Setting Up a Budget

Taking my own advice I immediately cut $2,400 a year in expenses!

BUSINESS RULE: You can never control your Gross (You can only hope to GUESS what it will be. You can only control your expenses (SPENDING)

FIRST: List on a month by month for the past 12 months your total Studio income from all sources: Lesson, retail sales, etc. 

Better yet put them on a 12 month graph - Even Better put up a graph fore the past two years. If you use Quicken or Quick Books - this should be easy!

This will show - if your studio income is increasing or decreasing. It will also show the Good months and the Bad months.
Example: Over the past 30 years, on the average, May is our 3rd worst month; November our 2nd worst month and December is the worst!

You must get it down on paper so you can see it. Don't try to rely on Memory!

Get out ALL you Bank and Credit Card Statements, and any Cash receipts you have.

Be sure to properly divide them between 

Business and Personal

WARNING: If your business expenses are more then you Gross Income you are already bankrupt!

                           Typical Expenses                    Personal Expenses
                                 Business

Monthly Cost Monthly Cost
Lease Rent or mortgage Payment
Wages and payroll taxes
Office exp. Computers, Postage. etc.
Utilities - Gas - elect- water  Utilities - Gas - elect- water - cable - garbage
Auto- Payment or Lease Payment 2nd Auto Expenses
Auto Insurance Auto Insurance
Auto: Gas
         Service - repairs - etc		 Auto: Gas
         Service - repairs - etc
Studio Liability Ins.
Warning: If you don't have liability insurance you could lose it all with one accident.
Typical Expense: About $70 a month
Health Insurance:
Warning: For many this is a #1 concern!		 Out of pocket - medical expenses. Even most Health Insurance plans have a Deductible and Co-Pay
Cost of Retail Products:
Warning: If you are not selling retail products you are losing money. Most Retail sales will give you a return of 40% - $200%. Try getting that type of return on you money any where else
Yellow Pages and Telephone - and Cell Phone
WARNING - do not let the Yellow Page People talk you into - Yellow Pages on the Web. Its a RIP OFF. They try to get over $100 a month - just for a listing. Click here for a section on Yellow Pages		 Personal Home Phone - Extra Cell Phones
Web Expenses - Internet expenses.

CRITICAL - You will have to learn to set up and run your own web sit.
Eventually this should become a Major source of NEW STUDENTS! Nor running your own Web Site is like trying to run a Karate studio and not knowing the Martial Arts.

Its not as hard a you think. 

Setting up on GODADDY will cost you about $9 a month
Extras - That $3 cup of Starbuck - 6 days a week adds up to $936 a year Food - This is a big expense (Especially fro a family - that will take careful planning
Eating out a restaurants - This can be almost entirely eliminated
Private Schools
School supplies - school Lunches
Youth Activities: Dance - Piano - Karate!!
Vacations
Other activities - Health clubs - etc.
Accounting - legal Fees
 

NOW COMES THE CRITICAL STEP

 - YOU MUST ADD UP ALL YOUR EXPENSE AND COMPARE IT TO YOUR INCOME!