Managing Your Dance Studio Money with the Profit First System

Jul 02, 2020

Money. We need to talk about it. We need to have systems in place to joyfully manage it. Because managing your dance studio money will lead you to have more of it.

I know what you’re thinking … We dance studio owners are creatives. We’re not the numbers type.

But aren’t we both? Really?

Shouldn’t we be?

The COVID-19 pandemic has taught us how important money management is during a crisis. And yet, managing your dance studio money is critical ALL the time … crisis or not.

Taking the Stress Out of Paying Bills

You read that right. Paying the bills doesn’t have to be stressful. What if you had a separate account for rent, taxes, costumes, etc.?

If you put money into these accounts as you receive it, you wouldn’t have to stress about finding the money to pay the bills. You’d know exactly how much money you have for each bill you’re going to have to pay.

For example, when you collect costume fees, you’d put that money into your costume account. It would be there when you have to pay the bill later for costumes.

This works for everything!

Multiple, Separate Bank Accounts … What?

It sounds counterintuitive, but this idea of separate accounts for each payable item works. This is the system taught by Mike Michalowicz in his book Profit First: Transform Your Business from a Cash-Eating Monster to a Money-Making Machine.

It’s a book — and a system — I recommend to all of my coaching clients.

Each and every one of my clients who have read the book has said they were able to financially weather this pandemic because they put this system in place for managing their dance studio money.

Ideally, each of these separate accounts are at different financial institutions. For example, your main business checking account may be at a credit union, while your costumes account may be at Bank of America. Your tax account is at a different bank. Your rent account is at a different bank. And so on.

With your money earmarked for specific use in these different accounts, it’s harder to access when you have that spur of the moment temptation to spend it on something else. You still can if you really decide you want to, but you must think twice about doing it.

Set Aside Your Profit First

 

If you don’t set aside your profit first, you’ll likely find things to spend that money on. It’s human nature.

So, one of your accounts should be your profit account.

Even if you start small with just 1% of your receivables, setting aside your profit first is powerful. It’s also rewarding!

Plan to reward yourself with something specific once a quarter with funds from your profit account. With this goal in mind, setting aside that profit first becomes easier to do.

Then it becomes a habit.

And bit by bit, you can increase the amount you set aside for profit.

Your ONE THING

Your ONE THING for this week is to read Profit First: Transform Your Business from a Cash-Eating Monster to a Money-Making Machine by Mike Michalowicz. It’s a quick read, and you’re going to want a copy of the actual book rather than the audiobook version.

You’ll also want to read it with your journal close by so you can take notes. So you can do the activities.

You deserve to be successful. You CAN have a profitable business and live your life without stressing and worrying about money.

Read the book. You’ll see what I mean.

Close

50% Complete

Two Step

Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua.