Job Discussion Forums

[Trippy]

Good day people, I have recently been approached by a Chinese business man to help open up a new ESL school in China. As for myself (Canadian), I am fairly new to the ESL world but very knowledgeable in the way of western business affairs. I am the owner of a couple successful businesses in North America. The reason I am posting, is to gather information from the pro teachers out there who have a greater understanding in these matters than my self. I also definitely appreciate the fact that there are great school and terrible ones. My primary objective is to make this a profitable school but at the same time I am extremely committed to giving highest quality of education by hiring the best teachers at a more then competitive salary for the valuable service they provide. We all know teachers deserve it! I would appreciate all comments relating to this topic. Here are some of my questions.

1. Do you need a partner to be a Chinese citizen?

2. How do I make sure I am not bumped out of the deal once the school is up and running? I ask this because of all the talk that the Chinese take it upon themselves to rewrite contracts at will. My goal is to make this a well run school especially for the teachers and students. Maybe this is a wrong assumption!

3. What is the going rate for student enrollment in a larger city? Ex: Shanghai or Beijing.

4. Who would be the best people to contact or where could we purchase the best ESL materials available?

5. What would be a more then competitive salary for a good teacher?

6. How many students should be in a class to keep it profitable by not compromising the education of the students or the comfort of the teacher?

7. How easy is it to find other business opportunities in China if you are of an entrepreneurial spirit?

Thank you for all your comments in advance. I will carefully review every post written. �Negative and Positive�

Also understand I ask this of you because I am committed to the teachers needs.

Sincerely, Trippy

[Edward]

Forget the middle man, and start the school yourself!

If you have the money, and that MUST be why this "Chinese contact" is courting you, then forget him and just do it.

You could make a lot of money, or lose a lot of money, it depends.

You can get an "English Training School License" for around 10,000 RMB. To get an actual "English SCHOOL License" you need about 10,000 RMB for the fee, and then another 500,000 RMB as a deposit in the bank.

That is why you see so many "Training Centers". You will notice in the advertising of Chinese papers they will say in ENGLISH it is a "school", but in actuality, the wording of the Chinese license says "training center", because you don't get a license for the English name. They could care less WHAT you call it in English, the license is for a Chinese business.

How is this Chinese partner going to handle the business? If you say you will pay GOOD teachers GOOD salaries [150RMB/hour OR 9,000 RMB/60 hrs. Month], can you, will you be able to? Or as you say, will this partner push you aside and take over. And what about �the long haul�. Can you stick it out, pouring money into a unknown school, that must attract new students?

There are ways you can do this yourself, but since you have no practical experience, you need someone who does; the problem is--Chinese. Who do you trust?

Maybe you are better off finding a foreigner with years of teaching experience, who already free-lances, so is not tied up with any schools currently and go from there. THAT teacher, or teachers could pull the right Chinese into business with you. The requirements for getting either license takes a lot of hoop jumping, but it can be accomplished.

I want to give you an idea of something I witnessed just this week. A school owner I know called me back recently saying that yes, he had sold his old school license, but no, he wasn't going to move to NZ like he said. He decided to stay and get a NEW school license and begin again, because he just couldn't give up the money. He wanted me and a friend to run/organize the oral English dept. and split all income [gross]] 50/50. Great I said, what do you want from me?

He detailed his plan, which was pretty detail-LESS, basically saying he couldn't attract people without my friend and myself there, THAT is why he was willing to split the dough. So we agreed to do "promotionals" for him for the coming months, PROVIDED we see real interest and good numbers for student sign ups, otherwise we keep our promotional fees and to HE could deal with the school and find cheaper, less experienced teachers. [to make 10,000+ USD/month<827,000 RMB>, it would require a head count of 800+ students/month]Some of the larger schools DO have a few thousand students, but "training centers" in general do not. One of the more successful ones, New Oriental, has classes going continuously with several hundred students per class. They train students to pass their IELTS and similar exams. These students pay approximately 1,000+ RMB for one month of training, usually 40+ hours.

How many students can one teacher handle? If a teacher makes 150/hour, working 30 classroom hours/week [10 prep. hours for lesson planning] a teacher "could" teach 40 students/daily three times a day, five days a week. Let's say 25 students take the course, not 40.

The teacher makes 6,000 RMB teaching 40 hours and the school makes ??? Remember, even if only 25 students pay up, the teacher STILL makes the money, while the school only makes...19,000 RMB, BEFORE expenses!

Average office rental--both high and low
7,000 RMB/monthly for small office in Garden Hotel Business complex
3,000 RMB/monthly elsewhere

2,000 related business office expenses [phone/elect./etc.]
2,000 week, three times ad run in Newspaper


While doing a promotional lecture just today [actually while WAITING to give it] two Chinese gentlemen showed up at his office door. My friend and I got wind of what he was saying, which was to the effect of "What's going on here? I bought your OLD school license, and you started ANOTHER school? Let's go outside and talk about it..." He disappeared with the guy, and so me, my friend, and another school associate [Chinese teacher of great character] began/finished the promotional.

My friend and I had a great laugh after we left, saying how even the Chinese screw each other over. So far, so good...because we get our promotional fees regardless. But do you see what happens, and what CAN happen? While I was writing this little �essay� my girlfriend had been reading a book about animals in Africa. She started laughing and said �now I know what [the guy who sold his license] is! He�s a dung beetle, just pushing around another ball of POOP! I am still laughing�

I am sure others will drop in their own experiences, to give you some insight anyway. You could take advertising out in the local big city papers if you are truly interested in opening a training center in China, and find partners with references. There can be money made here in China, but you would be better off getting into some export commodity rather than schools.


Good luck and best wishes on your venture! I am sure you will get more input from others and go from there.

Michael

[Roger]

I think you must weigh up different answers to your questions. also need to think very hard about where you are going to set up a "school"

The first consideration is: Can you make "profits"?
As a matter of fact - conveni9ently ignored by most operators of schools and language institutes! - public schools are Nallowed to make "profits". This may be a socialist relict, but it still applies in principle, although many public schools know how to bend rules.

I would also suggest that you think very hard about OTHER subjects than English because the current craze is not going to be a permanent fixture. It is mainlay government-induced and has to do with economics and politics owing to China's entry into the WTO. I have witnessed a significant downturn in this field back in Shenzhen in 1997-98, when HK was being handed back to China, and CHinese in Shenzhen found out that Hongkongers all speak Cnatonese and/or Mandarin besides English. interest was restarted only because of the central government's drumming the gospel of educating CHinese so Chinese can conquer world markets with their products.

Here is an attempt at answering your questions:
1) As an outsider, you will have to stump up 500'000 RMB, or else, partner with a local person. CHinese get a licence for 30'000 RMB in an escrow account. VIsit some of their businesses, and you see they are scrimping and saving every mao they can! Visit a franchised western training centre, and you see a big difference although it will be run by Chinese! Equipment, materials, classrooms, class sizes, remunerations for expats. Still, they will tend to ignore quality teaching in favour of money quantities. See English First, or in my experience, Linguaphone!

Oh, by the way: What do you mean by 'citizenship'? You don't fancy becoming a PRC citizen, do you?
There are now multiple year, multiple-entry expat visas and a kind of 'greencards' available.
You also need to think about TAXES! I refer you to www.dezshira.com on this topic!
And, lastly, don't forget repatriation of your foreign currency!

2) Human nature being what it is, there is always some risk, not unlike anywhere else. Just expect Chinese partners to be less interested in long-term commitments, and much more in short-term results! Most don't have businessplans nor do they reinvest their profits.
One of my nicest friends runs a chemical factory that after two years began yielding enormous profits. He derives no salary, but he claims all the profits as his own, and he does not reinvest any of it because he is interested in securing himself a Canadian passport or greencard!
He does not even have to pay tax on his 80'000 RMB a month income!

3) Tuition: China still being largely and nominally "socialist", a big chunk of business is realised through training staff in state-owned corporations. Here, anything is possible, but then again, they dictate to you. Also, their staff can be very fickle - and lastly, it is staff of such businesses that decide on your future! Which explains why the quality of lessons can hardly be improved.
SOme training centres also derive enormous profits from hiring out their staff teachers to public schools. Here too, you have considerable leeway in negotations.
Self-paying students can seldom afford to pay more than a few hundred RMB a month. This leads to classes being overcroweded with 30, 40 and more adults that show up after work, exhausted, mentally remoeved from the subject, and with their set ways!
Many are quite well motivated though - but not too many!

4) I would recommend producing some materials yourself! Although this may prwesent some tricky problems about copyrights and official approval from censorship, it is feasible.
The alternative would be purchasing books from Chinese publishers that have a partnership deal with Western publishers. However, many of these offer totally unsuitable products. I would like to refer you to CAMBRIDGE/LONGMAN - as an example of textbooks that you would like to avoid at all costs!
The best and most suitable series of textbooks - in my humble opinion! - still is NEW CONCEPT ENGLISH, albeit over 3 decades old! I recommend it because it drills very relevant grammar elements without being grammar-orientated. Unfortunately, the series is being published in CHina, and in true socialist-Chinese fashion comes with Chinese TRANSLATIONS! Imagine university students that still rely on a word-by-word rendering in CHinese of English texts! How useful is that?
Another series that apparently is quite good is called HEADWAY (I hope I didn't get it wrong!). I have not seen any of this series yet, but I have heard time and again it is very helpful.
Other materials that I have used on suggestions from my employers or students just don't make it! Interchange? Expressways? I always have to make modifications and add materials. For a teacher, these materials are too time-consuming! You have to prepare every lesson in detail, planning when to use a tape (which is so cumbersome, considering that you have to play it forward and backward!), and the results are mediocre. I feel they may be acceptable at college level, but hardly so for adults!

4) Teachers' salaries: The central govbernment maintains a minimum level of 2200 RMB - but that is for a very mibnimal work input! Let's say, 3000 RMB is a decent salary for teachers at public schools that put in no more than 15 hours a week.
Private training centres these days offer 6000 for up to 25 hours a week. Some pay more, but you don't need to reach for the top. What is not being said about these schools is that their work loads vary enormously. HOlidays are not included - you work 12 months, while public school teachers have paid holidays (although not all get paid during summer recess!).
Then there is the problem of sick leave! If I don't show up, I won't touch a fen of my hourly wage (yes, most pay hourly wages, 100 to 150, I sometimes make 200!).
Also, a public school or any legal employer is by law required to pay their expat teacher an annual home-bound plane ticket, worth at least 5000 RMB!
Housing too has to be provided!

6) Class sizes: At LINGUAPHONE, we never had more than 25 to a class, often considerably fewer! At CHinese-run institutes it routinely is more than that!
Here a cultural difference is being reflected - we think the fewer the better. They think anyone can benefit as they all learn in unison!
Chinese don't even seem to realise that they could learn a lot better with a low head-count!

[arioch36]

Edward, thanx for the inside insight.

Roger...New Concept??? Gag me with a spoon. I know it is very common, never met a student that liked it. I hate it. Oh well. I don't use a book much anyways.

I have had thougths about doing a summer school here in Henan. Five weeks, take the money and run. Problem is I hate being illegal. Ethically, what is the law? If the mayor of the town says you are good to go, is that ethically enough??? (Small semi rich town in Henan...rich by Henanstandards, ripe for the plucking

[Trippy]

You have all been so very kind for the priliminary insight into this venture.

Thank you so very much!

If anyone has anything additional to add please feel free.

Sincerely, Trippy

[Trippy]

Thank you Writerman,

Should I relook my way of doing business in a Western way, are there some does and donts.

Sorry for the puctuation, my key board is screwed.

Sincerely, Trippy

[Roger]

Well, Trippy,
the best advice you can get is the advice you derive from experience. Have you ever run a business of your own anywhere in the world?
So, why come to do just that in China?
Do you know this country's recent history?
If yes, then why do you push into its market?

Read the news on www.feer.com for a while, and see if you can learn anything from them! That's the Far East Economic Review. In its latest issue, it has a story about a Singaporean/Malaysian enterpreneur who formed a JV with a CHinese woman in Shanghai.
He was lured into doing this when he discovered that his branded textiles were being pirate-copied by this woman.
Instead of pursuing her before a court, he entered into a business cooperation.
But the woman did not change her ways.
5 years on, they are at loggerheads now, each accusing the other of bad faith and worse.
To the Malaysian's chagrin, there is no legal recourse!

It is not the only, nor the most shocking story I have come across!