Put a price on the head of your students
The Bulletin (Issue 57)
I’m gonna talk money here. If this offends your delicate teaching sensibilities, I don’t mean to make you blush, but bear with me and we’ll get back to the mission to edu-ma-kate the next generation and all that good, wholesome stuff.
But first you really have to have a handle on the money side of things if you want to succeed as a self-employed English teacher in Japan. I’m not talking personal finance here, I’m talking the lifetime value of your students. It may seem mercenary but it really helps if you put a yen-figure on your students.
How much is your student worth to your business? Let’s say you charge ¥8,000 a month for a single weekly lesson. If they stay for a year, that’s getting on for ¥100,000 a year (¥8,000 x 12 months = ¥96,000 a year). And let’s say your average student stays with you for 10 years.
How is this useful to know?
Now you know how many students you need a year to earn a living. If you want to earn the national average salary (just over ¥6 million), in the above example you’d need to keep 60 students on your books every year.
If the average student stays with you for 10 years, that would mean in any given year, if you had 60 students, you might expect six of them to quit.
Therefore, you’d need to recruit six new students every year to keep your school population constant.
Feel free to play with the numbers based on your own needs. Want to earn double the national average salary? You’d need 120 students, or charge ¥16,000 a month for every student, or some combination of the two. If you found that your average student quit after five years, then you’d need to recruit 12 new ones every year.
Don’t forget to add in extras. Find a figure that covers average amounts raised from textbooks, school trips, parties, speech days and so on.
You might discover your average lifetime value per student is significantly higher than you’d imagined before you made any calculations.
So what?
So… now are you upset when you offer trial lessons for free? You shouldn’t be when you think your average student is worth… er… (do the calculation based on the example above ¥8,000 x 12 months x 10 years)… approaching ¥1 million! Are you that bothered if they get the odd freebie from you? Or you spend (here’s the good, wholesome bit) the odd Sunday afternoon for free with that one kid who needs just a little extra help to finally understand phonics.
Know the value of your students, you’ll know the value of your teaching. More thoughts on how much to charge in fees is here.
See you on Friday for the Free Talk Staffroom podcast.
Patrick