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PS 165 The rate you set when you were new
Episode • Bonus Episode • 14th October 2026 • Upgrade Your Education Business • Sumantha McMahon
00:00:00 00:04:14

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In this episode, I explore how tutors often set their first hourly rate based on other tutors’ prices or their previous teaching salary, and how that initial figure can continue to influence pricing years later. She challenges tutors to look beyond simply increasing their current rate and instead ask what their work is actually worth today, based on the transformation, value and peace of mind they provide to students and parents.

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👋🏽 Hello! I'm Sumantha McMahon, and I've supported over 100 tutors and education business owners.

As a teacher 'dropout' turned professional tutor, combined with my 20+ years as a business owner, I'm in it with you! Yes, I'm qualified too :-)

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© 2024 Sumantha McMahon

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Transcripts

Sumantha (00:01)

I’m gonna ask you to think back to how you arrived at your very first hourly rate. And if you’re in a situation where you have just set your very first hourly rate, reflect on that as well. For most tutors, it goes one of two ways. Either you looked at what a few other people in your area or in your niche were charging, picked something slightly below or somewhere in the middle because it feels safer when you’re new, and that was the decision. I know I certainly did that at the very start.

Or you worked backwards from your teaching salary, if say you’re leaving leaving leaving the classroom. You took what you were earning in the classroom, you divided it and set a rate that would get you roughly back to the same place, which makes complete sense when you’re leaving because you know you know you can still pay your bills. But look at what you’re anchored to. It’s a figure that somebody else decided. It’s on a pay scale that you didn’t have any say in for a job that isn’t this one.

Sumantha (01:01)

Either way, you made the decision before you’re necessarily taught a single private session before you knew how you worked, who you’re best with, or what actually happened to a student’s result after six months with you. And here’s the thing that interests me.

The number is probably still in charge. Not the number itself. You’ve almost certainly raised it since, but the way you raise it tells you everything. It goes up by five pounds, then a few years later, another five. Each increase is measured against the last one, which was measured against the one before, all the way back to a figure you chose in almost total ignorance. So the original guess is still setting the scale. It became the anchor, and everything else has been adjusted to it, rather than a decision in its own right.

Sumantha (02:01)

And this is why the conversation about pricing so often stalls at whether you can justify going up. You’re asking whether you’ve earned a bit more than the last number. That’s a much smaller question than the one that’s worth asking. The better question is what is this work worth now if you’d never set a rate at all?

Ask it properly. What does a student actually get from six months with you? What happens to their confidence, their results, the atmosphere in the house on a Sunday evening for them? What does the parent no longer have to worry about? And what does it cost them if it doesn’t happen? And answer that honestly, and you’ll arrive at a figure, and it won’t be your current rate plus five. Now I’m not telling you to change that tomorrow. There is a distance between knowing what something is worth and asking for it, and that distance is real. But you can’t cross it until you know the number exists. And most tutors have never worked it out because they’ve been busy adjusting a guess from years ago. So that’s the exercise. Not what shall I raise it to, but what is this actually worth? Starting from nothing. Find that out first and then decide what to do about it after.

I kept the wording as in the original, including the repeated words, and only fixed a stray “i” and a capital letter. I placed the 01:01 and 02:01 timestamps at natural paragraph breaks based on an even speaking pace, so they may need a small nudge if you want them to match the audio exactly.

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