The Teacher's Guide to Pricing Matters: Quality Teaching Has Its Price

By Janine Bray-Mueller

Teachers see many opportunities for freelance work but is it really possible to make a living as a freelancer in the long-term? In this book, Janine Bray-Mueller has encapsulated some key lessons on pricing, learned during her career as a freelancer.

In a competitive market, pricing is problematic, particularly in uncertain economic times. Establishing a sustainable business relies on charging enough to pay not just for immediate living expenses, but also to update and extend your teaching skills, and cover costs such as holidays, sickness and pension provision.

Understanding why many teachers are trapped in a position of underearning is the first step to escape. Many teachers can be their own worst enemy if they lack self-confidence or undervalue their skills. Familiarity with local market conditions and competitors’ prices is important, but the ‘going rate’ is not necessarily an appropriate rate to charge.

Janine explains how to balance your business on three pillars: consultancy (one-to-one teaching), training (seminar workshops) and leverage (information products). This concept will enable you to build up a sustainable teaching business.

Various pricing strategies are described with advice on how to select those which are appropriate for different types of products, services and customers. Specialisation is a key strand in establishing a sustainable level of pricing. You may be under constant pressure to discount prices, but Janine makes clear the dangers in doing so. She also deals with when and how to increase prices to avoid a return to underearning.

Value-based pricing is an approach which Janine has applied very successfully to freelance teaching, and this is explained fully with valuable practical advice on how it can give you a more flexible approach to pricing.

Pricing Matters is full of careful explanations of key business concepts and practical advice on applying them in the context of freelance work. Step by step instructions are given on how to identify both your personal and business costs. With the aid of this book, you can calculate your available teaching time, so that you can establish your resentment number and price range. The worksheets and checklists included will help you to clarify your strategy and position yourself in the market.

Janine presents effective ways to manage pricing in an entertaining way and makes them both meaningful and memorable for the freelance teacher. Her book contains all you need to know to overcome your demons, price your teaching services effectively and establish a financially sound career which is sustainable in the long-term.

• Language: English
• Publisher: Books on Demand
• Release date: Oct 7, 2019
• ISBN: 9783741220043

Janine Bray-Mueller

Janine Bray-Mueller, a freelance teacher with 30 years of teaching and marketing experience, has served on committees such as a two-term voluntary member of IATEFL's Marketing Committee, Editor of HELTA (Hamburg) and an Editor of ETM (English Teaching Magazine), which was popular in Germany for many years. In addition, she has given presentations at the TESOL France annual colloquiums and has also been published in several language teaching magazines. Meanwhile, Janine has decided to share her marketing knowledge by writing a series of books giving practical advice to teaching freelancers. These books help colleagues in their teaching careers find students and earn enough to live from their work.

Book preview

LIMITATION OF LIABILITY/DISCLAIMER OF WARRANTY AND/OR LEGAL NOTICES:

The information presented in this book represents the view of the author alone as of the date of publication and should not be taken as expert instruction or commands. It is strictly for informational and educational purposes. Because of the rate with which information changes, the author reserves the right to alter and update her opinion based on new data.

While the author has made her best effort to verify the information provided in this publication, the author accepts no responsibility for errors, inaccuracies, or omissions. This publication is for informational purposes only, and she makes no representations or warranties concerning the accuracy or completeness of the contents of this document. Any slights of people, institutions, or organisations are unintentional. When advice concerning legal or related matters is required, the service of a fully qualified professional should be sought. You should be aware of any laws that govern business transactions or other business practices in your country. Any financial numbers or statistics referred to here or on any of my websites are estimates or projections, and should not be considered exact, actual, or a promise of potential earnings. All numbers are illustrative only. The author expressly disclaims any implied warranties of merchantability or fitness for particular purpose. No warranty may be created or extended by sales representatives, promoters, or written sales materials. The author shall not be made responsible for or liable for any loss of monies or any damages, including commercial profits but not limited to personal or other incidental or consequential damages.

Because of the rate at which information changes on the Internet, individual links and website information contained in this publication may have changed. The author makes no representations about the accuracy of the web information shared. As a reader, you need to accept full responsibility for your actions and should consult with a professional about your own circumstances before following anything in the book.

Parts of this book have already been published on the www.ft-training.com website, in the digital EFL magazine, or in the EFTT newsletter.

THANK YOU

Writing this book has been full of ‘ups and downs.’ It would never have been published without my family:

This book is dedicated to my Hubby.

My hero and partner for life.

And not to forget my four wonderful children.

Richard,

Elyssa

Herbert

Jessica

ACKNOWLEDGEMENTS

Thanks to Cara Leopold, teacher colleague in France for test driving this publication.

My thanks to Sean D’Souza of Psychotactics.com. His marketing insights and the many lively discussions in his membership site (the CAVE) triggered my enthusiasm to write this book for freelance teachers.

Latin: nanos gigantum humeris insidentes…

‘Discovering truth by building on previous discoveries’

This concept has been traced back to the 12th century and is attributed to Bernard of Chartres.

Contents

Additional Resources and Information

Preface

Introduction: Freelance Teaching as Your Dream Career

SECTION 1 : UNDER-EARNING PATTERNS

1.1 WHY IS IT SO HARD TO GET A DECENT LESSON RATE?

What is Under-Earning?

How underearning effects the quality of your retirement

How freelance teachers underearn

Why Is It So Hard To Get a Decent Lesson Rate?

‘Money is what money does...’

Mirror, mirror on the wall; who’s the best teacher in the school?

Mirror, mirror on the wall, who’s the best teacher in the land?

Murdering Ghosts in ‘The Fog’

Six ways in which ghosts can steal or murder your business

1.2 SELF-CONFIDENCE

What Ball and Chain Shackles Most Freelance Teachers?

Do freelancers underearn by choice?

What underearning is—and its consequences

Four typical reasons for not earning enough

The Hummingbird Effect

Perfectionism (when, when, when, when)

Are freelance teachers making excuses and ending up penniless?

Feeling afraid doesn’t mean you aren’t qualified to teach

Qualifications alone don’t make better teachers

Why You Should Revalue Your Teaching Skills

The case of the homework help

Taking teaching skills for granted is a recipe for disaster

Revaluing teaching values

The Ill-Fated Strategy of Accepting ‘The Going Rate’

The ‘going rates’ in freelancing

Set your own freelance teaching service prices

Pricing is based on the fire it puts out

1.3 THE ROLLER-COASTER TEACHING CAREER

The Teacher’s Resentment Number

What is the Resentment Number?

The Career Roller Coaster

Do you accept every job—just for the work?

Can You Charge Fair Prices for Teaching?

The three-year death cycle

Lack of money chokes many teaching services

What happens when teaching rates are too low?

Who is at risk of price dumping?

Can the market pay well for quality teaching services?

Why you should demand and receive acceptable prices

SECTION 2 : THE THREE-PILLAR BUSINESS CONCEPT

2.1 YOUR TEACHING BUSINESS IS YOUR TEACHING CAREER

Global Recessions Are A Teacher’s Best Friend

Why now is the best time to start

Global recessions

1. Money is scarce (or is it?)

2. Recognition in that what you are doing, you are doing well

3. Freedom is having enough money and time for choices

Teaching has an inherent problem

Three Pillars Supporting Your Teaching Business

The missing link

The three-pillar business concept

The three-pillar business structure is about understanding the concept of time

Your competition as a source to increase your income

Can the three-pillar concept be used in all types of businesses?

Should freelancers start with leverage?

‘How do you make it money-wise until you get enough revenue from your business?’

SECTION 3 : THE PRICING PARAMETERS

3.1 IMPORTANT CONSIDERATIONS

Should I Work For Educational Institutions?

Understanding our business

Is there a price tag on subcontracted and associate jobs?

Can associate jobs be a stepping stone in your career path?

The independent freelance teaching price tags

The entrepreneurial freelance teacher benefits

Acceptable and Unacceptable Teaching Rates

Freelance teachers are a commodity

‘When you’re a freelancer you take what you can get’

Geographic influences in setting prices

How freelancing work and a freelance title influence prices

Specialists working for educational institutions

Why Specialising Gets the Best Price

First impressions count—a lot

The market pays different rates for differing levels of expertise

Factors influencing a freelance teacher’s level of income

Are we comparing apples with oranges?

3.2 ABOUT PRICES AND DISCOUNTS

It’s Carved in Stone

What do you do if a customer wants a discount?

The Rule of the 3 Fs (when considering alternative payments)

The remorseless war on prices

Seven yo-yo wheels in discounting

Extraordinary Lesson Preparation Time

What is your price?

Not accurately invoicing work

To charge or not to charge for ‘never-ending’ changes?

Price Resistance—And Why You Cannot Avoid It

The fishermen’s dilemma

Can freelance teachers benefit from price resistance?

3.3 TIMING—WHEN TO RAISE PRICES

When Is The Right Time To Raise Your Rates?

Raising rates—is this really beyond your reach?

Raising Your Prices Comfortably

Why you should raise your freelance teaching service prices regularly

Keeping up with inflation

How to raise prices without feeling uncomfortable

What is the best method to inform a student or companies of an impending price rise?

The Story Your Prices Tell

Three reasons why freelance teachers don’t (or won’t) raise their rates

Prove It! (Researching Local Market Prices)

Freelance teachers expect LESS from the very beginning

Three ways to find out a range of prices you can charge

The catch to achieving a higher income

Controversial and Conventional Pricing Methods

The difficulty in establishing market prices for teaching services

Two simple-but-controversial pricing methods

FIVE time-tested pricing methods (described in this book)

SIX other time-tested pricing methods

3.4—VALUE-BASED PRICING FOR FREELANCE TEACHERS

What Is Value-Based Pricing?

How value-based pricing tactics raise your prices

Definition of a value-based price for freelance teachers

How Value-Based Pricing Techniques Are Used

Private students and the emotional element behind value-based pricing

Larger teaching projects and the emotional element behind value-based prices

The ‘value-based point system’ and the ‘teaching-skill table’

The Foundation of Value-Based Prices—The 3 Ps

The FIRST ‘P’ Concept: PRICE

The SECOND ‘P’ Concept: PERCEPTION

The WIIFM triggers

The WIIFM advantage

The THIRD ‘P’ Concept: POSITIONING

The Value-Based Interview Technique

Changing the student’s perception towards teaching services

Price or value? Which comes first?

What happens if the student baulks at your price?

‘Negotiating as if your life depended on it’

And when students still ask for a discount

SECTION 4 : BUILDING A FINANCIAL FOUNDATION

Before You Start

How can freelance teachers survive the three-year death cycle?

Necessity Is the Mother of Invention

Nitty-gritty nuts and bolts

Three stages of preparation

STAGE ONE—COST OF LIVING

Your aim: What are my CURRENT daily expenses?

STAGE TWO—ALLOWANCE MARKUP

Your aim: What are my long-term and future expenses?

STAGE THREE—AVAILABLE TEACHING HOURS

Your aim: How many chargeable days are available to teach?

Giving Some Flexibility to Your Prices

A Resentment Number range

Is there such a thing as a fortune teller’s crystal ball?

Flexibility Step 1—The starting point

Flexibility Step 2—Avoid this mistake

Flexibility Step 3—Control prices regularly

The Yes-Yes Pricing Factor

The concept behind a Yes-Yes price table

An (almost) predictable decision—the Yes-Yes price

Setting the stage for your next price increase

The bonus or extra to increase your course or lesson value

Examples of Yes-Yes price tables

SECTION 5 : DO YOU NEED A TEACHING SERVICE CONTRACT?

How to Avoid Students Not Paying On Time

Being paid on time

What happens when students don’t pay or don’t pay on time?

Set the rules at the first meeting

A contract is a form of reality check

Do You Need a Teaching Service Contract?

Why you need a teaching service contract with your customers

Are teaching service contracts necessary for both direct and associate customers?

What Goes Into a Teaching Service Contract?

Teaching Service Contract—Contents

What is usually forgotten in teaching service contracts?

The bare truth in making a stand at the very first lesson

Which contracts should a lawyer check?

When the customer wants to change the contract or contract wording

SECTION 6 : PUBLISHING YOUR PRICES

Should Freelance Teachers Advertise Their Prices?

The rampant war on prices

Why isn’t your price on the website?

And a personal decision about the ‘free trial lesson’

In Which Teaching Areas Should Prices Be Published?

Are you a freelance teacher who works for:

1. Educational institutions

2. Students and children

3. Business students and companies

Publishing Your Prices In A Teaching Partnership

Should the prices be shown on the website?

What provokes an automatic price discrepancy?

An argument against disclosing prices

Once Your Prices Are Made Public

The Boy Who Cried ‘Wolf’

An ideal pricing market

When students turn nasty

SECTION 7 : WORKBOOK

APPENDIX A—FINANCIAL WORKSHEETS

Financial Worksheet—1

ANNUAL BUSINESS COSTS: STAGE ONE AND STAGE TWO (DETERMINING YOUR WORK-LIFE BALANCE)...

Financial Worksheet—2

CHARGEABLE TEACHING HOURS: STAGE THREE

Financial Worksheet—3

CALCULATING YOUR RESENTMENT NUMBER RANGE

CALCULATING YOUR ESSENTIAL ANNUAL INCOME REQUIREMENT (AS DETERMINED IN STAGE ONE)

CALCULATING YOUR ANNUAL INCOME REQUIREMENT (AS DETERMINED IN STAGE TWO)

Financial Worksheet—4

PUTTING YOUR CALCULATIONS TOGETHER TO ATTAIN YOUR TEACHING RATE

Financial Worksheet—5

PRICE RESISTANCE

APPENDIX B—REFLECTION AND PRACTICE EXERCISES

Reflection and Practice—1

WHAT FACTORS AFFECT YOUR POTENTIAL INCOME?

Reflection and Practice—2

STRENGTHENING YOUR FREELANCING CAREER—THE THREE-PILLAR STRUCTURE

ARE YOU JOBBING? OR DO YOU HAVE A TEACHING BUSINESS?

NINE WORKSHEETS FOR YOUR THREE-PILLAR BUSINESS CONCEPT

WORKSHEET 1—THE BUSINESS PURPOSE BEHIND YOUR TEACHING ACTIVITIES

WORKSHEET 2—MANAGING YOUR STUDENTS

WORKSHEET 3—A MARKETING AND SALES PLAN

WORKSHEET 4—PROFESSIONALISM AND YOUR WORK

WORKSHEET 5—CHARGING TOO LOW PRICES

WORKSHEET 6—BEING TOO MUCH OF A GENERALIST AND NOT SPECIALISING

WORKSHEET 7—NOT GRATIFYING STUDENT-CUSTOMER SELF-ESTEEM AND SATISFACTION

WORKSHEET 8—NOT BEING PROFESSIONAL

WORKSHEET 9—WHY UNDERESTIMATING THIS WILL AFFECT YOUR HEALTH

Reflection and Practice—3

POSITIONING YOUR TEACHING SERVICE TO BUILD YOUR FREELANCING IDENTITY

APPENDIX C—CHECKLISTS

Checklist—1

SEVEN ESSENTIAL STRATEGIES TO STRENGTHEN YOUR TEACHING BUSINESS

Checklist—2

DISCOUNT PRICES AND THE RULE OF THE 3 FS

Checklist—3

SEVEN REASONS WHEN TO RAISE YOUR PRICES

Checklist—4

COLLECTING INFORMATION FOR YOUR POSITIONING STATEMENT

Checklist—5

EIGHT STEPS TO FOLLOW IN YOUR PRICE-VALUE INTERVIEW TECHNIQUE

Checklist—6

WHAT GOES INTO A TEACHING SERVICE CONTRACT?

EPILOGUE (OR LAST THOUGHT)

ABOUT THE AUTHOR

INDEX

WHAT FIRST READERS HAD TO SAY ABOUT THE TEACHER’S GUIDE TO PRICING MATTERS

Table of Figures

Figure 1 General Overview: Three-Pillar Business Concept

Figure 2 Three-Pillar Business Structure: Example for Teaching Services

Figure 3 Three-Pillar Template (1)

Figure 4 Three-Pillar Template (2)

Figure 5 The three stages of preparation to reach your hourly rate

Figure 6 Annual Calculation Overview

Figure 7 STAGE ONE – Cost of Living

Figure 8 STAGE TWO – Allowance Mark Up

Figure 9 STAGE THREE – Teaching Hours Available and Resentment Number Range

Figure 10 Resentment Number Range Flowchart

Figure 11 Teaching rate based on a single lesson

Figure 12 Teaching rate based on the number of hours taught in a single week

Figure 13 Yes-Yes price table for lessons

Figure 14 Yes-Yes price table for products

Figure 15 Yes-Yes price table for an airline ticket

Figure 16 Price resistance chart

Figure 17 Price resistance enquiry source

Practical Advice for Freelance Teachers

Additional Resources and Information

Explicit information referring to (1) the USP (unique selling proposition) and (2) brands and branding are explained in my forthcoming books What Do You Teach? and The Question of Trust.

My book The Ultimate Guide to Teaching Services give full details on:

Teaching niches

The preferred student profile

WIIFM and the ‘want factor’

In this book , you’ll find:

All charts and calculation examples in this book are available as Microsoft Excel worksheets. Please send your request by email to:

Janine Bray-Mueller at

http://www.ft-training.com/contact-janine/

NOTES BEFORE YOU READ

To avoid the ‘he or she’ issue, the plural is used wherever possible.

To avoid long, drawn-out explanative descriptions, the word student is used to encompass a student, a company, a customer, a school, who are taught or have received courses given by the freelance teacher.

A course encompasses tuition, classes, lessons, workshops, seminars, etc.

The word problem is used to cover all types of student learning issues or learning objectives.

The word student is used to encompass a student, a company, customer, school, who are taught or given courses by the freelance teacher.

Customer will be used in general situations and implies a student, people, companies, schools, etc., who are not yet ‘enrolled students’ of the freelance teacher and/or pays your invoice.

The word price is used to denote an hourly or daily rate, fee or any other kind of payment.

Preface

Why I wrote this book.

Do all freelance teachers have the calibre to run a teaching business? I’d say yes. But only when they start tiny, keep at it, and grow slowly. If they rush too quickly, they will fail. If they’re too slow and hesitant, the fear of failing in their freelancing career creeps in, takes over and dominates the business. I call this the bogeyman effect.

This book is about unravelling the confusion regarding how you can and should price your teaching rates to avoid underearning and create financial security for both you and your teaching service. The book aims to dissolve the bogeymen in our working lives and to reinstate our self-worth.

It also goes deeper than a simple guide to setting your teaching prices. It’s all about self-worth for you as a teacher in a rewarding profession. It’s not just a study of factors that often go wrong when you determine your prices, it’s also a motivational guide to overcome internal pressures hindering you from finding and hitting the right ethical price—for you.

Stress when deciding the best methodology to teach your students is inevitable, but when you add a whole bunch of other worries concerning your livelihood, it’s no wonder the fear of failure takes over. Money is a big one, but the most significant source of internal pressure is your own self-confidence—or rather the lack of it—an ethereal, emotional sense of inadequacy that undermines your career and well-being.

I’m not saying it’s going to be easy or any less frightening to make changes. Nor am I going to tell you that you’ll see an immediate financial effect. Building a sound economic foundation and establishing a teaching service takes time. You have to start small. You have to decide you are determined. You have to take one step at a time and keep going because one day, you’ll suddenly realise you are successful.

What I can guarantee, without doubt, is the clash between your wish to succeed (emotional feeling) and your perception of what you can or cannot change (intellectual). However, take heart and remember the words of the American author Ray Bradbury¹:

‘If we listened to our intellect, we’d never have a love affair. We’d never have a friendship. We’d never go into business because we’d be cynical. Well, that’s nonsense. You’ve got to jump off the cliff all the time and build wings on the way down.’

So let’s build our wings and learn to soar into the blue skies above.

Janine

WHY AM I QUALIFIED TO WRITE FOR FREELANCE TEACHERS?

Because…

I’ve been a freelance English language teacher for many, many years. I know how complicated—and confusing—it can be to run your freelance teaching service as a business.

I know there are far too many freelance teachers fighting against low earnings. I also know many teachers want to know how to work against the low-earning syndrome and don’t know where to find qualified answers or how to go about it.

I know many teacher associations—but I do not know of any that focuses on helping freelance teachers to market and position their own particular teaching service business. (I hope to fill this gap with my books.)

I know how confusing it can be to understand how to market your teaching service. I know why you are suspicious about ‘marketing.’

I know the feeling when you’re rubbing splinters into your hand as you ‘sell’ yourself to prospective customers.

I know how scary it is to implement something that could (yikes!) go wrong.

I know many teachers love their work but suffer the brunt of many snide comments from people not involved in teaching. I also know there are other teachers who will tell you that running a business and charging money for your knowledge means you’ve become vain and greedy and self-seeking.

Not least…

…because I know from experience that about 80 per cent of all new freelance teaching services will never get out of their start-up phase, and remain underpaid and dissatisfied. Further, and I believe you will agree with me from your own experience, that about 80 per cent of these disillusioned teachers give up freelancing within three years. And why do I think most teaching services will fail within three years? There are multitudes of reasons, but these three come up every time—and not just in teaching circles:

It’s the global economy

The time is not right

The competition is too hard because the teaching market is oversaturated

Believe me—the global economy and the time will never be right. So you might as well start today and build your teaching service career. As for competition—well, if there was no competition in the teaching market, then no one needs teachers. That there is so much competition means a need for teachers on the market exists. There are a lot of students waiting for you out there. Now that you know this, you also know that the future of your teaching business is in your own hands. Relying on a net of social security benefits² or on companies or educational institutions to keep you employed is risky. The best way to control your teaching career and your future financial existence is by taking charge of your own entrepreneurial teaching service business.

---

¹ Quote found on the Brainy Quote website: http://bit.ly/Bradbuy_BrainyQuote

² Some countries may offer a top-up for low wage earners. Many countries offer start-up support for new businesses, which can be helpful. In fact, I would advise teachers starting their freelancing careers to look into government funding schemes for new businesses.

Introduction:

Freelance Teaching as Your Dream Career

I love teaching English and my career as a freelancer. Yet it wasn’t always that way. It took several looong years agonising about how to balance the joy of doing a job I loved with reality—earning money. What was the culprit for those long, lost years?

Intimidation. It’s intimidation that is the inherited foe of every teaching profession.

Let me explain. When I started teaching English as a second language, I felt intimidated by my beginner status. I was insecure and scared of not ‘making it.’ I’d see monsters inside my school bag, in the classroom, and there were more of them under my desk.

For example, here I was, beginning my freelancing teaching career and facing already successful customers with ten years or more head start on me; students who already had successful careers and qualifications that were far better than mine. And they had the money to buy the latest mobile phones and notebooks, wear designer clothes, go on expensive holidays—and pay for my lessons.

And yes, the money. You focus on money when you have less of it. It looms before your eyes until teaching boils down to having or not having enough money for the work you do.

This is how the vicious downward spiral develops. It goes like this:

The better you are, the more money you’ll be able to earn (you think).

So you try harder. You work harder. You work long hours.

Because…

You are going to be the Best

The teacher with the best reputation

The teacher recognised for your knowledge and expertise

And when it happens…

It’s going to help you earn ‘Big Money’

Unfortunately, it doesn’t work out like that.

The reality is that the harder you try, the more you become confused because what you expect to happen (success and money) just d.o.e.s.n.’t happen.

Why not?

What went wrong?

What’s missing?

What else can I do?

That is when you feel overwhelmed. The fear of failure locks the door while your self-confidence packs your case and heads for the South Pole.

Let’s face it… Intimidation will stop even the best teachers wearing steel-toe work boots, by allowing the bogeyman free entrance to undermine your efforts for your teaching career.

The spook creeps out from under your desk in your home office when you’re vulnerable and not looking. The ghoul dissolves your confidence together with your self-worth and makes you want to give up. You feel it’s a lost cause. You think it was all a big mistake. You think it isn’t really what you’re meant to do and no, you don’t have any talent for this kind of work. I know because I’ve been there.

If you’ve been there too, take a deep breath and gather the remnants of your courage. Roll up your sleeves and settle down to work diligently with this book. It will help you quickly ascend the learning curve of running a freelance-teaching business without questioning yourself, your ethics, or your values. There will be no giving up because we’re going to vanquish the intimidating demon together.

Teaching is rewarding work. It’s fun, it’s interesting, and we get to know a lot of people. This book is about giving you the freedom to stretch your potential and enjoy your chosen field of work. Together we’re going to eradicate the core of intimidation, and re-establish your self-worth so you can prosper in a worthy profession.

The demon under your bed

As intellectual adults, we know demons don’t exist. However, they can become real. I’ve met them myself lurking in every corner of my teaching career. Shutting the door on them took a lot of dogged courage. I’m sure you will share my feelings when I say…

We don’t want any demons here.

The only way to get rid of them is to stop scaring yourself about what might, could, or has already happened. For example, no