More students always mean more profits, right? After all, $900 is more than $800, so your profits with more tuition payments must be greater. In the world of dance studio management, common sense is an unreliable guide to business and class management. Dance class size matters more than you think it does, and limiting enrollment can actually increase profitability.
The reason is pretty simple: every instructional business has a so-called breakpoint at which profitability diminishes and expenses increase. Here’s how to detect yours — and why smaller classes can improve your reputation and increase overall profitability.
Class Size Breakpoint: A Simple Equation
Picture the scene: your standard class size is six students. Two more want to enroll. It would be so easy to accept their money. The math of class breakpoints says you shouldn’t, for two simple reasons.
First, if you keep your class size manageable, you’ll need to create a separate class for the two new students. This means you’ll be paying another instructor — or spending your own valuable time — to teach a small class with limited profitability. You’ll need more studio space, spend more on electricity and other utilities, and get only very minimal payment in return. Depending upon the cost to keep your dance studio open longer or open up another class simultaneous to the first, you could even lose money.
What’s more, by having a class with such a small number of students, you manufacture an unfortunate illusion: that your classes just aren’t very popular. This can decrease motivation to come to class, and may even inspire students to drop out, losing you a potential repeat customer.
A classroom that’s not full appears to be a failed class. The students in the second class may believe that no one else signed up for the class, even when the reality suggests that your classes are too popular to accommodate all of the interested students.
Assessing Your Breakpoint
Your breakpoint is pretty simple to determine. Simply assess how many students you should reasonably enroll in a class, and then stick to that number. Some questions to ask that can help you determine your ideal class size include:
- How many students do I need to enroll to be profitable? What is the ideal number to maximize profitability without decreasing class quality?
- How much space will each student need, and how much space does each studio room offer?
- How much-personalized instruction does each class necessitate?
- What is the ideal instructor to student ratio for each class?
- How many students are typically interested in enrolling?
- Do students ever complain that our class sizes are too large?
- What do my instructors say about the ideal class size?
- Are there other limits on how many students I can have in each room, such as fire marshall room capacity restrictions?
- Are there any safety issues with a larger class size?
- Does your liability insurance carrier limit class size?
- What do your instructors say about the ideal class size?
- Can you offer a great variety of classes if you limit the enrollment for each individual class?
Why Breakpoints Are Especially Important for New Businesses
New dance studios are understandably eager to earn a profit. After all, the sooner you start making money, the more classes you can offer. Don’t allow a short-term fixation on profitability to undermine your long-term success.
New dance studios stand to greatly benefit from keeping class sizes small and setting a breakpoint. Small class sizes offer higher quality instruction and greater personalized attention. This produces satisfied students who are more likely to come back for another class and tell their friends about their positive experience. Smaller class sizes create the illusion of exclusivity, and alongside closed enrollment, can create interest in your burgeoning studio.
Class Management and Dance Class Size
It’s simply easier to manage a smaller dance class. Easier management means less expense, fewer dissatisfied students, and a better overall reputation. By limiting class size and closing enrollment when you exceed that limit, you make your business easier to manage. That’s worth way more than just a few hundred dollars in additional tuition fees, particularly when you have a small advertising budget and rely on word of mouth to create buzz surrounding your studio.
Closed Enrollment and Increased Demand
For generations, businesses have used the scarcity principle to drum up new business and increase customer loyalty. Setting a class enrollment breakpoint uses this well-established principle to your advantage.
When class enrollment is limited, it creates a sense of urgency that, if a student doesn’t sign up now, the opportunity might not be available later. This allows your classes to fill up more quickly, increasing profitability. It can even encourage a large number of students to sign up for a waiting list. This, in turn, may enable you to open a second class full of students. Even if an insufficient number of students join your waiting list, the mere presence of such a list creates interest in your studio, offering free advertising and increased value.
Quality Above All Else
It doesn’t matter how slick your marketing campaign is, how much you pay to web developers, or how costly your studio management software is. Advertising will only get you so far. The single most effective way to draw in business is to offer something no one else does — quality, affordable, in-demand classes.
When you set an enrollment breakpoint, you free yourself to offer precisely that. Rather than running a volume-based studio that offers low-quality instruction for a large number of students, you create a boutique vibe at your studio. This increases overall quality, creating students for life.
Rather than wasting precious time and resources enrolling a few extra students in a partially full class, ask yourself what your business offers that no one else does. Is it a specific dance style? An in-demand instructor? A gorgeous space? A convenient location? Focus on these valuable assets and watch your business soar to new heights of success. Set a breakpoint now, and stick with it.