This week I listened to a podcast that shed new light into my world as a yoga teacher entrepreneur. It is all about profit.
Warning — this is an article about money, profit and planning, so if you want to avoid these topic - there are lots of other articles on my site about anatomy, yoga philosophy, poses and breath practices.
Read this when you are ready to look at your finances. It isn’t the easiest topic. I get it!
Okay so if you are staying and up for this I want to tell you that it is going to be easy and fun! A while back I wrote an article called “Making Money Teaching Yoga“. It wasn’t such a fun process and now I get why. Moving forward I am starting here with my consulting clients. Okay let’s dive in!
Step 1 of Profit as a Yoga Teacher
Listen to this Learn How to Profit First podcast with Natalie Eckdahl and Mike Micalowicz. Pay special attention around the 20:45 time of the interview when Mike talks about how we need to stop thinking of the traditional equation of:
Sales - Expenses = Profit
He talks about how when we let profit come last in the equation - it actually will come last in our real life. So instead we switch it around to look like this equation:
Sales - Profit = Expenses
It seems backwards, but as many of us know. When we need to be innovative and frugal, we can be. When we have a bigger budget to use, we generally do.
So let’s see what this means to a yoga teacher on a really small scale. Let’s think about this in simple terms.
Example: Profit for 1 Yoga Class
For our example we will use a private booking or registered session (with students paying in advance). Your income for the class is $100 for the hour. (I am using $100 because it is a nice round number. $50 also is, but I think that teachers should be making more than $50 per hour. That is whole other article.)
Normally we do the quick math like this…
(SALES) $100 - (EXPENSES) rent, fuel, props, teacher training, etc. = PROFIT
This is often why we don’t see any profit. The expenses eat it all up.
So what if we looked at it as Mike is asking us to.
(SALES) $100 - (PROFIT) 5-10% of the sales = (EXPENSES) rent, fuel, etc.
Following some suggestions from the book and Mike’s website - we can start with 1-10% towards profit, so that means that you have $1 - $10 allocated as profit money. What do you do with this money? You celebrate! According to the Profit First philosophy - you draw out half of the total every quarter (3 months) and enjoy spending it. This gives the message to yourself that your business is profitable.
There is much more to this philosophy that I am excited to learn more about such as: paying your best employee (you), setting money aside for your taxes and using what is left to pay the expenses.
This is my summary of listening to the podcast and reading the free online resources from Mike’s site. I have just downloaded the book on audible today and in February I plan on reading his new version of Profit First. Click on the image of the book here to find out more about it.
Please note - this book link is connected to my affiliate program through Amazon. That means that if and when you shop on Amazon and start here from this link — I will get credits on my Amazon account. It is a great way to show your support and to help me to continue to do this work of helping yoga teachers.
Personally I plan to begin this Profit First system in my own business in January. I really appreciate the perspective and how it already fits in with the consulting work that I do with yoga teachers who want to focus on abundance.
Let me know your thoughts about the podcast and/or the book. For sure send me your money questions. I don’t have all the answers, but I love searching them out. If you want to continue the conversation — we are talking more in the private Facebook group for yoga teachers - THE CONNECTED YOGA TEACHER.
