How to Start a Dance Studio

Start a dance studio by following these 10 steps:

1. Plan your Dance Studio
2. Form your Dance Studio into a Legal Entity
3. Register your Dance Studio for Taxes
4. Open a Business Bank Account & Credit Card
5. Set up Accounting for your Dance Studio
6. Get the Necessary Permits & Licenses for your Dance Studio
7. Get Dance Studio Insurance
8. Define your Dance Studio Brand
9. Create your Dance Studio Website
10. Set up your Business Phone System

We have put together this simple guide to starting your dance studio. These steps will ensure that your new business is well planned out, registered properly and legally compliant.

Exploring your options? Check out other small business ideas.

STEP 1: Plan your business

A clear plan is essential for success as an entrepreneur. It will help you map out the specifics of your business and discover some unknowns. A few important topics to consider are:

• What will you name your business?
• What are the startup and ongoing costs?
• Who is your target market?
• How much can you charge customers?

Luckily we have done a lot of this research for you.

What will you name your business?

Choosing the right name is important and challenging. If you don’t already have a name in mind, visit our How to Name a Business guide or get help brainstorming a name with our Dance Studio Name Generator

If you operate a sole proprietorship, you might want to operate under a business name other than your own name. Visit our DBA guide to learn more.

When registering a business name, we recommend researching your business name by checking:

• Your state's business records
• Federal and state trademark records
• Social media platforms
• Web domain availability.

It's very important to secure your domain name before someone else does.

What are the costs involved in opening a dance studio?

The two main costs associated with a dance studio are the cost of a building and the cost of insurance. A building requires a large investment of capital, and the building’s taxes and mortgage should be included in the total building costs. Additionally, a studio should have a reserve fund available in case the building needs an emergency repair. Regarding insurance, a dance studio should have robust liability protection that covers all students, instructors, guests and events held in the building.

Dance studio can get started for much less in one of the following ways:

• Leasing and renovating an existing commercial space as opposed to constructing or purchasing a brand new studio
• Purchasing or leasing less expensive commercial space that’s smaller or in a less busy part of town

What are the ongoing expenses for a dance studio?

The ongoing expenses for a dance studio include the upkeep costs, mortgage and taxes associated with the studio’s building, employee salaries, and the studio’s insurance premiums. Building costs will depend on the value and size of a studio’s building, but will easily be at least several thousand dollars (and possibly tens of thousands of dollar) each year.

Who is the target market?

There are many ways to start a successful dance studio. However, most studios fall into one of two categories:

• Traditional Studio: traditional dance studios provide an educational space for movement arts, such as ballet, jazz, or even hip hop. While lessons can be offered to customers of all ages, many studios specialize in group or private lessons for children and teens. In addition to offering lessons, studios often organize dance performances or competitions for their students.
  

• Active Lifestyle Studio: a growing number of dance studios offer an alternative to hitting the gym. These studios offer instructor-led sessions in active dance styles, such as Zumba or Aerial Silk. This style of studio appeals to adults looking for a fun way to lead a healthier, more active lifestyle.

If a dance studio employs its own instructors, ideal clients include children and students from affluent families who are passionate about dance can afford to attend regular classes.

If a studio does not employ its own instructors, its primary clients would then be instructors - dance enthusiasts who often have professional dancing experience. They may be past dancers or still regular performers.

The dance instructors that a studio serves don’t need to be wealthy, but it helps to have a studio located in an affluent area as residents have discretionary income to spend on dance lessons, which can increase the number of dancers instructors have to teach. The more students they have to teach, the more often they’ll need a space to offer classes and lessons.

How does a dance studio make money?

A dance studio typically generates revenue in of two ways:

• By leasing studio space to independent dance instructors. Classrooms, the performance space and the entire building can be rented out.
• If a dance studio directly employs its instructors, then the primary income source will be class fees paid by dance students.

A studio can also sponsor recitals and/or bring in a special guest instructor. The studio could then acquire money through ticket sales and class fees.

How much can you charge customers?

Dance studio’s rates usually vary with when instructors want to use the space. During peak times, rooms may go for $100 an hour or more. On off-peak hours, fees may be closer to $20 to $30 per hour. These expenses are usually charged per-room, so a studio that has several classrooms can multiply its income by the number of rooms available.

Dance class fees typically range from $50-150 per student per class. Fees can be charged on a per class basis, or as part of a seasonal membership.

How can you make your business more profitable?

Dance studios can increase their revenue by offering special events, such as guest dance instructors and recitals. They can also rent out any performance space they have for dance-themed parties and other events.

STEP 2: Form a legal entity

The most common business structure types are the sole proprietorship, partnership, limited liability company (LLC), and corporation.

Establishing a legal business entity such as an LLC or corporation protects you from being held personally liable if your dance studio is sued.

You can form an LLC yourself and pay only the minimal state LLC costs or hire one of the Best LLC Services for a small, additional fee.

STEP 3: Register for taxes

You will need to register for a variety of state and federal taxes before you can open for business.

In order to register for taxes you will need to apply for an EIN. It's really easy and free!

There are specific state taxes that might apply to your business. Learn more about state sales tax and franchise taxes in our state sales tax guides.

STEP 4: Open a business bank account & credit card

Using dedicated business banking and credit accounts is essential for personal asset protection.

When your personal and business accounts are mixed, your personal assets (your home, car, and other valuables) are at risk in the event your business is sued. In business law, this is referred to as piercing your corporate veil.

Open a business bank account

Besides being a requirement when applying for business loans, opening a business bank account:

• Separates your personal assets from your company's assets, which is necessary for personal asset protection.
• Makes accounting and tax filing easier.

Get a business credit card

Getting a business credit card helps you:

• Separate personal and business expenses by putting your business' expenses all in one place.
• Build your company's credit history, which can be useful to raise money later on.

STEP 5: Set up business accounting

Recording your various expenses and sources of income is critical to understanding the financial performance of your business. Keeping accurate and detailed accounts also greatly simplifies your annual tax filing.

Make LLC accounting easy with our LLC Expenses Cheat Sheet.

STEP 6: Obtain necessary permits and licenses

Failure to acquire necessary permits and licenses can result in hefty fines, or even cause your business to be shut down.

State & Local Business Licensing Requirements

Certain state permits and licenses may be needed to operate a dance studio business. Learn more about licensing requirements in your state by visiting SBA’s reference to state licenses and permits.

Service Agreement

Dance studios should consider requiring clients to sign a service agreement before starting a new project. This agreement should clarify client expectations and minimize risk of legal disputes by setting out payment terms and conditions, service level expectations, and intellectual property ownership. Here is an example service agreement.

Recommended: Rocket Lawyer makes it easy to create a professional service agreement for your dance studio when you sign up for their premium membership. For $39.95 per month, members receive access to hundreds of legal agreements and on call attorneys to get complimentary legal advice.

Music Licensing

Dance lessons typically involve music. In order to offer music in a business setting, permission must be acquired from the composer or license holder. Typically, it is possible to obtain “blanket” license allowing a businesses to play music owned by a large catalog of artists and recording studios. Such licenses can be obtained from Performance Rights Organizations, such as ASCAP and BMI.

• Learn more about music licensing requirements

Certificate of Occupancy

To start this kind of business, owning or leasing a physical dance studio is must. Businesses operating out of a physical location typically require a Certificate of Occupancy (CO). A CO confirms that all building codes, zoning laws and government regulations have been met.

• If you plan to lease a studio:
• It is typically the landlord’s responsibility to obtain a CO.
• Before leasing, confirm that your landlord has or can obtain a valid CO that is applicable to your type of business.
• After a major renovation, a new CO often needs to be issued. If your place of business will be renovated before opening, it is recommended to include language in your lease agreement stating that lease payments will not commence until a valid CO is issued.

• If you plan to purchase or build a studio:
• You will be responsible for obtaining a valid CO from a local government authority.
• Review all building codes and zoning requirements for you business’ location to ensure your Dance Studio will be in compliance and able to obtain a CO.

STEP 7: Get business insurance

Just as with licenses and permits, your business needs insurance in order to operate safely and lawfully. Business Insurance protects your company’s financial wellbeing in the event of a covered loss.

There are several types of insurance policies created for different types of businesses with different risks. If you’re unsure of the types of risks that your business may face, begin with General Liability Insurance. This is the most common coverage that small businesses need, so it’s a great place to start for your business.

Another notable insurance policy that many businesses need is Workers’ Compensation Insurance. If your business will have employees, it’s a good chance that your state will require you to carry Workers' Compensation Coverage.

Is this Business Right For You?

Anyone with access to a commercial space that can be adapted into a couple of classroom sized rooms and a larger performance area might consider opening a dance studio.

A passion for and knowledge of dance is helpful, but not necessary because the studio owner doesn’t necessarily have to be the instructor, but can hire or lease space to one or more instructors.

What happens during a typical day at a dance studio?

 Some of the common day-to-day activities at a dance studio include:

• Creating lesson plans
• Offering regular dance lessons
• Planning and coordinating performances 
• Taking phone calls and answering inquiries from parents and potential students
• Cleaning and general maintance tasks - either performed by the owner or outsourced to other companies

What are some skills and experiences that will help you build a successful dance studio?

Whether or not your will be teaching lessons yourself, some background knowledge on different styles of dance can help you determine which instructors to hire and what types of lesson to offer.

It’s also useful to know how to handle basic maintenance tasks such as fixing broken lights, unclogging drains and repairing doors. These skills can greatly reduce how much a dance studio has to spend on repair and service calls.

First-aid knowledge will come in handy if a student or instructor is injured during a lesson.

What is the growth potential for a dance studio?

A dance studio is usually a single building that serves the surrounding community. The size of the building can vary, depending on how much demand there is for dance lessons in the area. Some studios only have one or two classrooms, and a performance space. Others have several stories of classrooms and a few performance spaces of different sizes.

A few studios have several locations within a region, but this is not common.

Should you consider joining a franchise?

Joining a dance studio franchise can be a good option for entrepreneurs who prefer to use a proven model rather than start from scratch. While joining one can mean slightly higher initial costs and less control, a quality franchise offers great benefits such as initial and ongoing support, marketing assistance, and brand recognition.

Opening a dance studio franchise typically requires $15,000-$500,000. Larger dance studio franchises like Jazzercise typically cost more, while more niche favorites like Tutu School and Kinderdance often have lower startup costs.

Interested in joining a dance studio franchise? Check out our favorites.