|
 Taking
A Giant Leap
Loving every minute of it, I’ve owned a school for thirty-two
years. Now I’m about to turn sixty with a tired body, grown
children and a retired husband. I want to make change in my
own life by selling my school, but I don’t know how to go
about it. What have other dance school owners done? Should I
look to sell it to one of my long time students or teachers or
should I look for an outside buyer, not associated with the
school? How do you determine the value of a dance school? I’d
love to have feedback from other teachers. Thanks—Betty
I just
recently had some friends sell their studios for similar
reasons. They went about it in different ways. If you have a
nice number of students, some people sell their studio based
per student. To give you an idea, one friend sold her studio
for $1000 per student and had approximately 160 students.
Then she added up the floors, mirrors, barres, and recently
done upgrades and that's how she got her price. Another sold
her business based on her average profit over the last seven
years, and then added in other costs such as floors, etc.,
taking into consideration the depreciation of the items.
As to whom
to sell it to, that is up to you. If you would like to keep
your reputation and name, you might want to think about one of
your longtime students because they know how you ran it and
what you expected. If you are not really worried or are
offered a better deal from an outsider, you might want to go
in that direction. I hope this has helped you a little, and I
wish you the best of luck in everything.
--Jennifer
Chin, Hamilton, NJ
I am
selling my studio now for the exact same reasons. I don't
know how much to charge for it, either. I am told that the
norm is what you gross in 1 year. I think I am going to charge
three-quarters of that, though. That includes everything. Just
walk in and teach.
--Cheryl,
Satellite Beach, FL
You might want to approach current faculty members first, as
they have the greatest chance of retaining your clientele
after the sale.
I have been told by a real estate broker that a service
business, which is essentially what dance studios are, can be
sold for anywhere between one to two years of your gross
receipts. One year of the gross for a well established studio
that has not grown significantly in the last three to five
years, and two years of the gross for a studio that shows
significant growth in enrollment each year.
--Suzanne
Citere, Lighthouse Point, FL
I recently
sold my business to a young teacher that has a love for the
students and the company. I felt this was the best decision
for me because the children did not go through any change
except not seeing me daily. I probably could have received
more money going to an outside source, but I did the best
thing overall.
--Anonymous
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