Financing the Dance: Part II

In order for me to truly pursue opening up and running a successful dance studio, I need a solid financial plan.  I need to break down all of the financial aspects of running a studio and put the numbers down on paper.  I would start with an income statement and then move on to a balance sheet.  An income statement “is like a motion picture: It shows what has happened during the accounting period with regard to the revenues (income) and expenditures (expenses) of the business.” (Entrepreneurial Finance, pg. 65)  This will help me budget my company’s money in a responsible manner that will ensure longevity of my business.  On a typical income statement, you have things such as: gross sales, cost of goods sold, and operating expenses.  Your gross sales are basically just the money you make off of the sales of your product or service.  Your cost of goods sold is the money you spend on acquiring the goods that you plan on selling.  Lastly, your operating expenses are all of the costs you have to pay for in order to run your business efficiently.  Some of these expenses may include: salaries, rent, and utilities.  The importance of having my income statement filled out and ready to go is so I can know exactly how much money my studio is bringing in and how much money is going out.  Keeping a record of all of my business expenses and revenue is critical to the vitality of my company.

            Now, a balance sheet is also very critical.  A balance sheet, also known as “the statement of financial position, lists all assets and liabilities.  It is like a snapshot taken at an instant in time.” (Entrepreneurial Finance, pg. 71) This gives me a record of all of the aspects of my company that are of value and all that are risks.  In the case of building my studio, being knowledgeable of everything that holds value and everything that poses a potential risk is extremely critical to the longevity and success of my business.

Source:

Adelman, P. J., & Marks, A. M. (1997). Financial Management and Planning. Entrepreneurial finance: finance for small business (5th ed., pp. 65, 66, 71). Upper Saddle River, NJ: Prentice Hall.

Financing the Dance: Part I

To finance the dance studio that I want to open post graduation, I will need to start with a critical management function, strategic planning.  To start, “planning is a systematic process that takes us from some current state to some future desired state.” (Entrepreneurial Finance, pg. 30)  My current state is at level 1, brainstorming and doing the groundwork and paperwork to start up my company.  It is going to take a lot of planning over a lot of time to grow my business and get it to my future desired state.  Now, I need to get into the specific form of planning that I am going to implement and that is strategic planning.  “Strategic planning involves establishing an overall plan for the business.” (Entrepreneurial Finance, pg. 30)  I will need to take my two and a half years of entertainment business education and draw up a very detailed, in-depth business plan to get me to owning a very successful dance studio. 

            My next step is to decide which type of ownership I would like to possess.  I need to decide between a sole proprietorship, a partnership (general or limited), a corporation (C or S), or a limited liability company (LLC).  Upon researching all of the different types of ownership, I have decided to start up a LLC.  A LLC “is a hybrid business entity having features of both partnerships and corporations.” (Entrepreneurial Finance, pg. 41)  It is “taxed as a partnership, has limited liability for its owners, and has flow through income and losses to individual owner’s tax returns.” (Entrepreneurial Finance, pg. 41)  Also, “the business income is accounted for on each ‘member’s’ individual income tax filing.” (Entrepreneurial Finance, pg. 41)  Past the definition of a LLC, it also has some major advantages.  These advantages include: “limited liability, eliminating double taxation, no restriction on number or type of owners, and it is easier to raise additional capital”. (Entrepreneurial Finance, pg. 42)  Now, out of all of the forms of ownership, a LLC has the fewest number of disadvantages.  The two main disadvantages of a LLC are: “limited life and transfer of ownership difficulties”. (Entrepreneurial Finance, pg. 42) 

On top of my research, my father is also an entrepreneur and he recently switched from a corporation to a LLC, so that somewhat influenced my decision as well.  He is a very intelligent man with a great business sense and a very lucrative, successful business.  He has inspired me to become an entrepreneur and he is the motivation I have to pursue my dreams!

Source:

Adelman, P. J., & Marks, A. M. (1997). Financial Management and Planning. Entrepreneurial finance: finance for small business (5th ed., pp. 30, 33-42). Upper Saddle River, NJ: Prentice Hall.

National Dance Association

The National Dance Association promotes dance education and focuses on health and reaches out to people of all ages.  Their vision/mission statement is: “The National Dance Association envisions a society where dance and dance education are an integral part of education and community life.  The National Dance Association (NDA/AAHPERD) leads in promoting and supporting creative, artistic, and healthy lifestyles through quality services and programs in dance and dance education.” (American Alliance for Health, Physical Education, Recreating and Dance, 2013) NDA has various educational programs and services.  They have the National Dance Honor Society, The National Dance Educator of the Year Workshops, Author Workshops, Let’s Move in School-Let’s Dance! Workshops, Page-to-Stage Workshops, Pedagogy Conferences, Dance Technology Conferences, Steps to the Future Workshop, PIPEline: Teaching Dance in Physical Education, Arts Advocacy Day, Continuing Education Units, The Choreography Evaluation Project, and Dance Education in America Exhibit.  They have also won numerous awards, such as: the Heritage Award, the NDA Scholar/Artist, Dance Educators of the Year, Student Awards, and the Student Literary Award.  This association is important to my industry because they educate people on how great dance really is.  They also inform people on how healthy and fun dance can be, which is very important, especially to children.  They promote and get the word out about dance education and they really narrow in on how important it is to have dance in the curriculum and to stay healthy.  They help my industry by creating healthier, more educated dancers.