///How to Get 12 Months of Revenue as an IMT

by Kristin Yost

photo by Joe Lanman

Are you tired of not making enough money, especially in the summer? Or are you perpetually frustrated because you think you should be making more, especially for all of the hours you put in? Well, letʼs figure out a way to fix that for you! Repeatedly I am asked how I charge for summer, what I offer, what I do for makeup lessons, etc…my responses are all based on the school of ʻhard knocksʼ because chances are they are not original ideas but modified based on what worked (and what didnʼt) the previous year. I had to figure all this out the hard way initially, but I have finally found a way that I (fingers crossed) think everyone should adopt! As you all probably know, I teach piano for my livelihood, not as a second income or just for fun. This is how my mortgage gets paid, how all of my bills are taken care of and where retirement goes. I need money coming in 12 months out of the year, and summer is not an option, period.

Piano teaching is a business, and one of your primary financial goals is to create a 12-month revenue stream, whether you realize it or not. There are months where you collect more, and months that are not as fruitful but the constant should be me money coming in, twelve months out of the year. There is no reason you should be forced to accept anything less. What we do at the Centre for Musical Minds is have an 11-month tuition revenue stream and in July we have an annual enrollment fee which covers music and recital fees – this amount is the same as 30-minute tuition and due in one lump sum. One of the reasons I have the enrollment fee due in July is because I take care of all of the music ordering for each student and supply books when they need them. Each summer I take advantage of 20-40% print music discounts for bulk orders.The enrollment fee is non-refundable and is prorated according to when students begin their study with us. A student who begins lessons in December is not going to pay the full amount upon enrollment and then again six months later.

Letʼs say as an example, you have 30 teaching hours each week, at the equivalent of $60/teaching hour ($120 monthly tuition) and at $1,800 per week, on average $7,200 per month, this is $86,400 annually. How can you collect $7,200 each month, even in the summer?

The reality of our lives is that our enrollment will go down a bit for summer, but it should not be drastically different. At the centre, we have 36 to 38 billable tuition weeks.Each tuition installment is due on the 1st of each month, one month in advance. Fall and Spring semesters are sixteen weeks, and for summer instead of 30-minute lessons weekly, we require either six 45-minute lessons with three ninety-minute group sessions OR a week of music camp (three hours per day) plus four 45-minute private lessons.Summer monthly tuition price is the same as the Spring/Fall 30-minute price and would be equivalent to $360 for the summer package, versus the Fall/Spring 30-minute lesson price in full of $480. So, it looks like this (according to our numbers above):

August 1 through March 1 – tuition installments of $120 toward fall and spring semester

April 1 through June 1 – tuition installments of $120 toward summer package

July 1 – $120 annual enrollment fee to cover the cost of music and recitals throughout the year

Per student, that is $1,440 annually. If you only taught 30-minute lessons,teaching 30 hours per week, that is $86,400. This still allows for 2 or so hours a day for administrative work (when needed) and keeps you at a 40-hour work week. For some of you that may be too many teaching hours but for me, I personally prefer to work those hours in order to be able to hire someone to handle the things I do not particularly enjoy doing (like Quickbooks entry!). Another way to curb that is to only offer 45-minute lessons, in which case tuition would be higher, and you can allocate hours/dollars accordingly. Earning $80,000 a year isnʼt too bad is it! Even after taxes, that is well above the national average of $50,000 (www.Census.gov). Our jobs are relatively low stress, job satisfaction is extremely high and if communicated correctly, policies should be relatively simple to enforce. Sounds pretty great to me!

In order to maintain your studio numbers and participation, you need to make your families understand you are the best, and itʼs important for them to continue study year-round for their interest and satisfaction levels to stay up. With that, you will see your numbers stay relatively stable through summer. Now, what do you do about the families who say they would like to take the summer off but they still want their spot for fall, or for the families that leave for the summer? Not to worry, I have some ideas on that too!

  1. Since Spring is so much longer, we start our ʻsummerʼ with three weeks of school remaining, so families who travel can be accommodated.
  2. In order to keep placement for fall and not participate in summer, we require payment in full for the annual enrollment fee and fall, due April 1st and of course is non-refundable should they choose not to continue. This past week we had a record number of families pay for the year in full.

Going into summer is always a little tricky because you are bound to lose a few students however, it doesnʼt need to mean you have to eat noodles for 3 months.Another creative idea I have used is instead of infusing pay-in-full discounts during the late summer/early fall, I moved it to Spring. This enables you to go into summer with financial cushion and reallocate revenue for when you truly need it.

So letʼs recap some of the important points to keep in mind for our 12-month revenue plan:

  • Invoice by semester, NOT by the week or month
  • Families on the monthly tuition plan should be paying one month in advance, NOT on the first of the month, for that month. This protects you.
  • For the 12th month (July), have the annual enrollment fee due
  • Summer is not optional, but make sure you offer something of perceived additional value so you can keep tuition at the same rate
  • Offer a pay-in-full discount in the spring, versus the fall, to infuse some cash into your summer months bank account!

Stay tuned tuned for next week, when I address the issues of time-management as an independent music teacher in my article: Creative Time Management for the Full-time Independent Music Teacher. I have some great ideas I would love to share with you!


This post is by Kristin Yost, an active performer, author, teacher, and lecturer.  Kristin is widely known for her conference presentations on business issues including “How I Made $100,000 My First Year Teaching Piano.” Kristin is the founder of Centre for Musical Minds in Frisco Texas and will be launching the Piano Teacher School (covering especially business issues related to teaching) in the summer of 2011.  Visit her other articles in the Dollars and Sense category on the ComposeCreate.com blog:

 

By | 2016-12-31T15:20:16+00:00 April 11th, 2011|Dollars and Sense|3 Comments

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Wendy Stevens
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3 Comments

  1. Anne Crosby Gaudet April 11, 2011 at 1:12 pm

    This is all great stuff, Wendy and Kristin. I wonder if you have come across a guide for setting one’s hourly rate. How should education, experience, location, facilities and expenses factor into the rate we charge? It’s a tricky and touchy subject, but if anyone can tackle it you two can!

  2. Kristin Yost April 11, 2011 at 9:30 pm

    Anne, I have not come accross a guide, however, I seem to have an opinion on everything so I’ll elaborate. 🙂

    I think the largest factors that should contribute to setting tuition should be demographics and education. I also make a point to know what my colleagues and competition are charging and align myself accordingly. If you are charging in the top tier, your education, instrument (yes, you need a grand piano), experience, etc…should also align.

    Just my two cents!

  3. Kathleen Gault April 13, 2011 at 12:27 pm

    I was just talking with our state MTA president, who lives in a larger district than we do. She said that their district does an anonymous survey annually (in May or June), asking members to give their hourly rate, length of lessons, etc. So everyone has a sense of range & a comparison of ‘raises’ for cost-of-living increases. Not a bad idea, and useful in that, at least in our state, where membership requirements are fairly stringent, this survey is being taken of the most qualified & experienced teachers in the area.

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