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What happens to your teaching business when students don't pay or don't pay on time? There aren't any rules unless you put them into place yourself. Set the rules at the first meeting because a freelance teacher's income is jeopardised when they are not paid on time, and their bills cannot be paid. And that is why you should always set payment rules from the outset. A regular income - a steady cash flow - keeps your teaching business alive. Remember, 80 per cent of businesses fail because they run out of money. Make sure you have a teaching service contract detailing your payment policies: when students are expected to pay and what happens when payment is late when customers sit before you. Teaching service contracts secure a legally sound footing for freelancers when making payment claims. It is their only legal and binding proof a teaching payment agreement exists between them and their students. In fact, should their relationship with one of their student turn sour, and they need a lawyer, the first thing they will be asked is: Do you have a contract? Contracts are simple reality checks to decide whether freelancers can work with a customer. If both sides respect the contract, they can work together. A lawyer is the best person to guarantee a contract is made correctly. On the other hand, they are expensive. For most teaching freelancers, a lawyer is a luxury they cannot afford - so a self-made contract must suffice. A self-made teaching service contract is better than none. If you have never prepared a business contract before, you may be quite daunted by the prospect of creating one. For example: § What details must be written into contracts? § What elements are usually forgotten in agreements (absenteeism, etc.)? § Situations when a lawyer must check the wording in contracts For this purpose, freelancers can use a teaching service agreement example as a basis for creating their own contracts. The contract example presented is for educational and demonstrative purposes.
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DO YOU NEED TEACHING CONTRACTS?
How to avoid late paying students
Make rules (pay upfront
and
have a contract)
Penalty clauses for late or breach of payments
Ask for upfront payments
When upfront payments are not possible
A contract is a form of reality check
ARE TEACHING CONTRACTS USEFUL?
Supplier
versus
Service Provider
Contract priorities
WHAT GOES INTO A CONTRACT?
Basic requirements
WHAT USUALLY GETS FORGOTTEN?
1. Cancellation policies
2. Sickness
3. Late payment policies
WHEN SHOULD YOU ASK A LAWYER?
When customers want changes to the contract
CHECK LIST
CONTRACT BLUEPRINT
EXAMPLE of a Teaching Service Contract
MISCELLANEOUS OPTIONAL ADDITIONS—EXAMPLES
Independent Contractor Relationship Clause
Non-Compete/Non-Soliciting Agreement
Examples: COOLING-OFF PERIOD
Example: LEARNING GUARANTEE
Example: ADDITIONAL LESSONS
Example: TRANSLATION WORK
Examples: INSURANCE/LIABILITIES
ADDITIONAL CLAUSE IDEAS FOR ONLINE COURSES
Examples: HEALTH AND LEARNING ISSUES
Examples: FLAMING AND MISBEHAVIOUR
Examples: LATENESS
Examples: CONNECTION PROBLEMS
Examples: ONLINE MINOR STUDENTS
WEBSITES AND DATA PROTECTION AGREEMENT (GDPR)
Data Protection Agreement for Websites
NOTE: Guidelines for Teaching Contracts is a republished, completely revised short book version of chapters previously published under The Teacher’s Guide to Pricing Matters, by Janine Bray-Mueller, 2019, BoD - Books on Demand, Norderstedt, Germany.
There are no rules (governing a teaching service) unless you put them into place yourself
That is why you should always set payment rules from the beginning
As a foundation for your work, contracts set up shared communications between yourself and the customer concerning receiving and giving tuition.
It also sets the groundwork for negotiations when things go wrong.
What happens when students don’t pay or forget to pay on time? Well… There are no rules unless you put them there yourself.
The same is true for freelance teachers if they don’t want to suffer high blood pressure because they haven’t (yet) been paid. When a teacher’s income is jeopardised, the iron ball of desperation rolls. Its metal sound is the first grinding note that ‘tolls death’ for any entrepreneurial freelance teaching service.
Should I ignore the receivable (the debt)? Or extend the time and allow the student to pay later (
and
continue working with them)?
Should I forget the receivable? Can I accept losing not just my money but also my time as well?
Should I sue? (Can I afford to go to court?)
Should I ‘fire’ the student and lose future business with them?
Should I give incentive discounts to pay early and to pay on time?
And so on…
How do you make sure you are paid on time? The easiest method is to make rules in your business and stick to them. It’s far better to lose a non-paying student than to have sleepless nights when you cannot pay your bills.
When you have your student sitting before you, make sure you define:
1. The scope of lessons, course, seminar-workshop and time frame
2. The rules for cancelling lessons or seminar-workshops
3. When the student is expected to pay and what happens when payment is late (direct and associate customers)
Who are direct customers?
Your direct customers are private students and companies you have found and won yourself through your marketing efforts.
Who are associate customers?
Associate customers (schools and institutes), on the other hand, find students and customer for you. You have not been involved in finding these students yourself.
Penalty clauses are not uncommon in commercial businesses, especially when the ordered services and delivery times are critical.
Should penalty clauses be included when customers don’t pay on time or cancel too late? The colleagues most at risk provide large training projects (such as workshops and speaker presentations). They have to weigh the consequences of not being paid (without penalty) against ‘prestige’ factors.
Does the contracted work present (a much-desired) future opportunity in their careers? For example, TED Talks.
• Would the size and reputation of the company on the commercial, industrial, or educational markets be an important asset to their portfolios?
A penalty is not normally necessary for private students unless we heed Marcus Tullius Cicero (106–43 B.C.) statement still used today: ‘the exception that proves the rule.’1
Let’s face it. Some individuals can become the worst repeat culprits. For these clients, late cancellation penalties (loss of lesson plus the lesson fee) must apply for all our students and not just companies. Be aware that company managers may not care about the penalty clause because it’s not their money. However, private customers feel (personal) financial pain. So they become much more aware of the consequences when they don’t show up, cancel too late, or pay too late.
It is good to know that the European Union has created support programmes targeting small and medium-sized enterprises (SMEs). Teaching freelance services are also considered SMEs and fall under the protective ‘Directive 2011/7/EU of the European Parliament and of the Council of 16 February 2011 on combating late payment in commercial transactions Text with EEA relevance.’ You can obtain more information by visiting the following EU web pages:
The
2011/7/EU Directive
(available in several languages):
https://bit.ly/EU_Directive_2011
The
EU Late Payment Directive
can be found on: