Thursday, 18 July 2013

From here, where?

I knew straight away.

Almost immediately after Tom had done my new website, I had my first phone call, then just a day or so later, my second.

After years spent scraping my financial arse along the ground, some seismic change was occurring. And straight away, it felt different to what had gone before. I knew, even before my work really went ballistic that things were suddenly how I'd envisioned them to be at the beginning. And so it's proved to be. I will be doing more than 40 hours work this week, not including the time spent travelling between lessons, and I really don't want to go much beyond where I am now.

In an organic sense, the work is self limiting. If someone phones up for lessons, and I tell them I can fit them in a week next Tuesday, they're going to go elsewhere, unless they're calling me because I've been recommended to them by one of my pupils. My work, by the way, comes entirely via word of mouth and through organic web searches. My weekly spending on paid advertising is zero, although some costs do arise from time to time, such as renewing my internet domain or stocking up on business/appointment cards.

If I choose to just let things go on as they are, I will continue to be busy for the next few months, with a bit of a dip in December, followed by a surge in the New Year. But what are my other options?

The most straightforward thing I could do to counteract this ever increasing workload is to put my prices up.

The more ambitious thing to do would be to take on other instructors. Take money from them each week in exchange for providing them with pupils. This, done properly, is where the real money is at. I've been on the other side of this situation before, paying others to earn a living.

Just as an aside, by the way, I was talking to another instructor. Someone who I've known for a long time. He has worked for a local franchise for quite a few years now, mentioning no names. He told me that he is paying £135 a week to the franchise owner, but both himself and the owner are declaring £50 a week. This particular franchise owner is doing ok for himself, thank you very much. He has over 70 instructors working under his name. Once upon a time, their number included me. Let's do some ballpark maths here.
70 instructors paying £135 a week is £9450 a week. They get about 4 weeks a year franchise fee free, so multiply that by 48 and you get around £450,000 a year income. To get the work that keeps the instructors paying the franchise costs around £100,000 a year in advertising, leaving a net income before tax of around £350,000. Yet this guy doesn't feel he's rich enough yet, so to minimise his tax payment, he's getting his instructors to falsely account. 70 instructors paying £50 a week is £3,500 a week, or £168,000 a year. Minus that same £100,000 leaves a declared income of around £68,000. And all the while I was declaring my full £8-10k income. With other creative ruses, this guy, this muti millionaire, is probably paying less tax than I am.

I worked for/with this guy for a couple of years, and it did have it's compensations, for a while at least.

But without being particularly greedy,

If I have 4 instructors working under my banner, paying me £100 a week each, and I spend £200 a week on google or whatever, and I employ Bren to deal with the admin, an extra £200 a week could be coming into our household without me having to do a whole load of extra work.

My personal deadly sin is not greed. It's sloth. My work sort of isn't work, because I enjoy it and am constantly fulfilled by it. I am my own boss, I make all my own decisions, and I stand or fall by them. I am not alienated, in the Marxist sense. This fulfillment is what's kept me flogging this dead horse through thin and thinner for the last 8 years. So I'm far happier to do this than I would be to slog my bollocks off in a factory or office, even if I was better off with the steady income of a "proper" job.

So to the idea that if you work hard enough, you'll make it...

The reason things have taken off for me are because of a particular set of precise circumstances.

One of my pupils happened to be about to marry an extremely competent web designer. I exchanged lessojns for a website. That's all. Just luck. If I'd worked just as hard but never encountered these people, my fortunes wouldn't have changed, no matter how much effort I was putting in. Despite my earlier statement, I wasn't poor because I was lazy. I was poor because I was struggling to make my voice heard above the din.

For now, I will be taking no action. I want a full year to go by from when I got my shiny new website, so that I can take a close look at what patterns there are to be discerned. Come new year, I may well start advertising on my site for other instructors, or possibly to apprentice someone.

driving lessons in North Wirral? learn to drive in Hoylake? driving instructor in Birkenhead?

1 comment:

Pete said...

Great blog post that. Lots of numbers I like that. It was quite long and as I was reading it, I kept thinking of new things to say many of which have now slipped my mind.

1) Re greed, wealth and petty fiddling and not so petty fiddling, you are right, at first glance it appears illogical that someone with all that income would turn to illicit tactics to boost it further. However, experience has shown this kind of activity goes hand in hand with this kind of person.

2) You can shop him anonymously to the tax office. They would welcome the info.

3) If you proceed with the franchise idea, do your due diligence with regards to what your legal responsibilities might be. You may find life is not so rosy on the other side of the fence.

4) There used to be an accountant in New Brighton by the name of Murgatroyd. He did all the taxi drivers. Every set of accounts he submitted was identical and they all earned £3,900 a year profit and paid no tax.

5) I agree greed is not a driver for you. This is why you'll never be very successful at money-making schemes. See point 1.

6) Rhubarb and custard.