Feasibility Study
Bob’s School of Dance
Mission Statement
The mission of Bob’s School of Dance is to instruct individuals in the art of dance in an inspiring, creative, positive, and structured environment to instill discipline, passion, and self-expression.
Table of Contents
Business Description……………………………………………………………………………..3
Industry Assessment………………………………………………………………………………3
Market Assessment…………………..……………………………………………………………4
Financial Assessment……………………………………………………………………………..6
Works Cited………………………………………………………………………………………8
Appendix A……………………………………………………………………………………….9
Business Description:
Bob’s School of Dance is a dance studio that provides the instruction of dance—ballet, tap, and jazz to students looking to become more poised and self-expressed.
Industry Assessment:
There are 55 million children ages 3-18 in the United States. Currently about 43 percent of American children in grades K-12 receive instruction in dance. Out of these children, about 23 million, or half, are female. Approximately six percent are instructed in the art of dance by qualified PTE and FTE Dance Specialists. In the past year over 3,500,000 children between the ages of 3 and 18 have taken dance lessons and this represents $1,750,000,000 dollars spent on dance clothes, dance recitals, dance lessons, dance shoes, and other dance accessories. An average student will spend $500 each year for dance (Statistics on Dance Education and Careers in Dance).
Although the dance industry has grown significantly over time, the dance industry today remains flat. More and more individuals are becoming interested in popular culture dance because of shows like “America’s Next Dance Crew,” “Shake it Up,” and “Dancing with the Stars;” however, the number of people interested in ballet, tap, and jazz is remaining constant. Regardless, traditional dance performances, such as the “Nutcracker,” still sell out annually at Christmastime.
This industry is quite resilient. “Today’s ballet repertoire offers great variety. New ballets and reconstructions and re-stagings of older ballets coexist with new works created by modern-dance choreographers for ballet companies. Choreographers experiment with both new and traditional forms and styles, and dancers constantly seek to extend their technical and dramatic range. The frequent tours of ballet companies allow audiences throughout the world to experience the full spectrum of today’s ballet activity” (History of Ballet). The variety of dance classes offered have kept individuals interested in the art of dance.
Barriers of traditional ballet, tap, and jazz dance classes are the new and emerging differing forms of dance now being taught. Barriers also include the long term maintenance of the dance floors, barres, and mirrors; however, these barriers are minimal. Other barriers are the costs of renting a building to teach or using one’s home as the place of instruction.
The industry will continue to maintain a plateau for as long as individuals remain intrigued and enthralled with traditional dance. Also as people continue to explore differing styles of remaining healthy and fit many will turn to dance as both an outlet for expression and exercise.
Market Assessment:
Bob’s School of Dance will be based in a small town in Ohio—Shelby, Crestline, Norwalk, Galion, or Ontario because Ohio already has a strong dance industry. Small cities provide smaller pools for business but instead focus on the people and keep their customers since the customers are treated with importance always.
For statistic purposes, this will only focus on Shelby, Ohio. Shelby is 5.1 square miles and has a population of 9,317 according to the 2010 census. The median family income is $43,373. Twenty-five percent of the population is children under the age of eighteen. The primary target market being addressed is young children, mainly female, between the ages of three and eighteen. Out of these 2,300 children the number of girls ages 3-18 is approximately 1,000. Since 7.4% of families are below the poverty line and almost half of the potential girls will have no interest in dance the number of potential customers is about 500 students.
Competitors of the dance industry are other extracurricular activities. Parents are more keen to put their “adorable” daughter in dance when she is little; however, when the child gets a little older more and more activities are available. After-school sports take a large portion of the eligible students away. Band, gymnastics, swim lessons, drama club, and church activities are some of the competitors of the dance industry. Just looking at dance, the competition is among the dance studios within 25 miles. Seventy seven percent of teachers surveyed draw in students within a 25 mile radius. Other studios such as the local YMCA, OPIS II and the Richland Academy in this radius will take prospective students and business. Statistics are from “The Guide to a Successful Dance Studio” and Wikipedia’s entry for Shelby, Ohio.
The plan for Bob’s School of Dance is to reach around seven percent of the children ages three to eighteen. The goal is to have between five and ten males and 180 to 240 females after a period of four years. The goal for the first year is to have a total of 100-125 students. As the studio grows additional teachers will be hired and the studio will be better known which will in turn lead to an increase in the number of students. A reputation is vital to the success of any dance studio.
A market trend exits for the location of dance studios in the United States. On “America’s Dance Studios Directory” ten states have more than 200 dance studios registered on the site. These states are Ohio, Pennsylvania, New York, North Carolina, Massachusetts, Illinois, California, Texas, Georgia, and Florida. The main location of facilities is the central north eastern part of the U.S. Ohio is the perfect place to start up a dance studio because the statistics show that dance businesses are thriving since there are so many. Facts and figures were provided from Wikipedia’s entries for Shelby, Crestline, Norwalk, Galion, and Ontario as well as from “The Guide to a Successful Dance Studio.”
A dance studio will experience some seasonality. Most parents will be looking for new activities for their children at the beginning of the school year; therefore, August and September are when more students will be signing up for classes. May will also be busier than other months when it comes to registration due to the rush of students wanting to dance during the summer months. It is important to open the studio before the big rush of students in August/September and May (The Guide to a Successful Dance Studio).
Financial Assessment:
Appendix A lays out the figures for the instruction of dance for the first three years of business. The figures are based off of OPIS II and the Richland Academy. A twenty dollar enrollment fee is required for each student and each thirty minute class will cost eight dollars. After the first three years the studio will neither be growing nor declining since the students will be situated and will be joining and leaving at a constant rate.
Expenses include the initial start up cost of barres, mirrors, flooring, and additional odds and ends which will cost approximately $15,000 for the first year. Each month that the studio is in operation will include the costs of renting the building, utilities, insurance in case someone gets injured, supplies—music, telephone bills, and marketing for the studio. Expenses for the first year total $35,580 and then $20,580 for the following years. A detailed list of expenses can be found in Appendix A under ‘Expenses.’
The studio anticipates a total of 100 students for the first year of operation. Ninety students are needed for the studio to break even for the year. The total revenue for the first year of operation is equal to the ten additional students over break even multiplied by eight dollars per class multiplied by 52 weeks in the year. This total is $4,160.
For the second year it is anticipated that the total number of students will increase by 25 percent leaving 125 students. And the third year there is an anticipated additional ten percent increase in the number of students giving 138 total students being instructed. There will also be a 20 dollar enrollment fee for each student. For the first year this will provide an additional $2,000 for the first year, $500 for the second year, and $260 for the third year since the fee is only for first time students.
Overall it appears that Bob’s School of Dance will be a profitable small business. It will have to be used as a hobby rather than a major money maker because revenues, although almost $35,000 each year after the second year, will not be enough to provide a nice living condition especially when additional instructors will need to be hired to maintain all of the classes as the studio becomes more well renowned.
Works Cited
“America’s Dance Studios Directory.” Dance Studio USA. 2 November 2011. <http://www.dancestudiosusa.com/>
“Crestline, Ohio.” Wikipedia: The Free Encyclopedia. 10 August 2011. 2 November 2011. <http://en.wikipedia.org/wiki/Crestline,_oh>
“Galion, Ohio.” Wikipedia: The Free Encyclopedia. 4 October 2011. 2 November 2011. <http://en.wikipedia.org/wiki/Galion,_oh>
“History of Ballet.” Dancing Online. 2 November 2011 <http://www.ccs.neu.edu/home/yiannis/dance/history.html>
“Norwalk, Ohio.” Wikipedia: The Free Encyclopedia. 19 September 2011. 2 November 2011. <http://en.wikipedia.org/wiki/Norwalk,_Ohio>
“Ontario, Ohio.” Wikipedia: The Free Encyclopedia. 4 October 2011. 2 November 2011. <http://en.wikipedia.org/wiki/Ontario,_Oh>
Roberts, Debbie “The Guide to a Successful Dance Studio!” Evanston Publishing, Inc. Evanston, IL 1992.
“Shelby, Ohio.” Wikipedia: The Free Encyclopedia. 4 October 2011. 2 November 2011. <http://en.wikipedia.org/wiki/Shelby,_Oh>
“Statistics on Dance Education and Careers in Dance.” 2 November 2011. <http://www.aahperd.org/nda/issues/upload/NDA-2010-Statistics.pdf>
Appendix A:
Expenses Each Month Year 1 Year 2 Year 3
Rent 1000 12000 12000 12000
Utilities 250 3000 3000 3000
Insurance 100 1200 1200 1200
Supplies 75 900 900 900
Telephone 90 1080 1080 1080
Marketing 200 2400 2400 2400
Initial Start Up Cost 15000
Total 35580 20580 20580
Year 1 Year 2 Year 3
Revenue Money Needed to Break even/day 114.774 66.387 66.387
310 Days of Operation Money needed per class 38.2581 22.129 22.129
8 dollars/class Number of students needed to Break even per class 4.78226 2.76613 2.76613
Avg 3 classes/day Students/day 15 9 9
Total Students 100 125 138
Additional Revenue 4160 29536 34944
5 Students/class * 6 days of class * 3 classes/ day = 90 students (Year 1)
Number of students needed to break even for year 1 is 90 students
3 Students/class * 6 days of class * 3 classes/ day = 54 students (Year 2 and 3)
Number of students needed to break even for year 2 and 3 is 54 students
