At Summer NAMM 2015, Kevin Cranley of Willis Music hosted leading retailers Chris White of White House of Music and Gayle Beacock of Beacock Music, along with industry accountant Daniel Jobe of Friedman, Kannenberg & Co., for a FAQ and best practices session on music lessons.
Here are their essentials for running a successful and thriving music lessons program. (Watch the video for the full session.)
How should I organize my lesson program?
Jobe shared that he’s often asked what direction to go with music teachers and commented that it generally falls into one of three buckets:
1. Collect rent from teachers. You’re the landlord, and it’s simple from a tax standpoint. The pitfall is growing your program and business.
2. Make teachers employees. This is clear-cut, as long as you follow the state and federal employment laws. The upside is that you control what, when and how they teach. The downside is payroll and unemployment taxes.
3. Pay teachers as independent contractors (1099 IRS form). When teachers are independent contractors, you can’t control them like you would if they were employees, and they can offer their services elsewhere. Another consideration is the length of time they’re employed. Jobe cautioned attendees to be in tune with state and IRS rules, as there can be huge penalties going back several years.
“You want to make sure you’re doing this right because it can absolutely put someone out of business,” Cranley added.
How are we going to run our program?
Monthly tuition. White tackled the problem of student cancellations by establishing a monthly tuition program, where missed lessons are non-refundable. He said that this is also one of his best recruiting tools for teachers. His employees tell students that the company can’t attract the best teachers if students don’t show up.
Beacock agreed with White and advised that “you need to commit to the culture and philosophy and be consistent with your policy.”
She shared that her company’s aim is to operate its lessons program as simply as possible. “You don’t want to end up administering rather than focusing on the quality of teaching and getting more students in your store,” Beacock said.
Lessons coordinator. White and Beacock have dedicated employees that help keep their lessons programs on track and running smoothly.
Policy manual, student handbook and teacher’s manual. White and Beacock recommended that you make these a part of your program to hand out to parents, students, teachers and staff.
Teacher absences. Beacock pointed out that she keeps a list of substitute teachers. Rarely does she miss a day of teaching in her studios. “You don’t want to lose that revenue forever,” Beacock said.
White also noted that sometimes students with perfect attendance actually get bonus lessons during months with more days.
Registration fees. White charges registration fees for lessons, noting that they’re an administrative cost and parents pay them for other lesson programs, such as gymnastics and martial arts.
Billing and collections: What are your tips and best practices?
Cranley recommended using Automated Clearing House (ACH) for direct deposit, payroll, and vendor or teacher payments. It saves time and energy.
Beacock said that her company bills on the 25th of the month for the following month’s tuition. Billing is 100-percent automatic. She allows payments in cash or check before the 25th for customers who don’t want their cards charged.
White’s lesson tuition is due at the first lesson of the month, and students must cancel a lesson two weeks ahead of time to allow for another student to fill the empty slot. Like Cranley, White’s company is transitioning to ACH or auto-charge.
How do you attract and keep good teachers?
“Reaching out to colleges and schools that have music programs yields quality candidates for teaching,” White said.
Beacock insisted that she relies heavily on word-of-mouth through her teachers. She noted that her teachers are loyal and enthusiastic ambassadors because Beacock Music has a great work environment, keeps the studios filled and helps promote teachers through social media.
How do you attract and keep good students?
According to White, it starts with quality teachers. White also views everyone as a potential student. “You’re always getting calls in your stores from someone wanting to get involved in music,” he said. White advised that lessons have to be part of your store culture and something you and your staff talk about automatically with customers and prospects.
Beacock mentioned that she has a lot of students taking private lessons who want to perform, and their parents want to see them play. For Beacock, it’s a win-win: The more engaged students are, the more engaged parents are when they see their kids perform. “We’ve changed our mindset to help teachers get their students out of the studios and performing,” Beacock said.
White pointed out that student performance opportunities are the busiest nights in his store. He also commented that recitals are a proven way of keeping good students.
Jobe shared that when he worked as a retailer, everyone on staff was involved in all aspects of the lessons program, especially the salespeople, who got bonuses for signing up students. “Your ultimate customer is someone who provides revenue in all areas,” Jobe said.
Summer: Opportunity or problem?
During the summer months, White offers a Summer Eight program that consists of eight lessons with a teacher. One hundred and fifty students signed up for the program in 2015. It gave White House of Music an opportunity to re-sign students who were thinking of quitting lessons.
Beacock Music has strong student retention during the summer. Beacock said she has created a store culture around summer—one that assumes students aren’t going to quit. She changes the curriculum and gives it a different flavor and twist. Beacock also suggested telling students that they can’t get their spots back with their favorite teachers if they leave for summer. (Her company doesn’t guarantee spots for the fall.)
Cranley commented that these ideas can also be adapted for holidays.