Dance Lessons Business

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Author: Paul Greenland
Editor: Donna Craft
Date: 2018
Business Plans Handbook
From: Business Plans Handbook(Vol. 41. )
Publisher: Gale, a Cengage Company
Document Type: Topic overview; Business plan
Pages: 7
Content Level: (Level 5)

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Page 41

Dance Lessons Business

You Can Dance! Inc.

Fleetwood Mall
27445 Ranger Road
Fleetwood, IL 62335

Full Text: 

Paul Greenland

You Can Dance! Inc. is a unique provider of dance instruction, with an entertainment focus in a mall-based location.

EXECUTIVE SUMMARY

The dominance of online retailers such as Amazon has had a major impact on brick-and-mortar retailers. As a result, shopping malls throughout America have witnessed the exit of retailers large and small. While consumers are doing more of their shopping online, they also are spending more on experiences, as opposed to merchandise, according to some analysts.

In the wake of these trends, some shopping malls have focused on becoming neighborhood “multi-malls,” which offer an eclectic mix of options for customers beyond retail stores, such as spas, fitness centers, and bowling alleys. Additionally, some malls are beginning to offer a wide range of lessons, including martial arts, soccer, music, and fitness.

You Can Dance! Inc. is a unique provider of dance instruction, with an entertainment focus in a mallbased location. The business, which is anticipating profitability during its first year, is located in the Fleetwood Mall, which offers affordable lease terms, options for future expansion, a convenient location, and strong foot traffic. The business is owned and operated by three experienced dance instructors, one of whom has extensive small business management experience.

INDUSTRY ANALYSIS

Worldwide, millions of people dance every day. While some dance competitively, many more do so for the sheer fun of it. In addition to being an enjoyable activity, there are other benefits associated with dancing. For example, dancing not only helps to relieve stress, but also is an excellent form of exercise.

A leading organization in the dance industry is the National Dance Council of America ( www.ndca.org ). With roots dating back to 1948, the organization bills itself as “the official governing council of dance and dancesport in the USA.” A total of 17 member organizations, representing about 25,000 dance professionals, belong to the NDCA. According to the organization, its purpose is “to provide, on a nation-wide basis, a united inter-association agency to represent the interests of those in the dance profession and other dance-related entities and organizations and to act as the agency for cooperation with similar councils in other countries.”

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MARKET ANALYSIS

Market Overview

You Can Dance! is located in Fleetwood, Illinois, which was home to a population of about 115,350 people in 2016 (47,500 households). That year, household income broke down as follows:

$0-$9,999—9.5%

$10,000-$14,999—5.3%

$15,000-$24,999—12.2%

$25,000-$34,999—10.4%

$35,000-$49,999—12.6%

$50,000-$74,999—17.3%

$75,000-$99,999—12.1%

$100,000-$124,999—7.8%

Following is a breakdown of the local market by age bracket:

0-4—7.7%

5-14—13.1%

15-19—6.7%

20-24—7.9%

25-34—15.2%

35-44—11.8%

45-54—11.5%

55-64—11.7%

65-74—7.4%

75-84—4.1%

85+—2.4%

Target Markets

You Can Dance! has three key target markets:

  1. Children Ages 4-7 (combo classes)
  2. Teens & Young Adults (walk-in jazz/hip-hop lessons)
  3. Adults 35+ (ballroom dancing)
Traffic Projections

Although traditional retail traffic at the Fleetwood Mall has declined in recent years, mirroring state and national trends, a growing number of entertainment and hospitality-related businesses have enabled it to remain a popular and relevant community destination. Working in partnership with mall management, the owners of You Can Dance! have calculated likely traffic volume patterns for the business' first year of operations.

Based on You Can Dance!'s maximum capacity (20 customers at any given time), the owners have calculated average capacity percentages for different time slots throughout the week, which are summarized in the following table:

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Dance Lessons Business

Competition

The Fleetwood market is home to 83 businesses that fall within the amusement and recreation services category. There are four dance studios that provide individual and group instruction. However, with its recreational focus and mall-based location, You Can Dance! has a unique business model, which will differentiate it from the competition.

SERVICES

You Can Dance! will be somewhat unique by the virtue of its location and focus. Compared to traditional dance studios, which often have more technical/competitive offerings, You Can Dance! will have more of an entertainment/recreational focus, appealing mainly to teens and adults who want to dance for fun. In addition, the business will generate the majority of its income from walk-in (often one-time) dance lessons, as opposed to studios that provide education on a longterm basis.

On an hourly, walk-in basis, the business will offer fun, high-energy hip-hop/jazz classes that allow participants a significant degree of flexibility and expression. Lessons, which cost $20 per person for 60 minutes of instruction, will be limited to groups of 10 participants per studio room at any given time. Each dance session will begin with a quick survey (show of hands) to assess the skill level of all participants, allowing the instructor to modify the lesson to meet the needs of the group overall.

Despite its unique focus, You Can Dance! will offer a limited selection of traditional dance lessons for both children and adults (four-lesson minimums), including:

Combo (children 4-7)

Because of its mall-based location, You Can Dance! will appeal to parents who wish to get a little shopping done, or enjoy coffee or dinner, while their children burn off some steam taking dance lessons. For children ages 4-7, the business will offer combo classes (jazz/ballet/tap). Classes will be organized into beginner, intermediate, and advanced levels.

Ballroom (adults)

For adults, You Can Dance! will provide ballroom dancing lessons on Friday and Saturday nights. Participants may learn one of several types of ballroom dancing, including Cha Cha, mambo, waltz, tango, samba, rumba, foxtrot, jive, and quickstep.

Traditional lessons will be offered at a rate of $15 per lesson ($60/month).

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OPERATIONS

Location

You Can Dance! will begin operations in the Fleetwood Mall, where a facility has been leased at an annual cost of $22,750 ($1,896/month). The facility includes an inviting reception area and two glass display windows that are capable of featuring either a large video monitor or an occasional demonstration by up to two live dancers. Upon entering the reception area, visitors will hear highenergy dance music and see looping video footage of customers having fun and learning how to dance.

The facility includes two 1,500-square-foot, climate-controlled studio spaces, equipped with high ceilings, mirrors, rails (needed for youth combo lessons), and sound systems. Interested customers can watch group lessons take place through large viewing windows on the outside studio wall facing the entrance. A small office area for the owners also is included.

The Fleetwood Mall has agreed to modify a former retail area to meet the needs of You Can Dance! by adding several walls. The owners have hired a contractor to install the mirrors, rails, and sound systems at a total cost of $15,000.

Policies
  • You Can Dance! can accommodate a maximum of 20 customers at any given time (10 customers per studio space). If maximum capacity is reached, customers must wait for the next session.
  • Lessons are provided in 60-minute sessions.
  • Although walk-in lessons are available at any time, combo and ballroom (offered in blocks of four, one lesson/week), must be scheduled and paid for in advance.
  • Participants do not receive refunds for prescheduled lessons that are missed. However, combo and ballroom lessons may be rescheduled with 24-hour notice.
  • Staff members reserve the right to decline customers who are disruptive or are wearing attire that is considered to be inappropriate.
  • Guests are encouraged, but not required, to wear loose-fitting, comfortable clothing to have the most enjoyable experience possible.
  • For safety reasons, customers may be asked to remove their jewelry during lessons (lockers are available in the reception area for a small fee).

PERSONNEL

You Can Dance! is being established by Mariah McDaniel, Taylor Parker, and Cindy Lewandowski. The owners are all experienced dancers who have worked as instructors for traditional dance studios in other markets. McDaniel's background includes 11 years as a competitive dancer and a stint choreographing for Western College's dance program. Parker was an instructor for many years at the Arthur Murray Dance Studio. Finally, in addition to teaching dance privately for 14 years, Lewandowski has experience running several small businesses and worked as a bookkeeper for a local accounting agency. Her business background will be a true asset at You Can Dance!

Independent Contractors

The owners have developed a list of reputable local dance instructors with whom they will contract independently for weekly blocks of dance instruction. This will provide the flexibility to scale the Page 45  |  Top of Articlebusiness' workforce up and down without hiring dedicated employees. Based on demand, You Can Dance! will consider hiring additional instructors after its initial year of operation.

Professional & Advisory Support

You Can Dance! has established a business banking account with Fleetwood Community Bank, including a merchant account for accepting credit card payments. Tax advisement is provided by Lewis & McGill.

GROWTH STRATEGY

Year One: Focus on establishing You Can Dance! as a recreation destination in Fleetwood. Concentrate on getting new customers through cross-marketing to passersby at the mall and word-of-mouth/social media promotion. Generate total gross revenue of $675,000.

Year Two: Continue generating awareness about You Can Dance! Consider hiring two additional fulltime instructors and offering more traditional dance instruction by adding additional sections of combo and ballroom dancing. Increase gross revenue 15 percent, to $776,250.

Year Three: Build on the business' differential as a unique dance instruction provider by adding exercise/activity-focused dance classes for highly targeted niche markets, including individuals with special needs and senior citizens. Increase gross revenue 15 percent, to $892,688.

Following the business' first three years of operations, the owners will evaluate the possibility of expanding to a larger facility within the Fleetwood Mall.

MARKETING & SALES

You Can Dance! has developed a marketing strategy that includes the following tactics:

  1. Distribution of coupons for half-price lessons throughout the mall to encourage attendance during periods of low volume.
  2. A presence on social media outlets, including Facebook, Twitter, YouTube, and Instagram, and social media-only specials for followers.
  3. Mini (60-second) public dance contests (2-4 participants) in the reception area of You Can Dance! that offer a certificate for one free lesson to the winner.
  4. Publication of an online profile in The Fleetwood Courier's local entertainment directory.
  5. Advertising on Fleetwood's local top 40 station, WFLT, including lesson giveaways and quarterly on-site broadcasts.
  6. Eye-catching signage and energetic, engaging music to attract the attention of mall guests.
  7. Exciting dance exhibitions/demonstrations in the store windows and reception area of You Can Dance! to attract the attention of passersby and generate buzz.
  8. Video monitors near the facility entrance that show customers participating in classes.
  9. A Web site with complete details about You Can Dance!, including lots of video clips and photos showing the fun, high-energy environment. Additionally, the site also will provide customers with the ability to pre-register for four-week classes.
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FINANCIAL ANALYSIS

You Can Dance! has prepared a complete set of pro forma financial statements, which are available upon request. Following is a breakdown of projected weekly revenue, based on expected mall traffic data provided by the management of Fleetwood Mall.

Weekly Revenue


Dance Lessons Business

Annual Revenue & Expenses

Following is a detailed breakdown of projected revenue and expenses for the business' first year of operations:

Revenue

Walk-in Lessons—$540,000

Traditional Lessons—$135,000

Total Revenue—$675,000

Expenses

Telecommunications—$1,650

Maintenance & Repairs—$500

Business Loan—$18,253

Accounting & Legal—$3,750

Payroll—$240,000

Payroll Taxes—$36,000

Independent Contractors—$115,000

Janitorial Services—$10,500

Utilities—$8,650

Miscellaneous—$2,500

Marketing & Promotion—$40,000

Facility Lease—$22,750

Total Expenses—$499,553

Net Income—$175,447

Page 47  |  Top of Article Startup Costs

The owners of You Can Dance! anticipate startup cost of $30,000, which they will divide equally and pay from personal savings:

Facility Improvements—$15,000

Sound Systems—$2,500

DVD Players—$350

Video Monitors—$6,500

Office Supplies—$600

Décor—$700

Office Furniture—$850

Reception Furniture—$3,500

TOTAL—$30,000

Financing

You Can Dance! is expecting to be profitable during its first year. However, the business' owners are requesting a business loan of $50,000 (36-month term, 6% interest) from Fleetwood Community Bank to provide working capital.

Source Citation

Source Citation   

Gale Document Number: GALE|CX3665700013