Cost of Running a Dance Studio

Don't underestimate the proportion of social dancers who are retired: the majority, I reckon. Nevertheless, the demand for daytime weekday instruction is very limited. Which is another good reason not to want to be saddled with a studio 24x7 ....

People are retiring later these days, unless they were laid off towards the end of their careers and can't find another job, in which case they're forced to retire early. But that segment is less likely to have a lot of extra $$ to pay for private lessons.

The least attractive aspect of being a peripatetic teacher (hiring floor space by the hour) is that it is difficult to make much money from private lessons anyway, unless you work with another teacher (who schedules the same working hours as you), so that you can share the floor cost. However, if I was able to command the hourly rates that seem to be the norm in US, I wouldn't worry very much about the floor rent, but here in UK, private lesson rates for a couple are rarely more than 3x the rate for attending a group class, and so it's classes that make the money.

If I had a studio, then I would need to work a minimum number of hours every week just to cover my studio's fixed costs, and then any additional hours I worked would yield 100% marginal profit. Of course, if I was using staff to deliver the lessons, I would have wages to pay, but no other marginal costs. However, as I am renting space by the hour, I always have the incremental cost of one more hour of rent if I teach one more hour, so the balance is different. I only teach privately, therefore, at times when I am unlikely to be able to attract viable numbers to group classes, and judge for myself the point at which the extra effort to do more isn't worth the modest financial reward.

I may be wrong, but I think that group classes are not a key earner in the US studio system (and may even be free to attend, alongside a 'package of private lessons'). Here, 90%+ of students would laugh in your face if you suggested buying more than one lesson at a time, or paying for it in advance. US rates too, seem astronomical. Just about the only sector of the industry, here, where prepayment is the norm is in the further education / adult education colleges, who require enrolment for a term at a time, and who run dance classes (sometimes of dubious quality) along with flower arranging, cake decorating and other similar subjects. In that sector, rates are pretty cheap, and prepayment is no real obstacle to enrolment.

One of my own teachers used to say how glad she was never to have acquired a studio, despite having had several opportunities to over the years. The industry has gone through ups and downs, and business is pretty tough, now. It must be pretty depressing to HAVE to work many hours a week, just to break even, and then only being able to make a profit by finding additional work. I rent my floor space hour-by-hour, and any activity that isn't profitable I can drop. I can make a modest amount working just one evening a week, and take on just the amount of work that I want to do (and need to do to pay my own bills, of course). I never have to risk making a loss. If a particular new class doesn't attract viable enrolment, I drop it, and try something else. I doubt there's much difference in that issue between the US & UK, but if the opportunity to acquire a studio came up here, I doubt I would be interested.

Just about the only thing that would attract me would be to acquire the premises themselves outright, as a long term commercial investment, but the building would have to be readily suited to alternate uses, not just as a dance studio. I would look upon the investment return foregone on an alternate use for my capital as the opportunity cost of not having studio rent to pay, but I would still have to work many hours a week to cover the other fixed costs that went with having the place, and those costs don't change much, regardless of whether you own or rent.

Are you talking about actually owning the building with the studio or renting it from the owner of commercial real estate? I thought the latter is a more typical setup for pretty much any small business, and the renters get to set up their space as they need for a studio, or a store or an office.

That depends upon the operation.. groups are the reason many studios are in business, and they are "sold", many times in small packages 4/5 lessons.Most of the studios in one southern city, has large group attendances, and they are pay as you go type ( sometimes right before a party/social.. I taught those every week for a yr in one school, never had less than 40 people.. beginners ! )

Many Chain schools do normaly include classes with private, but not always. One A/m school I coached out of for 10 yrs, never sold groups in packages, only charged them individually . This reduces liabilty of large groups left, at end of private lessons .

As to private lessons stateside, the price rates are very wide spread from as little £20 an hr up to £ 50 depending on location and teacher .

Yes, owning the building itself. It wouldn't be everyone's choice, and many couldn't raise the money, even if they wanted to, but I am lucky enough to have the capital, but it is currently invested elsewhere...

Very informative, UKD. I know three "gypsy" teachers and they seem to be doing ok, even with the economy crashing here in the US. Two do have part-time side jobs though

@Tanya, virtually all the studios around here do rent a unit in a commercial development and modify the interior as need be. I've wondered how a studio owner would do if (s)he did buy a 4- or 6-unit strip mall and rented out 3-4 units. Current problem is that there's a lot of vacant commercial RE here.

(I know a couple landlords who own 3-flat dwellings, live in one and rent the others. They seem to be doing well too.)

I thought so too. I only know one studio whose owner owns the building, but they basically converted their first floor to be a studio. It's a very small ballet place. There were two other places with similar setup, but a bit bigger, in one case it was a house in mixed-zoning section and the teachers just rented it, had a studio on the first floor and lived above it, and another one with similar idea, I am not 100% sure, but it seems like they own it because they do repairs a landlord would be normally responsible for.

But I'm not following UK's comments that if you rent space by the hour you have to share it with someone else and split the rent. The setup I'm used to is that the owner of the space gets paid his hourly floor fee from a lesson ($15 per hour is the going rate here), if two teachers rented it at the same time, he gets two floor fees, etc. So what's to split here?

I am doing both. I teach at a studio five nights a week, of variable length (sometimes I am fortunate enough to be booked up all evening, sometimes only one or two a night) and work during the day. I am lucky, in that my day job is flexible and really only demands that I be in my office physically three or four days a week, for somewhere between four and six hours each day. Everything else, I can more or less do from home.

If I had to be in every day from 9-5 there is no way I could do it. I should add, I don't have a partner or children, and I am not yet thirty.

It works great for now, but it's not for everybody, to be sure.

The point is that when renting floor space (not in a dedicated studio, where the arrangements may well be different), the rent is fixed. If you teach alone, the price you can get for a lesson (or a class) has to bear the whole of that rent, and that can make the profitability of private lessons (at the going rate) rather marginal. However, if you can share the floor with another teacher, there is no additional rent to pay at all, and each gets the (shared) use of the floor for half the solo price. That makes private lessons much more profitable.

I would expect the arrangement to be different in a studio (the one I use just shares the revenue equally, so they are quite cheap as a lesson venue, but very expensive for classes), and no doubt there are lots of variations, but I'm writing mostly about hiring somewhere like a community hall, or the function room of some sort of social club.

*bump* on behalf of a new DFer.