José María Fernández writes in his blog, How to make your Language School profitable regardless your size that “all business starts with 80% of enthusiasm, 10% of capital, and 10% of a crazy idea. As time goes on capital runs out, enthusiasm goes down a little bit but the crazy idea stays there unless we realize that we have to refine it, in some cases quite a lot.”
Do you really think that a language school is a profitable business? Yes! Depending on your attitude and approach, language schools can be a very lucrative business.
Of course, you can’t underestimate some issues that can affect the profitability of language schools such as the high cost for staffing and even the relatively high workforce turnover for this particular industry. There are also off-peak seasons for enrollment – that’s for sure. And even if all these issues pop-up, you are still required to continue fulfilling your obligations to pay for utilities, salaries, and rentals.
But despite it all, as it is usual in every business setting, the profit margin of a language school is considerably higher compared to the other industries.
You might say, “Yes, it can be profitable, but can it sustain the demand of the changing market trends”? Certainly! Language schools are now one of the fastest growing industries in the market.
Brett Montrose, Founder & Managing Director of Operations at Streamline Athletes, previously said in his piece that the global English Language job market is changing and it means a lot for ESL teachers.
So, if there’s a high demand for learning the English Language, how much more would people crave for learning all the other key languages in the world? Why is that? It’s because a majority of people around the globe can already speak good English.
Why is it that Language Schools are considered profitable ventures then?
You see, in this modernly tough competitive era, people are not only interested in becoming highly proficient in technology but also in becoming a linguist. Look around you and try to see how many people nowadays are enthusiastically clinging to the idea of learning a foreign language. There are just a significant number of populations who do not stop moving from one country to another.
Even frequent travelers seem to have a considerable edge in this reality. And have a look at job advertisements on the net. Did you notice that there are many employers now who mostly prefer hiring people who can speak more than one language?
Is that all the proof there is that language schools are indeed profitable, or do you need more? Alright, so you need more validation. How about the marketing part which is very smart business? Comprehend this – many students are based overseas. Can you imagine if you can promote your language school in their native languages? Don’t you agree that chances are high for you to recruit those students? In that case, a language school can certainly be a profitable business.
So obviously, there is a potentially huge market, and it does guarantee a profitable business given the right structure.
What are the key indicators to determine the profitability of language schools?
1. Language schools belong to the top performing economic contributors.
Isn’t it beneficial to leverage on this status? Language schools are good for the nation’s economy because they attract overseas investments and foreign exchange benefits. It isn’t just about the school-student relationship, but the positive outcome it brings to the economy out of that relationship.
Let’s try to twist this part for a moment and imagine YOU as an international student. Enrolling in a language school overseas would probably make you spend around $3,200 in a month during your study and stay. This includes:
- Approximately over $1,500 for tuition fee and materials based on a full-time program of let’s say 20-25 hours per week in one month.
- Around $900 for accommodation and food.
- Another $800 for errands, entertainment, and purchase of other personal needs.
So, if one language school has at least 25 enrolled students, it would sum up to around $80,000 in revenue per month. This is the kind of figure that foreign students add to the economy where the language school is located.
Wow, it’s amazing how much earnings a language school can generate for its economy month by month. Ask yourself now how and what you can contribute to your economy. Because having a language school creates interconnection with the greater business community from transient houses/dormitories, to restaurants, movie houses, shopping centers, public transportations, and the tourism sector. This interconnection greatly benefits the language schools, and it commands profitability.
2. Language schools belong to the sustainable growth industry.
How did language learning become part of the enormous growth industry? The fact that the population of the world is growing, people are so mobile, and the inevitable need for each nationality to communicate among each other will show you precisely the figures and projections of what’s in store for the language industry at present and in the future.
The world has 7.5 billion inhabitants. Currently, almost 2 billion of the inhabitants are English speakers – so that’s about 20% of the global population. Considering the mobility, most of these English speakers, if not all, are keen to learn a second, third, or more languages – that’s for sure!
In the U.S. alone, the language school industry grew by 2.5% over the past five years, with revenue of US$ 2 billion according to IBIS World Industry Market Report in October 2018. The foreign language instruction takes up the largest share of the products and services in the U.S. language school industry followed by the English language, and sign language instructions.
So, if there’s a great demand in the U.S. language school industry, how much more is it in non-native English-speaking countries? It could be greater! You see, language learning remains to exist even if there are modifications in linguistic modalities that can occur at any time.
The increasing population year-by-year corresponds to the increasing need to learn various languages. Therefore, the industry will sustain its growth for many years ahead — convinced now?
3. There is an actual and increasing need to learn languages.
And that need is never going to fade. There will always be a market niche for language learning schools. The ambitions and dynamics of every individual and company have made this possible. With the mobility of humanity and the business environment, this beautiful earth became the primary target destination and target market all at once.
What target is this guide referencing? For obvious reasons, the principal source for learning languages in the most effective way is through language schools – it is and will always be the dominant base. How effective could it be? Since learning is usually done face-to-face and one-on-one, students can focus on the actual task at hand.
For example, if the intent is to learn the German language, then clearly, students will have to enroll themselves in a German school or any language school that teaches the German language. This is why you will also have the edge if you can speak many languages fluently so you can, in turn, offer those language courses in your language school. You bet you have a vast potential market on hand.
4. Language schools are accreditation and certification based.
To produce quality and high standard in language teaching, language schools make its way to becoming accredited by national groups. Examples of these, among many others, are:
- Popular testing certifications such as ACTFL, IELTS, TOEFL, TEFL, and TOEIC
- Awarded labels after inspection like Accreditation UK, Eaquals, or Qualité FLE
- Certifications for language level such as CEFR, Goethe, Cambridge Language, or Cervantes
- Members’ accreditation like the English UK, Ireland Marketing English, and FELTOM
What does it mean to have any or all these accreditations and certifications for a language school? These are quality schemes and tools which are benchmarks that a language school indeed offers exceptional quality of training materials, practical lessons, and delivery of training.
And how does it relate to profitability? If a language school is into it, credibility and image speak. And you’d expect a high rate of patronage from potential students.
5. Language schools are champions of inclusion and cultural diversity.
Do you believe in the benefits of inclusion and diversity for everyone in every place? We all should. Aren’t language schools the best example of a group that symbolizes diversity and inclusivity? Exactly! It manages a workforce of diverse race, culture, gender, age, and origin.
Cultural diversity and inclusion are proven ways for profitability and sustainability in the performance of a business, and it applies to any respectable language school. Imagine having many different nationalities working in an organization and a language school? What a plus and huge asset it could have!
6. Language schools practice the art of good speaking.
How important is communication in language schools? It’s no doubt that it’s the core foundation to manage different languages effectively. And another overwhelming thing is that language schools do not only deal with various students but also with many other sets of people daily.
The interaction with teachers, employees, agents, suppliers, and relevant partners are so essential in language schools. Therefore, knowing how to communicate and, at the same time, teaching how to communicate internally and externally, are both very crucial.
Besides, language schools work in an international setting, so perfecting effective communication tools is mandatory. Do you realize how effective communication can result in good business performance? The fact is, just by having an excellent system of communication alone is already a benchmark to assure you that language schools can be profitable.
Can you see now that a language school is guaranteed a revenue-generating industry because of the continuing need for it?
Do you want to be unique and stand out from the other typical profit-making business ventures?
You may not believe this, but the truth is, starting a language school is such a fantastic business idea to secure your future, financially speaking. And since it has enormous market demand, the investment requirement could be very minimal for a start.
Would you like to explore the adventure of a different kind of future out of the daily rat race? Then start a language school now. It’s very lucrative! You wouldn’t want to regret it in the end.
Just don’t forget that there is no easy way to instant success in every business. But for as long as your language school persists in addressing the current needs of a wider audience, is an absolute advantage.
And to further prosper, you must consider other factors that have been proven to work. What are these? The location of your language school should be visible enough and strategically positioned in a bustling area. You must also have qualified and certified instructors and a language learning program that is very feasible for your audience and realistic for your business.
But overall, these factors would only be pointless if you’re not serving the needs of your varied students and not knowing exactly what their needs are. So, embrace the passion and focus on your audience to thrive and survive!