As a studio owner, at some point, like we did after 38 years of ownership, you may decide that it is time to sell your business. The two questions for most are, how do you do that? And who will buy it?
What I am going to propose here you may or may not agree with. And that’s ok. But if you are ever going to sell your business, I recommend that you seriously consider what I am proposing with an open and inquisitive mind. My goal is to share with you all of the potential options you have as a business owner.
To set up the right mindset, let’s first take a look at what we do. The studio owner wears many hats. Most of them come under the creative hat and the entrepreneurial hat.
The Creative:
I think most of us got into the studio business because we love to teach and want to share that passion with our students and do it our way! We all love our students, care deeply about them and want to see them excel not only as dancers but in life as children, teens and adults. We have seen firsthand the incredible impact our studio has had on our students, and it’s not just us saying so - we have received many great letters and have had conversations over the years with former students who have told us how our studio made a HUGE difference in their lives. We are also very proud of the students who have gone on to have very successful careers in the industry like ABT Principal James Whiteside, Broadway Choreographer Richard Hinds and Alabama Ballet Artistic Director Chris Stuart to name a few. We are also honored to have won many awards and are so blessed to have had an amazing team of dedicated individuals who shared our vision and passion. I still love it when our team creates a piece of choreography that moves folks. It is so rewarding and has given us so many lifelong memories that we will cherish forever.
The Entrepreneur:
As a business owner we all have had to make many tough business decisions. Hiring, firing and everything else in-between. Through the years, I must say, this part I have really grown to enjoy. As studio owners we are the CEO, CFO, COO, CMO and head of maintenance (LOL). Challenging yes, but for me, I love that challenge! The key here is that you own and operate a business. It’s not a hobby or something we just do for fun. The IRS identifies you as a business. LLC, Subchapter S or any other entity you go under, like it or not, you are a business. And what is a business? It’s an asset. And like any asset it has a value associated with it. How to come up with the right valuation is a whole other article, but for now let’s focus on the asset. Think about any other asset you may have. Real estate, a vintage car, jewelry, stocks and whatever else. As a business owner, shouldn’t you be intrigued with the idea of one day selling that asset? Michael Gerber, author of the book the E-Myth discusses building your business with the idea of one day selling it. You have put in all of the time, so why not try to see the fruit of all those efforts and build a solid future for yourself?
So now what:
After looking at both sides, it’s time to keep your inner entrepreneur front and center as you uncover where to find a buyer. It could be someone from your team who wants to take the leap and become a business owner. It could be another studio owner looking to expand or it could be a group of investors looking to acquire businesses in our industry. All viable and all legit.
They all have pluses and minuses but there are a few important factors to consider:
Does the prospective buyer have the financial wherewithal to purchase your business? If not, are you willing to finance part or all of the sale?
Are you willing to take on the risks that come along with the decision to finance the business deal and how long will it take for you to receive all of the funds?
How will this sale impact the team you have in place?
Is it important to you to keep your studio legacy alive?
Would you care if the name of your studio is changed and the curriculum is altered?
Are you willing to discount your business valuation to reward someone who has worked for you?
Would that decision impact your financial security and is that in your best interest?
Have I got you thinking? I hope so!
This is a big decision you are about to make and, in my opinion, you must look at it from all angles. The key here is that everything should be on the table. Only you can decide what is best for you, your family, your financial security and your business. Hey, you have after all put in all of the hard work, the sacrifices and have also taken all of the risks. You deserve the best option that fits you, with no judgement or questions.
With that in mind, I have seen some chatter on social media about studios selling out, jeopardizing the dance studio world or the studio losing their soul if the owner decides to sell to any of the larger groups looking to acquire studios.
And to that I say, nonsense!
A business does not have a soul of its own, rather the heart and soul is provided by the group of people gathered around that business and its purpose, energy and mission statement. A business is there to serve. The business owners direct all of what’s going on by hiring the right team and then nurturing and empowering them so that they can help create a welcoming and creative environment for your customers. When that owner sells, no matter who the purchaser is, there will be change! And not all change is bad. Let’s circle back for a moment to another asset you may have, your house. When you sell that asset will the new owner change things inside and outside the house? Will you try to get the best price you can for that asset? The answer to both questions is YES!
Stop for a second and think of all the people who have sold their businesses. Some famous folks who have cashed out and have made a huge profit, good for them! In many cases they were purchased by a bigger entity that had the resources to acquire them. So why not take a page out of their playbook? Find a buyer who sees the value in what you have built and is willing to give you a good price for it. Furthermore, it doesn’t matter who it is as long as you are comfortable with them, their plans for your studio, and all of the terms of the purchase. Change is inevitable, embrace it and move forward. Find the right buyer for you, whoever that is, it is your choice and there is no right or wrong, period! If that somehow makes you feel uncomfortable, what’s the alternative? Giving it away? Or just closing up your studio? No matter which way you decide to go, change will happen! I have always felt sad when I see a local business that has been around for years and had success to just one day disappear. I have often wondered, why wouldn’t they sell? Folks loved going there and how was it possible that someone, somewhere wouldn’t want to buy it? My hope for you is that this doesn’t happen. Your community will most surely miss you.
What if I told you…
You could sell your business and your legacy/brand will remain. Your studio name stays the same!
Your team would be well taken care of by a new general manager, someone on your team, who would be well compensated.
You would receive a good price for your business and would not have to finance any part of the deal.
Additionally, if you wanted to, you could stay on in some capacity as a teacher, choreographer or doing part time admin work. Just doing what you really love to do and getting paid to do that as well!
Would you seriously consider this offer for your studio?
Well, that is exactly what happened to our studio when we sold it to Ensemble Performing Arts. We were their flagship dance studio. And I am happy to report that everything we hoped and dreamed for with this deal has come to fruition.
We chose Ensemble mostly because they are experienced operators who consider themselves stewards of the owner’s visions. Our studio continues today under the D’Valda and Sirico brand with the same team and programs, which was really important to us. Ensemble is a partnership led by Misty Lown and Mandy Yip, both of whom we have known for over 10 years, together with Jeff Homer. Long before they became part of the Ensemble team and we have always admired their passion, expertise and integrity. Teri Mangiaratti who is also part of the team we met about 4 years ago and love what she is doing with her In Sync Action Plans. These are just some of the team’s 5-Star individuals that we are honored to call our friends.
As for me, aside from my work here with Dance Teacher Web, I also consult dance studio owners who are interested in selling their business. I have worked with studio owners who want to buy out a partner or sell to someone else, as well as advising them on how to get their business ready to sell. Additionally, I am proud to work with Ensemble as a consultant who helps them connect with business owners who are looking to monetize their assets. But my purpose of writing this blog was not to push or promote any one option but to present to all business owners all of the different opportunities out there. Your Studio is, after all, something you have built from the ground up. Whatever route you take should benefit you and not be subject to scrutiny by people who don’t even know you.
On a side note, I personally do not like it when people claim to know something when they really have no firsthand knowledge of the situation. They are creating drama with a narrative that they want to project. Making claims and assumptions on some perceived fear that isn’t reality. No one is trying to take over or push out all independent dance studios. There is room for everyone. Different strokes for different folks!
“The only thing we have to fear, is fear itself”
Franklin D Roosevelt
I am happy to work with any studio owner looking to dance into their next chapter.
Contact me at Steve@danceteacherweb.com
Here’s to your success!
