Here’s a brief list of the things that come to mind when I think of the “Business End” of things:
- Business end of a skunk (the stinky part)
- Business end of a scorpion (the pokey part)
- Business end of a dog (the bitey part)
- Business end of a snake (the poisonous part)
- Business end of an elephant (the tusky part or the poopy part, your choice!)
Is it any wonder that we often think so negatively about the “business end” of running our music teaching studios? One of the biggest drains on the private music instructor’s time and energy can be business administration. None of us got into teaching music and running our own studios because we enjoy bookkeeping and billing. And yet, nearly everyone I talk to who has more than 5 students feels like they spend too much time on administration. How can we set up our music teaching studios so that the business aspects are not draining and well-run?
The next several posts will be a series dedicated to the business end of running your business, from best practices to set things up, to how to select the people and software to help you run things! I always welcome your feedback, comments, and ideas that may help others!
First Things First
If you haven’t already done so, you’ll want to take a few basic steps to set up your music teaching studio’s business structure:
- Register your business in your state. You’ll have to decide on whether to become an LLC (limited liability corporation) or just register as a sole proprietor. If you’re working alone, there is no difference in your taxes if you are an LLC, and you are protected from certain kinds of liability.
- Open a dedicated bank account (or accounts) for your business. All business expenses, and ONLY business expenses will go through these accounts. They could be personal accounts that you use for business or actual business accounts. Often banks will charge for the business accounts, but if you work with them to set it up right they will waive the fees.
- Hire a professional accountant. Not just H&R block. You want an accountant who will know your name and take the time to get to know your business. You want an accountant who will help you set up your accounting software. You want an accountant who will let you call and ask questions without charging you for every 5 minutes of their time. More on this later. (And join my mailing list – part of the exclusive content you will get includes interviewing and reference checking questions.)
- Insurance. You may need additional insurance, even if you are working out of your house. More on this later!
Other things to think about as you’re thinking about streamlining the administrative aspects of your music teaching studio, and reducing your non-billable hours:
- Be prepared to get (and pay for) other professional help if you need it. We’re all good at some things and not-so-good at others. There is no shame or weakness in hiring a professional to do something better than you could do yourself.
- Set up a regular computer backup (Carbonite is a great cloud-based backup, or you can back up to an external hard drive).
- Think about a receipt saving system. It can be simple (mine is a manila file folder that says “Reciepts 2014”)
- Think about a mileage tracking system. You want some kind of log of business miles. It can be paper, on your phone, or whatever. As long as it’s accurate it doesn’t matter how you track it. This can be a HUGE deduction at tax time, but you must track it accurately and carefully. I typically deduct between $100 and $200/month in mileage.
Next time: Different ways Software can help you