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How To Start A Dance Studio

How To Start A Dance Studio

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How To Start A Dance Studio

How To Start A Dance Studio

Maybe you’ve been dancing all of your life and want to share that passion with others. Or, maybe you’re coming toward the end of a professional performance career as a dancer and are looking for a way to stay connected to the industry. Opening your own dance studio could be the solution to sharing your passions with others – and getting paid to do so.

But this isn’t a business venture you want to jump into immediately. Instead, take a few minutes to understand everything that’s involved in opening a studio of your own. This guide will provide an overview of the business, steps to get started, and answers to common questions. With the proper planning and dedication, your dream of owning a dance studio can become a reality.

Business Overview

Dance studios typically offer a variety of classes, usually across multiple styles of dance, such as jazz, ballet, tap, hip hop, and ballroom, to educate dancers, prepare dancers for competitions or careers, or simply as a form of entertainment and enjoyment. Some studios specialize in training young dancers who desire to pursue ballet as a career, running highly competitive and rigorous programs. Other studios take a less intense approach, appealing to a broader audience of children, teens, and adults of all learning levels.

At any studio, students will be able to participate in multiple classes in a week, and they may be able to train with multiple instructors. Dance instructors teach lessons, host group rehearsals, create choreography, and prepare students for competitions, recitals, and other performances.

Industry Summary

According to IBIS World, the dance studio industry has grown over the last five years and is projected to generate $4.4 billion in revenue in 2023.

This growth has been driven by the popularity of dance competition shows and rising interest in dance as an alternative form of exercise. Fusion-style dance classes that combine different genres have become increasingly popular.

Competition in this industry is high, especially from gym and fitness centers offering dance classes. To compete, owners must focus on differentiation through unique class offerings, top-notch instructors, and excellent customer service.

Target Market

Different studios typically have different audiences. Some market specifically to children and their parents, while others market to experienced, usually adult, dancers. Some studios offer a certain style of dance and market only to people looking to pursue that style, while others offer a wider variety of classes and can market to a wider audience, in turn.

In all cases, the target market will be students (and possibly their parents) who want to learn to dance and who have the disposable income to be able to afford dance lessons.

Steps To Start A Dance Studio

Step 1: Research the Market

Starting a dance studio business may sound like a dream come true. However, before you open your doors, it’s important to conduct market research to ensure that your business has the potential to succeed. Assessing the market will help you determine the demand for your services, identify your target audience, and make informed decisions about your studio’s location, services, and pricing. In this article, we’ll take a closer look at how to assess the market when starting a dance studio business.

The first step in assessing the market for your dance studio business is to conduct a SWOT analysis. A SWOT analysis involves identifying the internal Strengths and Weaknesses of your business, as well as the external Opportunities and Threats in the market. This will help you identify areas where your business can excel, as well as potential obstacles that you may need to overcome. You can use this information to develop a strategy that takes advantage of your strengths and opportunities, while also addressing your weaknesses and threats.

Once you’ve conducted a SWOT analysis, you’ll need to identify your target audience. Who will be interested in attending your dance studio? Are they young children, adults, or seniors? What types of dance styles are they interested in? Understanding your target audience will help you create marketing strategies that speak to their needs and desires. For example, if your target audience is parents of young children, you may want to emphasize the fun and educational benefits of dance for kids.

To assess the market, you’ll also need to research your competitors in the area. How many other dance studios are in the vicinity? What services do they offer? How much do they charge? Understanding what your competitors are doing can help you differentiate your business, offer unique services or pricing, or identify untapped niches in the market. For example, if several dance studios in your area only offer ballet classes, you could consider offering a wider range of dance styles to cater to different tastes.

To get a sense of demand for your dance studio business, you may want to conduct market surveys with potential customers. These surveys could ask questions such as what types of dance styles they’re interested in, how frequently they’d attend classes, and how much they’re willing to pay for classes. You could also ask about which studio features are most important to them (such as convenient parking, spacious studios, or professional-quality flooring). This information can help you tailor your services and prices to meet customers’ needs.

Step 2: Write a Business Plan

After confirming that there are customers to support your studio, the next step should be to write a dance studio business plan. This is an important step to start early when starting a dance studio, especially if seeking funding from a bank or lender.

A business plan helps to provide a detailed outline of the business, including financial projections, management team, marketing strategies, and other key aspects that lenders will consider before providing funding. In a business plan, several sections are especially important for a dance studio to focus on to increase their likelihood of securing funding.

Market analysis: In the market analysis section, it’s important to clearly explain why the dance studio will succeed in the proposed location. This section should include a description of the target audience, competitors, and how the dance studio will differentiate itself from the competition. By analyzing the market and showing a clear understanding of the industry, lenders will be more likely to invest in the business.

Management team: The management team section is crucial for lenders to assess the potential success of the dance studio. This section should include a description of the owners’ background and experience in running a business, as well as any relevant experience in the dance industry. Lenders want to see that the owners have the necessary skills and experience to manage the day-to-day operations of the dance studio and make informed decisions that will lead to success.

Location: The location section should discuss the proposed location of the dance studio and why it is ideal for the business. This section should include information about the community, demographics, and foot traffic. It’s important to show that the location has been carefully chosen based on market research and will attract the target audience.

Financial projections: The financial projections section is perhaps the most important section for lenders. This section should include detailed financial projections for the first three years, including revenue, expenses, and cash flow. It’s important to provide reasonable projections that show the business will be profitable and can repay the loan or investment. Entrepreneurs should be able to understand the assumptions and be able to explain the projections to lenders.

Related: How to write a business plan

Step 3: Secure Funding

Starting a dance studio business takes a lot of passion and hard work, but it can also require money. Whether you’re looking to open a new dance studio or revamp an existing one, finding adequate funding sources is the key to your success. Some common sources include:

Personal savings: Perhaps the most common way to finance a dance studio is through personal savings or investments. This method allows you to have complete control over your business and keeps you personally invested in its success.

Bank loans: Traditional bank loans and Small Business Administration (SBA) loan guarantees are also popular funding sources for dance studio businesses. While obtaining a loan from a bank can be challenging, it may provide you with the necessary financial support to start or expand your business. Should a bank find the loan request too risky to do on their own, an SBA loan guarantee might be utilized to secure the loan.

Microloans: If the funding requirements are modest or traditional bank loans are out of reach due to credit constraints, microloans could be a viable alternative. Some microloan providers offer business training alongside funding, which can be invaluable for a nascent dance studio owner.

Crowdfunding: Crowdfunding has become a popular way to raise funds for dance studios and other entrepreneurial projects. You can set up a campaign on crowdfunding platforms such as Kickstarter or GoFundMe to solicit donations from friends, family, and even strangers who believe in your idea. This funding option is not easy, but if your studio has a unique niche or offers something new and exciting to the dance community, there may be potential.

Grants and scholarships: Some organizations, such as local arts councils and non-profit organizations, offer grants to support the arts and dance communities. While grants are not super likely and the amount of funding won’t likely meet all of your financial needs, they may provide some help.

Related: Finding the money to start a business

Step 4: Acquire & Renovate the Location

After securing funding, the next step is to acquire and set up the location. This is a big step where all of the initial planning finally comes together into something tangible.

While most dance studios don’t necessarily require a prime, high-traffic location, it is usually important to be easily accessible to your customers, even though some customers will travel long distances if your program is excellent. In most cases, you want to look for areas with a high concentration of school-going kids, young adults, and families.

Dance studios require ample space to practice different dance styles and floor space to accommodate dance routines. Your location has to be spacious enough to include changing rooms, reception areas, and administrative spaces. You also need to consider the right flooring, mirrors, sound, and lighting systems when setting up the studio space, in addition to access to plenty of parking. Also, before signing any contracts, be sure to verify that the property is correctly zoned for a dance studio.

Related: Choosing a business location

Step 5: Register the Business

Starting a dance studio business requires proper registration to make it legal. Each state has its own rules and regulations for registering a business, so it’s important to research what is required in the specific state where the business will be located. Here are some general suggestions for properly registering a dance studio business:

Form a business structure: When starting a dance studio, you’ll need to choose a business structure. The most common options are:

  • Sole proprietorship: This is the simplest structure where you operate the business as an individual. It’s easy to set up, but you have unlimited personal liability.
  • General partnership: Two or more owners share management and liability. Establishing it is also relatively easy, but each partner is personally liable.
  • Corporation: You form a separate legal entity that protects the owner(s) personal assets from business liabilities. The corporation is more complex and expensive to set up.
  • Limited Liability Company (LLC): This provides liability protection like a corporation but with the ease of administration that the sole proprietorship and partnership offers.

Each structure has its own advantages and disadvantages. For example, the LLC and corporation offer liability protection for the owner’s personal assets, while the sole proprietorship is easier to start up and has lower costs.

Related: Comparison of business structures

Forming an LLC sounds complicated and expensive, but using an entity formation service guides you through the process so you know it was done right.

Some popular LLC formation services include:

IncFile - $0 plus state fees & free registered agent for 1 year!

ZenBusiness - Best for beginners. $0 plus state fees & free registered agent for 1 year!

Northwest - Best privacy protection. $39 plus state fees & free registered agent for 1 year!

Business name registration: After registering the business structure, you may need to register your business name. This process will vary depending on what business structure you pick. Sole proprietors and partnerships will often be required to register a “Doing Business As” (DBA), while corporations and LLCs register with the state during the formation process.

Related: Tips and ideas for naming a dance studio

During this time, it’s also a good idea to check if the name you want is available as a web domain, even if you’re not ready to set up a website yet.

Related: Finding a domain name for your business

Obtain business licenses and permits: There are no specific licenses for dance studios; however, there are general business registrations at the local, state, and federal levels that any business would need, such as a business license, sales tax permit to sell branded apparel and outfits for performances, Employer Identification Number for payroll taxes, and an Occupancy Permit to operate out of a commercial location among others.

To improve a dance studio’s credibility with customers and to better attract employees, accreditation may be useful. Popular accrediting bodies include the National Association of Schools of DanceNational Office for Arts Accreditation, etc.

Music licenses: If you plan to play music in the studio, whether it’s live, recorded, or streamed, a Public Performance License (PPL) will be needed. Fines for playing unlicensed music can be quite high.

Related: What licenses do dance studios need?

Step 6: Hire Staff

When starting a dance studio business, owners may consider hiring staff. Common types of people that a dance studio would need include dance instructors, receptionists, and administrative personnel.

Before becoming an employer, it’s essential to understand the legal requirements that need to be taken care of before bringing anyone on board. These include obtaining an EIN for tax purposes, verifying employment eligibility for all employees or independent contractors, complying with state reporting requirements, ensuring worker’s compensation insurance is in place (which is required by most states), and following labor laws.

Related: Guide to hiring employees

Step 7: Create a Marketing Strategy

Being the best dance instructor isn’t a guarantee to business success, which leads us to our next step – marketing. With so many dance studios out there, getting your marketing game plan right is essential to attract more customers. Here are a few popular marketing strategies used by other dance studios.

One of the most reliable ways to attract new customers to your dance studio is by offering free classes. This is your chance to showcase your studio and impress new customers with quality dance instruction and a welcoming atmosphere. Conduct these free classes during seasonal events, holidays, or any other special days when interest in learning dance is high.

Social media is a very powerful marketing tool available to dance studios. Platforms like Facebook, Instagram, and YouTube can allow you to reach potential customers locally and across cities, without spending a lot of money. Create a business profile for your dance studio on major social media platforms and post quality content to keep your followers engaged and interested. Videos are a great way to showcase dance performances, tutorials, and offer brief glimpses of your studio classes to potential customers. Using social media advertising allows you to target a specific audience, such as those who live in your area, follow other dance studios, or are interested in dance performances.

Community involvement is another way to create brand awareness and gain exposure for your dance studio. Consider joining local dance organizations and attending events that allow you to showcase the talents of your dancers. Additionally, partnering with community organizations like fitness centers, schools, and community centers can help you build positive relationships with influential community members. By establishing a presence in the community, you can tap into the network of people who may be interested in what your studio has to offer.

Related: Low-cost ideas to market a new business

Step 8: Prepare to Open!

Winding up the steps to start your dance studio there are likely several steps that are needed. Everyone will have different needs, but here are some common items:

Business insurance: Acquiring insurance to cover liabilities, property damage, and other potential risks is a prudent step to safeguard your business.

Related: What types of insurance does a fitness center need?

Setting up bookkeeping: Proper bookkeeping is essential for tracking income and expenses and staying on top of financial obligations. Using software like Wave Accounting (FREE) or Quickbooks or hiring an accountant are common options.

Contracts: Dance studios may need to prepare contracts such as performance agreements, release of liability waivers, and rental agreements for studio space. RocketLawyer and Law Depot have free and inexpensive templates that may be helpful.

Opening a business bank account: A separate bank account for the studio will help keep business and personal finances separate and make managing finances easier.

Purchasing dance studio software: Dance studios may benefit from using specialized software to manage scheduling, billing, and other administrative tasks. Examples include DanceStudio-Pro, Jackrabbit Dance, and ClassJuggler.

Setting pricing: Determining pricing for classes and services requires careful consideration of costs, competition, and market demand.

Accepting credit cards: Accepting credit cards is essential for convenience and security in payment processing. Payment processors such as Square or Stripe offer affordable and user-friendly options for small businesses.

Joining industry associations: Dance studio owners may benefit from joining industry associations such as Dance USA, National Dance Education Organization (NDEO), and the International Dance Entrepreneurs Association (IDEA). These associations provide resources, networking opportunities, and support for dance professionals.

Preparing for the grand opening: The grand opening of a dance studio is a significant event that requires careful planning and preparation. This includes promoting the event, coordinating logistics such as refreshments and decorations, and ensuring that everything runs smoothly on the day of the event.

Greg’s Tip: Have a marketing budget and promote constantly through social media, ads, flyers, deals, etc. Word of mouth alone is usually not enough to survive, especialy in the beginning.

Greg's Business Tip

Common Questions When Starting A Dance Studio

How much does it cost to start a dance studio?

The costs to kickstart a dance studio can range widely based on various factors, such as the size of the studio, location, and the level of expertise offered. Unless purchasing a building, the total costs to get started typically average between $10,000 and $50,000.

Here are some of the major expenses to factor in initially:

Location: Renting a space will likely be your biggest upfront cost, with initial deposits of around 2-3 months’ rent. Purchase and renovation of property is also an option. Assuming the cost of rent is $1,500 monthly, you would be looking at $3,000-$4,500.

Equipment: Expect to spend $3,000-$35,000 on mirrors, barres, floors, sound systems, office supplies, furniture, and other dance equipment.

Insurance: Liability insurance, workers’ comp, etc., can run $2,000-$4,000 for initial fees and deposits.

Marketing: Website development, advertising, and grand opening events may cost $1,000-$3,000 to start.

Business registration: Plan for $50-$500 for entity formation, business licenses, etc.

Music license: Average of $1,000 per year.

It’s also a good idea to have 3-6 months of operating expenses available as a buffer while ramping up.

If the cost to start a dance studio is out of range, consider starting a part-time home dance studio, working as a freelance dance instructor, or offering dance classes through a local community college before opening your studio. This can make you a better teacher, help you build up a good reputation, and even prepare you with many loyal students who will happily follow you when you open your studio. With this preparation, you’ll have a base of paying customers already established, which can make the transition into a full-time studio owner easier.

How much can a dance studio owner make?

The profitability of a dance studio can be determined through a simple formula: gross profit is calculated by subtracting the cost of services sold from the sales revenue. For dance studio owners, revenue is typically generated from fees collected from students, and variable costs such as the cost of utilities, staff salaries, and equipment maintenance are subtracted from this revenue to calculate gross profit​.

Here’s a hypothetical scenario to illustrate the profit calculation for a dance studio:

Assume a dance studio has 200 students.
Each student pays $50 per month for classes.
Therefore, monthly revenue = 200 students × $50 = $10,000

Monthly Expenses:
Rent: $1,500
Utilities: $500
Insurance: $200
Marketing: $100
Music: $100
Total Expenses = $2,400

Gross Profit:
Gross Profit = Revenue – Expenses = $10,000 – $2,400 = $7,600

What skills are needed to run a dance studio?

Opening a dance studio doesn’t require a business degree, but certain skills and experiences can make the process smoother and more successful.

Dance experience: A dance studio owner will need experience in at least one type of dance. Generally, this experience should be extensive, and most studio owners will have experience in performing and competing, too.

Teaching experience: While dance experience is important, it’s just as important for a studio owner to have experience in teaching others. A dancer needs to explain dance techniques in ways that students will understand and know how to engage with students of different ages.

Starting a dance studio can make for a steep learning curve if you haven’t taught lessons or have managed a dance program. Try to work as an apprentice under a studio owner if possible. Even just a few years of apprentice work can give you valuable experience and better prepare you for some of the challenges that starting a studio yourself may bring.

Knowledge of the dance industry and competition standards: Most studios compete, so a working knowledge of current dance trends and standards can help ensure a studio’s success at competitions.

Attention to detail: Detail is highly important in the dance world, and attention to detail will help a studio owner with everything from choosing the perfect flooring to perfecting students’ techniques.

Management skills: Some studios may hire multiple teachers. In this case, experience hiring, training, and managing others can be helpful, in addition to customer service.

Marketing skills: Marketing is essential to any dance studio. Experience with social media is particularly helpful in this industry.

What is the NAICS code for a dance studio?

The NAICS code for a dance studio is 611610, which is classified under Fine Arts Schools.

The NAICS code (North American Industry Classification System) is a federal system to classify different types of businesses for the collection and reporting of statistical data.

Related: What is a NAICS code?

Dance Educators of America
National Dance Education Organization
National Dance Teachers Association of America

How To Start A Dance Studio

How To Start A Dance Studio

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