You’ve got the name of your school sorted out, you’ve got a handle on how to actually teach a lesson, you’ve got some lesson plans ready to go, you’ve even got a few new students lined up, but there’s another key question you have to answer: how much should you charge for your English lessons?
Pricing is not an exact science, but there are two numbers you might want to figure out to help you: 1. How much do people typically pay for an hour of tuition? and 2. What’s your universal hourly rate?
1. How much do people typically pay for an hour of tuition?
Go online and you’ll be able to get some figures from competing chain schools and other self-employed teachers and online-only schools about how much they charge. It can be hard to compare because businesses deliberately make it hard to compare — some offer 40-minute lessons, some 50-minute, some private only lessons, some “semi-private” and group lesson rates, some charge more for native-speaker teachers, and then there is the whole nebulous area of “facility fees” and “sign-up fees” — more about those later. Don’t sweat the details, you are just after a back-of-the-envelope figure for how much other schools might charge for an hour of tuition.
Here’s how to do it:
Let’s say XYZ Chain School charges ¥2,000 for a 40-minute once-a-week group lesson, that means they charge ¥50 per minute of tuition (¥2,000 / 40 minutes = ¥50) which means they would charge ¥3,000 for an hour of tuition (¥50 x 60 minutes = ¥3,000).
But XYZ Chain School also charges a one-off signing-on fee of ¥10,000 plus an annual ¥30,000 in textbook fees. You might want to ignore these charges for ease of calculation as often the sign-up fee is waived as a sweetener to get new folk to sign up, but you could work out what these blood-suckers really charge in total, expressed as a per-hour fee, but since it’s kind of hidden from customers’ view, I wouldn’t sweat it for getting a rough figure.
2. What’s your universal hourly rate?
What was your wage in your last job, expressed as hourly pay? ¥1,000 per hour? ¥2,000? ¥3,500? Or more like ¥5,000? Whatever it was, wouldn’t you like to earn a lot more than you used to make? After all, isn’t that the point of going self-employed, to charge what you think you are truly worth? And this is one of the superpowers of being self-employed: you get to set your own pay rate. How? Let me show you:
Let’s start by doubling or tripling your previous pay rate. Just for example, let’s set your new hourly universal pay rate at ¥10,000. What does that mean, it’s just an arbitrary figure, no-one’s just going to pay you ¥10,000 an hour, right? Well, they kinda will. Remember XYZ Chain School was charging ¥3,000 per hour of tuition? So, if you want to earn ¥10,000 per hour, all you need to do is charge ¥2,500 per student and teach four students in an hour-long lesson. Or two students at ¥5,000 each per hour.
Here’s where the real power of setting a universal hourly rate for yourself is: once you know how much your time is worth to you, you can figure out how to charge it in a way that the market will accept. Want to run a playgroup but don’t know how much to charge? Think you can get 20 kids in a room at ¥500 a pop? go for it. Or want to be a bit more upscale and exclusive? Charge ¥1,000 for 30 minutes and just accept five kids in your class. Run two classes and you are making your ¥10,000 an hour.
When you know your universal rate, you can use it in reverse. Say someone offers you a one-off English editing job and they will pay you ¥20,000. Accept it if you think you can do a good job in two hours. Reject it if it looks like way more than two hours’ worth of work.
Do you have to stick religiously to your pay rate? No, of course not. You might charge less for a student you really enjoy teaching, or charge a lot more for a difficult group that you have to do lots of preparation for. You might find you have dead time (like early morning or early afternoon) and would consider filling it with cheaper-rate lessons, or you want experience in a new market so charge less than your going rate, but the thing is, now you have a universal pay rate, you know how much your time is worth and can adjust your fees accordingly.
What about all those facility, signing-on fees and so on?
Up to you. You might want to charge those, other places get away with charging them after all. Personally, I detest charging for things that I can’t reasonably ask for. You have to pay a facility fee because I can’t factor in the price of toilet paper into my overheads? Really? I’ll happily charge students for textbooks and special events, like school trips or a speech day, but an annual fee? A signing-on fee? What is that actually for? I’d rather reap the benefits of increased student retention when the parents realise my school doesn’t rip them off. Any lost revenue in fees not charged is repaid triple-fold with customer loyalty.
But that’s just my two pence, you do you.
Going completely free
I’ve decided to make all the lesson plans I post free for anyone who wants them. Every Monday, I post a new lesson plan to all subscribers. If you want to see what lessons are in the archive, go to the website here and click on any of the labels at the top of the page — kindergarten, elementary, junior high, high school or adult — and you’ll see what’s available for those age groups. Over time, it will amount to hundreds of lessons you can use for free. If you feel the urge to pay me for my efforts, or want a whole year of age-related lessons, arranged in a complete syllabus, just buy the textbook from the link at the end of any lesson plan. But, you do you.