Amanda Barr 0:02
Hello friends I'm Amanda bar. And I'm Rebecca Lu Brennan and welcome to Dance principles united the podcast. Together we are passionate about helping studio owners with the business of running their studio. Join us as we talk everything through marketing systems studio culture, motherhood, life and everything in between. This is the dance principles United Podcast
Rebecca Liu Brennan 0:28
Hi friends I heard you as super amazing this week. I am here with the incredible Nathan today who is going to give you some great insights as he always does. How are you Nathan? Hey
Nathan Barr 0:40
Beck really good managing to stay dry just here down in like I was gonna say sunny New South Wales but it's exact opposite of that right like absolutely horrible week. Soccer cancelled two weeks in a row for the kids were going a bit stir crazy bit at least Danzig can happen in the rain. Right?
Rebecca Liu Brennan 0:56
Exactly how sad that soccer was cancelled for you. I'm sure you really hated not being out in the freezing cold watching them run around after a ball.
Nathan Barr 1:04
I did. But man did like was so super, super excited to be honest. Absolutely,
Rebecca Liu Brennan 1:09
absolutely. But we're here to chat to you guys today about beads, the bigger E's studio owners hatred thing is chasing these. It's so painful. I've definitely changed a lot. Thanks to you with how my business works with this stuff. But yeah, I think it's like the pit hype. Right?
Nathan Barr 1:32
Absolutely. It's something that we always see, like, you know, every now and again, especially sort of, as we get halfway through the year to the end of the year, we start seeing the questions on Facebook groups, does anybody know a good collections company? All those types of things? Like yeah, it's it's the pet hate because especially, you know, what we see for most NCD owners is they're just such kind, generous, giving people and that notion of being a bit of a hard nosed, that that chases the cash and chases the money and says to the kids, like you know, we're gonna have to stop dancing because mom and dad haven't paid fees. It's just so against so much of what of what you stand for, right? But at the end of the day, you know, we're a business and what what I see with so many studio owners is not only the fact that they're not getting the money, which is a big issue, but unfortunately, how much of their headspace it takes up, as well, and how much it sort of affects them? Yeah, like I said, moreso from the headspace aspect, and not being able to focus on positive things in their studio in their business. Absolutely.
Rebecca Liu Brennan 2:32
I I know back in the day, probably 10 years ago, now neath I used to do the invoicing at the beginning of the term. And I remember most terms, I would have 20 to $25,000, owing by the end of the term, and trying to collect that, and trying to just the cash flow aspect of that, like not having the cash to pay your staff, it was a nightmare, an absolute nightmare. 100%.
Nathan Barr 3:02
And like you said, like that, yeah, that is a percentage, obviously, like you run a very big studio. So that number is obviously like a smaller percentage of your total fees and whatnot. But still, it's a big chunk of money, whichever way you look at it. And for every studio has that, you know, whether it's like three or 4%, or even like five or 10% of your fees for that term. That amount of cash for any studio owner, is something that we need, like you said, to pay the bills with the holidays, and all of those kinds of things. And like I said, it's just always such a sticking point and something that we need to I guess Yeah, flip out our way of thinking about it. There's so many different ways we I think we can attack it to number one, stop it getting to that point of having the big dollar amount outstanding, but then also just more effective ways of of chasing, and if it if it does get to that point as well. Absolutely. Yeah, sorry, I was gonna say, but I think today we're focusing more on how to stop it getting to that point, right?
Rebecca Liu Brennan 3:58
Yes. And I was gonna say the biggest game changer for me was swapping to direct debit or a membership, like you do at a gym, where that money just comes out each week of everybody's account. And that was massive for me to change that over a massive 100%.
Nathan Barr 4:14
And we see so many advantages from it, right? Number one, and this was something that came up in one of our SGC calls the other day was people talking about, you know, the start of term, because there are still we know there's still loads of studios that invoice for the term upfront. That's the more traditional way of doing that. We know that. And we completely understand that. But talking about, you know, we always have that start of term drop. And one of our members suggested and pointed out that they feel like it's probably come down a bit since they've swapped to that weekly direct debit, because instead of getting the bill for $800 upfront at the start of the term, it's just $80 a week coming up. Now obviously we all know it's the same amount over the term, but that $800 invoice makes it Parents stop and think, Oh, crap, I under bucks. That's yeah. Okay, a bit of money, interest rates going up the price price of groceries going up, I'm hearing all this inflation stuff like, Do you really like dancing Suze, like, like, all those little things, it's just it's that stop and think point. But once we shift to the weekly direct debit, I'd be fairly certain as well. And I don't have like the stats or the data to back it up. But I'd be fairly certain that that that's definitely true. That is just we've got there used to just paying that $80 or whatever it is per week. And that just comes out the start of next time it starts coming out again. And Little Susie just keeps on coming to dance, right? Yep,
Rebecca Liu Brennan 5:36
absolutely. It's a huge game changer. I'll tell you what else it's a huge game changer for and I know, I said this before your cash flow? Because I know every week exactly how much money's coming in. And then yes, you know, we still have a few people who, obviously their money doesn't go through. And we have to give them a call and chase them. But it's it doesn't get to an astronomical amount. That's the thing, because you're just chasing them straight away. And I think we know what we're sitting at each week. And we know where we go is just a total gamechanger. Yeah,
Nathan Barr 6:09
and exactly like you said, like, yes, we have people whose payments bounced, we get that as well. But using that $800 A term example, again, what would happen in the past and don't like this happened in our studio as well in us like before we converted to direct debit. And you were saying it happened at pause as well is that you get that you send the $800 term invoice and something happens in the family situation. They've always been a good payer, but the invoice goes outstanding for that term. In the back of your mind, you're like, ah, that family is always a great payer or good, they'll fix us up, you send a couple of emails and whatnot. But then it comes in the next term as well. And you send out the $800. Again, you get caught up in crazy comp season and all those all the things that we do when we start running a studio owners, and all of a sudden you get to the end of the next term and the next $800 and a couple of costumes haven't come out as well. So we've gone to like 1600, possibly like $1,800 as well outstanding. And you're like crap, what's happening here. And then again, we get caught up in the running. And they've always been a good pay put at the back of your mind. Next thing, the bill ends up around constant time at $3,000 outstanding because you haven't chased it up properly. And you put yourself in a bit of a bind, to be honest, by not chasing it up. But if we're on the weekly direct debit, it just means we can start opening those conversations really early, when they miss their first ad dollar payment. Hey, just notice your payments bounced, what can we do to help fix this up. And then we're just continually if we're on top of our admin and those sorts of things, then we're catching it at the ad 160 $240 Mark. And we can start making changes that whether that's them pulling back classes, or they get on top of it because at the end of the day, like I said it's it's our nature to be so giving and generous so many of the time and we always trust people's better nature, which is often to our to our detriment a lot of the times. But once we once we start because people end up paying or prioritising us where we allow them. So if they know that they can sort of get away with it, that means that they're going to put us towards the bottom of their prioritisation around bills. But if they know that we're going to be following up with them and just gently questioning, it's as if we're going to blow our lid after the first non payment. But if we're if they know that when they miss a dance payment, they're gonna be like, they're gonna get a little message about it. And if they miss two, they're gonna get a phone call about it. That puts us up the top of their priorities and making sure that we're always gonna get paid, right? Absolutely,
Rebecca Liu Brennan 8:30
absolutely. So that's definitely our first top tip is that direct debit stuff. But the other thing we wanted to chat to you guys today about is just some crazy fees and rules and things that we found some of our studio owners have, that can put a bit of a sour taste in people's mouths. And Nathan, I haven't told you this story. But I'm, I went to the gym last night, okay, and I couldn't, couldn't get through the gate for my class. So you have to, to kind of tap to go into your class. And the guy was like, Oh, let me check what's going on there. And he goes, Oh, you've got a class fee. And I said, what, four? And he said, Oh, you didn't turn up to one of the classes. So we charge you a fee when you don't turn up to the class right? Now, this is a pretty like boutique kind of gym. Not I've never been to a full class, especially the virtual bike class that I apparently didn't turn up to. I've honestly like I think I've the most amount of people that's ever been in there. There's 30 bikes in there. There'd be three of us, Max in any class time rap. That's the class that they were charging me for, guess how much they charged me to not turn up to that class and not push cancel on my app? Because the rule is, you have to push it so if I push cancel five minutes before the class, I wouldn't have got charged but I didn't do that. What do you reckon they charged me
Nathan Barr 9:53
$32 Yeah,
Rebecca Liu Brennan 9:55
it was $25 I feel like side Sorry, this isn't a cheap gym. I'm paying $65 a week for this gym, gym. And I got charged $25 for not turning up to a class that I knew wasn't fought out. I still went to my class, I'm still joining. I'm still at the gym, but it did put a sour taste in my mouth. Absolutely.
Nathan Barr 10:17
And if you were on the fence about, you know, one of your friends had just joined another gym and had said to you a few times, hey, back, like I'm getting this great new gym, maybe should come, like, come along with me. It's heaps of fun. Like, if you were sort of in that, yeah, on the fence situation, that would probably have been the catalyst for you
Rebecca Liu Brennan 10:33
to go right out. Yes, exactly.
Nathan Barr 10:36
I think that's something that we see studio owners doing a lot of the time with our policies and procedures, right?
Rebecca Liu Brennan 10:42
Yep, it totally is that look, we're not saying to not put some policies, obviously, you've got to have some policies, without a doubt. But I guarantee you, I'll tell that story to a lot of people I told it to, Tim, as soon as I got home and sat on the couch with him, I've now told it to you and all of our listeners, I'll probably tell my friends, I'll probably you know what I mean, like, that's a story that I will tell because it pissed me off. And that's the problem with some of this stuff is that it's gonna then circulate around that that's not a great chimp. And it is a good gym. Every other experience I've had there is amazing. The customer service is incredible. It's a beautiful gym, I feel really bougie in there, which is why it's my feel, you know, it's got saunas, and Dyson, hair dryers and like, all that sort of stuff that I know, but it's, for me, it's, it's, it's definitely the place for you. But that just put a sour taste in. And I'm now going to give it bad reviews to friends and family.
Nathan Barr 11:44
And the biggest thing is as much as like, I think it's just human nature, right that we not wins. But like we are quicker to highlight negatives than we are positives. Yeah, right, a lot of the time. And so especially for the next few weeks, when somebody asks you about the gym, that'll be the first thing that's in your mind, and that'll be the first thing that you tell about it. And I think that's so important with the reputation management of our studios. Because, you know, it was, and I think a lot of it come I was having this chat with one of our studio growth club members in our one on one this week as well, is that I think a lot of that comes down to money mindset. And having that money mindset of, you know, instead of white knuckling money, and holding on to it because that's what a lot of our sometimes our like, really rigid payment structures are about, as opposed to having that more abundance mindset. And I was chatting about like, the money mindset, like my money mindset from, from my upbringing. You know, it was very different to Amanda's. So Amanda was brought up by parents that always ran businesses, that sort of took more risks around those sorts of things. And I had a fantastic upbringing as well, this isn't a poor me by any stretch of the imagination, because I had a very amazing and very comfortable upbringing as well and didn't want for anything. But it was, you know, both of my parents were teachers, and it was at, you know, we're having good stable jobs with stable income, sort of low risk aversion, and just like building saving, and all of those sorts of things. But But you, you build a new save, and you hold on to things and you don't take a lot of risks. So that was an I believe that sort of mindset is how a lot of people's like payment policies, especially those those sort of harder line payment policies are sort of built around rather than that sort of more abundance mindset. And that's where like, we set up our fee schedule and our payment policies with more of that abundance mindset in mind. And that was like when manda first suggested it, because back in the day, when we had the pay by term, sort of thing, it was quite rigid instruction. Right. And when manda suggested, now, we should just just charge pay bi weekly, and if they leave in week three, then, you know, that's it, and they stop paying. And like, like I said, I went straight to the point of what what do you mean, like, we've run projections and budgets for the whole term. And we couldn't do that, because that means, like, just like I said, that that, that might that sort of more closed money mindset of like, holding on to everything for dear life was like, was what was driving my thought process around the time. And so a dance sensations, we changed our payment policy to be that you need two weeks notice, um, you need to give us two weeks notice in writing, and then we stop your payments. That was the policy that and we could have enforced that policy. But what we actually ended up doing most of the time, was if somebody emailed us on the Thursday and said, our little Susie's just not feeling dancing anymore. So we're going to we're going to stop classes. If we got that email on a Wednesday or Thursday of a week. We'd stop charging them for the next week, and we'd send them off with love. And thanks, and then just say the door's always open if you came back, and like I said, that scared the absolute hell out of me because I I was the one that is looking after the money. But you know what? It works. It really, really works. Because everybody that goes, doesn't have nobody has a sour taste in their mouth about money. And that's what people get the biggest bee in their bonnet about we know. And then they do feel welcome to come back. They never have anything bad. That's like they, they're always leaving on a positive, right? Yes,
Rebecca Liu Brennan 15:19
I think there's so many of us that let these students leave on a negative for various reasons. And we just have to be so careful of that. Because that can really bite you in the ass later on. I used to be one of those studio owners for sure. And yet, I used to do the same. Well, you've started your into the term week three, you have to pay for the rest of the term. That's just the way it is that, you know, it was crazy. And I feel the exact same. We're much more lacs about it now, but I think it's giving us a better feel in our community. Look, I still charged charges if they bounce. If their money bounces, we charge them for their money. And we're pretty strict on that. Because we want their money to not bounce. But as far as them opting out, I love what you said Nathe about, you know, I send you with love that is so important to do in your headspace as well. Because sometimes you lose big clients and it hurts like it really does hurt. But you're right, we have to send them with love, wish them the best. And you know what, they might come back to you a year later, you just never know
Nathan Barr 16:25
100% Exactly what you said, like, you know, because the weekly direct debit has comes with its own, obviously, like processing fees and things like that, which is an objection that we hear from studio owners a lot around that. And we were the same if their payments bounced, then that's on them. But again, it's that holding them accountable and holding them accountable that too quickly, is exactly what I was talking about before, it means that they know that we're on top of it, we're holding them accountable, which keeps us at the top of their we have to pay these people. We don't get slid down there like payment priorities list because like we all do that we're all humans, we all have those things like oh, I can probably just put that bill off for a couple of weeks, like doing those things and holding people accountable around it. Make sure that that that cash flow comes in steadily as well, right.
Rebecca Liu Brennan 17:11
Yep, absolutely, absolutely. It's interesting that I'm gonna go back to my gym thing, because I think about that now, Nathan, I think Yep. Well, at the end of the day, I probably will remember to cancel that class next time. Like, you know what I mean? They are teaching me something by doing that, whether they're teaching me in the right way or not, I'm not sure. But it's, it's interesting, you've got to find that fine line. But I think it'd be great for our studios, owners out there today to self reflect, to think about the fees and the rules that you have in place with fees. And think about if that was you getting those same fees and rules from a gym, for example, put it put a sour taste in your mouth? How would it make you feel? Or if it was your child going to a different activity? How would it make you feel if that was the case, if that if you were taking them to karate, and it was week three, and the child was screaming and crying and absolutely did not want to go because it's so hard to get these kids out to an activity they don't want to go to we've both been there. And so how would that make you feel that you had to keep paying it for the next seven weeks and just self reflect on that, I think is the key, right?
Nathan Barr 18:19
Yeah, without a doubt without a doubt. So we talked about in terms of like making sure that we are able to chase fees most effectively, we talked about weekly direct debit, or fortnightly direct debit, or whatever it is. Having that steady, regular cash flow not only like helps with making sure that those fees don't get too high in the first place, then the next bit is making sure that we chase it up and hold people accountable. I think a lot of it comes down to as well like people being a bit afraid of the phone calls around it. So like we can set we can shoot an SMS about it, we can send an email about it. But sometimes third one, we have to pick up the phone and call and call with empathy, like always lead with empathy around these, especially if it's people, like I said, that have always been good players, payers, so not players, ring them and say, Hey, I just noticed that your payments have actually bounced the last three weeks is everything okay? Yep. And like, let them have a bit of a talk because you're much more likely to start working on a solution with them. Because to be honest, what we generally see with most people, when you're having that conversation, you're not the only person they're getting those phone calls from as well at the moment, right? So making sure again, leading with empathy, but you've got to open the conversation. And sometimes it's a hard conversation as well, but it's a conversation we have to be comfortable with. And that we have to stand firm on not horribly not jump up and down to throw the toys out of the pram but like I completely understand maybe we need to cut back on a couple of classes while we can get this under. under control, right? Yep,
Rebecca Liu Brennan 19:49
absolutely. I love that you're coming at it with understanding and you know, I think it's that not being reactive and realising that people one get busy and forget and two You actually go through hardship and can't do it. And three sometimes, like you said, just aren't prioritising it because you're not prioritising it. I loved what you said about that as well. neath but yes, going in with it gentle is definitely the key.
Nathan Barr 20:14
We can be gentle, and we can be firm at the same time. Because we can't keep giving it away for free as well. And you've got to be able to, like, get comfortable with what, what you're going to do about it. And not jump up and down. But yeah, like I said, we can definitely be kind and firm at the same time and still get the result that we need out of it, which is our cash coming in.
Rebecca Liu Brennan 20:34
I love it. I love it. You were telling me a little analogy. You were telling me a story the other day where you're on the phone to each other. And I've wanted you to tell our listeners to finish off today. Can you tell us that
Nathan Barr 20:45
beautiful story now? Exactly. And it was around those, you know, those really tight rigid fee structures that we have in place, right? And then absolutely, the analogy came when I was like when I started in another life when I started my teaching career. And one of the professional developments we had early on there was about the school values and especially around making sure that everybody's on board with our school values so that we can do what we want. We wanted, which was educate the children, and it applies exactly the same to dance. And it's about how do you get everybody to stay around and do what you want. And it was the analogy was when people first started building cattle stations out in the in the out in the like, right out in the outback in the middle of Australia. And obviously they're coming from places close to the coast or even like back overseas where they had small paddocks, and they'd build fences around their cows, right. But then they get out into these wide, vast expanses. And there's no way that they can build enough fences because it's just too huge a property and whatnot. They're like, Okay, well, how do we solve the problem of all our cattle running away, because we need them to stay here, because that's what generates our income, right? And somebody came up with a bright idea like, well, all animals need water. And we're in the outback in the desert, he is there's not a lot of water, let's just put really big well, right in the middle of where we want them all to stay, instead of having to spend all the money and resources on not only building but maintaining those fences around them. And what they found was that that achieved that goal. And the analogy from an education perspective was that that well is the centre of everything we do. It's our values, it's so within our studio, right? It's the values of our studio, it's the amazing product that we offer within our classes. It's the family friendly feel, it's everything that we do, that keep our students in our families in around us. Now, what we see sometimes is with those really rigid policies that we try to build fences around them, and then we try and like steel reinforced those fences and, and things like that. And it just takes so much time, effort and resources to try and reinforce those fences all the time. And people hate like they're feeling being trapped in those fences. But if we've got a really strong set of values, and beliefs, and everything that's at the core of what we do, then it keeps our families and our parents in there and happy. And like I said, like it is a big leap to make that to our payment policies are included in that as well. But it's that idea of like, people will keep coming back and people will keep paying you and be more on time with their fees. Like I said that was the biggest shock to me was that when we actually relaxed those policies when we had more of that well idea rather than than trying to build the fences around it. We actually saw our revenues and our profits start to increase. It was completely foreign to me and completely unexpected. But it's 100% What happened.
Rebecca Liu Brennan 23:36
I love it nice to us such a rockstar and so inspiring. I hope you all got heaps out of today's podcast. Make sure you self reflect on what you're doing in your studio with payments and with all the things and reach out to us on the DMS and let us know if you change something because we love hearing from you. Thanks so much everyone and thanks for listening. We'll talk to you next week. Bye bye.
Nathan Barr 24:00
Thanks, everyone. Bye
Transcribed by https://otter.ai