Pricing. It’s one of the most important decisions you make about your belly dance business that can determine whether or not you’ll be here 5 years, 10 years, 15 years or 20 years from now.
It’s also one of the most complex decisions you’ll need to make. Pricing is extremely important because it’s used to make financial projections, calculate profit and loss and establish break even points. It involves both quantitative (things that can be measured, such as financials) and qualitative (things that are harder to measure, like customer perception).
So, how do you go about setting a fair price for your services – one your customers feel they get a good value for their money and one that provides you with a fair profit for your work?
While you can determine your price in a number of ways, here are some important considerations when establishing what you will charge. (Please note: For purposes of our discussion today, I’m going to focus on setting the price for classes. However, you can certainly take these principals and apply them to other money making opportunities, such as Belly Grams, Wedding performances, 15 minute sets, restaurant gigs and more. )
First Things First: You are in Business to Make a Profit
I’m not sure why, but often times I find belly dancers are hesitant to admit and embrace that the reason you are in business is to make money. Maybe it’s because as artists, we feel we should give our art away for the betterment of society. Perhaps it’s because money is one of our society’s last taboo subjects.
Whatever the reason, the first step in being a responsible business owner is to understand that (a) you are, in fact, a business owner and (b) making a profit is healthy, desirable and indeed, the whole point in offering classes or creating choreography or producing shows or festivals. If you don’t make a profit, you will not have the money to continue creating the art you love.
It’s All About Perception
If you want to be around for the long haul, you have to grasp the concept that pricing is fundamentally about perception. Also known as perceived value, it’s how customers see your service and the value you provide them in comparison to other products and services competing for their extra spending dollars.
To take a classic example, there is no functional difference between a Rolex and a Timex. Both are watches. Both tell time. Why, then, does a Rolex sell for thousands of dollars and a Timex starts around ten dollars? The difference is in the perceived value by the customer.
A Rolex won’t make you more attractive, healthier or sexier. However, when others see you wearing a Rolex, they perceive you are more successful and have something different (and better) going for you than someone who wears a Timex.
How does this relate to setting prices for belly dance class?
If you recall, we discussed how to position and brand yourself in a previous article in this series. Who are you? Are you the highest quality of instruction offered in your area? Why? Is it because of extensive training in Egypt? Certifications from respected organizations such as ATS? Years of experience in our field? If so, customers will be comfortable in paying higher tuition prices because you offer them a higher value and level of instruction for their hard earned dollars. And it’s always easier to lower prices than to raise prices, if you want to run a sale for special occasions like summer classes, when enrollment is typically low, or Christmas time, when people are looking for creative gift ideas.
On the other hand, maybe you want to compete on price. If this is your approach, then taking the Wal Mart approach low, everyday prices may be the most effective for you. With lower prices, you can attract more people to your class. The key to longevity with this approach is retention. You have to attract more customers to cover your expenses and you have to keep them for a longer period of time. Also, be careful – if your price is too low, customers may wonder why you are the lowest option on the block. (Low price can often be perceived as low value.)
Find Out What the Competition is Charging
It is common sense and cannot be overlooked. Find out what others in your area are charging. Be sure to analyze what comparative services, such as Zumba, Pole Dancing, Flamenco, Ballroom dance and gym memberships, are charging. Customers take belly dance for a wide variety of reasons – to check something off their bucket list, for fun and fitness, or for the art – and these competitors must be included in your analysis.
Look deeper than just the numbers. Create a spreadsheet that includes the features and benefits offered by your competition. What is the dollar amount charged? Class times? Number of classes per week? Location? Parking availability? Childcare availability? Instructor credentials? Look at all the variables so you have an accurate picture of what you’re competing against. If you offer something superior, you can charge a higher price point. If your offering is not as robust, you will likely have to charge a lower price.
Think Hard: What Are You Making Money For?
If you accept the concept that you are a business owner and you want to make a profit, now is the time to honestly outline your profit goals. Do you want to quit your day job and earn your living through dance? Do you want to use the money from dance to further your dance training with workshops and trips around the world for festivals? Are you seeking to bring in extra money to pay off a student loan or another bill?
Knowing what your goals are now will help you get there.
The Final Step: Set Your Price
Once you have an understanding of who you are and how you want to be perceived (ie: are you a Rolex or are you a Timex?), and you know you compare to your competition, you can set your price.
Here are some guidelines for this last step.
Your price must be higher than your costs or you will lose money.
You’ll want to calculate the total cost of producing and delivering your classes. To do this, include your variable costs (those that change, like copies of class handouts or music purchases) and fixed costs (such as rent and insurance).
You have to make a living.
Be sure to know how much you want and need to make to cover your time and effort. The fastest way to kill your love for teaching is to feel like the amount of time and effort outweighs what your financial reward. Build your personal profit levels into your equation or you will quickly wind up feeling resentful, taken advantage of and burned out. The old saying ‘pay yourself first’ is one that is founded in a deep seated truth.
Price yourself with enough extra to continue to invest in your business.
You need money to advertise and to grow your business. Businesses that don’t reinvest in themselves fail.
Never price yourself lower than your costs (or you’ll lose money and go out of business) or higher than what most of your customers consider fair (or you won’t get any customers).
Once you’ve taken the time to thoughtfully consider these elements, you can confidently and competitively set your price. And remember … it’s all about perception. Even the most fantastic class and first rate instructor is ultimately only worth what someone is willing to pay for it.
Do you have other ideas or additional insights on pricing? I’d love to start a conversation with you. Just email me at Raksanna@Raksanna.com or private message me on Facebook at Raksanna Raks Sharqi.
And let me know what other business topics you’re interested in. Maybe the next article can focus on running a profitable business, secrets of breaking into the workshop circuit, how to start a business with no money, growth strategies, innovations while staying true to your art form, or building your leadership skills!
Known and loved for her energetic, powerful and fun-loving original style, Raksanna is an award-winning, internationally recognized Middle Eastern dance artist. She is a highly sought after educator and workshop presenter and travels the world, teaching and performing at premier festivals and in intimate workshop settings.
She is the artistic director of Raksanna’s Near East Dance Ensemble, the author of the series Confessions of a Belly Dancer © and the executive producer and director its’ touring theatrical adaption. She has produced shows for Off Broadway NYC, Chicago, Kansas City and Detroit.
For more information about Raksanna, visit www.raksanna.com or send her an email at email@example.com. She loves meeting dancers from around the world and sharing the passion for dance! You can purchase any of the books in the series of Confessions of a Belly Dancer © at www.lulu.com/Raksanna and learn more about the show at www.confessionsofabellydancer.com