Last month we presented an article for dance teachers looking to start their own dance studio. If you missed it, please read it in last month’s archives. Remember that just because you love to teach dance that does not mean you will love being a dance studio owner or that you will be successful at it. It takes a lot of work and desire to grow and build a successful dance studio. Being a Dance Stuido Owner is hard work! But if you have a sense for business and would like to explore ways on how to build a business, you may just have the right entrepreneurial spirit! At the end of last month’s article, we asked Dance Teacher Web members to send us their follow-up questions about starting a school. Thanks to all who responded. Here are the answers to some of the questions we received.
Q. How do you go about finding the right location?
A. This is a very important question. As the saying goes with buying real estate, 'location, location and location.' The same holds true when renting, especially when you are going to be holding classes with children of all ages. Look carefully at the area. Are there other kid-friendly businesses nearby? Is the area safe and well lit? Is there any room for expansion down the road? Here is a good rule of thumb: Try to get your new landlord to do the initial step up: walls, subflooring and all mechanicals (plumbing and electric). Try to keep your costs for the first two years as low as you can negotiate. It may mean that you need to sign a slightly longer lease, but it will be worth it to keep cash flow healthy.
Q. What is the biggest issue you faced when starting out?
After 32 years as dance studio owners we had to spend some time to remember that far back! In some ways it feels like yesterday and in others it feels like a lifetime ago. The biggest adjustment we had was in understanding that we were teaching children who first and foremost were dancing because they wanted to have fun. You see, we had been dancing professionally for many years. Most of the classes we had taught and had taken were geared for professionals. If you are a dancer or only teach advanced students, you will need to tone it down quite a bit! You will need to remind yourself that you are imparting all the added benefits and life- enhancing skills attributed to dance training and that most of your students will not be professional dancers. This was a mindset that we were not altogether ready for when we first started. The other thing was that when we went into a school to teach master classes, we always received a great reception from the students and parents. But when they see you every day, you will also see their bad side as well. Not everyone will think you are the greatest all of the time. Just don’t take it personally. We know the truth!
Q. I do not have very good bookkeeping skills. What should I do?
A. Here is a little secret: most people who run their own business are not that great at it and can’t stand doing it! Here is an important lesson: Instead of spending your time trying to do something you are not good at and probably don’t even like, find someone who can do it for you. Here is what you do need to learn: How to read a monthly revenue report and what your projected profit or loss will be. Your bookkeeper can create these reports for you and can show you what they mean. If he or she can’t, find one who can. This report will tell you how much money is coming in and how much is going out. You can sleep a lot easier at night if you know where you are financially. If you find that you are going to be short, better to know it 6 or 7 months in advance rather than finding out today that you can’t afford next month’s rent. Time, and lots of it, is your best ally.
Q. Where can I get financing for my new school?
This has become more of a challenge in this economic climate. Here are a few things to consider: You can approach a bank, preferably one that you have a relationship with and have them help you apply for a SBA (Small Business Administration) loan. This is for our American members, but most countries have something similar. You will need to go in with a well thought out business plan—I recommend that you get help preparing this, and then you can get a loan that is guaranteed by the government. The bank is more willing to lend money if they know that, if you can’t pay them back, they will get their money back from someone else, like Uncle Sam. Another idea is to use assets you have as collateral. This is not always the best because, if you cannot pay, they can take what you have put up in exchange for the loan. I will say that we did use this method with a piece of real estate we owned when we first started out. We were able to pay it back and we did so quickly. My best recommendation is to confide in someone who can point out to you what you are risking in any promissory note you may be signing. I also believe that you need to just make it your business to pay it back, even if it means trying to renegotiate the agreement should you find that you are having trouble making payments.
Q. Which classes should I offer the most of at the start?
Preschool lessons! I know that if your dream is to have a school where you can teach students to dance as you explore in your own creativity, this reality will be a bit of a bummer. Here is what you need to remember: Beginner students turn into intermediate students and then advanced students if they stay at it long enough. If you can build a big preschool program quickly, these young children will be 9, 10 and 11 years old before you know it and you will have trained them as you like! When our preschool program grew, so did our bottom line. If you want to pay the bills and make some money, spend your money to get this student into your program.
Q. I don’t really care about the money. Could this be an issue for me?
In a word, YES! Look, the point is you are not selling out because you are interested in making a profit. If you think that trying to make money is somehow beneath you, then you are going to have problems making a school profitable. Think of the best company, organization or event you have a high opinion of. They are there because they made a profit and will continue to try to increase those profits so that they can expand what they offer and how they can offer it to the most important people to them, their customers! This may not be the overriding factor for why you want to be a dance studio owner but it will make it a whole lot easier to run if you can embrace the importance of creating a profitable venture. How creative will you feel if you are not making enough revenue to pay your bills or, even worse, yourself? We love the creative part of owning our own dance studio and being able to teach the way we like without getting anyone’s approval. But it would get old quick if we were constantly struggling and never making a profit. If you run a business you need to make a profit. If you’re not interested in that, then just keep working for someone and focus on only teaching and the creative part.
