At the top of my list of to-do’s over the holiday break? Whipping my studio into shape for the new year. It was badly in need of reorganization after the end-of-semester frenzy — and I’m pretty sure mine isn’t the only one!

That, of course begs the question: is your studio ready for 2012?

I started to feel a little overwhelmed as I wrote down all the tasks involved, but actually tackling them one by one was surprisingly enjoyable. The very best and most satisfying part was crossing them off the list, which looked like this:

• Scan printed sheet music
• Enter expenses and file receipts
• Finish thank you notes to students
• Frame and hang student artwork
• Clear out my inbox
• Part with unneeded programs, fliers, etc.
• Find homes for stray items in my storage closet
• Back up my computer on my external hard drive
• Put away Christmas music
• Pack up Christmas decorations
• Reorganize music bookcase
• Put instruments and equipment back in their place

Once all of these items were crossed off the list, I did a deep cleaning (including dusting, windexing, sweeping, and vaccuuming) and then took a long nap!

My studio reopens today after being closed for over a week; the fact that it is organized will make the transition into a new semester easier for both my students and myself. No rifling through stacks of sheet music and unalphabetized file folders or searching for missing books…at least until it’s time for spring cleaning/reorganization.

What’s on YOUR to-do list for project “Studio Readying 2012″?

However, as a business owner, the holidays can be a financially tough time. In the past, I’ve closed my studio for two full weeks (in coordination with most school calendars) — which results in two full weeks of lost income. There are ways to make up for some, if not all of it, though.

One way that I supplement my income during this time of year is by taking advantage of holiday performance opportunities. These include private and company parties, as well as community events such as downtown walks and showcases.

Another is to create additional opportunities for students outside of their regular lessons. I like to offer individual recording sessions to finish up those holiday CDs many of my students make for their families, group sessions focusing on learning holiday repertoire, and even group sing-alongs and caroling. In my experience, parents have been more than happy to have their children participate in such activities, especially when I invite siblings to join in.

Group events don’t take a whole lot of extra time out of an already busy schedule, but they do bring in a good amount of income. Consider opening up such opportunities not only to your existing students, but also to children in the community. I invite participants via my email newsletter, Facebook page, and church.

How do you supplement your income during the holiday season? Please add your thoughts and ideas in the comments!

Summer can be a wonderful, creative time in our careers. We have flexibility, we can attend workshops or masterclasses, we can spend more time practicing or performing. I see many of my friends, who have typical 9-5 jobs, struggling to figure out day care and summer camps. Living in a home with two professional music teacher parents and two school age children, we have the luxury of taking vacation when we want. Our children see more of us in the summer after a full school year of dinners without one parent or the other. We can choose which weeks to arrange daycare or camps, and which to spend together at home as a family.

The downside is that we have no income. Zero. Zilch. So how do we survive? The biggest change we made when we had children was to realize that we HAD TO PLAN. We couldn’t survive on pasta and peanut butter alone for 3 months. We had to take care of basic monthly expenses.

How do we do it? Year long planning.

Here are the steps we take every September.

• Create a basic monthly budget that does not include catastrophic illness or your car dying.
• Calculate your dependable monthly income (multiply your guaranteed work hours times your pay/hour)
• Calculate 15% of that monthly total or, if you receive different amounts every month, take the total you make over 9 months, calculate 15%, and divide by 9.
• First thing each month, religiously put this money into a savings account or money market that earns interest while it waits to be given to the government.
• Now comes the hard part. Calculate the total you will need to pay 100% of your bills for the 2-3 months of summer without an income source.

For most people, this is the part where we gulp, we realize that there is no way we can survive the summer, and then we bury our head in the sand while happily spending money throughout the year that we cannot afford. Is this the right solution? Of course not! So what are your options?

Most of us have some unplanned income (just like we have unplanned root canals and car repair). This unplanned income is one way to make your music teachers salary work for you.

• Do you perform in chamber music or contracted orchestra gigs?
• Do you teach extra lessons or give coaching sessions unexpectedly?
• Do you take students in the summer, even though you didn’t count on the income?

If you answered yes to these questions, then you have found a way to fund part of your summer account. Set up a separate savings account or money market and diligently put this “extra” money you earn throughout the year away for summer. Is it fun? No. Does it allow you to make being a music teacher a career that can last a lifetime? Yes.

Once you have made it through a summer or two you will have a more realistic sense of just how much you can realistically earn in the summer. Until then, I recommend that you plan your summer savings account as if you will earn NOTHING. Once you have a settled studio and a reliable number of students, you can include summer income in your budget.

Here is the breakdown for my family of two professional musicians and two school aged children:

• Monthly teaching income minus 15% into the tax account. Multiply this amount x 9 and you will have your total income for the year. It’s important to know where you are starting from.
• Multiply your monthly budget x 3 to find your total summer expenses.
• Now divide your summer total by 9 to find the monthly contribution you will have to make. Put this money aside religiously every month!

In our case we have altered this plan based on several years experience and a sense of the guaranteed income we can expect. Our summer plan looks like this.

• Extra teaching and contracted workshops throughout the year= 1 month of summer budget
• Reliable summer teaching = 1 month of summer budget
• What we have left to plan for= 1 month of summer budget
• We then divide the remaining 1 month by 9 to find our required monthly contribution. Every month, before we pay our bills, or go to dinner, or buy new shoes, we put that amount into a summer account.

I am sure there are other ways to plan for summer. But I am also sure that they have one thing in common, there is a PLAN.

I love teaching, I love my students, and I believe that what I do makes a difference in the world. In order to keep feeling this way and to be able to survive as a musician, it is incredibly important that I live realistically and within my means. It’s not always fun and it takes planning, but the payoff is a life-long career doing something I truly love.

I wish someone had held my hand and given me a realistic plan to follow as a young teacher. In those early years many of my fellow teachers either headed back to school, changed careers, or were forced to take “day jobs” to supplement their musician’s income. The key to success is to plan and to be realistic.

If you have been teaching for several years, what do you do about summer income? What were the toughest things you faced? How have you figured out how to live for 12 months on 9 months of income? I look forward to the conversation we can have.

After 23 years as a music teacher, I have learned a few tricks. The most important advice I would give a new teacher is CONSULT WITH A TAX ADVISOR! Even if you think your taxes are simple enough to do yourself, or you just don’t have the money to hire a CPA every year, meet for a planning session with someone knowledgeable and familiar with the self-employed. The advice you will get setting up a planning system is well worth the money. Having a monthly plan for money that you need to set aside to accomodate your quarterly estimated taxes and your basic summer expenses is vitally important. If you are a professional musician who is hired for performances irregularly, enjoy the added income, but do not count on it to pay you rent/mortgage or for other required monthly expenses.

I have personally had the experience of thinking everything was OK, receiving an unexpected tax bill in April, and being left with almost no money set aside for summer. When it happens, those relaxing weeks of summer with less teaching and fewer obligations can become a nightmare rather than one of the perks of being a teacher! Now, after years as a teacher trainer, I have heard the story many times and know that I was not alone as a young teacher who was caught in a bad situation.

Once I realized that my primary income would be the 9 or 10 months of the school year, I had to make adjustments in my basic budget. Our tax accountant gave us a wonderful formula that has worked for over a decade. She recommended setting aside 15% of your monthly income for estimated taxes.

As most of us have figured out by now, the federal government assumes that income is stable from January-January. This is the number they use to predict your quarterly estimated tax payment. But for many of us, our income changes rather drastically every September. Maybe this is the year that you took 15 new students in September. In this case, you need to plan for a high tax bill in April reflecting the added income from September-December. Or maybe, as is the case for my family, you have a year in which you moved and had to begin building a studio from scratch. In this case you will receive a tax refund and lower tax estimates for the following year. But don’t be fooled. As you build your studio and income improves, you need to have set that money aside for taxes.

No matter what your unusual circumstances are, come next April, you will owe taxes on the money you have made the past year. If you have a low quarterly payment, enjoy earning a little interest off the money you put away, but ABSOLUTELY DO NOT SPEND THAT MONEY. It is not yours, you just get to use it for a while until your estimated income catches up with your actual income.

In the music teaching business we are typically going to be in the lowest tax bracket (yes, I know, I wish we made more money too). The 15% rule only applies if you are counting your teaching income as your primary income and DO NOT have another significant income source. Please check with your tax advisor about your individual situation.

Once you have figured out how much you will owe in taxes for the year (remember that this is NOT always the number the government has said you owe in estimated taxes), you can move on to trying to plan for the summer. My next post will be “Part 2- saving for summer”.

Taxes are like getting your roof fixed. It is one of the unglamorous parts of our job. How have you handled planning for taxes? Have you ever been caught off guard with a huge April tax bill? Let me know your strategies.

I’ve taught private piano lessons for about nine years.  Since having a child two-and-a-half years ago, I’ve kept my studio relatively small.  I only accept twelve private lesson students, since I like to be a mostly stay-at-home mom.  In March, all my private lesson spots filled up, and I began a waiting list.  I have always hated turning students down both because I love my job, and let’s be honest–no one likes turning down money.  But I know that being home with my little one is most important right now, and in order to make a substantial enough leap in income, I would have to take on quite a few more students which means quite a few more hours away from my little one.

So, I decided to branch out from private lessons.  Before moving from Wisconsin about two years ago, a public school there had approached me about teaching piano lessons in a group setting as part of their summer school program.  I was all set to begin a certification process, but ended up moving to Montana before I could see it through.  The idea of teaching group piano entered my head again this spring when I thought of the way it would work out really well in allowing me to teach substantially more students at my studio without taking away the amount of time from my daughter that it would require if I was to teach each of these students privately.

So I took the plunge.

I began by taking online classes and purchasing training videos from the piano method I decided to use (the Mayron Cole piano method, for teachers who might be interested).  Once I realized this was something I could see myself doing and felt equipped and comfortable to move forward with the idea, I purchased seven digital pianos, stands, and benches and set up a group piano lab in the basement of our home.  It gave me a lot of anxiety to purchase thousands of dollars worth of equipment before I had students enrolled in my studio.  But I knew that I needed to spend the summer setting up the lab, and also wanted to be able to show parnets and students the space if they wanted to interview me prior to signing up for lessons. Since I am definitely known in the community as a private lesson music teacher, I also spent a lot of money on getting my name out as a group piano teacher, and educating my community on the benefits of group piano classes (only one other teacher in town offers group piano).

I will admit that I panicked when, the week before lessons began, I only had five students enrolled in three group classes–meaning that I was basically giving one student a private lesson for the cost of a group lesson (I charge less for group lessons).  But the day my first class began, I had a few last minute registrations and enrollment grew to seven students.  A few weeks later, I am up to nine students in three classes and was recently approached by a local junior high to teach a group piano elective one afternoon a week (a perfect job as they will be bussing students to my studio during my daughter’s naptime!).  

How do you decide if your risk is one worth taking?

• Is there an underserved area of the market in your community? 
• Would the purchase of additional materials/resources distinguish you from other competitors?
• Can you afford to fail?  If you lose your investment, will you still be solvent?
• Has growth in your current studio become stagnant?
• Are you a self-starter who is willing to stretch yourself in a different way?

This whole process has taught me the importance of taking risks as a studio and small business owner.  It was a scary thing to branch out of my comfort zone and take a chance that it may not be successful.  But I saw an opportunity and an unfilled niche in my community and decided to go for it.  It was especially nerve-wracking to invest money into the equipment and advertising necessary to launch my group piano lessons without knowing if I would have the students to pay back our savings account.  In the end, the risk ended up paying off.  With only two-and-a-half hours more per week of teaching time, I have been able to take on fifteen more students.  And the time that goes into preparing for these classes is something I can do while my daughter sleeps, so it doesn’t take away time from my most important fulltime job–being a mom!

“When the student is ready, the teacher will appear.”

Don’t hesitate to enlist help! Being an independent teacher, I am fiercely independent, self-sufficient, and sometimes stubborn! However, when I become willing to ask for help, it seems the teachers magically appear.

Everyone needs a little help every now and then. Many of us have not had the business training that running a successful busines requires – I am the first to admit that I am lacking in these essential skills. This month I will feature the newly formed Piano Teacher School founded by Kathleen Theisen and Kristin Yost. Kathleen Theisen is an assistant professor at Western State Connecticut University and Kristin Yost is the founder and director of The Centre for Musical Minds in Frisco, Texas. Both of these enthusiastic teachers are not only very successful in their music careers but are also thriving entrepeneurs. And now they are here to help! They have developed practical courses to help independent teachers with the myriad of different activities involved in the daily tasks of teaching.

Piano Teacher School offers affordable online courses in four areas: Business Planning, Organization Strategies, Image and Branding, and Technology. Their goal is to “maximize the efficiency and productivity of your music studio.” Each class offers videos on private links and includes personalized one-on-one coaching. There are detailed descriptions of the classes on their website at pianoteacherschool.com – each sound fabulous and I would like to take them all, if only I could find the time! Courses are also accepted by the Music Teachers National Association for recertification.

The Business Planning 101 course is five weeks long and includes four videos, PDF handouts, assignments, two Skype consultations, and a business plan outline. The cost is $150 with no travel needed. It can all be done in the comfort of your own studio! The course objective is to make teachers better business owners, which in turn, will make better teachers. Participants will prepare a business plan that offers immediate results, including evaluating current procedures, market analyses, financial analysis, etc. – all of the components that a business plan requires. I like their idea of seeing myself as the CEO of my company! The next series of classes begin on October 1st. Take the plunge, take a class and get cracking on that business plan.

“Teachers open the door, but you must enter yourself.”

“If you fail to plan, you plan to fail.”

What is a Budget?

As a teaching artist and studio owner striving to learn the ropes of running a small business, I find it particularly challenging when faced with financial obligations such as creating a budget. But it is a task that must be done and the simpler I can keep it, the better! So, what is a budget? The website, investopedia.com, defines budget as “an estimation of the revenue and expenses over a specified future period of time.” A budget can be prepared weekly, monthly, quarterly, or yearly. An important reason to have a budget is to maintain control over expenses and avoid overspending. On the other hand, a business must spend money to make money. A budget provides a tool for organizing cash flow and planning for the future. Learning what you have to grow the business and compete is another function of a budget.

In my research, I found that there two types of budgets: a static or fixed budget and a flexible budget. The static budget is simpler because it projects established levels of fixed income and expenses over a set period of time. It works best for businesses that expect income and expenses to be stable. A flexible budget is one that takes into account varying levels of income and expenses. A static budget can be used prior to the start of a budgeting period. The flexible budget helps in evaluating performance and can be adjusted as needed when income and cost fluctuate.

One of the reasons I have had difficulty in budgeting is due to a constantly changing income, both positively and negatively. For example, last year enrollement was down. Currently, I am grateful that the studio schedule is full, with a waiting list! In order to get control over my studio finances, I had to develop a budget that works for me in my unique, non-traditional business. Flexibility was crucial, but it was also important to have a starting point.

Avoid Financial Disaster, Be Financially Responsible! Create a Budget Today

Step 1: Create a spreadsheet with the following headers: Category, Budget Amount, Actual Amount and Difference. I found a simple worksheet at about.com.

Step 2: Calculate Income. (You can use studio helper to help with this!) The experts recommend making conservative estimates when forecasting income.

Step 3: Calculate Expenses (Again, studio helper comes in handy.) Expenses include accounting services, advertising, insurance, professional fees, travel costs, piano tuning, office expenses, payroll and payroll taxes, equipment, to name a few. Experts suggest it is best to overestimate your expeneses.

Step 4: Budget in a Cash Emergency Fund. Set aside at least 10 percent of monthly gross income and deposit it in a money market account. This is crucial for small business owners. If there is a downturn in the economy or an unexpected expense come up, this “rainy day” account will keep your business afloat. A small business should always operate with a positive cash flow.

Step 5: Review your budget every month. Here is where flexibility comes in. Since it is difficult to project expected income in my studio, going over the budget every month is essential. Things to look for are how close you came to forecasting revenue. If revenue was lower than expenses, it’s time to look for places to cut costs. Also, determine where you went over and under your planned expenses.

Finally, I found that 50 percent of my gross income went to expenses. I am curious if that is typical for other studio owners. Also, since I am a novice to small business ownership, I welcome any suggestions on budgeting. How do you budget in your small business? What do you use to assist in building a budget for your studio? Are there any additional programs that you find helpful?

The budget is done – it’s time to practice!