Korean Job Discussion Forums

[Dispatched]

[riley]

I remember my first job in Bundang was charging 88,000 for a class. So it is possible.

[joe_doufu]

[ontheway]

Joe Doufu,

Now that you've mentioned 40 or 50 students and shrinking, I can say you're definately in a bad spot. This could be turned around, but you probably need a new educational program, a commitment to quality, the discipline and guts to kick out bad students and either an infusion of cash or employees (that means teachers like you) willing to work for years with compensation deferred (a kind of "sweat equity"). As I mentioned before, this is a high risk situation. You need some possibility of big rewards at the other end of a long tunnel and you quite possibly will work years before you get it or get nothing.

You do have an E2 visa. This can be transferred to another employer. It's probably time to find one. Your current employer will have to sign a release letter and you need a new job. You can transfer your visa to the new employer with no trip to another country. Your current employer can cut his losses and your new employer can save too.

You should really move quickly. Your hogwan could be losing 2 million or more per month. You might have 60 days, 30 days... It depends on the resources of the owners. Of course, if they're trying to save this sinking ship, they won't want to let you go until they're ready to give up. Then they'll dump you.

I went through this situation. I saw it coming. A shortage of office supplies. Copier never got fixed. One driver let go. The other hogwan driver waiting to get paid. (And yes, it was 2 million per month. He supplied the van, gasoline, insurance.) My pay coming late. "Sorry I'm busy." or the "Bank was closed, can you wait until Monday." Finally, "It would be more convenient to change your pay date from the 1st to the 15th like the other teachers." etc. The owner was a very nice, honest lady. But, a bad manager. When she asked to cut my hours, I agreed. I used the free time to set up my next job (where I still work now, 3 years later). The Korean teachers were leaving. Layed off, essentially. It was only 2 weeks after cutting my hours that she announced that all the teachers would be let go. She'd be the only teacher.

My new job was a start up. A bit like a turn around, but no bad baggage. I've got all kinds of contract guarantees and hands on control with the finances. It's risky, but it works. My primary reason was the opportunity to design the best possible teaching program.

[joe_doufu]

[ontheway]

JeJuJitsu,

With your updated numbers, it looks like your hogwan is slightly in the black, although, if your owner (director) is relying on this net as his income, then he will be a bit grumpy. That is, he'll be earning less than you. Since he thinks of himself as the "businessman" and this is his sandbox (Korea) he might resent your offers of business help. I've seen that here before, too. Still, he should be able to attract enough new students to get back to where he was. The big problem will come if he spends his time blaming the other teacher (or possibly you in a few months). This is an irrational waste of his time that will detract from the effort needed to rebuild his business. However, I saw an American business owner do exactly that: he spent his time fuming over and sueing his former workers who started up a competing business. He destroyed his own business through the extra legal costs and neglect to running the business he had left. He went bankrupt a year later.

Watch out for the warning signs of a failing business.

In the meantime, what you can do is put on the best classes you can and try to be the best teacher with the best program in town. If you manage the product and he focuses on the business, it should be OK.

The still estimated numbers show:

100 students @ 100,000........10,000,000
30 students @ 80,000.............2,400,000
TOTAL TUITION....................12,400,000

less: late pay/no pay................200,000
FT (total cost:air/ins/apt etc) 3,000,000
2 KTs....................................3,000,000
Bus and driver (bus is more)...2,500,000
rent/util/expenses..................1,500,000
misc taxes and ins....................400,000
MONTHLY EXPENSES.............10,600,000

NET MONTHLY INCOME...........1,800,000

Of course, there is still nothing here for advertising, marketing, equipment, start up costs, interest. Your wonjangnim is in a tight spot but he can pull it out. You are making more than your boss. (your total cost with housing etc. is what he sees you making ie about 3,000,000).


Real Experience in Korea:

My first hagwon job: tuition 80,000 for 5 days/week, FTs and KTs same price, hogwan vans and buses, 50 minute classes. Other jobs were the same. In this small town, Hogwan prices currently run 60,000-80,000 for 5 day 40min classes with KTs only. Schools with KTs and FTs sharing classes run 80,000 to 100,000 even now for 5 days 40 or 50 minutes. All of these have unlimited class sizes, which means 16 to 20 students usually and vans to haul the kids. My classes were up to 25 students. And yes this is not Seoul or a big city. They would have higher prices.

For hogwans with limited class sizes, the rates are higher. One school with a university sponsor has a limit of 8 students per class, hogwan van, and both FTs and KTs sharing classes. They manage to charge 200,000 per month. They are also loosing money and have declining enrollment. Several limited enrollment schools that raised their tuition to 120,000 or higher have failed this year. The competition is fierce.

The school I'm at now has the most limited class sizes, the best program, and price lower than any other based on FT class time. We have NO KTs. We have done extensive research on prices. Of course we would like to increase while staying lowest.

And yes, I have business finance and accounting degrees (among others), decades of accounting, management and auditing experience, including several years of hogwan accounting experience, but I'm still learning, so I guess I am a "dummy".

[ontheway]

Jo Doufu,

I didn't mean to imply that you are an owner or partner. Only that in the situation you're in you might need to work like one to save the school and that you would have to get an understanding and contract terms accordingly. Further, that such a situation would require years of commitment to work and to get an adequate pay back for the huge extra hours you would have to work. (80 hours per week maybe.)

The point is that it's probably not worth it, so choose wisely.

The other point is, to not do a runner but to find a new job quickly. Transferring your E2 to a new school is viable and will give you (in my opinion) the best personal outcome both in financial terms and for your honor and reputation.

[Grotto]

Ahhh when I said three classes a week I meant 3 classes with a FT. If your students are only getting one class a week then 80k is fair.

[The Kung Fu Hustle]

Good luck joe doufu! On the upside I think that if you had 20 more students magically enrol next week through some do-or-die marketing trick then the director would just flog the hagwon off for a profit, giving you what's owed but leaving you in the same tentative situation.

The main problem I see is in getting out, and how to not get screwed. If you give your month's notice and then bail, whether or not you get what's owed you (pay, release letter guaranteeing your future ESL in Korea career) is highly unlikely. Cue exhausting iffy legal battle.

On the other hand if you run it could compromise you getting a job back here in Korea. I'm sure they must keep appropriate records at immigration of complaints from wonjangnims. In which case Japan sounds great, take me with you man!

I'm in a similar situation although it's around 75 students at the moment. We're a tiny hagwon surrounded by monster big hagwons and the kids just seem to do circuits every 3 or so months drifiting around the neighborhood. It's always in the black come the holidays though.

[just because]

Just make sure you know what all your options are IF the collapse does happen and you have all the relative forms and paperwork ready...

You can see it coming so make sure you are prepared

[joe_doufu]

Just had a talk with the boss asking what her plans for the business might be. She's quite aware that the building is old and should be remodeled, and that the curtains are not 8 years but 20 years old, but she didn't seem to have any plans to do something about it. She used the word "hope" in an explanation of how we'd get more students. I think I'm going to send my CVs to China starting tonight! Hopefully I'll get my full pay for this month soon.

[Hollywoodaction]

[ontheway]

There is no way you can get a driver with his own van for less than 2 million per month. He has to pay for the van, insurance, gasoline, oil, repairs, tires, and live on what's left. No way.

To pay for the van itself will be a minimum of 3,000,000 per year (probably much more with a decent van, taxes and depreciation.) that's 250,000/month. Gas etc. will be a minimum of another 250,000. He needs good insurance and in some cases a legally mandated paid adult to ride along and monitor the kids loading and unloading.

Having seen the actual numbers paid by a real hogwan I can state from experience that 2,000,000 is the min. for a full time van driver with a small van. It goes up as the vans get bigger and turn into buses. Now, if you mean he'll work for a NET income of 900,000 then maybe. But why would he? Many taxi drivers make 2 to 3 million per month here. Of course they work HUGE hours 7 days a week to do it.

Another option is to hire drivers on a per student basis. On a group basis, the cheapest rate we have found was 5,000 per student for each day per week per month. That is, for a relatively short haul for a group of 5 students coming 5 days per week would cost 125,000. 25,000 per student monthly as a group rate. If the student comes twice a week, it's 10,000 per student monthly (2 days per week X 5,000 for one month). Some driver fees approach 50,000 per student per month for the full time students spread out all over the city.

By the way hollywood, unless you've actually done the accounting, I doubt you know the real numbers. The accountant in a small hogwan knows where every won goes.

The hogwan business is competitive, tough and the money is tight. Some have high student teacher ratios, and can spread their fixed costs over a large enrollment, and can make a healthy profit. Maybe 10,000 per student per month at best. Many of the small schools make little or no profit, although all the classes are full and everyone gets paid. Just no net profit. But, as the schools offering small classes and high quality education proliferate, the days of the big class hogwans are numbered. The two biggest in this town have both crashed and burned.

[Cheonmunka]

It was a few years ago, but I was looking at purchasing an existing little school the van driver there was receiving 1.3 mill.
But he is probably an exception being semi retired...

[EFLtrainer]