I’m giving several presentations at various conferences this summer entitled “Best Stress Free Business Practices for Your Studio.” [Note: I will also be giving this at NCKP 2013. I'd love to see you there!] There is so much to cover in this session that I thought it might be beneficial to publish a more detailed blog post on this particular issue so that I can just touch on it during the presentation and provide more details here.
Why Shouldn’t I Charge By the Week?
There are several reasons why billing by the week is unhealthy for your piano studio. Here are just a few of these reasons why you should choose to change how you charge for your lessons:
1. You need a predictable income.
When you teach by the week, even if you bill “by the month,” you and your families tend to bill and pay based on the number of lessons you actually gave, which can vary greatly. Families are quick to deduct lessons that they have missed due to illness, soccer practice, and various other activities that crowd their schedules, making it difficult to maintain a good makeup lesson policy. Wouldn’t it be nicer to receive the same amount of money every month? This would make budgeting easier for both yourself and your piano families.
2. Your families will appreciate a predictable number with which to budget.
Perhaps you are tired of this question, “How much do I owe you this month?” It is much easier on everyone if you do not have to spend time calculating what families owe each month. Families can budget more accurately and you can actually begin to rely on a predictable salary a year.
3. You need to stop thinking you are only working for the student for 30 minutes.
In reality, we know that we spend a great deal more time on each student than just the 30, 45, or 60 minutes we spend with those students. But, have you ever really calculated how much time you actually do spend per student per week? I started keeping track at one point and realized that on average (remember that certain times of the year, we spend a greater amount of time picking out music, preparing for festivals, etc.), I spend an additional 15 minutes per 30 minute student! I think you’ll find the same thing occurs for you and your studio, but in case you are wondering what kinds of things a piano tuition pays for, there is a long list on this page that includes things like:
- Time spent with the student
- Time spent in preparation for the student (trips to the music store, lesson planning, bookkeeping, development of curriculum, etc. It has been cited by professional music journals that for every hour enrolled in piano lessons, you are investing in at least 2 hours of the teachers time!
- Your training and experience
- Recital costs and preparations (Programs, refreshments, facility rental)
- Professional organization memberships
- Professional journals (Don’t forget to subscribe to the indispensable Clavier Companion)
- Publications to assist you in keeping current on new teaching materials and trends.
- Studio expenses (Copying, computer software, incentive programs, instruments, tunings, repairs, newsletters.
- Music books, CDs, music club memberships
- Property taxes, self-employment taxes, insurance, business licenses, retirement
- Continuing education, conferences
- Certification costs
4. Your families need to stop thinking that you are only working for them for 30 minutes!
It’s important for us teachers to educate our students about this additional teaching and preparation time so that families are not tempted to think they are only paying for the 30 minute lesson. To help you with this, I have created the “Where Does My Tuition Go?” brochure which you can download free and hand out to your students! (See bottom of that page for the brochure to print.)
How Do I Start Charging Differently?
To begin charging differently, change your way of thinking about payments to “paying by tuition” vs. paying by the lesson. This reminds you and your families that they are paying for much more than just the time you spend with the student. Though there are many ways of doing this, and you are free to do it however you please, you can follow this 3 step process in order to make a plan that works for your studio.:
- Divide your year.
Here are 3 ways to do this: “by the year”, “by the semester + summer” or “by the school year + summer.”
- Calculate how many weeks you want to teach in each (year or semester).
- Multiply this number of weeks by your “per lesson” price. (Only you should think of your “per lesson” price. You want your families to get away from this kind of thought process.)
- Decide how often you want to be paid (divide previous number by this) and collect tuition!
Let’s see how this works with these 3 scenarios:
Example: “Tuition by the year”
- I choose to collect tuition by the year.
- I want to teach 38 weeks per year.
- My lesson price is $35 per lesson x 38 weeks = $1330 yearly tuition
- I want to collect monthly, so $1330/12 = $110.83 per month. This means that I will collect $110.83 per 30 minute student per month, regardless of whether the month has 1 or 4 lessons in it.
Example: “Tuition by the school year + summer”
- I choose to collect by the school year + summer.
- I want to teach 30 weeks in the school year.
- My lesson price is $35 per lesson x 30 weeks = $1050 school year tuition.
- I want to collect monthly, so $1050/9 (Sept.-May) = $116.67 per month for 9 months (Summer can be done however you want using the same formula.) Again, this means that families will pay $116.67 per month of 9 months regardless of whether there are 1 or 5 lessons in the month.
Example: “Tuition by the semester + summer”
- I choose to collect by the semester + summer.
- I want to teach 13 weeks in the semester.
- My lesson price is $35 per lesson x 13 weeks = $455 semester tuition
- I want to collect by the semester, so families pay $455 for the semester or $230 two times during the semester (gives those paying early a discount). Summer can again be done however you want using this formula!
I hope this is helpful to you. Of course, there are other ways of doing this, but I find that this seems the most straightforward. Moving to a yearly or semester based approach of charging tuition is well worth the effort and will save you lots of time, stress, and even money! Don’t forget to sign up for the newsletter so that you don’t miss other Dollars and Sense posts that help you experience “stress free teaching.”
I’d love to hear from some of you that have moved from the “by the week” approach to a different approach. Are you happy with this change? What have been your challenges in implementing this?