Most studio owners know their busiest classes. Fewer know their most profitable ones.

A packed Tuesday evening ballet class feels like a win. But if you're paying a senior instructor $45 an hour, splitting a large studio with another session, and offering a discounted rate to fill spots, that class might be earning you less than the quiet Thursday morning beginner tap with eight reliable students and a junior teacher.

Profitability by class is one of the most useful numbers a studio can track — and one of the least often calculated. Here's how to do it with nothing more than a spreadsheet and the data you already have.

Step 1: List every class and its gross revenue

Start with a simple table. One row per class, one column for each of the following:

• Class name

• Number of enrolled students

• Price per student per month (or per session, if you run drop-ins)

• Gross monthly revenue (students × price)

If you offer both subscriptions and drop-ins for the same class, track them separately. A class that looks full on the register may have half its students on discounted drop-in rates, which changes the revenue picture entirely.

One music school found that its group workshop brought in $37.50 per drop-in student or $134 per month on subscription — the same physical class, but very different revenue depending on the mix of payment types. The same logic applies to dance: a contemporary class with ten students on monthly plans and four drop-ins is not the same as one with fourteen monthly students.

Step 2: Calculate the direct cost of each class

For each class, you need two numbers:

Instructor cost per session
If your instructor is salaried, divide their monthly pay by the number of sessions they teach. If they're hourly, multiply their rate by the session length. Don't forget to include any employer taxes or benefits if applicable.

Example: An instructor paid $30/hour teaching a 60-minute class twice a week costs you $240/month for that class alone.

Room cost per session
If you own your space, this is harder to calculate precisely, but you can approximate it. Take your total monthly occupancy cost (rent, utilities, insurance) and divide it by the total number of hours your studio is in use. That gives you a cost-per-hour for the room. Multiply by the hours each class occupies.

Example: $4,000/month in occupancy costs ÷ 160 hours of use = $25/hour per room. A 90-minute class uses $37.50 of room time per session, or roughly $150/month for a class that runs four times.

Add instructor cost and room cost together. That's your direct cost for the class.

Step 3: Calculate contribution margin per class

Subtract direct cost from gross revenue:

Contribution margin = Gross revenue − Direct cost

This tells you how much each class contributes toward your overhead (admin time, software, marketing, insurance, etc.) before you've covered those shared costs.

A class with a positive contribution margin is pulling its weight. A class with a negative one is costing you money every time it runs.

Worked example:

In this example, Adult Jazz is losing money. That doesn't mean you should cancel it immediately — it may serve a retention or marketing purpose — but you should know it's a loss leader and make a deliberate choice about it.

Step 4: Calculate your break-even headcount

For each class, work out the minimum number of students you need to cover direct costs. This is your break-even number.

Break-even students = Direct cost ÷ Price per student

Example: If a class costs $390/month to run (instructor + room) and you charge $80/student, you need at least five students to break even. Student six onward is pure contribution margin.

This number is useful for two reasons. First, it tells you when to cancel a class that's been running under-enrolled for too long. Second, it tells you how aggressively to market a new class before its first session — if break-even is five students, you probably want seven or eight confirmed before you open the doors.

Step 5: Look at the pattern across your timetable

Once you've done this for every class, step back and look at the full picture. A few questions worth asking:

Which classes have the highest contribution margin? These are your core business. Protect them, invest in them, and think carefully before changing their format or pricing.

Which classes are chronically under-enrolled? If a class has been running below break-even for three months, it's unlikely to recover without a specific intervention — a marketing push, a format change, or a different time slot.

Which instructors are teaching your most profitable classes? This matters for retention decisions. Losing an instructor who runs two high-margin classes is a bigger operational risk than losing one who runs a single low-margin one.

Are your drop-in classes subsidising your subscription classes, or the other way around? Drop-in revenue is unpredictable. If a class depends on drop-ins to stay profitable, it's more fragile than it looks.

A note on classes that don't show up well in the numbers

Some classes earn goodwill rather than margin. A beginner class that feeds students into your intermediate and advanced programs may look unprofitable in isolation but be essential to your pipeline. A community class offered at a low rate may anchor your reputation in the neighbourhood.

The point of this exercise isn't to cut everything that doesn't maximise margin. It's to make those trade-offs consciously, with real numbers, rather than by feel.

Doing this regularly

Run this analysis once a quarter. Costs change (instructor rates, rent reviews), enrollment shifts, and pricing that made sense eighteen months ago may no longer reflect what the market will bear. A quarterly review takes about an hour once you've built the spreadsheet, and it gives you the information you need to make pricing and scheduling decisions from a position of knowledge rather than instinct.

At Noto, we built studio management software specifically for music and arts schools — partly because we kept hearing from owners who had no clear view of which parts of their business were actually making money. The analysis above works on paper or in a spreadsheet, and it's the same logic we used when thinking about how revenue, instructor costs, and enrollment data should sit together in one place.