Rachel Bull published a review of the workshop „Estimating your business figures – estimating risk and opportunities in your business“ given by mehrPerspektiven for the English Language Trainers Association of Stuttgart (ELTAS) on 15 March 2014 in the newsletter of ELTAU. Here some extracts with kind permission of the author:
„When I think back to this workshop the words that come to mind are:
clarity, discipline, boundaries and (facing) facts
The two trainers have diverse backgrounds including language training, industry, and consultancy; an excellent combination as they understood the the situation in which many freelance trainers work, and were able to give very practical and relevant advice. There were points at which I, and probably many others, felt that ’numbers woman‘ Heidrun Wehmeyer was reading my mind and felt myself blush when she implored us not to bury our heads in the sand and to accept the finance element of being freelance and running a business.
Clarity
Firstly, Jutta and Heidrun showed us figures that they have researched giving an overview of what a freelancer’s income has to cover. If we take the same weekends, annual leave, public holidays and amount of sick leave which the average employed person has, then we have 200 days in which to earn enough money for 365 days. If we subtract from this the time taken up with travelling, preparing, aquisition, observing the publishing market, networking etc., we are left with 100-140 days per year of paid work.
Our income needs to cover our private and our business expenses. The amount that an individual needs/ wants to earn will vary, but honestly and carefully considering outgoings will help to create a ball-park figure. The two tables (reproduced here with kind permission), provide a starting point.
Some categories may need adding or removing to suit your situation but they give an idea of the things we need to consider.
| Business Expenses p.a. | |
| Office rent (this also applies to a home office), electricity, heating, cleaning | EUR |
| Depreciation on equipment (furniture, laptop, copying machine/printer, etc.) | EUR |
| Business insurance | EUR |
| Accounting & legal costs (accountant, bookkeeping, etc.) | EUR |
| IT costs (including services, software, memory stick etc.) | EUR |
| Telecommunications, office material (phone, cell, paper, stamps etc.) | EUR |
| Marketing and advertising costs: creation and maintenance of a website, mailing activities, leaflet, Christmas cards | EUR |
| Books, magazines and other teaching resources | EUR |
| Further training (fees, hotel, travelling costs etc.) | EUR |
| Membership in associations | EUR |
| Travelling costs (car and/or public transport) | EUR |
| Provision for purchasing equipment | EUR |
| —————– | |
| General freelance business expenses | EUR |
| Private Expenses p.a. | |
| Rent or mortgage for flat/house, electricity, heating, cleaning | EUR |
| Food, clothes, health, other living expenses | |
| Household machines, other investments | EUR |
| ….. | EUR |
| Insurances (household, building…) | EUR |
| Accounting & legal costs (accountant, bookkeeping, etc.) | EUR |
| Private communication/TVcosts | EUR |
| Expenses for free time activities | EUR |
| Holidays | EUR |
| Membership in clubs | EUR |
| Travelling costs (car and/or public transport) | EUR |
| Provision for purchasing household items, savings | EUR |
| —————– | |
| Private expenses | EUR |
Discipline and boundaries
Apart from the discipline of keeping records, we also need to be disciplined with our time. To achieve balance between our work and our free time, we need to be careful that our work tasks don’t take up more time than is reasonable. A phrase that I noted down right at the beginning of the workshop was “socialising, but with discipline“ (which I think was a reference to the coffee break and not overrunning). With no fixed office hours we can allow things to run on longer than they need to. By spending time doing X, we are reducing the time that we have available for Y. Are we satisfied with the balance that we have?
Facing facts
If, like me, you started teaching in a sheltered environment or even sort of drifted into teaching, you’ve probably thought to yourself more than once when looking at a form from the Finanzamt “But I just want to teach English!!” and hope that the form will go away. It doesn’t. You deal with it and then the next month (or quarter, or year), another one comes. The main message for me from this day was ‚embrace it‘. As a freelancer, you are running a business, albeit a one-man (or woman!) business. Dealing with finances is one part of our job. If it’s not something we want to do, or we could spend our time more productively earning money, then we can outsource the job to a tax advisor. Even then, it is useful to have an overview of our financial needs so that we can make sensible decisions. If we take our business seriously, it’s easier to convince clients to do the same.
The presenters asked us to consider whether we could…
• optimise processes and travelling time e.g. try to geographically ‚bundle‘ lessons?
• reuse material? (and one participant raised the issue of storing/cataloguing material better)
• use slack time more efficiently?
• increase our hourly rate?
• win new customers?
• offer new products/ services?
In terms of developing new services or products, questions we can ask ourselves are:
• What are my strengths?
• What additional value can I show to my customers? (i.e. What do they gain by improving their English with me?)
• How can I market my services?
All in all, this was a very professional workshop with trainers who took themselves and our business seriously. Whether the information was new, or simply a reminder, it was a nudge in the direction of being clearer, more disciplined and more professional.
Mehr Perspektiven are happy to give individual consultations and they can be contacted via their website: http://mehrperspektiven.de ●