Forum: Ask a Studio Owner

Start up costs to open a studio???? Advice needed?
By tinydancr
On Thu Jan 01, 2009 06:06 PM

So I see all these posts regarding things I need to open a studio... however nothing about the realistic costs. Everyone says have lots of money as you will make none your first year. I'm not sure I get this.
Can someone help me out (i know this is asking alot) but help me to detail my budget and what I could expect to spend on things such as barres, mirrors, floors, stereos equipment. And hidden things such as taxes, insurance, etc etc?
I'm confident that my area needs a studio and I'm confident in my teaching abilities and ready to take it to the next level and become a director. I have a lot of great ideas, a fabulous location (that is currently for lease), I am passionate and buisness minded.
I just feel I need someone who is already successful telling me the correct steps to take prior to even writing my business plan. I have done my research as far as what things cost but I'd love to hear first hand.

In other words... what would you reccomend taking a loan out for to open a studio (approx 2500 sq feet)? And of course I welcome any other helpful tips :)

5 Replies to Start up costs to open a studio???? Advice needed?

re: Start up costs to open a studio???? Advice needed?
By bisousbisou
On Thu Jan 01, 2009 10:29 PM
Costs depend on so many things....what area of the country you are in for example. What is your rent + CAM? What kind of flooring are you going to be putting in? How much work are you going to have to put into your space or is the landlord going to do the build out? Insurance can vary depending on how many students you have and what you are teaching.

The one thing a lot of people forget when calculating their costs is your own "salary",in other words usually one teaches elsewhere and has teaching pay that they no longer will have when they open- you will need money to live on for a while.

Specifics are just that- specific to you and your particular situation.
re: Start up costs to open a studio???? Advice needed?
By Angelina32Premium member
On Fri Jan 02, 2009 07:21 AM
I'm in the midwest and I live in a small city (by small I mean we are just a few people moving away from being demoted back to village). My husband and I made up an spread sheet of all cost. Everything Rent, Ins, Office Supplies, Equipment, Postage, Ink, Payroll, taxes, everything and we came up with about $15,000.00. When I went to the bank for a business loan they gave me $20,000.00 which once I opened my doors, I was very thankful for the extra $5,000. Because I ended up moving locations 5 months after being open because I outgrow the first space. Good but bad problem.

National City Bank has a great Womens Business program.
Check with them.

I took all of this data in with me. After it showed all of my opening expense, I went through monthly bills, and showed my business running off of 25 students and added in the est. amount of income and showed the projected numbers for a year. I also inclueded how much I would be paying on my loan each month and when it should be paid off.

My husband did all of the work to get the studio started construction wise, so that saved me a ton of money. The marley flooring I bought was used from a company that rents to dance compitions so it was much cheaper than buying new.

Good Luck!
re: Start up costs to open a studio???? Advice needed?
By akmooreus
On Sat Jan 03, 2009 01:47 PM
We've recently gone through this process, so here is a checklist of things you should research locally:

Rent - Cost per square foot, plus CAM. In our area, warehouse space is $6-7 sf, retail space is anywhere from $12 sf to $21 sf, depending upon the neighborhood.

Utilities - Sometimes rent will include water, but not electricity. You'll want to find out and factor that into your estimated costs. If you are paying, count on a deposit of 1-2 months.

Phone - Basic business lines with voice mail can run $30 per month, per line. If you are in an area that has Broadband internet, you may be able to get an internet-based service for less. (Vonage)

Corporate registration - Check out your state's Dept of Corporations to determine the costs of Corporate, LLC, Partnership & Self-Proprietorship. When you Google it, you'll find a ton of places that will do it all for you, but they will charge about 3x the actual costs. If you have a little bit of common sense you can save a lot of money and do it yourself. To set up an LLC in Florida, with a Fictitious filing for our DBA, the total cost was about $250.

Business licensing - In Florida, you have to get both County and City Occupational/Tax licenses. For our particular studio, the cost was $180 for the City & $50 for the County. Also check with your State to make sure you don't need a state license. In Florida, you only have to have a state license if you offer ballroom.

Insurance - If you look around, you will find a very large range of pricing here. We were able to get a good policy for just under $500 per year. Extra events will need to be separately purchased, but this policy covers the weekly classes, plus 4 recital-type events and 4 fundraising-type events per year.

Advertising - You'll need to set aside some money for business cards, flyers, brochures, advertising, etc. The cost will depend upon the choices you make. Here are some guidelines, although if you research it, you may find better pricing:
- Business cards - $25 - 50
- Flyers - $20 (cost of paper & ink; self made)
- Brochures - $50 (cost of paper & ink; self made)
- Postcards - $100 (local printer)
- Website - $100 (domain, hosting, email & basic website, thru GoDaddy)
- MySpace, Facebook - free
- Email - free
- Newspaper ads - $50 - 500 (cost varies based on size of ad, newspaper)

Mirrors - $500 - 1000+ (cost depends upon portability, standard or glass-less, length, etc.)

Flooring - the most costly item in your studio, but the costs vary depending upon the type of subfloor you already have, the style of dance, etc. I found that you'll spend at least $5-6 sf, but you could go up to $12-15 sf if you are purchasing a high-cost subfloor and overlay. Do a lot of research on this. There's a sticky-thread just on this issue. Check it out.

Office materials, lobby furniture, cubbies for shoes, lockers, etc.... - all of these things will vary in cost based on what you decide you need/want.

Hope all of this helps.
re: Start up costs to open a studio???? Advice needed?
By bisousbisou
On Sat Jan 03, 2009 02:24 PM
akmooreus, I am also in Florida and my costs were almost double what you really does depend on where you are.
re: Start up costs to open a studio???? Advice needed?
By Dancr4ever
On Sun Jan 04, 2009 02:42 AM
Don't forget a website - a necessity. Email may be free but you have to pay for internet service. You also may want to purchase dance software for your computer.


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