Financial organization = less money lost, more money saved, and more revenue generated.
Throughout my journey owning my own aerial arts business, I have truly and perhaps somewhat comcially traversed the spectrum of financial organization. Once I recognized the importance of taking control of my finances, these are the steps I took that made a huge difference in my income and my workflow. Whether you teach aerial arts, pole, flexibility, yoga, dance, pilates, or any other movement art, I am confident these tips will help you gain clarity on your finances.
Step 1: Empower yourself through tax planning
Tax season can be a daunting time, but you can take control of your financial planning by accounting for your taxes each month. By allocating a percentage of your net income for taxes, you empower yourself to better plan your budget and marketing strategies. While it may feel demoralizing initially to calculate out taxes each month, over time, it becomes a natural and important part of your financial tracking flow. Expect to pay between 10-37% of your net income to taxes (minus your writeoffs). Check tax brackets in the U.S. here.
Step 2: Collect payments first – and automate them
Tracking down late payments can be a draining task. Ensure that your business is set up in a way that customers cannot receive services before making their payments. Automating payment processes not only ensures timely payments but also provides transparency for both you and your customers, minimizing miscommunications or misunderstandings. Plus, for new customers, it’s essential that they sign a waiver before taking a class – link the waiver and the payments into one user sequence to optimize the process for everyone.
Consider exploring user-friendly class booking software like TeamUP, which streamlines your payment collection process. You can start a free trial of it with my link to check it out! It’s important to find a software that aligns with your business flow and enhances your overall experience.
Step 3: Track your cash flow
Tracking your income and expenses is crucial for financial organization. While there are software options like Mint available for automated tracking, actively updating a spreadsheet provides a more engaging way to stay connected with your finances and observe week-to-week changes. I have personally developed an income and expense tracking sheet that organizes cash flow by quarter, with calculators built in for tax deductions, income and expense summaries, and an annual overview. This way, you can easily visualize your gross and net totals, as well as your profit margin. Get an inside look at these resources here.
Step 4: Price Point Precision
Setting the right price points for your services requires careful consideration. It’s not as simple as just “charging what you’re worth.”
A few points to consider:
- What is the market rate of your offering?
- What does it cost to run the class?
- How much do you need to make per hour to meet your needs and goals?
- What other options do people have besides your offering that they might turn toward instead?
- How does your offering add value to your customer’s life or solve a significant problem?
- Can your offering save your customer money or help them earn money?
If only there were a magical calculator that could help take the guesswork out of price points…
Oh wait there is! I have created calculators to help you analyze the income potential of your creative movement business. These calculators allow you to input different class prices, the number of classes per week, the cost of monthly memberships, and more, all while considering tax implications. I have spent over a year developing, testing, and refining these and have found them to be essential to my success running a studio. They are bundled with the financial tracker I built, offering a comprehensive solution for determining price points that align with your goals. Walk through these resources for free with me, and glean some additional insights and tips from me along the way.
Step 5: Think about the big picture
Cash flow is rarely linear, with fluctuations from month to month. It’s essential not to base your financial decisions solely on a single month’s performance. To gain a clearer understanding of your cash flow patterns, it’s beneficial to track and analyze data over a longer period, preferably a year or more. Creating an at-a-glance spreadsheet for the year and visualizing your annual cash flow trends through charts can provide valuable insights. As your business matures, maintaining a by-year spreadsheet will further enhance your understanding of the big picture.
The resources in the toolkit I made have saved me time and money, helped me identify my income potential, and empowered me to plan for longer term financial security.
Get organized now for long term success
Through proactive tax planning, automated payment collection, active cash flow tracking, well-considered price points, and a focus on the big picture, I have gained greater control over your finances that free up more of my time and energy to focus on the core of what I do – teach and create.
And you can do this too!
Remember, financial organization is an ongoing process, and with time, you’ll become more adept at navigating the intricacies of running a successful studio. Embrace these steps as tools to help you thrive and flourish in your entrepreneurial journey.