The End (of the Year) is Near
It's not only getting close to "Nutcracker" season, it's nearing the end of the calendar year, and not a minute too soon to start putting your professional house in order.
Whether you are a business owner, independent contractor, freelancer, or salaried employee, now, not April 15th, is the time to get organized. Gather your records together as if you were preparing your tax returns. Go through your bank records, pay stubs, petty cash receipts, and your written, and unwritten, business commitments as well. Then, go farther.
Look back.
Add up your accounts receivable (how much you are owed) as well as your earned income, and compare those numbers with last year's, and maybe the year before. Determine whether your business is more active than last year, and whether the activity actually translates into increased value. Look for patterns in your annual earnings history: is income seasonal or fairly steady throughout the year? Use computerized charts and graphs. They present a vivid picture, and don't require an advanced degree to develop.
Consider the history of "investment" in your business. Have you put money in? Were you covering a shortfall, or an expansion? Have you sought "investment" from outsiders? Have you borrowed for the business? Have you repaid the loans? What about credit card balances? Debt may be the sign of a struggling business. Or it may indicate a business about to take off.
Look forward.
Change your mindset: don't think like an artist; think like a businessman or woman. Even if you're a freelancer, think of yourself as a sole proprietor, with yourself as the product. Or, if you have a corporation or partnership, think of it as a separate and independent entity, without personalizing it.
Look at your business history objectively, and make projections based on discernible patterns. Factor in the uncertainty of making your living in the dance world. For example, did you need to take part-time work? Did you need to cancel classes and rent out studio space? Do you habitually (or just occasionally) need to "lend" the business money? Do you need donations and grants, or is your studio "tuition driven"?
Be equally objective about your temperament and financial needs. Dancers are used to coping with uncertainty. You may be comfortable drawing against such income as the business may or may not generate, but your family may need steady, reliable income.
Temperamentally, you may be comfortable with a small business or limited commitments. Redefine your "mission" and scale back to create a high quality "boutique" business. If you'd rather try to take the business as far as it can go, consider promotional activities, investment, diversification (adding adult exercise, martial arts or "mommy and me" classes to your schedule, for example, to reach a larger client base).
Create a plan based upon your insight into the past, present, and future of your business.
Reorganize your business.
Confirm your numbers with your accountant. Then speak to your lawyer. Your experts may advise you to establish a business entity (even incorporate yourself), write up a partnership agreement, become a not-for-profit corporation. Or, they may advise you to dissolve an existing entity that isn't helping you or consolidate entities that are diluting your resources. Every business entity has advantages, as well as drawbacks, and the well-chosen business entity will help you take your business where you want it to go.