The Bright Red L Driving School Blog

Sorry, not a Tuition Car

As an Instructor how much do you charge an hour? Why is this always a controversial topic amongst Driving Instructors? I believe it’s because the price per hour is how everybody measures and bases a judgement on driving lessons, both Pupils and Instructors. It is a standard for comparison between different schools. For Pupils there is probably a judgement of quality somewhere in there as well. My concern is that for Instructors they concentrate too much on the gross earnings per hour rather than the profit earned and Pupils are comparing apples to oranges using this standard.

Let’s consider this from the business point of view. With all Instructors being self employed, I have yet to hear of one who is employed by the school, the costs of running their business is what drives their pricing and profit. Of course Instructors have to make a profit as this is where they earn their wages. These business costs are part of being a franchised and independent Instructor and the quality of lesson delivery has nothing to do with the prices charged but the individual Instructor.

Let me draw some examples to prove my case. These all assume the Instructor in question is teaching for 30 hours a week. How they, or their franchise, market themselves to get this work is another big topic altogether. I will also assume they lease their cars. If a car is owned then a reasonable cost of buying and selling it is about £70 a week allowing for depreciation, servicing and interest on hire purchase, or loss of interest if the money was in the bank. The figures in the examples are weekly costs and earnings. All cars are assumed to have the same fuel consumption as every one of the example Instructors could choose a smaller, or diesel, engine to save costs.

Instructor 1, Franchised to a local school

Costs

• Car Lease – £70
• School Franchise – £50
• Fuel – £50
• Insurance – £10
• Other car costs – £10 (damaged tyres, car cleaning etc.)
• TOTAL – £190

Earnings

• 30 hours at £19 an hour average allowing for discounts and offers – £570

PROFIT – £380, PROFIT/HOUR TEACHING £12.66

Instructor 2, Independent Instructor

Costs

• Car Lease – £70
• Marketing costs – £25
• Telecommunications – £5
• Stationery – £2
• Fuel – £50
• Insurance – £10
• Other car costs – £10 (damaged tyres, car cleaning etc.)
• TOTAL – £162

Earnings

• 30 hours at £20 an hour average allowing for discounts and offers – £600

PROFIT – £438, PROFIT/HOUR TEACHING £14.60

Instructor 3, Franchised to a large national school

Costs

• School Franchise including fully expensed car and any Pupil referral fees – £300
• Fuel – £50
• Other car costs – £10 (damaged tyres, car cleaning etc.)
• TOTAL – £360

Earnings

• 30 hours at £24 an hour average allowing for discounts and offers – £720

PROFIT – £360, PROFIT/HOUR TEACHING £12.00

The conclusions I draw from my estimated examples are;

The most expensive lessons are from Instructor 3 earning the least profit per hour as a professional, are they really the best for the money? Instructor 2 has the best earnings but probably spends a lot more time on other business activities the others don’t, for example, designing adverts, building web sites and catching up on phone calls. If this time was added to the total worked it would reduce the profit per hour.

All of these examples will have different experiences if work reduces or increases. Instructors 1 and 2 are best placed to survive a downturn whilst Instructor 3 will struggle to meet their fixed costs. If work increases Instructor 3 will earn more profit per hour as the only cost that will increase, and then proportionally, is fuel and their hourly rate is higher.

With this in mind should Pupils judge the quality of a driving lesson from the cost per hour? The answer is, of course, no. However there is very little else except an Instructor, or schools, reputation to use. Often it’s not until the first lesson the choice of Instructor can be assessed. Should Instructors judge their own place in the marketplace based on their cost per hour. As we have shown if an Instructor can keep their costs down then they will earn a greater profit per hour and have flexibility on price. They will also be better placed to survive the quiet times.

At The Bright Red L we try to keep Instructors costs down making lessons better value for Pupils. Details are on our website for both Instructors and Pupils. We are currently recruiting Instructors in Portsmouth, Southampton, Brighton, Bournemouth, Bristol and Reading.

Sorry, not a Tuition Car

Welcome to my blog on all matters driving school and learning to drive. Our new web site has been live for a bit more than a week now and is working well. It is the key to being able to offer both ADI and PDI Driving Instructors one of the best value Franchises in the country. With prices starting at £29 weekly, this blog explains how we can do this price.

For many years Driving Schools have set themselves up in a town and placed a Yellow Pages advert to bring in pupils. These adverts can cost a significant amount of money so a number of instructors are needed by the school just to pay for the advert without all of the other costs that running a school brings. What happens if the enquirers start to drop away? The school still needs the same amount of instructors and the work spreads more thinly between them. The area covered cannot significantly increase without another expensive advert and the amount of Instructors has to stay high so they can stay in business

In the internet age pupils are increasingly turning to the internet to find driving schools. A high Google result brings in the enquiries and with our direct booking we are finding ourselves constantly sold out. Because we are using the internet we can cover a much larger area for the same marketing costs a local school would have in a single area. The direct booking means we can deal with more enquirers without the costs of manning so many phone lines.

This allows us to make a promise to keep Instructor levels to a maximum of 1 per 50,000 head of population in each area to keep the Instructors pupil count higher. With a choice of cars from £55.20 weekly, this represents excellent value when we are all looking for better value in tighter times.

We are currently recruiting in Portsmouth, Southampton, Bournemouth, Bristol, Reading and Brighton. Have a look at our web site Franchise section for more details.