Setting up of tuition centre
-
I heard that the profit margin is slim? Anyone can advise?
-
Ja3:
I heard that the profit margin is slim? Anyone can advise?
It depends on location, on the qualifications of the teachers, and whether the parents are willing to pay if you are running a \"boutique\" centre. I agree that the margin is not terribly fantastic for a \"grassroots\" tuition centre. -
It really depends on your centre’s reputation. Some centrex charge as low as $10/hour while others as well as $35/hour. Student numbers per class vary from as little as 4 to around 15.
Most centre are working on a reasonable margin from a business perspective but there are quite a few on low margin mainly because they either,
1. Trying to build up student base/reputation
2. Teachers in the centre are not ‘highly qualified’ -
There are some people who think that setting up a tuition centre is an easy job with a potential for high income. It may be true only for the very successful enrichment centre who found their niche in this market. It is a fallacy that tuition Centre was anything but easy. I had a friend who was passionate about teaching and went gung-ho into it with another 2 partners at a shopping centre. After a year, she had to shut down the tuition centre and their relationship had soured as a result. She told me they had irreconcilable differences where it comes to collection of school fees and operating the centre. They are also always comparing as to who did more to deserve the profits, if there were any at all.
When my friend was retrenched from her managerial job, she ended up working in temp/ contract positions to provide for her family. Then suddenly one day, she told me that she is going to set up a tuition centre with 2 partners whom she barely know and it was the passion to be her own boss and help nurture the next generation that made her determined to enter this joint venture. Her family gladly invested 5 figure sums into her new partnership.
She shared with me some of her unpleasant experiences. There were students who misbehaved during lessons and was always disrupting the classes and vandalizing her premises. She subsequently realised they were rejects from other tuition centres. There were also children with ADHD and their parents would usually blame her for not improving their results. She gathered from some parents that they had many tutors before but to no avail.
There are some kids who had tuition at other tuition centers besides her tuition centre, and their results were always bad. They usually stop when their results didn’t improve much after a few months and she had to find new students again or live on a lower income. Some parents refused to pay her the school fees even after their children had utilized their security deposits. She also had to deal with parents who forced her to conduct remedial lessons at her own cost when their children could not attend the lessons because of CCA or other personal activities. There is one parent who demanded her school fees back after 4 lessons because her child failed the prelim paper. It was unfair to my friend to be judged for her child’s performance based on just 4 lessons. I don’t think anyone can understand how she felt unless they had been through it all. Because she isn’t the confrontational sort, she refunded the school fees, short of breaking into tears in front of the parents who treated her abusively.
Usually she had to chase students for their school fees after every month. Most of them would forget to tell their parents and most parents didn’t bother to keep track of the lessons given. Only a few of them were prompt in giving her the school fees every month. She was even got scolded by some parents when she reminded them of the school fees. Her cash flow is so tight that she needs to use her own salary to pay upfront the rent, utilities, her teachers, stationary and the materials. What’s more, she has other 2 partners who don’t seems to put enough energy in running & marketing the centre and they had depended on her and demanded their profit sharing every month.
To conclude, I find the tuition market to be very unstable and volatile one. Nobody would want to be in this trade if there is a better alternative. It is the same scenario for taxi drivers and insurance agents.
With stiff competition from tuition centers, I cannot tell whether they are good or bad for anyone to venture into if they do not understand the tuition market well. But then, if running a business is so easy, then anyone would be rich, simply by quitting their jobs to run their own tuition centers. -
worrisome_dad:
I guess that was the key mistake your friend made, regardless of whether it was about setting up a tuition centre, or any other venture
When my friend was retrenched from her managerial job, she ended up working in temp/ contract positions to provide for her family. Then suddenly one day, she told me that she is going to set up a tuition centre with 2 partners whom she barely know and it was the passion to be her own boss and help nurture the next generation that made her determined to enter this joint venture. Her family gladly invested 5 figure sums into her new partnership.
...
-
Every business is full of risks and it is because of the risks there is potentially high returns. There are two huge mistakes your friend made.
1. While she was passionate about teaching, she only went into it upon retrenchment from a managerial position. What does this mean for me? Before investing thousands of dollars into the tuition business, she was never a tutor/educator to begin with. She has completely no experience in the education industry. Most founders of successful businesses don’t dive straight into the water, they would have done extensive research or gathered experiences working for companies in similar industries.
2. She got partners she barely knew & there were no clear guidelines of the roles of every individual partners. Before the investment materialise, there should have been negotiations of the roles and responsibility of each partner (teaching, marketing, admin role) as well as what they can expected to receive from the business (% profits, fixed salary for teaching/admin work etc)
This led to many, many problems for her. Any teacher/tutor should be able to tell you endless tales misbehaviour, class disruption, truancy, vandalisation of the seemingly angelic children. Together with parents who have high expectations and endless demands, this is NORMAL. Be it a teacher teaching in a MOE school or a private home tutor, or tuition centres, they ALL face the same problem. The problem arise because she was never an educator or tutor before such things occurred.
There are also bad business decisions. Never let customers utilise all their security deposits. Its collected for a reason, so why are you using it to offset unpaid fees? If the parents don’t pay, you end the service. 1st reminder, 2nd reminder, last warning, Service terminated - parent & child blacklisted. Its the same with any other business - especially wholesale of products.
Conduct of remedial lessons should have been in the company policy, and provision of tuition agreement (usually signed before commence of tuition at the centre) would have spelled out clearly when and how remedial lessons are held. Different centres have different policies - some only accept MCs while others accept a madrid of reasons. Most centres throw the children into other classes or hold a remedial class at the end of the week for all students. This is again expected within the education industry and its quite common.
Refunds based on performance? Well, if it isn’t promised then don’t do it. Its a bad business decision to refund the customer just because she doesn’t want to confront them. Its an admission that her centre didn’t do a good job teaching the child. Its bad for the centre’s reputation and income.
Your friend obviously had a break-down in communication with parents - the customers.
Another error? Entering lease with the shopping mall. Shopping mall have high rental charges. New centre without student base will find it tough to survive. It makes a lot more sense to place the centre near schools or deep in HDB heartlands because that is where the students are.
The story that you have told us, isn’t about the education/tuition market being TOO competitive or violate. Like all other businesses, its tough to get going but its not a No-Go industry. In fact, it remains a lucrative industry. The story, sadly is about your friend making a series of business error that would have cost her regardless of the industry she entered. -
worrisome_dad:
I'm a private tutor. I do not agree that the tuition market is unstable and volatile. It is only unstable and volatile if you are not producing results. I went into tutoring with my eyes open. My own mum was worried when I chose to become a full time tutor after graduating from university. She questioned me how much I could earn during my first year as a full time tutor. She persuaded me to take up alternatives or join the biomedical sector since I was trained in the profession. After my first year, my mum stopped asking me if I am earning a decent income. I wasn't forced into tutoring because I have no choice. I think it's unfair that you are making such a sweeping statement.
To conclude, I find the tuition market to be very unstable and volatile one. Nobody would want to be in this trade if there is a better alternative. It is the same scenario for taxi drivers and insurance agents.
With stiff competition from tuition centers, I cannot tell whether they are good or bad for anyone to venture into if they do not understand the tuition market well. But then, if running a business is so easy, then anyone would be rich, simply by quitting their jobs to run their own tuition centers.
What is wrong with being a taxi driver or insurance agent? Do you despise them? Have you not heard of tutors or insurance agents who earn more than 10K a month? Give us proper respect. We are all making an honest living with the knowledge we have.
If anyone opens a tuition center without any prior teaching or business experience. They are setting themselves up for disappointment. -
TheAnswer:
Applaud 'TheAnswer'! Agree with you!
I'm a private tutor. I do not agree that the tuition market is unstable and volatile. It is only unstable and volatile if you are not producing results. I went into tutoring with my eyes open. My own mum was worried when I chose to become a full time tutor after graduating from university. She questioned me how much I could earn during my first year as a full time tutor. She persuaded me to take up alternatives or join the biomedical sector since I was trained in the profession. After my first year, my mum stopped asking me if I am earning a decent income. I wasn't forced into tutoring because I have no choice. I think it's unfair that you are making such a sweeping statement.
What is wrong with being a taxi driver or insurance agent? Do you despise them? Have you not heard of tutors or insurance agents who earn more than 10K a month? Give us proper respect. We are all making an honest living with the knowledge we have.
If anyone opens a tuition center without any prior teaching or business experience. They are setting themselves up for disappointment. -
meinteel:
Thanks meinteel! I find it weird that people parachute into a tutoring business and imagine that they can make it big.
Applaud 'TheAnswer'! Agree with you!TheAnswer:
I'm a private tutor. I do not agree that the tuition market is unstable and volatile. It is only unstable and volatile if you are not producing results. I went into tutoring with my eyes open. My own mum was worried when I chose to become a full time tutor after graduating from university. She questioned me how much I could earn during my first year as a full time tutor. She persuaded me to take up alternatives or join the biomedical sector since I was trained in the profession. After my first year, my mum stopped asking me if I am earning a decent income. I wasn't forced into tutoring because I have no choice. I think it's unfair that you are making such a sweeping statement.
What is wrong with being a taxi driver or insurance agent? Do you despise them? Have you not heard of tutors or insurance agents who earn more than 10K a month? Give us proper respect. We are all making an honest living with the knowledge we have.
If anyone opens a tuition center without any prior teaching or business experience. They are setting themselves up for disappointment.
If anyone is interested in setting up a tuition center, your partners must be able to do some teaching as well. If tutors want to set up a tuition business, we will look for people who can teach and/or have a sound business plan. If the business owner can teach, the tutors will also think twice before doing anything silly because the tutors will be easily replaced.
All the problems stated above are faced by other tuition centers but they do not bow down to the demands of the unreasonable parents. If you bow down once, they will definitely step all over you. The problems are not new at all. -
补习中心成功与否，在于老师的专业知识和爱心，缺一不可。
只有知识，心中没爱，学生迟早会发现，跟着渐渐讨厌你，成绩肯定提升不起。
只有爱心，没有专业知识，只会像无头苍蝇，毫无章法，要怎么提升成绩？
对我而言，补习中心绝对值得投资，前提是你必须具备以上两点。
目前我所经营的补习中心，虽不能和其他大集团补习中心相提并论，但每当看到学生逐渐进步时，满足感便油然而生。
我爱这个行业，准备做一辈子！
Hello! It looks like you're interested in this conversation, but you don't have an account yet.
Getting fed up of having to scroll through the same posts each visit? When you register for an account, you'll always come back to exactly where you were before, and choose to be notified of new replies (either via email, or push notification). You'll also be able to save bookmarks and upvote posts to show your appreciation to other community members.
With your input, this post could be even better 💗
Register Login
