Money question

[IcemanSK]

I run a non-profit program at my church. I charge about half of what the lowest comercial school in my town charges. Classes are 1 hour long twice a week.

When I polled my former students as to what day to have classes, many said Mondays & Wednesdays due to other committments on other days. One mom, "Alice", was particularly pleased with those days.

A few days ago, Alice tells me that her son can only now come on Mondays because he's now taking a dance class on Wednesdays. She then asked if I could lower my price since he won't be participating once a week.

There are issues here that are both financial & personal for me.
1) This program is my only source of income, since I was laid off last month.
2) It's not a money issue for them: it's a time issue. They were the ones who pushed for these days.
3) I have few returning students, so I'm glad to have any who come back.
4) I feel Alice is taking advantage of the friendship that we've developed in the last 2 years by asking this of me.

There are obviously both business & personal issues here. I want to separate them & handle this in a a clear-headed way.

Any thoughts?

 

[terryl965]

Iceman you run a business first you was nice enought o get input when you really did not need too. Yopur price is your price stand your ground or others will do the same down the road. Is there a way to make it a three day program by adding a Saturday am class as well this will give them three days to choose two.

I would also remind her that she was one of the ones pushing for these days and you made that accomadation and there is really nothing you can do at this point and remind her of the going rate at other location and the quality of services she is getting for her child. Best of luck to you.

 

[diamondbar1971]

Iceman, you can't please everyone all the time and people will always take advantage if
the opportunity presents itself as in your case being involved with the church. People will use that against you as they will use your feelings and beliefs to their own good. I always had set days and I had open days and the price was the same and it was your choice to attend on what days you wanted to. Open days anyone could show up and the class was free to all of my students.

 

[MBuzzy]

I do a lot of work with contracts in my regular job and something that we ALWAYS look for is this mythical beast called "Industry Standard," and it is what a good bit of contract law is based on.

In the Industry of Martial Arts instruction, INDUSTRY STANDARD is for a studio to charge a flat monthly fee. Students are generally allowed to come to as many classes during the week as they choose, based on paying the one standard price. Now, this is my view of industry standard. I have only encountered or heard of one studio that did not have some variation of this policy - and that one studio is within the spirit of the policy (offers 7 classes per week of EACH art in a multiple art school and you pay based on how many classes you would like to attend per week....you pay the flat fee, can go to ANY of the nights, but if you don't go for a week, you still pay that flat monthly rate that allows you to go to X nights per week).

I believe that you are operating within industry standard by offering a flat monthly fee and allowing students to attend as many classes as they choose within that week.

Plus, look at it like this.....in my school, I pay $XX per month, if I miss ONE class, that rate doesn't change. So why should it for a situation like this...Martial Arts is not ala carte.

 

[Kacey]

I agree. I've been through this myself - it's one reason I'm so glad the Y collects dues now. I had several students in one family who were Orthodox Jewish, and the mother was constantly trying to get me to give her discounts for religious holidays on which the kids couldn't attend class; I pointed out that I had to pay my rent whether they were there or not, and if she didn't pay, I couldn't either, and then there wouldn't be a class. We went 'round and 'round on that for about a year, until I moved to the Y; then she tried it on them as well (with very little success).

I don't think you need to remind her that she pushed for those days; the class fee is a monthly fee, and if the boy can't come, oh well - it's not a per class fee. The only time you should adjust your fees (beyond any scholarships you choose to provide for those who need them) is if you cancel class and can't find a substitute. The Y used to prorate the next session's dues if class was canceled due to weather (or once, a power outage), but the students convinced them to stop; it messed up their auto drafts.

 

[Carol]

Higher tuition can lead to higher student retention. When the student is paying more for classes, then they have more vested in showing up. They want to get they're money's worth.

With cheaper classes, it becomes easier for other things to be more important.

I'd suggest raising your rates.

 

[Brian King]

The door mat is by the front door not behind the desk. The tuition is a monthly charge and goes to support the program.

Regards
Brian King

 

[IcemanSK]

I appreciate all of your input. Thanks so much. I need to stick with my price. This isn't an issue of scholarship, but of time.

Carol, I hear you when you say "raise the rate." But my initial reason for starting this program was to serve kids that can't afford class anywhere else in town. There is no MA school in the poor section of town. The City wants to "gentrify" the neighborhood so rent has tripled in comericial areas in the last year. The folks who live in the neighborhood can't afford to pay for classes. I have little overhead, so I can keep costs down.

Thanks again for your help!

 

[dancingalone]

I'd be frank and just explain you're depending on fees right now as your only source of income. She may be used to you running the program as a semi-form of community service and may not be considering your current financial needs. Good luck!

 

[IcemanSK]

I'd be frank and just explain you're depending on fees right now as your only source of income. She may be used to you running the program as a semi-form of community service and may not be considering your current financial needs. Good luck!

Well, they didn't come to class tonight: the only night of the week they were able. I suspect that I won't see them again.

I think you're probably right about the mom being used to how it "used to be".

 

[IcemanSK]

Just to update you on what has happened with "Alice" & her son. I left a voice mail politely explaining why she needs to pay the original price (I coped out & said it was because of my financial situation) & I've not heard from them since.

The additional difficulty is that she was my bi-lingual liasion to other Spanish-speaking parents. I've not seen any of those returning students either. I will get another Spanish-speaker to make those calls for me, but I don't know what's been said to them about me. I can't really worry about that, though.

 

[terryl965]

Just to update you on what has happened with "Alice" & her son. I left a voice mail politely explaining why she needs to pay the original price (I coped out & said it was because of my financial situation) & I've not heard from them since.

The additional difficulty is that she was my bi-lingual liasion to other Spanish-speaking parents. I've not seen any of those returning students either. I will get another Spanish-speaker to make those calls for me, but I don't know what's been said to them about me. I can't really worry about that, though.

Sorry to that we all must do what is best for the school and you did just that so do not feel bad my friend.

 

[Laurentkd]

Just to update you on what has happened with "Alice" & her son. I left a voice mail politely explaining why she needs to pay the original price (I coped out & said it was because of my financial situation) & I've not heard from them since.

The additional difficulty is that she was my bi-lingual liasion to other Spanish-speaking parents. I've not seen any of those returning students either. I will get another Spanish-speaker to make those calls for me, but I don't know what's been said to them about me. I can't really worry about that, though.

Unfortunatly, I think these types of issues just come with the business.

I agree that you need to keep your rates consistant. She opted to join another class after already commiting to yours. And had you done it for her you may have opend up the door for other people in the same situation to want the same thing, and before you know it you have the headache of trying to keep track of exactly how many classes each and every student took that month. One flat monthly fee makes sense, and is the standard in our business so no need to feel bad about that.

My dad (self-employed but in the auto business) always says that people like your "alice" are people that end up not being worth the trouble anyway. If you had allowed her to pay less for lessons now she would have found another situation where she woudl have wanted you to do things her way in the future. If someone wants something special once and you allow it they will expect something special from here on out. Especially someone like you who is doin this as more of a community service than anything else, you should haven't to put up with extra problems. I am sure you have more positive word of mouth floating around than you are aware of, and I am sure you'll have another spanish-speaker helping you out as soon as you make your need known.
Good luck!

 

[Twin Fist]

Iceman,
you did the right thing. You may have lost some students out of it, but I will bet you saved yourself some headaches too.

Tuition is a flat rate for UP TO X classes a month. Just because they dont make use of all those potential classes, that isnt your fault.

Not many commercial schools charge per lesson.For a reason.

 

[Sukerkin]

I agree, TF. A monthly fee for a commercial school makes a lot of sense. Trying to run it as a business with a weekly payment is quadrupling your accounting work. After all, we're not talking exorbitant amounts of cash here.

Looking back through the thread, I think Buzzy said it pretty well :tup:.