Tip Top, Top Cat
‘Look after the pennies then the pounds will look after themselves’. But, in reality, you have to be a little more proactive
As ADIs, we seem to spend much of our time paying full price for everything, whether for fuel, insurance, shopping, servicing, car payments, and so much more. Partly it’s the nature of a niche industry and busy working, but also a failure to realise the bargaining potential we have and that different suppliers are continuously competing against each other for your business, and that means offers and discounts. If you’re canny and regularly spend a little time being clever with your purchasing power, you’ll find you don’t have to pay full whack to run your business. You can save money, raise your profit margins, and this can add up to provide a better holiday, or working fewer hours, or any manner of improving your work life balance.
Prices & Profits
As an ADI, I believe I deliver tuition which is worth the £30ph that I charge. However, if I wish to increase my turnover (who doesn’t?), I could raise my lesson rate, but this can be difficult when I am already a premium price in my area where the general rate is £25ph. Also, a higher rate per hour does not automatically increase your profit margin. For example, if I increase my hourly rate to say, £35ph, there is a strong probability tat I’ll end up with fewer pupils, reducing my turnover, yet I still have my monthly outgoings to pay, and the net result is a drop-in profit. However, if I can reduce my monthly business costs, then I don’t need to raise my rate and the profit margin increases – happy pupils, even happier me.
Over the years since founding and running ADI Network, I have discovered many ways ADIs can save money and improve their profit margins, but without having to raise their hourly rates or worrying whether their specific area will tolerate paying higher lesson prices. Over the coming months I aim to share these money saving tips in Intelligent Instructor (running alongside my regular blogs and comments through ADI Network. For example, Tesco currently have an offer that can save you £5 off a 50ltr fill up. You simply buy £60 worth of goods in store (a weekly grocery shop?), and receive a voucher saving you 10p a litre off your next trip to the pump.
Routes & Destinations
But it’s not all about saving hard cash. Saving time can be an equally important factor in determining your nett profit for the year. Utilising more efficient diary management, accounting, payments and bookings from pupils, all add up to more hours you can teach, and more hours teaching equals more revenue. Often it is very simple, quick changes to the way you go about your business that can add up to make big differences to the success of your business. This has been the motivator behind the ADI Networks successful ‘Benefits Package’, and all directly through my personal experience as an ADI. It’s not rocket science, but it’s served me well, and I believe it can do the same for you.