Reducing Costs in the Teaching Studio

by John M. Zeigler, Ph.D.
Rio Rancho, NM USA

It's both hard and undesirable to skimp on the quality of the lessons a teacher provides, but running a teaching studio has a lot more costs associated with it than just giving the lessons. Printing of newsletters and other informational documents, buying supplies and music, piano tuning, advertising, paying for refreshments and hall space for recitals, and many other aspects of running a studio consume time and money. In this article, I'll discuss many different tips for reducing the costs associated with running your studio, at least some of which should be applicable in most studios. You'll still have to give lessons, but, if you take some of these tips, you'll make more money!

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Tuning

Regular piano tuning can run to a couple hundred dollars a year. It may be difficult to get your tuner to give you a discount (though it is certainly worth asking!), but, when you find one you like, consider proposing that you recommend that tuner to your students and fellow teachers for their tunings in return for a discount on your tunings or, even, a free tuning. Most towns have more than one qualified tuner or technician, so this approach can benefit both of you. Your local music teachers organization may have also made similar arrangements for its members, so check with them. It might make membership worthwhile for that reason alone.

Printing and Copying

Printing of newsletters, studio policies, exercise sheets which you have devised, recital programs etc. can run several hundred dollars a year. Sadly, most of these are lost or discarded shortly after they are given to students. Fortunately, this is an area which lends itself to help in these days of ubiquitous computers and fast Internet connections. Well over 80% of people have an Internet connection in the home and most of the remainder can access the Internet at various public facilities. Even those people who don't have an e-mail account can get free Web-mail from AOL, Google, Yahoo and many others, if they happen to access the Internet from a public facility. Thus, one way or another, the great majority of your students have access to e-mail.

The studio newsletter is a great medium for communicating with busy parents and students. Strongly consider delivering it by e-mail, which costs nothing. E-mail delivery of the newsletter has the advantage that you waste no money on those who don't read it, even though they should; those few who want a hard copy can simply print it themselves at their own expense. Since all modern e-mail clients provide easy-to-use tools for composing HTML e-mail, your newsletter can look the same as if you had spent money on printing and postage, but it will cost you nothing, aside from your time, to produce and distribute.

If you use a desktop publishing program to produce the newsletter, you can save the newsletter in HTML format directly from the File,Save As... menu. You don't have to know any of the arcane mechanics of HTML. Once the file is saved, simply attach it, along with any graphics files the newsletter may need, to e-mail. Having the newsletter in HTML format is particularly valuable if you have a studio web site, because you can then offer it online to anybody who comes to the site looking for a teacher.

For those few clients who don't have e-mail access, you can print a few copies and distribute them in the studio. The newsletter is also a great document to give to prospective clients. Since you save both postage and paper costs using e-mail, the cost savings add up quickly.

Be Acrobat-ic!

Many teachers create specialized learning materials for their students (worksheets, music, etc.), as well as important studio documents like a studio policy. The teacher must then pay for copying these documents, while dealing with cases where students lose the hard copy. Here again, your computer can be a great help in reducing this cost. Since the specific appearance of these learning materials is often critical, you may not be able to translate them easily and sufficiently faithfully into HTML for transmission by e-mail or viewing over the web. Fortunately there is another, very good, option. Most people who surf the Web are familiar with Adobe Acrobat .PDF (Portable Document Format) files, which faithfully recreate virtually any document in a form that can be read and printed directly on the web or offline, by any computer. The free Reader program which allows one to read these documents is offered for the download from the Adobe site. It is regularly updated by Adobe.

To create the PDF files, you can buy a copy of Adobe Acrobat. This program has all the powerful functionality that regular users of .PDF files might want, but at a cost of $300 or more. However, if you just want to create an occasional .PDF document, Adobe has a free online .PDF converter available, so you don't really need to buy Acrobat. You can also download several free programs from places like shareware.com and download.com that allow you to create .PDF files directly. These programs mostly work as printer drivers (i.e. you print to them as if they were printers, creating the .PDF file on your hard disk instead of actually printing to a physical printer) and do a good job of conversion. Just search those sites with the terms "Adobe PDF" to find the programs.

Once you have your materials in .PDF format, you can do a lot of things with them. They are readily attached to e-mail, so you can send them to clients parents for printing at home. You can also offer them on a studio web site, if you have one. One of the virtues of this approach is that you not only avoid the duplication costs, but, if the student "loses" their copy the parent can always go back to the e-mail or web site, or send you an e-mail, to get another copy. This pretty much takes care of "the dog ate it" excuse.

PDF documents have become the de facto standard for transmission of complexly formatted documents over the web. As long as your student or their parent has the free Reader program on their computer, they can read and print as many copies of the PDF document as they need. There are provisions in the PDF format for copyright notices and rights protection, so PDF documents are secure in that sense, too. (In the interest of full disclosure, let it be noted that the author has no financial interest in Adobe or any other PDF-related product, company or service).

Performance Spaces

Most studios conduct regular studio recitals, once or twice a year. If you have a small client base (under 20 or so), chances are you can squeeze people into the room you use for teaching. If the teaching space is small or you have a large studio, you may have to rent a larger space for these recitals, at considerable cost. There are some other options, however. Many of the larger local music teacher associations have permanent spaces which they will allow members to use for free or at a substantial discount over the prices of other halls. Another good possibility is a local nursing home or hospitable. Many nursing homes have large spaces which you can use for free in return for giving a free concert (i.e. the studio recital) to its residents. The church of which you are a member may also be willing to rent its space to you at a reduced cost. Of course, you can also recoup some of these costs by charging clients a fee for participation in the recital.

Music and Learning Materials Purchases

Many music stores will give music teachers a discount for the asking. This typically ranges from 10-25%. If you use a lot of some specific method materials, you can save yourself and your students some money by buying them in some bulk with your discount, then reselling them to students at below the price charged at the music store. If you happen to live in a smaller town where there is little or no competition for music customers, with the result that you can't get a discount, check out online sources. These are usually cheaper than local stores and often give teachers discounts as well. Academic Superstore is just one example of an online source with substantial general music offerings that discounts substantially (up to 50%) for teachers. Patti Music Company is a specialist offering substantially discounted prices to all its customers, though there are others, as well.

Check with your local music teachers association to see if they have arranged for member discounts for tuning and music learning materials. Most providers of services and materials won't discount for individual teachers, though there are some exceptions, but will almost always discount for members of a group of teachers - in exchange for a leg up on that chunk of business. If your local group hasn't made such arrangements, then pester them to do so!  This is one of the most valuable and cheapest to provide services that a teachers organization can offer as an incentive for membership. It costs the organization nothing and most relevant sellers are willing to cut such deals for the asking. You just have to make some phone calls.

Loaned Materials

Many teachers maintain a "loaning library" of videos, audio CD's, music and method materials, which students can use free of charge on a loan basis. This is a great idea, as it saves students money buying these items and the teacher time in instructing people what to get for themselves. Unfortunately, sometimes students leave the studio without returning loaned items, or lose them, or damage them beyond use. This can become an expensive burden for the teacher quickly.

If you loan materials to students and their parents, you can reduce your costs due to loss of such materials by charging a refundable "materials fee." If the student returns all borrowed items in good condition, the entire fee is returned. If not, the teacher deducts from the fee to cover the cost of the materials. From personal experience, we have found that this approach not only reduces losses dramatically, but saves the teacher several hundred dollars a year in covering those losses.

Activity Costs

Most teachers feel obliged to have various parties, studio concerts and other mixed business/social affairs in the course of their business. Some of these costs are probably best viewed as irreducible "costs of doing business," (e.g. Christmas parties) for which the teacher must pay most or all of the costs. Others present costs which can reasonably be shifted or reduced. For example, studio recitals can be turned into "pitch-in" events, in which the music is followed by food brought by the parents of the participants. These are fun. Asking parents to bring a single dish to such an event is not an unreasonable burden for most. For those few who feel that such a request is a burden, bringing drinks or purchased snacks is a good option. Alternatively, you can bypass some of the cost associated with having such events by charging a non-refundable "activity fee." Either approach will reduce your cost to put on these affairs.

Advertising and Publicity

Even if your studio is full with a waiting list, you should consider doing some advertising, since there is so much turnover in student populations that it is easy to find yourself in a situation where your studio is no longer full. In our experience, the two best sources for students are a Yellow Pages ad and a well-developed set of contacts with other teachers. If you don't know many teachers in your area, joining the local music teachers association is a good way to meet them and establish relationships. Chances are that you won't be able to negotiate much with the Yellow Pages people on price, so try to make your ad as visible as possible at the most reasonable cost.

One way that you can save money on acquiring students is to suggest to your local music teachers association that they start a "referral service" for new piano students. The association then pays for the Yellow Pages ad and the member teacher who runs it for the association takes the responsibility for seeing to it that students are directed equitably to all those teachers who have openings in their studios. We have found this approach very effective locally and it incurs no direct cost for the member teachers.

If the local music teachers association has a web site, make sure that it carries a referral list on the site for all its members. It is simple to set up and requires relatively little maintenance for the typical local music teachers association. The referral list should include the teachers' names, phone numbers, street location, e-mail addresses and web site URL's (if any), at a minimum.

As we have said in our series of articles on Establishing a Studio Web Site, a studio web site can be a great tool for publicizing your studio and communicating with your clients. Most teachers can write the site themselves (see the series previously mentioned for detailed instructions), using a desktop publishing program, a browser suite  that has an integrated composer tool, or even your word processor. Since most ISP's will allocate a certain amount of free space to each customer for a personal or business web site, serving the site's files can also be free. The uses of a good site for publicity and communication are so numerous that we can't list them all here. If you can write the site yourself (most people can), you can't beat the cost of this form of publicity.

Utilities

Controlling utility costs is useful for anybody, whether or not they teach piano. However, unlike many people, most piano teachers work out of the home, so they can't simply turn the furnace or air conditioner off during the day while they are at work. In these days of high energy prices, probably the single biggest thing you can do to help control your natural gas and electric costs is to install a programmable thermostat. These run from $25-70, depending on how many "bells and whistles" you want. They make sure that the thermostat is always turned down at night and turned up again when you get up. You can also use a programmable thermostat to set a different temperature for times when you're not teaching, than for times when you are. Most people can follow the directions included with the thermostat to install it, which requires little more than a screwdriver to accomplish. You can find them at just about any hardware store. Chances are good that you can recoup the price of the thermostat through lower heating or cooling costs in as little as 1 month. Of course, there are many other power-saving steps you can take. Most local utilities will provide you with a free list of things like weather stripping that you can do to cut your power and heat bills.

If you're like most teachers these days, chances are good that you have many services coming into your home - telephone, broadband Internet, cable or satellite TV, cell phone and more. If that situation is similar to yours, then check into the possibility of "bundling" those services. Bundling allows one bill to include all or many of those services, often at substantial discounts. Typically, phone companies are most aggressive in setting up bundling of services, though some other providers do it as well.

Tax Benefits

While I don't claim to be an expert on tax law, there are several legal ways you can recoup some of your costs through legal tax write-offs. Even if you don't do your own taxes, you can pass on this information to your accountant or whoever does your taxes. The effect of these deductions (usually filed on Schedule C of your U.S. Form 1040) can be to reduce your taxable income and, thereby, your tax burden. Of course, such reductions in your Federal Adjusted Gross Income (AGI) also mean smaller reductions in state and local taxes as well, since they usually use the Federal AGI as a starting point for calculation.

It is well known that most people who operate a business out of their homes, as many piano teachers do, can deduct a pro-rated amount (usually based on area) for room(s) used primarily for a business. A separate outside entrance to the room is no longer a requirement. You can also deduct a pro-rated amount for power, the cost of a second business-use phone line (but not the home line), and other utilities that serve the business, as well as the home. You must keep good records of the expenditures (e.g. utility bills) to claim the home office deduction.

Most people are also aware that they can deduct the cost of big ticket business items (like a piano) by depreciating their value over a period of years. This involves more paperwork at filing time, but you can download the necessary forms from the IRS site for free in PDF format (sound familiar?). There is no need to pay for the forms, so long as you know what you need. The ability to expense off a piano used primarily or entirely in a teaching studio can be a great advantage if you or your tax preparer are willing to keep the necessary records and do the paperwork at filing time.

A less well known and completely legal aspect of Federal tax law that is useful for many small businesses is the ability to expense off the full purchase price for capital-like equipment in the year of purchase (i.e. no depreciation to worry with) up to a limit of $22,500 a year (as of the last time I checked). Since most of us make large business-related purchases in good years when we have higher tax liability, this is a neat way to expense off things like computers, etc. that cost a sizable chunk of money, yet lose their value relatively quickly. Of course, you can only do one or the other - depreciate over time or deduct the full purchase price (up to the limit) in the year of purchase.

You can also usually deduct the cost of membership dues in professional organizations, business-related journals and books, and even some videos and CD music purchases, so long as an argument can be documented that they serve the purposes of the studio business and help generate income. There are many other deductions from taxable income that a piano studio may be able to take legally. The main requirements are that the deducted items must be clearly identifiable with generating business income, documented in writing in some form, correctly pro-rated, if necessary, and taken on the appropriate schedule (usually Schedule C), filed with your Federal Form 1040. Since tax laws are changed literally every year and only tax professionals keep up with all of the changes, consider the ideas in this article, insofar as they involve taxes, as suggestive of things you might want to investigate further with your accountant or whoever does your taxes.

Many teachers pay an accountant or tax service to do their taxes, usually at a cost of several hundred dollars per year. But, since you usually have to provide tallies of costs, income and deductions to the accountant anyway, you're still doing most of the work. You can save yourself a lot of money, perhaps ALL of it, by using tax software yourself. Such software uses an interview approach to find out what it needs to know to do your taxes, then produces all the necessary forms, without any mathematical errors, completely filled out for you to sign and send in. You can even save the cost of a stamp by using e-filing, a provided option in most of these programs. At least one program, TaxAct, is free to download, free to use, free to print the return and free to e-file the Federal return. The corresponding state forms are available for a small fee. There are a number of other good tax programs which you have to pay for if you use them to file, but are well worth the money, since they cost a tiny fraction of what using commercial tax preparation services cost. You can even get access to free software for tax filing from the IRS site. Since the Federal government has stopped sending the 1040 package to those who file their own paper returns, using such software has become even more attractive.

Garage Sales

If you enjoy shopping, but don't like to spend a lot of money doing it, garage sales may be just the ticket for all kinds of items useful in your studio. Although you never know what you'll find on a given day, music, piano method materials, learning software, older computers, books and videos are all common items at garage/yard sales. Typically, you can buy them at 10-15% of their original price (sometimes a LOT less), often in near pristine condition. It has been our experience that, if you mention you intend to use the items in teaching, people will give you an even better deal or, sometimes, simply give the item to you! Going to garage sales takes some time, but if you do it with some regularity because you enjoy it, you're just about guaranteed to find useful items at hard-to-beat prices. Of course, talking to people at garage sales is also a good way to get some free advertising for your studio, too.

Make Your Teacher's Group Count!

Because a group of teachers has more leverage to negotiate discounts than a single teacher, one of the best and most attractive things that a music teachers organization can do is to make an active effort to arrange discounts for their members. Discounts of 30-50% for services and 10-15% for music are commonplace. If your teacher organization isn't getting discounts for members, then find out why and start a program to do so! If it is, keep track of them and use them.

The Bottom Line

In the final analysis, a piano studio is a business, no matter how much you may love teaching. If you can't make a reasonable profit, you'll be out of business before very long or, at very least, become frustrated at not being able to make enough money from your hard work. Even if you don't teach as your sole source of income, chances are that you would like to make more money, as opposed to less. You can increase your net profit either by setting lesson fees higher or reducing costs. You'll certainly be more appreciated by your clients if you choose the latter course of action, than if you choose the former.