few ways to handle people in those circumstances. If you’re willing to be lenient and allow students to continue classes even if their economic position changes, you should write that into your payment policy. If they know they can come to you and explain why they may be late with some of their payments you can deal with the situation early and not have to chase them down or guess why their payments have stopped.
You should decide before a session starts what the qualifications are for being allowed to pay late without penalty or before they need to suspend their involvement with the program. If you have to enforce either of those consequences, it will be easier and less awkward if you can point to a standing policy that’s been written out, Inc.com noted.
For students who can pay and just can’t seem to stay organized, you may want to implement a short grace period and then a late fee. Remind people with another written message that a fee is coming if they don’t pay, and then enforce it if they still don’t. People who can pay but routinely refuse to should have their access to school resources limited until they either start paying, or at least offer a viable reason for their lateness.
You’ve put together your class schedule and written your studio policies, but one of the most important tasks still has to be done: deciding how you will process payments. As using cash and checks has fallen by the wayside, credit cards have become the preferred form of payment. Her are some tips for secure credit card processing for your dance studio!
Why you Should Accept Credit Cards
Accepting credit cards helps ensure your studio generates as much revenue as possible. One way it does this is by making it convenient for parents to pay tuition and other fees. Paying with a credit card takes just seconds and, depending on your system, can take place almost anywhere, whether online or from a mobile phone. Parents are already using credit cards for their children’s other activities and expenses, and by accepting credit cards you make sure parents can pay the way they prefer and don’t see your studio as that one difficult business they have to deal with.
As more and more dance studios accept credit cards, it’s important that your business remains competitive. Jon Koerber, software expert for dance studios and gymnastics classes, cited that online credit card transactions increased from $2.8 billion to $4.8 billion between 2006 and 2012, and they are only set to grow even more. Credit card processing is no longer weighed down to a clunky machine – they’ve been released online and in mobile applications. As Koerber wrote in a blog post for Capterra:
“You’ll also be losing business to your competitors if you not are doing business around the clock … And all the more so if [parents] can go ahead and sign up for classes from their living room after dinner. If your competitors have online registration and payment processing but you don’t, guess which dance studio will get the new customer after hours.”
Beyond providing convenience for your clients, accepting credit cards also makes everything easier for you. All the payment information will be stored in one place, which makes it simple to view or print revenue reports and quickly access the payment history of certain customers. All the complicated tasks involved with handling and depositing funds is left to the credit card service, which leaves you more time to run your studio.
What You Need to Get Started
You first need to identify which credit card providers you want to accept. Most business accept Visa and MasterCard, while some choose to also accept American Express. Then, you need to select a merchant account service. DanceExec explained a merchant account as “a kind of bank account designed to enable your business to accept payments by debit cards or credit cards. Your merchant account establishes an agreement between you the merchant and the merchant account bank on how to settle money you receive in the form of payment card transactions.”
Make sure the merchant account service you select enables you to accept credit card payments in multiple ways – ideally in-studio, online, over the phone and via smartphones. This way, parents can have a variety of payment methods available to them and can choose the one that’s most convenient for them, wherever they are.
Once you have chosen a merchant account and bank and have been verified, you can begin accepting credit card payments. While you can track and manage credit card payments on a separate system, most major dance studio management software companies enable credit card transactions in their overall system. This is a great option because the credit card transaction program is already fully integrated into the rest of your studio’s systems, which saves you time and headaches!
If you’re accepting credit card payments, you’re dealing with sensitive financial and personal information. So, you need to make sure you’re following the highest measures for security and privacy. Make sure the merchant account service you select has a strong record of PCI, or the Payment Card Industry Data Security Standard, compliance.
Another security consideration is where the credit card payment information is stored. The information should not be kept on your computer or on servers owned by credit card transaction software that you use – instead, the data should be stored securely on an independent server.
Costs to Be Aware Of
Accepting credit card payments comes with several fees. One is gateway fees, which are the fees that merchant accounts charge each month for verifying that the credit card used in each transaction is in good standing. Other merchant account fees include a monthly fixed management fee and PCI compliance fee.
Additionally, there are small fees placed on every individual credit card transaction. These include an interchange fee, which depends on the type of credit card used, discount fees and per-transaction fees. The specific fee amounts vary from provider to provider, so make sure you compare these figures when choosing a merchant account to get the best value for your money.
Though setting up secure credit card processing requires some initial research, the benefits for your dance studio make it well worth the time.
Remember when your high school math teacher told you that you’d need to understand algebra to get by later on in life? You probably scoffed, as many kids do. But we’re here again to go over more calculations that are essential to your dance studio’s success. Hang up your dance shoes and break out the calculator, and get ready for part two of our “Crunching the Numbers” series.
Any small business has to do a fair bit of marketing, and your studio is likely no exception. The fliers you print, the ads you run and the referral program you promote are all ways that you market your dance school in hopes of drumming up new business. But how are you supposed to know if your marketing efforts are working? That’s where metrics for marketing for dance studios come in. Read on to learn how you can calculate marketing return on investment, customer acquisition costs and more.
Marketing Return on Investment
First up is return on investment, commonly referred to as ROI. The concept is simple: You need to figure out how much business you’re gaining in relation to what you’re spending on marketing. For this calculation, you’re going to need your gross profit. You can refer back to part one of this series if you need a refresher on how to find this number.
To find marketing ROI, subtract your marketing investment – how much you spent on marketing services – from your gross profit. Then, you divide the answer by the marketing investment. So if your gross profit is $5,000 and you spent $1,000 on marketing, ROI would be $5,000 minus $1,000, then divided by $1,000. This gives you a marketing ROI of $4 – that means for every $1 you spent on marketing efforts, you got $4 worth of business.
This calculation is essential when you’re evaluating your marketing strategy season over season. It’s always good to try new campaigns – whether it’s direct mail, sale sites or something else – but you should evaluate the worth of a strategy after a given season. If your marketing ROI dips, chances are your new marketing efforts aren’t paying off.
Customer Acquisition Cost
Another important marketing metric is the customer acquisition cost, also called CAC. This is essentially how much money you have to spend on marketing in order to get one new student. The calculation is a simple one.
To find your CAC, set a defined time period. A good measure might be over the course of one dance season. Take the total amount you spent on marketing and divide it by the number of new students you acquired. So if you spent $1,000 on marketing and 20 new students signed up, your CAC is $50.
This metric by itself just tells you that you need to spend $50 to get one new student in the door. However, you can use CAC to calculate other more revealing numbers that will help you adjust your marketing and prices.
Time to Pay Back CAC
One way to use CAC to your advantage is to calculate how long it takes you to make back the money spent on acquiring each customer. You can calculate this in terms of seasons or months, whichever works for you.
To calculate time to pay back CAC, start buy subtracting your seasonal cost per student from the revenue per student. Divide your CAC by this number for time to pay back. So working off the example above, if you earn $500 per student per season and spend $300 per student, you’ll need to divide $50 by $200. This leaves you with an answer of 0.25, meaning you break even on a student’s acquisition cost after 1/4 of a season. Easy right?
If you aren’t a big fan of math, you’re not alone. An article in Psychology Today explained that almost 80 percent of college students described math as a skill they felt they couldn’t figure out. Even if math isn’t your thing, there are going to be quite a few instances where you need to crunch numbers as a dance studio owner. Yes, your calculator can help, but it’s important to understand the basic formulas and processes behind some standard small business profit calculations. Here’s some must-have math that studio owners need to know.
Calculating Gross Profit
Here’s that illustrious word that all studio owners hope for but many fail to achieve: profit. If you’re going to run a business and keep your doors open, you’ll need to know how to calculate gross profit, or the money you’ve earned from selling a service. The seemingly simple equation for gross profit is sales minus cost of services sold.
For studio owners, profit calculations are usually quite simple. Your revenue for a given season – or the money you collected from students – is your sales, and then you subtract any variable costs. Since you’re selling a service instead of a product, your variable costs will likely only include the salaries of hourly teachers, materials used in class and other expenses that incur as a direct result of holding class. Leave any fixed costs – such as full-time employee salaries, rent or mortgage payments, insurance, marketing costs or office expenses – out of this calculation.
So for example, if you charge $500 per student, and you teach 20 students this season, your revenue will be $10,000. If you spend $4,000 on variable costs, your gross profit would be $6,000.
Finding Your Gross Profit Margin
The next step in the important financial calculation is to figure out your gross profit margin, which is your gross profit expressed as a percentage of your revenue. Don’t worry – it sounds harder than it is!
To calculate gross profit margin, simply divide your gross profit by your sales, and then multiply by 100. Following the example above, $6,000 divided by $10,000 is 0.6. Multiple this by 100, and you get your gross profit margin of 60 percent.
Using Gross Profit and Gross Profit Margin
You may think that you’re in the clear if your gross profit increases year after year, but this isn’t always the case. Your gross profit margin is actually a better indicator of how efficiently your business is performing. If you notice that your gross profits are increasing but your margins are on the decline, this indicates that your spending is outpacing your revenue growth. Be wary of this trend! If your costs grow too fast, you could be heading for financial trouble.
Crunching Net Income Numbers
As you may have gathered, gross profit isn’t equivalent to the amount of money your studio is left with at the end of the year. You still need to take into account those fixed costs that remain stable from month to month. According to Entrepreneur magazine, these expenses include:
Wages of full-time workers
Once you’ve added up all these fixed costs, you’re ready to find net income. Subtract this number from the gross profit you’ve calculated. So if your fixed costs are $5,000 and your gross profits were $6,000, your net income would be $1,000. This may not seem like a lot of money, but it’s always a good thing when your business has a net gain at the end of the year. If your net profit turns out to be a negative number, this means you’ve sustained a net loss, and you’ll need to find a way to lower your costs or increase your revenue.
Check back soon for more math-related tips that are key for studio owners!
Each spring, you’re faced with one of the more unpleasant aspects of owning a dance studio – filing your taxes. If you think personal taxes were confusing, chances are that you’ll find business taxes even more so. There are a number of different deadlines you’ll have to adhere to and a variety of forms that need to be filled out.
If you struggle to keep your paperwork in order and get your taxes done on time, use this guide to straighten yourself out and get your studio’s taxes squared away.
Best Practices for Studio Owners
Your studio taxes will be so much easier if you stay organized throughout the year. If you throw paperwork here, there and everywhere, chances are that you’ll be scrambling to find it once tax season arrives. Make your life a whole lot simpler by setting up an organized filing system for your expenses, receipts, bills, invoices and other important paperwork. If you have office staff, train them to use the new system so that everyone is on the same page.
It’s important to save copies of other materials as well, especially if your studio isn’t making a profit quite yet. Dance Teacher magazine explained that if you don’t make money three out of five years, the IRS could deem your business a “hobby,” leading to you owing more money for losses you’ve claimed. If you’re operating in the red, save evidence that can be used to prove you’re taking steps to improve your studio, whether it’s marketing materials, new business cards, a company roadmap or your day planner.
Start getting your books in order at the end of each calendar year. As tempting as it is, you shouldn’t wait until February or March to start preparing your taxes.
What’s Up with Sales Tax?
Since your studio is an educational institution, you don’t have to charge sales tax on lessons, right? The answer actually depends on what state you live in. Back in 2014, dance studio owners across Missouri were shocked to find they owed back taxes to the state because of a legislative change. Americans for the Arts explained that the state reclassified studios as places of recreation and entertainment, which means they aren’t exempt from sales taxes.
There are actually a number of states where studios must tack sales tax onto tuition bills. DanceStudioOwner.com explained that this is necessary in Iowa, West Virginia, New Mexico, South Dakota, Hawaii and sometimes New Jersey.
“When dance studio owners don’t feel comfortable with sales tax, they’re definitely not alone,” Jessica Sheitler, owner of Financial Groove, explained to DanceStudioOwner.com. “I feel like it’s probably one of the most misunderstood aspects of running a dance studio, honestly. [Taxes are] different in every single state. Even within your state, it can be different within your county and your city.”
Chances are that you should also be charging sales tax on costumes and other merchandise that you sell. However, the regulations vary by state and jurisdiction, so figure out what’s necessary in your area.
Know Your Write-Off Options
You might owe the government more money than you’d originally thought, but the silver lining is that there are a number of expenses you may not have realized you could write off. The Houston Chronicle explained that you can write off reasonable and necessary expenses related to your profession. This means you can write off dance supplies, such as props and music or even office supplies. If you take the bus to work, you can likely file a deduction for the cost of your pass. Similarly, if you travel for the studio, track your mileage and write off the cost of gas.
Talk with your accountant about what expenses can be written off come tax time. Just remember that if you plan to write items off, it’s imperative that you keep any and all receipts related to the purchase or expense. The more detailed your records are, the more likely that the write-off will stick.
Find the Right Help
If all of this sounds overwhelming, it’s in your best interest to find a knowledgeable accountant who can help you get your taxes done right. Be sure to find a professional who has experience working with creative businesses – preferably studios – so you know that he or she can get you as much money back as possible. Once you find an accountant who is a good fit for your needs, don’t be afraid to seek advice for matters other than taxes. Chances are that he or she can help you work toward your other business goals.
“Have a dream for your studio and discuss it,” Lilia Wood, a studio owner who worked with Financial Groove, explained to Dance Teacher magazine. “Take advantage of their expertise so you can make those dreams a financial reality.”
As wonderful as all your dance students are, there’s always a chance that one or two parents will try to skip out on their bills. It’s certainly an unfortunate and awkward situation to handle, but it’s often an inevitable part of being a small business owner. While every situation is unique, and there may be instances in which you are able to meet privately with a parent and work out payment arrangements, there will be times that parents simply aren’t paying their fees. When you’ve sent multiple invoices, made phone calls, sent emails, etc. and received nothing back, you have two main options: accept that you probably won’t see that money or enlist the help of a collection agency.
There are probably a lot of considerations you’ll want to take into account before hiring a collection agency, but the bottom line is whether the service will be worth it for your particular situation. If you are a dance studio owner, here’s how you can figure out if you need to go to collection and a few tips to make the process a smooth one.
Are Collection Agencies Worth It?
Perhaps the most important factor to take into account when deciding how to handle past-due bills is whether going to collection will be worth it financially. If you have a customer who owes $50, chances are that the process of sending the account to collection and having service fees deducted won’t be worth it for the minimal amount of money you’ll get in return. However, bigger bills can sometimes make or break your studio, and if you get the sense the parents aren’t going to pay, it might be time to call in the professionals. After all, it’s better to get a portion of the total bill after the agency’s commission than to get nothing at all.
Many small business owners think that if they’re persistent, they can collect the money themselves. This is sometimes the case, but it will likely sap your time and resources to be calling, emailing and mailing the customers in question. You should also realize that the longer an invoice is past due, the less likely you are to see your money. A survey from the Commercial Collection Agency Association found that after three months, the probability of you collecting the money drops by 30 percent. At six months past due, there’s only a 50 percent chance that you’ll be able to collect.
Will Using a Collection Agency Hurt Your Reputation?
Sometimes small business owners are hesitant to work with collection agencies because it will hurt the company’s reputation. It’s no secret that customers generally dislike collection agencies, and there’s always the chance that the disgruntled parent will tell your other customers what transpired.
It’s a real possibility and you’ll have to decide if you’re willing to take the risk. However, one studio owner put the issue into perspective on a forum about collection agencies.
“If people don’t like collection agencies, then they need to pay their bills or at the least work out an arrangement to pay off the debt,” explained the owner on Dance.net. “A dance studio is a business and needs to be thought of as a business and run like a business.”
As always, payment policies should be clearly stated in registration materials and student contracts. Since payment issues could potentially affect a student who is still taking classes, carefully think through whether students with delinquent accounts can still attend, and make sure those policies are also communicated. If you run into problems down the road, these policies will give you a solid foundation for dealing with delinquent payments, and will help protect your studio’s reputation.
How Can You Streamline the Process?
The first time you use a collection agency, you may be a little lost in the process. However, you can make the ordeal easier by picking the right agency to work with and knowing what to expect.
When choosing a company to handle your collections, ask if they’ve worked with dance studios before and get references if possible. Call the other studios and see what their experiences were like before you sign up with an agency. The Fox Small Business Center recommended you check that the company is authorized to collect money from debtors in other states in case your past-due customers have recently moved. Don’t be afraid to get in touch with a few different agencies to find the one that’s the best fit for your needs.
Once you’ve chosen a company to work with, you can sit back and let them handle the awkward encounters. However, be aware that your past-due customers may very well call you to try and work things out. In these situations, you should simply explain that the matter is in the hands of the collection agency now and all communication and payment should go through them. Remember: You’re completely within your rights as a business owner to do what it takes to get the money you’re owed!
It’s always a good idea to build a relationship with the agency, especially if you think you’ll need to use them again. Be available to answer their questions and try to set up a meeting so you can talk about best collection practices face-to-face.
“When you hire a collection agency, you’re hiring a business partner,” Martin Sher, co-owner of AmSher Receivables Management, explained to Fox. “Smart clients meet with their agencies, discuss any issues that arise, provide them with any information they need and give them feedback.”
Using a collection agency probably won’t be an enjoyable experience, but at the end of the day, you’ll come out a stronger, more efficient business owner.
Because we deal with a lot of dance studios, we try to stay in tune with ways we can help them out in their day to day operations. Recently, we’ve noticed a recurring theme among our dance studio owner friends: questions about dance studio management software.
Should they use it? Which one is the best? How expensive is it?
Dance Studio Management Software Survey Highlights
Working with several studio owners and dance industry experts, we created a survey to help answer these questions and more. The survey was deployed in late 2014, and garnered over 600 complete, verified responses. Here are some of the key things we learned:
About two thirds (67%) of dance studios use studio management software.
Features rule. 35% of respondents say that they chose their particular software based on a feature set that met their needs. Also important: inexpensiveness (17%), ease of operation (16%), and recommendation of others (16%).
The three most important features of studio management software are billing and payment processing, class management, and email or text communication. The three features ranked least important were staff scheduling, website maintenance, and staff time clock.
Jackrabbit Dance is dominant, with 28% of the respondents indicating that they used it. Other popular software providers were Studio Director (18%), and Dance Works (14%).
Studio owner operators are generally satisfied with their studio management software, with 76% indicating that they were either “extremely satisfied” or “somewhat satisfied.” ClassJuggler, DanceStudio-Pro, Studio Director, and Jackrabbit Dance ranked the highest in satisfaction.
Read the In-Depth Report on Survey Results
To see the full summary of the survey results, please enter your email below.
As a small business owner, you’re probably going to be a little more flexible about payments than a big business would be. Sometimes it’s necessary to give parents extra time to get their ducks in a row, and that’s understandable. However, it can hurt your studio if you have too many past-due accounts and let them hang in limbo. Here’s a few tips for dance studios on how to handle parents who are behind on payments without losing their business.
Have Policies in Writing
One of the best tips for dance studios to prevent past-due payments from becoming a problem is to clearly detail your policies. Dance Studio Profit recommended having your studio policies printed on invoices and available on your website. This way parents won’t have the excuse that they didn’t know your rules. It’s also good to keep your policies relatively straightforward. Detail what will happen after 30 days, 60 days and so on. Set penalties for standard time periods so people aren’t caught off guard.
Be Open to Compromise
Chances are that you’ve built strong relationships with many of the parents at you studio, and that can make bill collections difficult and even awkward at times. However, at the end of the day, you are running a business, and collecting payments is a necessary part of the job. If you notice that a parent is struggling with payments, take time to sit down and discuss the problem. When you talk about the problem in private, you may be able to come to a compromise, like some sort of payment plan. This way you’ll avoid awkward confrontations down the line and keep your customers happy.
Give Fair Warnings
While you’ll want to establish a final cut-off date for past-due accounts, don’t let it sneak up on parents. There might very well be individuals who intend to pay, but keep forgetting. It’s best to give gentle reminders, either in person or in writing, that a payment deadline is coming up. Let parents know ahead of time if they’re going to accrue extra fines or if their child won’t be allowed to participate in class. It’s a small action that can go a long way toward getting past-due parents to settle their balances and keep your customers happy with your business.
Do you find yourself staying long after closing to file paperwork and answer emails? Does your “downtime” at home consist of scheduling social media posts? If the administrative workload at your studio is running you ragged, it might be time to consider hiring a dance studio manager or office manager. Many studios are hiring additional staff to help out with the day-to-day responsibilities that generally fall to the owner. Here are four considerations you should make if you’re thinking about a hiring full- or part-time dance studio manager.
1. Consider Automating or Outsourcing
The first thing you should do when you’re feeling overwhelmed with administrative tasks is to make a list of all the things you’re behind on. Dance Advantage explained that once you have a list in front of you, it will be much easier to determine if you need a new employee or if you could simply invest in some automation software. If your troubles are related to accounting and bookkeeping, you might need to invest in new accounting software. You could also consider outsourcing to an accounting firm. If you spend too much time wiping down the mirrors in your classrooms, you can hire a cleaning service to come in once a week. Once you have an idea about the distribution of your workload, you’ll be able to make a more informed decision about hiring a dance studio manager.
2. Weigh the Costs and Benefits
An office manager will definitely help to reduce your workload, but you’re going to have to write another paycheck each week. Dance Studio Life noted that most studio managers expect to receive between $10 and $20 per hour, depending on the size of the office and the responsibilities involved. Try to weigh the time and stress you’ll save against the cost of another salary. If the cost is within your budget, a studio manager might be the way to go. However, if the money would put a strain on your finances, you should probably look into other solutions.
3. Look for Candidates with Experience
When you’re reviewing candidates for the position, keep that list of responsibilities you made handy. It’s in your best interests to choose a manager whose experience lines up with your needs. If you’re behind on filing and paperwork, a candidate who has worked in an office setting would be ideal. Individuals with customer service experience will do a good job answering phones and emails. If you need help with more hands-on tasks like ordering costumes and creating rehearsal schedule, you might want to look for a candidate who’s familiar with the basics of dance. Hiring a manager with the right experience will be beyond helpful in the long run and ensures that he or she will be an asset to your business.
4. Create a Training Plan
Don’t overlook the fact that anyone you hire will need to be trained before they can be a seamless part of your studio. Unfortunately, no one will be able to walk in and immediately know what to do. Even if the candidate has worked in a studio before, no two business are the same, and there will be tasks he or she needs to be walked through. Take time to create a training plan before your new hire starts. The more specific your plan is, the quicker your manager will get the hang of things. You both will benefit from written policies, procedures and schedules. Dance Advantage also recommended explaining what the manager doesn’t need to do. If you want to be the point of contact for parent complaints or to be the only one posting to social media, explain that to your staff member. Sometimes he or she might try to be helpful and take on tasks that you’d prefer to do yourself.
When you open your first dance studio, you’re going to face many of the same sources of small business stress as other business owners. It doesn’t matter if it’s a restaurant, retail store or service provider, every company will face one or more of these problems at some point. However, the good news is that there are usually ways to effectively manage your small business stress so you can get back to perfecting pirouettes and picking recital tunes.
1. Huge Workloads
As a small business owner, you’re not only an instructor, but a marketer, accountant, human resources rep and much more. If you’re lucky, you have a spouse or friend who is willing to help out when you’re in a pinch, but there will definitely be times when you’re swamped with all the things you have to do. Unfortunately, your budget might not allow you to hire office help, so you’ll need to get creative. The first step toward solving this problem is to perfect your time management skills. When you have a dozen things to accomplish, it’s critical to have a set schedule. Set aside three hours each week for marketing, three for accounting, one for answering emails or whatever time you need. If you’re still pressed for time, consider falling back on the barter system. You may not have the funds to hire someone, but you have a service you can offer. Trade dance lessons for a marketing campaign or work with a local high school to offer student office training.
2. Tough Clientele
The first rule of business is that the customer is always right, even when they’re wrong. You’ll likely encounter a few hardcore dance moms who are impossible to please. On top of your existing small business stress, tough clients can be a breaking point. To solve this problem, establish firm rules and policies for your studio. You should have these set from the day you open, but feel free to adjust the rules as you go. If you find that parents are dropping their children off late, next season implement a policy dealing with tardiness. If you’re steadfast with your rules, parents will eventually learn not to question your authority in these areas and you’ll have fewer problems overall.
3. Fierce Competition
The Bank of America Small Business Community explained that creating a unique brand is crucial for a small business to stay afloat. To succeed, your dance studio needs to offer something better than your competitors. It can be more one-on-one time, flexible class times, unique genres or even lower prices. Setting your business apart from competition in some way will help you to retain customers and build a stronger brand name.
4. Expedited Growth
You probably want to expand your business, but doing so too soon or too quickly can be detrimental to your studio. A blog post from The New York Times explained that borrowing too much money or expanding into unprofitable markets can backfire and lead to financial ruin. To combat these temptations, establish a detailed business plan, including a timeline for growth. Regularly reevaluate whether you’ve been meeting goals or if you should wait before taking the next step. Get an opinion from a financially savvy friend before making any big expansion plans.
5. Accounting Issues
Finally, a business can fail if the owner isn’t cognizant of finances, even if everything else is functioning smoothly. The New York Times noted that many small business owners expect that a third-party accounting firm will give financial advice, but in reality, most of these firms handle taxes and nothing else. As a studio owner, you’ll need to wear the chief financial officer-hat. This means you’ll need to ensure the business has a cash cushion, is operating efficiently and is charging enough.
Be proactive in this area and head off problems by staying organized and aware of your studio’s finances. You should have allotted time each week when you focus solely on financial issues. Even if you’ve hired an employee to handle bookkeeping for you, make sure you always remain aware of your studio’s financial status, maintain access to all financial records, and ensure that there are checks and balances for anyone handling your studio’s finances. At the end of the day, you the studio owner must make the hard financial decisions required to ensure the success of your business.