Each year, Jackrabbit Dance gathers data from dance studios around the world to bring you the annual Dance Studio Industry Benchmark Report. Key metrics like class size, discount percentages, and month-to-month income growth are all integral to the success of your dance studio. But without context, these numbers may leave you with more questions than answers.
- Do I have the right class size to maximize tuition revenue?
- Am I offering too many family and student discounts?
- Should I consider adding more staff to my roster?
The list goes on. In the 2023 Dance Studio Industry Benchmark Report, we share industry benchmarks compiled from 4 years of data and dance studios in 23 countries. This will help you compare your studio’s performance against other dance programs worldwide. With this knowledge, you’ll be able to identify opportunities for growth in your program and where you should focus most of your attention. Here are some key findings.
Expenses are Up
Pinching pennies is the norm for most dance studio owners. Finding out where to cut expenses and invest in other areas of your studio is a general rule of good business. Through the Benchmark Report findings, we discovered that the general cost of business is up. Here are some ideas to maximize profits while minimizing expenses.
Minimizing Operating Costs
To ensure that your resources are being allotted to the right buckets, here are a few things that you can look at as you review expenses.
- Rent or buy with a purpose in mind – Make sure you have enough space to run the classes you need, but not so much space that you have empty areas you aren’t utilizing. Move some classes around the schedule or combine some classes before seeking additional space.
- Evaluate insurance policies – Your insurance premium often rests on the idea that dance can be a high-injury sport and you are teaching younger audiences. Evaluate insurance policy coverage and shop around for rates before settling on one.
- Use automation to minimize management costs – Cut down those to-do lists, enhance customer experience, and keep track of anything and everything easier with dance studio management software.
- Run regular reports – Collecting and analyzing data is the best way to keep a pulse on money coming in and money coming out. Create a baseline with reports like revenue summaries, reconciliation, and more.
After reviewing your large expenses and reporting, take a moment to look at your own salary and the salaries of your employees. Many financial advisors would recommend paying yourself a modest salary and basing it on your own personal expenses.
Since 2020, dance studio owners have increased their staff salaries by an average of 4% in an effort to combat staff turnover. Utilizing more streamlined processes and ensuring a positive staff experience is the best way to increase staff loyalty. Some ideas for streamlining processes at your dance studio include:
- Use a Staff Portal with a Time Clock
- Allow staff to take PTO when possible and make the process of finding substitutes easier
- Offer a self check-in option so staff can focus on making personal connections with students and families (added bonus → you can save money on payroll expenses with self check-in)
- Get rid of excess platforms and use an all-in-one solution instead
It’s easy to get frustrated with inflation and rising costs as a dance studio owner. While you can’t stop it in its tracks, by keeping a pulse on your own expenses and knowing where your money is going, you can plan for market changes – and, if anything, knowing that you are not alone in experiencing rising expenses should help.
Scaling for Growth
In the last two years, dance studios have seen an average of 19% student growth. With this comes questions of ‘How can I optimize my studio space?’ and ‘What is the best way to continue slow and steady growth?’.
How Can I Optimize My Studio Space?
Deciding on your dance studio class size is dependent on a couple of factors. It is important to consider the types of classes you offer and the experience you want your students to have. Figuring out what your ‘breakpoint’ is or in other words, what your student-to-teacher ratio is, is the first step to identifying areas of growth.
If your student-to-teacher ratio is one teacher per eight students for ages 5-7, enrolling nine students will affect your student and customer experience. Enrolling five students in the same class is hurting your bottom line and profitability. Obviously, getting as close to your breakpoint is the best option for your studio’s success.
In 2021, 11% of dance studios added new classes to the schedule, and in 2022, 3% of studios added new classes to account for student growth. After looking at enrollment reports, decide if you can combine classes if they are under enrollment or split into multiple classes if they are over enrollment and impacting student experience.
What is The Best Way to Continue Slow and Steady Growth?
Dance studios often have to find the sweet spot for enrollment growth. Too fast and the risk of not providing a positive experience to every family grows. Too slow and there is an increasing risk to your studio’s bottom line.
Carolyn Wells with Dance by Design Studio found that her perfect growth formula included web integration, a combination of class listings on her website, and an online registration form with dance studio management software. Read more about her 286% increase in student enrollment during her first year with Jackrabbit Dance here →
Whether you’re increasing your enrollment through word-of-mouth marketing, summer camp offerings, or good ole’ fashioned email marketing – you need to increase your staff too. Staffing has been a hot topic in the dance industry as many struggle to keep full schedules. In 2022, staffing issues prevailed but studios as a whole did see an increase in staff count. This allowed studio owners to focus on streamlining the staff scheduling process and hiring the best teachers out there.
It’s no secret that finding dance studio teachers can be difficult. Some things to focus on as you begin the hiring process include:
- Improve your careers page
- Use non-traditional job posting channels
- Forget about geography
- Build your own influencer network
With those things in mind, you’re ready to start recruiting and will be able to keep up with enrollment growth with ease.
Every dance studio has a slightly different business model. Whether you charge per class, offer fixed fees, have a merchandise store, or offer ePayments, you find what works best for your studio. The 2023 Dance Studio Industry Benchmark Report uncovered some revenue risks and opportunities for your studio and studios across the world.
Dance Studio Tuition
Many studios are at risk of over-discounting and 51% of classes were discounted or prorated at small and mid-market-sized studios. With the increase in business costs, this is a risky game. Dance studios offer one of three tuition models, depending on what works best for them and the community they serve. These models include:
- Tuition by class – Often used when studio owners want to offer discounts for taking multiple classes
- Tuition by total hours – Usually has a multi-class discount built-in
- Tuition by fixed fees – Overrides fee structure to any class and is usually used for competition teams or pre-professional students
It is up to you to decide if one tuition type works for your studio or a combination of multiple types is best by running regular financial reports. While discounting does provide some risk, there are ways to combat it. Offer waitlists for classes or let parents schedule a makeup class when their child is absent. There was an average of 14 students on the dance studio class waitlists in 2022, showing dance classes are still in high demand.
Convenience is the way of the future and there are many benefits to changing processes at your studio to increase convenience for families. One of the big opportunities lies in ePayments. There are multiple benefits including saving yourself and your families’ time, removing human error, built-in reminders, and offering flexible billing schedules.
Pulling from four years of data, 46% of dance studios processed contactless, automatic ePayments each month. That leaves much room for opportunity.
Interested in getting started with ePayments? Here are 5 steps to get started →
Expand Dance Studio Offerings
Increasing revenue doesn’t have to depend solely on increasing enrollment and tuition fees. Consider an online or in-studio store. Begin offering events like summer camps, birthday parties, master classes, or even a parent’s night out. With the return to a more traditional class schedule in 2022, don’t forget about the creative ways you can bring in additional revenue.
The 2023 Dance Studio Industry Benchmark Report found lots of data and some key metrics for your studio to learn from. As dance studios head into the rest of 2023, owners and managers will turn to increased reporting capabilities, a focus on automation to help staffing, and a renewed focus on policy.
Download the report to see the big statistics and get some next steps for your own studio’s 2023 business plan.