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 an effective business plan, here we are providing the business plan for a dance studio business startup named ‘Emmy’s Studio’.
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 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:
The startup requirements are as follows:
|Research and Development||$42,750|
|TOTAL START-UP EXPENSES||$247,500|
|Other Current Assets||$222,500|
|Start-up Expenses to Fund||$121,875|
|Start-up Assets to Fund||$195,000|
|TOTAL FUNDING REQUIRED||$0|
|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|
|Liabilities and Capital||$0|
|Accounts Payable (Outstanding Bills)||$0|
|Other Current Liabilities (interest-free)||$0|
|Additional Investment Requirement||$0|
|TOTAL PLANNED INVESTMENT||$695,000|
|Loss at Start-up (Start-up Expenses)||$313,125|
|TOTAL CAPITAL AND LIABILITIES||$221,875|
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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:
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.
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:
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.
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:
|Potential Customers||Growth||YEAR 1||YEAR 2||YEAR 3||YEAR 4||YEAR 5||CAGR|
|Adults (Above 18)||18%||11,433||13,344||16,553||18,745||20,545||13.43%|
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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.
High Quality Business Plan and Professional Support
It was amazing to work with OGS Capital for our business plan. They promptly responded our enquires and delivered document on time.The document was well organized high quality and content.We succeded with Alex and his team support. We thank you guys again for professional approach and easy communication.
Like marketing analysis, sales strategy 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:
The detailed information about sales forecast is given in the following table:
|Unit Sales||Year 1||Year 2||Year 3|
|TOTAL UNIT SALES||3,229,790||3,418,800||4,239,860|
|Unit Prices||Year 1||Year 2||Year 3|
|Direct Unit Costs||Year 1||Year 2||Year 3|
|Direct Cost of Sales|
|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:
6.5 Sales Yearly
Our forecasted yearly sales for the first three years of startup are given below:
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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:
|Year 1||Year 2||Year 3|
|Front Desk Officer||$35,000||$42,000||$59,000|
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
|Year 1||Year 2||Year 3|
|Current Interest Rate||10.00%||11.00%||12.00%|
|Long-term Interest Rate||10.00%||10.00%||10.00%|
8.2 Brake-even Analysis
|Monthly Units Break-even||5530|
|Monthly Revenue Break-even||$159,740|
|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|
|Direct Cost of Sales||$15,100||$19,153||$23,206|
|TOTAL COST OF SALES||$15,100||$19,153||$23,206|
|Gross Margin %||94.98%||94.72%||94.46%|
|Sales and Marketing and Other Expenses||$1,850||$2,000||$2,150|
|Total Operating Expenses||$188,766||$220,744||$252,722|
|Profit Before Interest and Taxes||$105,205||$146,040||$186,875|
8.3.1 Profit Monthly
8.3.2 Profit Yearly
8.3.3 Gross Margin Monthly
8.3.4 Gross Margin Yearly
8.4 Projected Cash Flow
|Pro Forma Cash Flow|
|Cash Received||Year 1||Year 2||Year 3|
|Cash from Operations|
|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|
|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|
|SUBTOTAL CASH SPENT||$35,296||$35,489||$43,882|
|Net Cash Flow||$11,551||$13,167||$15,683|
8.5 Projected Balance Sheet
|Pro Forma Balance Sheet|
|Assets||Year 1||Year 2||Year 3|
|Other Current Assets||$1,000||$1,000||$1,000|
|TOTAL CURRENT ASSETS||$201,259||$237,468||$273,677|
|TOTAL LONG-TERM ASSETS||$980||$610||$240|
|Liabilities and Capital||Year 1||Year 2||Year 3|
|Other Current Liabilities||$0||$0||$0|
|SUBTOTAL CURRENT LIABILITIES||$9,482||$10,792||$12,102|
|TOTAL LIABILITIES AND CAPITAL||$198,839||$232,978||$267,117|
8.6 Business Ratios
|Year 1||Year 2||Year 3||Industry Profile|
|Percent of Total Assets|
|Other Current Assets||1.75%||2.02%||2.29%||27.40%|
|Total Current Assets||138.53%||150.99%||163.45%||54.60%|
|Percent of Sales|
|Selling, General & Administrative Expenses||74.29%||71.83%||69.37%||65.20%|
|Profit Before Interest and Taxes||26.47%||29.30%||32.13%||2.86%|
|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.|
|Accounts Receivable Turnover||4.56||4.56||4.56||N.A.|
|Accounts Payable Turnover||14.17||14.67||15.17||N.A.|
|Total Asset Turnover||1.84||1.55||1.26||N.A.|
|Debt to Net Worth||0||-0.02||-0.04||N.A.|
|Current Liab. to Liab.||1||1||1||N.A.|
|Net Working Capital||$120,943||$140,664||$160,385||N.A.|
|Assets to Sales||0.45||0.48||0.51||N.A.|
|Current Debt/Total Assets||4%||3%||2%||N.A.|
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