INTERVIEW: Year-end Financial Reviews for Online Language Teachers
If the teachers were doing a financial review, they would have to see in black and white that the energy put into marketing and preparing these products does not match with how much money it brings.
As the year draws to a close, many individuals and businesses embark on the task of conducting annual financial reviews. As a small business owner in the language teaching industry, I am constantly seeking inspiration from others and exploring ways to enhance my work and financial performance.
The online teaching landscape is undergoing rapid transformation, driven by significant global events. During the COVID-19 pandemic, online teachers experienced a surge in demand, leading to increased workloads and higher incomes. However, the subsequent war in Ukraine, coupled with the energy crisis, resulted in a significant decline in demand for one-on-one online lessons, negatively impacting the online learning industry.
Eager to gain a deeper understanding of the Annual Financial Review process, I recently had the pleasure of interviewing two experienced online language tutors from the Czech Republic. Bára and Kristy, both seasoned instructors with years of teaching experience, provided valuable insights into the significance of regular financial reviews and how these assessments have guided decision-making within their respective businesses.
About our online language tutors
Embark on a linguistic adventure with Tak Trochen, a podcast hosted by Bára, a passionate Germanist dedicated to empowering language learners. Bára's love for the German language has enriched her life, and she shares her enthusiasm with others, unlocking the doors to a world of opportunities.
Mluv španělsky goes beyond conventional Spanish language teaching. Born in Serbia, Kristina discovered a profound passion for Mexican telenovelas and the Spanish language. With infectious enthusiasm, she inspires her students to overcome the fear of speaking Spanish and relish in their progress and success.
Q1: What are the key financial trends that you have observed in the language learning industry over the past year?
Bára: My colleagues and I are seeing big changes since the pandemic, which of course, has benefited the online learning industry. Many online language schools and individual businesses were completely booked due to people sitting at home with nothing to do.
Online teachers got used to the fact that demand was very high with zero marketing effort. But competition also skyrocketed because of the pandemic, so suddenly, face-to-face courses have to compete with a wide range of flexible online lessons. But traditional language learning businesses are not all ready for this; they suddenly have to be more flexible and focus more on marketing.
Then there was the war in Ukraine, the energy crisis, and now another war, which in my personal experience, have affected the online learning business rather negatively.
I'm seeing a significant reduction in the number of lessons per week that private clients are able to afford, more interest in shorter (and cheaper) lessons, a shift from 1:1 lessons to cheaper group lessons, and a big demand for microlearning in the form of short video courses or paid subscriptions in which people get paid language content.
Kristy: The teaching industry has changed significantly during the Covid-19 pandemic, including language teaching. Teachers now utilize smart tools such as Zoom or Teams to conduct online classes, incorporating interactive apps like Learning Apps, Wordwall, and Liveworksheets to make lessons more engaging and enjoyable. As a result, teachers are also striving to enhance their income. Some of the trends that have become particularly attractive and are being offered as a package by teachers include:
Online pre-recorded courses, benefiting both teachers and students. Students can learn at their convenience, and teachers can generate additional income.
Asynchronous teaching is a learning approach that allows students to undertake lessons on their own schedule without requiring consistent real-time interactions with an instructor. Many lecturers sell a 3-month package, typically involving assignment giving and correction.
Digital products in PDF format are also gaining popularity, such as grammar worksheets or vocabulary games. These products are reasonably priced and serve as a great source of passive income. Teachers often sell them on marketplaces like Učitelnice or Učitelé učitelům. Some teachers, including myself, prefer selling them on their own websites to avoid paying commissions.
Physical products - teachers are not only innovative in the online world but also sell physical items like books, board games, grammar cards, etc.
Q2: How has your own financial performance changed over the past year?
Bára: I have managed to diversify my streams of income a lot. I offer online lessons of different lengths (15, 25, and 50 min), I facilitate lessons with my tutors in our language studio for which I charge a commission, I launched my first product - an online grammar course for beginners, and I have grown the community on Forenders, a platform for creators where I create premium content. In addition to that, I've had several affiliate collaborations. Thanks to all of this, the turbulent changes of the last year haven't affected me at all; on the contrary - my financial performance has been the best in my entire business.
I owe it to financial reporting, which I finally started doing consistently. Once a quarter, I check not only the turnover but also the time spent on different projects in Toggl and see which sector of my business is doing the best. I adjust my activities for the next quarter accordingly.
Kristy: Every year, I experience a growth rate of around 35%. This year has been particularly remarkable due to the decision to focus primarily on teaching beginners. This choice allowed me to repurpose the teaching materials I had already created, saving me time. I could then allocate that time to other tasks, such as creating prerecorded courses or developing additional digital materials for fellow lecturers teaching Spanish.
Q3: What are your top priorities for financial growth in the coming year?
Bára: One of the biggest problems for online tutors is that we usually only make money when we are sitting at a computer and actively teaching. It's just that our time and capacity are limited, and this way, you quickly hit a financial ceiling that is hard to overcome.
So my main goal for 2024 is to improve sales automation and expand my asynchronous service offerings combined with short online lessons so that I can trade less and less time for money, and rely more and more on online products that sell even when I'm not teaching and yet provide value for the customer.
I would also like to continue to maintain and develop a great diversification of income streams, as it has allowed me to thrive in a rather turbulent year and increase my profits despite high inflation and lower demand.
Kristy: Lately, I have been focusing on creating online courses to assist my students in learning at their own pace. The goal is to genuinely help them, so these courses include not only videos but also interactive self-corrective assignments, grammar worksheets, and audio tracks. Additionally, my other priorities include creating grammar worksheets and workbooks.
Q4: How can your annual financial review help potential customers make informed decisions about whether to use your services and products?
Bára: Once a quarter, I adjust my services and allocate my time to areas that are growing. This year, as a result, I started spending a lot more time creating premium content, and it turned out to be a great decision. If I hadn't been doing a financial review, I wouldn't have had the flexibility to respond to premium content suddenly being much more in demand, and I would have continued to focus on other activities, but where there was no potential for future growth.
Kristy: Currently, my services encompass individual and group lessons, as well as both physical and digital products. I utilize social media, particularly Instagram, to showcase my services and demonstrate my teaching style, aiming to attract students who are committed to investing their time, money, and trust in me. Despite offering a three-month collaboration, many students stay with me for an average of five times longer. This not only saves me time in acquiring new students but also enhances my cash flow.
Q5: How can language learning businesses use their annual financial reviews to build trust and transparency with their users?
Bára: I take great pride in the fact that we do not sell at all costs. I always send potential customers a detailed questionnaire mapping out their pain points and needs. Only after evaluating it do I offer them a suitable product or service that, to the best of my knowledge, will really help them with their problem.
However, I have observed a peculiarity in the online teaching business: tutors offer services that nobody buys from them. Most often, it is asynchronous teaching (also known as language mentoring or language coaching). Why offer something that no one has bought from you for a year or two? If the teachers were doing a financial review, they would have to see in black and white that the energy put into marketing and preparing these products absolutely does not match with how much money it brings into their business.
Kristy: Even in this digital age, social connections remain crucial. Building transparency and trust nowadays can be achieved through a website, where students can learn about our story, prices, and the range of services we offer. Social media and newsletters are excellent tools for potential customers to become better acquainted with us—how we teach, how we communicate, our opinions, and more. When they trust us, the decision to purchase our services or products becomes more straightforward.
Q6: What advice would you give to individual language teachers to improve their financial security and stability?
Bára: Make sure you have various streams of income. The more pillars supporting your business, the less likely it is to fail. Don't be afraid of numbers. I also shied away from spreadsheets and reports early in my career, but let me tell you something - just because you're teaching a language doesn't mean you can ignore math. :) Set fair prices. In the Czech Republic, the going rates for language lessons are still ridiculously low, which leads to unqualified people working in the field and good teachers being chronically overworked. Being tired and overworked will never add good value to a client.
Kristy: First and foremost, I recommend that all teachers establish a two-way relationship of trust with their students. This is particularly beneficial when offering more expensive services; when students trust us, they are more inclined to invest in our VIP services or other higher-priced products. Secondly, to have more free time and avoid burnout, it's advisable not to rely solely on one-on-one teaching. Instead, it's better to create products or online pre-recorded courses. These courses don't need to include dozens of videos; rather, they should focus on specific issues, such as the usage of prepositions or pronunciation courses.
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Final Thoughts
Both Bára and Kristy are successful language teachers who have adapted to the changing landscape of the industry. They have both diversified their income streams, created online products, and are financially savvy. Their insights demonstrated how regular financial reviews can empower tutors to make informed decisions, optimize their resource allocation, and achieve their financial goals. They are both good examples of how language teachers can thrive in the ever-evolving language-learning industry. Here are the key takeaways from their stories:
Diversified income streams
Bára: Offers online lessons of different lengths, facilitates lessons with tutors, sells online grammar courses, and creates podcast and premium content
Kristy: Offers individual and group lessons, sells physical and digital products, and creates online courses
Marketing
Bára: Uses social media and affiliate marketing to promote services
Kristy: Uses social media and newsletters to connect with potential customers
Financially savvy
Bára: does quarterly and annual financial reviews in Toggl
Kristy: Tracks income and expenses, does annual financial reviews
Advice for other language teachers
Bára: Have multiple streams of income, do financial reviews regularly, set fair prices
Kristy: Create online products, focus on digital marketing, build trust with students
