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Finances

22 Aug

Building a Business Plan – Part 1

by admin
in Finances, Marketing, Policies and Procedures, Program Development, Uncategorized
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businessplan
Every Successful Business Has a Business Plan.

That being said, I have to admit that when I began my home piano studio, I did not write out a formal business plan or even a startup plan! I did, however, create professional documents such as a studio policy, studio brochure, business cards, tuition statements, and many other documents necessary for running my studio. I also had a lot of goals for my business but they were mostly in my head. In spite of not writing out a business plan, my business has flourished and I am now in my ninth years with a full studio and a waiting list. As I become more and more educated on the business end of things, I realize the need for a business plan. It’s never too late to write one. In fact, to insure that my business continues to be successful, it is absolutely essential.

Why Write a Business Plan?

Putting everything on paper is powerful. Similar to writing weekly assignments for our students and asking them to document their practice for the week, writing a business plan aids in solidifying goals and recognizing both strengths and weaknesses. The United States Small Business Administration stresses the importance of writing a business plan for the following reasons: to obtain outside funding and credit from suppliers, to manage operation and finances, to promote and market your business, and to achieve goals and objectives. A standard template for a business plan usually includes:

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21 Jul

Budgeting 101

by admin
in Finances
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BudgetNow that you are charging what you’re worth (last month’s blog), it’s time to discuss what to do with all of that money! A budget is an essential tool for any successful business. Ben Franklin said,

“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.

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21 Jun

The Courage to Charge What You’re Worth

by admin
in Finances, Policies and Procedures
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CouragetoCharge

In 2009 I had the pleasure of hearing Beth Gigante Klingenstein, author of The Independent Piano Teacher’s Studio Handbook, speak on the question of “Who’s in Charge of Your Studio?” at the University of St. Thomas Summer Music Institute. The main message I took away from her workshop was that if we as studio owners are complaining about our wages or any other aspect of our business, we have only ourselves to blame. We are the captains of our own ships and we can remedy the situation by raising our rates, setting studio policies and enforcing them, and ultimately, by realizing our worth as teachers of music and art.

In 2002, Beth conducted a survey of Independent Music Teachers (IMT’s) in the Music Teachers National Association and found that the average IMT earned $29.00 per hour and had an average gross annual income of $17, 893. What I found shocking was her comparison of the independent music teacher’s salaries to that of other business professionals. The IMT income was lower than a pharmacy technician, janitor, receptionist, file clerk, and even a manicurist! Why are we underpaid? Beth offered many reasons:

• Traditionally female profession – historically, traditionally male professions tend to be paid more
• We are independent
• We do not raise rates often enough or by enough
• We think “per-hour” instead of annual income
• We think “part-time” instead of “full-time”
• We fail to realize the difference between gross and net income
How do we change this? First of all we have to recognize and acknowledge our worth. One of the most disturbing mindsets that Beth discusses in her book is, “I don’t need the income because I am being supported by my spouse.” This attitude is a detriment to our profession. Many teachers support not only themselves, but also their families on their teaching income. If some teachers charge artificially low rates, everyone in the profession suffers.

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09 Jun

Maintaining Income During the Summer

by cconrad
in Finances, Policies and Procedures
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heaven on earthI own and operate a small piano studio out of my home, and the summertime is always a bit of a financial struggle for me.

When I took piano lessons growing up, we always continued our lessons during the summer.  They were a bit more sporadic, since my teacher usually took a vacation and my family usually took a vacation, but it certainly wasn’t as though we took the summer off.

When I began teaching piano in Milwaukee, I was surprised to discover that teachers in the area gave summers completely off from piano lessons.  Most of my students expected that I would be doing this same thing.  My first year of teaching, though it went against my instincts and desires, I decided to appease the masses and gave my students the summer off.

I will never do it again. 

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04 May

Size Matters!

by admin
in Finances, Marketing, Policies and Procedures, Staff Management
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Although your studio may be based on furthering artistic pursuits, a studio is a business, and a good part of its success depends on being realistic about this.  I taught and helped manage one music school where the board of directors hired an orchestra conductor with fundraising expertise as the school’s director.  Unfortunately, she’d had no business experience and not only didn’t understand how to make the business work, but didn’t even know how to ask the right questions.working-together

Understanding the business part of your work is essential, but it’s crucial to recognize that size matters.  Getting an MBA or reading big business advice books may not give you what you need to handle a small business.

That’s because most studios are small businesses.  It is possible, of course, that you are part of a chain of studios.  In that case, you may function as a middle manager, and must hew to the budgets and regulations of a larger corporation.

However, since most studios are small businesses, it’s important to realize thatskyscraper a lot of the popular business advice out there may not apply very well to you.  Clarifying which business practices suit you and your day-to-day work can have a big impact on how you handle your work, how you can best work with staff, students, and community, and how to handle competition.

I’d like to tell you a couple of brief stories about how I learned that some business “wisdom” was not geared towards my business, and what I did about it.

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