Summary
Entrepreneur scaled her dance lessons business from a few families in her parent’s basement to thousands of families in a gorgeous studio, but couldn’t scale her personal mission – offering discounted classes to families who otherwise couldn’t attend. By partnering with Village, she now offers scholarships that allow EVERY family to participate in Diamond School of Dance's incredible classes, without sacrificing her business.
Background
As we can personally attest to – our founder’s sister was one of Alicia’s early students – DSD is a prime case study in how to scale an extracurricular business from the ground up. Alicia’s self-taught knowledge has made her a thought leader amongst the national community of dance lesson business owners.
The one thing that hasn’t scaled, though, is Alicia’s ability to serve dancers from lower-income backgrounds.
In DSD’s basement phase, providing financial flexibility was easy – Alicia knew every family personally, and she had little to no costs besides her own time. If a family needed a special arrangement in order for their child to attend lessons, Alicia could make an exception to her normal rates.
But as word of mouth spread and DSD’s customer base and business expenses grew, it became increasingly damaging to the business to make these exceptions:
- To keep up with the volume of customers DSD needs to standardize billing, but these family-specific financial arrangements make that a hassle.
- Alicia no longer has personal relationships with all of her customers, so decisions on whether to lower rates for a family need to be made on blind trust – which has come back to bite her multiple times.
- Back when she was a solopreneur, waiving lesson fees just meant less money for Alicia. But now DSD relies on a staff of instructors, so giving away lessons for free either hurts their wages (and therefore product quality) or conflicts with Alicia’s goal to keep the lesson fees as low as possible for all families.
There was one path to solving all 3 of these problems that Alicia was aware of – starting a nonprofit to fund dance scholarships – but that came with its own list of barriers:
- Setting up a nonprofit entity and board of directors
- Applying for 501c3 status from the IRS, and if awarded, retaining it
- Fundraising donations from 3rd party donors
- Creating eligibility guidelines for families seeking scholarships, then assessing applicants
- Issuing + tracking scholarships given
- Annual state and federal tax filings and reporting requirements for nonprofits
All of these cost time and money that DSD simply doesn’t have as an independent studio.
Alicia faced a dilemma: If DSD was much larger, she could offer scholarships because she’d be able to run a nonprofit. If DSD was much smaller, she could offer scholarships because she’d know the families personally and could teach the lessons herself without any overhead. But as a mid-sized activity Provider, Alicia found it impossible to both do the right thing for her business and fulfill her personal mission to increase access to the extracurricular she’s passionate about.
Coming out of COVID-19, this became a business issue, too, when registrations decreased as families’ economic realities worsened. Scholarships were needed badly, but Alicia was stuck.
Our partnership
When Alicia found out about Village and its scholarship program, she was ecstatic.
Within days of first finding out about Village, Alicia’s team had all of DSD’s upcoming lessons moved over to Village and alerted their community about their new capacity to offer scholarships.
One day later, scholarships were being issued for DSD’s registration, all without further work by DSD, or a single dollar leaving their pocket. Here’s how:
- Once DSD was onboard Village and approved by our team, a “check for scholarship” button automatically appeared on every one of their registration pages.
- Applications are assessed using far more data than an individual Provider would have access to – we check the family's financial status based on information they provide, along with their participation in extracurriculars across their entire Village account.
- Scholarships are awarded from donations to Village’s nonprofit arm that we raise from local individuals, businesses, and charities.
- Families receive their results within seconds. If eligible for a full or partially subsidized rate, they have 24 hours to redeem their scholarship. Families sign up just like they would normally, and Village routes the balance over to DSD’s bank account as if the family had paid the whole cost themselves.
We’re just getting started in this partnership with DSD to increase access to dance for families in their community, but the impact is already evident both on a small and large scale:
- Within minutes of launching on Village, we learned of a teenage girl that was connected with Village by her after school club who had signed up to take her first ever dance class, with the help of a 90% scholarship.
- One week in, DSD has taken in 42 new reservations for their 5-week Mini sessions serving kids ages 3 through 18. These $69 sessions equate to $2,898 in earnings for DSD.
