The #1 Dance Studio Owner Trap To Avoid

Hello friends, I'm Amanda Barr, and I'm Rebecca Lubrennen, and welcome to Dance Principles United, the Podcast. Together, we are passionate about helping studio owners with the business of running their studio. Join us as we talk everything from marketing, systems, studio, culture, motherhood, life and everything in between. This is the Dance Principles United Podcast.

Hello everybody, welcome to another episode of the Dance Principles United Podcast, we're here. in studio today, it's look, it's our after lunch podcast, so we sometimes we gotta like, prep ourselves up a little bit because like, yeah, like always after lunch, get that little bit sleepy. But how are we all after lunch? Ready, ready for another interpretable episode?

I'm pepped now. Pepped now, let your tea. We've got my tea. It's all happening.

Hey, we're gonna try this. It's all through us doing a podcast today. We don't normally do that. Normally it's just two of us.

We gotta try it. We might all end up talking over the top of each other. Who knows? Or it might work really well.

It might work really well. We already just talked over the top of each other. I was going to say I thought Amanda said she was going to see it a bit quieter and this one and it took her about 43 seconds to break. Now I'm not going to hear from me again, everybody, if you're interested, I'm done.

But if you watch on the YouTube, you will still see her here, so that is all good. Look, a super excited again. I'm glad that you approved them. I do.

I do. Look, super excited because as always, look, generally when I'm on, we're talking numbers and money stuff, not ballet and teaching techniques because that's not really my wheelhouse. But we want to talk today about something that's popped up a lot recently in conversations I've been having with studio owners. And it's how much studio owners pay themselves.

And it's a big one because, you know, diving straight into it, like not meaning to give away the whole episode, don't stop listening after this. But, you know, the reality of the situation is I talk to a lot of studio owners that are literally paying themselves nothing. Right? And if you're listening to this, and you're like, yes, that's me.

Know that you're not alone. But then all the way to the other end of the scale, we're chatting with studio owners that are paying themselves 250k plus from their studios as well. So there is the full range of everything and anything in between that. There's different ways that people do it and all those kinds of things.

But today's podcast, we want to, and that's why we've got the three of us on because we've all got sort of different version stories about how that sort of played out for us all working in the dance studio and just yeah about making sure number one that you're paying yourself and ways to make sure that you're paying yourself properly. And then because the reality of the situation is that our studios for most teachers and most studio owners, it's their life's work. get something that they put 10, 15, 20, 30 plus years of their life into, and it's something that they need at the end of it to be able to have generated significant wealth for themselves and their family, right?

And it's crazy because when I was doing it and not paying myself, you just keep defending it because you think, I'm doing it for the kids, I love the kids, which you do. Absolutely. changing children's lives. So you see it as almost a voluntary thing, which it shouldn't be ever.

And so, yeah, it's interesting. I get that mindset of people that people have. It's a passion, it's a hard thing, right? And I think that there's that interesting thing as well that you know, we're talking about the huge spectrum of studio owners paying themselves from zero to 250 plus, right?

But there's also a full spectrum in any industry of businesses doing well and businesses not doing as successfully. I think that's number one. This isn't just, you know, unique to dead studios, but I also think there's a very big spectrum of how hard people are working in their business and how much they're treating it like a business versus a hobby because, you know, I've had some people that I've spoken to and they're like, I just teach two afternoons a week. I'm a studio owner and I'm not paying myself much.

And I'm like, well, are you working much more than 15 hours a week? Like, that's not a full-time job. Like, that's fine if that's what you want to do, but you can't compare your wage to someone who's like fully invested working as a full-time job. Yep.

Totally agree. Totally agree. Without a doubt. And look, something that we that I always bring up when I talk with studio owners about what they're paying themselves is sort of comparing it to national averages and things like that because sometimes we do need reference points sometimes and yeah we shared this at an event we had and I think some people were quite not shocked I'm not sure if that's the right word but interested in about where these things land so the median wage for an Australian person an Australian adult and I think this is it's pretty recent data it's like 2024ish data from ABS that the median wage of an Australian adult is $55,600 Really?

Right. So if you are paying yourself $55,600, then half of Australia is only more than you. Half of Australia is earning less than you. Okay.

Does that blow your mind? Yeah. That would be way higher. Yeah.

Interesting, right? Yeah. And look, obviously, there's lots of different factors because that's Australia-wise. If you're in a metro area, that's going to be very different to country, things like that.

But that's with all statistics, right? So that's just, I think this is a really interesting reference point that, you know, if you feel like, oh, I'm only paying myself $60,000 or something. Well, then, you know, you're in that top half, right? And then like something that really blew people's mind, especially studio owners that are doing quite well and are able to pay themselves great wages to we ask us back, get it a guess.

Let's gamify this. Okay. Here's the question. To be in the top 10% of earners.

I feel like I know this. Okay. It's like Nathan to be quiet. Oh, and I can see that.

I slouched to see you. Hi. OK, back. So to be in the top 10% of earners in Australia, meaning that you are earning more than 90% of all adults in Australia.

Right. How much do you need to be earning? 180. No, lower.

Well, 50. A little bit lower and I'm like, oh, I make you guess again, but like 143,628 if you're really interested in going to the dollar. You're at the top, what? The top 10%.

So if you were paying yourself around that much, then you're earning more than 90% of Australians. And if you wanted to combine that with your partners income, like looking at it from a household, then to be in the top 10% of all households income in Australia, $235,425. Wow. So look, I know understandably for some people like that might seem like a long way off and we'll get that as well.

But hopefully that just sort of puts those both of those numbers like helps give you a bit of a reference point Now if you feel like you're not paid like you might be only paying $40,000 at the moment or something in your studio That you're not that sort of far away from that average point. Hey, can I throw something else in there? I know that I'm meant to be sitting here quietly, but I don't know how to do that But um, you know those numbers that you're talking about are averages Most studio owners our females.

That number would be lower as a female. Yeah, without a doubt. Yeah, like you know what I mean, if we actually looked at it as an average across females, it would actually be a lot lower than that. I think that's an interesting thing as well.

Yeah, yeah, without a doubt. And look, so in terms of what I always like things that I keep coming across chatting with studio owners about paying themselves and because we're so passionate about helping studio owners build the studio of their dreams, right? And looking at the different ways that people pay themselves from their studio. Yeah.

So a few of the different ways and there's all sorts of weird and wonderful things. And if you like, if any of this gets you thinking guys, please make sure that you reach out to your accountant for the best advice around this because it's super, super important that you're getting that advice. But in terms of ways that I see people pay themselves. Yeah.

So method one is the studio owner that's often operating as a bit of a sole trader or as a sole trader and so that means that the studio money and their money is very intertwined and it's there there's not a business card and it but yeah there might be a oh this is the studio card type thing and this is Nathan's card but generally there's the one card because they're a sole trader and so the same account that the water bill for the studio gets paid out of and the electricity bill is the same card that gets tapped at Woolies or gets tapped at the petrol station.

What for personal stuff personal stuff. Yeah. This was me. Yeah.

Yeah. Absolutely. This is totally me when I first had my house. Absolutely.

It was me for 15 years at least. Yeah. Absolutely. Not like 15, but it was, yeah, as a sole trader, like as a sole trader.

Yeah. That there's things like that because it's all your money. You're operating as you a person. There's all sorts of different stuff.

But yeah. And so, you know, if you're tapping for groceries, kids cost a lot these days. Let's say you're tapping been $500 a week, imagine what your grocery bill is a week for me, it's right up at what you're telling me. And so like if you were tapping, I'm just going to use this number because it's easy.

$500 for groceries, yeah. And with your situation, let's just say that there's nothing else that you have to tap because you and your partner are able to split the other expenses, gets covered from other places. users. So if you're doing that, we're just going to call it $25,000 for the year is your income, right?

If you don't pay yourself and have a little wage. So wait, just so we understand, you're not paying yourself anything else, but you're just spending $500 a week from the studio account on your family's groceries, right? Yeah. And I hear people say, oh, but I don't pay myself at all.

Like, I'll hang on, but how do you buy groceries? It's off on my question. Like, oh, well, I use the studio card. I'm like, cool.

So like, you're not paying yourself nothing, you're actually taking $500 a week in drawings out as just happens to be in the form of groceries, right? And lots of people do that. Again, no judgment is that's where you're at at the moment and that's where you're at in your journey. The problem becomes when people are doing it that way is that if you were working in another job to get that $500 in your pocket but to be able to tap at Woolies or Coles, you actually would have needed to have been paid, I don't know, but let's just call it $700 for my easy maths, yeah?

Because you get paid $700, you get the 200 tax taken out and you're left with $500 that's in your account to go and spend, right? So unfortunately, what people that pay themselves this way and don't have regular conversations with their accountant, they get caught out, because at the end of the year, you've got to report all these things. The tax offer sits down and goes, what about that 200 bucks a week, tax you should have paid? They ask you for it.

They ask you for that $10,000 straight off the, and they're pretty good at making sure that they get paid first, right? Much better than we are at chasing up our overdue fees. So that's something that lays in. Like Becky said, you've paid yourself that way.

Amanda definitely did those sorts of things. Like it's something that we see all through the industry. And it's okay as long as you're managing it properly, right? And I think that's key about whatever way you're doing it, making sure that if you're doing this to make sure that you are keeping track of it and keeping yourself sorted and with your account and so that you're meeting all your obligations without being too boring.

Absolutely. We were having a joke before that Beck and I stay absolutely way too often. And then we're saying it. I've just said it like three times.

I've got the giggles as well. I didn't even realize I said it then. We will forgive them. We will forgive them this once.

I feel like we need to just like make this a little bit more fun with Fighters charts. So we'll just b**** about me and Beck talking about absolutely absolutely. So lootly. Okay, so that is number one problem.

What were you going to say Beck? I interrupted. I was going to say absolutely absolutely. Well, let me jump back in and take control and get you guys back on track.

So like I said, I talked about yet method one that I said studio owners paying themselves in inverted commas a lot is just tapping the studio card. Cool. Method two is the studio owner that doesn't even tap the studio card for their groceries, but what they just do is they peek into the bank account every now and again, and they just pay themselves what we call the old shit money. Oh shit, I need some money, and they get in there and just grab a thousand dollars.

They just pay themselves randomly $1,000 because I feel like there's enough money left. Is that- Is that- Have you done that? I don't know. I think you're one or the other sort of thing.

Yeah. I mean, it was a long time ago. Yeah. It was doing that, but not that I can remember.

I know that if we, you know, if I made a lot of money off the concert, I'd take myself on a little holiday. Yeah, absolutely. So I guess that's kind of the same thing. Yeah, absolutely.

Dermy. All right. I feel like we need to now, this is going to be our clip. How many times can we possibly say, absolutely, in a podcast?

Well, we could find not to say it. It was me. It was I was going to be in it. I know.

It's going to be in our brains now. So, like I said, that's option two, really, really guys recommend against that if you can, because if you're just taking what's left over, then you're not prioritizing yourself. And it's something that we know and something that I love working on a studio owner's with is making sure that if you are the business owner, if you are the one that's got the name on the door, you're the one that is taking on all the risk in the business. When things go south, which hopefully they don't, COVID was a great example for us.

We don't like to hunt back onto COVID too much, but the reality of the situation was that for the day after lockdown, I vividly remember sitting there and calculating with all of our savings available, everything that we had, how many more months of mortgage repayments did we have? Because that was then a few days later, JobKeeper came in and lots of and that was amazing for us as a business at the time. But that's the sort of risks we run being the business owner. Absolutely.

And because we take those risks on, we are the ones that deserve to be rewarded for it. That's what we're super passionate about. So that's why I they really prefer that studio owners don't just take that, I'll shit when it's available money. It's super important that you are prioritizing yourself.

And to be honest, like the tapping the card at the groceries or the petrol station falls into that category as well. Because what happens if you go for groceries that week, then it happens not to be enough money in the studio account, like what has to happen then? It's still that sort of same mentality. You're only taking what might be left or what might be available at the time.

and it means that you're not prioritizing yourself and not being able to, I guess, build the studio of your dreams because it's being really reactionary. Love that. Totally off topic, but God, I'd love a two-week look down right now. Just like, I don't know if you really have to say that.

I saw somebody else wrote that on Facebook the other day. Just two weeks of just like, you know where to now. So, I feel like I'm on a three-day lockdown on every weekend. Just as an FYI.

Absolutely. You do know that a weekend end of goes for two days. I do it like a three day. I go from Friday morning until Monday morning.

I do not leave my house if I can manage it. Right. It's not. You should come down for a weekend.

It starts on Friday 9 a.m. We'll see you there. It's a real party.

All right, you guys. This is why we don't do this room. It's because you guys just get like, I feel like I have to be the school teacher. Yeah.

You're getting. All right. Okay. So you've told us the ways that you did I see?

Number one, number two, what is there a better way? Is that what you're going to tell the stakes? What we'd prefer to see studio industry, regardless of how you set up, regardless of whether you're a soul trader, regardless of whether you're a company, is to treat yourself like an employee. Yes.

And to be making sure that you're putting on your own oxygen mask first, to make sure that you are paying yourself whatever wage that you can afford from the studio at this point, and like I really challenge like if you're listening to this and you're one of the studio owners that are paying themselves nothing at the moment, or even a studio owner that's not paying themselves what they think they deserve at the moment, is just to immediately put your wage up 50 dollars, even if that goes from zero to 50 dollars, because so much of finance and money and numbers is psychological.

And if you're prioritizing paying yourself first, you'd be amazed about the expenses and things like that that you end up being able to come. Absolutely. Because you've got to put your oxygen mask on first. It's crazy, though, that like, and I was saying these before in a podcast that we were on night, that people would pay a T-char, seven, eight hundred dollars a week, but they won't pay themselves.

Yes, it's insanity. It is. And it's something that happens all through the industry. We know that it does.

And it's something that, and look, again, this is said with no judgment and a hundred percent love. But the reality of the situation is, if you aren't paying yourself anything and paying all these other people, you've just created yourself a really poor paying job. I'm not a business. You're volunteering.

You're volunteering with risk. A lot of risk when it's your name on the door, you know, I think that's super interesting and about putting your own oxygen mask on first, right? Like you were saying before, like all of a sudden you magically find the money because I really do believe that we want to affect, you know, lives through dance. We want to change kids' lives.

We want to have an impact. However, we can't do that if we are not making money for a period of time. And look, you know, there is like, we've all done it, we've all worked for X amount of years and not been paid what we deserve. You know, maybe you have a partner, maybe, you know, whatever that is.

Maybe you live at home and you're young, but it's not sustainable for an entire life. And it builds resentment. Yes, that's exactly what I was going to say. Yeah.

And it builds resentment to your staff. It builds resentment to your clients, to your families. That's when people get the shits about things and they don't be their best self. You're gonna show up as your best self, your best business owner, your best teacher, your best leader if you are being paid what you deserve.

So even if, like Nate said, it's like $50, pay it to yourself first before anybody else because you do deserve to be paid. And it's because you then feel like you're doing it for everyone, which you're not, because they're actually opting into as a business, but you get the mentality that I'm doing all of these for all of these kids and parents, and don't they understand that I'm sacrificing you that all the time. I'm sacrificing my family time for them, and then when they leave or complain, you then make it so personal.

Because it feels like a favour. Right, exactly. Whereas when you start realizing they're clients, they're opting into your business and I really changed that language in my own self when I started running it properly. You're a client.

This is a business, this is a business transaction. So then when they, and you know, I'm paying myself well, so then when they leave, you're kind of like, okay, well, my business wasn't right for them or always so reflect whatever but it doesn't have the same life to the heart. Yeah exactly. And that's the thing you know it all like you know when we had every every studio has those like you said back those clients that move on the the big clients that you pour your heart and soul into but when you flip their mentality does it still hurt a little bit?

Yes we can't pretend it doesn't but holy molly it doesn't hurt a lot less and as you're like we used to flip the switch on that. Remember there was one specific student that really made us lip the switch on it after a lot of flexion, soul searching on it and from that point on it was always like a little bit of like that sucks like have a bit of a winge about it to each other and support the staff who are often upset about it as well. Yes. But in our minds we were just thinking cool we'll get through new preschools tomorrow.

Exactly. Yeah. It would make us back the same amount money that's half the like less than half of the headache of that high-end client or whatever. Yes and I think it also gives you the power to say to some because there's some periods that you are never ever going to satisfy.

It doesn't matter what you do for them, they are always going to want more more more and I think it gives you the power to sometimes say to people, I don't think this is the right place for you because you can't just keep trying to do those things for those people. That's the worst way to be. Yeah without a doubt. So I'm just going to ignore a matter.

I'm just trying not to talk because every time it comes out of my mouth, it's absolutely. So we talked about, like I said, I started before we got sidetracked off our tangent, which I think is for the best sometimes. But we talked about the best way and what I'd really challenge everybody to start working towards. And we're coming up to end a financial year.

By the time you listen to this, I would say it's a great time to reach out to your account and have that conversation around number one, how can I, like, if you are not paying yourself regularly, number one, it's how can I start paying myself regularly? What is the best way to do that? So that I am setting up and supporting myself financially. Or if you are at the point where you're wanting to increase, what you pay yourself, talk with your account and about that, about what that looks like.

Hey, I haven't actually had a pay rise in the last four years. I deserve one. My studio has done XYZ. So what does that look like what do I need to do to make that change?

And I think most effectively, like I would really love everybody to be paying themselves as regular employees. And you know, you're accompanying at the moment back, you're an employee of Paws. Is that right? Yep.

Which means that not only are you getting that regular pay, Paws is also because you're an employee, you're also getting contributed to your super as well and being able to build your wealth for your retirement and your future and stuff like that. That's a huge one because I didn't do super for so long. Yep, it's so many business owners and studio owners overlook. Yep, that's a huge one, guys, to please reach out to your accountant or your financial advisor about, because that's one thing that even if you haven't paid yourself very well over the last 5, 10, 15, however many years, That's the one thing that if your business starts or is becoming more and more profitable, that is one thing as business owners that we have a really, really great amount of levers to pull to be able to catch up or start catching up at least on what we've, what we may have missed out on in the last, in the last half of the many years.

Yeah, I think we should do a whole another episode on Super and what that means. Yeah. I think there's so much to dive into with Super Chat and, you know, we all have very strong opinions on super for staff members. We are very passionate.

We've sat here before. I mean, really passionate, but we also are passionate about it for yourself. So I think we should do this in a whole nother podcast. What do you think, guys?

Yeah, absolutely. Like a bit of a wealth creation and type. Absolutely. So here is the thing.

If you are not paying yourself what you deserve, put your own oxygen mask on first. Make sure you increase that. Even if it's just a little bit, even if it's $50, you know, if it's more great, but make sure you're paying yourself first because you'll be surprised at what will happen when you do it psychologically that way. Yeah absolutely and it's just it's become something that you just want to do more and more and more and more.

So so good thank you so much guys for listening to this week's episode of The Dead's Principles United Podcast. Hey if you have listened we want to know how many times did we say absolutely in this podcast? Drop us a DM, count them, maybe we have an magic prize for you. We hope you enjoyed this episode of the Dance Principles United Podcast.

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