Over the years, I have bought a couple of businesses and I recently even looked into buying a national franchise and negotiated for close to a month before I decided not to buy. But it wasn’t until last year, when I decided to offer my dance studio for sale, that I realized how many questions get fired at you when you’re in the selling seat.
Even though I had been a buyer and had asked a bunch of questions, when the tables were reversed I was sometimes rather taken aback by what was asked!
In a nutshell, I started a preschool dance school and built it to a couple of locations, had a solid, loyal student base and after nearly 2 years decided I needed to sell it for a range of reasons, primarily because I had competing opportunities and limited time. Luckily, I had approached my dance studio from the outset in a very organized and systemized fashion.
Questions Potential Buyers Asked Me
Are the venues locked in place and secured for the next 6-12 months?
What are the rentals, and where’s the paperwork outlining the agreement that the set days and times are secured for this dance studio?
Have you told your teachers that you’re selling?
If yes, how did they react? If not, why and when will you?
Have your teachers asked you if they can buy the studio?
Why don’t they want to buy it?
My note on this: I decided to tell my teachers as soon as I’d made the decision to sell and I offered them the business. They weren’t in a position to buy it, so, after they were made aware but declined, I looked further afield.
I waited a few days to see if the teachers changed their minds. Then, I approached other dance schools and dance teachers to see if they might like to buy the business.
How many students are there?
What is the life cycle of a student?
What profit is made per class per student less costs?
What is the gross and net profit per year per student?
What is the detailed P/L (profit and loss statement)?
Is this studio profitable? Is this studio in the red?
What’s the largest cost/s?
What are the fixed costs and variable costs?
Does this business have any outstanding debts/liabilities?
About Parents and Students
Do they know you’re selling?
Have you told them?
How have they responded?
If you haven’t told them when are you planning to?
About Other Dance Schools
What other dance schools are offering similar classes?
What price are they charging per term for similar classes?
Money seems to be the focus
Interestingly, I noticed that most of the questions related to money – profit, turnover, price per student, profit per student and all the financials. People also wanted to know about the staff and whether they would stay on. The teachers in my business were a critical piece of the puzzle since I myself wasn’t teaching in the studio; in some studios this might not be so important.
What I found amazing was that no one was really that interested in the brand, the goodwill, the dance programs I’d created or the social media following. The main value they saw in the business was in the monetary side of things, student numbers and staff retention.
What the selling experience taught me was that unless your business systems are tight and your financials are solid it will be very hard to sell a business based on reputation, name or quality programs alone. That being said, those aspects are really important to the success of the studio and therefore the profitability, so they are still important.
I have attributed this to the fact that a lot of dance teachers who acquire other dance schools will make the assumption, rightly or wrongly, that they already have their own programs, reputation, and branding. Therefore, they don’t need to worry about yours as they will just bring the acquisition under their already existing umbrella.
At the end of the day, selling a dance studio is the same as selling any business and a buyer, like a property buyer, wants to know that what they are buying has value and profit.
Ensuring that your business systems, financials and all fees are paid is going to be key when and if you need to sell your dance studio.
Emma Franklin Bell is an entrepreneur, author and mentor. In 2014, she sold 2 small businesses in the children’s entertainment space. She has written and published a book, and mentors dance teachers on the strategic direction of their business. She is based in Australia.
By now your studio’s season is officially in full swing and your classes are humming along. Your students and their families are getting used to their new dance schedules, school commitments, and carpools. Your staff members have also settled into your new routines around the studio and you are starting to find your “new normal” with the fall schedule. It can be such a satisfying feeling as a studio owner to finally feel like the pieces of your puzzle have fallen into place!
It’s completely fine (and encouraged!) for you to celebrate the success of starting off the new season right. But don’t let that satisfaction turn into complacency when it comes to your leadership: your team is on the front lines of service every day, and they need your active support, direction, and motivation to keep moving forward and offering up their best selves.
It’s probably been at least a few weeks – maybe more – since your new-season kickoff meeting with your team, which means it is the perfect time to re-cast your expectations and set the pace for the year ahead.
Keep your staff members feeling excited to come to work and on the right track by implementing these 3 Best Practices For Coaching Your Dance Studio Staff This Fall:
Looking for more great studio staff management ideas? Check out the following articles:
Writing a dance studio business plan is a BIG project. But an important one! This plan will lay out your studio’s hopes and dreams, as well as the step-by-step process for getting from Point A to Point B. A few questions to ask yourself as you get started:
Where are you now?
Where do you want to be in three years? In five?
Who will help you get there?
The point of a dance studio business plan is to clearly lay out the aspects of a new company: strengths, challenges, and all of the minor details that will make the business a success. This document is an opportunity for entrepreneurs and hopeful business owners to put all of their ideas on paper, so that colleagues and other advisors can review the plan and offer any advice or criticism before the business is launched.
As an example, TutuTix has created a sample dance studio business plan without financial forecasts for our imaginary dance studio, TIPS (the TutuTix Imaginary Performance Studios).
Feel free to use our guide’s ideas in your own plan, and please send us feedback about ideas we might not have that work particularly well in your studio! You can download the example dance studio business plan for free by completing the form below:
The layout of a business plan follows a logical progression of topics that a company needs to have defined prior to opening for business.
That order of topics should look something like this:
A concise description of your company, that acts as an overview of your goals and values. Keep it short but sweet! Why did you choose to build this kind of company?
Here, you can flesh out your overview and touch on how your business will function. Talk a little about your customer base, marketing goals, and strengths of your company. Why are you the best? Is it because you have the best staff, the most experience, the best rates?
Who are you competing against? How strong is that competition, and why do you think your studio can handle it? How will your business grow in this community over time?
There are lots of talented teachers and dancers who would be great studio owners. But in their current city or location, they would have a really hard time getting into the market and signing up students. That might be because of competition, lack of student interest in the area, or other reasons. How will your studio stand up to these tests?
Products and Services
Which dance classes will you offer? Will you rent out your space? Will you sell any retail items?
This section lists out your business functions: what do you offer, and how much will you charge? All of the items listed here will add up to be your studio’s income.
Marketing Publishing Strategy
How will people find out about your business, and how will you recruit additional students after your first season? What does your brand mean to you, and what do you want it to mean to others?
Operational Plan, Legal, and Startup Expenses
You can’t start a business from scratch: you’ll need funds and some professional consulting to get your company off the ground. How will you pay for your startup costs? Do you have that money already, or will you need to raise money with partners? Is a loan from the bank your best option?
By the time you get to writing this portion, hopefully you’ve talked to colleagues who might be opening the studio with you, or you’ve found a legal and/or financial professional who can advise you on the best way to move forward. Taking on debt to open a business is always risky, so you want to find funds the right way and have a plan to pay that debt back.
Most importantly: don’t be afraid to adapt! After the completion of the business plan, go back through and make adjustments based on information you’ve learned along the way! Ideas can and should evolve when they’re laid out on paper, so be sure to look for guidance from other teachers and business owners when putting together your plan.
How do you maintain your accountability as a dance professional?
Here are some thoughts for maintaining your relevance and staying refreshed:
Research New Ideas
Network with Other Professionals
Continue Your Education
Reflect on Your Career Progress
Consider Progress & Evolution
Have A Responsibility to Share
The responsibility to share promotes the practical application of research, network, education, reflection, and progress & evolution.
Find Your Outlet
As an example, with The Dance Exec, I enjoy the process of finding new content and information about our industry. I enjoy thinking through my teaching and choreography style to see what and how I can improve and evolve as an instructor.
It expands my network and worldview, and in turn, it makes me approach all of my work with a unique perspective.
What is your outlet for professional accountability? What do you do to make yourself the best professional?
Starting a dance studio (or relocating a studio) is certainly not an easy endeavor. It is a decision that should be thoroughly considered, weighed, and understood. Varying personal factors that should be considered are: personality type, business sense, life stability, income requirements, investment resources, personal willingness to commit, and a passion for business and/or dance. Most people would not open a clothing boutique if they did not love fashion, and the same should be said for dance studio entrepreneurs.
In starting a dance studio (or expanding your current studio), you must find your niche location and market. This section of the guide will cover all of the factors involved in choosing and up fitting a space for your current or prospective dance studio. In terms of your success, location is everything!
Finding Your Ideal Property
To begin searching for commercial property, it is a best practice to consult a commercial real estate agent. The agent will represent you and will protect your best interests throughout the process.
In searching for a prospective studio spot, it is important to consider the following items:
How much space (think square footage) do you need for your dance studio? How much space can you support with your anticipated student base and financial resources? Will the studio be a one-room facility, or will it have multiple studio rooms?
In planning for the studio, consider the following spaces:
When looking at spaces and considering prospective floor plans and layouts, as much space as possible should be dedicated to the actual studio areas. This is the primary selling point of your facility and will be the most used, income producing space.
Is the space you are considering zoned for your intended use? A real estate agent or landlord can clarify an area’s intended use and zoning.
Lobby space should be kept to a minimum. The lobby does not need to be a large space for parents to loiter, as that encourages gossip and detracts from studio space.
Office space, bathrooms, and storage should be kept to a minimum, but be sure that they are adequate enough to accommodate your needs.
Does the space have adequate parking to accommodate the number of clients you hope to have at your studio? Be mindful that you will likely need a spot for every person at your studio at any given time, including: students currently taking class, students transitioning to the next class, and staff vehicles.
The bottom line is that you need a spot for every single person that might be in attendance at the studio. Extra parking is always a plus—people will never complain if there are too many spaces, but there will be complaints if there is not enough parking.
You may also consider having a student drop off area, so parents can drop off and pick up students without utilizing a parking space. In considering this option, you want to ensure that someone that may take too long in the drop off area will not interrupt the overall traffic flow.
A well-designed parking/drop off area can be one less thing for parents to stress about when coming to your studio.
Since dance studios frequently involve children, it is absolutely imperative to consider the safety (actual or perceived) of your location. Ask yourself if you would feel comfortable leaving your own child in a particular locale?
You can run the best studio in the world, but if it is not a great, safe location, people will hesitate to bring their children. This could cost you business! And, while the price of a less than desirable location may be appealing, this is not an area to skimp on your budget; rather, you should invest in being in a better part of town.
When considering locations, investigate your neighbors and see if that fits into your ideologies and overall theme. A great place for a primary location might be in an area with a fun park, a children’s preschool, and a music center. You would not want to open your facility in an area that was surrounded by bars or other non-child friendly venues. Be alert, and think of how parents may view your location and presentation.
The cost of a visible location is expensive, and ultimately you will pay more rent. But, you will compensate the cost through blatant marketing. If your location is centered in an area that supports a lot of drive-by traffic, your facility will constantly be on the forefront of your community’s mind.
Keep in mind that convenience is a primary factor for people joining a dance studio (or any extracurricular activity). Make sure your locale is near prospective clients and reflects the mentality of the neighborhood. Some dancers will come to you because you run an excellent program and train great performers. But, the bulk of your students (and, consequently, your income) will result from people that are taking dance because your activity is convenient to their home. Make sure that where you decide to put your studio is near a solid base of prospective clients.
Consider what nearby, prospective clients want in a space. Are you near a country club with high expectations for their children’s extracurricular activities? Be sure that your space reflects the mentality of the neighborhood and fits in with your potential client’s expectations. If a competitor (dance studio, gym or otherwise) has a considerably nicer or more visible facility, how are you planning on competing?
5. Nearby Anchors
As mentioned in the safety segment, knowing the businesses that surround you can greatly impact your business, positively or negatively. Know the resources that will be surrounding you and how you can use them to benefit your business. Being near a popular landmark can help your business when providing directions. Also, if you are near a school or another complimentary business to your target market, this can be highly beneficial. People appreciate surroundings that are familiar.
6. Feasibility of Meeting your Opening Goals / Timeline
It’s important to consult with your landlord/contractor to ensure that they can meet your opening goals with construction permitting, up fits, etc. It’s important to initiate the beginning phases of starting a dance studio with the highest levels of professionalism and organization.
The Bottom Line
Your dance studio’s outward appearance will make a huge impression on your clientele. Take the time to provide the best possible environment and regularly evaluate areas for potential improvement. Make sure your facility is cutting-edge, safe, and the appropriate environment for your dancers to thrive.
Earlier this year, I wrote a post about plagiarism in creating dances and dance material. Since then, I have received an outpouring of information regarding situations involving copied dance choreography material. It is intellectually difficult to comprehend the necessity of this vice, especially when it impacts our students.
Check out this story, submitted by a parent, about her daughter’s experience:
A couple of years ago, I had the unfortunate surprise of finding my daughter’s jazz dance on YouTube. It was the beginning of our dance year and after the second week, my dancer excitedly came home and wanted to show us what she had learned so far.
She loved the song, the dance – she was thrilled. Not being able to find the exact version on iTunes, I searched on YouTube – the name of the song and dance. I clicked one dance and she said, that song is different, try another one. So I play another video. “That’s it,” she said. Well, as she is dancing and I am glancing at my laptop, I realize she is doing the exact same dance.
I waited another week and when my dancer came home continuing to do the dance from the internet, I knew there was a phone call I needed to make. Calling the Studio Owner the next day, who happens to be someone I highly respect and like, was one of the hardest things I have ever had to do. She was shocked and embarrassed, I felt sick to my stomach having to tell her.
I will never forget her apologizing and saying that it was a phone call no parent should ever have to make. She is the epitome of integrity. I did not share what had happened with my dancer or other parents because it would have created unnecessary drama.
I don’t know nor is it my business to know how the situation was handled, but the song and dance were completely changed. Unfortunately the group of 10 and 11 year olds did not understand why the dance they loved was being changed so it was a challenge to hear that and hear other parents question why as well.
It is so important for dance teachers to create their own work. It could easily be a dancer who finds the dance on YouTube, a dance they have workedhard on all year. Even if the teacher thinks, my studio doesn’t post dances, I can get away with it. What if it performs well at a competition and is featured on a competitions Facebook Page or YouTube channel?
I think the above situation was a verybig learning experience for a new and young teacher. Just wanted to sharemy perspective on what it is like when a parent discovers their daughter’sdance is not the teacher’s original choreography.
Should this be happening in our industry? Absolutely not. As leaders, we have to implement a standard of originality and creativity. While this is a specific example, it represents a common occurrence that happens too frequently. It is hard to comprehend that there are teachers using entire routines from YouTube, master instructors duplicating exact dance choreography for multiple dancers, and competition teams that are blatantly and specifically copying other studio’s concepts.
We have to be role models of integrity, originality, and creativity for our students, instructors, and peers to prevent situations like the one above. We have to separate and clearly define inspiration versus plagiarism. When we incorporate such high standards in our studios and our students, we create a stronger culture, brand, and legacy. And, that is something everyone can respect.
In school, students are taught to be vigilant about citing sources and making sure that proper credit is given where it is due in regards to research. You would assume this heightened level of respect for others’ work would translate to the professional world; however, with advances in technology making creative content easily accessible, it seems that copying without credit has quickly become a frustrating fad.
From choreographic concepts to entire routines to business models to misrepresentation via falsely acquired photographic images, the possibilities of using materials that do not belong to you are endless. But, here’s the question: why would you choose to use content that does not belong to you? You have created a unique institution that should reflect your core values, mission, and beliefs– not someone else’s culture and beliefs.
The next time a creative block occurs, allow yourself the opportunity to find your own unique inspiration. The final product will be representative of your culture, and you will feel honest in projecting it to your students and clientele.