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Budget
We’re doing our next session of SFPC in Fall 2014. One thing that became apparent after our first session was that we operate in a sporadic manner: popping up full-time for a couple weeks or months at a time, a couple of times per year, and then packing all our things into a tiny storage unit until next time. Amongst ourselves, we’ve started to talk about the times where we’re actively hosting the school as "on season" and the times where we’re off in our own world, or planning future sessions as "off season". One thing that we didn’t account for in our original operating costs were recurring expenses that accrue during our off-season. For example, our storage unit next to our old.
QuickBooks is $20/month, but we have to pay that even during the off-season. A whole year of this adds up to $240. If we run two sessions a year, we can avoid placing the whole burden of a year of operating expenses on the cost of running one session by planning to take in enough between the two sessions to cover this expense for the whole year. While the Spring session is only one-fifth as long as the Fall session, it doesn’t really make sense to allot these expenses in proportion to the semester.
These are the kind of things that we could’ve avoided having a problem with by putting aside a high percentage of our revenues for generic overhead. Now we find ourselves in a situation where we actually have to make more money.
While the second session may have been cheaper to run because it didn’t have to bear the costs of incorporation, it also inherited several months of pre- and post- off-season overhead costs, the third and fourth sessions will include the costs of growing more "legitimate" as an institution. Same goes for storage ($130/month or $1560/year), accountant fees ($1300/year).
Other, more simple models might be to attempt to raise funds for these kinds of costs in some other fashion and paying for a year of such services up front, so that less calculating needs to take place.
We began looking at numbers for a Spring session in mid-February. By the beginning of March we had made our first real budget. This was exciting to me because it was our first chance to plan for a session based on what we had learned from our first ten weeks.
To start, I took our table of spending by category from the Fall session and divided it five, to turn expenses for ten weeks in a budget for two. Things didn’t map perfectly. For example: the space we had chosen on the Lower East Side, which was much better configured to our purposes, was proportionally much more expensive than the deal we had struck in the Fall on a space in Fort Greene. We also wanted to change the structure of how we paid teachers: trying to pay better rates, inviting some past students to teach, and bringing on more visiting artists. I laid out the format and made adjustments for our new space, then Taeyoon came up with a revised structure for teachers:
I then went back in, reconfigured things, and added costs that seemed to be missing:
Throughout, we looked at the possibility of having only 12 students in a class, compared to the original 15, but in all cases it raised the cost per student to a rate we weren’t comfortable with:
Zach was also adamant that we come up with a price that felt reasonable first, and then come up with the budget to hit that target. Or, as he put it on Twitter:
every spreadsheet program should have a slider called “austerity” —@zachlieberman, March 5, 2014
We went through five more iterations of a budget, reconfiguring and making cuts, before arriving at a final budget near the end of March:
Similarly to how we iterated on the categorical budget, we went through five revisions of salaries for teachers and visiting artists as we learned more about who was interested in teaching, when they were available, and how much we could afford to pay. We started by assigning salaries formulaically based on units of time, and then revised the final numbers so that they made sense as a scale and total amount spent.
And with that, we were off. I learned that no budget is perfect. For example, Molmol couldn’t join us, other teachers which we hadn’t scheduled ended up popping by, and the numbers were re-adjusted as we went along.
- READ FIRST: About this section (A.K.A. Your Mileage May Vary)
- Share meeting notes
- Write checks
- Reconcile expenses
- Save receipts
- Send and track invoices
- Collect payments
- Run an event
- Host visiting artists and speakers
- Export financial data
- Form an LLC
- Budget
- Fundraise