Saturday, November 24, 2007


What a mirage the last two weeks have been! As mentioned in my previous blog, work was meant to be cooling down. Little did I know the following week would be another packed week and this past week would be a psychological rollercoaster.

One of the looming sticking points has been a renegotiation of my hourly charge due to the inclusion of GST and the re-writing of the contracts that required. I thought this would have been an easy process but one of the clients baulked at any movement in price and I didn't want to charge one more than the other. To not move the price means a pay cut of 12.5% upon getting registered. Knowledge was the key here when I discovered companies claim back the GST tax on their expenses (from GST registered companies) so any price rise would be superficial and they'd still effectively be paying the pre-tax amount. Upon this discovery, I finally got some resolution and now the contract re-writing has lost its trickiest element.

With all the discussions prior to that discovery came a pretty useful question to address any rise in the charge: What is the real market price for my services?
It was a genuine question but also a tool for this person to negotiate; it is the market that dictates the price and not whether you suddenly want to include the tax - if my pre-tax price was the market price, then the price won't rise just because of my need to include GST! I couldn't give a market price because I have had no contact with others in my employment niche; we are more or less lone wolves. Even if knew someone similar to me, price information would hardly be what you'd share without a lot of assurance you wouldn't be competing for a future clients. He said he'd 'call around' to see if he could find a market price. Later on he called me over and mentioned that he'd done a bit of research and said that my price was far over the market price. Surprised I pressed him for which companies he was making his comparisons: sit-down group classes, mostly in the city. I thought that was rather sneaky. It was to compare my service with something that does not have any of my competitive advantages: namely, its on their site (so no time wasted in transportation), its one-to-one (meaning student's weaknesses are dealt with through a personal curriculum and not a generalised one that may not deal with the needs of a student) and it is flexible to the student's schedule so they are not paying for lessons which they cannot go to due to workload or urgent meetings.

The shock to the end of this story was a sudden indication that my charge may be below the market price. Another company has been looking for someone similar to me in Wellington. They found one but found the charge to be too steep! They'd rather fly me down to Wellington to do their English tuition there for two days! Since they'd be paying for a flight and accommodation (probably discounted but still significant when compared to my charge), I can only assume my price is very competitive. Currently though, that plan is not actually possible due to my other commitments although I would like to negotiate a compromise. The Wellington work would be excellent if it could be done in a single day - the question is if that is really feasible. And that is what I will be finding out.

One thing is for sure though, next week will certainly be quieter on the teaching front - but there is still a lot to do. With the lead in to my vacation I'd like to get things straight. Not having things straight in my head and too many ideas floating around is not conducive to good sleep, I've found.

Tuesday, November 13, 2007

Stars aligning

I'm on the downward slope from a real boom period in business for me. Work should taper off somewhat till I'll be leaving on a jetplane to China. The last two years have both had a nice, profitable October-November period before my hours take a plunge at the end of this year and the start of the next. Complicating work will be hopping over the GST threshold - and taking a likely paycut as a response. This naturally should drive me to work more and harder - and if work continues its expansion, the chance of perhaps getting someone else on board. For me, that is a scary matter.

On the pessimistic side of things, I'll be losing at least one student over the New Year and there is always the worst case scenario of getting GST registered but have a drop in hours to the point where you're well under the threshold!

My imminent trip to China has spurred me into studying Chinese like there was no tomorrow. Earlier in the year I nurtured hope of taking the Advanced proficiency test, but my motivation ebbed and I couldn't study while my free time was consumed more and more by work. Now I find that even with a heavy schedule, making time to study is not an issue. It is funny how when you have the right motivation, things that seemed difficult can ease tremendously.

Spring has turned out to be turbulently nice. There have been some pearlers amongst the rough. I'm a bit sad to be missing out on a third of the summer. I had better get all my swimming and bush-walking out of the way before going just in case conditions aren't as favourable when I get back!