How Much Is Your Tuition Really?

Conducting a tuition audit can help you understand how much tuition you are actually collecting each month per student. Here’s a step-by-step guide to calculate your real revenue:

  1. Total Tuition Collected:

    • Add last year’s total tuition collections. This includes paid-in-fulls (PIFs), registration fees (deducting any uniform or other hard costs), and monthly billing received (after refunds and billing/credit card charges).

  2. Total Student Count:

    • Calculate the total number of students from the start of the year plus the number of new enrollments over the next 12 months. For example, if you started with 100 students and enrolled 10 new students per month (10 x 12 months = 120), you have a total of 220 students. Note: Actual retention will affect this number, but this provides a baseline.

  3. Annual Tuition Value:

    • Divide the total tuition collected by the total student count to get the annual tuition value per student.

  4. Monthly Tuition Value:

    • Divide the annual tuition value by 12 to get the average monthly value per student.

Example Calculation

Let’s use some hypothetical numbers:

  1. Total Tuition Collected:

    • Monthly billing: 80 students x $133 per month = $10,640
    • Net monthly billing (after 10% expenses): $9,576
    • Annual billing: $9,576 x 12 = $114,912
    • Shorted contracts: 30 students x $600 each = $18,000
    • Registration fees: 105 x $199 = $22,885
    • Paid-in-fulls for annual contracts: 15 x $999 = $14,985
    • Total tuition: $170,782

  2. Total Student Count:

    • Starting students: 100
    • New enrollments: 10 per month x 12 months = 120
    • Total: 220 students

  3. Annual Tuition Value:

    • $170,782 / 220 students = $776.28 per student per year

  4. Monthly Tuition Value:

    • $776.28 / 12 months = $64.69 per student per month

Boosting Your Numbers

It’s important to note that many factors can lower your average tuition per student, including family discounts, cancellations, barters, and administrative oversights.

To improve these numbers, consider implementing a solid renewal plan. For example, introducing a Black Belt Club can significantly boost revenue.

Example with Renewals:

  1. Adjusted Total Tuition Collected:

    • Renewal registrations: 24 x $299 = $7,176
    • Renewal PIF: 5 x $2,999 = $14,995
    • Adjusted total tuition: $192,953

  2. Annual Tuition Value:

    • $192,953 / 220 students = $877.05 per student per year

  3. Monthly Tuition Value:

    • $877.05 / 12 months = $73.08 per student per month

This adjustment shows a potential increase in net tuition collected by $22,171, making a strong case for implementing a Black Belt Club or similar renewal programs.

By understanding these dynamics and making strategic adjustments, you can significantly enhance the financial health of your martial arts school.