Ask the Experts: Tuition Increases

Dance is a business, and every year the cost of living goes up. How often and by how much should I raise tuition?

The thought of raising prices often causes concern—we fear it will mean upsetting or losing customers. But it’s important to remember that running a business requires you to make decisions that will keep your studio financially healthy.

We asked certified public accountant Sean Dever to offer some guidance. He says that, on average, your expenses will rise three to five percent annually, so a four- to five-percent tuition increase is reasonable. Getting your customers in the habit of seeing a price increase each year will help you stay ahead of expense increases and prevent a bigger increase in later years (if you skip a year or two). Dever also recommends keeping your figures “ugly”—instead of increasing your rates using factors of $5 and $10, go from $80 to $85.33. That way, your customers are less likely to spend time haggling over your price increase.

We also recommend you look at other areas where you may need to raise prices: choreography, private lessons, costumes and registration fees. While you should keep in mind what the rates are in your area, be conscious of what your studio needs to charge to maintain profitability. As you continue to deliver quality dance instruction, you can be confident that your price increases will be seen as a reasonable business practice.

Kathy Blake is the owner of Kathy Blake Dance Studios in Amherst, New Hampshire. She and Suzanne Blake Gerety are the co-founders of DanceStudioOwner.com.

Photo by B Hansen Photography, courtesy of Suzanne Blake Gerety

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