It’s probably a safe bet that most dance studio owners opened their doors because they dreamed of happy dancers, not hefty fortunes.
Driven by passion, not profit, many studio owners might not know exactly how to create a financially sustainable business, or worse, feel embarrassed about it, as if just the act of turning a profit somehow dilutes their standing as authentic artists or care for kids.
But making money isn’t anything to be ashamed of. In fact, it’s what a business does. Without adequate profit, a business can’t do the necessary work of maintenance, innovation, or expansion. With profit, a studio becomes a secure place for employees, a sound product for customers, and a financial support for yourself.
“Dance studio owners think: I want to see the joy on kids’ faces, I want to bring my art to the masses, I want to change the world,” says Melanie Gibbs of Boca Dance Studio and Pro Am Studio in Boca Raton and Pompano Beach, Florida, respectively. “I realized I was preventing myself from doing all those things by not running a healthy business-side in my studio.”
Mythos
When professional dancer and teacher Melanie Gibbs purchased her first studio 20 years ago, she wasn’t surprised that the previous owner had no best practices in place for finances.
“It was very much—maybe not the starving artist mentality, but like a general shrug with dance teachers in the industry: ‘Everyone knows we don’t make money’,” she says. “It was all about the kids, and it couldn’t be about the kids and also be a real job and actually pay your bills. That was the sentiment at the time, and it didn’t occur to any of us to question it.”
When Melanie Boniszewski opened Tonawanda (NY) Dance Arts in 1997, she hoped it would generate extra spending cash for family vacations or savings. “If it could make money, great, but it would probably never be a money-maker,” she says, explaining what she and her husband Kevin believed at the time.
Shanna Kirkpatrick had a more-expansive idea of what a studio could be: she had trained at an “all heart-no profit” studio but had also worked as an assistant at a second studio that had similar values “but made a living doing it.” The owner of the second studio “had a loyal team of people who were paid well,” Shanna, owner of Chara Christian Dance Academy in Friendswood, Texas, says. “I saw that studio grow.”
Mindset
Despite running “successful” studios (i.e.: solid dance educational establishments with growing enrollments), all three owners needed to learn a new type of “choreography” before their businesses could financially thrive—and this one involved business skills.
“It was pretty much just me,” Shanna says of her studio’s beginnings in a church gym, “and I didn’t have time to think strategically because I was always teaching. About 10 years ago I took myself out of the classroom by choice.”
“I did not identify at all with a business-owner persona,” says Melanie Gibbs, whose perfect storm of problems—an exit by her right-hand assistant, the opening of a new studio nearby (run by several of her former competition moms), and a cash-flow crisis caused by her laissez-faire fiscal attitude—led her to a More Than Just Great Dancing!® seminar that convinced her that she “had the agency” to take charge of her company’s financial future.
About 15 years ago, Melanie Boniszewski’s fiscal epiphany happened at a similar dance studio convention: “We went because it was in Disney,” she says, but came away thinking “this is a business—we need to treat it like one.” She started hiring teachers to handle her classes, and today the great bulk of her work week relates in some way to analyzing or strategizing business performance.
Today, Shanna says, her entire leadership team works on business health in some way: her in-house accountant/human resources manager keeps an eye on salary overruns, the general operations manager/marketer is responsible for filling classes, and the school director considers the profitability of costume choices and class enrollment numbers.
Melanie Gibbs now has a full-scope awareness of the finances for her two studios “24/7,” sharing the workload with her wife, co-owner Jo Meacham, as well as a director of finance, an assistant director, and a business administrator. At Tonawanda, Melanie Boniszewski makes budgeting and financial decisions with her husband Kevin, and daughter Kelsey Griffin; her acro teacher who “loves numbers and spreadsheets” handles retail sales.
Opening up about finances to employees wasn’t easy—Shanna says she sometimes felt threatened if someone brought up a salient point or concern. “For a studio owner, it’s a lot about ego. You have to bring other people on and let them make decisions,” she says. “You learn to put your ego aside for the greater good.”
Money
Melanie Gibbs’ magic word is “margins.” Everything—whether it’s logo hoodies, guest teacher workshops, recital costumes, or weekly classes—has to generate a minimum 20 percent profit margin. No matter how worthy an expense seems, if the math doesn’t work—if the expected net income is less than 20 percent—the answer is “no.” “It takes the handwringing out of decision-making,” she says.
Her goal for 2024 is to set new prices so that the tuition line on her profit and loss statement covers her expenses line. This means creating a fully-strategized schedule based on real data—which might mean fewer competition classes and more toddler classes.
This focus, again, requires rethinking longstanding dance studio traditions. A few years ago, when Melanie Boniszewski realized that 40 percent of her studio schedule was competition classes, she restructured the required team schedule by efficiently piggy-backing classes: a one-hour jazz class was immediately followed by a shortened (half-hour) musical theater class, eliminating the need to warm up already warmed-up dancers. Hours were reduced, but quality and value remained consistent. Because pricing remained the same, no one complained.
“If you’re losing money taking kids to competition, you have to change something,” she says. “You can’t run your business on feeling—you have to run it on facts.”
“Keep spreadsheets. Numbers don’t lie,” Melanie Boniszewski advises. She pores over spreadsheets to see which decisions will net the greatest profit, and also pays close attention to how profits can positively affect her employees. “I’m not a math person at all, but when I give raises it’s because I know we hit this level of revenue and I can afford it—not just because.”
When coaching other studio owners, Shanna advocates for profit-based thinking. Some studio owners, she says, think it is “too hard” to restructure their expenses or pricing, and that doing so will lead to uncomfortable client conversations. Shanna encourages those owners to put in the work to study their numbers, to see what it will take to “run the studio and run it right,” creating a plan of actionable steps toward that goal.
Mission
With profit, what sort of “investments” can studios make to advance their missions? Tonawanda invested in a new building, started a retirement match for employees, provides significant bonuses, matches food and donation drives held during the holiday season, and established a scholarship fund for needy students. A healthy cash flow also buys peace of mind—for example, Melanie Boniszewski enjoys paying her recital venue bill upfront rather than squeezing out monthly installments right up until showtime.
When profit goals are met at Boca Dance Studio and Pro Am Dance Studio, the result is employee raises (“on a corporate level,” Melanie Gibbs says) and increases in health insurance stipends. She also enjoys being able to give generous donations to community causes on the studios’ behalf. When enrollment at one of her locations hit 800 with 182 on a waitlist, Melanie Gibbs says the business was in a solid financial position and could finally expand its space—and she’s taking care to prioritize the classes most desired by those waitlist clients. Studio members get added value too—such as free monthly events—because the numbers have been analyzed and the costs budgeted.
“If you don’t have it, you can’t give it,” says Shanna, who, with savings from the business profits, added a second location. Her full-time employees receive a Roth IRA match and health insurance stipends. Her community benefits, too: savings made it possible for her to financially assist a fellow Houston-area studio struck by a tornado.
All three owners consider providing sustainable, viable jobs as integral to their mission. Profit allows them all to attract and keep top-level talent—with comparable pay and benefits, dance teachers can keep doing what they love. “The best way to serve your employees is to keep your business profitable and healthy,” Melanie Gibbs says.
Now comes the (perhaps) most taboo money conversation of all—what do you, as the owner, make? Melanie Boniszewski says she always paid herself a salary, even if some weeks it was “only a couple hundred dollars”—now it’s standardized and included in the regular payroll. (It’s a worthwhile conversation with your accountant; many tax professionals suggest business owners take a regular salary as a best practice.)
This past winter, Shanna completed a full “compensation evaluation” for herself as an employee of the business. She conducted research on pay scales for similar jobs, such as school superintendent, business coaches, and CEOs of businesses with similar profit margins. With those numbers on a spreadsheet and a figure in mind, she then considered if she’d pay someone else that salary to do her job.
Years ago, as a contract professional dancer, Melanie Gibbs remembers chasing down producers to get her paycheck or fighting to get compensated for rehearsal time. As a studio owner, she never wanted her staffers to have to do the same, and always paid herself last. Now she takes a healthy paycheck (without apology!) because focusing on finances has allowed her to build a business where everyone—students, families, employees, the community, and herself—prospers.
“Everyone participates in the benefits,” she says. “We are operating from a mindset of abundance, and it’s allowed us to do the things we always dreamed of. I’ll never go back.”
Best Practices for Sharing Dance with Your Community
- For her studio’s library program, Tara needed to explain to her participating teachers both the mission—it was important to deliver a high-quality program—and the practical—teachers would be paid for their skill set and time as they normally would. For her scholarship program, withholding information on which students were participating would assure that they wouldn’t be treated any differently by peers or staff.
- “When picking charities for outreach, consider what your kids are interested in, and what they can relate to,” says Nancy Rothenberg of Studio B Dance Center. Ask dancers open-ended questions like, “What can we do to make things better?” or “Where can we put our time and effort?” This gives the dancers agency, which personally links them to its successful outcome.
- “Structure your lessons, but also don’t be frightened of going off-plan,” says Emma McGurrell of Buzz Dance Company. Keep in mind that the dance space available to you might look very different from your typical studio environment. Also consider how—or if—you want other adults in the room (caregivers, paraprofessionals, classroom teachers, etc.) to support your instructional design. Having a Plan B prepared will go a long way toward ensuring your material is safe, engaging, and appropriate for all participants. As Emma says, “Read the situation, go with the flow, and always be ready to learn more yourself.”
