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#1 18-04-04 07:46:06

Ozzie
Guest

Charge More or Spend Less?

Hi All,

Leading on from the prices thread . . . . .

I noticed many moons ago when I went independednt that there was no point trying to sell lessons at £30 per hour if no-one was interested and it would cost me £40 to sell each hour of tuition.

Likewise there is no point doing lessons for £5 and spending £10 on each lesson on fuel, car depreciation, car repayments, advertising etc, and making a loss. By using a more fuel efficient car increases your profit, as it decreases your expenditure. However if that more fuel efficient car is unreliable it may be a false saving!

Lets assume that each hour of tuition costs £10 to cover overheads. For each £1 discount you give to pupils per hour could cost you £2000 a year. For each additional pound that you charge is £2000 in the bank (pre-tax). So does charging £16 or £17 make any difference to the pupil? Not really, but its £2000 in your bank. These poor pupils pay £100 for trainers, £4.50 for 20 cigarettes and £3 a pint and £10 just to walk into a club. Then want a driving lesson for nothing.

Just by increasing your prices by £2 which was what I did in January, increases your turnover by £4000, for no additional advertising, as the ads were already in place.

A Lada, and an Aston Martin do the same job, gets you from A to B in a car. One has more style than the other, and both cars make a statement, what are you saying about your school?  wink

Ozzie

18-04-04 07:46:06

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Re: Charge More or Spend Less?




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#2 18-04-04 08:33:06

bigred
Verified Member
From: Kent
Registered: 25-02-04
Posts: 1,592
Website

Re: Charge More or Spend Less?

It is partially true that the more you charge the better quality of pupil you get, and I don't mean ability!

I used to work for BSM, at that time most of the pupils joined because BSM was a name known to them, not because they had been recommended by a friend. They were an altogether very unreliable bunch.

When I started on my own, most of the pupils came as recommendations and proved to be completely different. Always there, happy to pay and had a level of trust in me I wasn't used to. (perhaps slightly exagerated to make a point!)

Now I have several other instructors we have to use Yellow pages and the internet to advertise. We have a mixed bag of both recommendations and new contacts.

It's would be very easy to charge a higher amount if they've been recommended by a former pupil.

I think advertising should be targetted at former pupils. They love to hear from their 'old' instructor!

Regards,

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