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Business Plan

Mary Elizabeth Sanders

Key Techniques for Key Learners 1049 Euclid Street Saint Paul, MN 55106 507-236-9379 555-555-5555 marysanders981@gmail.com

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I. Table of Contents

I.   Table of Contents ....................................................................................................... 2  

II.   Executive Summary................................................................................................... 3  

III.  General Company Description ................................................................................ 3  

IV.  Products and Services ............................................................................................... 4  

V.   Marketing Plan........................................................................................................... 4  

VI.  Operational Plan ........................................................................................................ 8  

VII.   Management and Organization ........................................................................... 8  

VIII.   Startup Expenses and Capitalization .................................................................. 8  

IX.  Financial Plan ............................................................................................................. 9  

X.   Appendices ............................................................................................................... 10  

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II. Executive Summary

Key Techniques for Key Learners is a piano lesson business owned, managed, and taught by me, Mary Sanders. I offer to teach basic piano, theory, composition software, and aural skills for an affordable price of $20 per 30-minute lesson. Music programs are being cut in schools so many parents are looking for private teachers to replace the void of musical art in their children’s lives. My customers will also be older adults looking for a hobby and college students looking to test out of some of the basic level music courses. There is a high turnover rate of students based on seasons; but since I do not need this business to make a living I know that Key Techniques for Key Learners will survive and even thrive in this economic downturn for many years.

III. General Company Description

Mission Statement: Key Techniques for Key Learners teaches basic piano, music theory composition software, and aural skills to beginning musicians by providing accessible, flexible, and affordable lessons in the Saint Paul area.

Company Goals and Objectives: Key Techniques for Key Learners wants to establish good relationships with their customers and educate people with the mentality that music is important in our lives. I plan to increase my customer base from 5 students to 20 students in a year, but still keeping all my overhead costs down.

Business Philosophy: Key Techniques for Key Learners will provide a variety of musical repertoires to beginning musicians at an affordable price. It is important to establish a good relationship between our customers to ensure loyalty and financial stability. We will market towards parents with children, older adults, and college students.

The music lesson industry has a high turnover rate. May students quit lessons with in their first year. By keeping prices reasonable, staying flexible, and always delivering high quality service in a welcoming environment I will retain my customer base.

The biggest strength I have is that I offer to teach a variety of musical skills for the same price as the competitors that only teach how to play piano. I have experience in marketing and I am a technology wiz. I know how to market and advertise in the most effective ways for the least cost. Starting small and building a good base for my business will ensure that it will not fail in this hard economic time.

Legal form of ownership: Sole proprietor.

I chose this because I am the teacher and I like to have everything under my control. I have a double major in music and business so I have the knowledge to cover all the important jobs myself.

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IV. Products and Services

Services: Key Techniques for Key Learners teaches piano lessons for levels 1-3, basic theory, and aural skills. Every lesson is personalized to fit the needs of each student. Basic composition and music computer software skills are available as well.

Competitive Advantages: The extensive knowledge of MIDI and musical technology gives me an advantage over the competition to attract a new target market of students. My price is more on the lower range for the quality and variety of lessons I offer. I have a huge advantage in convenience and insurances. Since I play piano and perform for the Mounds Park United Methodist Church in exchange for a room for a piano studio I don’t have to pay rent, utilities, maintenance, or insurance, and I get free parking for my customers and me.

Competitive Disadvantages: I am new to the market and it will take some time for my website domain to reach the top of the search engines. I also do not have an official teaching degree so I cannot charge as much as a professional with a musical education degree. I also do not belong to any of the piano teaching unions or organizations and do not force my students to compete in competitions.

Pricing: $20 per 30-minute lesson

$80 per month due at the 1st lesson of the month

$5 late fee per late lesson after payment due date (See appendix 2011 Studio Policy)

V. Marketing Plan

Customers Demographic Profiles

Customer Group 1 Customer Group 2 Customer Group 3

Description Parents of children Adults looking for hobby College Students looking to test out of basic music classes.

Age Late 20’s-50’s, 6 yrs+ 30’s-60’s 17-26

Gender m/f m/f m/f

Location Saint Paul Saint Paul McNally Smith

Social Class Middle Class Middle – Upper Class Lower to Upper Class

College Degree NA NA Music, Composition, Performance, Music Business

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Competition Indirect competitors: YouTube how to play piano videos, piano teaching software, online lessons, and self-teaching piano books and cds.

Major competitors: Laurel Music Studios and Elizabeth Jennings Piano Studio

These are my top competitors in terms of experience, policies, services, promotion, and best reputation. I analyze 10 other competitors but they are mostly McNally Smith students advertising on craigslist or extremely expensive upper class teachers; both really are not competing in my target market at all. Laurel Music Studios is more similar to my business yet it offers other instruments instead of complementary musical skills in each lesson. Elizabeth Jennings offers a more classical approach to teaching lessons and offers complementary skills such as music appreciation, history, sight-reading, and competitions. She is located farther away but not out of my target market range in the winter. The main advantage that I have over the classical studio is the fact that gas prices are rising this summer and Elizabeth Jennings doesn’t offer in home teaching. So even though her prices are low the parents still have to pay for the travel time. If I can secure students in the summer while gas prices are high it will really benefit in the long run. Laurel Music Studios has so many students that she is not flexible and probably does not have a personal relationship with all her students.

In the final column, I estimated the importance of each competitive factor to the customer. 1 = critical; 5 = not very important.

Table 1: Competitive Analysis

Factor ME Strength Weakness Laurel Music Studios

Elizabeth Jennings Piano Studio

Importance to Customer

Products Variety and Basic

Lessons X Lessons with different

teachers and instruments, group lessons.

Private lessons but only group lessons for

beginners.

1

Price $20/ 30 min lesson, no

group lessons X $25/ 30 min lesson

$20 / group lesson

$18.50 / 30 min lesson 3

Quality High X Good High 2

Service Piano, Aural, Theory,

Composition X Piano, other teachers and

instruments. Sight reading, theory, music history, guild

1

Reliability High and Flexible X 48 students, not as

flexible Only available 3 days a

week. 2

Stability Just getting started X Good Good 4

Expertise

17 years playing, accompanying, and

performing on piano

1+ year teaching

X Played 13 years through college

15 + years teaching 2

Company Reputation

New to market, Doesn’t compete in guilds

X Great Great, competes each year.

3

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Factor ME Strength Weakness Laurel Music Studios

Elizabeth Jennings Piano Studio

Importance to Customer

Location Upscale local, professional

X 991 Smith Avenue

West St. Paul, MN 55118

Shoreview, MN 1

Appearance Word of Mouth,

Internet X Professional Old fashioned and Strict 2

Sales Method None X Referrals, Internet, Yellow

Pages Competitions, Unions, Organizations, Internet

directories

3

Credit Policies Efficient and cost

reduction None Unknown 5

Advertising To be established X Wasted lots of money in

advertising in the wrong places.

Internet directories, local paper classifieds

3

Image X Professional Old Fashion yet Classy 2

Niche Many of the schools in the Twin Cities and St Paul have been cutting their music programs to save money. This means that parents are turning towards private lessons to replace this lack of musical education. Since I have an affordable price and a variety of musical repertoire that you don’t even learn in school Key Techniques for Key Learners is one of the top choices.

Strategic Direction SWOT Analysis -Strengths of the Business Excellent quality product. Which means that good referrals will add to a good reputation. Good management skills. Which means that I can run my business well. Good ability to extract information. Which means that I can control the business and foresee problems early. Deal with church for studio. Which means that my starts up costs are extremely low. -Weaknesses of the Business New Player Which means that my credibility problem may affect initial sales Lack of union or musical teaching organization. Which means the company has less reputation when attracting customers. -Opportunities in the Marketplace Add-on products such as Finale lessons and recording. Which means a potentially enormous market for the Key Techniques for Key Learners to tap into. Budget cuts to art programs. Which means that Key Techniques for Key Learners should target the parents of kids that had their music programs cut. -Threats in the Marketplace Increasing gas prices. Which means resulting in reduced profitability in out of home teaching. Economy is in a recession. Which means that people don’t have as much money for arts or entertainment due to cutbacks.

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Promotion and Brand Development Internet Promotion: a website www.keylessonsforkeylearners.com from godaddy.com. I traded some music lessons for a website from my friend Jeremy Wagner.

Emailing List with a newsletter sent out each month to customers to keep their interest and let them know about progress and events.

Social Networks such as Facebook, Twitter, and YouTube they will be updated constantly. This will allow people to network together, share music, ask questions, and share with their friends. If studio classes aren’t possible using YouTube so that students get a small dose of playing for an audience and feedback and be given if a lesson is missed.

Word of Mouth: I will play piano at churches and nursing homes. I will also contact other local teachers that are more experienced and maybe work out an agreement to have me teach students the basics and then they would teach the students the more advanced lessons.

Flyers: will be placed in schools, colleges, and music stores. I want to use the idea of having a keyboard on the boards and my business cards would be the keys. (See Appendix Sample Flyer.)

Discounts: I would offer a discounts for buying lessons in bulk and for new referral customers, after I get established a bit.

Image I want my customers to see me as a professional music teacher. I want to be approachable and not strict and scary. I will use my youth as an advantage to connect with my younger customer base. The most important image I want to portray is reliable, flexible, trustworthy, and loyal. Pricing The typical rates for teaching piano lessons is anywhere from $15-$50 per half-hour lesson. The cheapest teacher is not always the best. Teachers that cost a little bit more that offer more services such as lab training, flexibility, experience, etc are the better choice. So since I offer a variety of services and charge a little bit above the minimal rate I shall get more of the main customer base. It is important to market to customers that I know what I am doing and to look professional at all times. Basic piano lessons must cover all the necessary material and instill the correct techniques. By charging a little more I don’t look “cheap” or that I under value my skills. A typical piano teacher makes about $41,000 per year. So a salary of $41,000 equates to a monthly pay of $3,417, weekly pay of $788, and an hourly wage of $19.71.

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VI. Operational Plan

Sales Forecast Sales will depend on the number of students I decide to take on at a time and the seasons. If it is during the school year I may have more students than in the summer. (See Financial Plan.)

Location Key Techniques for Key Learners will be located at the Mounds Park United Methodist Church in Saint Paul. The parking is free and it is handicapped accessible. There is a living room area that has a black baby grand piano in the corner. This room is very comforting and inviting for my customers.

All of my occupation expenses such as rent, maintenance, utilities, and insurance are taken care of in my deal with the church.

My business hours are Monday-Friday 7am-10am and 3pm-8pm.

These are my starting hours but they will change with the number of students and which season we are in, school season or summer.

VII. Management and Organization

I will manage the entire business on my own. Since it is a small business and I will do all the teaching. I feel this is best. I will have complete control over everything even the website after it is built.

Professional and Advisory Support • Accountant- My personal accountant

• Banker- Wells Fargo: Tom Jones my financial advisor

• Website- Jeremy Wagner

VIII. Startup Expenses and Capitalization

I have $1,100 saved up for start up. Most of this is emergency money if something goes wrong. I worked out a deal with the Mounds Park United Methodist Church to play for church on Sundays and perform for events in exchange for use of the church for my piano studio and free parking. The church has insurance and pays for the upkeep of the room and the piano. I have traded teaching piano lessons to my friend Jeremy Wagner in exchange for a website and its upkeep. The only real expenses I have left are paper advertisement, a website domain, and a piano lamp.

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IX. Financial Plan

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X. Appendices

2011 STUDIO POLICY

Thank you for choosing to become part of Key Techniques for Key Learners! I hope you will find a deep sense of satisfaction and love for music as we journey through your education together.

I do have some policies that I ask you to adhere to that will benefit both the student and the studio. Please feel free to voice any concerns regarding these policies!

LESSON OPTIONS

I offer 30-minute piano lessons for $20 a lesson.

TUITION & PAYMENT

Monthly

$20.00 per 30 minute private lesson

1) Schedule your lessons by the month; for those unable or unwilling to commit to an entire semester of lessons.

2) Full monthly payment due by the first day of the month.

3) Lessons canceled within 24 hours of the lesson time will not be reimbursed and are available for make-up based upon the instructor’s availability and willingness, with the exception of illness or the death of a family member.

4) If you decide to quit taking lessons, please give notice 30 days before ending lessons. You will be charged for the unpaid lessons in that 30-day period whether or not you attend them, and late fees will begin to accrue after 8 days on unpaid balances. (For instance, if you give notice on January 16th, and have paid for January, you will owe for any lessons before February 15th that have not yet been charged to your account, whether or not you attend in February. Late fees would begin on February 8th.)

5) If you sign up for monthly lessons and then decide to commit to the full semester, the extra $5 per lesson will be applied to the remaining semester tuition. Payment due dates will then correspond to the full semester due dates.

THE UNPRACTICED STUDENT RULE

I the instructor retain the right to deny a lesson at no cost to the studio or instructor if that student has come unprepared and has had little to no practice, within reason. The student and/or his/her guardians will not be reimbursed, nor will the lesson count towards the two “free” missed lessons. Be sure to practice! Everyone will benefit more!

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OTHER FEES

Registration Fee - $10.00

A one-time only and non-refundable administrative fee for new students.

Late Fee - $5.00

Charged every week starting on 7 days past the due date.

Recital Fee – Varies

Typically $2 to cover the cost of refreshments at recitals.

DISCOUNTS

You may receive a free lesson if a new student signs up for lessons and brings in a voucher form with your name on it! (Available on the bulletin board in the waiting room)

BOOKS

Key Techniques for Key Learners is not responsible for the cost of students’ music books. If Key Techniques for Key Learners has purchased books for the student, the student must reimburse the studio for the cost of the books (including any tax paid by the Studio on the books). The student will receive the books upon receipt of payment.

Some books are available for purchase at Key Techniques for Key Learners. Also, books may be sold back to Key Techniques for Key Learners at a reduced price if they are in good shape. The owner of Key Techniques for Key Learners will decide if and for what price books may be re-sold to Key Techniques for Key Learners by students.

ACCIDENTS OR INJURIES

If a student has an accident or injury while at the Mounds Park United Methodist Church, the instructors will first contact Emergency (if necessary), then contact the guardians or next of kin listed on the Contact Information sheet that every student fills out upon first registering with Key Techniques for Key Learners. If no guardians can be contacted, the decision of how to respond to the situation will be upon the instructors. The instructors will do what is reasonably within their knowledge and power to stabilize the situation. The guardians will continue to be contacted until they are reached. Further action will then be the guardians’ responsibility.

 

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Sample Flyer Zoomed In Company Logo