Thursday, October 8, 2015

Top 5 Considerations to Set the Best Tuition Price in Your Music Teaching Studio

Setting pricing is something important to running any business. But where do we start, as music teachers?

My opinion is that there needs to be a balance between charging a rate that is low enough to be fair and reasonable, that students are willing to pay, and also charging a fee that is high enough that it reflects our experience and expertise, so students value what they are getting, and that sets you apart from other less-experienced teachers. You also want to be covering your own costs, plus making a profit.

How can we, as music teachers, go about setting our tuition costs? Where do we even start? Here are
the top five factors to consider, to help you set the best tuition price for your music studio:

1. Consider the market where you live. Supply and demand. What people are willing to pay will differ by location, and will be impacted by how saturated the area is with teachers of your instrument, and how high the demand for teachers is. If you are new to an area, or are just getting started, you can start by doing a little "market research". Go ahead and contact a few teachers, tell them who you are and that you're trying to get a feel for the going rates in the area, and straight up ask them how much they charge. In my experience, I've haven't found a teacher who wasn't willing to help by giving me this helpful information. Use this as a starting place to get familiar with the going rate, and what people are willing to pay in your area. I don't recommend significantly underselling other teachers, because this can lower your own credibility (from a student's perspective: "Hmm, I wonder why this teacher charges so much less? She must be less experienced. Maybe she doesn't know what she's doing?"). It also makes it harder to raise your rates later to the market rate.

2. Consider your teaching experience and educational background. As you are looking at the pricing of other teachers in your area, look to those with similar education and experience as you. This can help you set your prices in an appropriate range.

3. Consider your own costs. This varies widely from studio to studio. Having a projected budget makes it easier to get an idea of what you need to make in order to be successful. I'll cover this more in a future post, but it will also guide your goals and business decisions as well.

Ask yourself these questions:
Do you rent a studio space?
Do you drive to your students' homes? (In the past, when I've driven to students' homes, I always charged an extra fee for my driving costs.)
What are your expenses, or projected expenses? What is your biggest expense, or projected expense, for your music studio?

4. Consider what other student fees your tuition fee will cover. What exactly is included in what the students pay for tuition? Is it tuition only? Recital hall rental fees, membership dues, materials fees, etc.? Some teachers choose to have a separate materials fee or recital fee. If you include these all in tuition, take that into account as you set your price (and let your students know it's included, so they recognize the value they're getting!). What other expenses will you need to cover, while still making a profit for yourself?

5. Consider whether you will charge by individual lesson, monthly fee, or a semester fee. This decision is a very individual one, and I think any choice can work for a number of reasons. Ultimately, it's up to you as the teacher to decide what works for you. When setting your pricing, you'll need to take your "billing cycle" into consideration.

Charge by Lesson
If you are charging per individual lesson, there may be months when you make more, for example if there are five weeks in the month, and some months when you make less, such as when holidays occur. Decide if you are okay with this. Overall, it should more or less even out, you'll just need to be aware if it's a month where you'll make less and plan accordingly.

Monthly Fee
If you are charging a monthly fee regardless of how many lessons there are, you may have some months with fewer lessons due to holidays, and some months with more, but you'll be making the same amount each month and it's predictable. This predictability can be nice, and the regular amount can be easier on your students to remember.

Semester Fee
Another option is to charge per semester, and give an option to pay all up front (some offer a discount for this), or to split it up over several months. One advantage to charging by semester is that once students have paid up front, you don't have to worry about billing for the course of the semester. Also, it's nice to know they've paid in advance and have committed to those months of lessons.

As you take these five points into consideration while setting your tuition prices in your music studio, I'm confident you'll be on the right track to both cover your own costs and make a profit, while being at an appropriate market rate.

What other factors have you taken into consideration while setting your pricing? Please comment below to let us all know!




13 comments:

  1. People ask me what I charge all the time. I post it on my website. It think it's good for teachers to charge what they're worth and parents to see it online.

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    Replies
    1. Thanks for your comment! Yes, I agree it's good for teachers to charge what they're worth. I haven't personally put my pricing online up until now, but I know others who do, and that works for them. I think it's a personal decision. I do like the opportunity to introduce myself and the studio and all I have to offer first, and then go into pricing, but now that my studio has grown and I'm super busy, I think I may start putting it online because it will save time. :)

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