Quality Product; How to make it into REAL money

[durron597]

Scenario: My mother is an SAT tutor. She is well known for being arguably the best SAT Verbal tutor on Long Island, mostly because she has a reputation for being able to get students up 200-300 and sometimes even 400 points (yes, she has helped people change a 300 range score to a 700). I'm not really interested in going into more depth on her resume, but suffice it to say, she is the best.

I have two problems: The first is that she doesn't charge enough. She has people banging down her door and is always completely booked with a huge waiting list but she lets rich Long Island snobs run over her and ends up only charging at most like $125/hr. Other top tutors on Long Island charge often $250/hr and in rare cases I've heard as high as $500/hr. She's told me stories about customers of hers that go to other tutors before her that charge more, get no results, then they come to her and go up 200 points in less than 6 months. She also does things like help with college essays, I don't know if she's charging for that now but she used to do that type of thing for free. The problem, though, is that she has self confidence issues which have everything to do with her personality and nothing to do with her skills and so despite myself, my brothers, my father etc. begging her to raise her prices, she doesn't and then complains about the number of hours she works. We have been trying for YEARS, inflation goes up faster than her rates it seems.

Cliffs Notes Problem 1: Mom is EXCELLENT SAT tutor. Self confidence prevents her from raising prices. How to get her to have confidence to do it?

Problem 2: She constantly talks about how to convert her system for beating the SAT into something marketable so that she can live off of royalties and doesn't have to work anymore. The problem is that she keeps saying things like "Well I asked your father to make me a website and he hasn't done it yet." She's not really giving us enough direction to be able to make anything REAL for her. She also wants to keep as much of the equity in the business as internal to the family as possible (myself, my father, one of my brothers are all computer people) and so getting her to go with a more professional route seems to defeat itself before it even begins. She seems unwilling to even do basic stuff like hire a secretary to do her photocopying and keeping her curriculum/office organized to keep things in good shape at even the most basic level before she can begin to grow the business. I'm not an entrepreneur myself so I don't really know what I can do to help... I do know that she's done really basic stuff like going to Kinko's and putting vocabulary words on placemats and selling them (way too cheaply IMO) to current students but there's so, so much more here.

Cliffs Notes Problem 2: Mom has a very marketable SAT system product. Disorganization + lack of direction is defeating business idea before it starts. Help!

[Nicholasp27]

revenue management

sell the right product to the right customers at the right price at the right time


i can go into specifics with you about your exact situation if you want, however she will have to be willing to raise at least some of the prices; it doesn't have to be an across-the-board increase (and many times shouldn't be) to make her a lot more money

[secretprankster]

Suburban tutoring is really an incredible opportunity for $ these days. $500/hr is just completely ridiculous, but I've heard similar stories and it doesn't surprise me that much. Curious about what people have to say. How many years is she booked in advance?

EDIT: The second point seems to be aiming a bit high. Great SAT tutors are a dime a dozen these days, so unless your mother is some goddess blend of John von Neumann and E.B. White, I'm not sure how she can possibly compete with the huge SAT tutoring entities. Maybe I'm misreading.

[durron597]

[ QUOTE ]
Suburban tutoring is really an incredible opportunity for $ these days. $500/hr is just completely ridiculous, but I've heard similar stories and it doesn't surprise me that much. Curious about what people have to say. How many years is she booked in advance?

[/ QUOTE ]

i'm pretty sure she doesn't book that far, i don't know all the details and that's the main reason why i can't help her help herself. i do know she's booked through 2008, i mean obviously people cancel / things get shuffled around but she's got regular appointments lined up through 2008

[Arnfinn Madsen]

Problem 1
Her humility (maybe not the right English word) might very well be what makes her such a good tutor in the first place, always looking to improve her tutoring etc.. So it is maybe part of the solution, not only part of the problem. This is one (of many) reasons why it is often good to NOT let the one conducting the job decide the price, especially when it is somebody like your mother. It is her decision though, trying to tell her that she has to raise her prices is disrespectful because actually she doesn't have to, things are fine. She knows best if things are good for her or not, you can't tell her that.

If it is important for you I would try to visualize how much money she is missing out on and IF she admits it and agrees that better revenues would be a good thing I would suggest the following (if she says "I don't need more money" or "things or fine" or whatever I would drop the subject and stop interfering):
1) You make a pricelist
2) She hires a secretary to take care of bookings
This way revenue will be increased and she will still be able to be humble and nice towards the customers.

Problem 2
Somebody has to be motivated to build the business for it to grow, she isn't. It is as simple as that. You can never force anybody to be motivated. Again it becomes similar to above, this is actually your wishes, not hers. If it is important for you, then you have to get her motivated as well, and you will only manage that if you visualize some benefits for her.

Conclusion
From it all it looks like she doesn't care much about making money, so you will probably have to find something else to use in your "selling-process", which puts you back to square one, because all your reasons so far seems to be related to making money, and those are all probably worhtless. Some things that may work is:
-a chance for you to create a job for your son
-help more students in Durronville get into good colleges
etc.

[jeffnc]

This one's easy. You (or someone else she trusts) does her booking, billing, and collecting for her, for a cut. Hire someone if you need to. The business model explains itself. If she charges $125 now, then charge $175 and pay $20 of that to some "administrative assistant". Could be a domestic mom looking for part time work, whatever. All your mom does is show up. She doesn't tell her customers the rate, defend the rate, or necessarily even collect the money personally.

[durron597]

arnfinn,

great post. i think making a pricelist would be a great first step, it can make it more impersonal. one of the reasons my mom is so good is very similar to what you said; not that she's humble, but she's a social butterfly type and makes friends with both her students and their parents. she spends almost as much time on aim as i do, and still keeps in touch with a lot of her former students. so maybe she feels bad about charging her "friends" more money.

about your comments wrt problem 2, the thing is that she DOES want more money. i really think the problem is one of inertia. almost every time i have a long conversation with her it always comes back to her working too much and wanting to be able to make it generate money for itself so she doesn't have to tutor individually anymore.

also, random note: i am gainfully employed (not talking about poker), and don't really need her to grow the business, though it would be nice for my mom to be able to make herself rich.

[eviljeff]

as far as problem 2, she should try to make a book or video or something so she can have copyright protection. copyright protection is basically automatic once she fixes her system in a copyrightable medium.

I very much doubt it would be cost effective for her to pursue a patent application even if she does have a valid method patent.

[durron597]

[ QUOTE ]
as far as problem 2, she should try to make a book or video or something so she can have copyright protection. copyright protection is basically automatic once she fixes her system in a copyrightable medium.

I very much doubt it would be cost effective for her to pursue a patent application even if she does have a valid method patent.

[/ QUOTE ]

she's sent registered mail to herself, which is good enough

getting her to write the book is the problem, not having material to put in the book

[Arnfinn Madsen]

[ QUOTE ]
about your comments wrt problem 2, the thing is that she DOES want more money. i really think the problem is one of inertia. almost every time i have a long conversation with her it always comes back to her working too much and wanting to be able to make it generate money for itself so she doesn't have to tutor individually anymore.


[/ QUOTE ]

It is really tricky, since it may put her in a situation where she can work less hours, but it will demand more effort than tutoring, at least in the beginning. I would guess 1 hour of marketing is more of an energy drain for her than 4-5 hours of tutoring (I may be off though).

So, somebody else probably has to take the lead, and try to grow a business based on her ideas and then she will be his/her advisor on tutoring and he/she will then spin commercial ideas based on this. Then it has to grow considerably though since it needs to be quite large volume for her advice to add enough value, one manager + her is quite a bit of overhead. I really question how much value she can add short term by giving good advice on tutoring, it will pay off long term though through satisfied customers in form of building the Durronmomtutor Inc.-brand.

The value she may add short term that can make this profitable early on may be her current reputation, if that is really good (as you say it is) a good manager could manage to use that to market/sell products (tutoring by other tutors certified by her using her methods, cds with her name, books with her name etc.).