“We have eight people in our marketing function and two full service agencies, so we just have access to resources that an indepen- dent school would never be able to access, and we’re able to access them because we can offer them on a fractional basis to our 70-some locations,” Homer explained. “We’re able to offer more sophisticated targeting, bigger budgets, better execution, and we’re able to make the phone ring at the store. As soon as that customer then gets into the business, we know they’re going have a great experience there because that’s how the business has survived for as long as it has.” Additionally, Ensemble’s size allows it to provide store employees with a generous benefits package. “We offer benefits to all of our employees,” Homer said. “We have a 401k program that touches every single employee — whether you work one hour a week as a part-time teacher or you’re a full-time general manager — it doesn’t matter. We do health benefits starting at 30 hours a week for any employee regardless of job classification. So, we’re able to do some things to support our staff that might be harder for an independent store operator to do. And then obviously we have the financial resources to weather bad times, whether that’s something happening in the local community or in the economy. We have strength to be able to sustain these businesses through periods of hard times.” HUNTING FOR ‘THE RIGHT MIX’ Homer said Ensemble is continuing to buy locations at a rate of about one-to-two a month. Of the 70-some Ensemble locations, seven are full-line music retailers. When looking to purchase a music retail business, Homer said there are a few things he and his team look for. “We look at the mix of business,” Homer said. “Obviously we’ve come from the educational side of the business, and the proportion of lesson revenue is really important to us. The other kind of busi- ness that we find really desirable is the musical instrument rental business. We own seven music retail stores where lessons and rent- als make up more than half of the revenue, so that’s important.” Homer added that many of the music schools he’s purchased now also offer retail sales. “Our music schools will do a little bit of retail, so you might be able to get a [beginner] instrument, but you can’t buy a $5,000 instrument,” he explained, adding that as Ensemble has grown, the business has had access to leading MI supply lines. “We’ve been able to aggregate more volume product-wise. So, we’re getting better service, we’re getting better pricing and, in some places, we’re able to take a store that maybe couldn’t have gotten a premier brand, and we can allow them to deal some of those harder-to-get lines.” 72 LOCATIONS & GROWING As a fairly young company, age isn’t stopping Homer from big growth plans. “Our five-year goal is to have 250 locations,” Homer said. “We think that at that size, we would serve about 200,000 stu- dents a year — right now we’re serving about 25,000–30,000 — and we would be having a really exciting impact on perform- ing arts education nationally. That’s something we’re excited about internally. In terms of how we get there, it’s really just about doing more of the same things that we’re already doing. There’s no change to the strategy — nothing new that needs to be built. We just need to do what we’re already doing well on a continually bigger scale.” MI
FIRST-HAND ENSEMBLE EXPERIENCE
Former Middle C Music owner Myrna Sislen at her local 4th of July parade after selling her business to Ensemble Music.
Jeff Homer (left) with Middle C employee Dave Nuttycombe at the parade after the sale.
Sing the following song with me the tune of “Ghostbusters.” “Are you ready to sell? Is it time to retire? Who you gonna call? Jeff Homer!” “ “Want more time with your kids? Or maybe grand kids? Who’s the first call?... Jeff Homer!” For me, this is a song I sung to myself throughout spring of 2021 as I was selling my Washington D.C.-based music shop, Middle C Music to Ensemble Music Schools and its founder, Jeff Homer. When the pandemic hit in March 2020, staffing at Middle C Mu- sic had become difficult. We were doing fine financially because we switched immediately to online lessons, so I have to stress that my motivation for selling was not because business was bad. Business was great. Moreover, I had no desire to leave the industry — just the day-to- day of running a store. My motivation, quite honestly, was that I kept getting older, and dealing with customers was becoming a chore. As the pandemic continued, I kept looking in vain for a buyer. Then, in late November 2020, I saw a posting on Facebook from Carol Jordan, then-owner of The Music Room in Palatine, Illinois, announcing that she’d sold her business to Ensemble. I had met Carol at NAMM years pri- or and messaged her asking the details. She shared my story with Jeff, who contacted me, looked at my financials and said he was interested. Also in November 2020, I turned 75. Yes, it was a shock to me, too, but reality was giving me a strong nudge. I started negotiating with Jeff in January 2021. He came to visit Middle C Music on March 24 with his associate Jake St. John. They were very kind and loved the store, which we all described as the “jewel in the crown that is Ensemble Schools.” Well, maybe that was my description, but they agreed to adopt it. When serious negotiations began, I soon realized I would need help and turned to Alan Friedman and Daniel Jobe of Friedman Kannenberg & Co. It was the smartest decision I made. Alan was brilliant, and he and Daniel knew exactly what to say and had the facts to back it up. After some back and forth on price, I decided on a number I would accept. I told myself that if Jeff called me and came up to that num- ber, I would wait four beats and say, “You have just bought yourself a music store.” He did and I did and on June 1, 2021, we closed. Jeff was honest in all of his dealings with me. The unique part of Ensemble’s business model is it doesn’t change the name or culture of the existing busi- nesses they buy. So, most people I run into around town still think I own Middle C Music. Which is fine with me — and fine with Jeff. MI In 2021, Myrna Sislen, former owner of Middle C Music, sold her then 19-year-old music store to Jeff Homer and Ensemble Music Schools. Here, she shares her first-hand experience selling her business to Ensemble.
38 I MUSIC INC. I SEPTEMBER 2024
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