Service:
The service that I'd like to provide is guitar lessons in the local area. I want to start this business because in the past I've been very lucky to have several extremely good and devoted teachers and I'd personally love to educate others myself. I believe that I've been playing guitar long enough to feel confident teaching beginners or even quite proficient guitarists. I'd like my teaching to be informal and relaxed and mainly be focused on teaching technique and how to play songs rather than theory.
I'd prefer to travel to the houses of the people I teach as I think that learning in your home is a much nicer atmosphere than travelling to my house or a local space I'd have to hire out.
My mission statement is to provide high quality and fun guitar lessons at an affordable cost.
In order to stay true to that mission statement while still maximising profits I need to try and expand my business to more customers but I can also do some things on the side such as making some tuition material that I could sell or providing instrumental loans.
A different route I may also consider is being affiliated with a school instead.
Target Market:
I don't know of many people that would be entirely happy with being taught by someone vastly younger than them so to be honest I'd be aiming to teach children and teenagers instead of adults. My main target market would be students at local secondary schools and colleges but I would consider extending to primary schools and university students. Bearing in mind that I'd have to travel to them I'd probably only teach within a 15 mile radius of my house. If I wanted to work at a school instead I'd much prefer to work at a secondary school.
My local area, Haywards Heath, has two large secondary schools and several primary schools. Within a 5 mile radius there are at least 17 primary schools. There are two music shops, one that caters for a wide variety of genres including classical instruments and one which specialises in rock music and electric guitars. The noticeboards of two music shops are definitely a useful advertising space to have very nearby. Also there are very small venues in the nearby area.
There are some disadvantages however. My area isn't without competition, I know of several guitar teachers in the area already that run very successful business and there is also the aforementioned "Rok Skool" which could be a major competitor. Other things I have to keep in mind are travelling times and parking fees, which could run up extra costs.
I did some market research in the form of a 7 question survey, the answers of which are below:
The most popular way that people have learnt guitar in the past is by guitar lessons outside of school. People also use online tab websites a lot so maybe I could earn more money by making a website with very cheap high quality tab for people to download or something similar.
The most popular genre of music that people play is unsurprisingly rock by quite a large margin. This is a good thing for me as it is undoubtedly the genre I would feel most comfortable teaching.
50% of people live in my nearest town which is great as I'll spend less money on petrol that way. A lot of people live in Brighton however. Other responses showed people living in East Grinstead and Albourne which are both fairly local.
This is the most surprising result in my opinion. The majority of people would actually rather travel to me. I may not need to buy and maintain a car and could save thousands by finding a place to hire out such as a school.
Development:
As I'm aiming to travel to people I need to include the cost of getting a car in my budget. I have to buy a car, lessons and insurance which will cost a few thousand pounds. As I'm teaching teenagers in full time education, my working hours will need to be weekdays from about 4pm onwards, preferably early evening. I'd consider doing lessons on weekends and definitely during school holidays.
If I were to become affiliated with a school, I would teach 30 minute lessons throughout the entire school day. Lessons needn't be 1-2-1 either, my old secondary school used to have a similar system where two kids would be paired and be taught together. On the side, I could also run a "Rock Orchestra" that kids at the school could join. It's essentially a massive band with multiple guitarists and bassists. Parents would pay a termly fee and the kids would get to perform at school concerts. At £6.50 a week per kid for 90 minutes and the fact there can be between 15-20 kids, an extra £97.50-£130 per week is fairly profitable. Schools welcome after school activities as it enriches their students education.
There is a business in my area called Rok Skool where kids pay to have guitar lessons, get put in bands, write songs with people and play gigs. Another possible source of income from teaching guitar would be to try and get a job at a business like that. I think that the more sources of income I have from teaching guitar the better. I see no reason other than time management why I couldn't manage self-employment, working at a school and working at a rock school.
To grow as a business I'd get business cards and other advertisements to share and put on local noticeboards etc. I'd also try and market myself online by making a website, facebook page and twitter where I could easily advertise and communicate with people. I could also make posters which could be effective marketing. On Vistaprint.com, prices start at £9.99 excluding VAT for 250 business cards.
It may take time to set up the business before I even start teaching. If I wanted to start the ball rolling right now, it would take at least 5 months to get a car, learn to drive and pass my test. During that time frame I could prepare all my teaching material, set up my online presence and get all my business cards and ads together.
Legal Aspects:
If I want to work at a school I need to get a DBS check (used to be called CRB) so that I'm allowed to work with children. A standard DBS check costs £26. Also if I teach lessons at other people's houses, I need to get public liability insurance so that I'm covered if there are any accidental damages. The Incorporated Society of Musicians (ISM) costs £12 for a subscription if you're studying for a degree in any area of music, £65 if you've graduated, and £164 if you don't have a degree or diploma. The ISM offers 24/7 legal support and expenses cover for up to £100,000, tax support, advice and £10,000,000 public liability insurance and another £10,000,000 again for employers liability insurance. In order to have proper car insurance cover for my business, I need to get business car insurance. Typically this costs more than regular car insurance so i'll try and keep costs down by using a service like moneysupermarket.com to compare insurance rates. Also, as far as I know, costs can be lowered by having a box fitted in the car that monitors your speed so the insurance is lower if you don't travel at excessive speed.
Financial Aspects:
Aside from the initial cost of sorting myself out with a car, there's also the price of petrol itself that I'd have to buy. I'd have to buy a small portable amplifier to take with me and I'd probably consider buying a hard case for my guitar. I may need to buy guitar accessories such as cables, straps and guitar picks in case they get broken or lost during my lessons.
With that in mind, to turn a profit I'd charge £25 per hour for hourly lessons and £13.50 for half an hour. I'd try and include flexibility in my prices: regular customers would get every other week of hourly lessons for £20. If someone didn't want weekly lessons I could arrange biweekly lessons instead. I would make sure to let people know that any lesson cancellations within 24 hours will still cost full price as I think it's fair that I take precautions so I don't lose too much money.
The idea I discussed previously of working at a school is actually very profitable. Potentially I could teach 10 half hour lessons per day, 5 days a week, 36 weeks a year. If I organised a "Rock Orchestra" on top with 20 kids that adds up to £28,080 annual turnover.
If I earn under £32,010 per year, I'll have to pay 20% income tax to HMRC but if I manage to earn over that, I'll have to pay 40%. Furthermore, if I'm self employed, I'll need to pay class 2 and class 4 national insurance which amounts to £2.70 a week as well as 9% on profits between £7,755 and £41,450. If I do have an employer, If I earn between £149 and £797 a week, I have to pay 12% of that and if I earn over that I have to pay an extra 2% on those earnings.
It may be worth hiring an accountant to help me with all of this. According to an article in The Guardian newspaper, hiring an accountant for basic book-keeping and sorting simple tax affairs shouldn't cost more than £200-£300 per year.
Business Proposal:
This is a link to a thorough business plan that should be donwloaded because it looks terrible in mediafire. It shows a 5 year projection of the business, my yearly incomings and outgoings and shows final yearly profit for each year.
