In our interest-led learning environment, we foster collaboration by holding monthly brainstorming sessions to decide how to use our monthly budget. The kids have access to a set amount each month, and when they have things they want to do that exceed that amount, they plan fundraisers. Twice this year, that has meant lemonade stands.
The first lemonade stand was somewhat on a whim. One of the oldest students had the idea, and basically ran it with two friends. They made the lemonade and the signs, set it up, and after the stand had been operating for fifteen minutes, the rest of the students got wind of the event and showed up to help. This group of “helpers” had been playing Minecraft while the three girls had done all the work of creating the stand. I thought we were about to have a real-life Little Red Hen lesson.
The lemonade stand was successful, and after closing up shop, the three founder girls came to ask me if they could keep the money personally since they did “all of the work.”
This is an excellent example of why your tuition rates for your microschool or educational service need to align with your own needs and values. As an educator, only you know the effort it takes to thoughtfully provide the care, instruction, and resources you offer. Only you know the amount of money you need to be able to meet your needs, and live in a manner that makes you physically, mentally, and emotionally available to offer this service. If you do not meet your own financial needs, you will be pouring into your students from an empty well. You will end up feeling like you are doing “all of the work” while everyone else is “playing Minecraft.”
When shifting from education in the public sector, where someone else determines what your work is worth, it can feel strange to choose a price at which to “sell” your service. Often the most amazing educators go into the profession with the biggest hearts, embracing the fact that they will never get rich, but believing they will be rich in experiences changing the lives of young people.
When you choose to go out on your own, you are now an entrepreneur, engaging in the voluntary exchange of goods and services. You are free to choose all the details of how and when you serve, and how much your time and skills are worth. And the families are free to choose whether or not they value what you offer at the amount you set. In an ideal voluntary exchange, both parties will feel the relationship is beneficial. You cannot hold the belief that charging for your service is somehow taking advantage of people.
Getting Over Your Limiting Money Mindset
If you have never set a value to your work because you have always had someone else tell you what it is worth, or if you find that charging for education feels wrong because education “should” be free, consider this 1966 FEE article: “Mutual profit provides the incentive for people to produce and trade; it is the all-important fuel which keeps the economic engine progressing through human action toward the betterment of everyone.”
In other words, when people have choices about where to spend their money, those who want their business will work for their money and improve. In the case of education, a teacher who has set her own value and sees families as “customers” will work for their business with innovative educational approaches, flexible schedules, top-notch caring environments, and state-of-the-art resources. The families definitely win. At the same time, the teacher is free to teach in ways that fuel her passion to create the kind of learning environment where both she and her students are thriving, and do it for the amount of money that meets her needs. The teacher is also winning. We are working toward the betterment of everyone through this system of voluntary exchange within a free market.
Here are some steps I followed when setting my own tuition rates:
- Determine what kind of schedule will support the lifestyle you want for yourself and family. Do you want long weekends and summers off or partially off? Is this a side business or your main gig? Do you want late mornings or early afternoons? For me, at my home-based school with my own kids in the mix, I knew I needed long weekends and later mornings to have myself and the house ready to receive students each week.
- Once you have your ideal schedule, you know about how many hours you will be with the students. Be sure to factor in the amount of time you will spend prepping, communicating with parents, and advertising. Make an estimate.
- Consider your needs and values, and then play with the numbers. For example, it was important to me to be able to run the school as a team with my husband, so we knew we needed to earn enough to cover all of our main expenses without his full-time job income. We came up with several scenarios based on different tuition rates, maximum and minimum student enrollments for our space and budget, and considered how much side work we felt willing to take on to make up the difference if needed in the first year.
- Balance the demand of the market with your own needs. See what private school and tutoring rates are in your area to know what families might be willing to pay. Then, consider non-monetary benefits and weigh them against the work it will take to supplement your income in the first year if needed. In my case, at my minimum enrollment, I knew I would need to continue teaching some dance classes (my former job), and my husband would need to continue managing some projects at his current job. But the ability to have a family business working with my husband and kids, and to plan on taking some time off together in the summer, outweighed the fact that we might have to hustle some side projects in our first year. It helped us set a rate that felt fair to us, and when people started signing up, we knew it felt fair to families.
We started the first year with just our minimum enrollment, but have been able to add students as the year progressed and as we continued to share our unique learning approach through social media. We are now at capacity for our space and looking at options to expand! Most importantly, I happily work for my students’ benefit—and my own—because I have a mutually beneficial relationship with my families.
