Hi and welcome back. Today we are going to revisit this wonderful tool, the business model canvas. And this time we're going to use it to help you either launch your teaching studio if you have not yet done so, or help you build a more thriving and solid teaching studio to support your portfolio career. So let's go ahead and give this a world. So we're going to call this your studio growth plan, remind you that on the canvas we have the operational part on the left. We have the customer segments on the right. We have the financial foundations on the bottom. And then in the very center of the thing it is driving everything about this, your value proposition, all right? So, remember the last time we talked about David Cutler's turn the unique selling proposition. And so this is really, I think just another way of framing the value proposition. So as Cutler suggests, start with what is your why? Why are you doing this? What is it that you really, really want to accomplish with your teaching? This goes all the way back to course number one in this specialization, when we talked about the passion within the passions, right? You could say, well, I'm just a passionate music teacher, but there's probably something deeper there about the kind of connection that you would like to make with people. And so spend some time getting down to the core of those things, and it's going to take some introspection and some thought. Then I love how he phrases this next thing. What do you do really well, that your competition really doesn't? Okay, so another great phrases, what is your superpower? What is the thing that really makes you special and unique? And then lastly of course, what do your customers really need? And I will remind you again when we're talking about what your customers need, what is your market need? You have got to base that on as much empirical data as you can, by talking to people, by doing servings. Do not make assumptions about what your customers really need, talk to them and listen to what they tell you. Okay, so once you've done that, and you've got your unique selling proposition, that's still going to be the epicenter around everything else. For the business model can resist, going to take the same role as the value proposition, all right? So let's take a look at the customer segments. So what is the demographic that you want? Age, socio-economic class, and so forth? Are you going to teach locally or you going to teach remotely, or some combination of the two? Psychographic is the classic, you're interested in music, they're interested in self improvement or education, okay? So we have to figure out how to identify those folks who share certain psychographics. And then of course, private behavior is always going to be the strongest indicator. Either people that have already studied with you in the past, folks from your mailing list, folks on your network, customers at the local music store, etc. Now before we go to the next slide, let's take a little bit of time to think about this psychographic piece. How do we identify people who might be interested in taking lessons with you given simply their shared sensibilities and shared needs? Well, part of that would be to simply be as engaged in your local community as you can be, that could be in your neighborhood or in the immediate surroundings. See what kinds of musical activities are going on, see what folks tend to be doing and with a recreational time. Observe other cultural things going on in your neighborhood where you might be able to interact with potential customers. Because we don't yet know if they're interested in music, but if they're interested in other kinds of expressions, there's a good chance that they might also be interested in music. And again, things like a self improvement, is there a yoga studio nearby? Is there a community music school nearby that might be at its capacity and is interested in branching out? Okay, so part of this psychographic piece as we've talked about before, finding the proxies in your community that will point you towards groups of people who might share common interests. So you've got to start by being observant about the community around you. Look at the institutions that are there, see how you might be able to connect with some of those institutions, or the people in there. And then be ready to hand a card, or offer a free lesson or do some of the things that we talked about in the previous module, in terms of that promotional funnel. So, this can be one of the trickiest kinds of things. You have to follow your gut, you have to be willing to be observant in your surroundings. And you have to be willing to take some chances and go out there, put yourself out there, and you're not always going to succeed, okay? But you cannot merely say, okay, I'm going to reach this demographic in this area and expected to just, sort of materialize from there. And unless you have a large body of folks who have a prior behavior that have demonstrated to you, you're going to have to address this psychographic element in order to build the studio. Okay, so let's talk about the relationships in the channels. So first we've got the marketing channels, right? So again, depending on exactly who your target market is, these things may be tweaked a little bit, but you're going to have a web page for sure. And on that web page you're going to have your studio policies, you're going to have your cost. You're going to have perhaps some incentives their, information about some incentives. You're going to have your social media presence, which is going to be chosen based on the target market that you're trying to reach. You're going to start to assemble an email list, if you already have one great. You might be able to go into your database that we developed early on in the specialization, it may be filtered by either geography or by some of those identifiers. Remember the identifier columns? Some of those columns are not going to have identifiers that are going to be valid for this, so call your database appropriately and use that. And, it really is amazing how posters or other local kinds of stores where like bookstores or things like that. They really actually do work, [LAUGH] surprisingly enough, it seems terribly analog and old school. But if you go into your local music store and they've always got a bulletin board with all those things pasted usually by the front door. And people have pulled off the little tabs on those [LAUGH] on those fires, so that it's got to work to some degree, right? So that's a low cost, low barrier thing. And it's just one more way to get the awareness part of the marketing funnel and begin to hopefully move people down it. And there may be other marketing channels again that are distinct to your community. If there is a community newsletter for instance, homeowners association, a community house in your complex, those kinds of things. Those are perfect places to put up a flyer or poster or leave some kind of information, because the local community does see those things. Okay, are there other promotional chains? So there's the word of mouth, right, when it comes to teaching, that's one of the most important ones of all. So, if you have a small group of existing students and you're wanting to grow. The first and easiest thing is to talk to those students or their parents and ask if they would be willing to offer a referral to their friends and their network in their neighborhood. And if they succeed with sending you somebody your way, maybe they get a free lesson, right? As we talked about with the promotional. Funnel talk with educators in our community, incredibly helpful to find out what they need and to find out where their students are in need of lessons. Again, offered to do a free clinic at local schools. We've covered a lot of this because we talked about this in the marketing phone. And then the last channel is the delivery of your value proposition. So this is going to be the lessons themselves. But this last piece, what additional value could you bring to the equation, okay? So we're gonn talk about building community in the last lesson of this module. But this could be based on, again, what is your competition doing. If nobody is offering to adolescents and theory, that might be part of your unique selling proposition? Maybe, the other studio teachers are not good with having studio recitals or other kinds of group events. So, think creatively observe what's going on around you. Ask yourself, how can I differentiate myself from the competition and and then seek to bring additional value to the table? Make your unique selling proposition truly unique. Okay, now relationships stop and think a minute. What what is the nature of a relationship in a private studio setting? Well, it's either in person or remote, depending on, the venue and the delivery that you want to do, but it is absolutely personalized, Right? No, two students are going to be identical. No two lessons are going to be identical. So that is something to really think about and to say, how can I highlight the personalized element of what you're doing in your studio? Key activities and of course, this is always the long list, right? You have to teach, of course, you have to promote the studio. You have to keep the books, you have to manage payments, meaning manage your customer payments. So and so is late this month or you skipped a month and you're in arrears. You have to maintain your teaching space, whatever that might be. You have to keep the piano tuned or any other, whatever other instrument maintenance is required for your particular studio. You have to plan recitals or other group events, you have to keep up with the latest method books and the latest pedagogical techniques. And you've got to engage customers, particularly if we're talking about families and parents. Okay, that's a lot, isn't it? The nice thing about however, maintaining a teaching studio is that once you have that foundation laid, it is relatively easy to keep building on it. Particularly because of that word of mouth element that we were talking about. So make sure that you are keeping on top of all of these key activities so that your customer has an experience that is smooth and easy to navigate on there. And of course your value proposition is delivered through these key activities. So you got to do teaching space and, there are pros and cons to this. The problem with the home teaching space is that sometimes there can be distractions. There can be a spouse or your own kids in the other room and they're being disruptive or making noise or something like that. Maybe you live in a fairly small space and so having students around all the time is kind of intrusive and very practical. On the other hand, a home space is the most affordable, right? It's the cheapest and you can deduct the space that you use for teaching as a tax deduction, as a home studio. So there are certain advantages. Also if you do it at home, you have to maintain a certain level of cleanliness. And maintenance of cat hair all over the place or, have the bathroom's a mess or whatever you have to, you have to keep it at a professional level and that may be an additional burden. So there's problems with, home studios, yeah. Over renting a studio is expensive, right? And so yes, that's a tax deductible expense also. And it provides a kind of professional setting that is exclusively a professional setting. And that has some advantages. It allows you to have a little bit of distance from your professional space to your home space. Your own space is your own personal space. And so if you can't afford it, that might be better. Or I guess the idea would be if you lived in a home that had a completely separate area for your teaching studio that really was disconnected from the house. That might be the best situation of all. And some teachers go to students homes. And this can be an interesting thing to consider, particularly if you live in a dense urban area. It might not be a bad way to go in the sense that it removes the expense of having to maintain your own space. And some students may have access issues of getting to your place of teaching. And so part of your unique selling proposition, part of your differentiating from your competitors might be that you come to the student. Now, that draws down side of that. The drawback to that is that, you have to now factor in transportation time and transportation expense to get to them. So that's why I said, if you're in a dense urban area, this might make sense. If you're out in suburbia, let's say, or in a sprawl, kind of urban area, you're going to be spending all your time in a car, driving from lesson, a lesson. And it's now not just the time that that takes, but the gas and the maintenance on the car and so forth. So you have to think about depending on your market and depending on the needs of your market, that might not be the best option, okay? So but you've got choices as the point and it's one of those things that is going to be a key part of your of your resources. Obviously you've got method books and other kinds of teaching supplies that you need to require the music legally obtained, once again. You might need to acquire additional instruments depending on what you're teaching, percussion and drumming. You probably you're going to have to have some of your own equipment. Obviously if you're teaching piano, you have to have a piano, you have to have that maintained. Remember we said that not all resources are financial or physical resources, there are also human resources. So your pedagogical expertise, your experience as a teacher is a key resource. And is something that is a big part of your unique selling proposition is the experience and the perspective and the expertise that you bring to the table. Okay, so what about partners? How my partners work in this case? So one thing might be our their organizations in your community who aren't using their space during certain days or times. Can you share your studio with another teacher who has a different kind of schedule? Those would be too great examples of key partnerships in terms of managing your physical space. And then other local businesses that are interested in having you come into their store to perform, do a clinic, do some instrument repair demo, right? To do some sort of thing like that, that helps their business and brings people into their store. But also allows you to promote your studio. So other than your time, this is essentially free marketing, right? There could be a really valuable source of new students. So that would be a great way is to think creatively about local businesses in the area that might be able to partner with you. This could also be something like it doesn't have to be a music business, right? It could be a coffee shop or some other sort of thing that allows you to promote your studio. So remember, partners help you acquire resources, reach your market or reduce your costs. So I think this is the most overlooked part of the campus. Are these partnerships? Remember the partnerships have to be mutually beneficial. So, it's not you asking them for something, you have to bring something to them. And so to create a situation that will also help to benefit you, right? So get creative with that. Get creative, use your networking to connect with local organizations, local businesses, local venues. Local places of worship are often really great places where they have unused space during the week. These kinds of partnerships can be really important ways for you to acquire the resources you need to market and promote your studio with their audience. And in turn therefore also reducing your costs. Partnerships could be the make or break between whether or not you've got a sufficient profit margin at the end of the day to make this thing a sustainable venture, okay? So do not shortchange partners. All right, we've got everyone's fun thing, the costs. So the cost of your studio, even if you do a home studio, there's going to be some kind of costs associated with that. You're teaching materials, instrument maintenance, liability insurance. Here's an important one because whether you've got students coming into your home or coming into a space that you are renting. Somebody has to have liability insurance there to cover you in the the event that somebody is injured or there's some other sort of cause against you that somebody sues you. Liability insurance is meant to cover those kinds of eventualities. So if you are renting a studio, it might be that your landlord has a blanket liability policy that covers the facility. But don't make that assumption, make sure that you are covered for that. And certainly if you are doing this in your home, you want to make sure you have liability insurance because otherwise you could get sued and lose your home. And that would be bad. Okay, so make sure you have liability insurance. Then there are going to be things like taxes, health insurance, retirement savings, all those sorts of things that you need to set aside. And then of course, the cost is your time. If you pay all of your expenses and there's nothing left over, you're not going to have a successful studio because you still have to feed yourself, right? You still have to pay your own bills in your own obligations. So there's got to be enough left over at the end of the day to also pay you for your time. Okay, one more thing about costs before we go on to revenue is at this point this is where you pull out a spreadsheet. And you start to on the left part of the spreadsheet list, every single cost that you can think of. Then do the very best you can to estimate what those costs are let's say per month. And then look at what the total is. And you say okay, I have got a total of x hundreds of dollars or x thousands of dollars per month in costs. This is every cost that is associated with delivering your value proposition, right? So now I've got the minimum amount that I have to make to break even, okay? Now you can go to the question of all right, how many lessons do I have to give at x price in order to cover all of my expenses? And that's where you are able to figure out whether or not this thing is going to be viable, okay? So be sure to actually put numbers in there and crunch those numbers in game out scenarios, okay? Maybe you are thinking you would prefer to have a studio rental and so you put your spreadsheet together. And you come up with the things and you're like, that studio rental is going to cost me $1,200 a month and that kind of kills this model. I don't think I can afford to do that. I think I'm going to have to do this in my house at least at the beginning and make sure that I get things up and running before I'm going to have enough revenue to go and rent an external studio. And that brings you to the last thing. It's like, okay, now that I've got all my costs tallied up, let me figure out how much revenue I can bring in every month. So those are going to be your individual lessons of course. Those are going to be any perhaps group lessons. Maybe you do those once a week or maybe there are certain part of your market segments that can't afford individual lessons, but would pay for a group lesson of eight, let's say. And so you start to do group lessons. That can be another part of your unique selling proposition if your other competitors aren't offering that as an option. Then there's of course the bundled lesson plans, right? If you pay for an entire quarter in advance or a month, whatever it might be, they get a little bit of a discount. And then perhaps you have optional add-ons like a theory study group or group recitals or field trips or anything else that is an additional source of income. Okay, so you've got your spreadsheet pulled up, right? You have worked out all of the expenses, the costs they're going to be associated with this. I recommend breaking that down on a monthly basis. If there are expenses that perhaps ebb and flow a little bit during the year, I would take the average. And then do the same on the income side. Okay, how many lessons at x price? How many group lessons at x price? How many people do I think are going to want to do a bundle plan and get a discount? And how many people have expressed interest in any of these optional items, okay? So in both cases, if you are starting out, you're going to just have to do the best guess you can to put those numbers in. So do as much research, make sure that you've got as much data as you can, actual quotes and things like that to plug into both the income and the revenue side of things. And if you are unsure, area on the side of caution. For your costs air on the high side of those costs and on the revenue air on the low side of those costs, okay. Because if you can still make the math work then there's a good chance that this is going to be viable,okay. So on the revenue, the revenue is harder to estimate than the costs. Because the cost, you can go out and say, well, I can shop around for studio prices. I know how much it costs to tune the piano, I can get a quote from the print shop on posters, right? So the costs are pretty easy to get, it's pretty darn close to accurate, okay. The revenue is going to be based on, well, can I get enough students, right? So again, hopefully you've got people have responded and said, yeah, we're interested. You've got your social media in place, you're starting to do your network, you're starting to talk to potential customers, local educators, community music schools and you're getting a sense of the demand, okay? And then also you can play around a little bit with this, okay. So let's say you've got all of that and you get, okay, my base individual lesson rate is going to be $65 for an hour. And your best estimate, your conservative estimate is, you're going to start out with five students, let's say and you do the math and it doesn't work. And you're like, well, maybe could I attract a few more students if I dropped it to $60 an hour or $55 an hour? Or is that going to not make a difference? Because lowering your price may send the wrong signal, right? It maybe means that you have to do a little bit more market research or you might have to go back and look at your costs and see is there anything that I can reduce or there're partnerships that I can be using. So in other words, you have to do some gaming out, okay. Don't just throw a bunch of numbers in there and tally it up and said, look I'm ahead, I'm in the black or I'm in the red. It's not going to work right, either conclusion is wrong, okay. So be willing to play out different scenarios with your spreadsheet of course spreadsheets make that easy. So that you can begin to get a sense of the relationship between your costs and your revenues. And you will then begin to understand if the real issue is that you're just going to have to get more students or the real issues you're going to have to reduce your costs. And then you can go back to this canvas and review every element so that you can adjust the costs and the revenue accordingly so that you have a viable model. Okay, remember the name of this graphic thing, here is the business model canvas. The business model and the business model is how are you going to make money and is it a viable business model. Is it going to be sustainable and something that you can depend on? Okay, so make sure that you don't short change this part of it either that you really, you do as much research as you can on both sides of the equation. And that you're willing to play around and jigger things around to see if you can get to a place to find that sweet spot for something that is financially sustainable. All right, so as we finish up this lesson, we have one more lesson in this course, and in this specialization, and it's the final piece for building a thriving teaching studio, which is creating community amongst your students. We'll have that next time, see you then
