Start a music lessons business by following these 9 steps:
You have found the perfect business idea, and now you are ready to take the next step. There is more to starting a business than just registering it with the state. We have put together this simple guide to starting your music lessons business. These steps will ensure that your new business is well planned out, registered properly and legally compliant.
STEP 1: Plan your Business
A clear plan is essential for success as an entrepreneur. It will help you map out the specifics of your business and discover some unknowns. A few important topics to consider are:
- What are the startup and ongoing costs?
- Who is your target market?
- How long it will take you to break even?
- What will you name your business?
Luckily we have done a lot of this research for you.
What are the costs involved in opening a music lessons business?
The costs associated with starting a music lessons business are low. Business owners need to have their own instrument, which is often the most expensive startup cost. Typically instruments cost anywhere from less than $300 up to over $2000 (with some instruments falling lower or higher than this range). Instruments can often be found cheaper if used, as well as online. In addition to an instrument, business owners usually need a couple music stands (one for them and one for a student, unless teaching piano or organ; ~$30 each) and their own personal copies of the music they’ll be teaching (students are usually expected to buy their own copies; ~$3 to $25 each).
Instructors also need a place to teach, which can be a room in their own home, at each client’s home or in a public place, such as at a school, church or community center. Renting a space in a public building will increase operating costs a little, but it also provides space for teaching group lessons.
What are the ongoing expenses for a music lessons business?
The ongoing expenses for music lessons businesses are low. Business owners who drive to clients’ homes must pay for transportation to and from each client’s house, and those who use a public space have to pay for that space. Other expenses include instrument maintenance and repair costs, and occasionally purchasing new copies of music.
Who is the target market?
Ideal clients have a passion for music and are interested in learning to create music. Many are either students in school (anywhere from elementary school through college) or adults who have free time that they can spend practicing.
How does a music lessons business make money?
A music lessons business charges students for lessons, which usually last from 30 minutes to 1 hour. Lessons may be charged on a per-lesson or hourly basis. Group lessons usually cost a little less than private lessons, but they can generate more income because there is more than one student being taught.
How much can you charge customers?
Piano lessons usually cost between $30 and $60 per hour. Many music lessons businesses that teach other instruments charge similar rates. When lessons are only a half-hour long, these rates are usually cut in half for each lesson.
How much profit can a music lessons business make?
Even a part-time music lessons business can generate a significant revenue. An instructor who offers private lessons for 20 hours a week could earn between $600 and $1200 each week if they charged $30 to $60 per hour. Because the ongoing expenses are low, the vast majority of this is profit.
How can you make your business more profitable?
Offering group lessons is one of the main ways music lessons businesses generate additional revenue. Group lessons might cost students slightly less per hour, but they can increase the revenue a business brings in. Even if students pay just $10 per lesson, a half-hour group lesson with four students could generate $40 in 30 minutes, or an hourly rate of $80.
Other ways of increasing revenue including offering repair services for broken instruments (if the instructor knows how to repair instruments) and hosting recitals. Many instructors charge additional fees for putting on an annual or semiannual recital.
What will you name your business?
Choosing the right name is very important. Read our detailed guide on how to name your business. We recommend checking if the business name you choose is available as a web domain and securing it early so no one else can take it.
After registering a domain name, consider setting up a professional email account (@yourcompany.com). Google's G Suite offers a business email service that comes with other useful tools, including word processing, spreadsheets, and more. Try it for free
STEP 2: Form a legal entity
Establishing a legal business entity such as an LLC prevents you from being personally liable if your music lessons business is sued. There are many business structures to choose from including: Corporations, LLC's, and DBA's.
Form Your LLC
Read our Guide to Form Your Own LLC
Check out the Top Business Formation Services from our friends at StartupSavant.
You should also consider using a registered agent service to help protect your privacy and stay compliant.
STEP 3: Register for taxes
You will need to register for a variety of state and federal taxes before you can open for business.
In order to register for taxes you will need to apply for an EIN. It's really easy and free!
You can acquire your EIN for free through the IRS website, via fax, or by mail. If you would like to learn more about EINs and how they can benefit your LLC, read our article, What is an EIN?.
STEP 4: Open a business bank account & credit card
Using dedicated business banking and credit accounts is essential for personal asset protection.
When your personal and business accounts are mixed, your personal assets (your home, car, and other valuables) are at risk in the event your business is sued. In business law, this is referred to as piercing your corporate veil.
Open a business bank account
- This separates your personal assets from your company's assets, which is necessary for personal asset protection.
- It also makes accounting and tax filing easier.
Recommended: Find the right bank for you, read our review of the Top 5 Banks for Your Small Business
Get a business credit card
- This helps you separate personal and business expenses by putting your business' expenses all in one place.
- It also builds your company's credit history, which can be useful to raise money and investment later on.
STEP 5: Set up business accounting
Recording your various expenses and sources of income is critical to understanding the financial performance of your business. Keeping accurate and detailed accounts also greatly simplifies your annual tax filing.
STEP 6: Obtain necessary permits and licenses
Failure to acquire necessary permits and licenses can result in hefty fines, or even cause your business to be shut down.
State & Local Business Licensing Requirements
Certain state permits and licenses may be needed. Learn more about licensing requirements in your state by visiting SBA’s reference to state licenses and permits.
In addition, certain local licensing or regulatory requirements may apply. For more information:
- Check with your town, city or county clerk’s office
- Get assistance from one of the local associations listed in US Small Business Associations directory of local business resources.
Most businesses are required to collect sales tax on the goods or services they provide. To learn more about how sales tax will affect your business, read our article, Sales Tax for Small Businesses.
Music lessons businesses should consider requiring clients to sign a service agreement before starting a new project. This agreement should clarify client expectations and minimize risk of legal disputes by setting out payment terms and conditions, service level expectations, and intellectual property ownership. Here is an example service agreement.
Recommended: Rocket Lawyer makes it easy to create a professional service agreement for your business when you sign up for their premium membership. For $39.95 per month, members receive access to hundreds of legal agreements and on call attorneys to get complimentary legal advice.
Certificate of Occupancy
Some business owners travel to clients’ homes to offer lessons. However, if you chose to open a studio to offer music lessons - your studio will need to have an appropriate Certificate of Occupancy (CO). A CO confirms that all building codes, zoning laws and government regulations have been met.
If you plan to lease a studio:
- It is generally the landlord’s responsibility to obtain a CO.
- Before leasing, confirm that your landlord has or can obtain a valid CO that is applicable to a music lessons business. If your landlord does not have a CO suitable to a music lessons business, your studio could be shut down in the event of noise complaints from neighboring tenants.
- After a major renovation, a new CO often needs to be issued. If your place of business will be renovated before opening, it is recommended to include language in your lease agreement stating that lease payments will not commence until a valid CO is issued.
If you plan to purchase or build a location (e.g. lesson studio):
- You will be responsible for obtaining a valid CO from a local government authority.
- Review all building codes and zoning requirements for you business’ location to ensure your business will be in compliance and able to obtain a CO.
STEP 7: Get Business Insurance
Just as with licenses and permits, your business needs insurance in order to operate safely and lawfully. Business Insurance protects your company’s financial wellbeing in the event of a covered loss.
There are several types of insurance policies created for different types of businesses with different risks. If you’re unsure of the types of risks that your business may face, begin with General Liability Insurance. This is the most common coverage that small businesses need, so it’s a great place to start for your business.
Learn more about General Liability Insurance.
Another notable insurance policy that many businesses need is Workers’ Compensation Insurance. If your business will have employees, it’s a good chance that your state will require you to carry Workers' Compensation Coverage.
STEP 8: Define your brand
Your brand is what your company stands for, as well as how your business is perceived by the public. A strong brand will help your business stand out from competitors.
How to promote & market a music lessons business
Music lessons businesses often grow by word of mouth. Posting ads locally on Craigslist, bulletin boards and in newspapers can also help, though. Ads can also be posted where musicians frequent, such as schools, instrument shops, etc.
How to keep customers coming back
There are two main ways that music lessons businesses set themselves apart. Some offer inexpensive lessons, undercutting other businesses’ prices. Others specialize in just one or two instruments and gain a reputation as being the best music lessons business in the area for these select instruments. These businesses usually have an instructor who either has degrees in music or is a member of a successful group.
STEP 9: Establish your Web Presence
A business website allows customers to learn more about your company and the products or services you offer. You can also use social media to attract new clients or customers.
Start A Music Lessons Business In Your State
Select your state below for an in-depth guide on completing each of these steps in your home state.
Is this Business Right For You?
People who are passionate about music and can play at least one instrument well may be interested in starting a music lessons business. Music teachers in schools and band members are especially qualified, as they both have credentials and connections to people who love music. People don’t have to be a music teacher or in a band to start a music lessons business, though.
Business owners should have a significant amount of time available for teaching lessons, but this time doesn’t need to be during typical business hours.
What happens during a typical day at a music lessons business?
Music lessons business owners spend many hours teaching lessons, either one-on-one or in group settings. Depending on their particular business model, instructors may also drive to and from students’ homes, and they might have to repair or maintain instruments. Additionally, music lessons business owners will need to spend time constructing/finding lessons that are suited to their students’ skill level.
What are some skills and experiences that will help you build a successful music lessons business?
A music lessons business owner should know how to play at least one instrument very well, and knowing multiple instruments is helpful. While some instructors are self-taught, completing a formal training program ensures an instructor is highly skilled and provides credibility. Many colleges, universities and other education programs offer bachelor’s, master’s and doctoral degrees in music and music education, and certificate programs are also available throughout the country.
It’s also helpful if instructors know how to maintain and repair their own instruments. This isn’t a vital skill, as an instructor can have someone else perform repairs when necessary. Instructors who do their own repairs can keep their costs lower, though. People who want to learn to repair their instruments may learn how to from fellow musicians who are more knowledgeable or through a certification program.
What is the growth potential for a music lessons business?
Most music lessons businesses have one teacher, who is also the business owner. Businesses with a single instructor are limited by how much time the instructor can spend teaching students. An instructor who taught half-hour private lessons full time (40 hours per week) would be able to teach up to 80 students per week. Many instructors have other jobs and, therefore, can only teach part time.
A few music lessons businesses, however, have multiple instructors. If a business elects to hire instructors, there isn’t a limit to how large the business could become. In theory, a business could have lots of instructors offering lessons on many different instruments, and it could open up locations in other cities to reach even more students.
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Take the Next Step
Find a business mentor
One of the greatest resources an entrepreneur can have is quality mentorship. As you start planning your business, connect with a free business resource near you to get the help you need.
Having a support network in place to turn to during tough times is a major factor of success for new business owners.
Resources to Help Women in Business
There are many resources out there specifically for women entrepreneurs. We’ve gathered necessary and useful information to help you succeed both professionally and personally:
If you’re a woman looking for some guidance in entrepreneurship, check out this great new series Women in Business created by the women of our partner Startup Savant.
How and when to build a team
A music lessons business doesn’t necessarily require multiple employees. If a business owner wants to hire additional instructors, they usually do so when the number of students requesting lessons exceeds the number of lessons they have available. Most instructors, however, either raise their rates at this point in time or increase how many group lessons they offer. These strategies let them increase their revenue without taking on an employee.