Wednesday, April 4, 2007

Anatomy of a Startup: Allongé Dance Center

We recently had two full-fledged entrepreneurs (as opposed to aspiring, as most of us are still…) come visit our ever expanding Mogulettes meeting (we now have 36 members!) to share how they got started. Olimpia Hernández and Luis Blanco launched the Allongé Dance Center almost two years ago. Here are a few highlights of their story.

Trained as a dancer since she was a child, Olimpia had been dreaming of opening a dance studio for a long time. She had actually tried to do it on her own in the past but it hadn’t worked out. Then she met Luis, who has a background in finances, and decided to ask him to be her partner. From a business perspective, they complemented each other quite well. Luis could focus on doing the numbers-crunching and researching their target market, while Olimpia's expertise as a dancer and instructor would help them formulate the curriculum for the school, and give them a competitive advantage.

Luis and Olimpia share their startup secrets

Once Luis agreed to come on board, they decided to set a start date - that way they had a deadline to work towards. They gave themselves 9 months to prepare and immediately started looking at possible locations for the school. Their target market was parents with enough disposable income to pay for their children to attend dance classes, so they went into the census website and searched for neighborhoods with annual household incomes of $80,000. After that, they checked to see if there were any cultural or religious components to the area that might make a dance school unpopular with its residents. Competition was also a consideration, so they looked for places that didn’t have a lot of other studios operating there. Forest Hills, Queens, was their eventual choice. They even found a space that had just been vacated and had previously housed a dance studio.

With a little help from your friends
Luis quickly sat down and made some projections of how much they would need to "set up shop". He calculated it would cost $20,000 to renovate and rent the space for the first three months of operations. That was a huge chunk of change, especially since they didn't have it! They would also be losing money when the space wasn't being used, which would probably be most of the time at the beginning. But what else could they do?

Olimpia was able to find help in an unlikely place: she asked none other than her old boss for advice, who came up with a much cheaper alternative. He owned a dance school in Westchester where she had been teaching classes, and since she planned to open a studio in another county, she knew he wouldn't feel threatened. He suggested they do what he did when he started out: find a space they could rent by the hour, and only pay for the amount of time they needed it. Brilliant! (Another reason why we need mentors: to avoid costly mistakes!)

Howdy partner!
So they switched gears and looked into health clubs, karate schools and other options, until they found a yoga studio nearby that fit their requirements: a hardwood floor and a few open slots of time in the afternoons. However, when they got down to negotiating the rent, the owners wanted too much. So Olimpia and Luis came up with the idea of partnering up with the "yogis". They offered to give them a percentage of their profits in exchange for paying less rent, and the deal was sealed. Another hurdle overcome!

Coming up next: How Allongé found low cost ways to advertise

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