Thinking of selling your music school? Or maybe you’d just like to have that option someday?
In this episode, John Kozicki (Michigan Rock School and RockSchoolProprietor.com) speaks with Jeff Homer, founder of Ensemble Performing Arts. Jeff’s built a company that runs over 100 music schools, all through acquisitions from independent owners. In the conversation Jeff explains how to value a studio, find a buyer, and walks us through Ensemble’s acquisition process from letter of intent to integration, all while preserving each school’s legacy and community ties.
In this episode:
- Jeff’s vision for Ensemble and how maintaining community ties within each of the schools under the Ensemble umbrella is key to success.
- Understanding where most music schools are already great, and how Ensemble “takes the baton” on back-end task like hiring, accounting, taxes, etc.
- Marketing and growth strategies that Ensemble uses that any school can apply today.
- What the acquisition process and exit planning look like when Ensemble purchases a music or performing arts school.
Jeff also shares practical tips to make your studio attractive to buyers—clean financials, empowered staff, and smarter paid marketing—and outlines what sellers and staff can expect during and after the transition.
Be sure to check out Part One of this conversation with Amie Nunez from Ensemble Performing Arts here — 85: Amie Nunez | Building a Sellable Music School
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Episode Transcript:
John Kozicki (00:01.568)
Welcome to Rock School Proprietor Podcast. My name is John Kozicki and my co-host Mandy York is not with us today, but I do have a guest who is a lifelong student of music, self-proclaimed, an exceptional student of music, but a proven and exceptional track record in investment and business development. He’s also the founder of Ensemble Performing Arts.
Jeff Homer is joining me today. How you doing today, Jeff?
Jeff Homer (00:32.398)
I’m great, John, and I think many of my teachers would declare me to be an unexceptional student of music, but I’ve very much enjoyed my time with them.
John Kozicki (00:40.047)
Well, you know what? I tell you what, at my school, we’re good with mistakes and you know, it’s all part of the learning process and regardless of, you know, how technically proficient you become, if you’re having a good time, you’re having a good time. So good on you. Good.
Jeff Homer (00:57.806)
I’m definitely having a good time. still take a weekly piano lesson to this day, so it’s fun.
John Kozicki (01:02.248)
nice. So, okay, I know. I understand from reading a little bit about your background and hearing you on Dave Simon’s podcast was the first school that ensemble purchased the school where you were taking music lessons. Okay.
Jeff Homer (01:22.932)
No, it’s not. I decided, so I travel a lot, I have a complicated schedule and I thought it would be unfair to ask an ensemble teacher to accommodate me and my wishes. So I have, I pay someone good money at an arm’s length basis and if they want to deal with me, you know, they’re getting paid to do that and it’s not a condition of their employment.
John Kozicki (01:46.2)
Okay, okay. And to fill in some blanks here, I think some of our listeners probably would know you as the founder of Ensemble, which is a company that purchases and runs music schools. But how would you describe Ensemble yourself as the the founder and the visionary behind it?
Jeff Homer (02:04.6)
Yeah.
Ensemble is meant to be a safe pair of hands for a performing arts entrepreneur that’s built a business that means a lot to them and means a lot to their community and that they want to see continue to thrive after they’re no longer involved but they’re looking to spend their time in a different way. So someone that’s looking to step outside of the business that they built or that they bought and run and wants to see it, you know, really cared for as they have but not able to do it themselves anymore. So yeah, we’re an owner and operator of music schools, dance schools and some related performing arts businesses but always
in partnership with a founder or entrepreneur that helped to build those businesses.
John Kozicki (02:39.908)
Okay, and what what kind of numbers are we talking about here in terms of I guess more specifically music schools only because that’s kind of more the the audience for this podcast, although certainly interested how many dance schools you have also.
Jeff Homer (02:55.906)
Yeah, we own 110 music schools and music stores across the country. We’re in about 30 states. And yeah, it’s a wonderful partnership of community music schools and music stores. And so they all continue to do business as Tampa Music School and Grace Music School and the music shop. So we haven’t rebranded these. So they’re not a corporate or franchise conglomerate. They’re a bunch of community art schools that we now operate on behalf of those teams.
John Kozicki (03:26.746)
Okay, I had this in my questions actually for later in my conversation, but sort of organically, I guess I am curious, what do you think is the difference between the collection of music schools under the ensemble umbrella and say some of the franchises that we do see operating in, you know, across the US?
Jeff Homer (03:50.274)
The difference is local specificity. if you’ll allow me to leverage a consulting framework for a second, I was never a consultant, but.
Consultants love two by two boxes, right? So if you took our portfolio and you put it on an axis where the student experience is serious and there are high expectations to where the student experience is fun and it’s meant to be introductory and really exciting and fresh. And then you took the pedagogical approach and you organized it from classical to contemporary. We have schools in all four of those boxes in terms of even the elusive contemporary serious school. We do have a few of those.
John Kozicki (04:26.48)
Mmm.
Jeff Homer (04:31.984)
It would be really hard to represent those student experiences under one brand. And that’s one of the reasons we decided not to, was that there was not, our view, an opportunity to speak to the difference between a serious school where students have collegiate or pre-professional aspirations and a place to bring your six-year-old to have a really fun first experience with music. And so that’s one of the reasons we love keeping those local brands, because they speak to an experience that has been a valuable
to that community. I think highly of some of the franchises in our space. I think School of Rock in particular is a great experience for students. I love that it’s very performance oriented and that a student that comes in is going to get on stage with their friends as fast as possible and maybe we’ll go back and fill in the theory and technical skills later once you’ve gotten hooked with that performance experience and I think that’s very valid. I’ve always said that you could have a conservatory style school which is most of our schools
John Kozicki (05:17.818)
Mm-hmm.
John Kozicki (05:22.874)
Yeah.
Jeff Homer (05:31.776)
and a school of rock next door to one another and no parent would be confused about which experience was right for their kid. know schools like Bach to Rock you know I think are more
different based on who’s running them. The name Bakhtarakh kind of implies trying to be all things to all people, like that’s quite a span. So I love that our portfolio has kind of that pinpoint specificity in terms of, you know, where are we offering it? The name of the neighborhood or community is often in the name of the school and what are we offering in terms of something specific at the student level.
John Kozicki (05:50.949)
Mm-hmm.
John Kozicki (06:02.169)
Yeah.
John Kozicki (06:06.713)
So on that point, not in my questions, but now I’m curious about this. I run a rock school myself and I understand how a school of rock standardizes their operations. I understand how Bach to rock standardizes their operations across country and many locations. But you are not really doing that from necessarily the…
the user experience or the student experience. So what are you focused on? Because you have to standardize the backend in some way, correct? yes, talk on that.
Jeff Homer (06:46.69)
Yeah, yeah, so my, my pence…
Yeah, my pitch to the very first entrepreneur that sold me a music school here in Lewisville, Colorado was, you she looked at me and said, you know, I love that you are a student and that you’re passionate about music, but obviously you have no business in a classroom. not going to, I’m not qualified to teach a student, especially relative to the faculty that was there that’s very impressive. And so, you know, I was, I was never, it was never my intention to influence the classroom experience because that’s not my
of expertise. But I did see a school at that time that was serving students really well in the classroom but not running a business that matched that same quality behind the scenes. And so, you know, this was a pen and paper, post-it note kind of, you know, environment on a regular basis. And a lot of the teachers experienced the schools like, John, here’s your schedule for the week. It’s on an eight and a half by 11 sheet of paper. Please, you know, check off every student you see. Someone in the office will use their index finger to
John Kozicki (07:36.443)
Mm-hmm.
Jeff Homer (07:50.08)
count up the number of check marks on your paper and we’ll cut you a paper check for your pay at the end of the week. And I’m thinking like, yes, this is 2018. We can do better than this in terms of the operational experience of the school. So I’ve always thought of myself and then later Ensemble when that became a thing, that Ensemble was not the name of the strategy for school number one. But when we built this platform, what we’ve always sort of had this vision for is being a world class
John Kozicki (07:54.692)
Yes.
Jeff Homer (08:19.984)
back end for a performing arts business that does all the boring things, the what I call the 10 p.m. tasks, the things you do after the students have gone home for the day, does all of those things well and leaves the front end experience as untouched as is possible because generally these schools are really good at serving students. That’s not where they need our help. They need our help with payroll and compliance and IT and HR and you know financing like you know accounting and tax and
John Kozicki (08:28.665)
Yeah.
Jeff Homer (08:49.944)
and all those sorts of things that are not the, that are rarely the passion of a music school entrepreneur.
John Kozicki (08:56.985)
Yeah, yeah. So that kind of hits on one of my questions, which was going to be what was it that you saw in? Because my understanding is this was kind of your vision to get involved in a kind of community based business was sort of like a side hustle plan for you, correct? And but there’s got to be something that you saw in.
Jeff Homer (09:21.037)
Yeah.
John Kozicki (09:24.557)
in a music school that made you think like, yes, this is scalable, correct?
Jeff Homer (09:28.588)
Absolutely.
Yes, so yes, I was working for a family investment office here in Denver. So my career up to that point had been in investing. I worked for large institutional investment firms. Often the work that I did there was in partnering with growing small and mid-sized businesses where the thing that they did, whatever product or service that they did, that they served uniquely, they were really good at. as they grew, they needed kind of that scaffolding or that infrastructure to support a growing business build for them. And that infrastructure is really
similar from business to business. So I got a few repetitions that kind of helped me to scale a smaller mid-sized business where there was something unique that they did that was really in demand. So I was working for a family investment office and what had happened was I’d gone from working for a large investment firm in New York City where the work expectations are you’re there 90 hours a week and there’s not a lot of time for other things. Notwithstanding that I was also taking drum lessons when I lived in New York.
But when I moved to Denver, I ended up with a bunch of time on my hands. And I needed something to fill some of that time. And I thought it’d be really interesting to own a small business and to have a connection to the real world in that way. I love investing. I think it’s a fascinating intellectual exercise, but it has a level of unreality where you interact with the spreadsheet and beneath all those numbers are real people making real decisions, but you’re not in touch with them. And so I thought it’d be really interesting
John Kozicki (10:24.26)
Hahaha.
Jeff Homer (10:53.68)
to break through that on my nights and weekends and have a small business that I had a connection to and interact with some real people in my community. And so I started just really naively looking around and seeing what sorts of businesses were even for sale in the Denver Metro. And I was really fortunate to come across a music school and it’s sort of a number of things clicked for me. So my childhood music background and the fact that I’d taken a dozen years of piano lessons as a kid and in my high school and college choirs and these drum lessons I was taking in New York, I of always had the experience of being a student
music, so I knew why it was valuable. But then to answer your question about what was attractive from a business perspective, I started to think about, hey, I had the same piano teacher for a dozen years. Like, this is a sticky, long, live customer relationship. And there’s lots of things to like about the business from a purely financial or investor perspective in terms of that passionate student that has a connection with that teacher translates to customer lifetime value to recurring revenue. And it feels, you know, it’s a business with high revenue quality, which is
John Kozicki (11:33.69)
Mm-hmm.
Jeff Homer (11:53.482)
which is desirable. There’s even like a little bit of what’s called a negative working capital cycle, meaning that you collect money from your parents in advance of paying your teachers. And so there’s actually a little bit of a float that’s created when the business starts to operate, which is a really attractive feature that growth in a music school creates cash. It doesn’t require cash like many other businesses do.
So there was lots of things to like about it. And the intangible one was just these are fun places to spend time. mean, what a positive environment and how different from the sterile corporate finance environments that I’ve been in in the past. so walking into the school in the afternoon and seeing the kids there and the music floating in the practice rooms and just the energy of the place was really exciting. And I wanted to be there. I wanted to spend more time doing that. And I was in a totally different mood driving south to my day job and north to my side hustle.
John Kozicki (12:21.475)
Mm-hmm.
Jeff Homer (12:44.688)
And that’s how I started to think about, can this scale? I helped this one school set up a back office and get off of the pen and paper that I mentioned and get some systems and process set up to address some of those opportunities for digitization. Are there other schools out there that would have the same dynamic, where they’re really great at serving students but need help in the office? And that’s where the idea for Ensemble was born.
John Kozicki (12:45.411)
Mm-hmm.
John Kozicki (13:11.61)
Did you know what that number was that you needed in terms of how many schools did you, Jeff Homer, need in order to scale to the point where you ultimately could quit the day job?
Jeff Homer (13:27.982)
So my original vision for the business was that we were going to buy 40 locations. So obviously we blew past that and we’ve moved the goalposts out a couple of times now. But 40 was the original goal and I quit my day job after five. Some of that was timing, know, annual compensation cycles and other things. Some of that was dumb luck. I quit in February of 2020. So that was an auspicious time to quit one’s well-paying day job to run a kids activity business.
John Kozicki (13:57.177)
Right.
Jeff Homer (13:57.888)
And, you know, although we had five locations, they were not large locations. This was still a very small business at that time and kind of tenuous, but I was really glad that I was able to fully invest in navigating the business through COVID and getting reopened and making sure our, you know, our students were served and our staff stayed employed and all those sorts of good things. But yeah, so, so started, bought the first business January, 2019, bought four schools in 2019, added a fifth in January, 2020, quit in February of 2020.
COVID in March 2020.
John Kozicki (14:29.882)
So what being that you now have a lot of experience with music schools in in the trenches, meaning on the back end, not again, not the not the teaching which we established. But what what do you say are maybe signals of a well-run music school as you’re kind of observing from the
outside, not even, maybe not even considering the financial stuff, but because I do want to get into your perspective as the buyer and that selling process, but any, you know, green flags, as they say, that kind of stick out when you see music schools.
Jeff Homer (15:21.026)
Yeah, I think a lot of the proof of the quality of the experience is in student longevity and other signals of that. So if I see a school with hundreds of five-star Google reviews, one, they’re probably doing a great job of serving students, and two, they’re doing a great job at getting their parents and families to be advocates for them in their community. And so that’s just a high student base, which can only be achieved if you’re
delivering a great product and it also suggests a lot of engagement with those families. If the website looks up to date and inviting and makes me feel like I want to enroll there and gives me a sense of the energy of that place, if I can sign up for lessons online, that’s how a lot of parents want to engage these days. Sure, it’s great that I want to have that concierge experience and make sure the students match with the right teacher, but can I at least book the trial first or at least see your schedule or see
teachers and sort of get to a place where you today’s parent is going to feel well served by what the school is doing.
You know, it’s hard, you know, unless you’re on premise to really assess like, are these students making progress in their lessons and that sort of thing. But yeah, I think most of these businesses are places where there’s a lot of passion and certainly no shortage of pedagogical talent. And what I’m looking for is just can I discern that from the way you represent yourself to the outside world? And is that coming through in a way that’s going to resonate with, you know, with today’s mom or dad?
John Kozicki (16:58.209)
And what about similar traits in owners or personality types or is there anything that kind of makes you think like that person’s got it together?
Jeff Homer (17:04.609)
Yeah.
Jeff Homer (17:10.102)
An overwhelming trend in some of the top performing schools that we acquire is a partnership between
a spouse that is a teacher and a spouse that has a corporate or business background. Those mom and pops, literally, often really do well where one partner is bringing that student experience and the pedagogical approach and the other one is making sure that there is an infrastructure set up in the background to support it. Two business partners can often achieve the same thing, but I feel like more often those are both musicians.
John Kozicki (17:22.873)
Okay.
Jeff Homer (17:47.136)
So I think the spouse framework is is one that I often see go really well, but even just
You know, moving beyond that kind of for a second, it’s really, do you have someone in the building that has kind of a systematic or procedural way of thinking about scalability and growth? you know, you can build a wonderful business with, you know, 50 clients that you know all really well, but as you get to hundreds, you need different ways of serving them.
You know, some folks have that natural inclination to look at how can I automate this? How can I use technology? How can I use today like AI to to support the growth of my business? And some folks really just want to lean into the classroom experience and let that be what drives, you know, what drives.
the word of mouth and excitement around the business. And in my experience, it’s good, but that’s not maybe enough to have the level of success that you might want.
John Kozicki (18:52.045)
That’s interesting. it’s kind of sounds like you’re you’re talking about.
staying current, right? Understanding what is happening now and how that’s going to impact your business or how you can leverage that for your business. It’s kind of funny, Jeff, it’s making me think about sort of my early days in playing in an independent band and seeking first.
distribution for our records and then label representation. And what I learned back then was you get more interest from the labels, the more successful you are independently. So it’s very, you know, and obviously the labels can, they have a lot more say in other areas that independence can’t take you, but it does feel very similar if I can.
Jeff Homer (19:39.66)
Yeah.
John Kozicki (19:52.067)
kind of draw a parallel. Any thoughts on that?
Jeff Homer (19:53.582)
Sure. Yeah. Yeah, think, I think, yeah, that’s right. Where six.
One of the things I love about the music school business model is there is a virtuous cycle that is created where momentum begets more momentum, right? So if you are good at attracting students, you will be successful in attracting teachers and retaining teachers because you’ll be able to get them the hours that you’re looking for. If you get a reputation for being a great place to work and you’re able to attract and retain the best teachers, not only will your student retention be better, but you’ll, know, that that’s going to be a mutually reinforcing success cycle. And there’s lots of similar examples I can give you where
John Kozicki (20:09.465)
Mm-hmm.
Jeff Homer (20:31.984)
Yeah, a little bit of momentum starts to go a long way. And yeah, some of what I was referring to is just using technology to make sure that that scalability enhances the student experience rather than becomes a headache for whoever’s trying to run the business.
John Kozicki (20:50.349)
Yeah, yeah, okay. Well, I really wanted to talk to you about that selling process. And we’ve built a solid solid foundation for that now. So maybe walk me through from your perspective, your side, the scenario where maybe you are talking about purchasing another school and what is that acquisition process like from your side?
Jeff Homer (20:56.152)
Good, yeah.
John Kozicki (21:18.477)
What are kind of the major phases of that?
Jeff Homer (21:20.494)
Yeah, so we like to describe sort of three pre-closing phases, three post-closing phases to…
sort of orient people to the process. So the first phase is a discovery phase. And so in this phase, we’re meeting with an entrepreneur, and generally that person is telling us about some reason that they need to make a change with how they spend their time, right? So really commonly this is, want to retire, I need to relocate, I have kids or grandkids that are changing how I want to spend my time, my spouse has a business that’s really taking off and I want to lean into that instead.
business partners and one of them wants to exit that sort of thing. So there’s some catalyst for the conversation that’s rarely are people
just sort of generally interested in selling their performing arts business. They’re usually arriving at some kind of life milestone. And we’re getting to know them and we’re going to know their business and a little bit about the financials. And that’s all kind of during the discovery phase. We tell them about us. They tell us about their business. We talk about this commitment that we want to make to sustaining and being a steward of the business that they’ve built and really carrying it into the next many years, largely as it is.
today.
Jeff Homer (22:38.35)
The end of that first stage is a letter of intent or LOI is a kind of common abbreviation for that. And it’s basically a letter from us or any buyer that describes the proposed terms of the transaction. So there’s evaluation, there’s a purchase price, we’re talking about who’s going to be the key leadership of the school going forward. Often that’s like the existing front desk teacher, front desk manager or a key teacher. So somebody from in the business that we’ve selected based on the seller’s recommendation, obviously, that we think would be a great leader of the business and kind
it outlines all the things we would need to do to get the closing. It’s often in four or five pages long.
If the seller finds that acceptable, we move into the second phase, which is due diligence or like trust but verify, right? So we’re going assume that everything you told us was true, but we’re also going to check. So we’re to do a little bit more digging with financials. We’re going to work through sort of a legal and contractual history of the business. And this is not the most fun part, but it’s necessary to get through the process. And it usually takes about six or eight weeks. And it’s not, we understand that people
trying to run their business and it’s not a full-time job. yeah, we’re trying to make this as easy as possible, but there is some friction needed to get that done. In that process, we’re often talking to the seller’s landlord or negotiating a lease for the business, as well as definitive documentation like a purchase contract and employment agreements for the key employees going forward and all that kind of thing. The third phase is sort the immediate pre-closing period where we’re going to really, hey, we’re close. We just have this punch list of stuff that needs to get done.
And we’re to work really hard and really intensively to get this over the finish line in the next like five to seven days So there’s there’s a lot of paper flying back and forth. There’s checklists and there’s But there’s a really collaborative effort around getting the business closed
Jeff Homer (24:29.038)
Then there’s the partnership, right? So we’re closing. We deliberately don’t put this at the end of the timeline. This is in the middle of the timeline because we want sellers to understand that there’s some post-closing help that we’re gonna need from them to make a successful transition. So this includes us coming in person and talking to staff and telling them about Ensemble and why this is gonna be such a great opportunity for them. That messaging is really focused on continuity. So when we’re meeting a new staff member for the first time,
and we’re gonna say, hey, we bought this business because we love it. This is a wonderful place to learn music and you are a really important part of that experience. And so we’re keeping you, we’re keeping your students, we’re keeping your pay rates, don’t worry, of nothing is changing in that respect. Where you might see some changes or we’re gonna have this new online solution for payroll or we’re gonna offer health benefits at 30 hours a week and we have minimum essential coverage options for you even if you’re not at 30 hours a week.
We offer a 401k to our employees. So there’s a conversation about benefits that are usually an enhancement for the staff. But really, it’s first and foremost commitment that they’re safe and that we’re going to be investing in them and that we’re telling them, hey, this key person, teacher, or the front desk manager is going to be running the school going forward. You know them. You trust them. It’s going to be OK. And so we’re having a really safety-focused message.
And we’re also frantically doing a platforming, right? So we need to make sure that everyone gets paid and that all the money’s flowing correctly and that the utility bills go to us instead of to the seller. And so there’s a flurry of activity on kind of the initial integration. So that’s phase one post-closing. Phase two post-closing is, okay, everyone feels closer to business as usual. We’re learning about the business. Maybe we’re looking ahead. When is the next recital? When’s the next show?
preparing for, what do need to be prepared to support on our side. And then phase three is when we truly get to that business as usual. And if the seller is leaving, which they often are, they’re on their way to their next thing. And if they’re staying on to teach or to take on some other role, they’re in that role and they’re in sort of a steady state sort of transition. And from stage one to stage six there, something like 12 weeks is kind of as fast as it can go. And we’re happy to talk to people over years.
Jeff Homer (26:57.232)
But if both parties are invested and committed and working hard, we can get done in about three months.
John Kozicki (26:58.52)
Mm-hmm.
John Kozicki (27:07.753)
So are there any common maybe sticking points or areas in that process where it might slow down?
Jeff Homer (27:21.152)
Yeah, I would say a couple of areas. Landlords are often a really challenging part of the process. Their building is already leased to somebody and while Ensemble is sometimes a positive, right, large credit worthy national tenant, sometimes that’s desirable.
John Kozicki (27:28.126)
Mm, tell me about it.
Jeff Homer (27:39.64)
they’re not in a hurry to help us out. And sometimes that can be its own challenge. And then there’s just sort of the competing demands of needing to run the business while also trying to work through a transaction. And so things can go slow if it’s a busy time or we get into, got my recital next weekend and I can’t work on this this week. So life getting in the way and landlords getting in the way are probably the two most common challenges in terms of getting to finish.
John Kozicki (28:06.452)
Okay.
It sounds like and I know this is part of of the your commitment from ensemble to these these schools that you want to maintain the integrity of what that school is all about. You want to maintain the the culture. It sounds like you do a lot to make sure that the instructors and the staff that are currently there aren’t worried about this change.
At my school, we talk about when we’re handing off tasks like between admin staff and or myself and admin staff and then maybe to our instructors. Where do you see batons being basically handed all to ensemble and then still staying within the school that you’re purchasing?
Jeff Homer (28:44.974)
Yeah.
Jeff Homer (29:04.728)
Yeah.
That’s a really great question and I love the framing of that. the student care baton, customer service, pedagogy, classroom approach stays at the school.
John Kozicki (29:18.423)
Mm-hmm.
Jeff Homer (29:18.54)
The batons that nobody is looking for, the payroll, finance, accounting, tax, HR, IT batons, they go to Ensemble and they’re really happily passed off. And the ones that are still held by both parties are often the marketing and the teacher recruitment pieces. marketing, you know, we don’t have one brand voice, right? So we have all these unique local brands that we do business as. so Ensemble can’t do marketing
John Kozicki (29:23.517)
Hahaha
Yeah.
Jeff Homer (29:48.416)
for you on a purely done for you basis. We need photos of your building and photos of your experience and photos from your show and some thought around what your brand voice should be. And we can provide resources, especially on the technical or digital sides to do great Google ads and those kinds of things. But we need partnership in the marketing arm. And a lot of times they want that. That’s an important part of maintaining that brand identity. So marketing is a key partnership, both hands on the baton. And the other is teacher.
hiring. So we have a six person recruiting team that’s a huge advantage for us in terms of making sure our schools are staffed with wonderful folks that are providing great experiences for our students. They do a lot of the legwork in terms of posting ads and sourcing and going to job fairs and colleges and recruiting great teachers. But of course, you we need to make sure that our location managers are excited to employ these folks. And so our approach to hiring is usually kind of a two thumbs up approach. We are doing quality control, especially where we don’t have a professional
music educator in the GM seat, the general manager seat, and the local manager is saying, yes, I want to work with this person who seemed like a good fit for my culture and I like them and I want to work with them. And so those are kind of the key partnership areas.
John Kozicki (31:04.713)
Are there any instances or have there been instances where it made me when you mentioned marketing, it made me think about this and brand identity where you’ve come in and sort of tweet something and thought like, you know what? The branding for this business is good. But if we just leaned into this other thing that they’re already doing a little bit more, then it would take it from good to great.
or is that something that
maybe wouldn’t come into the realm of what ensemble does.
Jeff Homer (31:42.732)
Yeah, we do a little bit of this, when we do it, it’s in partnership with local leadership that’s excited about some kind of direction for the studio.
You know, we don’t promise to like, you know, put your logo in a freezer and never change it, you know, for 50 years as graphic design trends change and the world evolves, right? So we wanna make sure that we’re staying modern and we’re staying current. So things like web design and logos and that sort of thing, you know, are things that we will update in partnership with that local leadership and generally to great effect, right? So the, you know,
John Kozicki (32:05.121)
course.
Jeff Homer (32:22.56)
the text, you know, name of the school with a, you know, with a single quarter note next to it. Like, yeah, we can do better than that. Like, let’s go, let’s get something really graphically fun and interesting and think about what our colors should be and reflect that on the website. And so that can be really energizing in my experience. And so, yes, we are willing to, you know, keep up with the times to reference, you know, something you said a few minutes ago and sort of make sure we stay current and relevant.
John Kozicki (32:30.142)
Yeah
Jeff Homer (32:52.464)
But I think the core identity of the school is, know, what does it feel like to walk in there? What is, you know, what is a student, who is the right student in terms of their background and interest and goals and level of commitment? Those things, you know, are really slow to change and things that I think we don’t try to influence because
there’s evidence from the success of the school over the last 20 years that what they’re doing is working and serving that community.
John Kozicki (33:25.527)
Are there any common things that do change? And I guess things that would be noticeable more from, I guess, the customer side or maybe the instructor employee side.
Jeff Homer (33:48.29)
Yeah.
The employee side is much more visible, right? So we’re talking to the staff and they know that we’re partnering with Ensemble and they know that they’re now an employee of Ensemble. And I mentioned earlier the benefits and the, you know, they’ll have the online payroll and the healthcare and the 401k and also the advancement opportunities, right? So we have 110 schools. you’re someone, you know, if you work at a school that has a manager, you know, where do you go? Well, you can go to another school. You can come to work for us at corporate. You can get one of those recruiting jobs. Like there’s, there are advancement opportunities that I think are really exciting.
So we lean into that with teachers. For students, we really try to have the experience be that they show up on the day after closing and they see the same person at the front desk and they go have their lesson with the same teacher and the things are really similar. Over time, we might invest money in upgrading the space. We do renovations. We’ll do some of those rebranding, sort of like the graphic design and branding kind of uplifts. But I think it may also be
smaller stuff like we might bring retail to a school that doesn’t do retail and have a few convenience items that are there, asking the teachers what books they want to teach out of and make sure that those are stocked and that we have accessories or the types of student level instruments that the instructors like to recommend so that when somebody comes in for their first lesson they can go home with something to practice on that day and not have to buy something of questionable quality off Amazon later. do, a part of our business is we have a large
instrument rental platform. So we also have the Ability to Rent Students Instruments, especially string students. So I would say those are some of the things where we’re adding to that student experience, but in terms of someone that’s enrolled in lessons, I think they’re going to have a really high level of continuity in their experience.
John Kozicki (35:38.367)
Okay, I’d be remiss if I didn’t ask about any experiences or acquisitions that didn’t go well and learn a little bit about that. Whether that’s to just, you know, have an interesting story to tell here on the podcast or something to learn from.
Jeff Homer (35:47.107)
Yeah.
Jeff Homer (35:58.744)
that.
Yeah, so I’m glad to say that we still operate all of the businesses that we’ve required. We haven’t closed any down. The common theme in response to your question is overwhelmingly the people we buy schools from are really passionate.
and really proud of the businesses they’ve built. And they want to see these things be incredibly successful for the future. And they want to hand them off in tip-top quality. And we get people that work really hard and still spend the marketing dollar and go do the farmers market performance and whatever on the day before closing because they think it’s the right thing to do. But we have had a few cases where that has not been the case. And basically, I described that process of selling. The end of stage one is that LOI.
And we’ve had people that kind of stopped running the business after they signed the LOI and they worked through the process and we inherited a business where a lot of the momentum had come out of the system. And we got a business that was kind of stuck in the mud and there’s a lot of effort that was needed to get that moving in a strong direction again. And in some cases, that ground that you give up, sometimes it’s lost and sometimes it just takes a long time to get back. So yeah, I would say that that’s probably the
John Kozicki (36:55.478)
Yeah.
John Kozicki (37:03.381)
Yeah.
Jeff Homer (37:22.096)
the common theme is buying a business where it’s like, our show is in three weeks and we haven’t booked anything or we have a couple of key teachers that are leaving and we didn’t tell you or we haven’t thought about replacing them or I haven’t started the process to hire somebody or just sort of things like that that again, the proud…
John Kozicki (37:33.686)
Hmm
Jeff Homer (37:49.354)
entrepreneur that really identifies with their business is never going to be them, there’s been a few where we didn’t get the benefit of that.
John Kozicki (37:58.359)
So I sold my first music school and that was 2013. So Ensemble wasn’t even around at that point. And I sold to two of my instructors who were working for me. And I do remember, despite that, there were a couple of other instructors who, when I were gone, they were just like, okay, we’re out.
Jeff Homer (38:08.27)
It was not.
John Kozicki (38:25.27)
I mean, is there, do you experience a lot of that? It sounds like you try and prevent that with the hands-on conversations that you have with the staff, but do you experience like a little spike in turnover at all?
Jeff Homer (38:40.984)
It’s extremely rare.
Sometimes there’s a teacher that’s like, hey, I was really just here as a favor to the owner because we have a long relationship and that’s really the only reason I’m still here. But overwhelmingly, I mean, I would say 99 % retention through the transition. And I think that’s driven by a few things. One, you know, we’re really trying not to upset the apple cart. you know, if in your case, John, you had two teachers that used to work for you that are now going to be elevated over the rest of the staff,
John Kozicki (38:48.191)
Mmm.
Jeff Homer (39:12.974)
in our case, we’re usually taking the existing administrator front desk person and kind of elevating them a little bit, but there’s not a lot of change for the day to day experience and most of those staff members. I think generally that’s pretty continuous. And then we just ask kind of for the benefit of a few weeks or months to see how it’s going. And usually I think people find that, you know, they settle right back into where they were and maybe their schedules are a little bit fuller because we’re, you know, we do think we’re really good at marketing so we can help to build their
student base and make sure they’re earning lots of money. can again give them those benefits that they’re maybe not getting elsewhere and we find that that’s generally sufficient to retain the over overwhelming majority of the folks that we meet via acquisition.
John Kozicki (40:01.16)
As someone who sees the engine of many, music schools, what are the best run schools do that you think most music schools or a lot of music schools maybe aren’t doing?
Jeff Homer (40:19.083)
I have
I two things that come to mind right away. The number one thing that is underappreciated or underinvested in is paid marketing. So the most common marketing budget we see for a school is zero. And the next most common is some. I know I’m supposed to some money on marketing, but I don’t really know how much or even how to think about whether my budget should be $1,000 or $5,000 or $10,000. That’s not a framework that a lot of school owners have.
And of course it comes out of the family budget and so it’s you know, it’s it’s a hard choice to make but You know a student because of that when we went all the way back to the start of the conversation What I like what music school is what’s attractive about them from a business perspective? High customer lifetime value that student that’s gonna stay with you for two or three years is really valuable especially when you get their brother a sister neighbor cousin, whatever and so the value of an acquired student is thousands of dollars and
You know, at Ensemble, you know, we can consistently generate leads for like $50 to $60 a lead, and we can convert those leads to students at like 30 to 40%. And, you your mileage may vary, but not so much that you aren’t creating a couple of students for a few hundred dollars per that are worth thousands of dollars in lifetime value. And there are just not that many opportunities in business to spend a couple hundred bucks and make a few thousand dollars. And I don’t know why my, you know, peer
Music school owners don’t invest more in marketing, but it’s usually the first thing we do come into a new school great We’re here. We’re we’re deploying our digital marketing strategy, and we’re spending a lot more money on Google Ads and The second thing is a bit more nebulous But it goes back to what you said earlier by kind of keeping up with the times like is there a modern approach to running the business and has the way of running the business scaled with the business as you’ve gone from 50 students to 500 students and
Jeff Homer (42:19.01)
technology and people and process and I guess one reflection of that is how important is the owner to the day-to-day functioning of the business. I love seeing schools where the front desk is empowered to make decisions and families can get answers right away. Hey, I have this problem, can you do this for me? Not I have to call the owner or sorry, I’ll get back to you, but yes or yes we can or no we can’t and I can get a decision quickly and the customer experience is good. And so I think, yeah, that really comes down to
whether there’s a kind of a continuous learning or professional development ethos in the business that leads to a desire to keep up with whatever is cutting edge for small business at that time.
John Kozicki (43:05.181)
What advice, now on that, you mentioned either zero paid advertising or paid marketing budget or some, and you mentioned Google Ads in particular in that answer. What advice would you give to a studio owner who maybe is in that like, zero or some category? And you also mentioned
continuing education, I believe. Can you speak on that? I guess on both points? Because those are those are two really big categories. Paid marketing can mean a lot of different things. I think most often, music school owners think like, I’m going to put some money behind a Facebook ad, or I’m going to boost a Facebook post or something like that. Do you have a do you have an opinion on on
Either or if you were to say like Facebook boost and social media paid ads or Google ads.
Jeff Homer (44:10.222)
Yeah, I’ll answer it in reverse order because I think it’d be faster.
John Kozicki (44:14.228)
Okay.
Jeff Homer (44:14.378)
Everybody listening to this podcast has some interest in continuing education, right? No one’s listening to a music, you know, a school proprietor podcast that’s not interested in learning about how to run one of these businesses unless they just find the two of us, you know, unusually engaging and interesting, which is certainly not true of me. But so, but there’s so many resources out there for small business owners, whether they’re specific things to our industry, like building music school or mass or some of those similar kind of coaching communities for school owners.
John Kozicki (44:43.242)
Yeah.
Jeff Homer (44:44.272)
or whether they’re general resources like Chamber of Commerce or great books on building and running a small business. there’s tons of resources out there and it’s just a matter of whether there’s an interest in consuming them. And again, listening to this podcast is a pretty strong indicator, positive indicator for that in my view. So we might be preaching to the choir a little bit here. On the topic of advertising,
I think the most important thing is to start, you know, so wherever you are, you know, get started. And if it’s $500 a month, fine, like at least let’s get going with it and start to build some data because conversion data and things like that, they build over time and they become increasingly valuable the longer you run them. I do have a lot of thoughts about kind of Facebook versus Google. There’s two dynamics to this. One is technical. So
Social advertising got a lot less effective when Apple changed the privacy settings in iOS in iOS 14 It made it a lot harder to target individuals in a in a meaningful way And so we reallocated a lot of our budget from Facebook to Google in the last couple of years But there’s also a significant different in intent So if you are advertising on social you’re you’re you’re trying to interrupt someone’s scroll, right? And and that’s a hard thing to do right where I’m zoned out at the end of the
I’m scrolling idly and like I should sign my kid up for rock school like that’s a hard thing to break through conversely If you have parents that are looking for music school near me Making sure that you’re showing up really high in that result and in the paid tier of that result is really valuable because that parent is looking for lessons and Meeting them in a moment where there’s high intent Is is really valuable and it’s worth spending in our view. It’s worth spending the extra money
to get the person with high intent rather than the person in a horizontal position on their couch that’s not in a position to buy in that moment. yeah, look, think back to the continuing ed thing, this is something you can learn. There’s great resources for this, but there’s also really affordable folks you can hire to do this for you. And it’s not prohibitive. I think just getting started is such a valuable, because it’s so much easier to tweak your budget up or even down over time.
Jeff Homer (47:09.776)
Than it is to turn the thing on in the first place and so just getting started having that start to run and to demonstrate to yourself like how did you hear about us? I heard about you on Google. Okay, that’s that’s working Let me continue to double down on the strategy as my business grows and as I can afford it
John Kozicki (47:12.937)
Mm-hmm.
John Kozicki (47:25.811)
Yeah, okay, great advice. I actually didn’t know that about the Apple settings and the social ads, but that’s, yeah, fantastic advice. So for a school owner who is listening and they might be curious in speaking with you or someone from your team, what’s the first steps they should take to reach out to Ensemble or…
even maybe before that, what are some steps that they should maybe be doing before they even reach out to Ensemble?
Jeff Homer (47:59.758)
Yeah, I love that question.
I have two recommendations for everyone that thinks selling might be in their near to medium term future. The first is to think about the way that your business is going to look via the financials on paper. So many of us in the small business world are guilty of running a lot of personal expenses through the business, all this trip, this thing, this, you my home renovation, my nannies on the payroll, like we see it all. But it’s really much more helpful if it’s not there. So
Committing to kind of like running the business in a clean fashion and being able to demonstrate the value and the profitability of the business is super valuable. just understanding that someone, whether it’s me or somebody else, is going to be looking at your financials in the next couple of years and thinking about what they will see when they look there, you know, is important. And, you know, some things that are high ticket or whatever, yeah, we can sort that out and we can add that back and it’s no problem. you know, if you’re telling me that you went to the grocery store and, you know, some of it was snacks,
the school and some of it was groceries for your family, it’s gonna be really hard to figure out after the fact what portion of that is actually a personal expense. The other recommendation that I make is if you’re thinking about exiting the business or selling,
Start by half measures by really empowering some of the staff in your building to let you take that half step back and be home for dinner or be out of the school on the weekend or take that vacation because it will make the business more transferable, right? So if your staff can work independently of you, can run the business when you’re not in the building, that’s a business that’s going to be more attractive to acquire and it’s also going to be an immediate upgrade to your lifestyle. So if you’re thinking about retirement, well the halfway there is make sure you have a great, a great management
Jeff Homer (49:47.424)
That can that can allow you to to make sure like I said that you’re home for dinner You can take the vacation or that other thing So those are my two pieces of advice for folks that are thinking about exiting the business Getting in touch with us is really easy. We’re at the web at ensemble schools comm we have a bunch of resources for sellers So there’s a whole section of our website oriented for for school and store owners and gives lots of information about who we are there’s some testimonials from folks like you that have sold the business to us and there’s
resources about valuation and how to think about that and there’s ways to get in touch with with myself and our team so that’s definitely the best place to start.
John Kozicki (50:25.54)
Yeah, and we did speak with Amy Nunez from your team on an episode and she said the same thing about when we were talking more about exit strategy and we dubbed the term vacation strategy. That’s kind of the way to think about that in more of a short term. Jeff, this has been incredibly enlightening. I appreciate you taking the time and I think there’s so much gold in the conversation that we just had.
for any of our listeners. So thank you again. If there’s any other parting thoughts, I think he sort of wrapped it up in that last one though, huh? Okay.
Jeff Homer (51:02.478)
Yeah, no, I really appreciate the time and look it’s been an incredible privilege to partner with these hundred-plus school owners and I think we’ve done a great job of supporting and sustaining their vision for their businesses in their community I’m really proud of that and we’d love to partner with with them with more folks in the future
John Kozicki (51:21.556)
All right, Jeff, well, I appreciate it. And that’ll wrap it up for this episode of Rock School Proprietor Podcast. We’ll see you next time.
