Tribeca’s Downtown Dance Factory has seen a 491 percent increase in student count over 10 years, becoming one of Manhattan’s largest studios. The owners’ mindful approach to growth has allowed them to create a business where their work-life balance is just right, too.
Children’s recreational dance programs in the trendy Lower Manhattan neighborhood of Tribeca didn’t exist a decade ago, even though the area has more children per square mile than anywhere else in the United States.
Enter Hanne Larsen and Melanie Zrihen, whose youngest children attended the same preschool. The two bonded over their love of dance and a desire to enroll their kids (seven in total between them) for comprehensive, nurturing dance classes somewhere close to home.
The two recognized they had the right set of skills and experience as a team to fill this market niche. Larsen previously owned a dance studio in Sydney, Australia, and Zrihen has an MBA and a background in marketing and consulting. They first talked about how they would handle launching a business while parenting young kids, and then used other parents as sounding boards to gauge interest and feedback on their vision.
The duo did extensive background research on area gymnastics, art, music and karate studios, looking at their tuition and payment structures, length of classes and holiday schedules. “From there, we were able to figure out what clients would pay for dance classes,” Zrihen says. “We had a pretty good gauge on our neighborhood and what people were willing to do for their kids. Plus, we considered ourselves as potential clients and knew what we wanted for our own children.”
In 2009, Larsen and Zrihen each contributed $5,000 to a joint bank account to launch Downtown Dance Factory as an LLC, with Zrihen as the business director and Larsen as the artistic director. They were profitable by January of their first year and were able to recoup their investments within the first semester of operation. “We made sure to start small. We really considered who we were targeting and then built the curriculum to them,” Zrihen says. “We focused on kids ages 2 to 10, and the studio’s offerings have grown up with our client base.”
Larsen taught all of the nearly 20 classes that DDF offered in a local gym’s studio that first year, which they rented by the hour to keep overhead costs low. During the first three semesters, clients paid their full tuition in advance upon enrollment, providing the owners with the cash to front any major expenses.
Mining the Power of Word of Mouth
Downtown Dance Factory’s advertising and marketing plan initially focused on the basics: a handful of print ads in über-local publications, business cards, and marketing postcards placed inside local businesses frequented by families. They now use strictly online advertising.
Eileen Libutti Steel originally heard about DDF through “the mommy grapevine,” and she loved the studio’s mission. “Hanne and Melanie were moms, and they wanted for their kids what many of us wanted, too: one place to get great instruction in different dance genres.”
The “mommy grapevine” is a powerful word-of-mouth marketing tool. DDF finished its first season with 220 students, many under the age of 8. Larsen and Zrihen quickly recognized they had outgrown the scheduling capacity of the gym’s studio and needed a larger, more permanent space. In July 2010, they signed a lease for a 6,300-square-foot space—the entire fifth floor of its current location at 291 Broadway—where they created three studios, two restrooms, a girls’ changing room and space for stroller parking.
Key to DDF’s continued success is paying close attention to the marketplace and responding creatively to new revenue possibilities. “We looked at what people wanted. Were they enrolling in more jazz classes than ballet? Were they adding multiple classes on specific days?” Zrihen says. “We looked at enrollment numbers and the age of our population and tailored the schedule to them.”
Larsen and Zrihen focus on what they do well and have stayed with that approach. “At the end of the day, we know what works, and we believe it’s a good product,” Larsen says. “If it’s not for a particular person, that’s completely fine.”
In January 2012, they added half of the fourth floor to their lease, and in 2016, they took on a 10-year lease for the entire fourth floor. By the end of 2016, DDF had so many students performing in the 913-seat auditorium at the BMCC Tribeca Performing Arts Center, they needed a performance run of three days and seven distinct shows. DDF was also invited to perform during Liberty and Knicks basketball pre-game and half-time shows at Madison Square Garden. The six DDF performing companies feature students ranging in age from 8 to 17, and each company gets to perform at least once a year at these games.
Adding More Revenue Streams
Even with Downtown Dance Factory’s growth and success, leasing two floors of real estate in Lower Manhattan is not a cheap endeavor. Larsen and Zrihen recognized early on the importance of finding additional revenue streams beyond class offerings, uniform dues, the $50 costume fee per class, $25 recital tickets, and branded studio apparel and merchandise.
First they analyzed ways to expand curriculum by adding dance styles and creating beginning adult classes. DDF also offers a summer program with weeklong sessions for half- and full-day participants.
Beyond that, DDF brings in revenue by renting space for rehearsals and small-scale productions, and through its robust birthday-party program for children ages 3 and up. Party fees for a group of 10 children start at $700 for 90 minutes and may increase depending on the theme, goody bags or additional attendees. The studio provides an hour of dance classes and activities, along with paper products, helium balloons and a studio-branded item for the birthday child, and about 30 minutes for food and cake.
And, from November to March, DDF turns one of its studios into an indoor play space with a ball pit, tunnels, books and building blocks for babies, toddlers and preschoolers twice a week. The two-hour drop-in sessions are $10 and provide a way for children to play and learn, while their caregivers build friendships and learn what else the studio has to offer.
Reaching an Optimal Size
At the moment, Downtown Dance Factory has 1,300 students, seven studios, 175 classes each week and 50 staff members on payroll—including some who are devoted exclusively to customer service. Like many co-owners of businesses, Larsen and Zrihen themselves don’t take salaries. Instead, they share in net profits as determined by the Schedule K-1 tax forms they file to report partnership earnings, losses, deductions and credits.
The current space has a modern, playful atmosphere, thanks to the interior design aesthetic of Ghislaine Vinas, an early studio client and friend. Most of the studios have marley; two have wooden floors; and all are equipped with mirrors and ballet barres. There are two reception areas, newly renovated changing rooms and restrooms, stroller parking and two large waiting areas. “We felt it was important that the studio be welcoming and comfortable—a place where students and parents could enjoy being while they wait,” Zrihen says. “It helps create that sense of community.”
DDF’s community sensibility and its quality instruction have visible results. Its students place well at competitions, a dozen have been accepted to the prestigious LaGuardia High School of Music & Art and the Performing Arts and some have decided to continue dancing in college. While its core client base still comes from downtown Manhattan, word continues to spread, and clients are now traveling from Brooklyn, Staten Island, the Upper East Side, New Jersey and even Westchester, NY, to take classes.
Larsen and Zrihen have considered some requests to expand to physical locations outside Tribeca, but they decided against it in the interest of maintaining a healthy work-life balance. “We both live within three blocks of the studio, which is literally our second home. We didn’t want to be away from that and our families,” Larsen says. “We’re really lucky with what we have and that we get to be a part of this community. We don’t want to stretch ourselves too thin.”
This mindful approach to their business means that even with hundreds of students now, Larsen and Zrihen somehow remember every student’s name, personally reflecting the messaging on the DDF website: “Big Studio…Family Vibe.”
“As DDF has grown, it has managed to keep its small-studio feel,” Libutti Steel says, noting that her daughter is now 14 and takes 20 hours of classes weekly. “Melanie and Hanne set out to do something for their kids and the kids in the community. They have grown organically by doing something they love.”
Hannah Maria Hayes is a freelance journalist who has been writing for Dance Media publications for a decade.