Monday, September 21, 2009

Why I Don't Particularly Want To Start My Own English School

Somebody, in the comments section, asked me why I don't just start my own language school, and this is something that is often discussed around English teacher bar tables all over the world.

Let me explain my take on all this.

The first aspect is simple mathematics. To make a profit you need a lot of students. To have a lot of students, you need a lot of space. Since most people want to study at the same time -- after and occasionally before they go to work or university -- the peak hours are 7.00 am to 10.00 am and 6.00pm to 10.00 pm in the evening. That means you'll need a lot of classrooms, each with say 10 - 12 students. And space for administration and a teacher's room, etc.

There is huge inflation going on, especially in terms of property, in the developing countries where the greatest demand for English is; in Europe and America, that kind of office space is going to cost a shitload, especially if it's centrally located.

Now if you happen to already OWN a building with a huge amount of space, why would you want to go to the trouble of starting a school, when you could just rent out the space to someone else and make an easy bundle of cash every month?

Now, add in the cost of paying your teachers, and the expense and hassel of getting them legal working visas and sorting out the tax issues. If you have to pay for accomodation for your teachers, that's also going up tremendously every month. (My apartment in Vodkaberg cost less than $100 a month in 2003; by the time I left the rent had quadrupled.)

Then there's the fact that a lot of countries actually have rules about how many foreigners versus how many locals you have to employ -- in Thailand it was something like there had to be 3 Thais for every foreigner employed. (That meant they had to pay some kids to sit around and do nothing other than open doors and such.)

And if there aren't huge taxes and fees, there are bribes. Often there are both.

And the price that you can charge students to study with a foreigner are certainly NOT going up. It grows cheaper and cheaper to go abroad and study -- walk around central London and you'll hear very little English. But walk around central Prague, you probably won't hear much Czech. Foreigners and English schools are everywhere; anybody with the Internet can practice English whenever they want, and however they want.

The general trend that that kind of conversational ESL I've spent most of my adult life doing is going the way of the brontosaurus -- in ten years most people will use nothing but English in secondary school and the only work will be teaching children and maybe specialized business and testing work.

And let's not got into the development of instantaneous translation software and implants and such. I've got the Discovery channel now and for an English teacher, this stuff is scarier than the magnetic poles of the Earth shifting.

I've known one guy who started his own school -- though I haven't spoken to him lately, even after a few years he was working his ass off and not making a lot of money at it. Every English school owner I've spoken to -- including my former employers in Vodkaberg -- say that the schools don't make much profit. (Some of them were rich, but the English schools were only one of many businesses they owned.) While my school in Vodkaberg shestupled in size, I'm sure it didn't shestuple in profits; the owner went from driving a Lada 100 to driving a Toyota Camry, which is not too far up the ladder.

And of course, even under the best of economic circumstances, running a business in a foreign country leaves you incredibly vulnerable to various political shifts, currency devaluations, war and terrorism, etc.

And let's not discuss the difficulty of dealing with drunken fuck-up teachers and spoiled, demanding students.

Now an exception to all this might be sending teachers to companies to teach in-house; that's a lot lower overhead.

And as a final note, I submit to you that if you knew anything about starting and running a business in the first place, you wouldn't be an English teacher.

So that's the sitch as I see it. If anybody who owns a school is reading this, please feel free to correct my presumptuousness if you disagree.


stevie austin said...

I know nothing about nothing but am always willing to share this knowledge.

In my opinion, if you want to start a school as a one-man band, using your own savings, you have to head for the hills baby.

Central Prague, central london, even central vodkaberg (i presume), to start something there you need a syndicate of investors in order to raise enough capital for all the requirements you've laid out.

On the other hand, the provinces and small towns are not as well served by such cosmopolitan services, so there is the market opening.

Add to that, that expenses are low, regulations can be bent at dinner with the mayor/postman/publican, advertising is through free word of mouth, sign outside the shop, and additional local help comes cheap.

Of course you won't be able to entice a foreign teacher all the way out to bumf*k slovakia - population 1,500, so you will need to keep fronting for class yourself.

However, if you happen to have settled with a local woman and live in her hometown (as one of my friends in the game does) then it is possible to start a business and keep it cheap and manageable.

But your income won't match that of a school in central prague obviously.

then again, central prague is probably redundant for english schools. any employee who has a job in prague has probably already been employed due to the fact that the speak english. it's the people leaving the small towns to find work in the big cities who need to acquire the skills. so the real market is out in the wops.

i think its a fallacy to see the development of a new school in the same place as the schools we taught. I was in a city of 3 million and the schools had been going 15-20 years. Basically they started in the early 90s i guess. before internet, before globalisation had become entrenched, and when places still had local flavour. Even in a city of 3 million there would have been a lack of access to english lessons etc, so they basically filled the need. now it is no longer unfulfilled. so you can't start one there.

As for the discovery channel and micro-chips and automatic translators etc, those arguments can be applied to all forms of business.

The internet gives us access to all kinds of information so according to that argument why do we need schools? Or apprenticeships, or any other kind of service where a skill/knowledge is communicated personally?

I even read an article on MSN yesterday about the rise of online universities and the future for the old brick and mortar 15 years down the track.

speaking of bricks and mortar, this was the term used to refer to physical businesses during the dotcom boom era.

we know what happened to those companies, and only a couple (Amazon, ebay) made it through to a proper business without needing to go rent shops for retailing purposes (tho you can bet your life they rent huge office space for their administrative requirements).

In essence, if you want to start something on your own i think you need to start it at a community level in a small town that doesn't have the services the locals want (english school) but probably doesn't have many of the other services either (that you'd want) like nightlife, restaurants, shopping malls.

i see this as being a good thing since it will drive the urbanites back to the villages and contribute to a rebuilding of communities and a lessening of intellectual agglomeration.

i could go on for ages but i obviously already have.

like i said, i don't know anything about anything but am always willing to share.

Patrick Jackson said...

If you want a real headache try opening a restaurant!

Laura said...

Lots of money is not necessary. Just good old fashioned work ethic will do - which it is apparent you don't have.

Keep slavin' x

English Teacher X said...

are you speaking from experience there, Laura, or are you just another completely misguided optimist newly entered to the profession?

stevie austin said...

according to management theory (or at least my recollection of it), work ethics is derived from motivation. And motivation is assessed on the individuals perception of effort vs reward.

Therefore, work ethic isn't an inherent attribute that is maintained or absent from an individuals character, but is dependant on how they view the situation/equation.

English Teacher X said...

work ethic, haven't you people ever seen "Death of A Salesman?" Arthur Miller wrote that in the 60's, long before THIS economic collapse. . .in

stevie austin said...

not a big reader of long books. what did the arthur miller guy say?

English Teacher X said...

it's a short play, actually. just about a guy who works his ass off his whole life to provide for a family who don't really give a shit about him (because he's always working) and then gets fired and commits suicide in misery.

Laura said...

Not a new comer to the esl game but not a hardcore veteran such as yourself. However what I know is this: If Ray Kroc had the same attitude towards business as you then the world would never have heard of the big mac (not sure if this is good or bad). After all you quite often here of eikaiwa, as it's called in japan, aka english conversation school as just being a mcjob. With the 2 jobs requiring equal brainpower - no offense x.

You start small maybe even from an extra room in your house or a cafe and if there is a market you go from there.

If you look at lots of succesful business' in the us the fact is they were started with very little capital.

You could be the next mcenglish x. Imagine the possibilities. Next time instead of eating of the dollar menu you could super size it.

One question: in death of a salesman didn't he work for somebody?

English Teacher X said...

Article I wrote years ago about teaching the solo route.

My goal in coming ton Saudi Arabia is to save enough money (with sensible investment) that I don't have to worry about English teaching as my only source of income.

English Teacher X said...

the biggest mcEnglish school in Japan, Nova, went bust recently. . .

Chris said...

I'm the original poster who asked about the language school business route.

Laura, no personal offense intended, but your brusk comments obviously are not coming from a place of business experience. Thats ok, because one serious failed attempt at business would fix that attitude quickly. A failure that would most likely come from your inability to adequately weigh the practicality and risk of any given venture. Motivation and attitude matter not if the fundamentals of the business are bad. Even "Ray Crock" would have known that.

I was actually very impressed with the answer of ETX as to why he would not consider opening a school. He brought up issues that I had not thought of, such as that of space. I pride myself on being able to assess business risk, having owned a business in the past and written a book on the subject, and i had not assessed the space/cost issue when casually considering the ESL institute business. In this way, owning an ESL institute is much like a restaurant. The more space that you have, the better your margins can be.

Being successful in business is as much about, if not more about, assessing risk than it is about motivation and potential profit. It is much better, for both a persons sanity and finances, to avoid mediocre business ventures than it is to follow ones instinct and emotion into an opportunity that is doomed to be a struggle or a failure.

Laura said...
This comment has been removed by the author.
Laura said...

@x - good article. Agree with some of your points. I guess where I think a lot of "freelance" teachers go wrong is by not running it enough like a real business. Nova going belly up was huge news in Japan; the main reason they went belly up wasn't related to their business per say but of their management robbing customers blind you can read about it here:

Funny that you mention Nova I worked for them for 4 months before starting my own deal. A real hellhole that place was I couldn't wait to get out.

BTW - X even though I talk shit I do really like your blog and writing style although I am not in esl anymore your writing gives me a good laugh and painful reminder.

@chris - curious what is the name of the book you published? You said you owned a business what was that and where did you fail?

I think going out and renting a big space without the customer base is a sure way to go belly up. Sure you can make more money if those seats are all full. What if they aren't? What if it takes you 6 months to get off the ground? You are just burning cash. This is what kills lots of business' - the overhead.

I speak from experience on the english school thing. I know many teachers, firsthand, that started with "cafe" lessons and once they had a handful of students moved into a small space and upgraded with increasing demand. All of this requires hard work and professionalism (ie not banging the hot 23 year old university students) but if your serious about it in my experience it is a proven method.

Chris said...

I wont identify my book here, but the business was in Real Estate. I failed because I chose to implicitly trust a very close friend of mine as my business partner, instead of taking stronger measures to protect my interests. After all, I was the best man in his wedding.

You cant trust anyone.
It was, and would be, difficult to see this coming without having first experienced it. Not trusting anyone lowers your risk considerably.

Laura said...

@chris - sorry to hear that. It's too bad lots of friendships don't translate well into business.

Just gotta dust yourself off and try something new.

stevie austin said...

16 comments and not a titty picture in sight. don't let this give you the wrong impression X, I still want titty pictures.

but looks like your blog might be able to expand off-topics now you're in sandland and still keep the readership.

so if no school (which i wouldn't want to do either), why not a book? Chris can give you tips, and i already sent so many bloody links about the new publishing options available with internet start up companies.

i reckon you could sell some numbers. enough to make you proud anyway.

Chris said...

Your exactly right Laura, and I should have heeded that wisdom. If you enjoy your friendship, don't go into business together. And dusting yourself off is the name of the game.

On an unrelated topic, I didnt mean to start a "what can ETX do besides ESL" thread. Im sure that he doesnt want or need our advice, and is happy enough.

At least he's got the option of going to Saudi and pulling mid-5 figures tax free, without having to carry an assault rifle to do it. That would be a dream for many North Americans right now.

stevie austin said...

mainly just want to get the comments up to 19.

50k odd is good, although you're probably finding it a bit dull. playstation, videos, cable, and drinking with the expat community (engineers etc, maybe not teachers) would be my advice.

EnglishTeacher365 said...

Nice one, ETX. I worked solo in Kazakhstan, just renting a room big enough to hold a whiteboard and half a dozen chairs, with a desk and computer in the corner, for less than 100 bucks a month.

I made about three or four times what I was making as a wage-slave at the local 'university', averaging about 30 bucks an hour I guess. I obtained most of my customers by word of mouth, although I had an ad running in the local weekly English language newspaper, which was free as I did a bit of proofreading for them.

All in all, they were very good times indeed, with occasional big bucks coming in from oil-company work. But when you have kids you need to be living in a place that has good schools and hospitals, so the Central Asian equivalent of 'Vodkaberg' had to become history. Shame, really!

jesterpr said...

Every operation in ESL (Japan) I've seen has been a pretty seat of the pants operation-low quality books, boobs teaching, high prices, etc. However, that's how English is done in Asia.
Saying that the market in Japan is shrinking (due to the economy and the fading fad of eigo). There is consolidation. I suppose other places aren't as bad, but the price level is low.

Richard Roberts said...

Great article!

You did make this concession already, albeit breifly, but I would like to expand.

In the 2010's, a school really doesn't have to be bricks and mortar anymore. I know a number of training companies which don't have a premises and one or two online schools, and even one that operates in second life (.com)!!!

There more options these days, so look beyond having to have an expensive premises.

The future is getting exciting.