Opening a studio of your own has a lot of benefits. It gives you the freedom of crafting your own tailored schedule and space that is your ultimate vision of the perfect studio space. As the owner, you can give your clients the option of certain classes and pick and choose as you please.
Yet, having your own business unfortunately isn't just a place where you can play around and create willy nilly. There are quite a lot of things to consider when it comes to the possibility of success and failure of your studio. To ensure that your dream business doesn’t get up and running and then crash and burn not too long after, it will help a lot if you know the most common reasons that studios do not succeed.
Instead of jumping in full force because your bank finally gave you that loan you've been needing or you think you have found the perfect space, take some time to seriously consider and plan how everything needs to pan out.
In this article we will address the 5 reasons that most studios fail. Don't make the mistakes everyone else makes. Instead, learn from the things they did wrong, and you will give yourself a real chance at achieving your dream.
Reason 1: No Business Plan
Developing a business plan for your company is building a business 101. It is an essential contributor to any start-up. Often times, the types of folks that are opening up studios don't have a business degree or know what all goes into making a business plan.
On top of that, there are different approaches to building the plan depending on the type of business you are wanting to create. When you picture a business plan, you may immediately picture a huge manual, chock full of charts and complicated math equations.
These types of things may be included, true, but don't think of it as such a daunting task. Your business plan is what will guide you toward making the studio you intend it to be. It should plan out your first 3-5 years and project exactly how you wish you to grow.
To avoid the mistake of not constructing the right type of business plan for your startup studio, consider the following:
[The construction of an executive summary.]
Just like the beginning of an essay, you need a catchy hook that gets the reader interested. Your business summary should give a clear vision of what your studio is, where you see it going, and why it’s going to be a success. Don't go too crazy with this, it's only a summary.
Once you establish this, you can get more into detail in the body of your plan. You will probably only end up doing this last part once you are finished constructing the whole thing. That way, you know everything you want to include in the summary and the intro is completely accurate in it’s description.
[Describing the company.]
The next part of your studio business plan will be your company’s description. Here you will touch on what will be included in your studio and the specific market that you are targeting. It is always good to give an overview of the types of services that you will offer, but do not worry about going too far in depth, this section is meant to brief. The description is still part of the introduction. Note here what makes you unique in comparison with your competitors.
[Analyze your market.]
You are going to have to bite the bullet and get a firm idea of who your competitor is. Market analysis helps you define the industry standards in your region and it’s growth rates. You should also know just how many studios are in the area, if they are direct competitors of yours, and approximately how many clients they have. Here you can include your plan for entering the market that will set you apart from the others. Also figure out how many customers you will have the capacity to serve and define you pricing structure.
[What services and products you will produce.]
After you get all of the marketing jargon out of the way, it will be a nice and familiar zone when you start describing the attributes and services that you plan to provide. Here, you can go into extensive detail about your plans for altering the best classes in your area. Make an outline of the perks that you will provide for your clientele and how your curriculum will continue to develop moving forward.
It is super important to have a plan of how you are going to attract customers. After all, they have the fuel that will keep your business running. In this section, construct how you are going to attract your clientele and how you keep them coming back. It is a good idea to include a plan for how you may eventually target other markets in the future.
The last section of your business plan will focus on your funding plan and financial situation. Especially if your funds are not where you need them to be, creating a strong and detailed business plan will help you acquire investors or get a loan. If this is the case, you should make a section including your financial projections. To keep a business running smartly, you must have a solid plan for bringing in revenue, paying your bills and expansion.
Reason 2: Choosing A Bad Location
If you are not located in a good spot, you are going to do a lot more marketing work than you probably have time or funds for. On top of that, studios have their own special little needs when it comes to providing convenience for your clientele. Most of your targeted customers already have somewhere they can go, so what is it about your studio that’s better?
The basics need to be there a well as the perks. A typical studio should always include:
- convenient parking
- a safe environment where people aren't worried about dropping off their children or jogging from their homes
- visibility from a main road so the many passerbys will gain curiosity about the business
Furthermore, the interior of the building must include:
- a lobby
- a place for storage
- locker rooms
- a business office
If the space that you find was not already being used as a studio, you may have to arrange for some construction in the space such as:
- floors that absorb shock
- walls that have large mirrors
- installing a sound system
When you consider all of the above, you can understand why it’s not a bad idea to pay a larger sum for a good building in a popular location and why it’s worth it. Choose somewhere you are going to get noticed by the audience you desire and your clients will feel comfortable to roam around or grab some lunch after class.
Reason 3: Lack of Marketing
Every studio needs students, and you simply cannot get students without good marketing. Sure, you may start out with a good group of people, but many people have things come up or they move on and no longer have time to come to your classes. Because of this, you are dependent on having a constant stream of new clients. In order to gain interest in your studio you have to be creative. There are many effective and inexpensive ways to market your studio. Here are some examples:
- Send out emails and and postcards in your neighborhood. Put a cool image on a postcard and it’s easy to grab your neighborhood’s attention. Include an offer in the mix and give them more reason to come check out your business
- Give them something free. People just love things that are free. If it is being offered to them and they do not have to pay anything, a lot of people cannot bare passing on the deal.
- Provide specials to local schools. Hand out fliers and class schedules to neighborhood schools. Give them deals and the appeal of an extracurricular activity. Keep in mind, when kids bring stuff home from school, parents are more inclined to trust the source and check it out.
- Schedule an open house. You can post ads, but it is even better to give people a reason to come and actually check out your space.
- Take advantage of free advertising on social media. You can keep the communication flowing through many different social media outlets. By posting videos to Facebook and Instagram, you can peek the interest of newcomers and give them a reason to want to be involved. You can also include your social media website links and logos in all of your various types of advertising so people have a way to casually look you up in their spare time.
- Keep your website updated. It takes very little time to update your website. By doing so, you can boost your site’s rankings on Google and subsequently attract more attention. Make sure that each of your website’s pages includes all of the top keywords that your target audience will be searching for.
Reason 4: Unforeseen Workload
Very often, the types of people who venture to open up studios do so because of their passion. Whether it be dancing, yoga, fitness, or the like. Because of this, they do not necessarily take into consideration just how much work it’s going to be or the other responsibilities that they will be taking on.
When open a new studio, you are not only the studio owner, you are also:
Taking the lead. Everyone is looking to you now. Your staff and your clientele will be expecting to follow your lead, so it is up to you to set a good example. It is time for you to be the mentor and to embody the work ethic/attitude that you hope everyone else will also live by.
The manager of all things. If you do not hire one, you are going to have to take on the role of manager. this means making sure that all schedules and daily activities are organized and running smoothly. You will need to be on top of deciding what needs to be done, communicating it, what needs to improve, and keeping your staff focused on their specific goals.
In charge of sustainability and growth. You also have to take on the role of entrepreneur. This means continuing to keep the ideas flowing and coming up with plans for how the studio can grow and gain more profit.
The multitasker. You may find yourself overwhelmed with the plethora of responsibilities you have taken on, but you are going to have to get used to it. Furthermore, as your studio becomes more successful, you are going to have more piling onto your plate. This is why you need to make sure that you are extremely familiar with all of the aspects of your business and how they function right from the get-go.
Sure, you will most likely be bringing on more team members as you become more successful, but you should still know what needs to be done if any of them fall through or cannot pull their weight. If anything goes wrong, the responsibility will inevitably always fall back on you, as you will be the one paying for the damages.
As long as you continue to make sure that your business is running smoothly, you will ensure that:
- your classes are always running
- your employees are happy
- your students will notice the confidence in your study and feel more comfortable being there
Reason 5: Poor Staffing and Management Skills
When it comes to the people that you hire to be your team and support, you should always be looking for exceptional talent.
- Even if you aren't looking to hire or if you haven't found someone who lives in town, it will still benefit you to bring in guests artists and network with them. Think about the people that you know and the people they know, how can they help you?
- Another option is to train the students you have to help you with tasks that you need assistance with. There are always people looking for opportunities to intern or assistant teach.
- Consider what type of people you really need. If you are only cut out to handle the artistic direction of your studio, you may be in need of a proper office staff to take care of the rest of the logistics and manage day to day business affairs.
- Finding the right person for the job is not hard if you look in the right circles. You can find potentials candidates by:
- asking for referrals from parents, teachers, or alumni
- checking your local chamber of commerce for individuals who offer bookkeeping, accounting and small business services
- paying a small fee to an employment agency to find a well qualified and dependable employee
In addition to (or instead of) taking on more staff to help you with all of the tasks that must be handled daily, many studio owners are turning to studio management software. The software takes care of a huge chunk of the organizational office work and even some of the marketing as well.
Studio owners are turning to this option, not necessarily because they cannot afford the staff, but because it is the most efficient and customizable option available. Once studio management software is implemented into your company, certain hassles will be handled, such as:
- the management of billing and remembering who should be billed
- customer complaints and how they should be addressed
- random inquiries
- signing up students for classes, managing memberships, enrollments, and payment information
- keeping track of inventory so that purchasing is always calculated and accounted
- the management of legal and liability issues like: purchasing insurance, your business being zoned, and liability waivers
- delinquent accounts and the collection of bills and late fees
- giving clients guidance about schedules, upcoming events, and special offers
Be Prepared with a Solid Plan
At the end of the day, your best bet is to come in prepared with a solid plan. After you see how the machine you built runs, you can make the proper adjustments needed in order to iron out the kinks or rethink certain pathways. The main thing is to not get discouraged by mistakes or pass up opportunities to be more efficient. If anything goes wrong in your plan, find a solution. You are the creator, but do not be worried or afraid to ask for a little bit of help.