In our latest episode, Jill Tirone sits down with Sean Dever, CPA to answer financial questions directly from our member group. Sean explains the intricacies of pricing discounts and profitability, why a non-profit may not be right for your studio and how dance studio owners can benefit from selling additional items like costumes and dancewear. Listen in as he shares his expertise and financial advice to help you avoid pitfalls and increase your profits in your dance studio business.
A budget is useless if you’re not keeping up with your bookkeeping.
[3:55] Sean is a firm believer in raising prices each and every year. Especially in a situation where we are now with inflation and the cost of products and goods increasing.
[4:29] Sean is not a fan of discounting. But with students who take multiple classes per week it is difficult to charge full price but we have to be sure not to give away the house.
[5:15] People are quick to discount the second class or the second hour. Sean suggests leaning toward the third class or fourth class (hour) before the discounts start to come into play.
[5:43] Understand your overall profitability and then work backwards to how much you can price and how much you can discount.
[8:15] Sean believes small business owners should be profiting on each and every item. We should always be profiting from everything we do because we have to include our time and the reason we’re in business is to profit.
[9:05] Many medium-sized studios break even on tuition. The way they’re making money is the sale of additional items like costumes, dancewear, and recitals. Therefore, it’s important to mark things up.
[11:15] Be careful when setting up a non-profit. Sean often sees them set up incorrectly and run incorrectly. There is high risk and compliance issues.
[11:50] Most of things you would like to do and that are legal, you can do outside of a 501(c)(3). You can still collect and raise money and donations as a for-profit business.
[13:50] If you’re considering a 501(c)(3) for your studio, there are certainly advantages, but you really want to be sure you get a lot of legal and accounting guidance from people who do this work every day.
[15:00] Sean is excited to answer the financially-based question… How do you set a dance studio budget for the year?
[15:15] Many times, dance studios are not looking at their books/records often enough. They’re only looking once a year at tax time.
[15:30] The budget is useless if you’re not keeping up with your bookkeeping.
[15:43] The best starting point for your budget is your prior year figures.
[16:25] Increase or decrease based on your current situation (rent increases, increase in tuition and fees, etc.)
[16:40] Look at your budget quarterly.
[17:20] Sean shares that being off just a percent or two in your budget can mean the difference between having a profitable business and an unprofitable business. That’s why creating a budget is so important.
Links Mentioned in this Episode…
Sean Dever is a CPA and financial planner based in Massachusetts.
He provides tax, accounting, payroll, consulting and financial services to Gymnastics, Dance, Swimming and other child sport centers throughout the United States. His specific areas of expertise include taxes, payroll, bookkeeping, financial planning, tax planning and business valuations for business buyers and sellers.
Besides his experience as an accountant, Sean has owned and operated several small businesses, including several gymnastics schools, a dance studio, an inflatable rental company and most recently a swimming school!
Sean is a consultant for small business owners and has been a speaker for the USA Gymnastics, US Swim School Association, Rhee Golds Dance Life Teachers Conference, Dance Teacher Summit, Jackrabbit Boost Conferences, and the BostonBizExpo.com conferences since 1996.
For more information, please visit his website at www.devercpa.com.