Summer Moving, Happened So Fast

Summer moving, havin’ a bla-a-ast!

Summer?  In October?  Ok, its been a crazy last few months – but I finally have had some time to write about my summer adventures!  Hope you are all having a wonderful start to your school years – I’ve missed blogging and am happy to get back to it.

A little background – I have two studio locations, with the smaller location having one dance room. We are in a strip of businesses and we are currently the second-to-last unit from the end. The last unit on our end used to be rented by a Curves (workout for women), but the owner decided to move on and the space went up for lease last January.  It sat vacant for a few months and I looked at the space, did some calculations, negotiated the price and by June, we were in contract!

It may sound like I jumped in quickly, but in reality, I tried to make sure it was a smart decision, talked it over with just about everyone I could think of who could give me some perspective and triple-checked my break-even calculations.

So here is a super short tour of what we started with, and I apologize for the poor quality cellphone pictures:

That is standing in the front of the building, looking towards the back. The doorways back there lead to a utility closet (furnace / AC units) and bathroom.

And here is standing in the back by the bathroom and looking at the front.  Our existing space is to the right (“through” the purple wall). Windows look out onto the sidewalk and parking lot and there is an exterior door to the left.  Also strangely located air conditioner to the left and yellow ladder, which did not come with the space, much to my husband’s disappointment.

Here is a floorplan to help visualize. The new space is in purple:

So as you can see, the purple Curves space is a loooong room, but with a lot of potential!  And a lot of PURPLE.  Purple walls, purple trim, purple rug. What’s hard to see in the photos is that the ceilings are actually 10′ tall – which is awesome!
After brainstorming, our potential game-plan into turning this into a functional dance studio was this:
1) Divide the space and create a waiting area – one of the biggest struggles of our existing space was the waiting room was very narrow and small.  It was impossible for anyone with a stroller to enter and would be crazy when one class was leaving and another arriving.  I wanted to make the new waiting room a little bit deeper to help fix this problem.
 
2) Adding connecting doorways – we needed to connect the two spaces together, by joining the waiting rooms and in another spot.  In the waiting room, I wanted an open doorway to make the rooms feel very open and encourage overflow from the narrow waiting room into the larger one.
I also wanted to a door connecting the two studios, but <SPOILER ALERT> apparently the wall between the two studios was filled with bricks?!  My contractor found this to be annoying and confusing (as did I).   The only other place that had just sheetrock separating the two spaces was all the way in the back through the furnace closet.  Not ideal, but as Tim Gunn says, we made it work.

I know you are anxious for beautiful before and after photos, which I PROMISE will happen, but in another post!

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SOBuzz: Employee or Independent Contractor?

If you’re a Studio Owner (SO) or a teacher, there comes a time when you must decide: are you an employee or an independent contractor?

dance class

In most cases of studio owners I’ve encountered, your teachers are considered employees, not independent contractors.

However, the business of dance studios is a very diverse group when it comes to schedules and employee structures.  One studio could be run like a fitness club with changing instructors and schedules, another could run year-round.  Between these extremes exist a multitude of other possibilities.

And the consequence of choosing incorrectly can be costly.  If you pay your employee as an independent contractor when they should be an employee, you and your teacher could owe back taxes and employment taxes, complete with interest and penalties!

Quick aside:  The rules I will be discussing will apply to the United States.  If you’re outside the U.S., consult with an accountant or lawyer for the laws governing your business.


Employee or Independent Contractor?

It all comes down to how much control the SO has over the employee.

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Will An Electronic Signature Hold Up In Court?

Does one click make this contract legally binding?

Have you switched to online registration, but have the urge to chase people down to sign a paper copy because you’re not sure if the electronic signature will hold up should you ever need it to?


Maybe you don’t have to!

Disclaimer:  I am not a lawyer and “The Dance Buzz” is not a law firm and does not provide legal advice.  If legal advice is required, please seek the services of an attorney.

The signature is only as good as the contract.

First things first.  If your contract on paper wouldn’t hold up in court, then an electronic version won’t either.

Have your registration contract created or reviewed by a legal professional to make sure you are including the right language and terms.

Be sure to tell your legal professional what you want the contract to do:  Cover liability?  Create a tuition contract?  Be very specific in your contract and make it air-tight.  Once you have a good contract, then we can move online.

What exactly is the law?

Hand On MouseIf you operate in the United States, your electronic signatures will most likely be governed by the Uniform Electronics Transactions Act (UETA) and E-SIGN law.

The UETA has been adopted by 47 states and Puerto Rico, so unless you live in New York, Washington or Illinois, it will cover you.

How does UETA protect me and my dance studio?

A large part of this act applies to electronic signatures, which how your customers “sign” your contract and policies when they register online.

Two of the most important parts of UETA are Section 7, which gives electronic signatures as much legal value as a paper signature would, and Section 12, which eliminates the need to retain a paper copy of a registration form.  This means that in court, e-signatures = paper signature and no more paper filing for us!

Anything else I should know?

Your must provide a way for your customer to print or save the contract or agreement from your website or else it will not be legally binding.
The UETA words it as making the information “available to all parties”, which means there must be a way to print or save the contract at the time of signing online so that they can keep a copy of it if they wish (Section 8 or UETA).

pen and paper
No more chasing down parents to sign registration forms!
Hooray!

So bottom line, should I have parents sign a paper copy even though they signed up online?

Nope, an online signature is legally binding and a paper copy of the same contract would be redundant and unnecessary paperwork on your end.
Save yourself some time and effort trying to get all those parents to sign the registration forms!
At our studio, I make available a paper copy of our online contract and policies.  I leave them out on the wall for people to take.  I would say only about 10-20% of our customers will actually grab one to take home or read.

Ok, I live in New York, Illinois or Washington or somewhere else the UETA does not apply.  Am I covered?

SOBuzz: 1099-K, What the wha??

Do you accept credit cards? You may be receiving
a 1099-K this year.

If you're a business owner who accepts credit cards or PayPal at your studio, you might have received (or soon will) a new document for your taxes this year, the 1099-K.

You may be asking yourself, "why am I getting this and what the heck do I do with it?" while subconsciously rubbing your temples from the tax headache that's starting to form.

Don't fret!  It's actually not a big deal!  (Unlike the Dance Buzz, who is most definitely a big deal… I'm going to pull on my tax smarty-pants and see if I can shed some light on what is up with 1099-Ks)

WHY DID I GET A 1099-K?
A new law was passed that requires businesses who process payments (like PayPal or your credit card merchant) to report the amount of sales they processed and for whom it was processed (you).  They filed a 1099-K to the IRS reporting the sales they processed for your business.  That means that the government knows how much sales you did through credit cards. And you will report this amount on your tax return as part of your gross sales.

It is a way for the government to make sure everyone is playing fair and reporting all of their sales. In my opinion, I think it is in result of the major growth of online businesses.  This new law will help the IRS ensure that people who do a lot of business online are reporting their sales.  In the past, the IRS had no way of knowing how much income you received from credit card sales, which is an online business' primary method of receiving income.  Ok, I'm off my soapbox now.  Back to the subject at hand.

Read what the IRS has to say

Did you receive a 1099-K for your studio?

I ACCEPT CREDIT CARDS BUT DIDN'T GET A 1099-K.  WHAA?
You might actually not have to worry about it – you will only receive one if you had more than 200 transactions this year and more than $20,000 in gross sales.


OK, NOW WHAT DO I DO WITH IT?
If you have an accountant, give it to him or her.  They will need it to prepare your taxes.

If you do your own taxes, you are going to use this number to breakdown your sales income.

I STILL DON'T UNDERSTAND, SHOW ME AN EXAMPLE

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Business: Avoiding the Growth Trap

Room To Move StudioJust read a great small business article by Jay Goltz at the New York Times:

Avoiding the Growth Trap

Worth a quick read if you are a business or studio owner considering expanding your business to a second location or doing other “growing”.  If you’re like many small business owners, you are constantly looking for ways to improve your business or opportunities to expand.  It is hard to shut down that entrepreneurial spirit that may have even prompted you to open in the first place!

“It really comes down to priorities. Do you want to take outside capital and the “partners” that come with it? Do you want to take on more risk? More employees? More travel? More stress? More potential aggravation?”

Mr. Goltz also makes a good point that sometimes business owners get so caught up in growing their business and expanding that they forget to check if they are still making a profit!

“I have also figured out that business is not just about growth…it is also about making a profit, which many companies seem to forget as they grow themselves out of business. Business is also about understanding that bad things happen…choosing to over-expand instead of being prepared for this kind of stuff can put the company in jeopardy. “

Look before you leap, and really take a hard look at all the possibilities when you are considering expanding. Sometimes its the right move, but sometimes things may be better off left alone.  Figure out your priorities and you will figure out what is right for you and your business.

SOBuzz: A Competitor Who Stole My Ideas

Fantastic article by Therese Tucker (as told to Kathryn Hawkins) over at BNET:  "How I Beat a Competitor Who Stole My Ideas".

As dance studio owners, we have all been there.  You just put out a new ad (website, sign, brochure, etc) and two months–or maybe even two days–later you see a competitor using the same wording for their own business (class names, discounts, etc).  I've personally had a competitor copy and paste all of the wording from my website (which took me days to write) and pass it off as her own idea on her website.  How irritating!

What can we take away from this article for dance studio owners?

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Studio Owner Buzz: Music Licensing FAQ

Musica comprimida  -  Compressed MusicAfter just receiving my ASCAP licensing fee invoice for 2011, I thought it might be a good idea to do a post about music licensing.  I dove into researching the topic and came up with the answers to my own questions along with some interesting other facts.

Full Disclosure:  I only researched copyright laws of the United States, so if you have any information about international music licensing, please comment!

So without further ado, here are some frequently asked questions about music licensing (after the jump):
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