Wednesday July 30, 2008

Ahhhhhh, the dilemas of small business.  Last week we finally bit the bullet and made the decision we've been avoiding for a very long time.  Faced with the economic realities of our explosive growth and subsequent increase in expenses, we could not continue to be in denial regarding our monthly unlimited cards.  

Those of you who purchased and used these cards got a great deal.  So great a deal in fact,  as a whole, you averaged $6.43 per class - as compared to $20 if you had paid by the class.  That's about a 70% discount.  How long could any business sustain collecting 30% of what it needs to cover expenses?  Not long.  But in spite of this, knowing how attached many of you had become to the studio, our non-mathematical right brains reasoned we could offset the losses on our unlimited cards by offering more classes - and allowing the classes to run very very full -  but that didn't solve the problem and on the contrary, it created new ones! 

The good news is that after deciding to discontinue the unlimited passes altogether, we are going to give it one more shot.  The price is now $225.  Let me explain.  The studio is 4 years old.  In our first few years, we set pricing based upon the following criteria:

1. what other studios were charging (even though our space was much bigger and more expensive and we had more classes and more teachers on payroll) and

2. what we thought was affordable.  

What has changed is now we have historical data.   The monthly unlimited at $150 was a guess.  The new monthly unlimited at $225 is based on actual attendance data.

There's a lot of buzz about this circling around on Facebook and Myspace pages and we expected the fallout.  Of course!  I'd be complaining too if I had been paying $6 for a $20 class and it got taken away!  We are very sorry to do this and hope those who cannot afford the new unlimited card, will consider the monthly pass ($150) with a 15 class cap.  Or any one of our class cards - that haven't changed in price. 

Dance 101 is a pioneer in our industry.  The leader always gets the most arrows.  Why aren't there more adult dance studios?  Have you wondered this?  It's not for a lack of students - as we have proven.  The answer lies in the business model of drop in classes.  Of all the classical dance studios in this country that cater to Adults, the one who figures out how to be profitable will cause a ripple effect with Adult dance studios popping up in every neighborhood and giving LA Fitness a run for their money. Will that be us?  Who knows.  But for the time being,  Dance 101 will prevail. --Ofelia