Initial Investment Payback in less than 13 months!
So I have now had my Smith’s school for 14 months after purchasing it for 2.7 million Yen in 2006. After starting with only 15 students I now have 49 but 7 are Man-to-Man (Private) which is like having 56 students. The clear earnings exceeded the initial investment in July 2007. That is 13 months after taking over the school in July 2006. Not bad! But there is more work to do! If I can continue at this rate, by Dec. 2007 I will see a clear profit, after excluding the amount of my initial investiment, of between 2.2 and 2.5 million Yen for this year. Total earnings should be around 5 million Yen for this year. This is also not bad considering I am my own boss, work when I want and really enjoy teaching English in Japan. But this is just the beginning. I am sure that 10 or even 12 million Yen per year is possible. It does beat working for a corporate school for 250,000 per month! To be sure it requires a lot of effort but it is worth it! I am also convinced that it would have been nearly impossible without the great support of the head office staff manning the free-dial phones to talk with
prospective students, great training, and a proven administrative system, and curriculum which only come with a nation-wide franchise system built over the past 11 years. Smith’s has provided excellent support all along the way and I am sure they will continue to do so in the future as I continue to grow my school. TEAM: “Together Everyone Achieves More” has proven to be a valuable concept.
The Sky is the Limit!
From here on I will need to decide whether I want to grow the school only to a size that I can handle as the only teacher or to a size that I will need to hire another teacher or two and back away, just remaining as the owner. I also could decide to sell the school to a new owner. So there are many possible scenarios to consider, each with different risks and benefits. The sky is the limit, but I really enjoy keeping some hands-on participation at least for the near future. Conservatively I project that from the beginning of next year if I continue this hands-on approach, I should be able to earn 7 to 8 million
Yen in 2008 before tax without having to make such a large effort to promote by flyer distribution as I have had to do so far.
Promotion is the key!
There are many ways to promote your school, but by far the distribution of flyers at the nearby stations and by exchanging them with local businesses are the most effective methods. I distributed 55,000 flyers in 14 months or about 4,000 per month at four nearby stations. I am told that that is a low monthly number compared to more urban locations in Tokyo, Kobe or Osaka. But it is a good number in Okamoto which is a fairly affluent part of eastern Kobe. It generally has allowed me to gain about 3 students per month. Of course there have been and will continue to be good months and bad months in which I will add 9-10 students or 1-2 students, respectively. I have learned that April-May and Sept.-Oct. are the best times and also there is a small pickup in the Jan.-Feb. time period. Also, the website does help a lot to get new students. I have witnessed the effectiveness of the website more in the past few months with many students finding my school via a net search and many students bring copies of the website pages to the trial lesson. Hopefully the website effectiveness will continue to grow and reduce my need to do direct flyer distribution. Passing out flyers can be fun. It can also be very depressing but you have to understand the effectiveness of this method when you compare it to spending 20,000 to 40,000 Yen for a nearly useless one-time newspaper fold-in of 80,000-100,000 Yen per month for a sign at the local station. You may get some responses using PADO or SANKO LIVING (local newsprint ad papers) etc. But flyers are
still the most effective way.
Monthly Tuition is Well Understood and Appreciated!
Smith’s is 100% GESSHA SEI (meaning monthly tuition based payment). This is what Japanese students who study piano, flower arrangement and tea ceremony understand. It is the traditional way to pay in Japan, so it requires no explanation. If you check the Japanese news about what has happened to some large Japanese corporate-owned schools, you will know that up-front payment systems in which tickets or points are presold for 6 months or years of lessons are under fire currently due to the students not being able to get most of their money back or take lessons at the time or with the
teacher they want. So this monthly tuition system is best.
Perhaps more than anything, the chance to interact with so many people and to help them to polish their English skills is rewarding. The students really appreciate learning new expressions, practicing various patterns and competing in simple games to answer quickly etc. They often bring small gifts or souvenirs from their travels such as chocolates, cookies and snacks. The students also often have interesting stories to tell that enable us to study new words and expressions. So there are nearly an endless number of opportunities to have fun teaching English. I can’t wait to see what interesting story
I hear next week!
Also, you have the opportunity to hold fun events with your students, such as barbeques, trips to the local zoo or amusement parks or New Year’s Parties. I hold a free-talking time every week at a local cafe that is attended by 2-8 students. This “Night Out” is voluntary on my part but it need not be if your students agree to pay a small amount to attend. This additional chance to practice using English with other like-minded students is much appreciated by the students.
Some Events Held by the Okamoto School: