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Foreigners who own schools?? you making good money?
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itaewonguy



Joined: 25 Mar 2003

PostPosted: Wed Jul 16, 2003 8:10 pm    Post subject: Foreigners who own schools?? you making good money? Reply with quote

just curious if any foreigners have decided to invest their lives, time and of course MONEY into opening an ESL school in Korea,, and if so how are you doing? how much did it cost you to open the school etc...

dont have to get into private money matters about income just a few words about how its going and how much it cost etc...

thanks all..
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jh



Joined: 04 Jul 2003
Location: Seoul

PostPosted: Wed Jul 16, 2003 9:16 pm    Post subject: Re: Foreigners who own schools?? you making good money? Reply with quote

itaewonguy wrote:
just curious if any foreigners have decided to invest their lives, time and of course MONEY into opening an ESL school in Korea,, and if so how are you doing? how much did it cost you to open the school etc...

dont have to get into private money matters about income just a few words about how its going and how much it cost etc...

thanks all..


Okay, I'll take a stab at this one. As far as I know, you need MONDO capital. As for MONEY, it all depends on how you want it to look and what kind of facilities you want in it. The money is pretty simple, and in some ways really a non-issue.

The big issue is what kind of hagwon do you want? And what I mean by this is that the hagwon system breaks down from the big "language hagwons" to "bosup hagwons" to "study rooms" and other categories I don't remember. The nomenclature is in Korean. This is a drag also in that ONLY the Language hagwon can have English in their sign. The others MUST state their respective titles in Korean. That is, a Bosup hagwon must have "Bosup" in Korea, etc.

Now the categories are set up by the Ministry of Education. Also, the categories are set up in terms of ACTUAL FLOOR SPACE! (read MONEY here). A "language hagwon" may employ foreigners and charge the highest rates. It must also have a floor space of over 50 pyung (it's stipulated in cubic centimeters). If you don't have that floor space, you cannot open as a "language hagwon." (*They will come out and measure with a measuring tape before granting you that piece of paper called a license. Also they will ONLY come out AFTER you have finished with all the interior stuff and are READY to open your doors. If you don't measure up, after ALL that work and invested money, well...)

The "bosup hagwon" needs a floor space of at least 30 pyung. They must teach school subjects only (English is a school subject). The tuition they are allowed to charge is less than that of a "language hagwon". They cannot hire foreigners. Yup, that means that for everyone who teaches part-time at one of these "smaller" places, it is illegal.

Then, you have the smaller "study rooms" , and the subsequent trend goes on. But these ones fall into the jurisdition of the education ministry DIRECTLY (read taxes) whereas the bigger ones are self-administered, unless there is an audit.

Currently, the going rate in Seoul (depending on various locations) is about 50 million down and about 2 million per month for a 30 pyung place. Interior work (walls, designs, etc ) will run you about 10 million and upwards. Furniture and equipement will run you about 3 million and upwards (depending on how many computers you want and I think we all know about computer costs). These costs are based on a 30 pyung, bosup hagwon in Seoul.

Now, as far as I know, the abovementioned stipulations are for SEOUL ONLY! Outside of the city limits, I don't believe these stipulations hold. I could be wrong.

One last thing, the tuition that a hagwon can charge as stipulated by the authorities is ridiculously low (acknowledged by them as well). Something like 35,000won, 20,000 won, and 15,000 won repectively. This is not enforced obviously. The tax department only cares about getting their gallon of blood. So if you state that you really charge the amount stipulated by the Ministry, they WILL GO AFTER YOU! Believe that!

There are more things... but, I'm just winging this off the top of my head right now.
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saint_moi



Joined: 06 Apr 2003
Location: That little place where I'm meant to be.

PostPosted: Thu Jul 17, 2003 11:19 pm    Post subject: Reply with quote

What about legislation? Is it not illegal for foreigners to open; own and run ESL schools here in S.Korea?
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waterbaby



Joined: 01 Feb 2003
Location: Baking Gord a Cheescake pie

PostPosted: Thu Jul 17, 2003 11:33 pm    Post subject: Reply with quote

It's perfectly legal for foreigners to open their own school here in Korea. Very Happy You either need a lot of money, or a fair bit of money and a Korean spouse.
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dutchman



Joined: 23 Jan 2003
Location: My backyard

PostPosted: Fri Jul 18, 2003 3:21 am    Post subject: Reply with quote

Greta post jh! A question about the floor space. That floor space has to be classroom space correct? It does not include lobby and office space.

For a foreigner to own a hagwon or any business you have to make a 50 million won investment. This money has to come into Korea from another country.
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Anda



Joined: 16 Jan 2003
Location: South Korea

PostPosted: Fri Jul 18, 2003 4:45 am    Post subject: Um Reply with quote

Um, a rough start up cost on a hogwon I'm told is about 70 million won. That of course is in rented space. About 100 students are needed to cover all your costs if you aren't working but paying for all the staff etc with a hogwon. Anything over a hundred and you start to make good money.
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dutchman



Joined: 23 Jan 2003
Location: My backyard

PostPosted: Fri Jul 18, 2003 5:23 am    Post subject: Re: Um Reply with quote

Anda wrote:
Um, a rough start up cost on a hogwon I'm told is about 70 million won. That of course is in rented space. About 100 students are needed to cover all your costs if you aren't working but paying for all the staff etc with a hogwon. Anything over a hundred and you start to make good money.


That's probably true if you stay in the box and open the same old cookie cutter hagwon. I think with a little imagination and focus on efficiency 100 students would make for a nice income. It's all about plugging into the ajumma network. Once you've impressed the mother's with your teaching style and professionalism they stop caring about all the extra bells and whistles big hagwons use to distract attention away from the crappy teaching systems they have.
My wife has never once advertised her small hagwon and yet she has a waiting list of students. Just today she had four mothers call wanting to enroll. There is no sign on the door, no phone number posted. They only way people get her number is by word of mouth from the mothers of her (our) current students.
If you want to open just another hagwon and do the same thing every other hagwon is doing, I think your risk of failure is quite high. But there is a healthy niche market out there for people who build a business around themselves. Yes, it's a lot of work but it's also a lot of satisfaction (and money).

P.S. Would everyone who is interested in this topic please email or PM Dave S. and let him know there is a lot of interest in a usergroup for people interested in doing business here.
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waterbaby



Joined: 01 Feb 2003
Location: Baking Gord a Cheescake pie

PostPosted: Fri Jul 18, 2003 8:30 am    Post subject: Re: Um Reply with quote

dutchman wrote:

P.S. Would everyone who is interested in this topic please email or PM Dave S. and let him know there is a lot of interest in a usergroup for people interested in doing business here.


Great idea. I'll PM him this weekend. There have been many threads lately on different forums with different slants, but all basically about foreginers setting up businesses in Korea.
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jh



Joined: 04 Jul 2003
Location: Seoul

PostPosted: Fri Jul 18, 2003 9:35 am    Post subject: Reply with quote

dutchman wrote:
... A question about the floor space. That floor space has to be classroom space correct? It does not include lobby and office space.

Correct. The actual stipulation for the classroom floor space is under 30 pyung. I stated at least 30 cuz that's about the minimum total space you need with careful floor plan designing and planning to just barely meet their requirements. Also helps to provide some refreshments and be extremely polite to the "measuring employees" as measurement taking can be an arbitrary endeavor.

As the dutchman's wife has a hagwon, he already knows all this and really doesn't need my confirmation. I am assuming he's doing this to help out those who are interested and give weight to the facts.

(Hey, are you a hagwon owner checking up on his employees? I swear I only post on my breaks, boss! And I've never said a bad thing about hagwons here, really! Very Happy )

Quote:
For a foreigner to own a hagwon or any business you have to make a 50 million won investment. This money has to come into Korea from another country.
Yeah, but you need at least that much anyway no matter who you are. One way to get around the "coming in from overseas" is to simply take it out and declare it when you come in. A bit tricky, but possible.
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humanuspneumos



Joined: 08 Jun 2003

PostPosted: Fri Jul 18, 2003 11:39 am    Post subject: Depends on how you define ownership Reply with quote

Depends on how you define ownership: I've seen teachers own their classroom without owning all the other crap that goes with it via. Ipshi-hogwans.

There are schools in Korea willing to negotiate percentages. As it stands the percentage teachers are getting at hogwans is about 30% of the take.

eg. 60 students x 100,000 Won (conservative)= 6,000,000

I don't know if teachers think about this but in sales/marketing 30% net is actually pretty good. However, there are ipshi-hogwans with which you can negotiate a higher take and rent a space (room) for a very, very small sum of money. They get the head-ache of your E2 to process, the over-all building responsibility, transportation and - assuming you are a great teacher- they get a great name with an added course- English.

Frankly speaking- this is the only kind of and easiest foreign "ownership" I can see at this time in Korea. The first step is the first friendly coffee with the Ipshi owner with no English program or a poor program with a poor teacher.
Anyway- people are doing it- including Korean English speakers.

The bottom line is that you own the classroom/students (whatever percentage of the take you negotiated).
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dutchman



Joined: 23 Jan 2003
Location: My backyard

PostPosted: Fri Jul 18, 2003 1:17 pm    Post subject: Reply with quote

[quote="jh"]
dutchman wrote:
...
As the dutchman's wife has a hagwon, he already knows all this and really doesn't need my confirmation. I am assuming he's doing this to help out those who are interested and give weight to the facts.

(Hey, are you a hagwon owner checking up on his employees? I swear I only post on my breaks, boss! And I've never said a bad thing about hagwons here, really! Very Happy )

.


Laughing When it comes to Korean bureaucracies I don't consider any knowledge I have as fact. Wink


Last edited by dutchman on Fri Jul 18, 2003 2:40 pm; edited 1 time in total
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kimcheeking
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PostPosted: Fri Jul 18, 2003 2:17 pm    Post subject: Re: Um Reply with quote

dutchman wrote:
P.S. Would everyone who is interested in this topic please email or PM Dave S. and let him know there is a lot of interest in a usergroup for people interested in doing business here.


pm sent. I hope this goes through.
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Ryst Helmut



Joined: 26 Apr 2003
Location: In search of the elusive signature...

PostPosted: Sun Jul 20, 2003 12:33 am    Post subject: I suggest Reply with quote

Guys,

As I am looking into opening a couple business ventures, I too am interested in such a group, however, I think this medium is not sufficient.

We should be 'chatting' (at least) by MSN Messenger (don't know if it has a group function) or AOL IM (it does have group IMing capabilities). I prefer to have meetings, where we could bring papers or the like, and discuss possible flaws in each others' plans...but doubt we'd get together successfully. Time and distance constraints...ya know.

Whatcha think?


Shoosh,
Ryst
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kimcheeking
Guest




PostPosted: Sun Jul 20, 2003 12:40 am    Post subject: Reply with quote

Well if the group gets support from Dave Sperling it would be very easy for him to create a forum just for a usergroup and make it accessible or even only visible to those in the usergroup. It is literally only a few mouseclicks. I know cause I run a forum using this same software.

KK
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BTM



Joined: 20 Jan 2003
Location: Back in the saddle.

PostPosted: Sun Jul 20, 2003 1:18 am    Post subject: Reply with quote

If this happens (usergroup-based forum), I'd like to be involved, too. Not sure how that works, but....
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