234: Money matters: How to set your online music studio up for success ft. Bill Litster

 

About our guest

Bill Litster is the founder of Better Biz Info. No stranger to music himself, Bill started playing music when he was seven years old and plays five instruments. He also has eight kids who are musicians, as well! He has also owned several other small businesses along the way and has learned what it takes to get your finances set in such a way that can make your business successful and your dreams a reality!

You can find more information about Bill and his services at these links:

We all want to know “what’s next” for us

Everyone wants to jump to knowing “what’s next” for their businesses – but it’s hard to know what’s going to come next when you don’t know where you are, and this is something that can be easily overlooked. Bill likes to call this “top line focus” – which is where we keep thinking “If we keep putting more money on the top, then we’re bound to keep more of it.” But that isn’t the way it really works! The reality is if there’s money in your bank account, it will find a place to go. There’s always something else to buy. And if you put yourself as a business owner in the mindset of “if there’s something left, that’s what I get” I can guarantee there will be nothing left for you without a system in place to guarantee that you’re going to get paid. You need a system that takes cash flow management and an understanding of where you are to know where you’re going. 

Understanding where you are

Knowing where you are is all about clear visibility of 3 things:

  1. What is happening to you
  2. Where your dollars have been
  3. Where your dollars are going

The reality is knowing where you are, even if it’s painful, is less painful than not knowing where you are and losing sleep over that. It’s as simple as starting by figuring out how much money you spent on taxes, how much money you spend on your own paying yourself (which is often zero) and then how much you spent to operate the business. Now, you have a benchmark to go from and a starting point to turn things around.

There’s a great analogy that Bill likes to use called the “rear view mirror analogy” – basically it’s like driving a car, looking in the rear view mirror, hoping it gets you where you’re going but, that’s useless because all you’re doing is looking at what happened. We can’t impact what happened in the past, all we can do is deal with where we are now and where we want to go when we’re driving a car. That’s the most important information. We only glance in the rear view mirror for perspective to help us understand, “oh, that’s what happened to me.” I don’t want to make that wrong turn again. And you can look at your finances the same way.

Don’t lose sight of the dream! Don’t lose track of why you got into this in the first place because of getting caught up in a financial struggle. You can start to put some strategies in place to get from A to B and take it step by step to get there! 

So now let’s think about looking at those numbers

Now, you’ve stopped to look at your finances to realize where you’re at. Maybe you’re not making the kind of money that you’d like to be making – but there are options, there are things that we can do that will allow you to make more money!

Let’s look at a few things:

  1. How is that money coming in?
    • Is that money coming in because you raise your rates?
    • Is that money coming in because you take on more students? 
    • Is that money coming in because you offer a one to many program?
  2. The next step would be to look at your business as a whole. You now know where you are, let’s look at where you’re going and make some changes and see where we can make increases such as:
    • Increasing your lead flow by 10%
    • Increasing your conversion rate By 10%

Little changes over time add up! For you to be successful you need to change the systems you’re using. Money will come if we know visibly where it is, get our systems in place, and know what it means with where we are and we strategize specific incremental changes that you can do today, tomorrow, and the coming weeks and months to come. But you need to be ready for change! But you need to be ready to do the work that is required because it takes time. It takes discipline. It takes focus to turn your financial situation around.

Look at your spending

Where is your money going and how could you do things differently? For example, are you spending too much on your monthly building rent just because your student count went up? If so, how can you do things differently to cut costs? Well, in that instance you have a few options: Look into community centers or churches to rent rooms from while you’re growing, or really consider trying an online option!

Take a look into your overall spending habits and have an honest conversation with yourself about what is necessary and what isn’t, then look into alternatives. 

What action steps can you take now

  1. Go and grab a copy of Bill’s book! There are so many helpful hints and actionable advice for you to get started on your financial rebuilding journey now!
  2. Open up a new bank account
    • Start by putting 1% of whatever cash you have in your business into the other account (and then just commit yourself to put 1% in there every time you get paid)
    • You will be amazed at two things: how fast even 1% can build up and that you actually can make it and reserve

The bottom line is this: Each individual teacher who is listening right now, you are incredible and you deserve to feel confident in your money situation so that you can continue to offer 100% of yourself, of your heart, of your talents to your students in any way, shape or form that you do it

As always, I love connecting with you all, so head on over to my Instagram and Facebook to send me a message! Or go ahead and schedule a time to talk with me over at https://jaimeslutzky.as.me/call-with-jaime

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