Three Challenges of Starting an English school
If you’ve worked in the EFL industry abroad for more than a year, you more than likely have experienced your fair share of awful schools with poor management. Schools are usually opened by individuals with profit being the sole motive. If the school isn’t managed directly by the owner, you’ve most likely had a local Director that has no experience in education or working with foreigners. This leads many experienced TEFLers to say, “I could do this so much better. Why don’t I open my own school?”. Having been fortunate (or unfortunate enough, depending on how you look at it) to work as the Director of Studies for several start-ups, this is really easier said than done. In this article, we’ll look three of the main challenges and realities of opening your own school.
Challenge #1 – Owning a Business in a Foreign Country
This is your first, and biggest, hurdle. Basically, most countries will not allow you to legally start your own small business as a foreigner. If they do, the challenges can appear insurmountable For example, China requires an initial investment of two million US dollars to form a wholly foreign-owned company. And that’s cash only, assets don’t count. The legal hurdles are also quite large and can take years to navigate all the red tape. In Turkey, the owner is required to have an advanced degree or certificate in TESOL from an accredited institution and the process of applying and receiving the approval is a minimum of 9 months. That’s just one of many approvals needed and you often need to receive one approval before you can even start working on the next one.
Watch this if you have an ELT business
Another important point to remember is that, as a foreigner operating a business, you’ll be in competition with all the locals, who, most likely, are not following the same rules as you. In Turkey, it’s almost impossible to get a foreign teacher a work visa in less than 9 months and most of your teachers are only going to work for a year. In practice, no local school gives teachers working visas. They’re also probably not paying 80% of the taxes they should, providing insurance, or keeping up with local licenses as they should be because they have connections or know who to pay off to steer clear of the authorities. If you do not and are trying to do things 100% legally, you’re in competition with a large number of businesses that aren’t. And remember, the authorities are keeping a very close eye on you as a foreign business owner, so it’s unlikely you’ll be able to get away with not doing things legally. Profit margins for locally owned businesses will be huge compared to yours, so competition is very hard.
In practice, there are really only two ways that a foreigner can start their own school in most countries – do it illegally or marry a local and put the business in their name. Both methods are not uncommon. If you choose to do it illegally, which I definitely don’t recommend, the key is having strong connections in the right places to allow you to be overlooked. If you choose to put the business in a spouse’s name, just make sure you really trust them as it does happen that you can be completely cut out of the business if the relationship sours.
Challenge #2 – Having the Money
A standard business model in education is that you will not turn a profit for the first 3-5 years. Most teachers simply do not have the savings to support both themselves and a struggling business for that long. Remember, 9 out of 10 start-ups fail and finances are a big reason for that.
If you want to make it work, you will either have to have an additional source of income or a large amount of savings to rely on.
Challenge #3 – Managing a Business is not Teaching
Sounds like common sense, but many teachers have little understanding of what is needed to actually run a business. Leadership skills, financial acumen, marketing, sales, recruitment, facility management, these will all fall on your shoulders as you won’t initially have the money to hire others. Just take something simple like recruitment, exactly where would you hire teachers from? How would you get word out about your tiny, new school? What process would you have to get them from their home country to yours and how would you help them once they arrive? Recruitment for a foreign language school can easily take 50% of a director’s time, especially as staff turnover is high. Even if you are a good leader offering a competitive salary and extensive support, many teachers can’t handle living abroad and end up going home through no fault of the school.
The key is to have a strong business plan in place and be realistic about what you can achieve. The first school I managed, the owner leased property on the most expensive street in the country and, for his business plan to work, needed 700 students in the first year. Not surprisingly, he only got around 150 and was bleeding money immediately. He opened up another branch that, at maximum capacity, could only make a profit of $1,000 a month, hardly worth the effort. A solid 5-year plan with realistic expectations is essential to success. Talk to other school directors and owners. How do they spend their time, what do they focus on, what do they need just to run the business?
As you can see, just these three main challenges are a huge enough hurdle to stop most people from starting up their own school and there are many more besides. However, there are those who have done it and succeeded. Maybe you can be one of those special few. Join us in the next installation of this series and we’ll cover the transition from teacher to manager.