Money Moves

It’s undeniable: Gas prices are skyrocketing, homeowners are defaulting on mortgages and middle-class taxes are rising. What can Americans—and, specifically, dance studio owners, do to tighten their purse strings?

It’s time to pay closer attention to how you’re spending your money. We turned to the experts for their best advice on making smart financial moves.

Take Action Early

Stay keenly aware of your financial situation—and plan, plan, plan. “The biggest mistake business owners make in tough times is assuming things will get better faster than they do,” says Jim Muehlhausen, author of The 51 Fatal Business Errors and How to Avoid Them. A well thought–out strategy takes time to devise, so make a conscious effort to watch for economic changes and begin planning right away.

Start by taking a closer look at where your money is going. Make a long list of expenses—from employee salaries and office supplies to heating bills and marketing costs. “Whether in a recession or not, all businesses, notwithstanding size, need to be mindful of expenditures,” says Shawn Shewchuk, a Canadian-based consultant who works primarily with small and medium-size businesses. “It may at times seem like micro-management,” he adds, “but not taking steps to become aware of your financial situation can be disastrous. Never be reactive, as it may be too late.”

Don’t Panic

First of all, panic and stress won’t change anything (and can compromise your health!), so remember to maintain a clear head. Sudden moves, like slashing or raising prices, can hurt your business considerably. “Calculate the risks involved when implementing a new strategy,” advises Boston-based financial advisor Derek Brown. “The last thing you want to do is alienate your core clientele with an onslaught of new concepts that convey a ‘last-ditch effort to survive’ message.”

Michael Hart, a consultant and speaker on no- and low-cost marketing strategies, adds that some fluctuations are natural, and that business owners should try not to overreact. “It’s terribly important to gauge your response to recession concerns based on your studio’s performance, not on predictions of the future economic performance nationwide,” Hart says.

Trim Unnecessary Expenses

Go line by line and determine what and where you can cut, or where you can hold off. Are there ways you can delay discretionary spending? If it won’t hurt the business to put it off, consider waiting.

Shewchuk advises studio owners to shop around for cheaper options. He cites the example of a small company that saved $250 per month simply by  sourcing a new office supplier. “Initially, the savings appeared small, but this translated into an additional $3,000 per year,” he explains. “Belt tightening is an absolute requirement for small businesses to maintain profitability when there is a slowdown in the economy.” Also, consider turning to your tax advisor to ensure you’re not missing any important deductions, like business interest expenses, adds Brown.

Focus on Winning New Business

While defense is important, consider boosting your offense. “It’s very common when the economy is sluggish to see business owners slash costs,” says Hart, “and many choose to slash their advertising or marketing budgets first. This is a critical mistake and may accelerate cash-flow problems.”

Instead, he notes, studio owners should increase marketing to bring in more dancers during slow periods. The secret is to look for free or inexpensive ways to advertise. “A story on a business in a local newspaper carries up to seven times the commercial value of a similar size advertisement, and it’s free,” says Hart. “Publicity is remarkably powerful. The commercial value is almost priceless.” And don’t forget the power of word of mouth: Just by talking to your current students, you can urge them to tell friends what a great experience they have at your studio.

Offer Smart Discounts

Coupon-type advertising, or “advertising that directly brings in business as a result of that expense,” also makes sense during a tough economy, says Muehlhausen. Try two-for-one specials or refer-a-friend days in the slow summer months, and don’t be shy about your efforts. “Keep in mind that people are hanging onto their money tightly, so a lousy 10 percent discount isn’t likely to motivate someone to action,” he adds, noting that it’s often better to offer something too generous than not generous enough.

Put the Web to Work

Tiffany Wright, author of Solving the Capital Equation: Financing Solutions for Small Businesses, says the internet can help people more than they think. There are web-based companies that specialize in helping owners save money by conducting office-related tasks virtually. “We can handle all the administrative tasks for a company, no matter where the business is located,” says Dida Clifton, the founder of TheOfficeSquad.com. These companies may also act as consultants, pinpointing any oversights or inefficiencies in your business plan and helping you to resolve them.
 

Make Some New Friends

“To save cash, consider bartering,” suggests Wright. If you haven’t already, partner up with local dance stores and make fighting the bad times a team effort. A storeowner, for instance, may post your class schedule in the shop or on her website in exchange for placing large recital orders or referring students to her business.

Be sure to nurture those new friendships. “Put an emphasis on forging close relationships,” says Brown. “The key to long-term success comes from the goodwill of strong relationships developed through the years.”

Ask for Help

By being honest about your money struggles, you can devise a reasonable payment plan with lenders or bill collectors and take a load off your mind. “Due to the high price of fuel, many gas and electric utilities are offering credits to those who contact them to place regulators on their air-conditioning systems,” says Wright. “The credit will reduce your bill immediately, and the regulator will reduce the energy you use.”

Get a Good Coach

Don’t weather tough times without support. “I’m a strong advocate for all small business owners joining and attending organized business clubs and associations in their communities,” says Hart. “Organizations such as OSBO (Organization Supporting Business Owners) have staff consultants who work with individual business owners on a variety of issues. Those who join have a variety of experts to tap into if indeed there was a local market downturn.”

Use the Downtime Wisely

Most economists say not to expect any significant pickup until late 2009, warns Muehlhausen, but it’s still important to ready yourself for better times. Use any downtime you have to reenergize and plan a business strategy for the upturn—things always get better. DT

Debbie Strong is a writer and dancer. She teaches dance and Pilates at All the Buzz in Queens, NY.

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Courtesy Tonawanda Dance Arts

If you're considering starting a summer program this year, you're likely not alone. Summer camp and class options are a tried-and-true method for paying your overhead costs past June—and, done well, could be a vehicle for making up for lost 2020 profits.

Plus, they might take on extra appeal for your studio families this year. Those struggling financially due to the pandemic will be in search of an affordable local programming option rather than an expensive, out-of-town intensive. And with summer travel still likely in question this spring as July and August plans are being made, your studio's local summer training option remains a safe bet.

The keys to profitable summer programming? Figuring out what type of structure will appeal most to your studio clientele, keeping start-up costs low—and, ideally, converting new summer students into new year-round students.


Find a formula that works for your studio

For Melanie Boniszewski, owner of Tonawanda Dance Arts in upstate New York, the answer to profitable summer programming lies in drop-in classes.

"We're in a cold-weather climate, so summer is actually really hard to attract people—everyone wants to be outside, and no one wants to commit to a full season," she says.

Tonawanda Dance Arts offers a children's program in which every class is à la carte: 30-minute, $15 drop-in classes are offered approximately two times a week in the evenings, over six weeks, for different age groups. And two years ago, she created her Stay Strong All Summer Long program for older students, which offers 12 classes throughout the summer and a four-day summer camp. Students don't know what type of class they're attending until they show up. "If you say you're going to do a hip-hop class, you could get 30 kids, but if you do ballet, it could be only 10," she says. "We tell them to bring all of their shoes and be ready for anything."

Start-up costs are minimal—just payroll and advertising (which she starts in April). For older age groups, Boniszewski focuses on bringing in her studio clientele, rather than marketing externally. In the 1- to 6-year-old age group, though, around 50 percent of summer students tend to be new ones—98 percent of whom she's been able to convert to year-round classes.

A group of elementary school aged- girls stands in around a dance studio. A teacher, a young black man, stands in front of the studio, talking to them

An East County Performing Arts Center summer class from several years ago. Photo courtesy ECPAC

East County Performing Arts Center owner Nina Koch knows that themed, weeklong camps are the way to go for younger dancers, as her Brentwood, California students are on a modified year-round academic school calendar, and parents are usually looking for short-term daycare solutions to fill their abbreviated summer break.

Koch keeps her weekly camps light on dance: "When we do our advertising for Frozen Friends camp, for example, it's: 'Come dance, tumble, play games, craft and have fun!'"

Though Koch treats her campers as studio-year enrollment leads, she acknowledges that these weeklong camps naturally function as a way for families who aren't ready for a long-term commitment to still participate in dance. "Those who aren't enrolled for the full season will be put into a sales nurture campaign," she says. "We do see a lot of campers come to subsequent camps, including our one-day camps that we hold once a month throughout our regular season."

Serve your serious dancers

One dilemma studio owners may face: what to do about your most serious dancers, who may be juggling outside intensives with any summer programming that you offer.

Consider making their participation flexible. For Boniszweski's summer program, competitive dancers must take six of the 12 classes offered over a six-week period, as well as the four-day summer camp, which takes place in mid-August. "This past summer, because of COVID, they paid for six but were able to take all 12 if they wanted," she says. "Lots of people took advantage of that."

For Koch, it didn't make sense to require her intensive dancers to participate in summer programming, partly because she earned more revenue catering to younger students and partly because her older students often made outside summer-training plans. "That's how you build a well-rounded dancer—you want them to go off and get experience from teachers you might not be able to bring in," she says.

Another option: Offering private lessons. Your more serious dancers can take advantage of flexible one-on-one training, and you can charge higher fees for individualized instruction. Consider including a financial incentive to get this kind of programming up and running. "Five years ago, we saw that some kids were asking for private lessons, so we created packages: If you bought five lessons, you'd get one for free—to get people in the door," says Boniszewksi. "After two years, once that program took off, we got rid of the discount. People will sign up for as many as 12 private lessons."

A large group of students stretch in a convention-style space with large windows. They follow a teacher at the front of the room in leaning over their right leg for a hamstring stretch

Koch's summer convention experience several years ago. Photo courtesy East County Performing Arts Center

Bring the (big) opportunities to your students

If you do decide to target older, more serious dancers for your summer programming, you may need to inject some dance glamour to compete with fancier outside intensives.

Bring dancers opportunities they wouldn't have as often during the school year. For Boniszewski, that means offering virtual master classes with big-name teachers, like Misha Gabriel and Briar Nolet. For Koch, it's bringing the full convention experience to her students—and opening it up to the community at large. In past years, she's rented her local community center for a weekend-long in-house convention and brought in professional ballet, jazz, musical theater and contemporary guest teachers.

In 2019, the convention was "nicely profitable" while still an affordable $180 per student, and attracted 120 dancers, a mix of her dancers and dancers from other studios. "It was less expensive than going to a big national convention, because parents didn't have to worry about lodging or travel," Koch says. "We wanted it to be financially attainable for families to experience something like this in our sleepy little town."

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