The biggest dilemma I’ve faced so far with starting a business, is without a doubt, to evaluate the price of my time and service. In fact, I spent hours researching other Finnish private teachers and discussing reasonable pricing with friends. Why is it so hard to value your own expertise? Is it just because I’m too much of a humble Finn or is the general value of teaching changing as it’s easier these days to learn whatever skill with free tutorials or almost free tutors?
When I started tutoring in the Finnish language in September 2019, I started it as a hobby with no intention to make it as the main source of income. My rate on the language learning platform called JustLearn was as modest as 15€ per hour. Compared to my regular teacher salary, which normally would include all the benefits such as pension contributions and health insurance, this hourly rate was more or less a half of what I received in Sweden or Finland. At that time, I thought it was reasonable because I was still practising my online teaching skills and I wanted to explore tutoring without worrying about taxes. Also, I didn’t feel right to charge for the time spent on preparation since the role of a tutor didn’t require the same amount of planning prior to lessons as the role of a teacher. After all, the point of tutoring wasn’t to create a comprehensive course plan but to support learners’ self-studying as a native-speaker guide.
Searching for other Finnish teachers and their services online, gave me another perspective to private teaching. Despite the fact that Finnish is a small language with a very marginal target group among all language learners, it seems to have a pretty vast selection of native-speaking tutors, qualified language teachers, self-study courses, and tutoring material online. The prices for learning Finnish vary from free self-study material to private lessons for 100€ per hour. Lessons with a native-speaking tutor without a degree in Finnish language or education, are usually in the range of 10€ to 30€ an hour. In comparison, the hourly rate for an English tutor can be as low as 7€ per hour. Thus, considering my degree – Education as a major and Finnish language and Literature as minors – I should aim for a rate that is closer to the maximum rather than the minimum.
On one hand, I understand why the prices for private lessons with qualified teachers are so high. As an entrepreneur, you need to arrange everything that is usually done “automatically” by the employer for yourself and by yourself because you are your own employer. You are responsible for your own benefits, such as retirement plan and unemployment fund, that are normally included in a fully loaded salary. And not forgetting the taxes! The value-added tax (VAT) in Finland is as high as 24% for sole traders. To explain the private teachers’ high prices in Finland, you could say that the student is an employer, and as the employer, they pay the fully-loaded salary to the teacher.
On the other hand, I thought about how much I myself would pay for private lessons in a new skill. 100€ is a lot of money and I don’t think that many language learners would be ready to pay such a price for one Finnish lesson. At least not if they are paying by themselves. This brings up another question: do I want my courses to be available for only those who have the privilege to pay the highest prices? After receiving valuable comments on the pricing from friends around the world, I decided to stick to my principles and offer affordable access to learning Finnish with professional guidance.
As transforming from casual tutoring to professional teaching, I needed to take preparation time into consideration before establishing the final prices. The better income would allow me to spend more time planning the new courses and preparing better material, which would obviously improve the quality of the instruction. Eventually, I created a pricing system that represents the average price for Finnish tutoring and teaching as well as the average hourly rate for private lessons in other languages. To kick off the business and explore the market for my expertise, I wanted to enter the market with reasonable prices, however, without compromising the quality. The pricing system also favours package deals making it cheaper to book for example 10 lessons instead of just one. Having more lessons with the same student improves the lesson continuum and creates a stronger customer relationship which makes it easier for me, as the teacher, to truly individualise the learning experience.