Pro-rated months vs Alternating Pay Schedules

[MasterKiller]

I generally pro-rate the first month, depending on how many classes are left, because it's just easier for me to make everyone pay at the same time my rent is due.

But sometimes I think I'm passing up good money by not charging students for a full first month, regardless of start date, and keeping track of their due dates. I keep all my books on a custom Excel spreadsheet, so I could easily track whenever anyone owes me, but I'm afraid I would spend a lot of extra time chasing people down.

I'm not big enough to really worry about automatic deducts, or anything like that.

[Shaolin]

I used to do the exact same thing. Excel is okay if you're just starting out and need cheap accounting software. As you grow your school, you need to expand your accounting department (so to speak). Invest in quick books; it'll cost you at first but it's worth it; you'll be able to accurately keep better track of your money and inventory. Next, STOP pro rating people! Think of it this way, when you give away lessons for free you're just whoring yourself out. You have a specialty service you're providing and should get paid to do so. Did your teacher give you anything for free or did he make you earn it. Second, if you were to add up all the pro rated fees you throw away (because that's what you're doing) for the year you'd probably have enough to have a 2-4 month cushion in a savings account that you could use for when times are slow or purchasing more equipment or expanding your school or hiring an assistant/accountant so you can work on more important things. Next, it may seem easier on you to have all your monies come in around rent time but is it the most convenient for your students. They have other bills besides you and maybe could use some flexibility. Hypothetical; a student needs to stop for a couple of weeks because their tuition date conflicts with another bill, now you're in a pickle. You don't want the student to take a break because 95% of students that "take time off" never return. Your other option is to eat the month and then add that tuition to next months bill or string it out over several months until they're paid up, then what if they still quit in that time, you're still out the month you gave them. Also, as your business grows you're going to need and want a consistent income and not have to put projects or events on hold until the first of the month because that's when you get paid. You're setting yourself up to operate paycheck to paycheck and you won't survive long because of it or you will survive but just be broke all the time.

Have options for your students: set up so they can pay you with credit/debit card, EFT, cash/check (make sure you charge them $25 for an NSF cause that's what the bank is going to charge you). I also recommend charging a $10 late fee if tuition is more than 5 business days late, it sounds mean but your landlord is going to charge you if you're late with his/her money. You may not think you're "big enough" now to get started on some of these payment options yet but it'll be easier to get started now while you're small so this way you're in the habit of doing so and no one will try to take advatage of you like trying to cut deals for lower tuition costs. And, when you feel you are big enough to do so it may be harder to get your older students to switch to another payment method.

Hope this helps.

[Mas Judt]

What he said.

When running a basement gym, you can be flexible.

When running a business, it is a matter of respect and discipline. As quickly as you can automate payments (without using a billing company), the better off you are.

I've been dancing around opening up a gym for a while, and now with the mini-depression looming, I think the time may be right (rents are VERY negotiable now). But at that point, it is a business.

And because it is a business, you must ask people to be fair to you too.

And remember, a bird in hand is worth two in the bush.

[lkfmdc]

1. you charge a full month up front, you increase your cash flow

2. you have people paying all through the month, you have cash flow ALL MONTH

3. "pro rating" seems like a "deal"and then everyone wants to negotiate

I had a guy last night try and negotiate my rate, I told him flat out "sorry, these rates are not negotiable, you just have to decide whether you want to do this or not"

As an added fun note, he was like a lot of the "let's make a deal crowd" - he's in some G'd aweful McDojo where he admits he isn't learning crap but he has a belt so he wants to stay there :confused: so he wants to train with me for basicly nothing so he can get good :rolleyes: disrespect all around - he can you know what himself really

[Mas Judt]

I've seen only two types of students that really do well:

Guys who are already established, decent martial artists looking to expand, repair, improve or supplement their toolbox.

Completely new folks.

The mid-range dojo rats are often not worth the fee they pay, as they are disruptive time sinks with heads full of strange ideas that they want to impose on everyone around them.

We need a special school for them: 'Team Self Esteem' - where you can go around feeling good about yourself even though you have accomplished nothing.

[lkfmdc]

I've seen only two types of students that really do well:

Guys who are already established, decent martial artists looking to expand, repair, improve or supplement their toolbox.

Completely new folks.

The mid-range dojo rats are often not worth the fee they pay, as they are disruptive time sinks with heads full of strange ideas that they want to impose on everyone around them.

We need a special school for them: 'Team Self Esteem' - where you can go around feeling good about yourself even though you have accomplished nothing.

what he just said +100

[Mas Judt]

Andy,
I am very lucky right now as my gym is private. Team Self Esteem never gets in the door, unless I think they might have some hope. My club is small, and only contains folks who are dedicated - all others are encouraged to leave or self eject.

On the other hand, it is 'open' to skilled players of all sorts, it is not like we are secretive or anything, just my teaching time is limited and it cheats the good students to tolerate the self obsessed.

On the other hand, I have strategies for managing this when I do open a public school. Just because someone has their head up their posterior, does not mean it can't be removed.

[KC Elbows]

On the other hand, I have strategies for managing this when I do open a public school. Just because someone has their head up their posterior, does not mean it can't be removed.

Would that be a back door disciple?

Great thread, guys. Taking serious notes here.

[David Jamieson]

Would that be a back door disciple?

Great thread, guys. Taking serious notes here.

pssst copying and pasting is easier. lol