Why You Should Institute Yearly Piano Lesson Price Increases

This article is first in a series of posts that are a follow-up to the workshops I’m giving this summer and fall called, “Best Stress-free Business Practices in 2012.”

In a recent survey, my local piano teaching organization found that over 50% of the teachers had “no set time” in which they raised their teaching rates.  Only 6 out of 50 teachers participating in the survey raised their rates every year. So, I wanted to share with you some of the things I’ve discovered and shared with my teaching friends about what happens when we don’t raise our rates yearly and how to do something about it.

I’m sure you all know about inflation. Inflation is defined as “a general increase in prices and fall in the purchasing value of money.”  Inflation happens every year at differing rates depending on what you are talking about, but the idea is still that over time, the same amount of money will purchase less/fewer goods.  So, let me give you an example.  Let’s say that since 2005, you have charged $25 for a 30-minute lesson (a very low granted, but I’m in the Midwest) and you have not increased your prices at all.  If we plugged these numbers into the inflation calculator at the Bureau of Labor Statistics, here’s what we find:

Piano Lesson Price Increases | composecreate.com

This means that whatever you were buying for $25 in 2005, you now have to spend $29 for the same products.  So, if you aren’t increasing your rates every year, then you are trying to live the same way with LESS MONEY!  You may have been thinking all these years that you are just “not giving myself a raise” to help your families, but you are really giving yourself a pay CUT every year!

Let’s see what that adds up to at $4 per student, 20 students a week, 40 weeks a year:

$4 x 20 students = $80 a week
$80/wk x 40 weeks per year = $3200 a year

That means that you have lost $3200 compared to what you were living on in 2005! (Granted, it will not have been $3200 every year between 2005 and 2012, but you get the idea that it can be pretty substantial once it is compounded!) I don’t know about you, but I can’t imagine having to live with $3200 less than I did 7 years ago and yet that is exactly what we are doing when we don’t give ourselves regular price increases.

Piano Lesson Price Increases | composecreate.comNow, just a few notes about the inflation calculator.  This calculator is just one of many that you can use to help determine how much you should increase every year.  You can also consult the Employee Compensation Index which gives you an idea of what kind of pay and benefit increase companies are giving to their employees.  There are several other calculators (including health care costs, etc.), but none of them give you an exact picture of what is happening in your studio.  This is why it is so important to pay attention to your expenses (see Got Enough Money? by Kristin Yost).

For example, if you travel a lot to competitions and festivals or if you travel to student’s houses, then the price of gas is a major factor in your expenses!  The CPI inflation calculator helps you take the price of gas into account.  If the price your health insurance has increased, then you’ll want to consult the Employee Compensation index.  If the price of supplies, MTNA costs, the cost of music, etc. is going up, then these things will significantly impact your cost of giving lessons and need to be accounted for.  The point is, use the CPI as a guideline as to how much to increase each year and then adjust that according to your studio expenses. This is an excellent guide to help you as you look at your piano lesson price increases.

And don’t forget, that’s just to keep up with inflation!  It’s not really “giving yourself a raise” but rather just keeping up.  Don’t be afraid to give yourself a raise if you deserve it, if you are offering more to your students than before, etc.

Yearly Piano Lesson Price Increases

So what do we do now that we know we need to institute regular price increases?  Well, I’d encourage you to increase your prices yearly for these reasons:

  • Your families typically get a cost of living increase regularly  (some not yearly, but regularly)
  • Yearly increases prevent the need for large increases, making it easier on your families
  • Yearly increases allow flexibility.  For example, because I have increased my price yearly for about 10 years, I was able to give my families a break last year when it was tough economically. I knew I would be taking a slight pay cut, but I could do this because I had kept up with inflation.   In addition, one year instead of a price increase, I just decreased the number of lessons I taught, resulting in a salary increase but not a price increase for families

You don’t need to explain the price increase every year.  You can simply put the following in your policy:

Families should expect a yearly price increase.

If you do not set your rate to be reasonable and competitive to begin with and don’t factor in your piano lesson price increases, you are more likely to fall prey to the “piano teachers can’t make any money” mentality that surrounds us. It is possible to make a decent living teaching piano! It’s just up to us to make wise business decisions to make this happen.

Questions about piano lesson yearly increases? Comments?

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By |2016-12-31T15:20:07+00:00June 11th, 2012|Dollars and Sense, Piano Teaching, Preparing for fall|6 Comments

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  1. Kathleen Gault June 11, 2012 at 9:50 am

    A group of us teachers were discussing this just last week, at our end-of-the-year lunch. The ones who hesitate to raise their prices gave all their usual reasons about wanting to make it affordable for families. What stands out for me in your great article is your comment that, if we don’t raise our prices regularly, we are giving ourselves a pay CUT every year. I think a lot of us, because we care about our students so much, are blinding ourselves to this side (our side as ‘workers’) of what we do. Thanks for this great article, I will be passing your thoughts along to a few friends. I really appreciate getting these emails and Tweets, Wendy.

  2. Wendy June 11, 2012 at 11:22 am

    Thank you for your comment, Kathleen! I’m glad you think it’s helpful and will share it with others. I didn’t realize either that I was giving myself a pay cut, but when I think of it that way, I find that I must do it this way.

    In the full workshop, I give a little pep talk about “false narratives” that we let ourselves believe that keep us from making good business decisions. I think that “making it affordable for families” is a part of one of those false narratives. We many times have empathy for other family’s finances, but don’t take the time to count the impact on our own finances. It may be true that we want it to be affordable, but allowing good business sense to be in the driver’s seat instead of empathy will allow teachers to make the act of living affordable for their OWN family! Women especially are susceptible to this as one of our strengths is empathy.

    Anyway, I appreciate you sending this to others. One by one, we can change how we do business and raise the standard of excellence and professionalism in our industry!

  3. Valerie Evensen June 11, 2012 at 12:42 pm

    Excellent article! I hear the same arguments in our local teacher’s association . It’s in my policy that I raise my rates a small amount each year. I used your calculator link above and I’m close to being on target . We do care a great deal about our students, but we need to care about ourselves and our families as well. I think it shows pride in what we do and who we are when we are professional about what we charge. I know I get treated better since I started charging more, wrote a policy and stuck by it, etc.

  4. Beth Tadeson June 11, 2012 at 2:01 pm

    Thanks for the great article. I do increase my rates little by little every year & no one ever questions it – usually about 3-5%.
    I love your blog, especially the Dollars & Sense collection. I so look forward to more articles and wish it were in the budget to come to SMU. It’s a little too far to come from Canada!

  5. Leila Viss June 11, 2012 at 9:10 pm

    I tend to ignore the obvious, thank you for the common “cents”!

  6. Laurie Meinhold June 15, 2012 at 10:52 pm

    Although I agree with your comments the teachers in my area have all experienced a marked decrease in students these past two years. In addition the school district and many employers have not increased pay. They have decreased it, and given furloughs. The pay of the average worker in America has declined in terms of buying power tremendously for many years now. Piano teachers are not alone in taking pay cuts.

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