Managing Business Finances as an Online Course Creator
5 minute readIf you are a course creator, you might think of yourself as a more "creative" person rather than an analytical one. So it is understandable that money, taxes and finances would not be your preferred topic of conversation.
However, as a business owner, you need to wear many hats. You are the content creator, marketer, designer, salesperson, accountant, and CFO.
If you want your business to grow, the truth is that you need to manage your finances and get comfortable doing so.
This is what today's article is all about. If you struggle with keeping your money in check, having a clear overview of your finances or simply don't know where to start, keep reading below, as we will share our top tips for course creators to handle their finances without the hassle.
#1: Get Clear on Your Revenue Goals
When we say "get clear on your revenue goals" we don't simply mean: "I want to get to 6-figures in sales" or a generic number like that.
Being clear on your goals means having a very specific number in your head, and working towards a plan to achieve it.
Ok, easier said than done, right? How can you come up with a number when you are just getting started?
You can do this by working backwards and considering certain metrics in your business. If you just started selling your online course, and you have chosen its price: how many sales do you have to make to achieve a revenue you are comfortable with and that allows you to keep growing?
The first thing to do is understand your living expenses.
This is so important as it gives you a clear idea of what threshold you need to surpass in order to be profitable. If you want to be an online course creator as your full-time business, you'll need to ensure that your online course business can cover your living expenses.
So before you come up with an imaginary revenue goal, sit down and start calculating your monthly expenses. How much do you pay for rent, food, shopping, health, travel, and so on?
Open your bank account and take the average of these expenses per month. Remember to take into account your future business expenses as well, even if you are just getting started. These can be platform subscriptions, business purchases, equipment, tools, etc...
Once you have your number, you know that your revenue needs to be higher than this if you want to run a sustainable business. Thankfully, unlike selling physical products or other types of businesses, becoming an online course creator has significantly fewer expenses: The Benefits of Selling Online Courses vs Other Ways to Make Money Online
If you have already chosen the price for your online course, all you need to do now is to figure out how many sales you need to make per month to pass that threshold and break even.
This exercise can also help you understand if the price of your online course is the right one for you. Here you might realize that you have settled for a price that is too low, or maybe you realize that your price doesn't need to be quite as high.
To learn more about pricing an online course, check out this article from our blog: Ultimate Guide to Pricing Your Online Course (With Earnings Calculator)
#2: Separate Your Business Finances From Personal Ones
Another key aspect of managing your finances as a course creator (or for any business owner really) is to have separate bank accounts: one for your personal use and one for your business.
This can be a lifesaver when it comes to getting a clear view of your expenses, doing your taxes and checking on your revenue goals.
If you are just starting out, this might seem unnecessary. However, separating your bank accounts is also a good practice in terms of mindset, as it makes it easier for you to check on your finances without spending time separating them.
#3: Schedule a Weekly Finance Time
Getting into the habit of opening up your bank account and checking into your finances can help you keep track of all your expenses with ease.
If you don't force yourself to allow some time to check this, you run the risk of neglecting your finances or simply forgetting.
Schedule a weekly (or daily if you believe it necessary) finance time with you to review your spending and revenue. How you do this doesn't have to be extremely detailed or analytical, but simply measuring your total income vs total expenses can make a huge impact in helping you understand if something needs to change in your business.
#4: Plan For Retirement
If you are an online course creator or business owner, you are your own employer.
So things like insurance or a retirement plan are not automatically included in your business - you need to take care of this yourself.
Depending on where you live, there are many different options for self-employed business owners to plan for retirement and choose a contribution plan. Check the option you have depending on your location and what kind of retirement plans are available in your region.
#5: Pay Yourself Regularly
Many course creators believe this step to be unnecessary: since they are the only ones working in the business, paying themselves doesn't make a difference. However, it does.
Paying yourself can have both positive financial and mental outcomes. First of all, by paying yourself first, you make sure that your monthly revenue goals are being achieved. You are also taking money out of your business bank account, raising the bar higher for your upcoming sales.
This is also a mindest practice: the simple act of getting paid on a schedule can help you reduce stress, gain a healthier relationship with your money and avoid burnout.
We talk about this concept and many more tips on how to handle money in an interview we recently did on our podcast - The Creator Adventure - with money expert Erinn Bridgman:
#6: Save Monthly for Your Taxes
Self-employed and business owners also have to pay their own taxes, usually once a year (if you're self-employed in the US, then you'd need to be paying quarterly estimates as well).
When the time of the year comes to pay your taxes, it is a good idea to be prepared. You don't want to drop from the sky and have to find the money somewhere because you haven't saved up for this moment.
As soon as you start your business, you should have a clear idea of how much tax you need to pay and when, so you can start putting money aside each month in preparation for this.
#7: Get Health Insurance
Another perk that doesn't come with self-employment is health insurance.
Depending on where you live in the world, you might have health insurance or not. Make sure to be up to date about your country's regulations regarding insurance and what you need to do to get one.
Bonus Tip: Invest in Leveraged Income Products
Good news. If you are an online course creator, you are already doing this!
Creating leveraged income means that the time and effort you put into your business will give you exponential results in terms of earnings.
With leveraged income, the work you put in once will generate recurring profits in the future without having to put in more work.
Products like online courses, membership sites and digital products are all examples of leveraged income products. When you created your online course, you worked hard to build lessons and content and promote it, but once is launched, it works on auto-pilot. You still have to keep promoting it and answer students' questions, but most of the work is already done!
This is leveraged income, and it can be a fantastic financial asset for your future.
At Heights Platform, our focus is to help you create a scalable business with leveraged income. If you haven't already, start your Heights Platform free account today and see it for yourself.
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