Why Piano Teachers Can’t Afford to be Employed: Expecting more and investing in yourself

More and more, piano teachers are choosing employment with community music schools over self-employment as independent teachers. For them, the lure of income stability, sustainable student-flow, and administrative ease outweighs the uncertainty and risks of independent teaching.

As a result, community music schools are attracting droves of fine, qualified teachers and their programs are thriving, built on the successes of extensive marketing, broad program offerings, and established credibility.

But, can piano teachers really afford to be employed?

The high costs of employment stem from the model of contract teaching which inflates tuition rates, increases teacher turnover, and reduces teacher pay through commission rates, non-compete agreements, and program overheads, negatively impacting student development and continuity.

 So, why are piano teachers seeking employment?

The answers vary among teachers, but most are drawn towards employment by its stability and security. Some misinterpret the viability of self-employed teaching and others simply lack the business, marketing, and entrepreneurial skills necessary to establish an independent studio.

Employment isn’t always a bad thing; it’s how many piano teachers get their start and admittedly, music schools often play an important role in connecting communities to arts education, development, and performance.

But the accessibility of small-business resources providing website, marketing, and financial services make self-employed piano teaching more viable and financially rewarding than ever before. Moreover, independent piano teaching from a home studio has high reward potential with little investment risk.

In fact, self-employed piano teachers can earn higher salaries, enjoy greater schedule flexibility, and achieve superior job satisfaction while offering exceptional instruction at a lower cost than employed teachers.

Commission Rates and Tuition Inflation

Commission rates create a problem for both teacher and student by reducing teacher pay and inflating student tuition. On average, employed teachers pay between 25% and 35% in commission rates for the use of studio facilities, instruments, administration, marketing, and advertising, costing full-time teachers between $8,000 and $12,000 per year and raising student tuition by 20-25%.

Most piano teachers earn about $900 per year for every thirty-minute, private student. That equals about $45,000 in gross annual income and nearly $34,650 in net annual income when applied to a full teaching load of fifty students.[i]

Self-Employed Piano Teaching

Gross Income

Taxes

Net Income

$45,000

23%

$34,650

The following table examines commission rates of 25, 30, and 35 percent applied to the same annual teacher earnings of $45,000:

Employed Piano Teaching

Earnings

Commission Rates

Gross Income

Taxes

Net Income

$45,000

25%

$33,750

23%

$25,987

$45,000

30%

$31,500

23%

$24,355

$45,000

35%

$29,250

23%

$22,522

This table reveals that full-time employed piano teachers paying a 35% commission rate earn almost $12,000 less than self-employed teachers; around $10,000 less with a 30% commission rate; and nearly $8,000 less with a 25% commission rate, equaling a total loss of about $50,000 every five years and $100,000 every ten years.

Consider that most self-employed piano teachers with thirty students earn about $21,000 in net income while employed teachers with forty-five students and paying a commission rate of 35% earn about $20,000 in net annual income. Meaning that for about two-thirds the amount of teaching, self-employed piano teachers earn more per year than employed teachers.

Non-Compete Agreements

A non-compete agreement is a legally binding contract between employer and employee that prohibits the latter from pursuing certain teaching ventures during and after their term of employment. Meaning, employed piano teachers may not pursue or maintain profitable relationships with clients of the employer after the termination of employment. Non-compete agreements often preclude teachers from teaching from home or for another studio throughout the term of employment.

Deservedly, employers should retain students after the termination of their employees; however, contractual agreements that prevent teachers from pursuing supplemental, non-competing teaching ventures during employment encroaches upon the teachers’ right to work.

Equitable non-compete agreements are plausible. They foster successful programs and teachers through partnership and longevity, not just regulation.

Schedule Constraints

Fixed hours, compulsory loads, and weekend responsibilities are all common challenges of employed piano teaching; sometimes, avoiding evening and weekend teaching is difficult and reducing teaching loads can be impossible.

Self-employed piano teaching, on the other hand, provides the freedom to choose whether to schedule Saturday teaching, how late to teach in the evenings, and when to practice, learn, or to spend time with family. The point may seem overstated, but the jewel of self-employment rests in its autonomy to freely pursue family, work, and leisure.

Invest in Yourself, Not Someone Else

The saying is true, “It takes money to make money,” and piano teachers prove it by either paying thousands of dollars in studio commission rates or a few hundred dollars in studio investments.

Due to the accessibility of small-business resources offering effective, affordable marketing and advertising services, piano teachers can choose to invest in themselves rather than someone else.

The popularity of social media provides easy-to-use marketing tools that engage current and potential students for not cost at all. Using Facebook, teachers can post studio news, share photos, list student achievements, and highlight events. Social media marketing is highly effective because it utilizes the power of peer sharing, known as online word-of-mouth advertising. It’s a free and effective first step towards studio
 marketing.

Online teacher directories provide inexpensive, professional advertising on the web. Lesson Rating, Piano Teachers Directory, Piano Teachers, Online Yellow Pages, and Thumbtack offer their services for between $4.99 and $99 per year. Teachers can post photos, tuition rates, and contact information in professional teacher profiles that appear in regional online search results. Teacher directories offer an affordable
means to productive online advertising for piano teachers.[ii]

Google Adwords offers customizable online advertising campaigns that reach customers in targeted geographical and demographic regions. Ads are listed on Google search results, meaning, your studio reaches hundreds of potential customers every day. Users set their own budget and pay per click. Ads can link to a studio website, Facebook page, or blog.[iii]

Creating a studio website is essential and it doesn’t have to be overwhelming or expensive. WordPress offers appealing, free blog-sites; web-builders like Volusion and Moonfruit provide professional, customizable website templates for $15 to $199 per month; and WordPress Premium Themes and Elegant WordPress Themes offer sophisticated business web-templates for $39-$99.[iv]

Teacher Co-ops

What if piano teachers decided to work together instead of working for someone else? What if they combined their experiences, resources, and finances to make independent piano teaching even more viable and financially rewarding?

Imagine that three independent piano teachers decide to form a teacher co-op named City Piano Academy in which they remain self-employed and teach from home. Individually, they gross approximately $22,500 in net annual income and teach about twenty-five students.

They begin by contributing 4% of their annual net income, equaling $700 individually and $2,100 combined, on marketing and advertising efforts. They spend $150 on online teacher directories, $70 on a domain name and website hosting, set a $50 monthly budget for Google Adwords advertising, spend $39 on an Elegant WordPress Theme, and hire a graphic designer to create a studio logo for $200. Next, they spend $400 on SEO, search engine optimization, to improve their search result ranking on Google, Yahoo, and others.

By the end of year one, City Piano Academy has spent $1,459 on marketing and advertising and the remaining $600 investment is refunded to the teachers. Online marketing efforts attract thirty new students, meaning each teacher gains ten new students and $9,000 more in gross annual income. Now, all three teachers earn $31,500 in gross annual income from thirty-five students apiece.

During year two, the teachers decide to reduce annual contributions to 2%, equaling $485 individually and $1455 combined and covering $150 for online teacher directories, $70 for domain name and hosting renewal, and an increased budget for Google Adwords advertising that includes new campaigns for $100 per month.

By the end of year two, City Piano Academy has added thirty additional students, bringing individual teacher earnings to $40,500 from forty-five students per teacher. Satisfied, the co-op decides to reduce contributions to the minimum investment necessary to maintain website hosting, which is $23.50 individually and $70 combined. From this point forward, the teachers decide if and when to reinitiate aggressive marketing and advertising efforts.

City Piano Academy exemplifies the power of collaboration and of investing in one’s self, not someone else. Individually, these teachers never invested more than $500 in a single year nor did their three-year total ever exceed $1,100. These teachers saved thousands of dollars by avoiding commission rates and non-compete agreements. They also kept student tuition low by avoiding overhead, facility, and administrative expenses.

Summary

Employment isn’t always a bad thing, but the model of contract piano teaching has inflated student tuition, increased teacher turnover, and reduced teacher pay. Commission rates, non-compete agreements, and schedule constraints contribute to the problem. The accessibility of effective, affordable small-business resources makes independent piano teaching more viable and financially rewarding than ever before. It has some of the lowest risk and highest reward potential of any small-business investment. It’s time for piano teachers to expect more. It’s time to invest in yourself, not someone else.


[i] Taxes vary widely. Seven states have no income tax at all whereas the average is between 5% and 7%. Federal income taxes are typically 15% and self-employment taxes, which include social security and Medicare, are 12-15%. Most employed workers filing W-2 forms pay about 20% in annual taxes; self-employed workers pay between 15% and 30%.

[iii] Google Adwords can be located at http://www.google.com/adwords.