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Q: Owning your own school...
I've met a couple of people over the years who have, and there are a couple on here who say they do/have...
What was it like going through the whole process?
What sort of start-up and crap did you have to deal with?
Was it worth it?
Are you still having problems that you probably shouldn't have?
How much greasing of the wheels did you have to do - or did you get away with not doing that?
Partnerships??
Thanks
8 years 49 weeks ago in Business & Jobs - China
my wife took over a small county school. tuitions were low, but she didn't market enough. if you charge too little, people will think there's something wrong with the school. Chinese connect money to quality; in fact they know few other ways of measuring quality.
we bought the whole thing with 60 students (seller claimed 100) for about 5000dollars and struggled with it for a year until i went to work in the small nearby city. we kept the school on the side for years until we recently sold it. it was making small profits in the end, perhaps 40k yuan/year, mostly because we saved on rent in a new location. it wasn't worth the effort, so it had just 30 students when we sold it. i could never get my wife to charge more than 1600/year - you might get lucky if you market and sell the school better than we did.
i also worked in a small city school. that owner had better marketing, and richer customers. he charged 9900yuan/10 months and got about as much customers - around 100 when i left. the classes were similar in quality, but there were more staff, fancier equipment and materials. He told me the school was barely making profit, so I must assume it made a very good profit. but i don't know his finances.
my wife's school was legal, though i was technically forbidden from teaching in it. the other school was pretty much a sham because i was working there on an L visa. But the police happily took their bribe.
Small cities might be easier to start up in, since bribes are sadly more functional than China's restrictive bureaucracy. But always work with the right authorizations and visa, and contact SAFEA if anything is wrong. And don't do drugs: Drugs're bad m'kay.
dom87:
thats really a low charge.. look at webi or wallstreet, they charge over 30000/year lol
coineineagh:
you cant compare large cities with small ones. different law enforcement, different incomes, different bribing methods, different students, differet marketing.
RandomGuy:
30000/year is still low, international schools often charge more than 100000/year.
coineineagh:
true, but a lot of cronies are taking pieces of that big pie. my point was, the further from large cities, the easier the bureaucracy.
dom87:
you cant compare international schools with a crap shit edu center what webi and ws is.
a real school charge for fulltime. The investment for a real school is out of your range
coineineagh:
yes milord, ours not to reason why. apologies for disturbing your conversation with my irrelevancies. And international schools in China are crappiness with a higher price tag - definitely not value for money. real learning is objectionable to the government and the people.
Start here for the overall picture:
http://middlekingdomlife.com/guide/option,com_xmap/sitemap,1/Itemid,157.htm
Or here to answer your question directly:
http://middlekingdomlife.com/guide/opening-your-own-school-part-one.htm
Shining_brow:
Thanks Sino.
Similar to what I was expecting. though without the suggestions of the vast amount of bribes that need to be paid...
It also didn't mention how long before one can legally hire FTs.
Or, in general, the amount of money needed :(
Sinobear:
To legally hire FTs requires one year after the initial licensing then only a limited number of FTs for the first three years.
Total startup would, of course, depend on where, size and scope of the operations, etc, etc.
philbravery:
Do you find that rules and enforcement would vary from province to province ?
I was interested in this. I don't own a school but will answer your question anyway.
If you want to set up a school in a big city you would need an enormous reserve of cash and really high up connections which you as a foreigner won't have access to.
In a smaller up and coming city/town you might need between 35k to 100k dollars in start up costs. Or convince a chinese investor to believe in you. Could probably make between 30000 and140,000 dollars a year depending on your success .Not sure it would be worth the hassle of working 7 days a week for years
Marketing, rent, money to the right people. A cash reserve until your school breaks even. The biggest problem is having the connections. Smoky cash draining dinners every night.
You need experience in education, to look aryan, fluent mandarin skills, a chinese partner you trust with your money. It's doable I think. The worry is you end up only making 40k a year after all the effort. That's happens a lot I hear
im basing my answer on what my friend went through. He had a smart Chinese wife who technically owned it all
He said his net profit was 100k. I liked him but he could tell porky pies, not sure if he was telling the truth about his profit. The cost of running a school will ensure profit is never mammoth
my wife took over a small county school. tuitions were low, but she didn't market enough. if you charge too little, people will think there's something wrong with the school. Chinese connect money to quality; in fact they know few other ways of measuring quality.
we bought the whole thing with 60 students (seller claimed 100) for about 5000dollars and struggled with it for a year until i went to work in the small nearby city. we kept the school on the side for years until we recently sold it. it was making small profits in the end, perhaps 40k yuan/year, mostly because we saved on rent in a new location. it wasn't worth the effort, so it had just 30 students when we sold it. i could never get my wife to charge more than 1600/year - you might get lucky if you market and sell the school better than we did.
i also worked in a small city school. that owner had better marketing, and richer customers. he charged 9900yuan/10 months and got about as much customers - around 100 when i left. the classes were similar in quality, but there were more staff, fancier equipment and materials. He told me the school was barely making profit, so I must assume it made a very good profit. but i don't know his finances.
my wife's school was legal, though i was technically forbidden from teaching in it. the other school was pretty much a sham because i was working there on an L visa. But the police happily took their bribe.
Small cities might be easier to start up in, since bribes are sadly more functional than China's restrictive bureaucracy. But always work with the right authorizations and visa, and contact SAFEA if anything is wrong. And don't do drugs: Drugs're bad m'kay.
dom87:
thats really a low charge.. look at webi or wallstreet, they charge over 30000/year lol
coineineagh:
you cant compare large cities with small ones. different law enforcement, different incomes, different bribing methods, different students, differet marketing.
RandomGuy:
30000/year is still low, international schools often charge more than 100000/year.
coineineagh:
true, but a lot of cronies are taking pieces of that big pie. my point was, the further from large cities, the easier the bureaucracy.
dom87:
you cant compare international schools with a crap shit edu center what webi and ws is.
a real school charge for fulltime. The investment for a real school is out of your range
coineineagh:
yes milord, ours not to reason why. apologies for disturbing your conversation with my irrelevancies. And international schools in China are crappiness with a higher price tag - definitely not value for money. real learning is objectionable to the government and the people.
I've owned my own school since I arrived here. Honestly it's not difficult at all. As far as setting it up and getting the licenses, that is a different story. I would suggest buying a school that already has all of the necessary licenses, especially the license to hire foreigners because it's the most difficult to obtain. But once you have all that, actually running the school is a piece of cake. You might have to do some hand greasing if you have a Chinese business partner, because they will own 51% of the company so the government officers that you may deal with might treat you guys like they would an other company. However if you own the school by yourself, and set up a WOFE, then you don't have to worry about that but you will have other headaches to deal with and more start up capital and other requirements.
To give you an idea of what it would look like, I will show you what my books look like for 1 year:
Rent for the school: 20,000
Electricity: 800
Government Fees: 20,000 (this includes renewal of my licenses, and "guanxi gifts" to all necessary government offices that I deal with, including the police department).
Salaries: 0 (I am the only teacher, so I don't pay salaries to anyone)
House rent: 9,500
House Utilities: 2,500
That's it. Cost of supplies are negligible. Only supplies i need are marker ink to refill the white board markers.
So every year to operate my school and live here, I spend 52,800rmb. The tuition from 4 students takes care of that. Tuition: 13,000 per student per 9 months. Summer camp is 1 month, 2400rmb. February and August I do not work. So as long as i don't drop below 4 students, I break even or make a profit. I have 47 now so it don't worry about this. Owning your own school is definitely better than working for someone else in my opinion. But it's much easier if you go to a smaller city. Personally, i wouldn't attempt it if i were in a big city Tier 1 city. Too much competition, too much energy spent on trying to get students. Being the only foreigner here, the students and parents come to me. I don't do any advertising or marketing. I go to school and just teach, that's it.
As far as the start up, you will have to pay a bond to the government, the amount depends on your city. The bond will be used to pay back student's parents if you decide to take their money and not give them classes and just run away. When you close your school, they will give the money back to you. For my school here in my city, I had to give them 60,000 and i'm in a smaller city. So I would say total start up costs including the bond, rent, and supplies, would probably be around 85,000-100,000 if you were in a similar city to mine. If you buy a school that already has all these licenses you would spend a little bit more, maybe around 200,000, because the previous owner will make you give him the amount that he paid for the bond, because when you close the school, that money will go to you, not him.
This is all assuming you want to open your school 100% legally. There are lots of people who operate their school without any licenses or anything, and that's totally doable. Your start up costs will only be the cost of renting the space and then supplies. But of course there's the risk and the fact that you'll have to find someone to and pay them, to do your work visa so you're not in the country illegally. You'll either have to pay a school to sponsor your work visa, or actually work for another school and run your school secretly and in your spare time. Unless you work for a college, then they won't care about you doing your own school.
For me, I already have a license to hire foreigners, and I do have a Chinese business partner. So I am able to give myself a work visa every year for my own school.
So my suggestion..if you have the money and a chinese partner you can trust, buy a school that already has all the necessary licenses so you can be legal and not worry about anything.
If you have the money, but don't want a Chinese partner, form a WOFE in China (also expensive) and buy the school
Don't wanna spend all that money, form your school "underground" and work for another school(preferably a college) so that you can have your work visa...or pay another school to do your work visa for you and just try not to get to caught or too open about it.
Good Luck!
Shining_brow:
Thanks for the experience, WT.
Q: the deal about buying out an existing school... you're legally allowed to do that with a WFOE, and all the licensing is based on the previous owner's stuff?? Any changes to the licenses or other requirements?
And - can a WFOE add new partners to it at any time? (thus, instead of worrying about a Z visa for a teacher, make them a silent partner or something, and get them a Z on that!)
dokken:
Don't you need materials for the kids, textbooks, other stationary. Cleaning supplies an ayi? It's interesting. I think smaller scale is the way to go. My mate has about 275 kids and the costs kill him. Particularly ft salary.
dokken:
Also the level of bribes he has to pay seem to be much higher. He had to pay 100000 to education bureau alone
WanderingTeacher:
As for the WOFE, the licenses for the schools are in the name of the school. So when you by the school, you are now the own of said school so therefore the licenses are yours. Don't need to transfer the names or anything like that for the licenses, they will always be in the name of the school. As far as partners, they won't have a z visa, they will be given a business visa or rather you can sponsor their business visa I suppose. I'm honestly not sure how that will work as far as them working in China. Again, just like the z visa, I'm sure there will be stipulations as far has what kind of business they can conduct and I'm sure it will stipulate that they can only do business in regards to your wofe, outside business projects would probably be illegal, but I'm not sure. I'm sort of in the process of doing this myself because my Chinese business partner is filthy rich and wants to retire in January, go love on the beach, and leave the school in my name, so I would have to form a wofe to do so but I honestly feel like it's too much work and hassle for me. There are a lot of stipulations and regulations and policies regarding starting a WOFE and your registered capital for start up cost and many other requirements. I'm not that serious about my school or doing this long term, I only got into it for the experience and to make more money to fund my travel addiction. After he retires I'll probably sell my school and go to another country.
WanderingTeacher:
Dokken - yeah that's why I charge high tuition, so I can make money but work less and have less students. Of you charge less money, everyone can afford it. My max is 50 students. But no I don't use textbooks for my school. We only teach oral English so when my students come to my school, we only talk, and have debates and discussions. Textbooks are not useful for learning oral English,. Actually speaking English is useful. One of my student's mom cleans the school once a week when the student comes. She does it because the daughter studies for free. She is my business partner's niece. As far as paper and pens and all that, the student's all have a notebook that they purchase and they are responsible for bringing their own supplies. And with me being the only foreign teacher, I don't have to worry about paying a salary to anyone. Would it be easier if I had another teacher? Yes, but I'd rather keep my money for myself and just work a little bit more. Is your mate a foreigner or Chinese, if he is a foreigner, he should be paying any money to the education bureau and you should tell him to stop. If he us a foreigner I'm surprised that they would take his money, foreigners are basically exempted from bribes because they government officials are afraid that we would report them to the main government to to Beijing and then they would of course go to jail. Chinese people won't report them because it's just their culture. If your mate is Chinese, then they fucking sucks. I don't know why he's paying them that much. He should only need to buy a money card for like 500 to 1000 rmb and give them to the top 3 or so leaders at the Bureau every spring and autumn festival. This is what we do for all the offices that we have to deal with so that's why we into spend about 20,000 a year on bribes. If it was only me owning the school and I didn't have a Chinese partner, then I wouldn't have to pay them anything because they wouldn't dare accept my bribe.
dokken:
Nope the official in charge said "everybody in china needs to pay this, so you do as well
