Branching Out

Picture courtesy of Dana's Studio of Dance in Southlake, TX.

What studio owners should know before expanding their business

Many dance studio owners in North Texas experience a lull in business during the summer months and should therefore use this time to seriously consider expansion. But how are studio owners to know if the time is right? Or if they should add a room or move to a bigger location? Or if they are even financially capable of expanding? These are viable questions that all owners struggle with no matter how many expansions they have gone through. So, before going out on a limb, why not take some cues from studio owners who have succeeded in their own business expansions?

Look Before You Leap. Timing your business expansion can be challenging, studio owners say, especially if you’re not looking out for the signs. For Dana Bailey, owner and director of Dana’s Studio of Dance in Southlake and Keller, TX, expansion has always been in the cards, but it was her class sizes that got the ball rolling. “When your class ratios are too large and you cannot expand by adding additional classes, it’s time,” Bailey says.

A major sign for Cindy Brenna, owner of Cindy’s School of Dance in Allen and Celina, TX, was when she started offering classes on Friday afternoon/evenings. “We did have good enrollment on Friday’s, but we also had sporadic attendance,” Brenna says. “I would say if you need to add Friday classes for more than one season you might want to look at expanding.”

In addition, Candace Murphy, owner and director of U Can-DANCE Inc., McKinney, TX, says if your business starts growing and you are anticipating a need for your services, chances are you are ready to expand. “I knew there was a market for a dance and performing arts ‘think tank’ and the creative services that we offered,” Murphy says. “With that in mind, we set our sights on growing.”

Funding The Growth. Budgeting for expansion can be difficult; so it’s important to start planning early, studio owners say. “Unfortunately, we didn’t have that opportunity, but ideally you want to start one year in advance,” Murphy says. To help get organized Murphy recommends putting together a moving and a post-moving budget. “You will want to include all the things you will need in the move, for example the cost of boxes, the cost of a truck and the cost of movers or people to help,” Murphy says. For after the move, she suggests owners then get “all the things you will need to get things up and running at the new location, including utilities’ deposits, phone, internet and supplies.”

Brenna adds, “Try to make a list that includes everything you will need and don’t cut your budget short. It is difficult to come up with the money after the project has started and you realize you need additional item,” she says. Brenna also suggests exploring all the options for leasing property. “Will your landlord give you a finish out allowance, and if so, how much? Do you plan to put down a wooden dance floor? You must also be aware of city codes in your area,” Brenna says. “Sometimes these require finish out items that you would never dream of.”

Laying Down Roots. In terms of location and square footage many studio owners say it all comes down to what kind of business you want to run in the long term. Bailey has always known what she wanted her business to be; in her case the plan was to open several locations. “I wanted to reach more families,” Bailey says. “But opening a second location does add more responsibility in the long run.”

When searching for a new studio Brenna says she looks for a location with enough space for one classroom, restrooms, waiting area, observation room and office. “I have found that approximately 1,200-1,400 square feet allows for one reasonably sized dance room (20×40) leaving 400-600 square feet to divide between the other areas,” Brenna says.

Seeds of Wisdom. In today’s economic climate studio owners say it would be wise to think long and hard before making the decision to expand. “If you are experiencing good enrollment and making your budget work, I would wait until there is more recovery from the recession before taking on any additional debt,” Brenna says. “If you are ‘busting at the seams’ and turning away a significant number of students then you should probably look seriously at expansion,” she adds.

Bailey’s advice to those considering expansion, “If you are in the position to do it, it is always great to expand your product.  However, you must keep in mind that you do not want to overload your plate, so you can still provide quality to your clients.” Murphy adds, “Make sure to be confident and perfect your product and what you offer. And be conservative in your negotiations. The point is to get into a new spot with as little overhead as possible.”

You can also see this article in the May-July 2011 issue of DANCE by the Dance Council of North Texas.


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