I have owned a school with more than 400 students for 21 years. Until last summer there was a dancewear store about 10 miles away, where my students and those from many area schools purchased their dancewear. For the last few months I have been ordering my students’ shoes and dancewear from various wholesalers, and I have been making a nice profit from these sales.
Last week the space next door to my school became available for rent and the landlord offered me a very reasonable rate. The location would be perfect for a dancewear store. I figure that my students alone are a good start for the business and I hope that the other schools in the area would send their students there.
My parents have years of experience in retail and my dad is out of work, so I think he could manage the store. What advice can you offer me as I contemplate this decision? —Helene
If you decide to move forward with this venture, I advise you to completely separate the dancewear business from your school. Come up with a name that is not similar to your school, let the store have its own entrance, and be sure that the employees of the store do not try to solicit students from other schools to take classes at your school.
I suggest this for a couple of reasons. One, you want to gain the trust of the studio owners in your area that they can send their students to your store and not worry that you will try to recruit them. Two, several of the biggest names in the dancewear business will not sell their products to dance schools. By creating a separate entity, I believe you will have a better shot at carrying many of the brands that your clients would want to purchase.
I do think a base of 400 students is a good start to launch a dancewear business, but to offer your father a full-time job, cover the rent, and possibly have additional employees, you would need business from other students and dancers in your area to make it work financially. I would get on the phone to talk with the school owners to determine whether they would send their students to your store. Just like you, they might have found wholesale dancewear to fill the gap for their students. If they are making a profit on these sales, they may be less apt to send that business your way.
As a dancewear store owner in 2011, you must also understand that several reputable online dancewear retailers often sell their products at discounted rates, and some of them are offering school owners rewards for sending students to their sites. You must consider these online options as your competition.
Another point: What is your father’s experience with dancewear and fitting shoes? One of the most important aspects of owning a dancewear store is being able to properly fit a dancer for pointe shoes, which requires experience or training. You might need to hire someone qualified for this role.
Finally, it is important to investigate what the investment in inventory for your store would be. Many wholesalers have minimum-order policies that could run into thousands of dollars. In some cases you might be able to order a product for a customer, but overall it is better for customers to walk out of the store with their purchases. That is what will set you apart from the online stores.
It is not my objective to discourage you from jumping into this venture, but I have known dance teachers who have had tremendous success selling dancewear and I have also met some who have lost their shirts. This decision is one that you must investigate thoroughly to be sure it is the right move for you.
One final question to ask yourself: Will you make as much profit, if not more, by keeping your dancewear situation the way it is now, or will you clear more with all the expenses associated with owning a full-fledged store? You might discover that you are better off financially with what you have already. Good luck to you. —Rhee