When was the last time you took a good look at your tuition prices? Evaluating the cost of doing business and your revenue stream is important to ensure continued success. While it is never easy to set or raise tuition prices, the cost of doing business is not etched in stone. Taking the set-and-forget approach to your tuition prices could leave you high and dry – especially in periods of inflation.
Like lesson plans or streaming subscriptions—your tuition rates should be evaluated at least once a year. Remember, you're not taking money just for the sake of it – you charge tuition to continually offer a better service for your customers.
Look at expenses
Before you decide on a rate, the first step is to look at your business expenses. Have your utilities or rent gone up? What does it cost to pay your employees? Reviewing your monthly bottom line is the first step to setting your tuition rates because it establishes a baseline for the lowest amount of money you’d be able to charge and still break even.
The next question you’ll need to ask yourself is how much profit you want to make to invest back into your business. You built your business to improve and grow continually – but you'll need additional funds to achieve your goals. You’ll need to be sure you’re generating enough funds to begin budgeting for your next big project or improvement. Then, of course, you'll need to add in any additional profits you intend to collect for yourself to maintain your personal lifestyle.
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My mother always told me to be you and nobody else, and that same rule applies to how your run your business. Don’t copy the business down the road. Your business is not the same as theirs, and while they might be good – you're better! But seriously, comparing what similar facilities do in your area is a great next step. However, remember that copying their tuition prices is not a fool-proof plan for success. Don’t be afraid to charge more than the neighboring facility. If you provide the best service – your customers will pay more.
Raising tuition is okay; the cost of living goes up, and so does the cost of doing business. Isn't there some old saying... "timing is everything"? This phrase is also true when it comes time to raise tuition. Finding the right time to raise your rates is critical. As long as the new rates are communicated early and effectively, it is easy to raise tuition with the change of a calendar year or new registration cycle.
There is no wrong answer when it comes to communicating with your membership. From social media posts to SMS texts, posting your registration and tuition to a website for easy sign-ups and price transparency is one of the easiest ways to get your message out. Another one of our favorite ways to communicate is through Newsletters. Sending a monthly newsletter is an effective solution to communicate everything needed, from registration sessions, FAQs, Athletes of the Month, or special events happening within your walls.
No matter what steps you choose to follow to set your tuition, having an evaluation and communication plan is critical for you to maximize the success and growth of your business. Plus, GoMotion’s financial reporting tools and communication capabilities will be there to assist you every step of the way.