Episode Transcription

9: Don’t Make These Pricing Mistakes in Your Tutoring Business

Hello, lovely lady. Welcome to Classroom To Business, the podcast designed specifically for teachers working to become successful businesswomen and creating financial freedom and lifestyle flexibility. I'm Kirsty Gibbs business coach mentor for educators and teachers just like you who are ready to step away from the classroom and create something.

The Classroom to Business Podcast is committed to helping you grow your business, break down those barriers to success, and replace your teaching salary without having to work more hours. It is time for you to find freedom and start being your own boss so you can once again enjoy what you do and wake up each morning loving life.

Let's get.

Okay. In today's episode, I am going to touch on an area that a lot of us get stuck on. It can hold us back physically because we can't make a decision and it can hold us back mentally because we let. Self sabotage and imposter syndrome takeover, and that topic is pricing. It is something that so many teacher entrepreneurs in general, I think struggle with, and I do believe that it's because for a few reasons.

One, we've never had to think about putting a dollar amount on the services that we provide. So when we're in the classroom, We just do what we are good at. We do what we, what we love. You know, we go above and beyond because we know it's going to make an impact and a difference for those children's and families' lives that we work with.

When we run a business, we have to look at it differently. We don't have anybody paying us a salary. We actually have to be the person in charge of that money, and that relates to your pricing. And if we don't get that right, then we end up running a hobby or a non-for-profit without even realizing it.

And if that's what you want to do, that's totally fine, but today I'm talking to people who are wanting to build a business and something more than, you know, helping some friends out on the side for. So I'm going to share with you some of the most common pricing mistakes that I see tutoring business owners make.

The first one is worrying what other people think. Now, this is, honestly, this is a problem across so many facets of business and even our lives, but when it comes to pricing, Specifically, we worry about how can I possibly charge that much? So we have in our heads an idea that we think is fair or reasonable or, okay.

And for some of you, let's take for example, maybe for you, $50 an hour is something that you'd feel comfortable with, but in your market, in your area. There are a lot of people charging $80 an hour, but you don't feel comfortable with that, and you start to think, well, how can I possibly charge that? What are people going to think if I charge that, people will think I'm ripping them off.

People will think that I'm not worth it. You have to get rid of that thinking. You have to get rid of that mindset. I will go into this a little bit more and a couple of points time. You have to value yourself and your experiences and your background and see what you bring, what difference you make, what impact do you have on the lives of these children, and know that pricing is actually a transaction.

So you are providing the services, they're providing the payment, and it's not fair. If either one of you aren't providing something, that's not a business transaction then and that's not what we want. Okay? The other thing that we worry about is what if some people can't afford me? What if some people look at me and think I'm too expensive?

Let me tell you right now, guarantee there will always be people who think you are too expensive and people who think you are too. No matter what in anything that you do, okay? It's just the way that the world is because not everybody values things the same. Not everybody has the same backgrounds and experiences and just even general life experiences to agree with how much everything should be can get quite deep there.

But I think you'd get my. So that's the first mistake. We worry about what other people think and if they can afford you and you know, how can you possibly charge that much. The second mistake people have is they have a scarcity mindset. This is probably the most common mistake that I see people having, especially when they're starting up.

They think that there are only a certain number and, and you might. Consciously think this. This is more subconsciously, you think there are only a certain number of families out there, so you have to put your price really cheap and really low so that those families come to you rather than somebody else.

And in your head you think, because if I put my price high, people won't come to me. That is not the case. 100%. That is not the case, and I'm just gonna use an example of cars right now. There are cars that are super, super cheap and a lot of people buy them. There are cars that are really, really, really, for a better word, expensive and people buy them.

So you have to understand that just because you are pricing your services, Then somebody else does not mean you won't get students. What will impact the way that you get more students is the services that you provide and how good you are at actually helping those students and transforming them from where they are now to where those families want them to be, and also how good your marketing is to actually get them interested in your business.

It's actually got nothing to do with your pricing. Nothing to do with your pricing, okay? Because if you've got families who are coming to you and you put your prices up, $10, even $15, they will, 90% of them will stay with you because they value what you do, and they can see the difference that you make and the impact that you make.

So again, it has nothing to do with your pricing. It's actually you and your staff if you have staff and the service that you provide. So we have to get rid of the scarcity mindset. There are so many families out there and students out there who need support and that's, it's unfortunate, but it's true.

And what it means is that there is room for. There is room for you to start your business and to grow your business and to set your prices at the price that you want to set them at. Because you are unique, you are different to the other tutoring businesses. You are you. And if you've done any of my trainings before with my marketing, you'll know that I talk a lot about your unique selling points and your superpowers, and that's where that ties in.

But at the end of the day, You have to get rid of the scarcity mindset because there are so many families who really do need your support. The other issue, mistake, I guess, in this scarcity mindset is that people say, oh, I'm just going to start low. I'll start with $50 because I think I'll get lots of people interested if I'm only charging $50, and then I'll increase it.

Now, this is a massive mistake. One, because you're not valuing your services from the get go. So you're kind of showing people where you sit on the scale. You know, are you a Porsche or are you a Toyota? Or are you a, I don't even know some of the lower cars, but where you, you are showing where you sit there.

But also I can nearly guarantee you that when you go to CHA to increase your prices because that was your initial plan, start low and build. You won't, or you'll put it off and put it off and put it off. And if you are listening right now and you're going through this, then hopefully you can take something away from this and you're having a little giggle because you know that's the situation you are in.

You're in and you are nodding away. But what we tend to do is we have a price for our families and we feel so uncomfortable about asking them to increase their price, even though. Everything around us is going up. We feel bad for our families. And again, I think this is the big kind hearts that teachers generally have.

You know, we do what we do because we want to help people because we want to make a difference. And we are very, we are very passionate about what we do. . So when it comes to asking people for more money, sometimes it feels icky. And if that's you, then, I mean you're not alone, but there's a lot of work that you can do around your money mindset to show that it doesn't need to be that way.

Okay? We're not gonna go into that today, but you need to know that when you increase your prices, it's not a negative thing, it's just the way that the world. All right. You may have staff, and if your staff wages have increased, how can you possibly expect to pay your staff if you haven't increased your prices?

Electricity increases, rent increases rates if you're paying rates. All of these things are increasing, and if you are not increasing your prices to match the increases that you're having in your business, you will. Bomb out and be in the negative, or you're just gonna plateau and things are gonna be really, really difficult for you to actually grow.

So moral of the story lesson there is don't start low with the intention of building it up. Start your prices where you want your prices to be. Number three, people value themselves. Too lowly, and if you don't value yourself, how can you expect anybody else to value you? You are an. Okay. You're experienced in your particular area, so whether it's maths, science, music, literacy, you are experienced in your area.

Maybe it's just early gears. Maybe you are experienced in high school, transitioning to high school. Whatever your superpower is, that's what somebody is paying you for. If you are too cheap, then people might look past you because they. No, she mustn't be that great if she's only X amount of dollars, or maybe she's really cheap because she can't get anybody else in.

Okay? You want to align your pricing with your worth and your value. And again, this is something that we haven't had to do before as teachers in the classroom or educators in the classroom because somebody else decides all of that for us. And no matter how much we work, how much extra effort we put in the salary is still the same no matter what.

It just depends on what somebody else has dictated. This situation is different for you right now. You get to seriously sit down and look at what you bring to the table, and by all means, do some market research, see what else is around there. If you're brand new to this and you have absolutely no idea how much tutoring is, go out there and do some research.

See what's in your area. Compare their experience and their background to what you have so you can get an idea of where you sit on that scale, where you want to sit on that scale. So to give you an example, I work with ladies who charge $70 an hour, all the up to $120 an hour, and then all within that spectrum.

But they are comfortable charging. What they charge for where they are, and they can, they feel within themselves that they can justify that. Not that you actually need to go on round and justify it to anyone, but if you can justify that to yourself, that is the first hurdle that you need to jump. Because if you don't feel comfortable and confident about the pricing that you put out there, then that actually comes across when you're speaking to your potential.

Parents who are going to sign up when it starts to get to the point of talking about pricing, and if you've got a price out there that you feel really icky about or that you don't think you are worth, then they actually will pick up on that. It's, it's really interesting, actually, how true that this is.

You have to. I'm not saying bring your price down. I'm saying believe in yourself. I'm saying sit back and look at all of the impact that you have made for the last however many years. All of the extra experience, PD trainings that you've done, the relationships that you have with children, the way you work with them, maybe certain techniques that you use, the fact that you know you can make a difference.

because of X, Y, and Z. Be thinking about all that. Even if you sit down and brainstorm, all of you know what makes me valuable, what makes me good or better, or different or unique? What makes me amazing? Okay? You have to really believe in yourself and then find that price that aligns with that. Do not value yourself too low.

Because it comes across in your marketing, and like I said, as a parent myself, if, or even just, you know, shopping in general, if something is too cheap and I really want a good result, I usually don't go for the cheapest option because I want a good result. So when I'm putting my child into something and I can, you know, guess that most of your parents are like this, if I'm putting my child into something because.

Really value this and I want a good result out of it, then I'm going to go for something that aligns with that. And pricing is important when it comes to aligning with a service. Now, the other thing to remember here, just off on a bit of a tangent, is that if you feel you have a price that's really high, so maybe your one-on-ones are $110 an hour.

which by the way, I'm not saying is really high, but you might think that your par or your parents might be saying, oh, I can't afford $110. You then have options, okay, put together some groups or some semi-private. You don't have to have the whole attitude of, oh, I don't wanna put my prices high, because then there's so many kids who I can't work with or I can't help.

Yeah, you can. You can definitely still work with them, but create a service. That is suitable. So create semi-private or small groups. So you know, small groups could be three or four students in there, and they're paying $70 or $60 rather than 110, so it's more affordable for that family, but they're still getting you or your member of your team, and they're still getting that high quality service with that specialized niche or superpower that your business is known.

It's not a second grade or a second rate service, it's just a different service and they're paying less because there's more students in the class. So there's not as much one-on-one attention. That doesn't mean it's not as good. Okay? Look at a gym. When you go to a gym. You could do a gym class, don't dunno.

Prices right now, I'm gonna make this up for $20 a session. That gym class might still be amazing. , but if you want to do a one-on-one with that person, it's $90. Doesn't mean the gym class is a second rate service, it's just a different service. So you have to look at your options in that same way. Okay? So if you are feeling that you are worth $110 for a one-on-one, but you know there's families that just cannot afford that, look at a service that you can introduce that can serve those.

Even semi-private where both students pay $80 an hour and you get two kids in there at once. So consider that, and I would actually love to hear if you are going to implement groups, because this is something that I am going to do a podcast on soon, an episode on soon. But I would love to hear of the challenges that you're having and the things that are scaring you when it comes to starting.

Number four, don't change prices. Now, this is a big mistake when businesses continue to keep the same prices year in, year out. What do you think happens when it comes to the growth of your business? Not much. Yes, sure. You might get some new students, but. Everything else is going up around you. All of your expenses are increasing, yet you have kept your income the same.

It remains the same, but the amount going out increases, which equals a decrease in profit. You need to be reviewing your pricing and your profits regularly. So this is something that I do a lot inside the children growth membership and with my private clients, is we review our businesses. So every month you should be looking through and seeing, okay, how much am I making?

How much is going out? How much is my profit? That's like in the most basic of level when we're reviewing. . And if you are noticing that your expenses are increasing, but your revenue's not, so the money that's actually coming in, you need to do something about it. Okay? So review your expenses. But if you've had that same price for two years, 100%, you need to change that price.

Okay? 100%. Don't even think about it. You need to change it. And again, it's something I actually have templates that I have got inside of my me. or if you're just starting out inside of Truda Bootcamp, you'll have access to swipe copy of emails that you can send out to parents that talk about price increases and things like that.

Because I know that for a lot of us, it's not something that we wanna talk about, but we need to, okay, we, we've gotta be serious here. We've gotta take our business seriously and sometimes get into those uncomfortable positions only to realize that people are okay with. You know, you might increase your prices, but people expect that to happen because that's what happens in the world.

Day to day prices increase. Not great. Don't love it myself. I'm sure you don't love it either, but if prices don't increase, then you don't have a business. You will go backwards. . The other thing is your prices. You also should consider increasing them if you have a wait list. So if you've got a wait list because you're fully booked, then you either need to, one, increase your prices or two, look to create some groups or semi-private.

So that's the fourth mistake, is that people don't change their prices. Fifth mistake is when businesses don't have a big enough gap between group sessions and one-on-ones. So if you are running groups and one-on-ones, you want it to be super obvious that the difference between those two services. But if someone is looking for a more affordable option, you want that group to be a no-brainer for them.

So the example that I used before was a one-on-one is $110. A group session with. Three or four kids might be 65. That's a big difference. So those parents look at that and say, oh yeah, I would definitely, that's what I need. Okay. Whereas if you've got 110 and a hundred, they're looking at that thinking, well, for $20 more I could just get a one-on-one or I, you know, if it's 110, $10 more, I could just get a one-on-one.

You don't want them thinking that you want there to be a big enough difference between the two that. Obvious that a one-on-one is very unique, very personalized, and the price tag matches that. The group sessions are still, like I said before, whether your superpower is training that your staff have, whether it's you, whether it is program or approach that you use, that's still the same, so it's still an amazing service.

but it's more affordable because there's one or two or three other kids in there, whatever you decide. So that's that. Fifth mistake is when people don't have a big enough gap to make it so obvious which option the parents should choose. Alright, hopefully you have taken something out today. I mean, if the mistakes that you've made, then you're not alone.

We've made, you know, a lot of us have made these mistakes, but if you haven't yet made those mistakes and you are sorting out your pricing now, then take this on board and don't be scared to get out of your comfort zone when you are. Setting your prices. So just to recap the five biggest mistakes that tutoring businesses make with their pricing.

Number one, worrying about what other people think and if people can afford you. Number two, having a scarcity mindset, thinking that if you keep your prices low, you'll get more people. Or if you put them too high, you won't get any people. Number three, not valuing. and putting a low price point that actually makes the customer devalue you.

Number four, not changing your prices and leaving them the same. And number five, not having a big enough gap between your groups and your one-on-ones. All right. Hopefully you found that really helpful and insightful. Please make sure you let me know. I love hearing from you. Share this. Tag me on your socials.

I really, really love to see those of you who are listening and let me know the key takeaways from this episode. If you enjoyed this episode today, I would absolutely love for you to leave a review. It only takes a minute, and if you haven't yet subscribed, make sure you do to ensure that you never miss an.

Finally, if you want to know more about what we do, head over to the website, kirstygibbs.com or check out the link in the show notes below. Thanks for listening. It's so great to have you here.