Intelligent Instructor is proud to have brought together industry and business experts to produce ‘The Ultimate Guide to Running a Driving Instructor Business’.

This FREE  64-page guide, in association with Drive-Up Training, will support you in running a business the way you always dreamt it could be.

Over nine weeks, we are publishing a selection of the articles in this guide.

This week, Dan Hill, Founder and MD of MyDriveTime, discusses the importance setting your lesson rates when making a success of your driving school business.


 

 

The Price Is Right

There is no need to guess about – or be anxious about – setting the right price for your product, based on the value you offer.

If you’re familiar with the famous 1980s TV show, you’ll know that there was a lot of guessing involved. However, whilst deciding on the right price for your time and skills might seem tough, there is definitely no need to guess
as a driving instructor.

Setting the price you charge for your time is, in my view, THE most important decision you’ll make as an instructor. There are certainly contributing factors, such as your area, qualifications, experience and even how shiny your car is. But it’s all secondary to the price you charge being right, because it’s crucial that your business is sustainable and enables you to reach your targets.

It’s understandable why most instructors are anxious about setting their price, but there’s absolutely no need to be. Because there’s no need to guess. The market will tell you. Here are three key elements that will help you set the right price for your business:

A ‘Business Owner’ Mindset

Most instructors don’t hail from a business management background and struggle with ‘pricing’; both how much to charge and how much to pay for the services they need to support their work.

This is largely because they think like a consumer – focusing solely on the cost of things – rather than like a business owner who focuses on the value of things.

Instead, consider every purchase as a potential investment. Will this purchase benefit your business by adding value to it? Or will the cost of this investment outweigh the benefit?

If the benefit outweighs the costs, then invest – the net effect is a positive one. If the cost outweighs the benefit, then it’s probably not worth it. And remember, ‘benefits’ come in many forms – enabling you to do and earn more, or making you happier or saving you time and hassle.

Another common mistake is for instructors to base their price on their own sense of self-worth as a person. It’s important to get your mindset right here too. It’s easy to believe customers will judge your driving school based on you – your personality and your friendship – but they won’t. They will buy the service that your business is selling – your skills and expertise. You just happen to be the one delivering it.

Remember, while it always helps to be a lovely person – especially for referrals – your potential customers are judging your price on the skills and service your business provides, not on your personality.

Market Position

You get to choose where you position your service in your local market. Do you provide a premium or a budget service, or somewhere in between?

Providing the highest quality service will appeal to those who value quality, and they’ll gladly pay for it. It will cost you more to run though, so you must charge a top rate to make it sustainable and to make enough profit to pay yourself.

Providing a budget service can work too, but you’ll need to charge a lower rate to attract business.  It’ll cost less to run, meaning there’s still profit
here, but you’ll be beholden to those with a higher market position moving forward, unless you choose to enhance the quality of your service.

“Be the best you can be and hold yourself to high standards”

We all want higher standards in our industry, and my guess is that if you’re reading this guide, you’re aspirational and will want to strive for more, so be the best you can be and hold yourself to high standards of vehicle cleanliness, punctuality for lessons, and keeping thorough records of progress, in a digital format, that can be analysed and shared with students.

Don’t let your market position slip through complacency. Always be looking for ways to improve the value for money your students pay, and you can charge more for your time.

Supply & Demand

Customers will either buy your time for the price you quote, or they won’t. They will decide if you’re charging too much or too little, so let the ‘demand’ dictate how much you can charge for your ‘supply’.

The next time the phone rings, quote a higher rate. If they book in, then you’ve just earned extra money for no extra cost. Over the course of a year, that difference can pay for a family holiday, while in the eyes of your students, it’s an extra pound or two a week.

And if they start turning away, consider reducing it
until you hit the maximum accepted price, then consider what more you could offer.

Ultimately, there’s a continuous demand out there, and you’ve worked hard to supply your expertise. Don’t sell yourself short by not charging enough for your service.

 

 

Dan Hill, Founder and MD of MyDriveTime

 

Next week, Tom Stenson from Drive Up Training discusses getting your marketing in the right place, especially online.