10 Questions to Address Before Acquiring an Established Dance Studio Business
It's important to have legal and financial counsel before making any purchasing decisions. At the very least, have an expert provide feedback on any documentation before any money changes hands. These questions are meant to provide an outline and starting point to guide a preliminary conversation if you are purchasing an existing studio business.
- What is the approximate value of the business based on data from Schedule C tax documents and Profit & Loss from the business for at least the past to years?
- What is the approximate value of the tangible assets being sold? This could include equipment like flooring, barres, sound system, website URL, logo files and customer database.
- If you'll be renting the building when does the lease expire? What are the terms for transferring it? Can the currently rental rate be locked in? Ask to speak with the landlord directly.
- If you'll be purchasing the property, ask for all the background data on the building. Ask for information about the abutting property or other commercial uses nearby. Ask about room for expanding the studio.
- Are there employees or independent contractors currently working for the studio? Are they planning to stay? What do their contracts look like – non-compete clauses? Employment at will? Are the employees planning to stay on? Who manages the office and everyday studio operations? Will they stay on after an ownership change?
- Can any of the current policies or licenses be transferred? Ask about things like ASCAP, BMI, etc.).
- What processes are currently in place for registration, tuition or payroll? Can these accounts be transferred? How can these merchant accounts be set up with a new tax ID number? Are these processes currently working or will you need to create new ones?
- What relationships are already established with vendors? Can those accounts and passwords be transferred? What is the current relationship with theaters? Who is the contact person for these theaters or other community partners?
- What are the trends of this studio? What is the studio culture? What is the studio's reputation in the community?
- What is the history and studio story? Has it shown consistent positive growth? Is there anything important to note in the history of the studio that could affect it moving forward?
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Thank you for a great webinar! It's good to know that we're all feeling the same, no matter where we are in the world. Thanks so much x I cannot tell you enough how good it feels to connect with someone who's willing to look at the truth of the situation with humor and cautious optimism... I definitely needed a lot of that advice, but more important, I needed to hear it from two badass, empowered women. Thank you, the webinar has definitely given me some motivation to put some work and time in to plan our new normal in the studio. Thank you so much for today. Lots of great ideas. Thank you!
