Know Your Numbers

What this episode covers

What are the most important numbers for your business? Knowing your numbers is key to knowing whether your business is going to work for you. Being good at something doesn’t necessarily mean you can turn it into a successful business unless you know your numbers. Neil takes an in-depth look at the  numbers in your business helping anyone who has a tutoring business to understand what and how they can have a truly successful business doing what they love   KEY TAKEAWAYS As tutors, business isn’t usually an area of special knowledge There is a  focus on the technical skills and knowledge needed to teach and the necessary business skills may be neglected. What are the most important numbers for your business? It’s not how much money you bring in to your business it’s what there is after you’ve paid for everything. There are  two variables that generate profit - sales and costs Sales are generated through; Teaching fees Product sales Royalties & commissions Investment incomes Anything else that brings money into the business Costs are incurred through; Wages Cost of goods and materials (sheet music, strings, etc) Equipment purchase/leasing/rental Travel – motor use/trains/planes/hotels/food Rent, rates and other property expenses: fuel gas, electricity, insurance etc Everything else that is vital to the running of the business and which takes money out of the business. Until you understand and know what your numbers really are, you don’t really know if you have a viable business. Without the numbers, you can’t assess where you are. You have no baseline to and cannot measure the effect of any changes you may make to how you run your business. How can you increase your revenue? Think about it – could you:increase your customer base, Raise your fee rate,Increase the frequency of sales How can you reduce your costs? Look at all your costs – the fixed costs, and the variable costs of doing business Fixed costs don’t vary with the amount of work done – rent, fixed salaries etc Variable costs depend on the amount of work done – e.g. cost of travel to a client’s location You have the control to raise your income and reduce your costs if you understand the numbers in your business. Get the clarity you need on your numbers and then you can move your business forward and make more money.   BEST MOMENTS ‘It’s easy to confuse our excellence and specific technical skills with having a good business, but they’re very different things. ‘Turnover is vanity, profit is sanity’   VALUABLE RESOURCES The Tutor Podcast Weird Things Guitarists Do book by Neil Cowmeadow www.Neilcowmeadow.com   ABOUT THE HOST Neil Cowmeadow is a maverick peripatetic guitar teacher from Telford with over 19 years’ experience in the business of helping people. Learn how to start, grow and love your business with Neil’s invaluable advice and tips without the buzzwords and BS!   CONTACT METHOD [email protected]   The Tutor Podcast Twitter

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