I need a benchmark % figure for profits before EBIT.
Can anyone give me a ball park figure for…
humdrum profitable?
nicely profitable?
and enormously profitable?
I think my school will generate about 20% EBITDA but I don’t know if that’s a good or bad projection/amount…
Anyone got more experience than me?
Kenneth
To be honest. Don’t expect to see profits for at least 6 months.
You need to give us more information about the buxiban.
Building - owned or rented
Up to code
Number of classes expected
Staff structure.
How full on are you going to get?
What are you going to spend on the place?
Big or just a studio.
In short, no easy answer until we know more about it, there are just too many factors to consider.
Location?
I spend a lot of money on silly stuff. Elevator upkeep…my little school is six floors tall and the elevator takes a beating. I also spend a lot of money on transportation. I have four buses and I have to hire taxis to pick up the odd child here and there and I have to rent a freeway bus to pick up kids from one school. This adds up quickly. We own the buildings of the schools but get reamed on taxes.
We have the kids pay monthly (An Ching and Kefu classes) and three months for the night classes. The big payoff is that the An Ching and Kefu kids have to pay double every six months.
Profit? Well yes, there is profit. Just get a lot of kids and keep them. And don’t overpay those pesky foreign teachers 
.
One more thing…don’t ever buy a franchise school. Those kind of schools are profit vampires.
Sorry, I’m a bit confused. You mention EBIT and EBITDA in the same post.
Do you mean that you have a ballpark figure for one, but not for the other?
Or simply that you think you know how you will perform and want to know how that measures up against others? That’s what I think you mean, and use of the two different terms in your post is just you being messy.
I’m assuming you mean earnings after paying yourself a salary, right?
When it comes to the profit margin for buxibans, then there’s something happening here to the birth rates here, which might have a bad bearing longer term. The demographics here are maturing, so there’ll not be so many babies in the future. As there are limits to how many English lesson you can sell to une student, it is surely to lead to some consolidation in the industry.
I think it’s hard to come up with a standard rule for how much monies a buxiban should give you in your pocket. It depends on size, location, management skills, type of school and so on.
[quote=“Mr He”]When it comes to the profit margin for buxibans, then there’s something happening here to the birth rates here, which might have a bad bearing longer term. The demographics here are maturing, so there’ll not be so many babies in the future. As there are limits to how many English lesson you can sell to une student, it is surely to lead to some consolidation in the industry.
I think it’s hard to come up with a standard rule for how much monies a buxiban should give you in your pocket. It depends on size, location, management skills, type of school and so on.[/quote]
I see the same thing. There is going to be a blood letting in the ESL industry and the schools that are going to make it are the ones that are on the ball. How “on the ball” is defined is very important. Understanding the market is vital. So very, very important.
keeping costs down is even more important than it usually is. This is one of the reasons why I am against franchise schools. Last year I was introduced to an owner of a franchise school. He told me he was paying $300,000NT a year just to use the name. No way in hell I am going to pay anybody that kind of money just to use a ah…um…“famous” name.
Less kids in the market is not a problem if one can figure out how to have kids go to more than one class. 
Again, understand what the market demands.
There is still money to be made in this business, you just gotta work a bit harder and be a bit more creative than the school next door.