Jun 29, 2016
How do you bill your students for lessons? Do you you charge per lesson, monthly, quarterly or charge tuition? Do you use a set billing model for all your clients or charge on a case-by-case basis?
A clear, fair and enforceable billing practice is critical to running a successful teaching business.
If you already have one in place, awesome. If not, your business will benefit greatly from adopting a consistent billing practice. We’ve woven best billing and business practices into the design of the Fons.
When I first began teaching, I was uncomfortable with the idea of doing business. I wanted to be “all about the art” and I avoided talking about money with clients. I used an ambiguous agreement, and most clients still paid me. Some paid late, some never paid. I accepted checks from clients sheepishly, as if I hadn’t spent the previous 15 years mastering the skill I was passing on to others.
Having self respect for your career choice is a skill that you can and must learn. Here’s how we run our studio now.
1. Adopt a business mindset
For you to live, you’ve got to make a living. Your clients want you to eat and have a roof over your head. They will not resent you for running a business and appreciate this takes money. Students will appreciate your professionalism and commit more to their studies if they are working with a pro. If you currently make your living as a professional instructor, you most likely spend many hours a month on the administrative task of getting paid.
2. Invoicing — The Old Way — bill clients monthly and up front
Many studios bill recurring clients up front for the month ahead. On the 25th of each month, they invoice all of their clients for the following month. Clients send back any adjustments they may need to make for vacations or other planned breaks. They are then sent an updated invoice, which is due the first week of the month.
Wow. That’s a ton of administrative time. My personal studio billed this way for more than a decade. And this was the main reason my wife, Alyson, spent so many hours a month on billing and scheduling.
As my studio grew, the admin time also grew to the point this system just didn’t work anymore. Then we started brainstorming a better way to bill and built it into the Fons platform.
3. A New Way- automated payments on a lesson-by-lesson basis
Using Fons, we have almost completely eliminated the administrative work necessary to run a teaching studio. Each of my students are scheduled and managed using the Fons calendar.
Clients enter a payment method at the beginning of their tenure and each scheduled lesson slot on the calendar will run their card for the amount of that lesson, after the scheduled lesson. The instructor is paid every evening for the lessons that have processed, generating a steady cash flow throughout the month. This process saves so much time for the teacher and the student.
4. Another Way-flat rate tuition.
Many instructors have adopted a flat-rate tuition model. Clients pay a set fee every month/quarter/year for access to a studio’s offerings. David Cutler outlined this model in his book the Savvy Music Teacher.(great reading for revamping a teaching business)
5. What about the card fees?
So many teachers, myself included, have avoided credit card payments in the past because of transaction fees. Here’s the deal, it’s totally worth it!
Let’s do a little simple math. Let’s say I teach 20 students a week and I charge $75 per lesson. Credit cards take 2.9% plus $.30 a transaction. Here it goes.
20 lessons x 4 weeks = 80 lessons a month.
80 lessons x $75 = $6000 a month
80 lessons x .30 transaction fee = $24
$6000 x 3.4% = $204
— — — — — — — — — — — — — — — — — — — — — — — — — —
Total fees $228.00
Let’s factor in the cost of using the Fons app as well, which is $29.95/month.
So for just $360 a year, I lose my biggest business headache. A $72K a year teaching business loses its cumbersome payment processes. Again, for just $360 a year*. That’s the equivalent to how much one student pays per month. I’m pretty confident that with no more chasing checks and payment processing, I’ll be able to find a few extra hours a month to teach an additional student and make up that cost.
*ACH payments are processed at 1.8%, so fees will actually be lower than this if you have clients pay via ACH.
Plus, my clients enjoy an elegant and efficient interface to schedule and pay for all their lessons. It makes their life easier. It makes my life easier. It gives me more time to teach. It’s a bit of a no brainer.