Double the Locations, Double the Stress? The Real Cost of Dance Studio Expansion

Hello, friends.

I'm Amanda Barr.

And I'm Rebecca Lou Brennan. And welcome to Dance Principles United, the podcast.

Together, we are passionate about helping studio owners with the business of running their studio.

Join us as we talk everything from marketing systems, studio culture, motherhood, life, and everything in between.

This is the Dance Principles United podcast.

Hello, everyone, and welcome to another episode of the Dance Principles United PODC podcast. I'm here with the amazing Rebecca Lou Brennan. How are you doing, Bec?

Pretty good. Love being in the studio with you. Always, Nath. Always a vibe.

Absolutely. Absolutely. We've just back from. Look, we're batching a bunch of podcasts today. We're just back from our lunch where we were discussing all the important topics in the world. Like, we've got our. You'll probably listen to this after the fact, but we've got our studio growth club retreat coming up in the Hunter.

Valley in a couple weeks every weekend of the year.

And obviously the topic came to what we're wearing and the dilemmas around that.

The amount of drama that I put myself under and pressure of what to wear is insane.

Nath, I'm sorry. I don't think I can really relate to our audience and yourself. I know.

I just need to let go. I'm just so obsessive with. Yeah, I don't know if you guys are like that out there, but I am just so self conscious about how I look and what I wear in front of people. And I really. Everything I was saying to Nath over lunch, I just keep going round, round, round. Like the amount of shops I'm looking at online, it's actually really unnecessary.

Yeah, I'm sorry. I was just saying I'll probably wear jacket, shirt and pants.

It's so much easier for guys, though.

I know. I'm sorry.

And like, girls can be. Not that I think our members are like this at all, but I think just in general in life, girls can be very judgmental.

Absolutely.

Probably coming from my freaking teenage years, but it's like a therapy session, this podcast right now.

Wait till you get the invoice.

But like, you know, like, people are so judgmental on that stuff and then you just carry it with you and then you just overthink everything.

Oh, it's. Yeah. 100.

Really getting.

We're getting deep. We're getting deep here on the Dance Principles United podcast. But sex, fashion dilemmas and. And the things around, that isn't really what we were going to talk about on. On today's podcast, but we are here to talk about something that I think I've wanted to chat about on the podcast for a little while. And it's about whether we expand or optimize our studios. And I'm excited to dive a bit into, like, dive deeper into. Into what that means, because what we're all about here at Dance Principles United is helping studio owners build the studio of their dreams. And the great thing is, is that it's. What's different for one person is going to be very different to the studio down the road, very different to the studio in the suburb. Like, everybody's got their own version of their dream studio and what that looks like, and there's multiple different ways to grow our studio and whatever's gonna sit best for you. And we love helping studio owners find what's right for them. Right.

Yeah. I also think that can change over time.

Yes, absolutely.

You know, you get inspired, you wanna change things up a bit. You know, I've had my studio for 21 years now, so I think that has definitely changed since I first bought it, for sure.

And we've got. We always talk about that there's seasons within our. Well, you know, we've got studio owners that are sort of just starting out, that are in their early to mid 20s, that have loads of time. They've got all the time in the world to invest. Like, you were in that position with your studio once. I know Amanda definitely was. Then their studio can be 100% of their focus. And at times like that, we can just go all in on trying to grow the absolute crap out of our studios. And then we've got other amazing members in our community that have just started their families, and so in that season of their life, the business isn't probably pursuing that as aggressive growth and things like that. Like, so just like our life has seasons, our business has seasons as well.

That's so true. And, like, you definitely do change as the kids come along and then, you know. Yeah. Love that. Nice.

Oh, I know. Like I said, we're going really deep, really deep on all the things today. But when we were talking about, like I said, there's. The way that I see it is, I'd love to hear your take on it, that there's really sort of three main ways that we can be growing our studio and they are tied into each other is that, like, obviously we want to be growing our revenue and profits is the key. That's what. That's the outcome of what we're doing. And the main ways to do that is to grow our class placements. Or grow our enrollments, which then feeds into our class placements. But then there is a third way that we'll probably dive into a little bit later that we can keep growing our revenue sometimes without really having to grow those student. Like if we are lucky enough to have a studio that's almost full, there are other ways that we can grow our revenue without. Without increasing class placements or student numbers too much.

Interesting. Very interesting. I think, yeah, it's like class placements is where it's at though, right? Like, I think you can have. And I've talked about this before, but 200 students and 200 class placements, they're all doing one class or 200 students. And you know, some of our members have 200 students, but they've got 1200 class. Like that's such a big difference in revenue.

Yes. And, and obviously there's like, there's things we can dive into about that. Like discounting structures is a whole nother podcast episode and things like that. But we're wanting to. To make sure that when you are looking to grow your studio, that you are able to look at it with clear goals in mind and you're not just pursuing growth for the sake of growth, that you've got some sort of goal in mind that you know what, you know, like I said, like what your general and overarching goals are, that you're not just pursuing, like I said, growth for the sake of growth. Cause that's where we can sometimes see studios come unstuck. Because growth is expensive.

So expensive.

It costs money for us to pursue growth, whether that be from expanding premises, investing in marketing, investing in extra staff and things like that. So setting ourselves and gearing ourselves up for growth is expensive and can cost a lot of money. And so we want to make sure that we are doing so with some sort of payoff in mind down the track.

Yes, well, and you know, this is what happened with me because I was looking for a bigger building for a very long time, couldn't find it. When I say a very long time, I'm talking two and a half years. So it wasn't a short amount of time. And I was looking at everything and then another premises came up like five minutes away from.

So we're talking same suburb, just the.

Other side of it, literally.

Yeah.

And so we've taken it on. But you're exactly right. Like with that, I knew that I was then going to have to have double the admin staff.

The fit out to start with.

The fit out. The fit out.

Yep.

That was a lot of investment. Definitely the fit out. Double the admin staff, you know, potentially double the teachers because we're putting two. Like it was just a whole expense that I knew we could afford. Like I wasn't dumb about it. We can afford it. Am I making the same profit I was? No, no.

And you're not going to for the first couple of years.

And that's the thing. Like it takes time to grow that and to expand in that sense. Yep, I know we will get there. But yeah, running two locations is trickier. So much trickier.

And look. And I think like I'm going to be a little bit controversial here and I do think that a large percentage of the studios we see that take on a second location probably shouldn't. And I know that's a big call and I know that sort of, like I said, might, might cause a bit of controversy out there, but I think sometimes like you did it after multiple years of looking, searching, knowing your numbers inside out, knowing. And not just like when I say numbers, I don't just mean like financial numbers, I mean like knowing your class placement numbers, like knowing even like the distribution of your student ages, knowing how many preschoolers you have and how many preschool class placements, knowing how many under sixes, under eights, under tens and things like that that you have and that you're looking at that whole big picture before you undertake such a massive financial burden in expanding into that second location.

Yes, absolutely. And you and Amanda had two locations. Did you start with two locations?

No.

So tell me this story.

So Amanda had the initial location down in Kiama on the south coast, New South Wales, which she opened when she was. It's a, it's a country town, population even now maybe 15, 16,000 people. So not a big town by any stretch. So she had that location for I think 16 of the 21 years. But that was like Dan Sensations climber was. Was it?

Right.

We were a one student.

So that was your first.

That was the first location. And what we saw is. And this is probably. We're not going off on a tangent because it's definitely what we're, what we're talking about. But there's another town about 15 minutes north, it's called Shell harbor and it was hugely like rapidly growing. It was where all the new housing estates were going in. It was where when every, anybody was moving down from Sydney to the south coast, they wouldn't get past Shell Harbour. Kyma property market was very expensive and still is and people coming down would be able to afford all of the housing estates around Shellharbour. So Shellharbour's population, and especially around younger families absolutely exploded. Whereas Kiama, with the property prices, was starting to have younger families disappear. For like we saw it happen. Like people that we went to school with, for example, weren't able to buy into the Kiama property market. And all of the people that we were going to school with were moving 15 minutes north to Shell Harbour. Right. That's where their kids were going to school. That's where. Yeah. And so it was this massive demographic shift going from the town that we grew up in that we built the studio up in, everything just shifting to that town a little bit further north. And that's when we decided and we found the perfect commercial premises.

I think that was the key too though.

Right.

Like you did find that incredible building.

And we were fortunate enough to have worked hard and made good money from the studio to be able to purchase that building. And we opened a second location in Shell Harbour and built that up from the ground up. Now, talking about profitability taking a hit when you on top of the fit out invest in purchasing your commercial property. Yeah, profits definitely took a hit for those first couple of years, but we knew it was part of our longer term strategy. Like I said, we saw the demographic shift. We saw that there was less and less young families bringing their kids up in Kaima. We were going, if we wanted to continue growing and making our business more profitable, we were going to have to be accessing that market as much as we could. So that's what led us to go into that second location.

And you, I remember meeting you when you had the two locations and you were struggling then with running the two locations. It's so much more work, 100% and like it's not necessarily more profit.

No. And it was a 15, 20 minute drive. And I think that's very different to your setup at the moment where it's like five minutes.

Yeah.

Because it's. You spend number one, I think two locations most of the time is more than double the costs and I think most importantly for you, it's more than double the headspace. And especially like I said, we were running it as two, like I said, obviously under the same umbrella, the same marketing and branding and staff would go between locations. But you're running it as dance sensations, Kaima dance sensations, Shellhaba and having to market individually in those areas. So you are really think of that. Yeah. On one hand in Kiama, we're running marketing there to try and obviously Attract more students. But we're really focusing in Kaima at that time on making sure we're still showing them the love and making sure that we're really focusing on retention. Because we were so mindful that all of our current loyal families that have been with us for 10, 15 years, we didn't want them to think, oh, they've got this new shiny koi over here now they're going to forget about us. So we were working like more than triple as hard because we were grow, grow, grow, grow, grow in location number two. But making sure that we had to do all those like, retention things in, in Kiama to make sure that they were feeling the love that we needed to show them as well because they've been such amazing customers and clients over the years.

Sounds exhausting.

It was like, it really was. And it was like I said, definitely more than double the work. And for those first few years it was like, like there was cash flow issues because we'd taken the big risk. And don't get me wrong, like, we definitely got the rewards on the other side of it. Like I talked about lots, but it was, it was a big commitment to make. And yeah, it, like I said it, I don't think it could have gone either way because we were, we were always really confident in what we were doing. But I know for a lot of, like a lot of businesses out there, not just dance studios, I'm talking that go for that second location and things like that, like, it can go the other way really easily.

Absolutely. And then Amanda was just saying over lunch that it's the best thing you ever did was close that second location.

Absolutely. Like I said, that was our, it was always sort of like our long term play to like, we saw the writing on the wall for the demographic of Kaima shifting. We're like, we need to have a stronghold in that Shell harbor market. And the fact that, yes, we bought that, bought that property in Shell harbor and then we ran them alongside each other for the couple of years just to make sure we're like, oh shit, I think, I think Shell Harbor's going to work. I think we're going to be able to grow it. And yes, we were able to. And then, you know, you sit down and look at the numbers and you're like, okay, like, should we keep them both? Is it time? Like, and then you look at the numbers, you're like, okay, I'm paying two rents. I'm paying more than double admin. Like all these, Like I said, it's, it's more than double the expenses most of the time.

Oh yeah.

To run the both locations. And again, like, side note, we were like we had three studios in Kaima. The building that we'd purchased in Shell harbor was three studios but with enough space to put in another three. We're like. So it made sense once we were again, but running all the numbers, making sure that we look at things like, okay, like what age groups do we have? Where do our student. Where are our students distributed across those age groups? We're like, no. When you look at all of those things together in tandem, like, no. It makes perfect sense for us to focus those costs but most importantly, like focus our focus. But be able to focus our 100% attention into one location.

It's the marketing too. Like I hadn't actually thought of that because obviously with my two locations it's the same. It's the same marketing.

Yes.

But having to split your marketing budget would suck because you're only going to get like you can get half the amount of people in because you're splitting. Yeah, I hadn't thought of that.

And look to be like, like off on a tangent a bit. But we were more like it was probably a 70, 30 split more in Chillhaba because that was really what we were trying to grow.

Yes.

More. More aggressive.

But I'm just thinking about other studios, the two locations.

Yeah, it's hard. Yeah.

It seems like you would really want to be completely full in that one location. And even then I don't know that it's. I think you'd probably rather do something what I've done, which is a closer location and distributing it that way and being able to market solely in that one location would make a lot more sense to me.

Absolutely. Because we've seen other like I know Katya from. From Catapult's done that successfully as well. She's. She had I think two or three studios at one space and was bursting at the seams, but was able to find enough room for one other studio space with extra parking. Literally a two minute walk down the road.

Exactly.

I don't even know if that qualifies as an extra location. It's just putting on an extra room. But again, she'd looked at the numbers inside and out, understood where those classes were, where the student numbers were distributed and it made sense. She's like, if I get this space, it will cost me this much extra. But I have the potential to bring in more revenue than is going out and for me to be significantly more.

Profitable so there's two things I want to talk about. First of all, bursting at the seams.

Yes.

What are you going to count bursting at the seams as? Because it's always an interesting thing when people say I'm full and then you look at their classes and you're like, you're not really full. You might have a couple of full classes. But what does full mean?

Yeah. And I think we have a confirmation bias around this a lot. Like you think, like you said, oh yeah, I'm bursting at the seams because you happen to be on reception or you know that, that 3:45 and 4:30 time slot most days the waiting room's really crazy and that a couple of the classes look full. So let's say like, yeah, if you're running three studio spaces, are your classes bursting at the same number one or like a good chunk of the day for your preschool classes? Are you running preschool classes every day.

And seven days a week?

Yep. And they're chock a block. If not, well then you've got a lot of potential class placements to fill there. Then looking at your, your afternoon classes, is it just that 3:45 and 4:30 classes that are like pretty full and then from 5:15 it actually starts dwindling off a bit and maybe you're at the phase of life where you're going to pick up your own kids at 5 o' clock so you don't see that it starts to dwindle. Right. And yeah, you still obviously the classes are going well but then it's like classes of 10 instead of 22, 23. And is it every single day of the week or is it just so happened to be the two days that you are an admin are absolutely chockers and the three days that you're actually teaching and you're in with your high level comp kids so barely get a chance to come out and see the admin that it's actually not that busy out there like. So I think making sure that you're looking at it across the board that you're doing things like, you know, checking out your class capacities that you're seeing. Right. If I've got, you know, we used to always go on our big kid classes were 25 maximum and our preschool classes were 15. So what, what percent, how full is each class as a percentage? And then I would look at it across the entire studio and you know, we see some studios that like, oh, I think like I'm just bursting at the seams and I think maybe Like, I should be looking at another location and then we go in and look at some of these numbers and it's like around the 50 capacity mark across the board. Yeah, and so. Exactly. And I think, like, I think that's the opposite of where you were at, right?

Oh, yeah, totally. Yeah. The total opposite of where we were at. And we were doing it because, well, one, I think we needed to split things up more because it was just getting too crazy in there. But it's allowed us, and I was saying this before, to actually increase our class placement so much because the kids can do more things on one afternoon. So it's definitely increased in that sense. But it's still, it is still a lot of work to have those two locations. And I would probably prefer to have one massive location, but we couldn't make that work. So it is what it is. I was going to say another reason that I think that people do that is because they think they've gotten all the kids in that one location and so therefore they're going to go to the second location and get the kids there. And I hear a lot of people talk about the fact that, oh, that big studio down the road, which is now me in my location, that big studio down the road has taken all the kids, therefore we can't get kids in that location. And that just is so untrue. Like, I talk to especially new people coming into our world all the time about this. Nath. Like, have you ever googled how many kids are actually in your area? And they're not. They're actually not taking the kids. They're just better at marketing. They're marketing consistently. And so therefore people are going to them consistently. It's nothing to do with how many kids are in the area, in my opinion.

No. And I think, you know, we can be smart about how we look at these things. And that was what, like, we were doing when we were looking at opening up in Shell Harbor. So, you know, we don't have access to the data that all these big multinational companies do. Right. But you look at things like have a bit of a look at how many primary schools, feeding area and preschools. And then when you look around, like when we were looking at purchasing that Shell Harbour building, you look around the council website and you say, ah, Woolworths has just announced a huge new Woolworths shopping center in there. Woolworths don't do things because they're silly. They have access to incredibly accurate population forecasting data. And they're not, they're putting it in there because they know how big the area is going to get.

Absolutely.

Wait, another little Zach's Academy going in. Ah, interesting. They see do use the same consultants Woolies do and know that there's about to be a school and new families move into the area. So like start looking around for little, little signs like that, that there's loads of kids in the area. And like I said, without, like our example in Kiama, we saw that it was actually going the other way, that, that, you know, the, the enrollments in the local primary schools were actually starting to drop. That. Yeah, you're obviously like all preschools are full everywhere. So that's not really. But, you know, but there's no new preschools going in. Like, it's, it's that thing and I think that's something, you know, the Pendereth area inside out, back to front. And man and I have both been reading a book by, By Cody Sanchez, Main Street Millionaire. And she talks about. It's all about like local businesses and things like that, but she talks about, like you said, like, people think, oh, well, I think if I just go to that town, they must need a dance studio because there's none there and the town's half an hour away. They've never really. They never lived there. They don't know the area that well, but they don't do their research. They just think, oh yeah, there's a few. There's a school here and there's a few things like they must need a dance school without doing the research. Right.

Yeah. And probably without realizing that it takes time to grow. Doesn't matter what it is or where it is. That takes time, effort, money, consistency. It's not just going to suddenly grow because there isn't one there.

Yes. Yeah, absolutely. So we've talked about, like, yeah, obviously, like, you know, going into a second location. Yes, there is. And don't get me wrong, like some people do it and do it successfully, but it should be something that like, you look at, like with. With a bit. With a lot of caution, if I'm honest, because there are so many other better ways for you to grow your enrollments, your class placements and your revenue without doing that. And I think a really, really vital one that a lot of people miss is making sure that you've got your timetable right so that it's optimized for your class placements.

Yep.

How. How do you. How do you look at that? At pause.

Well, Amanda always says this and it is put your timetable together not for your teachers, but for what's best for parents so that they can do as many classes as possible in one afternoon. And that is a game changer when you do that. If you just completely take your teachers out of the equation, which I would never have done back in the day because I was all about having just those teachers and couldn't see past. So there could possibly be other teachers.

I can only get this hip hop teacher on a Monday, therefore.

Yep, yep. And just putting it in so that they can do three or four classes back to back is 100 the key. And trying to put things together that, that need to go together, like circus and acro, in my opinion, should always be back to back. Because that's just a no brainer.

Yeah. And I think that's absolutely key. And that's what, like I said when I sit down with studio owners often and go through that capacity thing and it's like, okay, well like tell me about the classes that, that an 8 and under can take. And they're like, oh, well, they can do this one on a Monday and these two on a Wednesday and this one on a Thursday and this one on a Saturday. And it's like, okay, well, is it any wonder that they're only enrolled in the one class on a Monday?

Exactly.

And if we get that timetable sorted, then with the exact same number of students, we end up taking our class placements from like, you know, two classes a kid up to 2.5.

Yeah.

And that's where, like, that's where we really start seeing incredible growth without having to take on extra expenses. Without having. And when we can increase the revenue and the class placement side of it without really increasing our expenses, that's when we start growing our business and like making ourselves more profitable. Which is, which is what we're after for people, right?

Absolutely, it is. It's been an amazing chat. Bit controversial, I know. Have enjoyed it though. Yes, have enjoyed it. Let us know, guys, drop us a dm. We always love hearing from you if you, you know, have thought about expanding or want to expand and whether we've changed your mind on that today.

Absolutely. Would love to hear, as always, in the comments either here on the podcast or on YouTube if it has sparked. Yeah. Any thoughts?

Yeah. Thanks so much guys. Make sure you like and subscribe. We'll talk to you soon.

Thanks everyone.

Bye.

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