Own business: how to open a language school

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1 PROJECT SUMMARY

The goal of the project is to open a language school for the implementation of a range of affordable services in the field of foreign language learning and translation in a city with a population of over 1 million people. The main source of income of the institution is payment for teaching a foreign language.

Language schools provide a range of services for learning various foreign languages ​​for different levels of students.

Every year, the popularity of language schools is growing – people are aware of the benefits of knowing a foreign language and strive to learn it. Therefore, the linguistic school is a prestigious, sought-after and profitable type of business.

Key business benefits:

  • relatively small amount of capital investments;
  • promising direction, annual growth in demand for this type of service;
  • fast payback.

For the implementation of the project, a room with a total area of ​​100 m2 is rented, located in one of the sleeping areas. It is planned to teach seven foreign languages ​​in various programs at the linguistic school.

The target audience is the population of the city aged 16 to 45, families with an average income.

The initial investment is 635,800 rubles. Investment costs are aimed at equipping the office and purchasing materials to support the educational process, and creating a working capital fund. Own funds will be used to implement the project.

The financial calculations cover the five-year period of the project’s operation. In accordance with the calculations, the total net profit for the first year will be 1,290,000 rubles, and the return on sales will be 17.5%. Upon reaching the targets, the initial investment will pay off after 7 months of work.

2 INDUSTRY AND COMPANY DESCRIPTION

In the modern world, the role of foreign languages ​​is rapidly increasing. This trend is especially noticeable during the crisis, when interest in learning foreign languages ​​increases sharply. Analysts attribute this phenomenon to the desire of people to acquire competitive advantages that will increase their value as professionals. However, the motives for learning a foreign language can be very diverse: someone needs it for work, someone learns the language in order to communicate freely while traveling abroad, someone is preparing for admission abroad or for the Unified State Examination, and for someone it is becomes a hobby.

Over the past ten years, the attitude towards the study of foreign languages ​​in Russia has changed markedly. First, the demand for this type of service has increased. Secondly, learning opportunities have expanded – today the market offers various ways of learning foreign languages, and everyone can find the form of learning that suits him. Language schools and courses, tutors, online learning, Skype lessons with a teacher, trips abroad and so on.

People are beginning to realize the benefits of knowing foreign languages, as evidenced by the results of a sociological study:

  • 97% of respondents said that it is much easier to travel knowing foreign languages;
  • 98% of respondents said that a second foreign language would help them in their careers;
  • 95% believe that learning a second foreign language will improve mental abilities;
  • 1/3 of enterprises want to hire a person with knowledge of a foreign language in a certain field;
  • people with knowledge of a foreign language can count on a 20% salary increase.

In terms of growth in the study of foreign languages, Russia ranks 10th. The list of leaders includes China, Romania, Ukraine and Malaysia. At the same time, the EF2013 Index, developed by the international educational center, characterizes Russia as a country with a low level of knowledge of foreign languages. This fact is associated with the fact that the standard school curriculum and the training program at universities are inconsistent, outdated and rather fragmented. Therefore, people, faced with the need to use a foreign language, are forced to resort to the services of language schools, courses or tutors.

The goals for learning a language are varied: 26% consider a foreign language as a career growth factor, 23% study the language for professional development, 20% do not set a specific goal and learn the language for self-development, 12% learn the language while planning emigration, 8% – to pass exams at a school or university, and 7% – for the international exam TOEFL, IELTS. 4% learn the language so that they can communicate freely while traveling.

In the Russian market, 76% of students choose English, German – 10%, and French – 7%. The remaining 7% are in Japanese, Chinese and other languages. It is worth noting that the study of Asian languages ​​has recently gained popularity.

When asked what foreign language they would like to learn, respondents indicated: 25% – English, 7% – French, German – 5%, Spanish – 4%, Chinese – 3%, Italian – 3%, Japanese – 1% .

57% of respondents believe that it is impossible to do without knowledge of a foreign language in the modern world – and, in particular, because it is needed to travel to other countries and this is a requirement of the time.

At the same time, 46% of respondents who do not speak foreign languages ​​would like to acquire this knowledge.

Thus, teaching foreign languages ​​is in great demand, and the popularity of this type of service is growing every year.

Today, in the largest cities of Russia, the practice of studying foreign languages ​​in language schools and courses that are able to create the necessary conditions is widespread. Table 1 shows the approximate number of language schools and courses in different cities of Russia as of the beginning of 2017.

Table 1. The number of language schools and courses in the largest cities of Russia according to 2GIS

CITYNUMBER OF LANGUAGE SCHOOLS, PCS
Moscow1520
St. Petersburg583
Novosibirsk325
Yekaterinburg291
Nizhny Novgorod143
Kazan103
Chelyabinsk178
Omsk171
Samara129
Rostov-on-Don139

Online learning is also gaining popularity: over the past two years, at least 15 online resources have been created. However, consumers prefer language schools.

The cost of educational services in the segment of learning foreign languages ​​is different, depending on the form of education – in a group, individually for one academic hour, or the purchase of the entire training course. In addition, the cost of classes varies depending on the language – for example, learning English due to its popularity will cost much less than learning Japanese. Therefore, when creating a language school, it is necessary to clearly understand which languages ​​to include in the program.

Thus, the dynamic development of the market of paid educational services in the segment of foreign languages ​​allows us to speak about the investment attractiveness of this business.

3 DESCRIPTION OF GOODS AND SERVICES

The main activity of the language school is the provision of educational services in the field of teaching foreign languages.

Before opening a linguistic school, it is necessary to determine which languages ​​will be available for learning, as well as what audience the courses are supposed to be – preschool children, high school students, students or adult working people. The development of educational programs, the range of services provided, the planned sales volumes, and the organization of the educational process depend on this.

The most requested language is English, followed by German and French. This set of foreign languages ​​is considered mandatory for the linguistic school. It is recommended to organize courses in rarer languages: Italian, Spanish, Chinese, Japanese. This can become your competitive advantage and attract clients, since the competition in the field of teaching foreign languages ​​is quite high.

You should also provide a range of different courses so that each student can choose the form and direction of study suitable for him at your school:

  • express training in fluency in colloquial speech;
  • English for children;
  • preparation for exams USE, TOEFL, IELTS;
  • intensive teaching of a foreign language;
  • group and individual lessons;
  • specialized business English courses;
  • family education (with the possibility of making a convenient schedule and home schooling).

The list of services and areas of study is open and is determined individually for each linguistic school, based on its goals, financial capabilities, staff composition, etc.

This project involves the opening of a language school offering the following types of educational services:

  1. General curriculum for English, German, French, Italian, Spanish, Chinese and Japanese. Classes in small groups of 4-6 people and large groups of 12-20 people. The course program includes spoken language and grammar base. For the English language, the choice of a program is supposed depending on the level of knowledge – initial, basic, advanced;
  2. The intensive (accelerated) English language training program includes three levels – elementary, basic, advanced;
  3. Preparing for exams USE, TOEFL, IELTS and so on. The course includes preparation for various international tests in a foreign language, as well as preparing students for passing the OGE and the Unified State Examination. The presence of group and individual courses is expected;
  4. Spoken English. The course is focused on expanding vocabulary and live communication practice;
  5. Business English. The course includes the study of grammar, the expansion of vocabulary, the study of specific business terminology;
  6. English for children: programs for children 3-5 years old and 6-7 years old. Education is built on the alternation of educational activities and various games, which allows students to effectively learn the material.
  7. Translation services – written translation of texts from Russian into English, German, French, Italian, Spanish, Chinese, Japanese and vice versa. Translation of various types of documentation, advertising and other texts is carried out.

In accordance with the specified list of services, the required office space is determined, the staff is formed, the class schedule is drawn up and the marketing strategy is planned.

4 SALES AND MARKETING

The target audience of the language school, taking into account the course programs, is the population of the city aged 16 to 45 years, families with an average income.

Corporate identity, a catchy name and logo are of great importance for a language school, therefore, before launching a project, it is recommended to work on naming and creating an image. The help of naming specialists will cost an average of 6,000 rubles – the cost includes the development of a brand, logo, name.

The location of the language school also plays an important role – it is necessary for students to be convenient to get to the school. It is advisable to choose an office in a passable place, on a crowded street. Placing a school in a residential area will become a competitive advantage, since the proximity of the school to home for some consumers is a determining criterion when choosing.

Near the school it is necessary to place a sign indicating the location of the language school. Coordination, production and installation of an advertising sign will cost about 24,000 rubles.

In the first months of opening, it is necessary to conduct an advertising campaign. For this, it is envisaged: distribution of promotional leaflets, posting ads in the elevator. The budget for this type of advertising will be about 10,000 rubles. In order to form your client base and attract visitors, it is recommended to hold various promotions and bonuses: the first lesson is free, a discount for reposting on social networks, the “bring a friend – get a discount” promotion, etc.

You must also create a group or profile on popular social networks. The content of a group or profile should be diverse, including not only organizational issues and advertising of school services, but also contain useful information – these can be fascinating videos in a foreign language, interesting facts about world languages, useful infographics, etc. Marketers note that the provision of useful and, most importantly, free information by the company increases the degree of loyalty of potential customers. Through social networks, it is convenient to carry out various promotions and bonus programs, which were mentioned above.

It is also recommended to create your own website – this will not only increase the reputation of the school, but also simplify the process of informing about the services. On the site, users will be able to read the description of each course, see the class schedule, see prices, take a test to determine the level of preparation, find out the contacts and location of the school, get acquainted with the teaching staff. Creation and promotion of the site will be approximately 50,000 rubles.

It is necessary to comprehensively use promotion tools – then advertising will give the fastest and most effective result. However, it should be understood that for a language school, as for any service sector, word of mouth is the most effective way of advertising. Therefore, the best advertisement for your language school is qualified staff and a pleasant atmosphere.

5 PRODUCTION PLAN

Opening a language school includes the following steps:

  • Registration with state bodies. In accordance with Art. 91 of the Federal Law “On Education in the Russian Federation”, additional education is subject to licensing. The state fee for a license is 6,000 rubles. You should also decide whether you will issue students with a document confirming the passage of a particular language course. To issue a state-recognised document on completion of studies, you must obtain a license from the local department of the Ministry of Education. The simplest option is to organize a language school with individual teaching activities – in this case, a license is not needed, but there will be no right to issue documentation confirming the qualifications of graduates. To implement the project, it is planned to create a language school without the right to issue a state document. To conduct commercial activities, an individual entrepreneur is registered with a simplified taxation system (“income” at a rate of 6%). Types of activities according to OKVED-2:
  • Additional education for children and adults, other, not included in other groups
  • Activities for translation and interpretation.
  • Location and choice of office. A good location implies proximity to educational institutions, shopping centers, crowded streets. It is desirable to have free parking and convenient transportation. Also, when choosing a room, it is necessary to pay attention to lighting, sanitary condition, availability of a bathroom and other technical characteristics. The optimal size of the room for a language school is from 100 m2 – this area is enough for two classes and a reception room with a reception. If it is intended to provide individual training services, it is recommended to provide a small room for this.

To implement this project, it is planned to rent an office of 100 m2 located in one of the residential areas. The cost of renting such premises with repairs will average 70,000 rubles for a city with a population of about 1 million inhabitants. It is planned to place 2 classrooms and a hall with a reception. One classroom will be specialized for English classes, where classes will be held daily. The second room will be used for classes in other languages. This division will allow you to correctly arrange the space and facilitate the scheduling of classes.

  • Recruitment. For a language school, the availability of qualified personnel is one of the main parameters, so you should carefully approach the selection of staff. You can search for employees in the following ways: on specialized sites; collecting information through acquaintances; monitoring of teachers of general education and private schools with a subsequent job offer.

The composition of the teachers determines the schedule of the language school. It is assumed that the work schedule will be from 10:00 to 20:00 seven days a week, since the availability of weekend groups will allow serving more customers.

The average duration of a foreign language course is 4-8 months, or 72-144 academic hours. At the end of the course, students take a test that assesses the level of knowledge gained during the course. Recruitment in groups is carried out 2 times a month in English and 1-2 times in other languages. The main flow of students falls on evening groups (from 17:00 to 20:00). Small study groups consist of 4-6 people, and large groups of 8-16 people. An even number of students in a group is recommended, since in the learning process it is often necessary to split the group into pairs to complete tasks, which increases the effectiveness of such training.

Table 2 shows the sales plan and revenue calculation for the first year of the language school. The implementation plan is drawn up taking into account the mode of operation, the number of courses implemented and their duration. For example, an intensive English course takes 72 academic hours, and a general course takes 144 hours.

Table 2. Implementation plan for the first year of the language school

NAME OF FOREIGN LANGUAGENUMBER OF COMPLETED COURSESPRICE, RUB.REVENUE, RUB .
English120120001440000
Deutsch98130001274000
French97130001261000
Spanish90140001260000
Italian79140001106000
Chinese4416000704000
Japanesefifty16000800000
Translation Services320250 rubles / 1000 signs80000
TOTAL7925000

6 ORGANIZATIONAL PLAN

For the functioning of the language school, it is necessary to form a staff of the following employees: teachers, administrators, accountant, cleaner. The main staff are teachers, since the atmosphere of the educational process, the level of knowledge of students and the impression of the school as a whole depend on their professionalism and sociability. Based on the implementation plan drawn up, the language school needs to hire 2 teachers in English and 1 teacher in each of the other foreign languages. Thus, the teaching staff will be formed from 8 specialists.

When choosing teachers, the following requirements must be met: higher education (preferably linguistic), excellent knowledge of spoken and written languages, two years of experience, and a proven and comprehensive teaching methodology.

The administrator position involves shift work – 2 through 2, so you will need to hire two employees. Requirements for the administrator are limited to a high level of discipline, responsibility, communication skills. Their responsibilities include receiving calls and letters, registering clients for classes, forming groups, scheduling classes, maintaining groups on social networks, and providing the school with the necessary equipment. Part-time employment is assumed for the cleaning lady and accountant.

A head of school is also needed, who will perform the functions of a manager. All the staff is subordinate to him, he makes a decision on hiring employees, builds a marketing policy, and interacts with a counterparty.

The total wage fund will amount to 274,000 rubles, and taking into account insurance payments – 356,200 rubles per month.

Table 3. Staff of the language school

General payroll
StaffThe number of employeesSalary per 1 employee (rub.)Total salary (rub.)
Supervisorone2700027000
Teachereight25000200000
Administrator21700034000
Cleaning lady (part time)one60006000
Accountant (part time)one70007000
General fund s/n274000

7 FINANCIAL PLAN

The financial plan takes into account all income and expenses of the project, the planning horizon is 5 years. To launch the project, it is necessary to calculate the amount of initial investment. To do this, you need to determine the cost of furniture, technical equipment of the office and the purchase of educational material. Approximately 54% of the initial investment is for office furniture and equipment; 26% of the investment is for educational material, and 20% for advertising and registration.

Table 4. Investment costs

NAMEAMOUNTTHE COST OF 1 PIECE, RUB.TOTAL AMOUNT, RUB.
Furniture and appliances:
Table (training)61300078000
Desk (for the teacher)230006000
Chair4080032000
Receptionistone1000010000
Magnetic whiteboard245009000
Educational materialone130000130000
Sofaone1000010000
A computer42000080000
MFPone60006000
wifi routerone15001500
Coolerone30003000
Rack230006000
Stationeryone50005000
Microwaveone30003000
Wardrobeone70007000
Safeone65006500
Registration:
IP registrationone800800
Making a seal, opening a cash registerone20002000
State fee for a licenseone60006000
Advertising :
Signboardone2400024000
Group promotion on social mediaone1000010000
Creation and promotion of the siteone5000050000
Working capital:one150000150000
Total6355800

Fixed monthly costs are shown in Table 5. Of these, almost 70% of the costs are related to employee salaries. Depreciation is charged on a straight-line basis over 5 years. In monthly costs, it is also necessary to provide for the costs of updating methodological material, since this is an important element of the educational process.

Table 5. Monthly expenses

NAMEAMOUNT, RUB.
Rent (100 sq.m.)70000
Salary and insurance contributions356478
Communal payments6000
Advertising, marketing, printed materials10000
Depreciation*7050
Unexpected expenses10000
Update of teaching aids and textbooks20000
USN taxes (6% of revenue)39625
Total expenses519153

Thus, fixed monthly expenses were determined in the amount of 519,153 rubles. The volume of planned revenue is 660416 rubles per month. It is planned to reach the planned indicator for the fourth month of the school’s work.

8 PERFORMANCE EVALUATION

The payback period of the project with an initial investment of 635,800 rubles is 7 months. The net monthly profit of the project upon reaching the planned sales volumes will be about 140,000 rubles. It is planned to reach the planned sales volume in the fourth month of operation. Return on sales in the first year – 17.5%.

9 POSSIBLE RISKS

To assess the risk component of the project, it is necessary to analyze external and internal factors. External factors include threats related to the economic situation in the country, markets. To internal – the effectiveness of the management of the organization.

Opening a language school comes with the following external risks:

  • high competition in the current market of paid educational services. Price monitoring, well-thought-out pricing and advertising policy, determination and implementation of one’s competitive advantages will help to reduce this risk;
  • an increase in the cost of rent, which will lead to an increase in fixed costs and may affect the financial condition. It is possible to reduce the likelihood of risk by concluding a long-term lease agreement and choosing a conscientious landlord;
  • risks under contracts with suppliers of educational materials. It is possible to reduce this risk if the requirements of the Civil Code of the Russian Federation and other legislative acts are observed when concluding contracts, the choice of reliable suppliers, the determination of the amount and procedure for compensation by the supplier of the damage caused;
  • business seasonality, which reduces the demand for educational services in the summer months. It is possible to mitigate the risk when developing a marketing strategy, an effective advertising policy that involves holding promotions and bonuses.

Internal risks include:

  • non-fulfillment of the planned sales volume. It is possible to reduce this risk with an effective advertising campaign and a competent marketing policy, which involves various promotions and bonuses;
  • lack of qualified specialists. This risk will be mitigated by monitoring employees of other schools and offering them the opportunity to combine work, as well as careful selection of employees for interviews, cooperation with universities that train translators and foreign language teachers;
  • a decrease in the reputation of the institution among the target audience due to errors in management or a decrease in the quality of services. It is possible to mitigate the risk with constant monitoring of the quality of services, receiving feedback from the institution’s customers and taking corrective measures.

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