Thread: studio....need advice

Hi everyone. I need some advice. I'm currently teaching at a studio where I pay a certain $ amount based on how many students I have. The studio is great but unfortunately they are closing their doors at the end of the month due to the economy. :(

Anyway, I have found a new studio that I will basically have all to myself exept for Thursdays (there is a bellydance troupe that practices there). I works great for me because I teach Monday - Wednesday. They will be giving me access to use the studio whenever I want. The owner of the studio is no longer teaching and the building is only used on Thursday nights.. The deal is for me to pay a monthly fee plus electricity (they want me to put it in my name). The troupe that already practices there will be giving me their monthly fee and then I pay the owner.

I already have teachers insurance through IDEA for myelf and additional insures my current studio.

So, based on these terms and info I've provided, what do you think I need to start teaching at this new studio? It seems to me like I'm leasing the building and the troupe that is already practicing there will be renting from me? If that's the case, then I need studio insurance. Should I require the troupe to have insurance themselves? Will I be liable for them?

Help please, any suggestions/advice would be great? I still need to sit down and speak with the owners but just wanted to get an idea since this is new territory for me.

Thanks!
Maria

Congratulations, you're a studio owner! It sounds to me, too, like you are subletting the studio from its previous owner and renting it out to the other group.

Who is your current insurance through, and what is the square footage of the studio? I used to have teacher's insurance that just happened to also cover my studio, up to 1000 square feet -- I think that was through Venbrook? (sorry, I've had a couple of insurers over the years & don't remember for sure) So when I first opened my studio, I discovered that my facility was already covered.

When I opened my second location, though, and hired more instructors I bought insurance through State Farm. It covers me for a lot more facility-related and business-related issues. The cost is closer to $800 a year, where I was only paying $275 before, BUT that's for two locations.

Most of the instructors who teach at my studio are professionals who teach other places, too, and already have insurance. I don't make new teachers get insurance immediately but if they are becoming long-term fixtures I will ask them to.

You need to find out whether you need a business license through the city. Contact City Hall. You may also need fire inspections, occupancy permit, etc. If your area is zoned for business this shouldn't be a big deal or a major expense. (a business license was $75 in the smaller town where I operate, $300 for a 'special district' in St. Louis)

Depending on your city, you may also need to pay business tax (in St. Louis it's 1% of your earnings).

I'm assuming that you're already claiming your business income as a teacher and you can just continue using whatever accounting system you've been using for your new business.

Lauren..thanks for your reply.

I currently have insurance through IDEA. I will be the only instructor there other than the occasional workshop that I host. I will also be getting a business license (LLC) for the studio.

My main concern is about the troupe that is already practicing there. They aren't teaching but only practice and I don't think they have any type of insurance. Will my studio nsurance cover them?

Maria

I think it depends on your policy -- I'd contact your insurer and ask them to be sure.

Incorporating into an LLC isn't the same thing as getting a business license from the city. If the city requires one, you'll need it no matter what your business structure is. Also an occupancy permit, possibly sign permits, etc. I suggest just visiting City Hall they'll walk you through everything you need.

I think Lauren pretty well covered it (when in doubt, ask- different policies cover different things!) but I wanted to throw in that this isn't as hard/onerous as it sometimes seems. Everyone I've dealt with (city, state, feds, insurance, licencing, whatever) are generally nice and helpful because they *want* businesses to succeed. That was honestly my biggest hurdle in setting up either of my businesses- this weird notion that the agencies are out there to get you on some infringement. I've made mistakes, filed things late, etc. but there has always been someone in whatever the pertinent office is who has helped me get back on track. The property owners should have a rental contract for you which outlines what they require as far as insurance.

ETA- I love my small business development center! Yay for free counesling for small businesses! Go find your local Small Business Association and see if there's anything in your area. Not only do they know what permits & such that you will need, I've had some good leads for various things, like inexpensive places to host special events, referrals to local artisans whose wares I now sell, etc.

You'll also want to find out about getting the music licensing required for a studio. You'll need to talk to ASCAP, BMI, and SESAC. Those are the major 3 and were required for us when I co-owned a ballroom studio.