By Sara Willcutt

Consider your plans for the next five to ten years.

Do you want to start small and save up to move into a larger space? Do you have the capital to start in your ideal space? As you start to look at options, remember to evaluate all the costs involved. Renting a space that is already set up as a dance studio is good for a small business owner on a tight budget. Renting also provides more flexibility if the studio gains many students and needs to move to a larger space.

Plan ahead:

You need the ability to sublet some or all of the space. If student enrollment grows quickly, you may need to move to a larger space before the lease is up. Read the lease very carefully to make sure subletting will be an option.

Maintenance:

When renting space, it is the landlord’s responsibility to provide building maintenance. Find a reliable landlord. Some may get around to fixing things fast, while others take a long time to respond and may be difficult to contact. Find a landlord that you feel comfortable with.

Remodeling:

Some landlords will help with the cost of remodeling, especially if they believe it will make the space more profitable in the future or if they have a long term commitment from their renter. Some landlords, however, will not help with these costs. When deciding about a space, consider how mush remodeling will need to be done immediately. Talk with the landlord to see if they are willing to help with any costs. It they say yes, get it in writing. Business owners should be prepared to modify the space themselves, or work with what is already there.

Rent Increases:

One drawback of renting is the potential for rent increases. One option to protect yourself is to negotiate rent increases ahead of time.

Get help:

A commercial real estate lawyer can help you go over the leases and understand its implications. It is great to be excited about your plans and want to move forward. However, it is important to know exactly what you are getting into. There are several organizations that provide free or inexpensive counsel to the arts community.

Buying a space:

Buying is a big commitment. Many business owners start out renting, build up a student enrollment, save capital and then, expand to a larger space or to owning a space as a way to move forward.

Things to consider:

One benefit can be that payment will not increase over time. Also, if you want to sell your, space you can often do so at a profit.

The capital challenge:

The amount of capital needed for a down payment coupled with remodeling costs can be a real challenge to come up with. Owning a space requires long term planning. Besides the initial investment, owners are responsible for maintenance and property taxes

Help from the government:

To help small businesses succeed, the US government allows owners to write off the interest on a mortgage as a tax deduction. To find out more about deductions and help in planning your business, go to the IRS website.

The benefits of owning:

The space you own is yours to change and remodel as you see fit for your establishment. Stable payment amounts help with long term planning for the school. Recognition in the community is very important. When you stay in one location and build a good reputation, you will have a steady enrollment of students. It can be difficult to change spaces. If you move to a new location, you will probably lose some students just because of the move.

Zoning:

Whether you are renting or buying space, you need to find a location that is zoned for a dance studio.

The type of space:

Some industrial spaces work well for dance studios because they have large open spaces. You may need to take down walls to open up the area needed for classes. Industrial spaces may be available at lower cost simply because they lack the divided areas for office space.