How to make money in Education in the UK and Ireland

James Dixey, who started his career teaching English as a VSO in Zambia and Ethiopia, has since built and sold Pilgrims Language and Teacher Training Courses of Canterbury for a record multiple. He now runs an M&A business, James Dixey Ltd, which helps other owners sell their Educational Businesses or acquire new ones. For more information contact us.

Educational Businesses that consistently make money in the UK and Ireland exhibit most of the following 8 Critical Characteristics:

1. They are led by competent people and management who have the drive and energy to continuously strive to make money. Unfortunately, many Educational Businesses lack this crucial characteristic.
2. They are located in the right area for their particular type of Educational Business. For example, Tutorial Colleges and ELT schools need to be in cities where lots of students want to be, like Cambridge, Oxford, London, Brighton, and Bournemouth. It is challenging to make serious money in Education in places like Inverness or Bradford.
3. They trade for 12 months of the year. Many schools and colleges close for the Summer and Easter holidays, leaving their plant and staff idle for 25% of the year.
4. They consistently manage their Overall Class Average (OCA) like a hawk, making sure it matches their Promise and Price Positioning to their market. Unfortunately, few educational businesses do this consistently well.
5. They are the right size for the facilities they own or hire. Many schools and colleges own or hire facilities that are too big for their business, resulting in wasted resources.
6. They ask for and collect all fees in advance, reducing the risk of bad debts and paying unnecessary bank fees.
7. They understand and rigorously control their Customer Acquisition Cost (CAC), often the single biggest cost of any educational business. The CAC is the total cost of recruiting each student to the business, including agent commissions, discounts, employment costs, sales material, website costs, and more. Highly profitable Educational Businesses keep their CAC below 10%.
8. They have happy and satisfied students who recommend their friends and family to the business at no cost, reducing the CAC and increasing revenue.

In conclusion, by getting these 8 Critical Characteristics right, Educational Businesses in the UK and Ireland have a very good chance of consistently making money.

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