If I had known what I was in for, I would have instead shot myself in the head; twice.”
A foreign headmaster/Training Center owner
This is written based on one headmaster’s direct experience and the experience of other foreign headmasters he has known.
By no means is this presented as definitive advice on how to open a school. What works in one place may not work in another. As they teach in Infantry school, the correct response “depends upon the situation and terrain.” The only purpose here is to share some things that have worked and offer suggestions based upon experience.
Many people, Chinese and foreign alike, look at owning an English training center (hereinafter, “school”) as a relatively easy way to make money. It seems simple enough; rent some space, toss in some desks and blackboards, hire some teachers, then spend all day counting the stacks of money rolling in.
By all outward appearances, the school business in China seems to beckon, “C’mon in, the water’s fine!” Yet, the overwhelming majority of those who jump into the water wash up scarred and broken on the reefs. I’m told 95% of new schools fail within two years, and I believe it.
Operating a training center is, in truth, a relatively simple business, but by absolutely no means an easy business. It is fraught with risks, frustrations, and difficulties.
Your first two years will be financially challenging. You should plan on operating in the red for at least your first two years. The first two years will use all of your budgeted capital investment as well as all the income you generate, and you’ll still be operating at a loss (hopefully, at a smaller loss each month).
Somewhere in your third year, you’ll cross over into the black—if you are lucky and all is going well.
Your first two years you should plan to have no days off, working from morning until night, and draw no salary. Expect your patience, ingenuity, and even health to be sorely tested. Honestly, the first two years can be simply brutal.
The first decision you need to make is what kind of school you aspire to open. There are really two choices. You can either open up a “real” fully legal business concern, or you can open an unlicensed “shoestring school” that, with luck, might pay a living wage.
Many have the notion that they’ll start a small unlicensed school, in their apartment or single rented room somewhere and then gradually grow into a large successful business. Typically, five years later, the school still has only one teacher and the school moves frequently to stay ahead of the authorities. I call these “shoestring schools.”
My observation is that if you start as a shoestring school, you’ll end up remaining a shoestring school. An underfunded, illegal school attracts the wrong kind of attention and isn’t very competitive in the market.
If you are satisfied running such an operation, ducking and weaving to avoid paying the fees and fines associated with this sort of operation, having to move when neighbors or competitors complain, then proceed at your own risk.
However, you should be prepared to accept the notion that this is all your school will probably ever be—essentially a fly-by-night outfit skirting the edges of the law with little potential for expansion. Expansion costs money and shoestring schools can typically only yield a fair living wage at best. Thus, the funds needed to make significant expansions won’t come from operating a shoestring school.
This may seem like bucket of cold water being tossed upon the dreams of many. After all, the very bedrock of entrepreneurship is the notion of small enterprises growing into big ones: right?
The fundamental issue is one of legality. Microsoft, Dell and Hewlett-Packard didn’t spend their formative years operating entirely illegally. As a foreigner, you’ll naturally draw more than your fair share of attention. But when you attempt to compete, illegally, with the locals, expect that attention to be focused, white hot, upon your actions.
Training centers and foreign affiliated schools are coming under increasing scrutiny and regulatory supervision. The trend is towards more, not less, supervision and enforcement.
The other choice is to open a fully legal and licensed school under the guidance, supervision and approval of the authorities at all levels. I call such an operation a “real” school.
If you still feel opening a school is right for you, stay tuned for the next installment Choosing Partners in Opening Up and English Language School, Part II.