Although as a Broga teacher you are essentially self-employed, we recommend that you keep your Broga practice finances separate from your personal finances. This way you will be able to keep track of you business expenses and frequently look at your books to find ways to save money, cut unnecessary spending, and run your practice more efficiently. There are two types of costs that businesses face: fixed costs and variable costs. A general definition of these terms are that fixed costs are those costs that are more static and not determined by sales volume, while variable costs are dependent on the number of units produced. For your Broga practice, most of your costs will be fixed costs like rent and utilities, insurance, marketing, administrative, and loan/interest payments if you take out a loan. These are set costs that you pay regardless of how many customers attend your classes (i.e. the number of units you produce). A variable cost that you will face is the licensing fee (2013 trainees are exempt), which depends on the number of classes you teach per month. Variable costs are easier to handle for a small business, so, in order to save money, try to cut back on fixed cost spending, for example, by finding the lowest rent locations.
Below we break down the estimated start-up costs, monthly costs, and annual costs that you will likely face as a Broga teacher:
Start up costs:
- Broga Training/Licensing Fees- $295
- Yoga Supplies-$125 (mats) + $200 (blocks) + $120 (straps) + $75 (stereo) + $100 (cleaning)= $620
- Marketing- $100
- Insurance- (varies)
- Music Licensing- $100
TOTAL: $1,115 (+insurance)
- Broga Licensing Fees/mo-$80 (5-9 classes/wk)
- Rent- avg. $35/hr = $1,260 (@ 9 hours of class/wk)
- Broga Renewal Course- $150
- Music Licensing- $100
- Marketing- $200
TOTAL: $450 (+$1,340/mo)
We recommend putting together an income statement, balance sheet, and statement of cash flows in order to keep track of where your money is going and how much is coming in and going out. These financial statements can be very useful in making sure your business is running efficiently. You should also utilize a money management program such as QuickBooks or Quicken, as stated in the “Small Business Taxes” section.
It will also be important to understand your break even point (break even point = fixed costs/ (revenue – variable costs)) which is the point at which you will have made enough of a profit to cover your fixed costs and experience no losses. Obviously, this will be a very important milestone to hit. Keeping this equation in mind could mean the success of your business as it will help you find ways to lower your costs, find the appropriate prices to charge, and give you a tangible goal for your business to reach.
Below are three very good articles to help you understand a little bit more about the costs of running your business, the financial statements and how they work, as well as how to maintain appropriate profit margins: