The #1 Dance Studio Owner Trap To Avoid

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 everybody, welcome to another episode of the Dance Principles United Podcast. We're here in studio today. It's, look, it's our after lunch podcast. So we sometimes we've got to like pep ourselves up a little bit because like, yeah, like always after lunch you get that little bit sleepy. But how are we all after lunch? Ready, ready for another incredible episode?

I'm pepped now.

Pepped now. You've got your tea.

I've got my tea.

It's all happening. Hey, we're going to try this. There's all three of us doing a podcast today. We don't normally do that. Normally it's just two of us. We're going to try it. We might all end up talking over top of each other.

Who knows?

Or it might work really well.

It might work really well.

We already just talked over the top of each other.

I was going to say, I thought Amanda said she was going to sit a bit quieter in this one and it took her about 43 seconds to break.

Got it. Now you're not going to hear from me again, everybody. If you're interested, I'm done.

But if you watch on the YouTube, you will still see her here. So that is all good. Look, super excited again.

I'm glad that you approve, babe.

I do approve. Look, super excited because as always, look, generally when I'm on, we're talking numbers and money stuff, not ballet and teaching techniques, because that's not really my wheelhouse. Um, but we want to talk today about something that's popped up a lot recently in conversations I've been having with studio owners, and it's how much studio owners pay themselves. And it's a big one because, you know, diving straight into it, um, like, not meaning to give away the whole episode, don't stop listening after this, but, you know, the reality of the situation is I talk to a lot of studio owners that are literally paying themselves nothing, right? And if you're listening to this and you're like, yes, that's me, um, know that you're not alone. Um, but then all the way to the other end of the scale where we're chatting with studio owners that are paying themselves $250K plus from their studios as well. So there is the full range of everything and anything in between that. There's different ways that people do it and all those kinds of things. But today's podcast, we want to, and that's why we've got the three of us on, cause we've all got sort of different versions, stories about how that sort of played out for us all working in the dance studio. And just, yeah, about making sure, number one, that you're paying yourself and ways to make sure that you're paying yourself properly. And then because the reality of the situation is that our studios, for most teachers and most studio owners, it's their life's work. It's something that they put 10, 15, 20, 30-plus years of their life into. And it's something that they need at the end of it to be able to have generated significant wealth for themselves and their family. Right.

And it's crazy because when I was doing it and not paying myself, you just keep defending it because you think I'm doing it for the kids. I love the kids, which you do. Absolutely. Changing children's lives. So you see it as almost a voluntary thing, which it shouldn't be ever. Um, and so yeah, it's interesting. I get that mindset of people that people have. Yeah, it's a passion.

It's a hard thing, right?

It's really hard.

And I think that there's that interesting thing as well that, you know, we're talking about the huge spectrum of studio owners paying themselves from zero to, yeah, $250,000 plus, right? But there's also a full spectrum in any industry of businesses doing well and businesses not doing as successfully. I think that's number one. This isn't just, uh, you know, unique to dance studios, but I also think there's a very big spectrum of how hard people are working in their business and how much they're treating it like a business versus a hobby. Because, you know, I've had some people that I've spoken to and they're like, oh, I just teach two afternoons a week. I'm a studio owner and I'm not paying myself much. And I'm like, well, are you working much more than 15 hours a week? Like, that's not a full-time job. Like, That's fine if that's what you want to do, but you can't compare your wage to someone who's like fully invested working as a full-time job.

Yep, totally agree. Totally agree.

Without a doubt. And look, something that we, that I always bring up when I talk with studio owners about what they're paying themselves is sort of comparing it to, you know, national averages and things like that. Because yeah, sometimes we do need reference points sometimes. And yeah, we shared this at an event we had, and I think some people were quite not shocked, I'm not sure if that's the right word, but interested in about where these things land. So the median wage for an Australian person, an Australian adult, I think this is pretty recent data. It's like 2024-ish data from ABS that the median wage of an Australian adult is $55,600.

Really?

Right. So if you are paying yourself $55,600, then half of Australia is earning more than you, half of Australia is earning less than you.

Okay, does that blow your mind?

Yeah, I thought it would be way higher.

Yeah, interesting, right?

Yeah, and look, obviously there's lots of different factors because that's Australia-wide. So if you're in a metro area, that's going to be very different to country, things like that. But that's with all statistics, right? So that's just— I think it's just a really interesting reference point that, you know, if you feel like, oh, I'm only paying myself $60,000 or something. Well, then, you know, you're in that top half, right? And then like something that really blew people's mind, especially studio owners that are doing quite well and are able to pay themselves great wages to—

Well, ask Beck, get her to guess. Let's gamify this.

Okay.

Here's the question.

To be in the top 10% of earners.

I feel like I know this.

Okay. Me a little bit more and just start ask that question and then we'll cut.

It's not like Nathan to be quiet.

It's just that the distance—

oh, and I can see better. I slouch to see you. Hi. Sorry.

Okay, Beck, so to be in the top 10% of earners in Australia, meaning that you are earning more than 90% of all adults in Australia.

Right.

How much do you need to be earning?

$180,000.

Nope. Lower.

$150,000.

A little bit lower. And I won't make you guess again, but like $143,628 if you're really interested in going like to the top.

And that's the top what?

The top 10%. So, if you were paying, if you were paying yourself around that much, then you're earning more than 90% of Australians. And if you wanted to combine that with your partner's income, like looking at it from a household, then to be in the top 10% of all households' income in Australia, $235,425. Wow. So look, I know understandably for some people like that might seem like a long way off and we get that as well. But hopefully that just sort of puts those, both of those numbers like helps give you a bit of a reference point. If you feel like you're not paid like, you know, you might be only paying $40,000 at the moment or something in your studio, that you're not that sort of far away from that average point.

Hey, can I throw something else in there? I know that I'm meant to be sitting here quietly, but I don't know how to do that. But, you know, those numbers that you're talking about are averages. Most studio owners are females. Yeah, that number would be lower as a female. Yeah.

Without a doubt.

Yeah. Like, you know what I mean? If we actually looked at it as an average across females, it would actually be a lot lower than that. I think that's an interesting thing as well.

Yeah.

Yeah, without a doubt. And look, so in terms of what I always like, things that I keep coming across chatting with studio owners about paying themselves, and because we're so passionate about helping studio owners build the studio of their dreams, right? And looking at the different ways that people pay themselves from their studio. Yeah. So a few of the different ways, and there's all sorts of weird and wonderful things.

Oh, there definitely is.

And if you're like, If any of this gets you thinking, guys, please make sure that you reach out to your accountant for the best advice around this, because super, super important that you're getting that advice. But in terms of ways that I see people pay themselves, yeah, so method one is the studio owner that's often operating as a bit of a sole trader or as a sole trader. And so that means that the studio money and their money is very intertwined and it's, there's not a business card, but yeah, there might be a, oh, this is the studio card type thing and this is Nathan's card. But generally there's the one card because they're a sole trader. And so the same account that the water bill for the studio gets paid out of and the electricity bill is the same card that gets tapped at Woolies or gets tapped at the petrol station.

What, for personal stuff as well?

For personal stuff.

Yeah. This is me.

Yeah.

Yeah, absolutely.

This is totally me when I first had my— Absolutely.

That was me for 15 years at least. Yeah, absolutely.

Oh, not like 15, but it was, yeah, as a sole trader, like as a sole trader, that there's things like that because it's all your money. You're operating as you, a person. There's all sorts of different stuff. But yeah, and so, you know, if you're tapping for groceries— kids cost a lot these days— let's say you're tapping $500 a week.

Easily.

Imagine what your grocery bill is a week, plus me.

It's right up there. Yeah.

And so like, if you were tapping— I'm just going to use this number because it's easy— $500 for groceries. Yeah. And with your situation, let's just say that there's nothing else that you have to tap because you and your partner are able to split the other expenses, or the other expenses gets covered from other places. So if you're doing that, we're just going to call it $25,000 for the year is your income, right? If you don't pay yourself any other wage.

So wait, just so we understand, you're not paying yourself anything else, but you're just spending $500 a week from the studio account on your family's groceries.

Exactly.

Is that right?

Yeah.

And I hear people say, oh, but I don't pay myself at all. I'm like, oh, hang on, but how do you buy groceries? Is often my question. Like, oh, well, I use the studio card. I'm like, cool. So like you're not paying yourself nothing. You're actually taking $500 a week in drawings out. It just happens to be in the form of groceries.

Right.

Right. And lots of people do that. Again, no judgment if that's where you're at at the moment and that's where you're at in your journey. The problem becomes when people are doing it that way is that if you were working in another job to get that $500, in your pocket to be able to tap at Woolies or Coles, you actually would've needed to have been paid, I don't know, but let's just call it $700 for my easy maths. Yeah. Because you get paid $700, you get the $200 tax taken out and you're left with $500 that's in your account to go and spend. Right. So unfortunately what people that pay themselves this way and don't have regular conversations with their accountant, they get caught out because at the end of the year you've got to report all these things. The tax office sits there and goes, what about that $200 a week tax you should have paid?

And they ask you for it.

They ask you for that $10,000 straight off the, like, and they're pretty, uh, they're pretty good at making sure that they get paid first, right? Much better than we are at chasing up our overdue fees.

Yep.

Yeah. So that's something that, like I said, like Becky, you said you've paid yourself that way. Amanda definitely absolutely did those sorts of things. Like, it's something that we see all through the industry and it's okay. As long as you're managing it properly, right? And I think that's key about whatever way you're doing it, making sure that if you're doing this, to make sure that you are keeping track of it and keeping yourself sorted and with your accountant so that you're meeting all your obligations without being too boring.

Absolutely. Absolutely.

We were having a joke before that Bec and I say absolutely way too often, and then we're saying it. I've just said it like 3 times and got the giggles as well.

Oopsie. I didn't even realize I said it then.

We will forgive them. We will forgive them this once.

I feel like we need to just like make this a little bit more fun with finance chat. So we'll just bitch about me and Bec talking about absolutely.

Absolutely.

Absolutely. Okay. So that is number one problem. What were you going to say, Bec? I interrupted.

I was going to say absolutely.

Absolutely.

Well, let me jump back in and take control and get you guys back on track. So like I said, I talked about, yeah. Method 1 that I see studio owners paying themselves in inverted commas a lot is just tapping the studio card. Method 2 is the studio owner that doesn't even tap the studio card for their groceries, but what they just do is they peek into the bank account every now and again and they just pay themselves what we call the old shit money. Oh shit, I need some money. And they get in there and just grab a $1,000.

They just pay themselves randomly $1,000 because they feel like there's enough money left.

Is that— exactly.

Have you done that?

No, I don't know.

I think you're one or the other sort of thing.

Yeah, I mean, it was a long time ago. Yeah, yeah, I was doing that, but not that I can remember. I know that if we, you know, if I made a lot of money off the concert, I'd take myself on a little holiday.

Yeah, absolutely.

So I guess that's kind of the same thing.

Yep, absolutely. Damn it. All right.

Okay. I feel like we need to now, this is going to be our clip. How many times can we possibly say absolutely in a podcast?

Or we could try not to say it. Hey, it was me. Okay. Yeah, it's going to be in it. I know it's going to be in our brains now. But so like I said, that's option 2. Really, really guys recommend against that if you can, because if you're just taking what's left over, then you're not prioritizing yourself. And it's something that we know and something that I love working on studio owners with is making sure that if you are the business owner, if you are the one that's got the name on the door, you're the one that is taking on all the risk in the business. You know, when things go south, which hopefully they don't, but you know, COVID was a great example for us. We don't like to harp back onto COVID too much, but the reality of the situation was that to, for the day after lockdown, I vividly remember sitting there and calculating with all of our savings available, everything that we had, how many more months of mortgage repayments did we have, right? Because that was then a few days later, JobKeeper came in and lots of, and that was amazing for us as a business at the time. But that's the sort of risks we run being the business owner.

Absolutely.

And because we take those risks on, we are the ones that deserve to be rewarded for it. Yeah, that's what we're super passionate about. So that's why I really prefer that studio owners don't just take that, oh shit, when it's available money. It's super important that you are prioritizing yourself. And to be honest, like the tapping the card at the groceries or the petrol station falls into that category as well.

Yep.

Because what happens if you go for groceries that week and it just happens not to be enough money in the studio account? Like, what has to happen then? Like, it's still that sort of same mentality. You're only taking what might be left or what might be available at the time. And it means that you're not prioritizing yourself and not being able to, I guess, build the studio of your dreams because it's being really reactionary.

Love that. Totally off topic, but God, I'd love a 2-week lockdown right now.

I don't know if you're allowed to say that.

I saw somebody else wrote that on Facebook the other day.

Just 2 weeks of just like, you're not allowed out of the house.

I feel like I'm on a 3-day lockdown every weekend, just as an FYI. Absolutely.

You do know that a weekend only goes for 2 days?

I do like a 3-day. I go from Friday morning until Monday morning. I do not leave my house if If I can manage it.

Right.

It's not, it doesn't help.

Sorry, look. Yeah.

You should come down for a weekend. It starts on Friday, 9 AM. We'll see you there.

It's a real party.

All right. You guys, back on. This is why we don't do this, Ruth, because you guys just get like, I feel like I have to be the school teacher.

Yeah.

You're getting, all right.

Okay.

So you've told us the ways that you, uh, that I see. Number 1, number 2. What, is there a better way? Is that what you're going to tell us next?

What we prefer to see studio owners do, regardless of how you set up, regardless of whether you're a sole trader, regardless of whether you're a company, is to treat yourself like an employee.

Yes.

And to be making sure that you're putting on your own oxygen mask first. To make sure that you are paying yourself whatever wage that you can afford from the studio at this point. And like, I really challenge, like, if you're listening to this and you're one of the studio owners that are paying themselves nothing at the moment, or even a studio owner that's not paying themselves what they think they deserve at the moment is just to immediately put your wage up $50, even if that goes from $0 to $50, because so much of finance and money and numbers is psychological. And if you're prioritizing paying yourself first, you'd be amazed about the, the expenses and things like that that you end up being able to cut.

Absolutely.

Because you've got to put your— yeah, you've got to put your oxygen mask on first.

It's crazy though that like And I was saying this before in a podcast that we were on, Nate, that people will pay a teacher $700, $800 a week, but they won't pay themselves.

Yes.

It's insanity.

It is. And, and it's something that happens all through the industry. We know that it does. And it's, it's something that, and look, again, this is said with no judgment and 100% love. But the reality of the situation is if you aren't paying yourself anything and paying all these other people, you've just created yourself a really poor paying job.

Well, a non-paying job.

A hobby. Yeah.

It's not a business.

You're volunteering.

Yeah.

You're volunteering to, you know, with, um, risk.

A lot of risk.

A lot of risk when it's your name on the door. You know, I think that's super interesting and about putting your own oxygen mask on first, right? Like you were saying before. Like all of a sudden you magically find the money. Because I, I really do believe that we want to affect, you know, lives through dance. We want to change kids' lives. We want to have an impact. However, we can't do that if we are not making money for a period of time. And look, you know, there is like— we've all done it. We've all like worked for X amount of years and not been paid what we deserve. You know, maybe you have a partner, maybe, you know, whatever that is. Maybe you live at home and you're young. But it's not sustainable for an entire life, and it builds resentment.

Yes, that's exactly what I was gonna say.

Yeah, and it builds resentment to your staff, it builds resentment to your clients, to your families. That's when people get the shits about things and they don't be their best self. You're going to show up as your best self, your best business owner, your best, uh, teacher, your best leader if you are being paid what you deserve. So even if, like Nate said, it's like $50, pay it to yourself first before anybody else, because you do deserve to be paid.

And it's because you then feel like you're doing it for everyone, which you're not, because they're actually opting into you as a business.

Yes.

But you get the mentality that I'm doing all of this for all of these kids and parents, and don't they understand how much I'm sacrificing? Yeah, I hear that all the time. I'm sacrificing my family time for them, and then when they leave or complain, you then make it so personal because it feels like a favor, right? Exactly. Whereas when you start realizing they're clients, just opting into your business— and I really changed that language in my own self when I started running it properly— is you're a client, this is a business, this is a business transaction. So then when they— and you know, I'm paying myself well. So then when they leave, you're kind of like, okay, well my business wasn't right for them, or always self-reflect, whatever. But it doesn't have the same—

yeah, knife to the heart.

Yeah, exactly. Yeah.

You know, and that's the thing, you know, it all— like, you know, when we had— every, every studio has those, like you said, Bec, those clients that move on, the big clients that you pour your heart and soul into. But when you flip their mentality, does it still hurt a little bit? Yes. We can't pretend it doesn't.

No.

But holy moly, does it hurt a lot less. And as you're like, we used to flip the switch on that. I remember there was one specific student that really made us flip the switch on it after a lot of reflection, soul searching on it. And from that point on, it was always like a little bit of, uh, like, that sucks. Like, have a bit of a whinge about it to each other and support the staff who are often upset about it as well.

Yes.

But in our minds, we were just thinking, Cool, we'll get 3 new preschoolers tomorrow.

Exactly.

Yeah, make us back the same amount of money. That's half the, like, less than half of the headache of that hired client or whatever.

Yes, and I think it also gives you the power to say to some people, because there's some parents that you are never ever going to satisfy. It doesn't matter what you do for them, they are always going to want more, more, more. And I think it gives you the power to sometimes say to people, I don't think this is the right place for you. Yeah, because you can't just keep trying to do those things for those people. That's the worst way to be.

Yeah, without a doubt. So, um, I'm just going to ignore Amanda Barr.

I'm just trying not to talk because every time it comes out of my mouth, it's absolutely—

So we talked about, like I said, I started before we got sidetracked off our tangent, which I think is, I think is for the best sometimes. But we talked about the best way and what I'd really challenge everybody to start working towards And you know, we're coming up to end of financial year. By the time you listen to this, I would say it's a great time to reach out to your accountant and have that conversation around number one, how can I, like if you are not paying yourself regularly, number one, it's how can I start paying myself regularly? What is the best way to do that so that I am setting up and supporting myself financially? Or If you are at the point where you're wanting to increase what you pay yourself, talk with your accountant about that, about what that looks like. Hey, I haven't actually had a pay rise in the last 4 years. I deserve one. My studio's done X, Y, Z. So what does that look like? What do I need to do to make that change? And I think most effectively, like, I would really love everybody to be paying themselves as regular employees. And you know, you're a company at the moment, Bec. You're an employee of Paws. Is that right? Yep. Which means that not only are you getting that regular pay, PAUSE is also, because you're an employee, you're also getting contributed to your super as well and being able to build your wealth for your retirement and your future and stuff like that.

Such a huge one because I didn't do super for so long.

Yep. It's something so many business owners and studio owners overlook. Yep. That's a huge one, guys, to please reach out to your accountant or your financial advisor about. Because that's one thing that even if you haven't paid yourself very well over the last 5, 10, 15, however many years, that's the one thing that if your business starts or is becoming more and more profitable, that is one thing as business owners that we have a really, really great amount of levers to pull to be able to catch up or start catching up at least on what we've, what we may have missed out on in the last, in the last however many.

Yes.

Yeah.

I think we should do a whole nother episode on super and what that means. I think there's so much to dive into with super chat. And, you know, we all have very strong opinions on super for staff members. We are very passionate. We've sat here before and been really passionate, but we also are passionate about it for yourself. So I think we should do this in a whole nother podcast. What do you think, guys?

Yeah, absolutely. Like a bit of a wealth creation-y type chat.

Absolutely.

So here is the thing.

If you are not paying yourself what you deserve, put your own oxygen mask on first. Make sure you increase that, even if it's just a little bit, even if it's $50, you know, if it's more, great, but make sure you're paying yourself first because you'll be surprised at what will happen when you do it psychologically that way.

Yeah, absolutely. And it's just, it's become something that you just want to do more and more and more and more.

So, so good. Thank you so much, guys, for listening to this week's episode of the Dance Principles United podcast. Hey, if you have listened, we want to know how many times did we say absolutely in this podcast? Drop us a DM, count them. Maybe we have a magic prize for you.

Absolutely. Have a great week, guys.

Bye.

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