Understanding Your Business Finances

If you're running a business or looking to start one, then this is your sign to stop you right now and make sure you are aware of the importance of understanding your business finances.

For so many of us who come from the classroom and into our own businesses, the finance side of things can be quite daunting and very overwhelming.

Having a better understanding of what's going on, what to look for, what to review, etc, will give you confidence to know that you CAN do it and you no longer need to bury your head in the sand which is just one of the many things we are covering in my program, Tutoring Growth Membership. 

The Tutoring Growth Membership is my monthly coaching program with industry-specific training that will show you the exact path to take to level-up your side-hustle to a successful, sustainable and scalable business.

Today however, I wanted to share with you some of the key financial terms and explain them in a 'non-accountanty' way, so that you too have a clearer understanding and can start getting into this good stuff as well!

1. Income and Expenses

   Knowing where your money is coming from and where it's going to. Income is the money that you earn from tutoring, selling courses, running workshops, selling products, etc. Expenses are the things that you spend money on, like rent, electricity, advertising and paying staff (if you have any).
   
   

2. Profit and Loss

   This is like keeping score of your business. Profit is when you earn more money than you spend and loss is when you spend more money than you earn. You want to aim for a profit to make your business successful, but this may not happen right away.
   
   

3. Cash Flow

   Imagine your business as a bucket. Cash flow is like the water going in and out of the bucket. You need to make sure there's enough water (cash) coming in to cover all the holes (expenses) in the bucket. Managing cash flow means having enough money to pay your bills and staff on time.
   
   

4. Budgeting and Forecasting

   A budget is like a plan for your money. You need to decide how much you want to spend and how much you expect to earn. Forecasting means predicting how well your business will do in the future based on your budget.  This is so important for those who are looking to start out and replace their teaching salary.

Keeping a close eye on your finances will help you make smart decisions for your business and ensure it thrives in the long run, but if the finance stuff feels overwhelming, don't worry! Take it one step at a time.

And if you want to learn more about aspects of growing your business (finances and more), then make sure you are on the Tutoring Growth Membership waitlist.