Episode 6: Costumes on a Budget

This week on the lounge we are discussing costumes on a budget!

If you go to Kohl’s and purchase an item, you don’t expect to pay the wholesale cost, you know it's going to be marked up. But, from a dance mom’s point of view, Erica didn’t understand why you would mark up the price of a costume. Thankfully, our gracious podcast host Caroline, former artistic director and owner of Reverb Performing Arts Center, does a great job of breaking it down.

Let's say you have little kids “tiny toes”, then you have your primary level kids and then you have your competition students. For each of these programs you're going to collect a specific amount for costumes. Tiny toes is $55.00, next level is $65.00 and then $75.00, and so on. You set that budget. If you can get a costume for $35.00 then there is nothing wrong with that. That's what we have to tell ourselves. As a dance mom, Erica wondered why the studio was able to keep the remaining money. From her perspective, she wanted to know that every penny she paid was toward that costume. (As a studio owner, you may struggle with the same thought, remember, in comparison many other activities, dance classes are relatively inexpensive.)

Here’s why costume money is not all for costumes. The process: studio owners aren’t simply going to the computer and picking a costume. They are searching and it requires some diligence when you are shopping on a budget. They measure all those students for sizing. Then they spend the time on the computer setting up the orders. The costumes come in and get sorted. They are inspected… no holes, correct color, all the accessories are in the bag, new tights are paired with them. If the size is incorrect, it hast to be returned, meaning paying for a new costume and shipping costs. You see where that $20.00 from finding a costume under budget is needed. Someone needs to be payed for all of the work that went into this process.

As we have said, Studio owners deserve a paycheck.

Most Studio owners so desperately want these kids in the studio. They want to make the studio available, make it possible for parents to have multiple kids in the studio and to take multiple classes. As a studio owner, you can't do so at the expense of your family, your time, your life, your finances. There has to be a balance. Costume markups shouldn’t be the way you're making all of your money but it should be a way that you're bringing in a profit.

Caroline had mentioned she would take tuition out at the beginning of the month. Then mid month, a portion towards the costume cost. In Erica’s dance mom experience she had two larger payments per season, one being typically the end of November and around Christmas time. Some parents may prefer to just pay upfront and have that cost out of the way, but having multiple choices is helpful for studios and the families.

We talked about this with budgeting when discussing recurring expenses and variable expenses. The costume expense as a parent is a variable expense. When parents sign up they would see right up front what they would owe for each child, each dance class, each costume and then split that out over each month.

Another option you have is to put together promotions at registration. Caroline would run a costume contest, knowing the profit coming in from registration fees would more than cover the cost of a free costume. The first 50 people to register are entered to win. Budgeting for costumes is a simple, effective way, to stay consistent and earn a profit.

Upcoming episode… No Money, No Mission!