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Profitable Tutoring
In the following series, Philip White, a Maths tutor for over 15 years, offers tips on how to start and run a successful private tutoring practice.
Chapter List
5 INCOME: How to price your services
5. INCOME: How to price your services
5.1 How much should you charge?
The answer is to charge what the market will bear, with the proviso that
both yourself and your pupils are satisfied that you are giving value for
money.
Sounds simple?
One of the most common mistakes made by new businesses of all types is to
think that people are only motivated by price in the buying decision.
Consequently, a common initial approach to the market is to undercut what
everyone else is charging. This is foolish, and unprofessional.
Think about some of the more significant purchases you have made during your
lifetime. Your house, or your car for example.
Did you buy purely on price alone? Of course you did not. If you did, we
would all live in the same type of house, and drive the same type of car.
The cheapest.
Of course price is an important consideration when buying any product or
service. But it is only one of many considerations.
After all, why do parents send their children to private school, when they
can have essentially the same product down the road for no additional
expense?
5.2 Getting started
Even if you are new to private tuition, with little or no formal teaching
experience, I would advise you to start by offering your tuition services at
the prevailing market rate. Not above it. Not below it. If you adopt the
main ideas I have been outlining in "Profitable Tutoring", you will be ahead
of the competition, because few tutors that I have come across put much
imagination or effort into marketing their services.
You will not need to undercut the opposition.
Once you have established a good reputation, you will be able to charge more
than the going market rate, because the perceived value of your services
will be that much greater.
5.3 Boost your income - Not your hours
One of the best ways to boost your tuition income is to offer double lessons
i.e. take two pupils at a time (they will usually be friends who are roughly
the same standard).
Let us say that your hourly rate is £16.
However, if you take on two pupils together at, say, £12 per hour each, you
have boosted your hourly rate to £24. I have used this approach on a number
of occasions, and it has worked very well.
The pupils themselves benefit, since they are receiving quality private
tuition at a more affordable rate. The lessons themselves can be more
enjoyable, since it is easier to "bounce" ideas off two people.
Furthermore, you are probably increasing your potential market. I have come
across pupils who are a little intimidated at the thought of individual
private tuition with a stranger, but who find the prospect of tuition with a
friend more reassuring.
The only disadvantage for the two pupils concerned is that you are not
giving totally individual attention. Providing both pupils are of roughly
the same standard, however, they should still benefit significantly.
There is, of course, nothing to stop you offering small group tuition of
three or more if you have a suitable tuition venue.
The possibilities for expansion are endless. You may even decide to start
your own tutorial college.
5.4 How to reduce short-notice cancellations
One of my biggest problems in my early days was the problem of last-minute
cancellations.
Unfortunately, there are people out there who really do seem to believe that
you are only on this planet for their convenience.
I have had pupils call me half an hour before an expected lesson, saying
that they cannot make the lesson. No explanation is given, nor an offer to
rearrange the lesson. Similarly, there are those pupils who simply do not
arrive for their lesson, without so much as a phone call.
The answer to the problem of short-notice cancellations is to implement a
system of advance payment. It will not completely stop pupils cancelling at
short notice, but it will drastically reduce such problems.
On my Tuition Profile I state that I require payment of a lesson in advance
after the very first lesson.
If a pupil cancels at short notice (less than 48 hours), the payment for the
lesson in advance is automatically forfeited.
Because all of my terms and conditions are stated on my Tuition Profile, my
pupils are aware of my requirements before they start. There can be no
misunderstandings. This is another reason why my Tuition Profile is an
essential dimension of my business.
It really is a matter of using your discretion. You must not make your terms
and conditions so draconian that you put off prospective pupils. After all,
you will have to be fairly flexible. It is a pre-requisite of being a
private tutor.
However, you must also be firm from the outset, otherwise some of your
pupils really will try and take you for a ride.
If you cannot maintain a regular income from your activities, you will not
remain in business, and consequently your pupils will not be able to benefit
from your tuition.
Even if you are starting out as a private tutor, I would still recommend
that you request a lesson in advance from each pupil. Although you do not
have a reputation at this stage, providing you have set yourself up in a
professional manner using the advice I have given you, you should not
encounter any problems.
I have never lost a pupil because they refused to pay for a lesson in
advance. Besides, it is a test of commitment on the part of your pupils.
5.5 How to obtain payment for a short-notice cancellation
If one of your pupils cancels within the 48 hour deadline without offering a
reason, or for something for which they should have given you greater
notice, adopt the following procedure:
- If you can, offer a rearrangement within a couple of days of the cancelled
lesson, but point out that you are making an exception on this occasion.
- Arrange the next lesson.
Send off a copy of a letter similar to the one I have included below, on
your best business stationery:
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Dear Mr. & Mrs. West,
Re: Richard's lesson: 11.04.2010
Regarding the cancellation of Richard's tutorial last Tuesday, I am writing
to remind you that under the terms of my tuition I require 48 hours notice
of cancellation.
I do appreciate that it is not always possible to avoid short-notice
cancellations, but please remember that when I get a last minute
cancellation there is no way that I can allocate the hour to someone else.
As a result, I will require payment for the above tutorial. I trust you
appreciate my position, and I look forward to seeing Richard for his
tutorial next week.
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5.6 Cash or cheque?
Never turn down the offer of payment by cheque.
You may have perfectly sound reasons for not wanting payment by cheque, but
do not let your pupils know. Most people, when offering to pay by cheque,
will ask if it is O.K. Always say yes.
If you are paying a large number of cheques into your current account, your
bank may start asking questions about your activities. Banks like to charge
businesses.
5.7 How to avoid opening a business bank account
Easy. Apply a small surcharge for those pupils who wish to pay by cheque.
I justify such a procedure by stating that the bank charges me for paying
cheques into my business account. I am simply passing on the cost to my
customers. There is nothing to stop you doing the same.
It is an excellent deterrent to paying by cheque. After all, most of your
pupils (and their parents) will prefer not to consistently pay an extra 50p
or £1 per cheque.
By adopting the above procedure, you will find that the vast majority of
your pupils will pay in cash.
In time, of course, you may generate sufficient income to warrant opening a
business account. For tutors earning additional part-time income, however, a
business account should be avoided. You deserve to retain your earnings, not
pay a percentage to the banks.
Profitable Tutoring
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Page Last Updated: 29th January 2010
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