Opening a dance studio can be very profitable. With proper planning, execution and hard work, you can enjoy great success. Below you will learn the keys to launching a successful dance studio.
Importantly, a critical step in starting a dance studio is to complete your business plan. To help you out, you should download Growthink’s Ultimate Business Plan Template here.
15 Steps To Start a Dance Studio:
- Choose the Name for Your Dance Studio
- Determine the Type of Dance Studio You Will Launch
- Develop Your Dance Studio Business Plan
- Choose the Legal Structure for Your Dance Studio
- Secure Startup Funding for Your Dance Studio (If Needed)
- Secure a Location for Your Business
- Register Your Dance Studio with the IRS
- Open a Business Bank Account
- Get a Business Credit Card
- Get the Required Business Licenses and Permits
- Get Business Insurance for Your Dance Studio
- Buy or Lease the Right Dance Studio Equipment
- Develop Your Dance Studio Marketing Materials
- Purchase and Setup the Software Needed to Run Your Dance Studio
- Open for Business
1. Choose the Name for Your Dance Studio
The first step to opening a dance studio is to choose your business’ name.
This is a very important choice since your company name is your brand and will last for the lifetime of your business. Ideally you choose a name that is meaningful and memorable. Here are some tips for choosing a name for your dance studio:
- Make sure the name is available. Check your desired name against trademark databases and your state’s list of registered business names to see if it’s available. Also check to see if a suitable domain name is available.
- Keep it simple. The best names are usually ones that are easy to remember, pronounce and spell.
- Think about marketing. Come up with a name that reflects the desired brand and/or focus of your dance studio.
2. Determine the Type of Dance Studio You Will Launch
The next step is to determine the type of dance studio you will launch. The four main types of dance studios are:
- Children’s Dance Studios – These dance studios offer classes for children including ballet, tap and jazz.
- Competitive Dance Studios – These dance studios specialize in preparing dancers for competition. The focus is on technique, skill development, and proper performance techniques.
- Performing Arts Centers – These are all-encompassing performing arts centers that offer classes in dance, music, and theater.
- Adult Dance Studios – These specialize in providing dance classes for adults.
3. Develop Your Dance Studio Business Plan
One of the most important steps in starting a dance studio is to develop your business plan. The process of creating your plan ensures that you fully understand your market and your business strategy. The plan also provides you with a roadmap to follow and if needed, to present to funding sources to raise capital for your business.
Your business plan should include the following sections:
- Executive Summary – this section should summarize your entire business plan so readers can quickly understand the key details of your dance studio.
- Company Overview – this section tells the reader about the history of your dance studio and what type of dance studio you operate. For example, are you a children’s dance studio, a competitive dance studio or an adult dance studio?
- Industry Analysis – here you will document key information about the dance studio industry. Conduct market research and document how big the industry is and what trends are affecting it.
- Customer Analysis – in this section, you will document who your ideal or target customers are and their demographics. For example, how old are they? Where do they live? What do they find important when purchasing products or services like the ones you will offer?
- Competitive Analysis – here you will document the key direct and indirect competitors you will face and how you will build competitive advantage.
- Marketing Plan – your marketing plan should address the 4Ps: Product, Price, Promotions and Place.
- Product: Determine and document what products/services you will offer
- Prices: Document the prices of your products/services
- Place: Where will your business be located and how will that location help you increase sales?
- Promotions: What promotional methods will you use to attract customers to your dance studio? For example, you might decide to use pay-per-click advertising, public relations, search engine optimization and/or social media marketing.
- Operations Plan – here you will determine the key processes you will need to run your day-to-day operations. You will also determine your staffing needs. Finally, in this section of your plan, you will create a projected growth timeline showing the milestones you hope to achieve in the coming years.
- Management Team – this section details the background of your company’s management team.
- Financial Plan – finally, the financial plan answers questions including the following:
- What startup costs will you incur?
- How will your dance studio make money?
- What are your projected sales and expenses for the next five years?
- Do you need to raise funding to launch your business?
4. Choose the Legal Structure for Your Dance Studio
Next you need to choose a legal structure for your dance studio and register it and your business name with the Secretary of State in each state where you operate your business.
Below are the five most common legal structures:
1) Sole proprietorship
A sole proprietorship is a business entity in which the owner of the dance studio and the business are the same legal person. The owner of a sole proprietorship is responsible for all debts and obligations of the business. There are no formalities required to establish a sole proprietorship, and it is easy to set up and operate. The main advantage of a sole proprietorship is that it is simple and inexpensive to establish. The main disadvantage is that the owner is liable for all debts and obligations of the business.
A partnership is a legal structure that is popular among small businesses. It is an agreement between two or more people who want to open a dance studio together. The partners share in the profits and losses of the business.
The advantages of a partnership are that it is easy to set up, and the partners share in the profits and losses of the business. The disadvantages of a partnership are that the partners are jointly liable for the debts of the business, and disagreements between partners can be difficult to resolve.
3) Limited Liability Company (LLC)
A limited liability company, or LLC, is a type of business entity that provides limited liability to its owners. This means that the owners of an LLC are not personally responsible for the debts and liabilities of the business. The advantages of an LLC for a dance studio include flexibility in management, pass-through taxation (avoids double taxation as explained below), and limited personal liability. The disadvantages of an LLC include lack of availability in some states and self-employment taxes.
4) C Corporation
A C Corporation is a business entity that is separate from its owners. It has its own tax ID and can have shareholders. The main advantage of a C Corporation for a dance studio is that it offers limited liability to its owners. This means that the owners are not personally responsible for the debts and liabilities of the business. The disadvantage is that C Corporations are subject to double taxation. This means that the corporation pays taxes on its profits, and the shareholders also pay taxes on their dividends.
5) S Corporation
An S Corporation is a type of corporation that provides its owners with limited liability protection and allows them to pass their business income through to their personal income tax returns, thus avoiding double taxation. There are several limitations on S Corporations including the number of shareholders they can have among others.
Once you register your dance studio, your state will send you your official “Articles of Incorporation.” You will need this among other documentation when establishing your banking account (see below). We recommend that you consult an attorney in determining which legal structure is best suited for your company.
5. Secure Startup Funding for Your Dance Studio (If Needed)
In developing your dance studio business plan, you might have determined that you need to raise funding to launch your business.
If so, the main sources of funding for a dance studio to consider are personal savings, family and friends, credit card financing, bank loans, crowdfunding and angel investors. Angel investors are individuals who provide capital to early-stage businesses. Angel investors typically will invest in a dance studio that they believe has high potential for growth.
6. Secure a Location for Your Business
Having the right space can be important for your dance studio. When considering a space for your dance studio, you should keep in mind how much space will be needed, how accessible the location is, and how much rent you can afford. Consider how easy it is to get to your studio from public transportation, parking options around the area, and how many amenities are nearby (e.g., restaurants).
To find the right space, consider:
- Driving around to find the right areas while looking for “for lease” signs
- Contacting a commercial real estate agent
- Doing commercial real estate searches online
- Telling others about your needs and seeing if someone in your network has a connection that can help you find the right space
7. Register Your Dance Studio with the IRS
Next, you need to register your business with the Internal Revenue Service (IRS) which will result in the IRS issuing you an Employer Identification Number (EIN).
Most banks will require you to have an EIN in order to open up an account. In addition, in order to hire employees, you will need an EIN since that is how the IRS tracks your payroll tax payments.
Note that if you are a sole proprietor without employees, you generally do not need to get an EIN. Rather, you would use your social security number (instead of your EIN) as your taxpayer identification number.
8. Open a Business Bank Account
It is important to establish a bank account in your dance studio’s name. This process is fairly simple and involves the following steps:
- Identify and contact the bank you want to use
- Gather and present the required documents (generally include your company’s Articles of Incorporation, driver’s license or passport, and proof of address)
- Complete the bank’s application form and provide all relevant information
- Meet with a banker to discuss your business needs and establish a relationship with them
9. Get a Business Credit Card
You should get a business credit card for your dance studio to help you separate personal and business expenses.
You can either apply for a business credit card through your bank or apply for one through a credit card company.
When you’re applying for a business credit card, you’ll need to provide some information about your business. This includes the name of your business, the address of your business, and the type of business you’re running. You’ll also need to provide some information about yourself, including your name, Social Security number, and date of birth.
Once you’ve been approved for a business credit card, you’ll be able to use it to make purchases for your business. You can also use it to build your credit history which could be very important in securing loans and getting credit lines for your business in the future.
10. Get the Required Business Licenses and Permits
In order to operate your dance studio, you’ll need to obtain a number of business licenses and permits. The type of licenses and permits you need will vary depending on your location. However, some common licenses and permits include the following:
Business License: A business license is typically required for all businesses. It is a document that allows you to operate your business legally.
Zoning Permit: A zoning permit is required if your dance studio will be located in a commercial area. This permit is issued by the local government and it ensures that your dance studio complies with the zoning regulations for the area.
Building Permit: A building permit is required if you are making any renovations or changes to the building where your dance studio will be located. This permit must be obtained from the local government before any construction can begin.
Health Department Permit: A health department permit is required for any business that provides services such as food, beverages, or health care. In order to obtain this permit, your dance studio will need to meet certain health and safety requirements.
Additional business licenses and permits that nearly all states, counties and/or cities require include:
- Sales Tax License or Seller’s Permit: for selling products
- Fire Department Approval: a process by which the local fire department reviews and approves the installation of a fire alarm system.
Depending on the type of dance studio you launch, you will have to obtain the necessary state, county and/or city licenses.
11. Get Business Insurance for Your Dance Studio
When starting a dance studio, it’s important to have insurance to protect your business. The type of insurance you need will vary depending on the size and type of your dance studio. However, some common types of business insurance include the following:
General Liability Insurance: This insurance protects your business from any liability claims that may arise. For example, if someone is injured while attending a dance class at your studio, this insurance would help to cover the costs associated with any legal expenses.
Product Liability Insurance: This insurance protects your business from any liability claims that may arise from the sale of products. For example, if a customer is injured by a product you sold them, this insurance would help to cover the costs associated with any legal expenses.
Commercial Property Insurance: This insurance protects your business from any damage or theft that may occur to your property. For example, if your dance studio is damaged in a fire, this insurance would help to cover the costs of repairing or replacing the property.
Business Interruption Insurance: This insurance helps to cover the costs of lost income if your business is unable to operate due to a covered event. For example, if your dance studio is damaged in a fire and is unable to open for an extended period of time, this insurance would help to cover the lost income you would have incurred during that time.
Workers’ compensation insurance: If you have employees, this type of policy works with your general liability policy to protect against workplace injuries and accidents. It also covers medical expenses and lost wages.
Find an insurance agent, tell them about your business and its needs, and they will recommend policies that fit those needs.
12. Buy or Lease the Right Dance Studio Equipment
When starting a dance studio, you will need to purchase or lease the following equipment:
- Dance floor: You will need a dance floor that is large enough to accommodate your dancers. It should be smooth and level, and it should have a non-slip surface.
- Mirrors: Mirrors are essential in a dance studio, as they allow dancers to see their form and correct any mistakes.
- Barres: Barres are used by dancers to help them maintain their balance while performing exercises. They can be made from wood, metal, or plastic.
- Storage lockers: Dancers will need a place to store their personal belongings, so you will need to purchase or lease some storage lockers.
- Chairs: You will need chairs for your dancers to sit on between classes.
When picking between buying or leasing the equipment, you should consider how long you plan to stay in business and how often you will use the equipment. Leasing can be more cost-efficient if you don’t use the equipment very often.
Additionally, if your dance studio is a non-profit organization, you may be eligible for grants or funding to help purchase the necessary equipment.
13. Develop Your Dance Studio Marketing Materials
Marketing materials will be required to attract and retain customers to your dance studio.
The key marketing materials you will need are as follows:
- Logo: Spend some time developing a good logo for your dance studio. Your logo will be printed on company stationery, business cards, marketing materials and so forth. The right logo can increase customer trust and awareness of your brand.
- Website: Likewise, a professional dance studio website provides potential customers with information about the products and/or services you offer, your company’s history, and contact information. Importantly, remember that the look and feel of your website will affect how customers perceive you.
- Social Media Accounts: establish social media accounts in your company’s name. Accounts on Facebook, Twitter, LinkedIn and/or other social media networks will help customers and others find and interact with your dance studio.
14. Purchase and Setup the Software Needed to Run Your Dance Studio
To run a dance studio, you will need software that can track classes, manage payments, and schedule appointments.
There are quite a few software options on the market that can meet your needs. Some popular options include:
Studio Director: This software is designed for dance studios, gyms, and other businesses that offer classes. It allows you to track class attendance, manage payments, and schedule appointments.
MindBody: This software is used by a variety of businesses, including dance studios. It allows you to manage payments, class schedules, and customer data.
GymMaster: This software is designed for gyms and fitness centers. It offers features such as class scheduling, membership tracking, and payment processing.
Research the software that best suits your needs, purchase it, and set it up.
15. Open for Business
You are now ready to open your dance studio. If you followed the steps above, you should be in a great position to build a successful business. Below are answers to frequently asked questions that might further help you.
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How to Open a Dance Studio FAQs
Is it hard to open a dance studio?
There is no one-size-fits-all answer to this question, as the ease or difficulty of opening a dance studio will vary depending on your skills, experience, and resources.
However, if you follow the steps above, you should be able to open your dance studio without too much difficulty.
How can I open a dance studio with no experience?
If you don't have experience running a dance studio, don't worry - you can still open one.
The best way to open a dance studio with no experience is to start small. You can offer your services to friends and family members, or to local businesses. Once you have a few clients, you can then start marketing your business more aggressively.
What type of dance studio is most profitable?
The profitability of dance studios can vary depending on your location and the type of dances you offer.
However, some types of dance studios are more profitable than others. Hip hop and breakdancing studios, for example, tend to be more popular and therefore more profitable. Studios that offer multiple types of dance, such as ballet, tap, and jazz, can also be more profitable than those that specialize in a single type of dance.
So, before you open your dance studio, do some research to determine which type of dance is most popular in your area. Then, focus your studio on that type of dance. You should find that this will help make your studio more profitable.
How much does it cost to open a dance studio?
The cost of opening a dance studio can vary depending on a variety of factors. Some of the most important factors include the location of your studio, the type of dance studio you open, and how much equipment you need to purchase.
In general, however, you can expect to spend between $10,000 and $50,000 to open a dance studio. This includes costs such as marketing expenses, start-up fees, and equipment purchases.
What are the ongoing expenses for a dance studio?
The ongoing expenses for a dance studio vary depending on the size and type of studio you run. The average ongoing experiences range between $500-$1,000 per month. Common expenses include rent, salaries, music and dance equipment, licensing fees, insurance premiums and advertising costs.
If you are running a small dance studio, your monthly expenses may only amount to a few hundred dollars. However, if you are running a large dance studio with dozens of employees, your monthly expenses could be in the thousands of dollars.
How does a dance studio make money?
A dance studio can make money in a variety of ways. The most common methods include charging for classes, charging for private lessons, and selling merchandise.
In addition, many dance studios offer performance or exhibition opportunities for their students. These opportunities can be a great way to make money and showcase the talent of your dancers.
Finally, many dance studios also offer birthday parties or other special events. This can be a great way to bring in extra income.
Is owning a dance studio profitable?
Yes, owning a dance studio can be very profitable.
Dance studio owners can earn between $50,000 and $100,000 a year depending on how successful the business is. With the right marketing strategy, dance studio owners can attract more students and increase their profits.
Owning a dance studio also provides many other benefits such as flexibility and creative freedom. Many entrepreneurs find owning a dance studio to be both profitable and personally rewarding.
Some of the key things you can do to make your dance studio more profitable include:
- Offering a variety of services and products
- Charging reasonable rates for classes and private lessons
- Marketing your dance studio effectively
- Getting involved in the local community
- Offering special events and birthday parties
- Narrowing your focus to a specific niche market
- Optimizing your website for SEO to increase online visibility
- Creating a unique selling proposition
- Providing outstanding client service
Why do dance studios fail?
There are many reasons why dance studios can fail, such as:
- Charging too much for classes and private lessons, which can make it difficult to attract students
- Not marketing the dance studio effectively, which can lead to a lack of awareness among the target market
- Focusing on too many services and products, which can confuse clients and make it difficult to know what the business is really about
- Not understanding the needs of the target market and how to best serve
- Not investing in training and keeping up with industry trends, which can make it difficult to stay competitive
One of the main reasons that dance studios fail is a lack of planning. This can include not having a detailed business plan, not doing research on the industry, and not targeting the right customers.
Another reason is a lack of marketing and sales skills. This can include not creating a sales process and not have a clear and strong value proposition.
The last main reason is a lack of financial management skills. This can include not having a realistic budget, not tracking expenses, and not investing in the business.
Who are key players in the dance studio market?
The dance studio market is made up of a variety of different players, including small businesses, large enterprises, and even individuals.
Some of the key players in the market include:
- Joffrey Ballet School
- New York City Ballet
- Royal Academy of Dance
- RAD Dance Academy
- Martha Graham School of Contemporary Dance
- San Francisco Conservatory of Dance
However, there are many other players in your specific target market, and it is important to research the market to identify the key players that may have the most direct influence on the success of your business.
How much should I charge for my dance studio services?
Dance studio fees can vary depending on the type of dance studio services being offered, as well as the size and scope of the project.
However, some common dance studio fees include:
- Private lesson fees - $50 to $200 per session
- Group class fees - $10 to $20 per person
- Choreography Fees - $50 to $150 per hour
- Performance Fees - Varies depending on the size of the performance and how long it will last
The best way to determine the right fee for your dance studio services is to research the rates of similar businesses in your industry, and to also consider the value that you will be providing to the client.