So far in this series on scheduling and curriculum design, we've discussed the importance of scalability, and the three factors that limit your ability to scale your business. 

We also discussed how instructors make things harder on themselves than they have to, and why efficient scheduling contributes to keeping your clients happy.

As I wrote last week, your ability to keep your customers happy revolves around three factors:

Today we're going to discuss the third factor, price, and how it impacts efficient class scheduling.

How Price Influences Your Scheduling

So, you might be wondering how your prices can possibly have an impact on your class schedule. The explanation is that simple math and economics are at work in how your price influences your scheduling, or vice versa. 

Here's why...

If you only have so many hours in the day to teach in, that means you only have so many classes you can teach each day. And since you're also limited by how many students you can comfortably teach at once, that means you have a finite number of students you can teach in each class.*

It's simple math. You can only teach so many students in your school at a time. And while the numbers may vary from school to school and from owner to owner, it's still an undeniable fact that every school owner must work within a numerical limitation on enrollment.

How This Works Out In Real Time

Let's just say that, because of your day job and other factors, you've determined that you need to schedule classes between 6 pm and 9 pm each night. And, let's say that you decide to make your kid's classes 60 minutes long, and your adults classes 90 minutes long.

That means you can only fit in one children's class and one adult class each night. With most students attending 2-3 classes a week, and your main instructional classes falling on Monday through Thursday, that leaves you with only four class blocks to assign students to:

• Mon/Wed children
  
• Mon/Wed adults
  
• Tues/Thurs children
  
• Tues/Thurs adults
  

If you have an average-sized school, and you are an average instructor, you'll be able to accommodate about 15 students in each class:

• 15 students x 4 class blocks = a capacity of 60 students with that schedule
  

Now, let's multiply that 60 student max capacity by a $125 average tuition:

• 60 x $125 = $7,500 per month
  

Even at a 50% profit margin (quite achievable if you set your school up the Small Dojo Big profits way), that means you're limiting your income to $3,750 a month, or $45,000 a year.

When Things Go Wrong... And They Will

Now, for some that might be a reasonably decent income, but hear me out. You will never operate at capacity all the time, because you're going to lose students every month, and you'll be replacing those students all the time. Plus, in certain months you'll lose more students.

For example, if you lose ten students in May that means your revenue will drop by $1,250 bucks. That doesn't sound so bad, does it?

Hang on a minute, because it's worse than it sounds.

Since most of your expenses early on in your school's growth will be fixed (meaning they don't fluctuate as business volume increases), your income will likely also drop by that much because you still have to cover the same amount of expenses, even though your total revenue (gross profit) has dropped.

So, now you're only making $2,500 a month, or the yearly equivalent of $30,000 a year before taxes. Sure, your income will probably jump back up in a month or two, but at that income level those fluctuations suck.

Pretty soon you're using credit cards to make up the difference during those "rough months." That just makes things worse, because now you have a large credit card bill to pay, and the next time you have a dip in your revenues at the dojo you're that much worse off.

Before long, you find yourself burned out and depressed, and you're ready to give up your dream of teaching full-time and running a dojo.

A Slightly Different Scenario

But, let's say for a moment that you design your schedule in a way that allows you to double your capacity to 120 students. Let's run those numbers again based on that level of enrollment:

• 120 students x $125 tuition = $15,000 in gross revenue a month
  
• $15,000 a month gross revenue - $5,000 overhead** = $10,000 a month profit
  

At $10,000 a month profit, if your income dips $1,000 or $1,500 in a month due to having a bad month with more students dropping out, it doesn't hurt nearly as much as when you're only profiting $4,000 a month.

Now, do you see why it's so important that you're able to scale your business up and get your enrollment above 100 students (and preferably at 150-175 year round)?

Coming Next...

In the next several installments of this email series, I'm going to go into efficient class scheduling. And, I'm going to discuss efficient curriculum design as well. Stay tuned.