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!