How to Start a Dance Studio

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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.

But this isn’t a business venture you want to just jump into right away. Instead, take a few minutes to understand everything that’s involved in opening a studio of your own. From the challenges to the rewards, the more you understand about starting a dance studio, the greater your chances of it being a success.

Business Overview

Dance studios typically offer a variety of classes, usually across multiple styles of dance, with the purpose of educating dancers, preparing 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 grew from 2014 to 2019. During that time, the industry experienced a 3.8% annual growth, and the number of dance studios increased to 53,140. Industry employment also grew to 108,454, and the industry brought in $4 billion in total revenue in 2019.

This growth is partially due to a revitalized interest in dance, thanks to the prevalence of dance-related television shows, like competitions, and the promotion of dance as a great exercise option. This renewed interest has primarily affected ballroom dancing, fusion, and Latin-inspired dancing. An increase in disposable per capita income from 2014 to 2019 also contributed to the growth of the industry and the additional studios that opened to meet the increased demand.

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Industry Trends

Dance studios need to be aware of current trends and use those trends to stay current and relevant to their audiences. According to Wellness Living, dance challenges were prevalent in 2018, and they quickly became a trend that shaped the dance world and the public’s perception of dance. By embracing these trends, like a newly released dance challenge, studios can not only keep things new and exciting for their current students but can create valuable marketing materials, like videos, that may appeal to new students, too.

Social media is sure to stay highly important in the coming years since it can help dance studios go viral and reach new audiences, bringing in new students. As mentioned above, studios that actively use social media will be at an advantage, like when releasing a video of students participating in a dance challenge.

Modern dance will likely continue to be more popular than classic techniques. But, studios can continue to teach students the importance of classical technique and how they transfer to stronger, more creative modern techniques, making for a well-rounded education.

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.

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 technique 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. If possible, try to work as an apprentice under a studio owner first. 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 of 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’ technique.

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.

Checklist for Starting a Dance Studio

If you’re thinking about starting your own dance studio, there are a few things you should keep in mind. Here is a checklist of the essentials to get started.

Step 1: Write a Business Plan

After coming up with the idea, the next step in starting your business should be to write a dance studio business plan. Not only will a bank require you to have a business plan, but multiple studies have shown that a business plan helps increase the odds of starting a successful business.

Related: How to write a business plan

Step 2: Form a Business Entity

A business entity (also referred to as a business structure) refers to how a business is legally organized to operate. There are four primary business structures to choose from, which include the sole proprietorship, partnership, corporation, and Limited Liability Company (LLC). Each type of entity has its own pros and cons, such as liability exposure, costs, and administrative requirements.

When deciding on which business entity is best for a dance studio, it normally comes down to the sole proprietorship and Limited Liability Company.

A partnership opens the owners up to unnecessary personal liability because if a partner does something to get the business sued, or runs off with cash from the business, the other partners are personally liable to repay.
 
The corporation can be a good choice to minimize liability risk because it separates the business assets from the owner’s assets. If the corporation is sued or certain business debts can’t be paid back, the owners aren’t personally responsible to repay them. The downside to the corporation is that it is more complicated than all the other entities and requires more administration than the LLC. If you plan on raising a lot of investment though, the corporation is usually the better choice.

That leaves the sole proprietorship and LLC.

The sole proprietorship is the least expensive and easiest entity to start which is appealing. The downside is the owner is personally liable should anything happen to the business, which is an important consideration. The LLC offers the ability to operate as a sole proprietorship with the liability protection of a corporation. Depending on the state, the cost to form an LLC runs from $40 – $500, which is pretty inexpensive for protecting the owners from business-related lawsuits and certain debts.

Related: Guide to forming your LLC
 

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!

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Step 3: Name the Business

Finding the perfect name for a business can be challenging. Not only does the name have to resonate with your customers, but it also has to be available to use.

Related: Tips and ideas for naming a dance studio

Step 4: Select your Location

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.

Rental costs for studio space will vary depending on the facility that the business rents. An already outfitted dance studio will usually cost more to rent than a space that needs to be renovated, but the business will save on renovation costs and start operating as soon as the rental agreement begins.

Consider how much space is needed and how that space is used. Most studios will need a lobby/waiting room, classrooms, office, bathrooms, storage, and plenty of parking. Studios offering multiple types of dance and planning to run multiple classes at once will need more space, which can also increase rental costs.

Related: Choosing a business location

Step 5: Apply for Business Licenses and Permits

There are no specific licenses for dance studios; however, there are general business registrations at the local, state, and federal level that a dance studio might 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.

Related: Common business licenses, permits, and registrations by state

Step 6: Find Financing

Coming up with a good business idea and having the skills to run it are one thing, but getting the funding to start a dance studio is another. The cost to start a dance studio is relatively small; however, funding can be difficult as a majority of expenses are for renovations to the building. In order to get a small business loan, the borrower(s) will need to have good credit and be able to invest 15-25% of personal savings towards the total start-up costs.

Related: Finding the money to start a business

Step 7: Open a Business Bank Account

Keeping your small business and personal finances in separate bank accounts is important to track the income and expenses of your business and identify trends.
 
Many banks offer free business checking accounts, so be sure to find a cost-effective option for your business.

Step 8: Get your Marketing Plan in Place

Marketing your studio’s grand opening is important, but thought will be needed for ongoing marketing campaigns. Not only does marketing bring in new students, but as studios start up new classes and programs, they need to market those to build enrollment, too. Marketing techniques can involve everything from putting dance videos on social media to print advertising and even radio advertising.

Additionally, if there is a health or fitness club that isn’t offering dance classes, this could be an opportunity to work together and cross-market each facility’s classes.

Related: Low-cost ideas to market a new business

One important task while working on the marketing is developing an online presence. A website developer may be out of the budget, but Wix makes it easy for non-technical people to get a website running quickly and affordably.

Step 9: Get Business Insurance

There are several types of insurance to consider when starting a dance studio. A few of these include:
– General liability insurance protects the business if anyone, like a dancer or a family member, is injured while on the property. This type of policy can cover expenses like legal fees or medical bills.
– Commercial property insurance protects the studio if its equipment or the studio itself is ever damaged in an event like a fire.
– Worker’s compensation insurance helps to cover expenses like medical bills or lost wages if an employee is ever hurt while on the job.

The cost to insure a dance studio will vary depending on factors like where the business is located, the studio building’s value, and the number of employees. To get the best idea of insurance costs, request quotes from multiple companies. When comparing those quotes, pay attention to variables like coverage limits and exclusions, premiums, and deductibles.

Related: Types of insurance your business may need

Step 10: Hire Employees

A studio owner may teach all of the studio’s classes initially, but as the studio grows, it may be time to hire additional dance instructors. According to PayScale, dance instructors make an average of $23.51 per hour, though hourly rates range from as little as $11.89 to as much as $39.21, depending on an instructor’s experience and location.

In addition to paying for employee salaries, a studio also needs to budget for other types of expenses that come with hiring employees. Paid time off, worker’s comp insurance, and even retirement and health insurance contributions are some of those costs.

Related: Hiring your first employee

Step 11: Set up an Accounting System

Setting up an accounting system for your dance studio is critical to the long-term success of your business.

Staying on top of taxes not only keeps the business out of trouble with the government, but the numbers can be used to track and monitor trends and cash flow in the business and maximize profits.

Related: Setting up the accounting for your business

The thought of accounting can be intimidating for a lot of new entrepreneurs. There are a number of ways of handling bookkeeping, from DIY to hiring a bookkeeper. These include:

- Pen and paper - Low expense, but difficult to track.
- Spreadsheet - Low expense, but easy to make errors.
- Accounting software - Medium expense, but owner typically inputs expenses. Some great accounting software programs include Freshbooks or Wave Accounting.
- Hire a bookkeeper - Higher expense, though very affordable at $100-$200 per month in most cases. A dedicated bookkeeper will probably save money because, in addition to handling all of the bookkeeping (so you can focus on the business), they also provide personalized tax advice and ensure the business is in compliance.

Find bookkeepers in your local area or use a service like 800Accountant.

How much does it cost to start a dance studio?

The cost of starting a dance studio will mainly depend on the facility available to the business owner. If a business owner is able to rent or lease an existing studio, this can help to keep costs down so that startup costs may be only $10,000 or $20,000. If an owner needs to renovate a space into a studio, then major expenses like mirrors and flooring can drive that price up to $40,000 or $50,000.

Some common startup costs for a dance studio include:
– Studio renovation expenses, like flooring and mirrors
– Furniture for waiting areas and changing rooms
– Equipment bars and mats
– Dance studio software
– Signage
– Working capital to cover the first 3 to 6 months of salary, utilities, internet, rent, etc.

If the cost to start a dance studio is out of range, consider 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 potential income of a dance studio varies widely. Dance Magazine identified studio owner salaries across a wide range, with some owners making $24,000, $40,000, $80,000, and more. Factors including a studio’s location, specialization and dance class offerings, size, and area demographics can all affect its potential profits.

Are there grants to start a dance studio?

It’s extremely rare to find a grant to start a dance studio. If you search for business grants, you will come across a lot of scams and misinformation. Occasionally an organization will offer grants to start a business, however, be skeptical and don’t provide any sensitive personal information or pay money to get more information.

Legitimate federal grants can be found at Grants.gov, and you can check on your state’s economic development office to see if they have any grants available.

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?

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

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