Local performing arts studio dances its way through COVID-19 pandemic

LITTLE ELM — A small dance studio is now breaking even in sales since it re-opened in May, after the stay-at-home order expired, thanks to good rapport with students' parents and a little bit of luck.

3-D Performing Arts Academy, or 3-D Dance, as it is more often called, was undergoing financially tough times after the novel coronavirus pandemic hit the United States back in March, in which Denton County issued its stay-at-home order.  The order classified the small business as “non-essential,” so it had to close, and its sales plummeted.

“We had no idea that we would shut down,” Owner Michelle Finch said.

“That was just crazy,” Owner Suzy Simpson said.

At the start of 2020, however, 3-D Dance was only going to get bigger, and only more money was going to be made.

Finch and Simpson had accumulated eight years' worth of money to put a down-payment on a second location, which was going to be in Celina.  But on the same day that they were going to sign that lease, which they had originally planned to sign just about a week earlier, the lockdown went into effect.  The delays in signing the lease were not COVID-related.

“Since we didn't sign before Spring Break, and then we could kind of see this virus starting during Spring Break, we chose not to pursue it,” Simpson said.

They thought the money would have to go elsewhere, and they were right.  3-D Dance's projected versus actual revenue rate for April and May was only around 57.5 percent.  The months before that, however, were from 94 to 120 percent.

“Our 2020 projections were to continue to grow,” Simpson said.  “Our highest revenue month in the entire history of 3-D Dance was February of 2020.  And then, all of a sudden, we just went pbbt,” she said as her hand fell down.

Even though Finch and Simpson were not able to open a second location, not only did that already-saved-up money help preserve their business as a whole, but they also got help from the federal government via the Coronavirus Aid, Relief, and Economic Security (CARES) Act.

They got $58,700 from the Payroll Protection Program (PPP), which ensured their employees kept getting paid regularly during the shutdown, meaning they would not have to file for unemployment.  They also qualified for and took out the Economic Injury Disaster Loan (EIDL), worth $150,000, which is good to use for about four to six months, but they have not used that yet.

$20 million of CARES Act money also went to Phase II of Denton County's Operational Plan for Economic Normalization (OPEN) Grant, in which 3-D Dance received $45,071.63.

Finch said the government did enough to help keep her business running during the height of the pandemic.

“We also had some good traction,” Finch said.  “We had a great advertising system.  We had a great reputation and a great relationship with our parents, and they trusted us.  So I think because our business was strong, it was enough to keep us.  It was just enough.”

3-D Dance's classes work like a regular school year.  Finch and Simpson made its summer tuition free to try to keep students engaged until the beginning of the 2020-21 school year.  They believe that helped with sales during the Fall semester by keeping the student enrollment retention rate up.  3-D Dance began to break even during September.

“As long as we don't have to close again, or as long as we don't see a sharp decline [in student enrollment] again, we'll come out pretty much exactly as we should have had COVID not happened,” Finch said.

However, the pandemic is still going on, and according to University of North Texas Accounting Professor Neil Wilner, he thinks they might go out of business if the pandemic lingers for too long.

“That's something that hurts everybody, and again, leads to a downwards spiral where you would have more businesses going out of business, meaning more people are going to have to cut back on their expenditures,” Wilner said.  And we already talked about being in a recession; it could lead to worsen if we can't get a hold of this thing and get back on the growth cycle.”

Wilner also said that having an adequate cash-on-hand flow will help 3-D Dance continue its business with customers.

“Any way that they can get the cash flow to keep them in business until we get a recovery from the pandemic itself, and the related economic recovery that will come with it, it's going to be a positive to be able to stay in business until you get to that point,” he said.

He also said that bigger businesses have it easier since they normally have more cash on hand, and that 3-D Dance will need about six months' worth of cash to stay in business until the end of the year.

Since 3-D Dance's PPP and OPEN Grant money have already been spent, Finch said she currently plans on using her EIDL money to cover the normally low sales of June and July.  But if there is another area that needs more attention in the future, she will put it towards that instead.

“We went ahead and took it out, and then we'll use it if we need it because it's the best insurance policy you can have is to just have money sitting in the bank, so it's sitting in a money market right now,” Finch said.

The upcoming presidential election could also determine what will happen with 3-D Dance's financial status.

According to a Gallup poll, voters ranked the economy as the fifth most important issue when voting for a candidate.

With the exception for a single family of four kids, everyone is back at 3-D Dance, taking classes in person.  As a result, Finch is mainly concerned with another possible shutdown, but she does not think that will happen.

“I just don't think that people will tolerate it,” she said.  “I think that we'll be open with some sort of restrictions, but I don't think it'll be a total shutdown like it was March through May.  So, I'm optimistic that it's behind us.  Even if the virus continues, I don't think the shutdown will happen again.”

We will just have to wait and see.  For now, 3-D Dance continues its routine.