An example: what if I have 30 customers in an average week giving me 35 hours, and I cover 500 miles during that week? The franchise cost is £x, the fuel bill is £y and the income from driving lessons is £z. What is my net profit? When making these calculations, do not forget to include all your costs.
Motoring costs: fuel, car insurance, road fund licence, MOT, car repairs, car cleaning, car servicing, replacing tyres, car depreciation, replacement car fund (if you are thinking about leaving the franchise at some stage) and franchise fees.
Personal costs: association fees, other subscriptions (e.g. FSB), insurance, private pension, accountancy fees, DSA fees, office expenses, National Insurance and income tax. Note : if a car is supplied as part of the agreement, some of the ‘motor’ items listed above may be included in the franchise fee. Check the details with the school. Consider the following with care: Will you make at the very least, a reasonable living? What would happen if you have to pay a fixed franchise rate but then receive few clients? Is there a minimum contract term?
Remember you will still have to pay for fuel. Working for yourself and having your own driving school Many ADIs prefer to run their own driving schools. They like the idea of being their own boss and of being able to organise the day-to-day running of the business in a way that suits them. Probably one of the most satisfying aspects is that you do not have anyone (apart from your clients) to answer to. You can choose which clients to take on, which geographical areas to work in and what to charge. If your driving school is a success you can take full credit for it. The counter-arguments to working on your own are that you will have to do all your own advertising and will be the first contact when people ring to make inquiries. You will have to organise everything from your school name to your clients’ records. While it is true that you can take full credit for any success, you will also have to accept full responsibility if things do not work out.
The name you give your driving school will probably depend on how high you have set your sights. If you wish to run a regional or national driving school then it is probably better not to use your own name as you may find that this is already being used in other areas. Rather, give it a unique name and register this as a trade name, copyrighting the name and logo so that they cannot be used by anyone else. As this article does not have the scope to deal fully with this subject, we recommend that you explore it in more detail.
Your decision as to which areas to cover will be influenced by the following: The number of other ADIs working in the area and whether they work part time or full time. Whether you want to specialise in giving tuition in an automatic car and, if so, what level of competition you are likely to face in the area. The population density.Will you need to travel backwards and forwards covering small towns and the surrounding villages? How far afield do you want to travel? Remember that the time between driving lessons is dead time. In other words, you receive no money, you pay the travel costs and your car is clocking up unproductive miles. Whether the test centre is far away from the main areas where you will be working. Looking at these areas, is it likely that your clients will be able to afford driving lessons of two to three hours to cover the extra travelling time? The unemployment rate. The percentage of the population who are on a low income. If you are considering working in a deprived area, whether you will you be able to charge enough for your driving lessons and whether your clients will be able to have driving lessons on a regular basis. In the more affluent areas, driving lessons will most likely be considered as an essential item. In the poorer areas driving lessons will probably be considered a luxury and, as a result, they will be way down on the priorities list.
How often do you see the national driving school cars in your areas? National driving schools have large overheads, so you should be able to undercut their prices and still make a reasonable profit. How many owner/driving schools do you see regularly every day? Do you see these at weekends? Do you want to work full or part time? Many driving instructors work part time. This may be by choice or it may be because they cannot find sufficient work for full-time employment. If many of the instructors in your area fall into this category, then you may also find work difficult. They might not get enough work because they do not receive many recommendations. They may also have poor pass rates. If this is the case, you can move in and, by using the methods we suggest in this article, build up your reputation and flourish. Their loss will be your gain. What is your competition? Can you pick out the ‘new boys on the block?’ A shiny new headboard and signs may be an indicator. A pink licence is a give away. Who is advertising in the local papers and what are they offering? If they are advertising in this way on a regular basis, they may be struggling for work. This may be because they are poor at their job or because clients are generally hard to come by. Or it could mean that they have had a large number of test passes recently. Keep reading the adverts to try to gauge the situation.
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Note: This article was sent to us by: Annie Worley at 01172010
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