Your ability to operate your dance studio as a business is the main determining factor of your profitability. To help you sharpen this ability, here are seven significant principles that every business owner needs to follow. They are relevant and important at every stage of your business. Remember that, even though your business is based in the arts, it is a business, and your dance classes and programs are your products. Once a year, its essential to look at your studio from this business perspective to make sure youre getting the financial results you want.
1. Your Product Must Answer A Definite And Immediate Need. The first principle to consider in selecting any new product or service is to determine if it fills a genuine, existing need that customers have right now. A new product or service must solve a problem of some kind for the customer or make the life or work of the customer better in a cost-effective way. You must be very clear, from the beginning, about exactly what your product or service does to improve the quality of the life or work of your customer. For example, in recent years we have added Sunday classes as we found there was a need for this in our area.
2. Offer Excellent Quality At A Fair Price. The second principle for business success with any product or service is that it must be of good quality and at a fair price. If it's in competition with other similar products or services, it must have what's called a Unique Selling Propositionone or more features or benefits that make it unique, different and superior to any competitive product or service. Determine what makes your classes or programs different and better than others in your area. This area of uniqueness is central to success in business. No product or service can succeed unless it is somehow unique and superior to any other product or service that competes with it. There's seldom any opportunity to build a business around a "me too" producta product or service that's just the same as all the others, where the only difference is that it's you who happens to be marketing it. The safest business strategy is to start off with an accepted product that already has a widespread market and then find a way to improve upon it in some way. Make it better or of higher quality, or lower the price in some way, like offering an 11th session free when a student signs up for 10. Instead of trying to invent a new business, start off with a service that people are already using and find some way to make it more desirable.
3. Be Careful With Your Money. The third principle for business success is keeping a tight financial control on expenses and careful budgeting. Successful companies use accurate bookkeeping and accounting systems. They put these systems in place at the very beginning and carefully record every penny they spend. Even the largest multi-national companiesthose that do billions of dollars in sales each yeartend to be very careful with their expenditures. They're constantly looking for ways to cut costs while maintaining the same level of quality. They focus on frugality at all times. If youre still keeping records on the back of an envelope, or forgetting to keep records at all, you might not even be aware of how goodor badyour cash flow is. Make an immediate resolution to move to a simple software bookkeeping system or some step up from what youre currently doing.
4. Cash Flow Is Essential To Success. Especially with a small business, you must hold onto your cash the same way someone drowning would hold onto a life preserverlets hope that image is far from your situation, however! Cash is the lifeblood of every business. Cash flow is a critical measure and determining factor of business success. All successful entrepreneurs install careful financial controls and monitor them every day. They carefully consider every expenditure. They take the time to analyze the use of every dollar. They work from detailed budgets and they review them every week and every month. The basic rule for entrepreneurial success is this: only spend money to earn money. In business there are only two categories: revenue and expense. The basic rule for running your business is "If it's not revenue, it is expense!" Set up your system so that you always have some amount of cash in reserve. More than not spending money you dont have, you want o try to build a cushion in case of emergency. In these economic times, this may be harder to do than ever, especially if you have parents who are struggling to pay their bills. In necessary, work out payment plansthis way you are assured of a certain amount of money coming in every month.
5. Guard Your Cash Carefully. One key to business survival, with regard to your operations, is "frugality, frugality, frugality." I once read of a man who had started with nothing and built an $800 million dollar business empire by the time he was 55. I was amazed to see that he ate lunch at a small diner across the street from the office, and drove a used car. He delighted in saving money. Even when Wal-Mart founder Sam Walton was worth more than $25 billion dollars, he still drove his own pickup truck to and from work. This attitude of frugality from the top permeated every aspect of Wal-Mart all the way down and throughout every department. (It pretty much still does!) Practicing frugality assured that the business was profitable, year after year.
6. Maximize Your Marketing Efforts At All Times. One of the most important principles for business success is strong momentum in the sales department. This requires an emphasis on marketing that involves your entire staff. Though arts-based, a dance studio is still a business, and hopefully a profitable business, so everybody must think about selling and satisfying customers all day long. What's the purpose of a business? Some people say that it's to "make a profit." But thats not the right way to look at it. The true purpose of a business is to "create and keep a customer." Profits are the result of creating and keeping a sufficient number of customers in a cost-effective way. Thats where your business emphasis has to be. And keep in mind that, although you teach students, their parents are your customers, too.
7. Remember That Selling Is The Core Skill Of A Successful Business. The key to business success is simple: "Sell! Sell! Sell!" One of the most important single skills you must develop for succeeding in your own business is the ability to sell yourself and your product to your customers. In fact, the ability to sell is one of the indispensible skills for a successful life. With very few exceptions, all successful businesses begin with a single person who's excited about the product they are offering and who's very good at selling it to others. They like their product so much that they can hardly wait to talk to other people about it, and they are eager to make new customer contacts. But without sales expertise, the finest product or service will fail. The key here is to learn how to communicate what youre offering to others and, as you grow and bring on staff, to get your people excited about your programs and have them help you spread the word.
Brian Tracy has produced more than 300 audio and video learning programs that cover the entire spectrum of human and corporate performance through his company Brian Tracy International
