Do you want to start language school business?
Are you thinking about starting a language school? Well, the United States has the largest immigrant population as compared to all other countries due to job and study opportunities. And knowledge to speak and write English fluently is required in several study programs and job fields.
So, if you are intended to hire a team which can teach desired languages accordingly, then, you will be required to make a detailed business plan for language school. To let you know about the essentials of a business plan, we are providing one here, for the startup, ‘Naomi Language School’.
2.1 The Business
Naomi Language School will be a licensed and registered language school based in Boston, with the aim of teaching English, French, Spanish, German and other languages. The school will provide various courses meant to teach language skills from basic to intensive level.
To manage the school, Naomi will be there in her school by herself, besides, she will hire administrator, coordinators, and tutors. In this business plan english language school pdf, you will later find out the details of how the business will be actually started and run.
Knowing your customers can help you a lot in taking major decisions while making language school business plan template. There are a large number of universities and colleges in Boston which offer scholarships to international students. And there are many people from outside the US, who came here just to make a living. So, our customers will be very diverse, relating to different countries, speaking different languages.
2.4 Target of the Company
Our target is to help foreigners understand our language and norms, to settle in our country. Our other targets are to become the most renown language tutoring center while earning a profit margin of $15k per month by the end of the first year.
3.1 Company Owner
Naomi Connery is a knowledgeable lady with a bachelor’s degree in English Language & Literature from the University of Oxford. Besides English, she is adept in speaking and writing German, French and Spanish Language.
3.2 Why the Business is being started
Naomi can use the relevant skills she has by starting a language school business. To fulfill the desire of running her own business, while availing what she has achieved so far, the best option she figured out was to start a language school.
3.3 How the Business will be started
Although Naomi is multilingual, still she can’t run the school on her own. She will rent a building which was previously a high school. After getting essential licensing, the building will be renovated. Naomi will purchase the essential inventory, and will hire tutors to teach the English language to non-English people, and other languages as well to be learned by anyone.
Naomi didn’t take the risk of preparing english school business plan by herself. Her business plan which is given here as a sample is written by professional business plan writer. The costs for the startup are as follows:
The detailed startup requirements are given below:
|Research and Development||$32,750|
|TOTAL START-UP EXPENSES||$187,300|
|Other Current Assets||$232,500|
|Start-up Expenses to Fund||$11,875|
|Start-up Assets to Fund||$15,000|
|TOTAL FUNDING REQUIRED||$0|
|Non-cash Assets from Start-up||$18,750|
|Cash Requirements from Start-up||$0|
|Additional Cash Raised||$18,750|
|Cash Balance on Starting Date||$21,875|
|Liabilities and Capital||$0|
|Accounts Payable (Outstanding Bills)||$0|
|Other Current Liabilities (interest-free)||$0|
|Additional Investment Requirement||$0|
|TOTAL PLANNED INVESTMENT||$695,000|
|Loss at Start-up (Start-up Expenses)||$313,125|
|TOTAL CAPITAL AND LIABILITIES||$251,875|
Mentioning the services, you want to provide in your language school business plan template, can help you a lot in figuring out the best ways of advertisements and earning profits.
The language learning programs which will be offered in Naomi Language School are:
- Basic English Learning Program: For children and teens, and for the foreigners, we will provide basic English learning program enabling them to speak and write English.
- Intensive English Learning Program: For undergrads, grads, and professional incomers we will be offering intensive English learning programs to excel their English speaking and writing skills.
- Other Language Learning Programs: We’ll offer programs to learn languages like German, Spanish, French, Chinese, Arabic, and Japanese from basic to a comprehensive level.
- Career Language Training: For professionals who have either come for a managing or other important job in the US, or the natives who will be going in some other country for job works, we’ll be having special and short language programs.
Marketing Analysis of Language School Business
Our target customers will belong to diverse countries and cultures; it will be challenging to bring them together in the same environment to learn the same language unless you have done a detailed marketing analysis in your language school business plan.
In this sample business plan language school pdf, we are analyzing our target groups in order to make our services compatible with their needs.
5.1 Market and Industry Trends
The United States is recorded for having the highest number of international students worldwide. In order to fill the gap between foreigners and natives, there are currently 13,240 language training centers operating in the US, generating a revenue of $2 billion annually according to IBISWorld. Although there are enough language training centers, yet there is an increasing demand for more, with an expected growth rate of 2.5 percent. So if you manage to administer your students and their requirements efficiently, you won’t be at loss.
5.2 Marketing Segmentation
Our experts have identified the following type of target audience which can become our future consumers:
The detailed marketing segmentation of our target audience is as follows:
5.2.1 Foreigners: Our biggest target group will be the students and professionals who come to Boston to continue their studies and jobs respectively. They usually find difficult to be fluent with the new language. Moreover, certain jobs and study programs require them to get a workshop on the English language before entering the relevant institute.
5.2.2 US Citizens: This group comprises of those students and professionals who are native of US but require some additional language skill regarding English or some other language. For such people, professionals and students we’ll be teaching a few languages other than English in our center.
5.2.3 Professional & Career Oriented: We’ll be having special and short timed language training programs for the professionals who either have to excel in English language or some other languages which we will be offering.
The detailed market analysis of our potential clients is given in the following table:
|Potential Customers||Growth||Year 1||Year 2||Year 3||Year 4||Year 5||CAGR|
|Professional & Career Oriented||20%||12,867||14,433||15,999||17,565||19,131||15.32%|
5.3 Business Target
Our main targets to be achieved over the next three years are:
- To earn a profit margin of $15k per month by the end of the first year
- To start online language training besides our current work by the end of the third year
5.4 Product Pricing
Our services are highly efficient, therefore we haven’t priced our services low, they are in fact priced a little bit higher than our competitors.
As mentioned earlier that there are a lot of language schools running in the United States, so before thinking about how to start a language school business you must think about something additional and more lucrative. In this language school business plan pdf you can read about the competitive aspects and advertisement strategy Naomi Language School will adopt.
6.1 Competitive Analysis
Our biggest competitive advantage lies in our workforce. Our tutors are highly experienced and professional and they know the tactics of teaching an entirely new language to those who are alien to it. Secondly, we’ll be greatly benefitted by our location. Boston is the city with two major universities Harvard and Massachusetts Institute of Technology; so students from all over the world desire to come here to study further. We are exactly located in the metropolitan area, where those students can easily approach us to remove their hesitation of speaking a new language. Lastly, we will not only be teaching the language, but we will also be teaching the skill, we’ll arrange group talks and interactions so that foreign students can adjust with the new people.
6.2 Sales Strategy
To advertise our services:
- We will carry out a large-scale social media campaign.
- We will arrange free seminars to exhibit our teaching methods.
- We’ll contact notable institutes to let us introduce our services to their foreign students.
6.3 Sales Monthly
6.4 Sales Yearly
6.5 Sales Forecast
|Unit Sales||Year 1||Year 2||Year 3|
|Basic English Learning Program||1,887,030||2,680,320||2,588,240|
|Intensive English Learning Program||802,370||815,430||823,540|
|Other Language Learning Programs||539,320||770230||1,002,310|
|Career Language Training||265,450||322,390||393,320|
|TOTAL UNIT SALES||3,494,170||4,588,370||4,807,410|
|Unit Prices||Year 1||Year 2||Year 3|
|Basic English Learning Program||$140.00||$150.00||$160.00|
|Intensive English Learning Program||$600.00||$800.00||$1,000.00|
|Other Language Learning Programs||$700.00||$800.00||$900.00|
|Career Language Training||$650.00||$750.00||$850.00|
|Basic English Learning Program||$2,149,800||$2,784,000||$3,383,200|
|Intensive English Learning Program||$120,050||$194,500||$268,500|
|Other Language Learning Programs||$50,110||$71,600||$93,000|
|Career Language Training||$139,350||$194,600||$249,850|
|Direct Unit Costs||Year 1||Year 2||Year 3|
|Basic English Learning Program||$0.70||$0.80||$0.90|
|Intensive English Learning Program||$0.40||$0.45||$0.50|
|Other Language Learning Programs||$0.30||$0.35||$0.40|
|Career Language Training||$3.00||$3.50||$4.00|
|Direct Cost of Sales|
|Basic English Learning Program||$989,300||$1,839,000||$2,679,700|
|Intensive English Learning Program||$66,600||$119,900||$173,200|
|Other Language Learning Programs||$17,900||$35,000||$52,100|
|Career Language Training||$19,400||$67,600||$115,800|
|Subtotal Direct Cost of Sales||$1,294,100||$1,699,400||$2,104,700|
Staff required by Naomi Language School is given here in this business plan for language school sample with a little job description.
7.1 Company Staff
Naomi will manage and supervise the overall operations, other staff will be:
- 1 Administrator for managing all operations
- 1 Accountant for maintaining financial records
- 2 Sales Executives responsible for marketing the school
- 10 Tutors for tutoring different languages
- 2 General Assistants for undertaking various day-to-day
- 2 Cleaners for cleaning the facility
- 1 Freelance Web Developer for managing school’s web pages and social media accounts
- 1 Front Desk Officer for receiving calls
- 1 Security Guard
7.2 Average Salary of Employees
|Year 1||Year 2||Year 3|
|Freelance Web Developer||$85,000||$95,000||$105,000|
|Front Desk Officer||$50,000||$55,000||$60,000|
Doing detailed financial analysis in your business plan is essential as it will list all the startup costs, salaries of your employees, and other expenses along with a plan to cover these expenses. A language training center doesn’t require a lot of investment unless you want to spend too much on getting the perfect location. The investment and expenses Naomi did in order to meet the criteria of an excellent language center are given here in this english language school business plan pdf. This language school business plan sample is written by a professional business plan writer, revised by a financial expert. So, you can take help from here, in case you are starting the same business.
8.1 Important Assumptions
|Year 1||Year 2||Year 3|
|Current Interest Rate||10.00%||11.00%||12.00%|
|Long-term Interest Rate||10.00%||10.00%||10.00%|
8.2 Brake-even Analysis
|Monthly Units Break-even||5530|
|Monthly Revenue Break-even||$159,740|
|Average Per-Unit Revenue||$260.87|
|Average Per-Unit Variable Cost||$0.89|
|Estimated Monthly Fixed Cost||$196,410|
8.3 Projected Profit and Loss
|Pro Forma Profit And Loss|
|Year 1||Year 2||Year 3|
|Direct Cost of Sales||$15,100||$19,153||$23,206|
|TOTAL COST OF SALES||$15,100||$19,153||$23,206|
|Gross Margin %||94.98%||94.72%||94.46%|
|Sales and Marketing and Other Expenses||$1,850||$2,000||$2,150|
|Total Operating Expenses||$188,766||$220,744||$252,722|
|Profit Before Interest and Taxes||$105,205||$146,040||$186,875|
8.3.1 Profit Monthly
8.3.2 Profit Yearly
8.3.3 Gross Margin Monthly
8.3.4 Gross Margin Yearly
8.4 Projected Cash Flow
|Pro Forma Cash Flow|
|Cash Received||Year 1||Year 2||Year 3|
|Cash from Operations|
|Cash from Receivables||$7,023||$8,610||$9,297|
|SUBTOTAL CASH FROM OPERATIONS||$47,143||$53,651||$59,359|
|Additional Cash Received|
|Sales Tax, VAT, HST/GST Received||$0||$0||$0|
|New Current Borrowing||$0||$0||$0|
|New Other Liabilities (interest-free)||$0||$0||$0|
|New Long-term Liabilities||$0||$0||$0|
|Sales of Other Current Assets||$0||$0||$0|
|Sales of Long-term Assets||$0||$0||$0|
|New Investment Received||$0||$0||$0|
|SUBTOTAL CASH RECEIVED||$47,143||$53,651||$55,359|
|Expenditures||Year 1||Year 2||Year 3|
|Expenditures from Operations|
|SUBTOTAL SPENT ON OPERATIONS||$35,296||$39,549||$43,582|
|Additional Cash Spent|
|Sales Tax, VAT, HST/GST Paid Out||$0||$0||$0|
|Principal Repayment of Current Borrowing||$0||$0||$0|
|Other Liabilities Principal Repayment||$0||$0||$0|
|Long-term Liabilities Principal Repayment||$0||$0||$0|
|Purchase Other Current Assets||$0||$0||$0|
|Purchase Long-term Assets||$0||$0||$0|
|SUBTOTAL CASH SPENT||$35,296||$35,489||$43,882|
|Net Cash Flow||$11,551||$13,167||$15,683|
8.5 Projected Balance Sheet
|Pro Forma Balance Sheet|
|Assets||Year 1||Year 2||Year 3|
|Other Current Assets||$1,000||$1,000||$1,000|
|TOTAL CURRENT ASSETS||$201,259||$237,468||$273,677|
|TOTAL LONG-TERM ASSETS||$980||$610||$240|
|Liabilities and Capital||Year 1||Year 2||Year 3|
|Other Current Liabilities||$0||$0||$0|
|SUBTOTAL CURRENT LIABILITIES||$9,482||$10,792||$12,102|
|TOTAL LIABILITIES AND CAPITAL||$198,839||$232,978||$267,117|
8.6 Business Ratios
|Year 1||Year 2||Year 3||Industry Profile|
|Percent of Total Assets||4.35%||4.71%||5.80%||9.80%|
|Other Current Assets||1.75%||2.02%||2.29%||27.40%|
|Total Current Assets||138.53%||150.99%||163.45%||54.60%|
|Percent of Sales|
|Selling, General & Administrative Expenses||74.29%||71.83%||69.37%||65.20%|
|Profit Before Interest and Taxes||26.47%||29.30%||32.13%||2.86%|
|Total Debt to Total Assets||2.68%||1.04%||0.76%||67.10%|
|Pre-tax Return on Net Worth||66.83%||71.26%||75.69%||4.40%|
|Pre-tax Return on Assets||64.88%||69.75%||74.62%||9.00%|
|Additional Ratios||Year 1||Year 2||Year 3|
|Net Profit Margin||19.20%||21.16%||23.12%||N.A.|
|Return on Equity||47.79%||50.53%||53.27%||N.A.|
|Accounts Receivable Turnover||4.56||4.56||4.56||N.A.|
|Accounts Payable Turnover||14.17||14.67||15.17||N.A.|
|Total Asset Turnover||1.84||1.55||1.26||N.A.|
|Debt to Net Worth||0||-0.02||-0.04||N.A.|
|Current Liab. to Liab.||1||1||1||N.A.|
|Net Working Capital||$120,943||$140,664||$160,385||N.A.|
|Assets to Sales||0.45||0.48||0.51||N.A.|
|Current Debt/Total Assets||4%||3%||2%||N.A.|