Do you want to make more money? Then you need a budget for your piano studio. You can’t expect to earn more without a plan.
Many music teachers can be reticent to talk about money. It makes them feel icky. They feel like they should care more about the music, the children, the art.
This post was originally written in August 2019, then revised and updated in May 2021.
I’ve been delighted to gradually see the tides turning on this view. There’s no reason to be embarrassed about the fact that you want to make money.
In fact, treating your business like a business will make you a better teacher. Your students deserve a teacher who takes their music teaching studio seriously, and that includes the finances.
In some cases, the throwing-stuff-at-a-wall plan is a good one. In most cases, it’s not. Especially when it comes to money.
Creating a budget for your piano studio means you’ll have clarity around what you need to spend and make to meet your goals. It might not be your favourite thing to do, but the end result is worth a bit of discomfort.
Side note: For the multitaskers among you who like to learn while walking the dog or cleaning the kitchen, I also discuss the budget-creating process in Vibrant Music Teaching Podcast episode 98.
Know Where You Are
The first step in creating your piano studio budget is to take a cold hard look at where you are now.
Know Your Expenses
Do you know how much you spent on your studio last year?
We don’t just need this for tax purposes. It’s very important information for all business owners. Who cares if you make 100,000 smackeroonies next year if you spend 90,000 of it?
Revenue is a vanity figure. Profit is what matters.
Create a spreadsheet with all of your expenses for the past year, grouped in categories such as:
- Bills – heating, phone, electricity
- Music books (this one may be frighteningly large!)
- Printing costs
- Professional development (e.g. memberships like Vibrant Music Teaching, resource subscriptions or other investments you make in your continuing education)
- Website hosting
Depending on how you manage your bookkeeping, you may already have this. But there’s a caveat.
For most music teaching studios, a budget for the academic year is better than the calendar or financial year.
This may mean reworking things and combining a couple of different spreadsheets together, but I’ve found it to be worth it. Most of us plan and make changes based on the academic year so your piano studio budget should follow the same pattern.
If you have literally no way to find this information, then simply estimate for now and immediately implement a system for keeping track going forward. My Music Staff has accounting as part of their package or you could use Wave which is free up to a certain point.
Know Your Income
So, now you know how much you spent. Do you know how much you earned?
If you have no idea, you’re not alone! Many teachers are not really aware of how much they end up taking in. They know what they charge…but they don’t keep a close enough eye on their actual income.
Compile this data across the same time frame as your expenses and put it in the same spreadsheet so you have a series of columns for expenses followed by a column (or several if you have multiple streams) for income.
Now, for each month, tally up the expenses and income in each area and make a new clean and tidy sheet so you can see this information at a glance. Here’s how it might look…
If you want to use that exact Google Sheet as a starting point for your own music studio budget, click here to make a copy in your Google Drive.
You may have already known the final figure at the bottom. What I want you to take a really close look at are the trends.
- Is there a time of year when you often have students dropping out?
- Did you spend a whopping amount on music one month? Was this necessary or not?
- Does your recital cost more than you thought?
There are plenty of expenses you can’t do anything about, but there are always some we can chop up as we create your budget.
For more money-management help, head over to my hub page for handling the business-side of your teaching studio.
Create Your Music Studio Budget
You know where you are now. It’s time to decide what to do about it.
Make a copy of the sheet you created with the income and expenses from the previous year and delete the numbers. It should look something like this…
Then we can start to fill in those blanks.
What You Can’t Change
Start with the things you can’t do anything about.
Your bills, for example, are unlikely to change. Round up the total amount you spent on bills last year and copy that across to act as your annual budget for next year. Enter rounded figures for each month as well.
Do this for all the expenses which are fairly fixed, and either:
- Average out the spend across the months OR
- Allow for higher expenses in certain months (e.g. if you know you’ll spend extra for a recital or because of cold-weather)
Trim the Fat
Make your studio as lean as is realistic. Don’t just chop into budgets at random, but do get real with yourself and cut the expenses which aren’t benefiting your studio.
If you tend to go wild on sheet music, then maybe this is the area you cut back on.
Are you paying for an app or program which you’re not using much? Ask yourself if it’s important and if it fits in with the goals you have for your students. If it does, make a plan to use it. If it doesn’t, bin it.
Estimate Your Income
Calculate how much you are likely to make each month.
Multiply your fees by the number of students who will be in your studio, but keep in mind the trends you noticed when analysing last year’s figures. If you always lose students to hockey in April, then allow for this. If you live in a military town and many folks are relocated each January, then estimate based on that.
This is not the time for pie-in-the-sky thinking.
Your budget is not the place for dreams, hopes and aspirations. It should be reliable and a reasonably good predictor of the future. You want to be able to look at the budget each month and say, “Yep, I’m on track!” unless there is a truly out-of-the-ordinary event.
Reassess if Necessary
Are you happy with the final figure? If it’s not enough for you to support the lifestyle you want, then it’s time to rethink:
- Are there any other expenses you could cut?
- Do you need to take on a new income stream?
- Should you raise your rates?
- Could you consider a more profitable lesson format?
Ultimately, your business is under your control. Take the reins, take charge and make it the one you want.
How did you get on with your music teacher budget?
Did this exercise throw up any curve balls? Are you surprised by how little you’re making, or how much? Tell us about your experience in the comments.
3 thoughts on “How to Create a Piano Studio Budget”
Great article, very timely for me personally and professionally! Ready for the next article!
Thank you for this idea! I just did step 1 and 2. I don’t know why I didn’t do this before. I can tell it will be very helpful.
You’re welcome! 🙂