Top 5 Tips for a Successful Studio

This week I had the opportunity to give a virtual guest lecture to the Vocal Pedagogy class at Shorter University.  My friend, their professor, had asked me to come in and talk about what it takes to run a successful studio.  So I came up with my Top 5 Tips – aka, my quick-and-dirty advice to college students who want to run their own music teaching studios.

And, since I’m all about multitasking, Here they are for you too.

#1 Charge what you are worth:

Successful Studio Strategies: Charge What You Are WorthMusic lessons are valuable to people of all ages, am I right? I could spout the myriad benefits of taking music lessons, but I know I’d be preaching to the choir here.  So why do so many teachers out there charge a rate that effectively pays them less than minimum wage? And how can you gain the confidence to charge a premium rate for your time and be confident in your lesson rates?

How is a Music Lesson Like a Fine Wine?

People only recognize its value if they are told.

(Some of this post is excerpted from an article I wrote for musicianwages.com. )

In 2007, a team of researchers at Cal Tech* studied how price impacts people’s enjoyment of wine:

There were 5 bottles of wine, labeled only by price: $5, $10, $35, $45, and $90.  The lucky participants tasted each wine, rated their experience, and had their brains scanned while they enjoyed their wine.  (Can I volunteer for this study?)

Everyone’s experience improved as the price went up—and their brain scans proved it. The pleasure centers in their brains lit up more intensely with higher prices.

Here’s the catch: There were actually only three wines, and the researchers manipulated the marked prices! So when the subject tasted the $10 wine, it was actually a $90 wine—and they enjoyed like it was a $10 wine.

A lot of people heard about this study and resolved to only buy $5 wine. But there’s something much more important here for anyone teaching music lessons:

If you price your $90 music lesson like a $10 one, people will treat it like a $10 music lesson, and they will treat you like a $10 music teacher.

How do we make the world recognize the real value of music lessons?

It begins with YOU charging what you are worth.

Music is a priceless gift, but we must put a price on it. We need to price our product as a $90 wine, not a $5 one.

Pricing your lessons at “bargain rates” does not mean people will think they’re getting a good deal.   More likely, it will mean that you get less respect for your time, your abilities, and your business. You are charging $5 for your $90 wine, and people will value your teaching accordingly. After all, if you were selling a Mercedes Benz for $1000, everyone would ask, “What’s wrong with it?”  A high quality product should have a high quality price.

My Story

When I first started teaching, one of the few things I did RIGHT was charge enough for my time. I benchmarked my lesson rates to the big music school in my area – they were charging about $34/ half hour lesson. I started at $140 a month with 6 weeks off, and I’ve since raised my rates and taken more vacation—in fact I’ve written it into my policies that I increase my rates annually. I currently charge $149/month and I get 9 weeks off per year.

Now keep in mind, this lesson rate might be totally inappropriate for your area – I’m just mentioning it as a point of reference.

Your time is valuable.

Whatever you’re thinking you’re going to charge for your lessons, you should probably double or triple it. Why? Assume that you’ll probably net less than 30% of your lesson fee after expenses and taxes. (Whoa, that puts things in a different light, doesn’t it?) Charge flat rates monthly or quarterly, because this way you can keep your income steady even when you take a couple weeks off.   If you do it right, you can have steady income all year AND enough time off. Don’t give refunds for missed lessons, don’t make up missed lessons. I know it sounds weird, but there are ways to set your studio up so that you  never have to make up a lesson and that won’t drive away your  customers.

#2 Get your Money House in Order:

Organized finances are crucial for a successful studioSo I want to tell you about a few of my friends and their messy money houses.  No names  will be used to protect the innocent.

I have a self employed friend who did her own taxes, and deducted a lot of poorly-recorded mileage and donations to Goodwill.  When she got audited by the IRS, she got slammed for sloppy recordkeeping and had to pay hundreds of dollars in back taxes, penalties, and interest.

Another pair of friends are freelancers. They don’t use a separate bank account to track business expenses.  She is pretty good about saving receipts but hubby isn’t. More often than not, his business related receipts get washed with his pants and are totally unreadable.  They don’t even know how many hundreds of dollars a year they miss out on deducting because he often pays cash and the receipt disintegrates in the wash.

Money Basics

All of these mistakes are avoidable if you take a few basic steps.

Separate Accounts:To run a business, you will need separate bank account/credit card. It doesn’t have to be a “business” account but it does need to be a separate account for your business. When you use a debit or credit card, all expenses are time/date/vendor stamped—which means that a lost receipt for a small amount is not such a big deal.

Professional Accountant: If you’re serious about running your own business, you also need a professional accountant. A good accountant can help you set up your accounting software properly from the get-go.  A good accountant will also know your taxes – what you’re responsible for and what you need to be aware of.  This is crucial – nobody likes a tax surprise!

Accounting Software: And yes, you will need accounting software of some kind. Your accountant should be able to help you set it up properly from the start, which will minimize the time you spend on bookkeeping, invoicing, and tax preparation.  If you need something that’s basic and free, I’d recommend Wave.com.  If you can spend $200 on software, I’d recommend Quickbooks – and have your accountant help you set it up.

#3 Professional is as professional does.

Professionals run successful studiosWant to know the best summer or part-time job you can get that will prepare you for the customer service side of running your own business? Receptionist.

Why? Receptionists have to learn to be polite and professional with everyone, even the rude, angry, whiny, and mentally ill. They learn to treat every person who crosses their professional path with honor, respect, and humility. They learn how to handle and diffuse upset or angry people. They develop a professional demeanor on the phone and when they greet people. They get comfortable making conversation with strangers, even the real weirdoes.

Reception and Perception

In my first job out of college, I was a receptionist for a large nonprofit.  During my year as receptionist, there was a guy named Bradley who would call just to chat with me. There was a period when it was several times a day.  I think he was unemployed, lonely, possibly mentally ill, and just wanted to talk.  Unfortunately, I didn’t have time to talk all day, and I didn’t want to encourage a potential stalker.  He was exasperating. He even tried to disguise his voice and tell me he was someone else.  But I still had to be polite to him, every time.

Your students are your customers, and while the customer is NOT always right, everyone DOES deserve to be treated with respect, no matter what. Every person you talk to in any situation is a potential customer.  And if they aren’t a potential student, their child or grandchild or niece or nephew, or best friend’s kid might be! If you act like a jerk to anyone, you could be driving away future students.

When you can settle into the mindset of being kind and polite to all people all the time – even when you’re having difficult conversations—your professional standing will increase.

#4 Studio Policies are the Load-Bearing Walls

Build the framework for your Successful StudioSo you know how all buildings have certain parts of the structure that hold it up? Some walls can be moved or have doors put through them, and some just can’t because the house would fall down.  This is how I like to think about studio policies.  They are the structure upon which you build your business. When you just live in a house, you almost never think about the fundamental structure of it. But when you’re building your own house (as when you’re building your own business), you have to plan the load bearing walls carefully.

We’d all like to live in the magical world where we could pursue our craft free from distractions.  Where we could always do what we love – teaching… Where students would always do as we ask… Where nobody ever tries to take advantage of your good nature… Where we don’t have to bother with such mundane things as invoices, banks, bounced checks…

Sadly, we live in the real world.

Being in business for yourself means you’re the one stop shop.  You do bookkeeping, billing, marketing, receptionist.  You’ve got to have a framework that defines how your studio functions.  This is your studio policies document. Envision your ideal studio.  Write policies that lay it out. Then stick to them – or be very deliberate about exceptions. Revise them every year as you figure out what works for you and what doesn’t.

I also review and revise my policies annually – I think of it as touching up the paint or cleaning the gutters.

#5 Retention of the right students is the best recruitment.

What is the best ROI for your successful studio?Advertising is expensive.

Marketing and recruiting is hard work and can be really expensive. It requires follow up, talking to strangers, etc.  You pay with your time and energy if you don’t pay with your money.

Realistically speaking, you will get a better return on investment (ROI if you like corporate buzzwords) for cultivating your student-retention skills rather than pouring money into advertising.  Long term students will achieve the best results and will refer students like them.

If you have a nucleus of committed families who are in it for the long haul, they will tell their friends about you. People tend to hang out with like-minded people, and their friends are likely to be just as committed.

And those students who you can’t stand?  Let the Crazy Makers go. You don’t want any more students like them, right?????

I started with about 6 students (two of whom are still with me), and I’ve grown to a fairly steady 30ish students with almost zero spending on advertising.

College Students Need Your Advice Too!

Do you have any advice for college students from your time as a music teacher at the School of Hard Knocks?

I’m sure they’d love to read your comments, and so would I!

Hungry for more? My online class, The Happy Studio, is in the final stages of development and will launch (I hope) in the next couple months. Join my mailing list, and get a discount when it launches!

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