I got an email recently from a company which supplies pupils. I don’t have any real problem with places like this (as long as they aren’t ripping people off), but one thing about it made me smile.
The article “Should I Become A Driving Instructor?” is very popular, and one point I make in there several times – indeed, I mention it frequently on the blog – is that independent instructors often go to great lengths to stress how successful they are when they’re advising newly-qualified ADIs on how to start out in the business. “Go independent”, they say. “I did it, and I’ve never looked back”, they add.
So the funny thing is that over the last few weeks, I’ve noticed a lots of these people asking on social media if pupil supply companies are any good! I know of at least one who has already signed up to the company that emailed me.
I’d have thought that if you were the mega-successful independent you’ve been claiming to be all this time, who only has to blink to get all the pupils he/she wants, thus making franchises redundant, you wouldn’t need a service like this – and especially not when there are pupils falling out of the sky right now. I mean, by having to rely on such a service, you’re halfway towards towards being franchised, because you’re certainly not doing it all “independently”. Supplying your own pupils is the key detail in being “independent”.
Doing a bit of checking as a result of the email I received (you have to poke around a bit) it seems that each referral costs £18. It’ll be interesting to see how long they can keep that up, because I’d bet money that it will rise to £20 or £25 over the next year or two. At the current rate they’re charging, it won’t be high-margin for them, and I would imagine it is dependent on them signing up enough instructors in the area to meet a target in their business plan.
I’ve said before that the driving instruction business is a mature one, and the maximum prices you can charge are pretty much capped in any given location. It isn’t a high margin business, and the best profits are to be had from keeping your overheads down. As far as the entire pupil supply chain is concerned, introducing a stage where someone finds the pupil and farms them out adds a layer of additional cost, and someone has to be paid to do it – meaning someone has to pay for it to happen. The instructor takes the hit, and each pupil referral is equivalent to a lost hour of income.