Changing business strategy

Hey everyone. I'm in a bit of a dilemma. It's looking like I'm going to have to close my studio at the end of May and return to driving to my students as I did in the past. This is mostly for personal reasons. In going forward with this plan, I'm thinking I'll go ahead and stop marketing lessons in my studio right now and begin only offering in-home lessons. I've been offering in-home lessons alongside studio lessons, but I've been asking for a much higher rate ($45 for 30 min) for the in-home lessons. Going forward, I want to lower the rate (to maybe $35) to make lessons more accessible to people and hopefully regain enough students to be full time as I was before moving here and opening my studio. So my problem is this... I intend to keep my current studio students and begin driving to them for lessons, but only asking for a small increase to do so, maybe $3 (making their rate go up to $30), so I don't lose them. But for the students that I currently drive to for $45, it doesn't seem fair to continue charging them so much if I'm only charging everyone else $30-$35. But, as has been mentioned here before, lowering rates makes it seem as though the service being provided wasn't really ever worth that much which undermines respect and the value of the lessons for the student. So I figure I can do one of two things... 1. Keep the current in-home lessons at the higher rate and hope they don't find out, which just doesn't sit right with me, or 2. Lower the rate and explain that the reason the rate was so high before was because of my studio. Basically, I'm thinking that because I was available to teach in my studio, back to back lessons during teaching hours, that students where paying extra for borrowing from that time to travel to their home. Plus the overhead costs of having the studio space but not using it. But without the studio, being only available for in-home lessons, the cost is justifiably reduced. Does this make sense?

If you will be driving to the homes of the students who are currently driving to your studio, are you not saving them gas money as well as time (which is also money)?

#1 is Bad.

#2 is Good. I would make a promotional flier and e-mail that explains that you are completely changing your teaching method, and thus a complete re-vamping of the price structure is part of the big change.

I hate the idea of you lowering your price for home students who are happy with paying full price. I understand time is money too. I think my answer would depend on the ratio of existing students paying the higher fee vs studio students.

Not ideal I'm sure, but could you give the families a choice? More progress and change their lesson to 40 minutes for $45 or choose the lower fee?

I think this might be a better idea, or grandfather these students in for a semester and let them know ahead of time what your going rate is for the convenience of not having to drive to the studio. You may lose a student or two, but you most likely will be making more money overall with the higher rate. It's tough, but we have to remember that we have to survive to be able to continue teaching, and you shouldn't be afraid to ask for more money when the situation changes.

Sorry for the double-post, but I just was wondering: how many students do you have, and how many will you be switching to in-home lessons? Is it feasible to do time-wise?

I currently have about 15 studio students who will be switching to in-home, and 7 in-home students in 3 homes. There's definitely plenty of time for driving to all these students... they're all fairly local to this area. Before opening my studio here, I used to drive to about 45 students a week... about 400 miles a week. My hope is that by switching to driving only, with a reasonable rate, I might get these kind of numbers again. So I can survive.

I figure with the studio students, even though I'll continue with them at a lower rate, I'll definitely let them know that it's lower and that they can expect an increase in the future. But I do like the idea of offering a longer lesson for a higher rate. Then instead of raising the rate in the future, I can just shorten the lesson length. That might work for some.

Scott, you have raised a most interesting dilemma, for which I'd say there is no right answer. If you care to, we'd probably all be interested to learn why you will be forced to close your home studio next May. Because of course this is what is causing the impending problem.

Could you start teaching at a local music school, or in rented space? That would be another solution for your 15 in-studio pupils, though it would cost you money. It could even be a solution to your entire problem, if you also explain to your 7 in-home pupils that next year you will no longer be teaching in students' living rooms, but only at Madame Sousatzka's Conservatoire of Music, located next to the Shell station in your Chicago suburb.

Another issue for you to ponder is whether you would indeed get any more students by charging a lessened $30-$35 for in-home lessons, rather than your present rate of $45. My guess is that you would not.

So my vote would be to keep everyone at $45 in their homes, and just explain this hefty coming price rise *now* to your in-studio families so they can start to get used to the idea for next fall (or next June, if you teach in the summers).

If anyone balks at this price jump, and you really like them, you could indeed make the price rise on a case-by-case basis in two stages: i.e., give them a break of maybe $35 per in-home lesson for a few months, maybe until the end of 2013, when it makes the full jump up to $45.

Keep us posted. Maybe we'll have further ideas.

Hi Scott. Having read many of your posts the last couple of years, I have the impression that as a music teacher you really have something worthwhile to transmit and that kids who happen upon you are quite lucky. I sincerely think that it will be a pity if you don't find the way to give a solid organisational/business foundation to your teaching activity so that it can continue in the best of conditions, so please stick at it and give this side of things a sober and serious rethinking.

By the way, the Shell station in the suburbs might not be such a bad idea, it may permit you to stabilize your situation and to think things through in a more thorough fashion.

Yes, please keep us informed!

As someone who might possibly be relocating to Chicago in the next year, I've started looking at the music/piano market in the area and would love to hear anyone's thoughts!

If you cannot teach at your home anymore due to personal reasons, can you open a music school next to Shell (just like everyone else suggest).

Three years ago I decide to combine teaching at my living room situation together with teaching at student's house into teaching only at office studio and I never regret of making the transition.

Now I am teaching not from my living room, but a very professional office suite in a very desirable location. Yes, I pay some rent every month, but it really worth it.

Keep us posted.
Good luck.

Thanks everyone for your feedback. I appreciate all the suggestions on how to handle the situation and you've all given worthwhile things to consider. Ultimately, at this point it's just looking like the only way I'll be able to survive is to drive to students. The cost of maintaining my current situation is just not affordable and other reasons are complicating the situation. For the time being, I'm leaving the studio open and accepting students but I'll have to see how things work out over the next couple of months.

Scott, just remember that most piano teachers don't drive to students' homes. You are offering a service that many a parent would jump at, and would willingly pay a premium for. The fact that you are a capable and committed teacher just makes what you are offering even more impressive.

IOW, I'd be hesitant to lower your rates. But as I said before, there is no clear right answer to your dilemma. Earning an acceptable living via independent, one-on-one music teaching is a rough go.