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Not all Sunshine and Roses (Closing a School)

 

As a school owner writing a blog, it’s tempting to want to write only about what’s going well.  A little similar to wanting to show your best face on Facebook.  We all have times when we make mistakes and the result of one of those mistakes for us was to have to close a school at the end of August.

 

What went wrong?

In April 2019 we opened three schools, all in places we thought would be good.  Two were in malls and one near the largest elementary school in Yamagata City.  For the one in Yamagata City, we didn’t have a school in that area of town and, being near a large elementary school, it seemed like a great place to locate.

 

Demographics

In researching the location, we became too focused on the number of children in the area and not on the types of families living there.  The families who live in that area, however, tend to be more working class and focus more on sports rather than academics.  Juku attendance is also low.

 

This also led to a much lower rate of student introductions.  At other schools, a large number of our students come through introductions.  While the school we closed rated highly in satisfaction surveys, we were simply not getting similar numbers of student introductions.  I believe this is because the other families in the area were less interested in studying English, so the parents of our students felt less comfortable giving introductions—or even letting others know their children are taking English lessons.  We would have done better looking at the culture of the area, not just population.

 

Construction Costs

We had difficulty finding a location that met our needs.  When a building did come available, we were so confident the school would be successful that we were willing to spend a too much money on construction to get the building ready.  The rent and running costs were also high.  The building had been a maternity clinic at one point, so had a large water pipe extending to it, and the basic water bill charge increases relative to the size of the water pipe, for example.

 

Overconfidence

Let’s be honest—we got a little overconfident and prideful, which led us to be more likely to make mistakes.

 

Timing

We started our third year at the location in April, but low numbers again this year made it clear the location wasn’t viable and we decided it was better to close now than to nurse it along and continue making losses.  We had put a lot of money into it, but those were sunk costs (see sunk costs fallacy) and continuing to keep it open wouldn’t bring that money back.  The only reasons to continue would be for the students there and to maintain our pride.  That is too high of a price to maintain pride and a school with too few students isn’t good for the students either.

 

Conclusion

In the end, we gave notice in June that we would be closing and our final lessons happened at the end of August.  We worked to get the students in classes at our other two locations in Yamagata City and 93% of them made the move.  We gave full refunds to the students who quit of all money paid, including entrance fees, text fees, and all tuition payments to that point. What is important now is not becoming scared as a result of this experience, but learning from it so that we continue to grow, but in a way that is healthy and sustainable.

 

 

Books/Articles I’m reading:

  • Always Day One: How the Tech Titans Plan to Stay on Top Forever by Alex Kantrowitz –

https://www.amazon.co.jp/Always-Day-One-Titans-Forever/dp/B086CWFVRL

  • Do you Talk Funny?: 7 Comedy Habits to Become a Better (and Funnier) Public Speaker – by David Nihill

https://www.amazon.co.jp/Do-You-Talk-Funny-Funnier-ebook/dp/B017MWHCVI/ref=sr_1_1?dchild=1&keywords=Do+You+Talk+Funny%3F&qid=1629107544&sr=8-1

  • Built to Keep Black from White: Eighty years after a segregation wall rose in Detroit, American remains divided. That’s not an accident. – by Erin Einhorn and Olivia Lewis

https://www.nbcnews.com/specials/detroit-segregation-wall/

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