In my previous post I proposed a reflection to put you on the right track to become a successful freelance teacher. Once you define the who, where, what, and how to start your teaching business, it’s time you thought about the more practical aspects involved. It’s time we talked about money.
I don’t know about you, but I was never very interested in numbers, let alone finance. If you’re like me, you’ll know what I mean.
For you to succeed as a freelancer, however, it’ll be really useful to understand where your money is going. Not only will it help you run your business more efficiently, but you’ll also know when/how much to save and invest back into your business.
If you feel overwhelmed, you should hire an accountant straight away. At the very beginning, though, you may not need to do that depending on your income, where you live, and the tax laws in your country.
For those of us in Brazil we have the option of becoming a Micro Entrepreneur (MEI) and we can register online for free. In addition, there’s SEBRAE, a non-profit entity which offers free advice over the phone and in person for small business owners. They are pretty helpful. For Americans, The US government (SBA) offers a similar service. Their 10-step guide is worth checking out.
Regardless of our location, what we all need is to be informed.
See what’s available in your town. If there’s not much where you live, start by checking the online courses posted below. There are many other courses to choose from.
The point is, we have to know more about our business, our clients, our market, and all the legal requirements to operate. We have to pay our taxes, and think about our retirement as well. Without this knowledge we may not last long and we’ll lose money for sure.
To give you a better idea, I made a list of expenses that should help you see where your money goes.
- What are your costs to get to your students? (Include transport & time);
- If you work from home, make sure you include: electricity (e.g. A/C adds a lot to our monthly bills in Brazil), internet, monthly subscriptions like Zoom, Off2Class, or any other service related to your classes;
- Materials you buy: books, tools, paper, ink, anything you purchase and use in class;
- Paid courses you take for your advancement, paid events you participate in, CPD (Continuing Professional Development) investments in general;
- If you have your own website, add the costs with domain & hosting to the list;
We’ve just scratched the surface here. This list includes your overhead expenses like utilities, others like investing in your CPD, and of course you should account for the unpredictable expenses like fixing or replacing broken equipment, or not being able to work when you get sick. You need to be prepared. You need to have a business plan, a contingency plan in place.
I suggest you try one of the courses below to learn more about business and finance. I recommend these online platforms: Coursera and Future Learn. Coursera offers many paid programs, but you can audit almost any individual course for free. Just search the catalog using the course title, click enroll, and a window will pop up. You’ll see at the bottom of the screen “audit the course”.
Next, I’ll talk about a FAQ: How much should I charge?
How would you answer that?
Thanks for reading! ‘Til next time!