Table of Content

    Dance studio business plan for your own dance school

    Do you want to start a dance studio business? If you are passionate about learning and teaching dance then it is the perfect venture for you to invest in. Moreover, you can start this business with lower initial investments as compared to other businesses and can make it extremely profitable, provided that you plan and execute it successfully.
    If you are wondering how to open up a dance studio, the first step you should take is to develop a comprehensive business plan covering all aspects of your business. The business plan will not only help you in startup but will also form the basis of your company’s future policies. So, for assisting you with writing professional business planning, here we are providing the business plan for a dance studio business startup named ‘Emmy’s Studio’.

    Executive Summary

    2.1 The Dance Studio Business

    Emmy’s Studio will be located at a ten minutes’ drive from the main residential district of Manhattan. The business will be owned by Emmy Jill, a famous American dance teacher. Emmy served in several dance institutes and has extensive experience in this industry spanning more than 10 years, that’s why she knows everything about how to start a dance studio business.

    2.2 Management of Dance Studio

    The company will hire a staff comprising of trainers, assistants and sales executives, all of which will be trained for one month prior to onboarding.

    2.3 Customers of Dance School

    Emmy’s Studio will be a licensed dance studio where people of age-groups will be taught various dances belonging to several parts of the world by the best trainers of the United States.

    2.4 Target of the Dance Company

    The business targets are to balance the cost of a startup within next 5 years of launch and to become the best dance studio in Manhattan. Our sales and revenue targets for next three years are summarized in the chart below:

    Dance Studio Business Plan - 3 Years Profit Forecast

    Immigration Business Plan
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    Dance Company Summary

    3.1 Company Owner

    Emmy’s Studio will be owned by Emmy Jill, an American dance teacher. After completing her Master’s in Theatre and Dance from the University of Colorado, Emily remained associated with several dance institutes across the United States.

    3.2 Why the Dance Studio Business is being started

    Emmy has devoted her entire life to learning and teaching various dances. Her passion for dance is the ultimate motive behind her starting this business.

    3.3 How the Dance School Business will be started

    Before opening a dance studio business plan development, you must decide whether you will start everything from scratch or procure an existing facility because it will greatly affect the costs of startup. Emmy’s Studio will be started in an existing dance studio located at a ten minutes’ drive from the main residential district of Manhattan.
    The costs for startup are as follows:

    Dance Studio Business Plan - Startup cost

    The startup requirements are as follows:

    Start-up Expenses  
    Legal $75,500
    Consultants $0
    Insurance $62,750
    Rent $22,500
    Research and Development $42,750
    Expensed Equipment $42,750
    Signs $1,250
    TOTAL START-UP EXPENSES $247,500
    Start-up Assets $0
    Cash Required $322,500
    Start-up Inventory $52,625
    Other Current Assets $222,500
    Long-term Assets $125,000
    TOTAL ASSETS $121,875
    Total Requirements $245,000
    START-UP FUNDING $0
    START-UP FUNDING $273,125
    Start-up Expenses to Fund $121,875
    Start-up Assets to Fund $195,000
    TOTAL FUNDING REQUIRED $0
    Assets $203,125
    Non-cash Assets from Start-up $118,750
    Cash Requirements from Start-up $0
    Additional Cash Raised $118,750
    Cash Balance on Starting Date $121,875
    TOTAL ASSETS $0
    Liabilities and Capital $0
    Liabilities $0
    Current Borrowing $0
    Long-term Liabilities $0
    Accounts Payable (Outstanding Bills) $0
    Other Current Liabilities (interest-free) $0
    TOTAL LIABILITIES $0
    Capital $0
    Planned Investment $0
    Investor 1 $312,500
    Investor 2 $0
    Other $0
    Additional Investment Requirement $0
    TOTAL PLANNED INVESTMENT $695,000
    Loss at Start-up (Start-up Expenses) $313,125
    TOTAL CAPITAL $221,875
    TOTAL CAPITAL AND LIABILITIES $221,875
    Total Funding $265,000

    Any questions? Get in Touch!

    Services for customers

    The most important thing to decide before you think about how to open a dance studio business is the services you will provide to your customers. It is important because all subsequent components of your business plan depend on your provided services.
    Emmy’s Studio will be a licensed dance studio where people of age-groups will be taught various dances belonging to several parts of the world by the best trainers of the United States. We will provide training for the following five types of dance:

    • Ballet
    • Jazz
    • Hip-Hop
    • Salsa
    • Kathak

    Marketing Analysis of dance studio business

    The most important component of a dance studio business plan is its accurate marketing analysis because it decides whether a startup will become a success or end in failure. That’s why an accurate marketing analysis must be carried out before developing the business plan for a dance studio. If you are starting on a large scale then it is better to seek the help from the marketing experts.

    Note

    If you are starting on a small scale, you can take help from this dance studio business plan template or other dance studio business plan sample available online.

    5.1 Marketing Trends

    Strategic/Operational Business Plan

    This dance studio sample business plan also presents detailed dance studio business marketing trends which will provide you a clear demonstration of the market potential of this industry. According to IBIS, there are approximately 70,000 dance studios or private dance trainers in the United States as of 2018. The industry is growing at 3.5% per year with annual revenue generation amounting to $3 billion. These stats clearly show that any business in this industry can become extremely profitable provided that you plan it successfully.
    Marketing segmentation of the business plan dance studio shows the various segments or groups of our prospective customers. Our target market is the residential community living nearby at the 10 minutes’ drive from our studio. The community consists of all types of people from varying backgrounds.

    There are currently more than 738,000 households in Manhattan out of which 17.1% have children under the age of 18 living with them, 25.2% are married couples living together and 10.9% are persons with 65 years of age or older. As per the financial position, nearly half of the community has a monthly income ranging from $40k to $50k while nearly 10% people have incomes even around $100,000. So nearly all of the people are well established and can easily afford our membership fees. Our experts have identified following target groups for our services:

    Dance Studio Business Plan - Market Segmentation

    The detailed marketing segmentation of our target audience is as follows:

    5.2.1 Children (6-18):

    The first group of our customers will be the children living in the vicinity of our dance studio. According to a recent census, nearly 70% of children living in Houston participate in dance classes or related activities. One of the significant reason behind parents sending their kids for learning dance is the health benefits associated with this activity that’s why this target group will constitute the bulk of our customers. These children belong to financially stable families who can easily afford our services.

    5.2.2 Adults (18+):

    The second category includes teens and individuals who themselves want to learn a dance for any reason and are aged above 18. Their dance practice will differ from other groups and they will be subjected to private training along with group classes.

    5.2.3 Professionals:

    The last category includes those individuals who have a passion for dance and want to pursue a career in it. This group will be trained at a completely different level under the direct supervision of Emmy and notable dance experts from the United States.
    The detailed market analysis of our potential customers is given in the following table:

    Market Analysis
    Potential Customers Growth YEAR 1 YEAR 2 YEAR 3 YEAR 4 YEAR 5 CAGR
    Children (6-18) 48% 22,334 32,344 43,665 52,544 66,432 10.00%
    Adults (Above 18) 18% 11,433 13,344 16,553 18,745 20,545 13.43%
    Professionals 34% 18,322 19,455 20,655 22,867 24,433 15.32%
    Total 100% 52,089 65,143 80,873 94,156 111,410 9.54%
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    5.3 Business Target

    Our business targets are:

    • To become the best dance studio in Manhattan
    • To achieve the net profit margin of $10k per month by the end of the first year, $15k per month by the end of the second year, and $25k per month by the end of the third year
    • To balance the initial cost of the startup with earned profits by the end of the first year

    5.4 Product Pricing

    Product pricing is also one of the main deciding factors in the success of a startup. To encourage sales, we have priced our services slightly lower as compared to our competitors. We will basically offer three types of packages to our students to choose from:

    • Monthly membership for $1000 per month
    • Semi-annual membership for $5000 per six months
    • Yearly membership for $8000 per year

    This fee includes the compensation for group classes as well as the individual training sessions. For professional dancers, membership fee is 40% more than our normal fee considering the expenses of special trainers arranged for them.

    Strategy

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    Like marketing analysis, sales strategy for business is also an important component of any business plan so it must be thought through before starting a dance studio business plan development. In case, you don’t know how to write a business plan for a dance studio with the incorporation of effective sales strategy, you can take help from this template or the dance studio business plan examples available online.

    6.1 Competitive Analysis

    Our competitive advantage lies in the power and dedication of our team. We have a team with excellent qualifications and experience in professional dance and choreography. Secondly, our prices are very reasonable and comparatively lower than the most of our competitors. Finally, our biggest competitive edge is the training of traditional Indian Kathak dance which is not taught by any dance studio present within 10 km radius of our studio.

    6.2 Sales Strategy

    • We will attract our customers towards us by various efforts, such as:
    • We will advertise our studio in magazines, newspapers and social media
    • We will offer discounts on the membership for the first three months of the launch
    • We will arrange seminars and awareness sessions on the importance of dance and the accompanying health benefits
    • We will arrange transportation facilities for our members and students
    • Within 6 months of startup, we will start an online portal by which our members and students can access our dance training sessions and can practice at home

    6.3 Sales Forecast

    Our sales are forecasted in the following column charts:

    Dance Studio Business Plan - Unit Sales

    The detailed information about sales forecast is given in the following table:

    Sales Forecast      
    Unit Sales Year 1 Year 2 Year 3
    Ballet 187,330 260,320 258,240
    Jazz 802,370 815,430 823,540
    Hip-Hop 539,320 770230 1,002,310
    Kathak 265,450 322,390 393,320
    Salsa 1,435,320 1,250,430 1,762,450
    TOTAL UNIT SALES 3,229,790 3,418,800 4,239,860
    Unit Prices Year 1 Year 2 Year 3
    Ballet $140.00 $150.00 $160.00
    Jazz $600.00 $800.00 $1,000.00
    Hip-Hop $700.00 $800.00 $900.00
    Kathak $650.00 $750.00 $850.00
    Salsa $140.00 $120.00 $100.00
    Sales
    Ballet $214,800 $274,000 $333,200
    Jazz $120,050 $194,500 $268,500
    Hip-Hop $50,110 $71,600 $93,000
    Kathak $139,350 $194,600 $249,850
    Salsa $62,350 $72,300 $82,250
    TOTAL SALES
    Direct Unit Costs Year 1 Year 2 Year 3
    Ballet $0.70 $0.80 $0.90
    Jazz $0.40 $0.45 $0.50
    Hip-Hop $0.30 $0.35 $0.40
    Kathak $3.00 $3.50 $4.00
    Salsa $0.70 $0.75 $0.80
    Direct Cost of Sales
    Ballet $98,300 $183,000 $267,700
    Jazz $66,600 $119,900 $173,200
    Hip-Hop $17,900 $35,000 $52,100
    Kathak $19,400 $67,600 $115,800
    Salsa $27,700 $69,200 $110,700
    Subtotal Direct Cost of Sales $294,100 $699,400 $1,104,700

    6.4 Sales Monthly

    Our forecasted monthly sales for the first year of startup are given below:

    Dance Studio Business Plan - Sales Monthly

    6.5 Sales Yearly

    Our forecasted yearly sales for the first three years of startup are given below:

    Dance Studio Business Plan - Sales Yearly

    Any questions? Get in Touch!

    Personnel plan

    In case, you don’t have any idea about the staff required for starting a dance studio, you can take help from this sample dance studio business plan.

    7.1 Dance Company Staff

    The company will initially hire the following staff:

    • 1 General Manager for managing the overall operations
    • 2 Administrators/Accountants for maintaining financial records
    • 4 Sales Executives responsible for marketing and discovering new ventures
    • 7 Trainers for providing dance training to members
    • 10 Assistants for undertaking day-to-day tasks
    • 3 Drivers for providing transportation facility to members
    • 4 Cleaners for cleaning the studio
    • 1 Front Desk Officer for acting as a receptionist

    7.2 Average Salary of Employees

    The average salary of our staff is summarized in the following table:

     Personnel Plan      
    Year 1 Year 2 Year 3
    General Manager $42,000 $59,000 $76,000
    Accountants $85,000 $95,000 $105,000
    Sales Executives $85,000 $92,000 $109,000
    Trainers $135,000 $155,000 $185,000
    Assistants $60,000 $63,300 $70,000
    Drivers $63,300 $70,000 $76,700
    Cleaners $76,000 $93,000 $110,000
    Front Desk Officer $35,000 $42,000 $59,000
    Total Salaries $343,300 $380,300 $440,700

    Financial Plan

    The last thing to do before thinking about how to open your own dance studio business is to develop a financial plan outlining the development of company over the next few years. The financial plan of Emmy’s Studio is as follows.

    8.1 Important Assumptions

     General Assumptions      
    Year 1 Year 2 Year 3
    Plan Month 1 2 3
    Current Interest Rate 10.00% 11.00% 12.00%
    Long-term Interest Rate 10.00% 10.00% 10.00%
    Tax Rate 26.42% 27.76% 28.12%
    Other 0 0 0

    8.2 Brake-even Analysis

    Dance Studio Business Plan - Brake-even Analysis

     Brake-Even Analysis  
    Monthly Units Break-even 5530
    Monthly Revenue Break-even $159,740
    Assumptions:
    Average Per-Unit Revenue $260.87
    Average Per-Unit Variable Cost $0.89
    Estimated Monthly Fixed Cost $196,410

    8.3 Projected Profit and Loss

     Pro Forma Profit And Loss      
    Year 1 Year 2 Year 3
    Sales $309,069 $385,934 $462,799
    Direct Cost of Sales $15,100 $19,153 $23,206
    Other $0 $0 $0
    TOTAL COST OF SALES $15,100 $19,153 $23,206
    Gross Margin $293,969 $366,781 $439,593
    Gross Margin % 94.98% 94.72% 94.46%
    Expenses
    Payroll $138,036 $162,898 $187,760
    Sales and Marketing and Other Expenses $1,850 $2,000 $2,150
    Depreciation $2,070 $2,070 $2,070
    Leased Equipment $0 $0 $0
    Utilities $4,000 $4,250 $4,500
    Insurance $1,800 $1,800 $1,800
    Rent $6,500 $7,000 $7,500
    Payroll Taxes $34,510 $40,726 $46,942
    Other $0 $0 $0
    Total Operating Expenses $188,766 $220,744 $252,722
    Profit Before Interest and Taxes $105,205 $146,040 $186,875
    EBITDA $107,275 $148,110 $188,945
    Interest Expense $0 $0 $0
    Taxes Incurred $26,838 $37,315 $47,792
    Net Profit $78,367 $108,725 $139,083
    Net Profit/Sales 30.00% 39.32% 48.64%

    8.3.1 Profit Monthly

    Dance Studio Business Plan - PROFIT MONTHLY

    8.3.2 Profit Yearly

    Dance Studio Business Plan - PROFIT YEARLY

    8.3.3 Gross Margin Monthly

    Dance Studio Business Plan - GROSS MARGIN MONTHLY

    8.3.4 Gross Margin Yearly

    Dance Studio Business Plan - GROSS MARGIN YEARLY

    8.4 Projected Cash Flow

    Dance Studio Business Plan - Projected Cash Flow Diagram

     Pro Forma Cash Flow      
    Cash Received Year 1 Year 2 Year 3
    Cash from Operations
    Cash Sales $40,124 $45,046 $50,068
    Cash from Receivables $7,023 $8,610 $9,297
    SUBTOTAL CASH FROM OPERATIONS $47,143 $53,651 $59,359
    Additional Cash Received
    Sales Tax, VAT, HST/GST Received $0 $0 $0
    New Current Borrowing $0 $0 $0
    New Other Liabilities (interest-free) $0 $0 $0
    New Long-term Liabilities $0 $0 $0
    Sales of Other Current Assets $0 $0 $0
    Sales of Long-term Assets $0 $0 $0
    New Investment Received $0 $0 $0
    SUBTOTAL CASH RECEIVED $47,143 $53,651 $55,359
    Expenditures Year 1 Year 2 Year 3
    Expenditures from Operations
    Cash Spending $21,647 $24,204 $26,951
    Bill Payments $13,539 $15,385 $170,631
    SUBTOTAL SPENT ON OPERATIONS $35,296 $39,549 $43,582
    Additional Cash Spent
    Sales Tax, VAT, HST/GST Paid Out $0 $0 $0
    Principal Repayment of Current Borrowing $0 $0 $0
    Other Liabilities Principal Repayment $0 $0 $0
    Long-term Liabilities Principal Repayment $0 $0 $0
    Purchase Other Current Assets $0 $0 $0
    Purchase Long-term Assets $0 $0 $0
    Dividends $0 $0 $0
    SUBTOTAL CASH SPENT $35,296 $35,489 $43,882
    Net Cash Flow $11,551 $13,167 $15,683
    Cash Balance $21,823 $22,381 $28,239

    8.5 Projected Balance Sheet

     Pro Forma Balance Sheet      
    Assets Year 1 Year 2 Year 3
    Current Assets
    Cash $184,666 $218,525 $252,384
    Accounts Receivable $12,613 $14,493 $16,373
    Inventory $2,980 $3,450 $3,920
    Other Current Assets $1,000 $1,000 $1,000
    TOTAL CURRENT ASSETS $201,259 $237,468 $273,677
    Long-term Assets
    Long-term Assets $10,000 $10,000 $10,000
    Accumulated Depreciation $12,420 $14,490 $16,560
    TOTAL LONG-TERM ASSETS $980 $610 $240
    TOTAL ASSETS $198,839 $232,978 $267,117
    Liabilities and Capital Year 1 Year 2 Year 3
    Current Liabilities
    Accounts Payable $9,482 $10,792 $12,102
    Current Borrowing $0 $0 $0
    Other Current Liabilities $0 $0 $0
    SUBTOTAL CURRENT LIABILITIES $9,482 $10,792 $12,102
    Long-term Liabilities $0 $0 $0
    TOTAL LIABILITIES $9,482 $10,792 $12,102
    Paid-in Capital $30,000 $30,000 $30,000
    Retained Earnings $48,651 $72,636 $96,621
    Earnings $100,709 $119,555 $138,401
    TOTAL CAPITAL $189,360 $222,190 $255,020
    TOTAL LIABILITIES AND CAPITAL $198,839 $232,978 $267,117
    Net Worth $182,060 $226,240 $270,420

    8.6 Business Ratios

     Ratio Analysis        
    Year 1 Year 2 Year 3 Industry Profile
    Sales Growth 4.35% 30.82% 63.29% 4.00%
    Percent of Total Assets
    Accounts Receivable 5.61% 4.71% 3.81% 9.70%
    Inventory 1.85% 1.82% 1.79% 9.80%
    Other Current Assets 1.75% 2.02% 2.29% 27.40%
    Total Current Assets 138.53% 150.99% 163.45% 54.60%
    Long-term Assets -9.47% -21.01% -32.55% 58.40%
    TOTAL ASSETS 100.00% 100.00% 100.00% 100.00%
    Current Liabilities 4.68% 3.04% 2.76% 27.30%
    Long-term Liabilities 0.00% 0.00% 0.00% 25.80%
    Total Liabilities 4.68% 3.04% 2.76% 54.10%
    NET WORTH 99.32% 101.04% 102.76% 44.90%
    Percent of Sales
    Sales 100.00% 100.00% 100.00% 100.00%
    Gross Margin 94.18% 93.85% 93.52% 0.00%
    Selling, General & Administrative Expenses 74.29% 71.83% 69.37% 65.20%
    Advertising Expenses 2.06% 1.11% 0.28% 1.40%
    Profit Before Interest and Taxes 26.47% 29.30% 32.13% 2.86%
    Main Ratios
    Current 25.86 29.39 32.92 1.63
    Quick 25.4 28.88 32.36 0.84
    Total Debt to Total Assets 2.68% 1.04% 0.76% 67.10%
    Pre-tax Return on Net Worth 66.83% 71.26% 75.69% 4.40%
    Pre-tax Return on Assets 64.88% 69.75% 74.62% 9.00%
    Additional Ratios Year 1 Year 2 Year 3
    Net Profit Margin 19.20% 21.16% 23.12% N.A.
    Return on Equity 47.79% 50.53% 53.27% N.A.
    Activity Ratios
    Accounts Receivable Turnover 4.56 4.56 4.56 N.A.
    Collection Days 92 99 106 N.A.
    Inventory Turnover 19.7 22.55 25.4 N.A.
    Accounts Payable Turnover 14.17 14.67 15.17 N.A.
    Payment Days 27 27 27 N.A.
    Total Asset Turnover 1.84 1.55 1.26 N.A.
    Debt Ratios
    Debt to Net Worth 0 -0.02 -0.04 N.A.
    Current Liab. to Liab. 1 1 1 N.A.
    Liquidity Ratios
    Net Working Capital $120,943 $140,664 $160,385 N.A.
    Interest Coverage 0 0 0 N.A.
    Additional Ratios
    Assets to Sales 0.45 0.48 0.51 N.A.
    Current Debt/Total Assets 4% 3% 2% N.A.
    Acid Test 23.66 27.01 30.36 N.A.
    Sales/Net Worth 1.68 1.29 0.9 N.A.
    Dividend Payout 0 0 0 N.A.

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