LessonSignups

The so called “Free Plan” offered by Teach Street

At LessonSignups our fees and plans are competitive and easy to understand. There are no hidden fees, surcharges or other tricks.

We charge $29.99/month for our service. This covers our operation and ensures that we can provide customer service, keep our website running, and continue to make it even better. In addition to that, if you chose to accept online payments you pay PayPal’s fees. PayPal charges a fixed fee of $0.30 per transaction + 2.9% of the amount of transaction if you make less than $3,000 total transactions per month. If you have more than $3,000 total transactions per month it is 2.5% (and even less if you did more than 10k…). If you signup all students for the whole quarter you might easily get over $3,000.

Let’s say you have 20 students, each of them pays $400 for the fall quarter: September - December. PayPal will take $0.30 fixed + $10.00 variable fee, that’s $10.30 per student or $206. LessonSignups fee for the same period is $120 so the total comes to $326.

That’s it. We do not display Ads and we do not collect any additional fees from your students. Of course! Why do I even write this?

Compare this to fees charged by TeachStreet. They offer a “Free Plan”. If you accept payments with PayPal they even waive the fixed $0.30 per payment and only charge 2.9%. So on a $400 payment you save $0.30 and only pay 2.9% (regardless of your monthly transaction amount), that’s $11.60. If you have 20 students you pay $232 in PayPal fees — more the PayPal charges! In addition to that TheachStreet charges students a “Booking Fee” of 5%. That’s $20 per student for your $400 fall session. Let’s do the math…

If you have 20 students that’s an extra $400 they have to pay because your lesson now costs $420 to your students. You save $29.99 per month if you use TeachStreet’s “Free” plan. But over all you and your students pay TeachStreet $632.

TeachStreat also offers a “Pro” plan priced at $29.99. Under this the teacher does not pay 2.9% but there still is the same 5% “Booking Fee” per student. So under the Pro plan you would end up paying TeachStreet  4x$29.99 or $120 for your plan plus $400 in booking fees paid by students, a total of $620.

To summarize our example: If you have 20 students and charge each of them $400 for the fall session (September-December) the total of PayPal fees and LessonSignup fees will cost you $326. That includes managing you make up session, that TeachStreet does not do. TeachStreet “free” plan will cost you $632 and their Pro plan will cost you $620.

How do you deal with canceled lessons?

Every student needs to cancel a lesson from time to time. Some students are more careless than others, canceling lessons to go see movies or because they did not study for their lesson. But even the best students can get sick or have a family emergency.

Some teachers are strict and do not provide any refunds or make-ups. If you do not show up you lose your time and your payment. If your lessons are highly sought after and you get away with that, lucky you. For the rest of us this would not work.

If you simply let your students cancel lessons you lose money. What’s even worse, it creates the wrong attitude. Students will learn that it’s OK to call or email you and cancel. They even save money by doing that!

Fortunately, you can have the best of both worlds. Allow your students to reschedule a lesson if they need to. But instead of canceling it, offer a make-up lesson. You are nice to them by accommodating their needs. You still get paid. And they get their lesson.

Except… that good old day planner begins to look messy and you are doing admin work instead of teaching.

How nice would it be to have an online calendar where you could keep track of all lessons for every student? If every student could go online and notify you when they cannot make their future lesson? What if they could also select one of the times that you provide for make-up lessons? And now that their time is available, maybe another student could use it to make up their own lesson? Right, right, that’s exactly how Lesson Signups works. You get an email for every schedule change so you are always up to date. And if you have an emergency and need to cancel a lesson you can use it too! Log into Lesson Signups, mark the lesson a canceled and your student will be notified. They will go online an select a make-up time that works for them.

Isn’t that awesome?

How do you deal with canceled lessons?

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Online Payments Costs

If you are a private teacher and you are thinking about accepting online payments this post will help you weigh the costs versus benefits.

The Benefits

Online credit card processing saves time and provides convenience. Instead of remembering to collect checks from your students and to take them to your bank, your students will now pay you online while you teach, play or sleep. The money goes into your PayPal account and you can either transfer it into your bank account online or use the PayPal balance directly for online shopping. Stop for a minute and think how much time this saves you! Then read on about the costs.

The Costs

To discuss costs I will focus on the 3 leading merchant accounts: PayPal, Amazon Payments and Google Checkout (see discussion about other options at the end of this post).

Transaction cost is similar for all three merchants - a fixed fee of $0.30 per payment + a variable fee 2.9% of payment amount. For example, if you ask $30 per lesson and teach 14 lessons per quater the total payment for quater will be $420 and the fee will be $0.30 + $12.18, so $12.48 total. The variable portion is discounted if you receive more then $3000 per month. That sounds like a lot of money, but if you ask all your students to register and pay at the start of a quarter, semester or year, it will not be so unrealistic. Also, one larger payment is better then multiple smaller ones because you pay the fixed fee ($0.30) only once. If you need to make a refund PayPal will give you the variable portion of fee back, so it costs you 30 cents.

Doing the Math

To continue with our example, if you ask for $30 for a half hour lesson you make $60 per hour. So a $12 fee is worth about 12 minutes of your time. That is 12 minutes of administrative work - keeping records, asking for money, putting students into your calendar, going to bank, etc. Work you probably do not enjoy very much. If you collect payments monthly or even for every lesson you need to do this many times. Can you do all that in 12 minutes?

Why not pass cost onto students

Some businesses do not like to pay for the convenience they get with online payments and decide to pass the “convenience fees” onto their customers. Do not do that. If the above is not enough to convince you let me give you a few more reasons:

• It is unprofessional.
  Real businesses, big and small, accept cards and do not charge extra.
• You WANT your students to pay online.
  It saves you time and time is money.
  Why penalize them for it?
• You won’t get rich of it.
  Come on, it’s just 2.9% and you already saved more.
• You look like you are trying to nickel and dime your customers.
  Oh wait, that’s right, you are!
• It creates complexity.
  Ever seen pricing like this: “Entry fee $20, -$5 for club members, -$3 for members of other clubs with dues, +$2 for 2 day schedule”? Unfortunately, this is real, from our local chess club. My head is spinning. Can I just please pay $20 or whatever and you leave me alone?

Most importantly:

If you need to ask for a ’convenience fee’ of 30 cents + 2.9% maybe your prices are too low to begin with. If you raise your price by a dollar or two per lesson it will cover the costs and it probably won’s upset nearly as many people as an extra fee.

Details - Alternatives to the Big Three

Are there any alternatives to merchant gateways? There are. Some banks offer gateways for credit card processing with your business account, Authorize.net provides another gateway and there are others. I am not focusing on the the big three names for 2 reasons:

1. Amazon, PayPal and Google have all built these payment processing systems for their own use, to accept payments online. They are now offering others to benefit from them (for a fee, of course). This is a huge advantage because it means the gateway is important to them and that it is thoroughly tested and used every second for their own business. Banks offer online payment gateway to make their accounts more attractive and to make money from fees, but they have not built it for themselves.

2. Fees collected by credit card companies are fairly complex. Different cards have different fees based on type of card, rewards programs offered with the card, etc. Some fees are charged at the time the transactions is processed, but other fees are charged later, based on a number of factors - including the reward programs, again. PayPal, Amazon and Google all roll all these fees into a flat percentage rate. When they give you your portion of the payment it is yours to keep and they will settle all the actual fees when applicable.

Why I Started Lesson Signups

It’s been 4 months since I started building LessonSignups. It all started with frustration. We have two kids who love to take lessons - swimming, piano, chess, gym, etc. We have used some pretty terrible online registration systems that were obviously built from scratch for one user on a shoe string budget. Registering by phone and trying to remember to bring a check for the next lessons is even worse. There has to be a better way!

I googled a lot, and yes there are sites with registration software. But I began to understand why most private teachers do not use them. Most are geared towards schools or businesses. Some specialize in summer camps or in gym programs. Some are costly, some are too complex or simply do not offer what a private teacher needs. Private teachers are in the most difficult position because they cannot justify getting a website built just for their own use, spending a ton of money or even hiring an admin person.

While talking to teachers I know I found that the first issue they face is surprisingly  simple. Everybody needs to be on the same page about the class schedule, number of lessons per quater, or year and the total (or monthly) price. This seams obvious until you consider that lessons are skipped due to holidays, school breaks, etc. The solution to this problem is equally simple: an online calendar with lesson schedule and descriptions. So the calendar is the center point of http://lessonsignups.com.