Do you want to make more money? Then you need a music teaching studio budget. You can’t expect to earn more without a plan.
In some cases, the throwing-stuff-at-a-wall plan is a good one…in most cases, it’s not.
Many music teachers can be reticent to talk about money. It makes them feel icky. They feel like they should care more about the music, the children, the art.
I’ve been delighted to gradually see the tides turning on this view. There’s no reason to be embarrassed about the fact that you want to make money.
In fact, treating your business like a business will make you a better teacher. Your students deserve a teacher who takes their music teaching studio seriously, and that includes the finances.
Having a budget for your music teaching studio means you have clarity around what you need to spend and make to meet your goals. In this two-part article, I’ll show you how to create your budget.
The first step is to take a cold hard look at where you are now.
Know your expenses
Do you know how much you spent on your studio last year?
We don’t just need this for tax purposes. It’s very important information for all business owners. Who cares if you make 100,000 smackeroonies next year if you spend 90,000 of it?
Revenue is a vanity figure. Profit is what matters.
Create a spreadsheet with all of your expenses for the past year, grouped in categories such as:
- Bills – heating, phone, electricity
- Music books (this one may be frighteningly large!)
- Printing costs
- P.D. subscriptions (like Vibrant Music Teaching or any other investments you make in your continuing education)
- Website hosting
Depending on how you manage your bookkeeping you may already have this, but, there’s a caveat.
For most music teaching studios the academic year is better than the calendar or financial year.
This may mean reworking things and combining a couple of different spreadsheets together but I’ve found it to be worth it. Most of us plan and make changes based on the academic year so your music teaching studio budget should follow the same pattern.
If you have literally no way to find this information then estimate for now and immediately implement a system for keeping track going forward. My Music Staff has accounting as part of their package or you could use Wave which is free up to a certain point.
Know your income
So, now you know how much you spent. Do you know how much you earned?
If you’ve got no idea you’re not alone! Many teachers are not really aware of how much they end up taking in. They know what they charge…but they don’t keep a close enough eye on their actual income.
Compile this data across the same range as your expenses and put it in the same spreadsheet so that you have a series of columns for expenses followed by a column (or several if you have multiple streams) for income.
Now, for each month, tally up the expenses and income in each area and make a new clean and tidy sheet so you can see this information at a glance. Here’s how it might look…
If you want to use that Google Sheet as a starting point for your own just click here to make a copy in your Google Drive.
You may have already known the final figure at the bottom. What I want you to take a really close look at are the trends.
- Is there a time of year when you often have students dropping out?
- Did you spend a whopping amount on music one month? Was this necessary or not?
- Does your recital cost more than you thought?
There are plenty of expenses you can’t do anything about but there are always some that we can chop up. Spend some time thinking this through and get ready for my next article where we’ll create your new music teaching studio budget.
What surprised you in your analysis?
Have you found this process useful? Did anything jump out at you? Share your thoughts in the comments.