Weekly Teaching Tip – August 22, 2016
by John Henny
Three years ago, my wife Tracee and I decided to open a 2,000 square foot music academy. We currently have 10 teachers and staff (and growing) working for us.
I will be honest, this journey has not always been easy. In fact, I’ve had more than a few sleepless nights along the way, but it has ultimately been more than worth it.
I wanted to share some of what I’ve learned with those of you considering this type of venture.
It Will Be Hard
The fact is, you can only teach so many hours a day, so creating a business where you have others work for you becomes very enticing. The promise of more free time and extra income are why most teachers try this.
That can definitely happen, but it won’t at first. In fact, I can almost promise you will work harder, a lot harder. You will also not make much money at first; you might even lose money as you get your new, larger business established.
There are some important decisions to make, and it can cost you a lot of money and frustration if you choose wrong.
Here are some of the big things to think about.
Obviously this is a decision you cannot change too easily. In general, the more organic foot traffic at your location, the higher your rent will be. On the plus side, your advertising costs can be lower as it is easier to create awareness in a busy area.
There’s also the option of running the business from your home, but I strongly suggest you check the zoning. Even friendly neighbors can become cranky with the increased traffic and parking, especially if you are running multiple lessons at once.
We are in a business improvement district, which has additional yearly fees. Always be sure to ask about hidden fees when looking at a commercial space
Also, be sure to check with local zoning as some areas may not allow services such as lessons, and may be restricted to only retail.
Studio Size and Number of Rooms
When you are established, more teaching rooms equal more income, but in the beginning they can be costly, with extra construction, equipment, and rent expenses. It may take you a while to get those rooms filled, so in the short term they will be sitting empty.
We made the choice to have the extra rooms, which is paying off now as we are able to accommodate up to 14 students per hour. However, the costs were honestly scary at first.
We made the decision to go for the extra rooms because trying to go back and add them later would have been very expensive and disruptive.
Front Desk Staff
At some point you will need a dedicated front desk staff to answer phones, keep track of scheduling and to sign up new students. When you decide to do this depends on how much business you are dealing with.
When running your own business you always need to think how much your time is worth. When handling the day-to-day running of the studio becomes overwhelming, it will likely make financial sense to hire staff.
Note: take extra care when hiring staff as the wrong employee can wreak havoc your business quickly.
This is an area many of us treat as an afterthought, but putting the right systems into place in the beginning can be a lifesaver.
Ideally, you should have systems that can track teaching schedules, student base, leads, email communications, and (most importantly) billing and payments. You will also want to have payroll and accounting software to keep you up to date.
Our current systems even include an app for parents and students so they can keep track of their lesson schedules and payments. The investment in good systems has been money well spent for us.
Offering Other Instruments
At first, we tried being a voice-only studio, but soon found we were turning away a lot of potential clients who wanted instruments.
Instruments now account for nearly half of our student base. This has allowed us to grow faster, while still maintaining a reputation as a premiere vocal studio.
The first two you might consider are guitar and piano. They remain the two most popular to study.
Employees Versus Subcontractors
Don’t take the following as legal advice, because this is very important. You should talk to your accountant or tax attorney, of which I am neither.
In the US, there is a very fine line between employees and independent contractors, and it seems to be getting smaller all the time.
Most studios have their teachers as contractors, which does save them on some taxes and regulations, but also exposes potential liabilities.
If you decide to classify your teachers as independent contractors, you need to be very careful in how you handle them.
The number one difference between employees and contractors is the idea of who controls how the job is done.
When someone paints your house, you have approval over the final job, but you do not dictate how he or she holds their brush, or whether paint is applied from right to left or left to right. The contractors control how they do their job.
If you oversee and instruct your teachers how to teach, you are crossing into employee area.
Having the government come and reclassify your employees can be a devastating mistake. Between the back-taxes, interest, and penalties, you are looking at a financial disaster. Make sure to get this decision right.
At my academy, we want to make sure our teachers are doing the best job possible, so everyone is an employee. Yes, it’s more expensive, but we advertise this to the public and use it to separate us from the competition.
There is so much more to go into, as making correct decisions can be critical to your success. If you are coming to the Teacher Conference in Atlanta this year, Tracee and I will be there to talk about running a large studio and to help you with any questions you may have.