To make a good income, you need a good plan. Making a music teacher budget is the first step to managing your income and feeling more successful as a teacher.
If you missed part 1 of this article go back now to analyse your past year in your music teaching studio. You need that information if you’re going to create an effective budget for the new year.
Right, let’s get started on that budget. Make a copy of the sheet you created with the income and expenses from the previous year and delete the values. It should look something like this…
Then we can start to fill in those blanks.
What You Can’t Change
Start with the things you can’t do anything about.
Your bills, for example, are unlikely to change. Roundup the amount you spent on bills last year and copy that across to act as your annual budget for next year. Enter rounded figures for each month as well.
Do this for all expenses that are fairly fixed and either average out the monthly spend or allow for more spending in certain months if you know you’ll need extra for a recital or because of cold-weather, etc.
Trim the Fat
Make your studio as lean as is realistic. Don’t just chop into budgets at random but do get real with yourself and cut the expenses that aren’t benefiting your studio.
If you tend to go wild on sheet music then maybe this is the area you cut back on.
Are you paying for an app or program that you’re not using much? Ask yourself if it’s important and if it fits in with your goals for your students. If it does, make a plan to use it. If it doesn’t, bin it.
Estimate Your Income
Calculate how much you are likely to make each month.
Multiply your fees by the number of students who will be in your studio but keep in mind the trends you noticed when analysing last year. If you always lose students to hockey in April then allow for this. If you live in a military town and many folks are relocated each January then estimate based on that.
This is not the time for pie-in-the-sky thinking.
Your budget is not the place for dreams, hopes and aspirations. It should be reliable and a reasonably good predictor of the future. You want to be able to look at the budget each month and say: “Yep, I’m on track!” unless there is a truly out-of-the-ordinary event.
Reassess if Necessary
Are you happy with the final figure? If it’s not enough for you to support the lifestyle you want then it’s time to rethink:
- Are there any other expenses you could cut?
- Do you need to take on a new income stream?
- Should you raise your rates?
- Could you consider a more profitable lesson format?
Ultimately, your business is under your control. Take the reins, take charge and make it the one you want.
How did you get on with your music teacher budget?
Did this exercise throw up any curveballs? Are you surprised by how little you’re making, or how much? Tell us about your experience in the comments.