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rxk22
Joined: 19 May 2010 Posts: 1629
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Posted: Tue Jan 06, 2015 8:16 am Post subject: Owning an Eikaiwa |
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I had some time off for winter vacation, and did some walking around my area. I live about 20 mins outside of Tokyo in more or less typical Tokyo suburbs. Nothing fancy, still pretty urban and densely packed.
I was surprised at how many Eikaiwa I saw. I always saw the big chain, and smaller chain schools near the bigger stations. I had seen a couple of the mom and pop ones here and there too.
It was pretty surprising walking down some of the road ways. The ones with 4 story apartments, with shops on the first and sometimes the second floors. They tend to be in older buildings too. Along my rail line, in about a 20 minute walk I saw about 7 Eikaiwa, not too mention the 3 chain ones in the same area
Why bother making a thread about it? Good question? Cuz, that's why.
Anyhow, a lot of my Japanese friends ask me, "why not open up your own school?" I never really wanted to before, as that just isn't my style. But, looking into it OOC, it seems like a fairly crowded industry.
In any area with any real pop, there just seems to be a ton.
Anyone own an eikaiwa, or know someone who does?
I wonder how many close up shop % wise per year?
How long does it take to get enough students to break even?
I know that the overhead, outside of rent isn't too much, as you have utilities and your salary. But still rents seem high around here.
I think a lot of these places are one man shows, so unless they really want a second teacher, you never see ads, hence me not seeing a lot of them. |
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mitsui
Joined: 10 Jun 2007 Posts: 1562 Location: Kawasaki
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Posted: Tue Jan 06, 2015 12:03 pm Post subject: |
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I know two. You need to be no more than five minutes away from a station.
These teachers need at least one more job in order to make it.
One works at two universities and the other at one.
It helps to have a Japanese spouse in order to find students and promote the language school.
Over the last several years business has gotten worse. |
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Maitoshi
Joined: 04 May 2014 Posts: 718 Location: 何処でも
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Posted: Wed Jan 07, 2015 12:52 am Post subject: |
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Many owners are actually housewives who teach English lessons to make a bit of money. The corporate parents of these franchise chains take around 50% of the student fees. Each student pays about ¥6,000 a month, so the owners only really start to make a decent part-time income if they teach 40 students once a week. Of the Japanese women I know who operate this sort of franchise, they don't really recommend it. The work is tiring and the pay quite low for the work involved, particularly when administrative duties are accounted for. |
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rxk22
Joined: 19 May 2010 Posts: 1629
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Posted: Wed Jan 07, 2015 1:14 am Post subject: |
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mitsui wrote: |
I know two. You need to be no more than five minutes away from a station.
These teachers need at least one more job in order to make it.
One works at two universities and the other at one.
It helps to have a Japanese spouse in order to find students and promote the language school.
Over the last several years business has gotten worse. |
Wow, why bother? That is a lot of extra over head, to have to work a second job.
BTW I meant actual store fronts. Do your friends rent office space?
Yeah, I don't know many gaijin here who could do contracts. That is pretty difficult. You basically need N2 to be able to do that. I admit, my wife would have to do a lot of the contract whatnot. |
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rxk22
Joined: 19 May 2010 Posts: 1629
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Posted: Wed Jan 07, 2015 1:21 am Post subject: |
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Maitoshi wrote: |
Many owners are actually housewives who teach English lessons to make a bit of money. The corporate parents of these franchise chains take around 50% of the student fees. Each student pays about ¥6,000 a month, so the owners only really start to make a decent part-time income if they teach 40 students once a week. Of the Japanese women I know who operate this sort of franchise, they don't really recommend it. The work is tiring and the pay quite low for the work involved, particularly when administrative duties are accounted for. |
I didn't even count those. I was talking about the store front/office eikaiwa.
I see a decent amount of ECC's and Kumons around here as well. The ones that are in someone's house. I didn't even count these in the competition that the store fronts/chain types face. So, including this, Japan's English market must be saturated.
I looked into ECC a few years ago.. Friggin take 50%. Screw that. Basically if I am paying 50%, I'd expect advertising, as well as a phone number that my students call to schedule/cancel lessons, and for general inquiries. I'd also expect book keeping and training for that, as well.
Normal franchise fees are like 4-8% in other industries. |
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Maitoshi
Joined: 04 May 2014 Posts: 718 Location: 何処でも
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Posted: Wed Jan 07, 2015 1:48 am Post subject: |
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Yeah, it doesn't look worth it for many of them. It would start to make sense if they could keep closer to 100%. The corporations in charge of the franchises, materials, et cetera, that's where the money is being made. |
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mitsui
Joined: 10 Jun 2007 Posts: 1562 Location: Kawasaki
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Posted: Wed Jan 07, 2015 1:52 am Post subject: |
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With one he rents a house and he has a large room for teaching, with lots of books.
He lives far from the station.
With the other it may be attached to his house.
Years ago people could make it with only a BA but times are tough.
One has a kid the other may have three, but has a spouse with a full-time job. |
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rxk22
Joined: 19 May 2010 Posts: 1629
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Posted: Wed Jan 07, 2015 1:59 am Post subject: |
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Maitoshi wrote: |
Yeah, it doesn't look worth it for many of them. It would start to make sense if they could keep closer to 100%. The corporations in charge of the franchises, materials, et cetera, that's where the money is being made. |
I guess it kinda makes sense for Japanese housewives. As they get ECC or Kumon name recognition. But if they are taking 50%, just undercut everyone, and you can still make more than if you were paying ECC.
Materials are pretty easy to get these days. If you are paying big bucks for them, then you're a sucker. Even decent sources/publishers want sales, so they tend to have reasonable prices. Why pay the crazy prices eikaiwa chains charge? |
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rxk22
Joined: 19 May 2010 Posts: 1629
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Posted: Wed Jan 07, 2015 2:05 am Post subject: |
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mitsui wrote: |
With one he rents a house and he has a large room for teaching, with lots of books.
He lives far from the station.
With the other it may be attached to his house.
Years ago people could make it with only a BA but times are tough.
One has a kid the other may have three, but has a spouse with a full-time job. |
Ok, yeah my wife looked into this. Renting a house with a large downstairs, where I could teach. It would've cost 6万 than what we normally would rent. So, the over head is there. So, really I would say to make it worth while, I would need a decent cash flow. Otherwise, if you only gross 30万 a month, and then minus the little bit of CapEx for the school and the extra rent, you'd only come out around 22万 ish a month.
I wonder how much time they put into those schools. Far away from the station means less classes imho. If they are doing the 2-3 mom and baby classes in the morning, and 5-6 lessons in the afternoon until evening, then I don't see how it is worth it. If your spouse has to work, and you are putting in long hours, I'd rather be an ALT and do privates. You'd probably come out ahead both time and money wise. |
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marley'sghost
Joined: 04 Oct 2010 Posts: 255
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Posted: Wed Jan 07, 2015 2:22 am Post subject: |
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Have a buddy who runs his own. Rents a room, big enough for a table and half a dozen students, a small lounge with books and pictures and coffee/tea and a desk for business. He says he charges 4000 an hour for private one on one lessons. Seems to be doing fine last time I checked. Has something like 50 students and manages to get 2 and a half days a week off. It was a bit touch and go at the beginning I understand, but worked out fine. |
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rxk22
Joined: 19 May 2010 Posts: 1629
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Posted: Wed Jan 07, 2015 2:31 am Post subject: |
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marley'sghost wrote: |
Have a buddy who runs his own. Rents a room, big enough for a table and half a dozen students, a small lounge with books and pictures and coffee/tea and a desk for business. He says he charges 4000 an hour for private one on one lessons. Seems to be doing fine last time I checked. Has something like 50 students and manages to get 2 and a half days a week off. It was a bit touch and go at the beginning I understand, but worked out fine. |
That's not bad. I wonder where his office is. Not to be too snoopy, but I have no idea how much office space is.
Also, when did he start the place? I think starting now would be hard, but if you are already established, it is easier.
I wonder outside of the major cities, how it is? I am in Kanto, so perhaps in the smaller cities or other areas, maybe the comp isn't quite as rough? Or maybe, that is canceled out by decreased demand? |
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nightsintodreams
Joined: 18 May 2010 Posts: 558
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Posted: Wed Jan 07, 2015 11:58 pm Post subject: |
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You guys look at the negative side of everything. One could look at all those seemingly successful eikaiwa and come to the conclusion that there must be a lot of money to be made in the market and that it can't be that difficult to do as so many people have been able to (and still are) doing it. But you two conclude that it's an oversaturated market where many owners are earning just over 200,000 yen a month. Pfft...Please!
I also have friends who have done it. You can start from a room in your house or from picking up privates in coffee shops before moving into your own school when you've built up enough customers.
You two will never do that though because you're 'can't' people, that's why you're always blaming your failures on Japan, the economy, Philippinos etc, rather than accepting the simple truth. |
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Maitoshi
Joined: 04 May 2014 Posts: 718 Location: 何処でも
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Posted: Thu Jan 08, 2015 3:05 am Post subject: |
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Nights is right, guys. All it takes is positive thinking and a whole lot of work. The guys I know who own businesses (rather than just owning their jobs) do make quite a lot of money. Many of them will tell you, though, that they rarely take vacations or have the day off. 60 to 80 hour workweeks are not abnormal for business owners who build thriving businesses. There's something to be said, though, for time freedom and quality of life, though. Anyone that tries to tell you that you can make ¥1,000,000 a month part-time is likely to be selling a "business opportunity." |
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Maitoshi
Joined: 04 May 2014 Posts: 718 Location: 何処でも
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Posted: Thu Jan 08, 2015 4:21 am Post subject: |
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Then again, you might put all that work into building up a great income only to lose most of it to alimony payments. Not to mention the house, cars, children, et cetera. |
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Maitoshi
Joined: 04 May 2014 Posts: 718 Location: 何処でも
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Posted: Thu Jan 08, 2015 4:25 am Post subject: |
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Best to take it easy at the pub with your mates. At least they will have an ear to listen to your troubles when the wife's complaining reaches a fevered pitch. |
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