The answer is quite simple. It’s because running a tuition business is nothing like running a private school. What did you just say? Yes, you heard it right.

You might imagine it being a ‘mini weekend’ school. But the truth is, IT IS NOT. At face value, it may look like it is the case, but the more you are involved in the process, the more you realise that it is not. Many differences are not completely evident. The quicker we accept these realities, the better it is for the tuition business as a whole, which means more money in the bank. I’m sure you would like that to be the case. 

When I first started, I was guilty of running the tuition business as a private school. I wanted to make sure teachers were strict, there was discipline, students were more attentive in class and completed their homework to good standard and quality; and so much more. Over the years, I’ve learned and realised that things need to be done very differently from how a school does. Why? There are many reasons for this.

Firstly, schools can be bucketed into 3 different types (relevant to the UK), which are: 

• States schools; 
• Grammar schools and 
• Private schools (also known as Independent schools). 

Let us take the first two types, States and Grammar. Both are funded by the government. Private schools are the only type that charges fees to students for attending schools and are not funded by the government. So for a tuition business, the first two types are immediately eliminated as they have nothing to do with making money. For these schools it’s more about administration, making sure things are properly done per legislation, they keep a good name and are getting good accreditations from Ofsted. They are not focused on making money. They have allocated funding from the government, which is decided by the Local Authorities (LA), and thereafter used by relevant governance forums to run the school they are responsible for.

BUT, WHAT ABOUT PRIVATE SCHOOLS? They charge money; surely a tuition business can follow similar principles, right? Well, NO. Although private schools charge fees for students to attend, their business is not as unpredictable as running a tuition business. 

5 REASONS why I would NOT run a Tuition business as a Private school

1. Recurring cashflows are difficult to predict in a Tuition business

Private schools have recurring income and cashflows coming to their bank account. With tuition businesses, it can be a ‘pay as you’, monthly or termly system. The number of students that pay termly is next to nothing as compared to monthly and ‘pay as you go’ basis. Termly payments work for parents who want to save money for the long term and can afford it. Otherwise, they don’t have a reason to pay upfront for 3 months. 

2. Student turnover is unpredictable in a Tuition business

For private schools, student turnover is not a problem. You’re not going to find any students leaving in the middle of the year, would you? Well, there can be a few students who leave, as people relocate or change jobs. But if you think about it, the change is most probably at the end of the academic year. 

Let’s imagine a private school takes 1000 students every year. How many do you think are going to leave in the middle of the year? 5, 10, 20? Well, the answer is not many as it is very difficult to find a place in school in the middle of the academic year. How much of an impact do you think it’ll have? Not much. With a tuition business, it’s not possible. Every time you operate, you’re thinking whether or not a student is going to come. No student means no income. Any student lost is a loss in income. Simple as that. 

3. Future forecasts are difficult to formulate in a Tuition business

It’s very easy for the private school to forecast future cash flow projections; and can plan things accordingly i.e. how many teachers are needed, facilities etc. With a tuition business, it’s difficult to predict these cash flows long-term. You might be able to predict over a shorter term, but not over a longer term.  

4. Tuition business is a part-time business, whereas a Private school is a full-time business

Unlike a private school which operates on a 5-day-a-week basis, tuition businesses are conducted on a part-time basis. What do I mean? 

A lot of these businesses are run over a weekend or as evening classes on a weekday. The timings and coordination of classes are very different to run and manage as compared to a private school, which is quite set in how private schools are run. You will have strict class schedules and lesson plans, which is not true in a tuition business.

5. Tutor / Teacher availability can be unpredictable in a Tuition business

Teachers availability can be an issue. Given tuition classes are run on a part-time basis, it may mean that teachers are unable to teach and travel to work that day. So there comes a need where supply teachers then need to step in to teach the class resulting in inconsistencies with delivery and quality control. Private schools, on the other hand, have full-time teachers who attend their jobs responsibly as they have to earn a living to pay their bills. 

With tutors in the tuition business, it’s very much based on their interest and how much effort they are willing to put in to earn extra money, which means, at times it can be difficult to motivate them. Not to mention the number of times they may have family events or holidays, which would then mean they cancelling their availability.  

In The End

These are just some examples that show that running a tuition business is very different to running a private school. Yes, both charge fees for their services, but the challenges are very different. I’m still amazed at how tuition businesses out there try and run their tuition businesses as private schools. 

To make it a financial success, the mindset needs to shift away from such an approach. The quicker tuition businesses understand this, the quicker they can make more money.  

More on this in future posts. Follow us for more insights and opinions.