A profitable dance studio frees up your time to do more, learn more, reach more students, and yes, even enjoy a few precious moments of free time. Here’s how to make a dance studio profitable and how studio management software can help get you there.
1. Offer Something No Other Studio Can
Why do students choose your studio over another? If you don’t know the answer to that question, then you’re missing out on a powerful opportunity to boost your dance studio profitability. Profitable dance studios present something unique — a new philosophy, community involvement, a diverse roster of classes, or something else of unique value.
Further, while group classes are a must when you run a dance studio, private lessons are also a good way to increase your customer base. People are often willing to pay more if they can have a private dance lesson.
A little research into what your students need and what they enjoy most can illuminate what’s special about your studio, helping you offer something of greater value.
2. Recruit Great Instructors
No matter what type of student you teach or what community you serve, better instructors will attract more students, more money, and ultimately, more profits. If you offer truly exceptional instructors, the best students will flock to you.
Exceptional instructors need exceptional pay and benefits, as well as a professional, well-run working environment, though. Attracting better instructors is really about finding ways to make your business a better place to work. That may mean cutting costs elsewhere to fund better pay, improve your benefits, or other strategies.
3. Raise Your Prices
Raising your price point for classes or private lessons is an easy way to boost profitability or even position your studio for an entirely new demographic. However, aiming too high risks driving a decisive wedge between your business and prospective customers or could even alienate your existing customers.
Finding the ideal price point for your business is perhaps one of the most challenging balancing acts you’ll face while running your studio. Making matters even more complicated, the perfect price for your students will often evolve over time along with your class offerings and business model.
With that being said, raising your prices may not turn out to be an epic misstep, but actually the best decision you could make for your business.
There is a right way to raise prices without putting your studio’s future on the line, though. Here are some key strategies to keep in mind if you do raise your dance studio class rates.
Explain your rationale
The most obvious way to raise dance studio class prices without losing students could also be one of the most effective. Don’t spring the increase on your students without any warning. Instead, communicate with them honestly and openly about the decision. Give them time to process it, and position it as a positive development for the future of your studio, your teachers, and the effectiveness of your classes.
Another way to convince customers of the new prices could be to convey it as a percentage change, since this will contextualize it within the grand scheme of the value they receive from your studio.
Test a higher price point
With every major business decision, it’s always a good idea to test the logic behind the strategy. Reach out to a few of your teachers and students — perhaps an even cross-section of newer students and established regulars — and inform them of the impending price change.
Let their reactions guide your next steps. It’s possible that you may have reached too high with your price increase, or there might be a better way to “sell” customers on the change. Or, they may totally take it in stride. In any case, testing the concept in small groups will minimize the damage before it has a widespread impact on your business.
Prove the value of the change
The perceived value of your service is what will shape your ability to increase your price point. To offset any negative reactions to raising your prices, clearly communicate how the price increase will enhance your service offerings. For your studio, perhaps that means upgrading your equipment or adding more classes.
Demonstrate that customers both new and existing are getting something more with their business. It shows that your studio is constantly evolving and that business decisions like price increases are a result of improvements and a desire to serve students better.
Offer alternative pricing packages
You can also consider offering alternative pricing, wherein existing customers put off by the price increase can shift to a more economical option for a few months.
In the case of your studio, this may simply translate into fewer classes or shorter membership periods. By including tiered pricing, you’ll also be able to attract a broader range of students and position the higher-end version as a premium product.
Gradually grow with demand
Rather than making a sudden hike in your rates, the best way to raise them may be to do so gradually. As demand among your students increases, charge a bit more for a specific class or just to new students.
The most popular services you provide are the least likely to be affected by a minor price increase, and this could be an excellent way to fuel your studio’s future success, as these higher profits could even be reinvested to make your studio better.
4. Ensure You Reach Your Ideal Student
Many studio directors, especially those who have just opened their doors, are eager to get any students at all. They’re less focused on what their ideal student looks like. Over time, however, focusing on your ideal student — rather than just packing your classes with anyone who is willing to sign up — is often key to greater profitability. Your ideal student will be willing to pay more for what you offer. They’re loyal. They sign up for more classes. And they tell their friends.
Data on class enrollment trends can help you determine who your ideal student is. Consider who enrolls in classes, why they enroll, and whether they take more classes down the road. Then shape your marketing strategy around this ideal student.
A dance studio software tool like Studio Director can help. You’ll be able to access enrollment rates over time, compare periods, and more in one single interface.
5. Use Retail Sales To Your Advantage
Retail sales can prove invaluable, offering a stable and low-effort source of income. They can also associate your business with recognizable brands, potentially drawing in new students and elevating your reputation.
For example, you can buy dance merchandise, such as clothing, shoes and other accessories at wholesale prices. You can then sell this merchandise for a profit to your students. Setting up a small space in your studio as a “store” can help you increase profits without a lot of extra time or energy.
In addition to selling dance clothing and shoes, you could offer water bottles, socks, sports bags, t-shirts, sweatpants, sweatshirts and trinkets that appeal to dance lovers (such as themed key chains or mugs).
Further, dancing works up a sweat, so selling snacks and drinks is a really easy way to increase profits. Single-serving bags of trail mix, granola bars, pretzels, snack bars, sports drinks, bottled water and juice are great ideas, but you can expand your offerings based on how much space you have in your studio to set up your snack bar.
6. Spend Less Money
One of the most important factors for increasing your dance studio profitability is spending less money. But you can’t just cut expenses across the board and expect to turn a bigger profit. In fact, doing so can actually destroy your profits and reputation.
Put simply, there’s some truth to the adage that you have to spend money to make money. For example, having well-written contracts can protect you against lawsuits, but you need a great lawyer to write these contracts. Iron-clad insurance policies offer significant liability protection. Excellent marketing draws in new students. Great pay for your instructors ensures they work hard and don’t jump ship at the first opportunity.
The real trick for how to make a dance studio profitable is by balancing the need to spend money on necessary services and reducing costs as much as possible. How can you do this? Studio management software is one of the best ways. Automatically track your inventory, manage enrollment, and more all in one simple platform. You’ll need fewer employees, less outsourced help, and less time to manage your day-to-day tasks.
7. Rent Out Your Studio
You probably don’t hold classes all day, every day in your studio. Make more money by renting out your space to other groups when you aren’t holding classes.
For example, you could rent the space for dance-themed birthday parties or to other small dance groups who might not have their own place to hold classes. Perhaps a local high school class needs a place to practice in the evening or a private dance instructor doesn’t have a studio.
8. Make Decisions Based On Data
How many students are enrolled in your classes right now? How many are repeat enrollees? How much money does the average student bring in?
If you’re like most studio owners, you probably have no way of answering these questions. And even if you do, it requires going back to your office and scrolling through disconnected spreadsheets.
There’s a better way: Studio management software keeps track of all of your information in one place. You’ll be able to make intelligent decisions about the future of your studio informed by facts — not intuition and emotion.
With The Studio Director, you can harness the power of both intelligent decision-making and actionable data. Running a profitable business requires you to cut useless costs, spend your money wisely, and use your time effectively. The right studio management software can help you do just that. And best of all, you’ll spend a fraction of what you might spend on administrative staff, lost time, and outside experts.
With The Studio Director, you can make better decisions, automate key tasks, and make your dance studio profitable. Ready to see how it works?