How to Start a Dance Studio

Last Updated on

Quick Reference

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.

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 who 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.

Skills, experience, and education useful in running 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.

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.

Costs 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.

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
  • Studio management / calendar software
  • Signage
  • Working capital to cover the first 3 to 6 months of salary, utilities, internet, rent, etc.

Steps to Starting a Dance Studio

Step 1: Write your 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
Free sample business plans

Step 2: Form a Business Entity

A business entity (sometimes referred to as a legal entity or business structure) refers to how a business registers to operate. There are four primary business entities 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.

Related: Comparison of Business Entities

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 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 business and personal finances in separate business bank and credit card accounts makes it easier to track the business’s income and expenses.

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 social media marketing to print advertising and even radio advertising. Marketing costs will vary depending on the type of activity being performed.

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

Step 9: Get Insurance

A dance studio needs several insurance policies to be fully covered:

  • 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 of these policies can 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: Hiring 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 accounting for your business

 

How much can you potentially make owning a dance studio?

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 class offerings, size, and area demographics can all affect its potential profits.

Things to consider before starting a dance studio

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.

Building a studio program also takes time, and unless you’ve found an area with an unmet need for dance lessons, you probably won’t quickly grow your program. Consider working as a freelance dance teacher 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.

 

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