Korean Job Discussion Forums

[decolyon]

I'm not interested in starting my own hagwon. I've read those threads. It sounds like a lot of money, but way too much hassle.

But I was talking with a Korean friend tonight who is planning on opening her own place. I'm just curious that after the initial set-up and adjustment phase, as the owner, how much could she expect to earn? Monthly or yearly?

If anyone can just ballpark it or if you've ever found out what your owner makes I'd appreciate the info.

I'm just curious really.

[hagwonnewbie]

She can probably make somewhere between minus 10,000 dollars and positive 10,000 dollars each month.

[thegadfly]

Well, earnings depend on the number of students and the overhead. Every school I have worked at (or heard about) charged a monthly fee, and seemed confused when I asked about the hourly breakdown...but with the hourly breakdowns I have done, it seems to be 6k-10k won per student per hour...say 8,000 won.

A teacher, hired at 2 million won a month for 120 hours a month is a basic cost of about 16k per hour. If rent is 600k for the teacher's place, that adds another 5k per hour. Rent on a single classroom has to be another 600k a month, so that is another 5k an hour...not including the airfare and pension that should be paid...let's say another 3k or so -- 16+5+5+3=29k per hour expenses for one teacher and one room...so right now, there needs to be 4 students in each class in order for there to be anything left over for any other expenses besides the basic teacher and the room.

Larger class sizes yield higher profits, as there is a fixed cost per unit of class time (a portion of teacher salary/rent/pension/room rental/utilities). Schools usually have secretaries/janitors/bus drivers/etc, and those jobs need to be covered by the earning potential of the classes as well. For schools I have worked at, anything under 5 or 6 students per class was losing money, with 6 being just past breaking even.

If a teacher has classes of 10 students each, and 6 students' worth of tuition covers all expenses, then the profit would be about 4 students' worth, or 32k per hour, or almost 4 million a month profit, after about 6 million of various expenses.

Two teachers with a full load and 10 students per class would be twice that (8 mill a month), and so on and so forth. More administrators, bigger buses, lots of advertising, loads of school supplies or staff dinners or various and sundry would eat into that profit margin, as would having fewer than 10 students per class...and fewer than 6 students in a class would be a net-loss for the school (although less of a net-loss than zero students -- teachers with small classes lose money more slowly than teachers under their minimum hours...which is why teachers may have to teach a class with only one or two kids in it).

This is only a very basic, back-of-the-envelope kind of calculation, as there are a quite a few simple variables that can throw off the annual earnings (parents that decide not to pay, refunds that need to be given, low-enrollment months near vacation or exam periods, teachers with higher-than-basic salaries), but basically, each teacher should be earning 1-4 million won a month for the school, part of which would be used to fund the operation of the non-teaching portion of the school...and depending on how much THAT costs, each teacher should be "worth" a million or two of "profits."

School has 10 teachers? Owner probably "earns" 10-20 million won a month, with about ten times that passing through the office. Lots of money comes in, and lots goes back out...and many folks forget about the going back out part.

I didn't even touch on bribes, licenses, advertising, or taxes....

...or to make a short story long, what Hakwonnewbie said....

[TheUrbanMyth]

[englisheeeteachaaa]

Most hogwan directers follow a simple equation in order to get profit.
3. basic stages of running a hogwan:
1) Get Students and a foreigner
2) ?????
3) Profit.
They have the same logic as gnomes.
http://www.youtube.com/watch?v=y-eak9Jz3_k&feature=related

[Capo]

alot if its busy.

When I did after school. I had 10 students paying 40k per month which gave me 400k net per month for teaching 2 1 hour classes for 4 weeks. Now consider my classes were cheap compared to a hagwon and they are putting on more classes etc. they can make alot of money. However, if student numbers are low and tutition fees are just average they may only break even.

[Koreadays]

some make 100.000dollars a month.
some make 50.000 dollars a month
some make 10.000 dollars
some make NOthing,...

[wooden nickels]

also:

building rent/lease
utilities
renting/up-keeping copiers + paper
books
supplies, supplies, and more supplies
water cooler
heaters/AC
.
.
.
the list goes on

There is the potential to make a lot of money with a hogwon. However, most hogwons are probably making less profit than one would think.

[englisheeeteachaaa]

And most hagon owners are just retarded.

If you honestly believe most hagwon owners want to educate children then you are an apologist. They just want to make a profit, end of discussion.



Most hogwan directers follow a simple equation in order to get profit.
3. basic stages of running a hogwan:
1) Get Students and a foreigner
2) ?????
3) Profit.
They have the same logic as gnomes.
http://www.youtube.com/watch?v=y-eak9Jz3_k&feature=related

[sojusucks]

[Troglodyte]

A lot of hogwons are very short lived enterprises. I think that partially it's because the owners don't know what they're doing. Sometimes though it's because they don't even intend for the business to go on long term. A lot of small businesses here are opened because some small businessman sees it as an opening to make money for a couple years. They're the ones that really don't make any investment in the school other than bare minimum or on things that can be used later in another business (e.g. photocopier, shelves, basic office equipment. When the profits aren't very good, they try to milk what last profits they can without any investments and then close down. Maybe they open a noodle restaurant. Maybe a clothing store. Maybe they go on welfare for a few months while they look for a job.

[thegadfly]

[Juregen]

[Juregen]

[englisheeeteachaaa]