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All Children Participate
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Pull-Out Programs
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| Need to convince one person (Director/Owner) to make a sale |
Need to convince parents of each child to make a sale |
| Year long contracts |
Month by month contracts |
| Buyers make a buying decision once a year |
Buyers make a buying decision each month |
| Stable cash flow all year long |
Sporadic monthly cash flow |
| Less sensitive to the economy |
More sensitive to the economy |
| Difficult to terminate yearlong contract |
Easy to terminate monthly agreement/contract |
| Easy accounting -1 payment per account each month |
Time consuming accounting - payments from many parents |
| Minimal returned check fees |
Regular returned check fees |
| Enrollment is never a concern since all children participate |
Enrollment is always a concern, especially for holidays/vacations |
| Average cost per child low - leads to greater volume |
Average cost per child high - leads to lower volume |
| Convenient for schools - entire class takes the program with their regular staff teachers |
Inconvenient for schools - select children are taken out, other children are upset and some school teachers have to leave their classrooms to help |
| All the staff sees, knows and values the program |
Few staff members see the program or know what children do each week |
| Accepted as an important part of the curriculum - fees part of tuition |
Not an important part of the curriculum - an optional extra |
| Yearly renewal likely |
May not make it a full year |
| Higher overall account retention |
Lower overall account retention |
| Instructor hours and income are stable |
Instructor hours and income are unstable |
| Class size is large - motivating for instructors |
Class size may be very small - not motivating for instructors |
| Low instructor turnover |
High instructor turnover |
| Greater long term financial security |
Questionable long term financial security |
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To summarize, conducting a pull-out program will cost a massive amount of capital for:
1) Selling and retaining clients
2) Accounting
3) Hiring and retaining instructors
Long term success is directly related to each of these areas. And, it’s not cost effective to start a business with so many unnecessary worries.
Be careful if you are considering investing in a pull-out program promising large profits. These profits are often based on unrealistic sign-up numbers and lead to all the disadvantages listed above.
