How to Charge for Lessons and Subsequent Contract Issues. Part 1: Brought to you by Tom Callos of the100.us FIRST, WHAT WE DONT (REALLY) WANT We, ideally, dont want to create a business model that has us spending tomorrows money today. Now every so often a business might have to be in a position where it just has to invest tomorrows money for todays expenses ---but in general, we dont want to cultivate a business model that uses the income from untaught lessons, next weeks, next months, 3 months worth of tuition, or a year or more of $$, to operate the school in the present. The reason we dont want that is that it forces the school to focus mostly on sales --as most of the operating capital of the business comes from new sales and/or quick membership upgrades, ----and not from students who stay and pay their way. The school that traps itself into being a cash up front or tuition up front business, a school that has a high gross revenue due to collecting significant amount of pre-paid lessons well before those lessons are taught, becomes a school that, for its own financial survival, must get new students and sell new memberships, over serving its members who continue to provide adequate revenue to the school. Some school owners claim that they are taking all pre-paid lesson money and putting it into savings, however my experience has been that 99% of all teachers spend every dime they make, just about as fast as they can make it. For a sound and sustainable business model, one that isnt focused on convincing brand new (or nearly new) clients to enroll on long term courses for discounted but cash-up-front rates, you must operate your school spending todays income for todays expenses. In a school with a pay as you go business model, the focus has to be on retaining students, over the mad and furious drive to get a flood of new students that is the near-sighted and destructive slant of most of the sales rhetoric in the martial arts business industry. If you put yourself into a position where you dont get paid if you cant keep a student, then youre going to learn how to keep students. If you put yourself in a position where you only make money when you sell new courses, youre going to learn to sell new courses. Coming, Part 2, How to Set Up Courses so the School is Always Taken Care of, Without Forcing Students to Pay for Untaught Lessons (or Having to Send Students to Collection).
Posted on: Sat, 05 Apr 2014 19:43:23 +0000
Trending Topics
Recently Viewed Topics
© 2015