Thursday, February 7, 2013

How much does it cost to run a pole studio?

Pole studios (and small businesses in general) are failing at an alarmingly high rate.  Probably not too unlike many other small businesses, a lot of pole studios are being opened by eager dancers who would like to make their passion their business, but have little to no experience running a small business.  I've heard so many people say they want to be their own boss so they can set their own hours and only work when they want to...not realizing when they are the boss, they get to work ALL the hours. 

I have not owned my own small business but I have watched a number of close friends try to do it, and I have watched them struggle.  I have also watched a number of pole studios and how they operate, so I wanted to talk about how much it costs to run a studio, for those who may be considering the venture.

First up, you have to find the space.  Rent will probably be one of your largest expenses.  You may have to come up with a deposit, and will probably have to commit to a length of time, often three to five years.  Then you have to make it yours.  Flooring, mirrors, poles, crash mats.  None of that stuff is cheap and most landlords will not be fronting the cost for you.  Also, think about the type of flooring and whether it will be destroyed if you have to drill your poles into the floor.  Then, once you're up and running, there will be maintenance and upkeep costs.  The alcohol to clean the poles.  Toilet paper.  Is garbage, water, gas/electric included in your rent or do you have to pay that separately?  Have you thought about how often you may need to replace your poles?  Who maintains your air conditioning or heater?  Who pays for the plumber if the toilet gets clogged? 

Paying taxes on a small business is no joke.  You pay all of your own taxes.  In the United States, you are paying State and Federal taxes, including a self-employment tax (which was around 8% last time I checked).  This means your effective tax rate can be over 40%.  Sure, you have write-offs, but not everything you buy for your studio can be written off.  The law in the U.S. is pretty strict about clothing and shoes, so you may not be able to write off all of those costumes you bought for parties (definitely talk to a tax professional, since there are exceptions to every rule). 

Obtaining medical insurance as a small business is not easy, and it's very expensive.  At my previous job, my boss was paying over $650 per month just for my medical insurance.  I don't fully understand "Obamacare" in the U.S.  So many people seem to believe it guarantees us all insurance.  I don't believe it does.  Among other things, I believe it removes an insurance company's ability to deny insurance based on prior health issues.  However, you still have to go out and buy a policy yourself, at the fair market rate (and rates typically go up 25% every single year).  I understand those who choose not to purchase their own insurance are then assessed an $800 "fine" when they do their taxes at the end of the year.  I could be completely wrong and welcome an explanation from someone who might understand it better.  As a person with a day job, I have insurance and don't have to worry about this.  However, it's something to think about as a potential small business owner, who may be putting themselves at a higher risk of injuries, and may not want to be without health coverage in the case of an emergency. 

What kind of business entity are you planning to be?  If you want to incorporate, that is additional money to an attorney and a fee to the State.  You can also create a fictitious business name and pay a smaller fee to the county.  You will also most likely need a business license from the city in which your business will be opened.  If you want to copyright your name or any images, that is more money to an attorney and to the government to protect your potential trademark. 

In California, each county can also assess a 1% annual tax for the value of every single thing in the studio.  From the flooring to the clothes and shoes on the racks.  They don't want to miss out on their piece of the American Dream.  I don't know about you, but the American Dream is starting to sound more like the American Government's Dream.  We work so they can play.

You also have to pay to license music in your studio.  For just one of the companies that licenses music (there are three big companies that do licensing), this is about $240 per year.  You can read more on that HERE

You also need insurance.  You must, must, must let your insurance broker know you have a pole studio.  You must also let them know if your students are inverting, if they are wearing heels, and if you offer circus acts such as aerial silks.  Yoga or pilates insurance will not cover you!  Please read more on that HERE

Do you have a background in dance and fitness?  Or do you just love pole dance?  If you are not already certified in personal training or fitness, or even if you are, you may want to consider pole certifications.  You are holding people's health and bodies in your hands, so you want to make sure you are well-versed in how to take care of them.  You can read more on pole certifications HERE

Are you going to teach all of the classes or are you going to hire instructors?  What is a fair wage?  Will you require them to be certified?  Will you pay their insurance for them or make them pay?  Many studios trade services with their instructors.  The tax man will want a piece of that action, so be careful in how you work out barters. 

Will you carry shoes, clothing, grip aids or other products for sale?  That will require some money up front.  You may also need a license to pay sales tax to your state. 

How will you advertise your studio?  Marketing is not cheap.  Sure, social media sites like Facebook and Twitter can help you with free marketing opportunities.  But, don't overlook simple ideas like creating fliers with discounts for other businesses in your area.  As you build strong relationships with your neighbors, that can bring in business as well. 

Yeah, I know, I'm a buzzkill.  I don't bring all of these up to ruin anyone's dream of owning a pole studio.  Pole studios have been opening and closing at an alarming rate.  At a meeting last year, United Pole Artists reported that there had been almost zero growth in the previous year.  Not because no studios were opening, but because studios were closing at the same rate as they were opening.  Jennifer Michelle Marketing (of PoleSkivvies fame) recently reported she was having trouble getting in touch with studios because they were out of business.  I know a couple of places that lasted just six months.  I know a studio in my area just went out of business.  I recently read on Facebook about two other popular studios closing (one in Southern California and one in New Zealand).  It makes me sad.

My hope in reporting this is so people can be realistic about the requirements to open a business, and so that we can build a strong community of pole studios around the world.  If you are interested in opening a studio, please consult with a strong businessperson who can help you create a viable business plan. 

Did I miss anything?  If you can think of some costs not on this list, please leave a comment.  If you have any experience with opening a studio, please leave some advice for those who may be starting their new adventure soon!

32 comments:

  1. Brilliant. I bet there is at least ONE THING that every single studio owner never thought of in here. Fantastic advice for potential studio owners aspiring to "live the dream" which I'm sure will help prevent it turning into a nightmare.

    Great job Lori, as usual.
    Spinny x
    www.everythingpoledancing.com

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    1. I so don't want to discourage people either but I hope if people go in with eyes open, then they WILL be ready to live the dream! :-)

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  2. I just recently opened a studio out in Reno, and it has been by far a fun ride, but also nerve racking. I have done many things, including buying Michele's Marketing Plan (I do advise new owners get this, if not for the that sounds like a great idea, but for the organization it gives). I also do believe that talking with professionals is a plus, I am lucky to have a brother who opened a fitness studio and learned a lot from him as well as having friends who own pole studios that have been successful.

    If you read this and were thinking, OMG nevermind! DON'T! You can do this, it is possible! I have no doubt that this article is by far the best I have read on people starting their own studio! Thank you so much for the excellent advice! Don't give up on your dream, just know all the steps in order for you to continue to live that dream!

    Nicole
    Owner of Poleletic Fitness
    www.facebook.com/poleleticfitness
    www.poleleticfitness.com

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    1. Thanks for sharing your story! Yes! Please don't let this discourage you, potential studio owners!! I want people to open studios...I just want them to be aware of what is involved. I think some people believe they can just get a space and start teaching...so I want them to be better prepared. :-)

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    3. Hi, ladies

      it has been a year since yall started up this conversation. It is really discourage in a way but in other hand the truth has been spoken all above.

      I am a potentional new opener. I rather hier instructor and make sure nothig is missing, not a details. Here we also speak about different places in the world where are different rules, governments , state rules or whatever it is in your home land. Where i am from not only need to pay rent but i need to open a new firm under my name and then i follow the instructions by the law if any required. I am still in my dilemma what to do but nothing in this life is easy, not a day work, night work.. to work for somebody or freelancers. If you want something on your own you definitly have to work all the hours and be "slave" in a way because you are responsible for those peope who choose you and your studio for their pleasures and fun. What should i do.. is a question i need to sit down and conversate with myself but this confession is a true thing and i believe all the ladies in here have rights too. We just have to make a choice to live the dream with risks or do what life puts in our plate which is unfair.
      If you have any advices i would be happy to read.

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  3. Very good read--one of my dreams in life is to start a small business and even selling online there is so much overhead plus easy to overlook fees.

    adAstra
    Flexines.blogspot.com
    "Making the Flexible Sensible with a dash of sexy"

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    1. Everyone wants their piece of the pie! But I do hope you will achieve your dream!! :-))

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  4. I opened my pole studio in 2006. It cost me $60,000 last year to run my studio. That means that even though we took in $80,000 we spent $60,000 of that on employee wages, insurance, taxes, continuing education, rent, utilities, bookkeeper, tax accountant, marketing, maintenance, cleaning, studio supplies and credit card processing fees. That leaves the owner of the studio a grand profit of $20,000 to live on in 2012. Something to consider if you are planning to open a pole studio.

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    1. Great point...those credit card processing fees...they sure can eat into a small business' profits!! What do you do? Raise prices to cover? You can't really charge people to use their cards. It is certainly more convenient to take a card than a check that might bounce. So much to think about...

      Wow...$20,000...I know I couldn't live off that. :-/

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  5. Great job Lori...you truly are a spokesperson for so many. Again, the dream of owning your own business, calling the shots, working when you want...hah...that is a dream...I have a mountain bike that hasn't seen a mountain in 2 years, a snow board that hasn't been on the snow in a year. Be ready to give up alot of the things you use to do on a whim. Its like the decision of owning a home, or renting. Once you do it, there is a commitment that is attached. When you're employed and the day is over you go home and its over. When you own a business you go home, go to bed, and you're still thinking of the next step.
    BUT...I love what I'm doing and I would do it again. Just be ready to work...if you don't want to put in the time and effort. Just be a student.

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    1. We need to send you on vacation this year! :-)

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  6. Thanks Lori. I was wondering what would be involved in setting up a Pole Dance Studio here in Perth, Australia. I'm involved in naturopath therapy, which of course has a significant focus on fitness. I thought Pole Dancing would be more interesting and less costly then a run of the mill gym or fitness centre. Your article pretty much answered ever question on my list.

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    1. I don't know the rules of Australia but hopefully they are more friendly to small businesses! I'm glad to have helped and hope that I didn't discourage you! :-)

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  7. I opened a Pole Studio in a pretty conservative town where the economy is really stagnant. Opened in fall of 2008 and showed a profit from day 1. I had no money when I started and it was very tough. I started a 1 page web site "Pole Studio to Open Soon" gathered emails for a year.

    1st rented in a dance studio put the poles up and down every day for class. it worked people signed up! Wore me out!

    Found a really cheap place to rent, definitely not high rent district, actually could not even get any one to rent to me in a high rent area. No hard wood floors, no fancy lighting. Curtains from the thrift store, Mirrors from the salvage yard. I collected large 4 feet wide sliding closet doors for the year I collected emails, they are free on Craig list, yard sales and salvage yards. No one wants the bronze 1970 style. I myself took all the frames off, backing off, and hung them myself with my husband on the wall. Saved $5000.00

    Charged 6 poles on a credit card, borrowed the 1st and last rent from a friend, and opened.

    I would say the thing that saved me is I had no debt, no student loans or credit cards, and lived way below my means.

    I don't make a lot of money, but do bring home at least $20,000.00 a year. Its not a lot, but this town is cheap to live in.

    I do have 2 other small business's on the side and am very happy. I'm in the best shape of my life, I work hard, but I don't live for money, I live for my choices I made in life. I get to do just what I want.

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    1. You sound positive and i am happy to hear you did start your dream and are confident in future for all you have created!!

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  8. By the way, to add to the above post, and put my name in...

    the year I gathered e-mail address's, I spent an extraordinary amount of time to learn how to advertize on google and get my page to come up, I built my own web site. That particular year I feel was very important in getting excitement going for me, and the Bachelorette parties I did that year were very profitable because I went to their place to host the party and had no over head.

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    1. Great advice!! I'm glad your studio is doing ok! :-))

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  9. Hi! I know its almost a year later since this article was posted. But, I just did a search for pole fitness marketing plans and you came up. Thanks for the great article. Extremly interesting and hits straight to the gut. I am actually still looking for the marketing plan which you mentioned in your article. When I clicked the link it took me to a page of sponsored ads. If you can let me know where I can get a marketing plan that would be great.

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    1. It appears that Jennifer is no longer in business. :( If I come across any pole-specific marketing plans, I will let you know. Where are you located?

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    2. i would like to get an advice as well. I am from Sofia; Bulgaria ( eastern europe)

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    3. you can write me an e-mail as well naturalwoman0107@gmail.com

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    4. Hi there. Marketing plans are usually created by the business owner and a consultant or attorney. I can't give you one. You may want to consult with someone who helps small business owners. Many cities offer help. You should start there.

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  10. Here we are again.....a year later. I'm thinking about opening a business, but curious as to where you can find sturdy poles at?

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    1. You want to look for competition grade such as Platinum Stages or X-Pole

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    2. We had moved this conversation to email but, yes, completely agree. Competition grade is key.

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  11. Also, what size diameter did you all purchase? Which is better?

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  12. 45mm is the safest and great for all size hands. 50mm is great for leg and hip holds, not so much for those who have small hands. They tend to lose grip easier which lends to injuries. No competition no longer uses 50mm.

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  13. Thank you so much Lori for this article! It gives you a good prespective of owning a studio as a whole. Everyone's comments are a big help.

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  14. I went to my first pole dancing class more than 3 years ago and thought, gee I could do this. Space, check in desk, waiting area, floors, mirrors, curtains, and chairs. Not bad! However, I forgot about what it really take to start and maintain such a business which is key. Thanks for posting this blog. I have my work cut out for me should this business venture jumps back in my spirit again. This is a great "Blue Print."

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    1. It is unfortunate how common this is. :(

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