Updated: Nov 6, 2020
I don't know about you, but I'm definitely not enjoying doing calculations and spreadsheets. As a language teacher, I much more prefer to work with words. Give me grammar, pronunciation drills and etymology any day, instead of budgets and number.
But that said, I have slowly realised how important it is to be on top of your finances when you run your own language teaching business. When you run your own business, you need to offset money yourself for tax. So you need a system for tracking your income regularly, in order to put money aside for tax. But it's not just that. By tracking your income, you can start to see patterns in your earning that can help you to make strategic decisions. You can also see what your expenses are like, how much you spend on your business every month.
One thing that I found difficult for a long time was to justify investing money back into my business. When I started , I didn't have any money to spare. I was desperate for a monthly income, so it was so hard to justify investing in things. I borrowed, begged and bartered my way through my first year. And taught myself a lot of skills. But I have since realised that it can be really worth it to invest in certain things that can free your time up to develop more products and take more clients (and ultimately bring in more money).
One such investment was subscribing to a booking system. Another was buying a short course on how to manage my social media calendar. A third one was investing in Paypal business account so that I could accept credit card payments. Investments in systems and processes can be so worth it.
I have tracked my income for over 10 years, by using a spreadsheet that I have set up. It's not complicated, but it's really effective. I fill it in a couple of times per month (and currently I'm aiming to fill it in weekly), both takings and expenses according to category. The way it's set up, it automatically summarises the total takings and expenses and works out what my taxable amount is.
It saves me so much time when it comes to filling in my tax return, as all I need to do is to copy and paste the yearly total numbers into my tax return.