School businesses have sprung up and and have taken roots in almost every part of Nigeria in the past few years. The neglect of schools by successive governments have been the main reason for this.
However, checks by our Business Research team have shown how investors in this sector of the economy are struggling to reap good profits for their labour in the industry. We are using this post to show you some of the reasons why school businesses are not making profits in Nigeria. Please enjoy the full report by our team below.
Can we stop the birth of these school businesses?
If there is a business that has experienced constantly increasing patronage from investors in the last three years or so, the school business is just one of it. According to a reliable source from one of the government offices in Ogun state, about 60 new schools were started in Mowe (Ogun state) and its environs alone at the beginning of the current academic session.
While school businesses should be profitable ventures considering the lack of care for our public schools by the government and the ever-increasing population of children of school age in this country, a large percentage of the practitioners of this business are really struggling.
From our interactions with many schools by our Business Research team at Zarepath Publishing, we have observed about 17 Reasons Why Many School Businesses Are Struggling Financially. I hope this write up will help you to put things right in your school if you have started already or prepare your business plan if you are planning to set up one.
Reasons your school business is not making profits
- No Business Plan: many investors have gone into this business without having a business plan. The school business is just like any other that requires a business plan. At least a 5- year business plan is necessary if you are starting out.
- No Properly Defined Vision: “My people perish because they lack vision”. Most school owners start a school without defining their vision for the school. The majority of your customers will desert you if they notice that you don’t have a clue of why you set out in the first place.
- Survival Pushed Many Into Businesses: We have interacted with many proprietors who are in the business because they just want to feed themselves and their families. You need more important reasons to go into this business than for you and your family to feed yourselves.
- No Passion for Education: You can still do very well in this business if you are not education-oriented but you must have passion for the industry. You must be interested in how the industry works. Some investors are not interested in this and yet they have created offices for themselves in the school as proprietors and have directed affairs in the school from their offices. This will always draw the business backward.
- You Don’t Have To Be A Copycat: Some schools are in existence today because the owners just wanted to join the league of school owners. Mr. A, B, and C in my office or neighborhood have schools, and then I must also set up one. These types of schools only do well copying what other schools do. They copy and execute developmental projects shabbily and continue to struggle for a long time.
- You Don’t See It As A Business: The school business is a BUSINESS and the earlier you begin to see it this way the better for your school. A school business will survive if it has a way or ways of bringing in customers into its fold and they are happy to part with their money on a consistent basis. Don’t just sit there expecting magic in your school business fortunes. Begin to see your school business as a business.
- I Can Run It Myself: It is not a sin if you bring in an expert to run your school for you if you are not an expert. This is one of the “sins” of proprietors and proprietresses. Pay experts (and leave them alone) to do it for you and begin to witness growth in your school business fortunes.
- Early Expectation of Financial Profits: Most school owners expect financial profits too soon in this business. You must realize that the real financial profits may not come until after 5 or 10 years of existence of your school. You must learn to put back every kobo you make at the early stage of your business into facilities development.
- Running Or Starting The Different Schools At The Same Time: It is not bad if you start your school business with the primary, secondary, crèche/playgroup schools in place but you will struggle if you have limited resources to put facilities in place for all of them. Many investors start with all the different schools even with resources that can barely sustain a crèche/playgroup school! You should start one, develop it and add others with time.
- Inability to Learn Marketing Skills: This “sin” is common with lots of school owners. You will not do well in this business if you cant market it well in the marketplace where the competition is growing by the day.
- Not Ready To Bring In Investors: It can be a very wise decision if two or more people pull resources together to set up a school. I have observed that most schools raking in the mega-profits today in the industry are owned by more than one person. The school business requires money to grow quickly. So reach out to people who have the funds.
- Operating An Unregistered School: Most school owners can’t see the link between their profitability and the proper registration of their schools. They believe they can operate the school for a long time without registering it with the authority. Operating an unregistered school can work against your profits when it matters most.
- Not Defining Your Target Market: There are Mega schools, Mini schools, and Small schools. At whatever level you are, you must find out the market you are targeting. Some mega schools (the real moneymakers in this business) can have customers from all the states of the federation and even abroad. Some mini and small schools must concentrate on their immediate community to source for customers. Some mega schools also have the high- income earners of the society as their customers while the mini and small schools have the medium and low-income earners as their customers respectively. It is not a sin if you start small but it is a sin if you start small and remain small. Direct your marketing arsenal at your market (people) and grow to a mini or even a mega school in the future.
- Believing Only Prayer Will Grow The School: Yes prayer is a big necessity to grow any business but work must also be done on your part to grow the school.
- Over Dependence on School Fees: Many schools have relied on school fees as their only source of income. This should not be so. School fees should just be one of the many areas where schools can make money. There are many ways. We recently finished research that investigated other ways of money-making for schools. Contact us for more information here or WhatsApp 08034300979
- Inability to Fix the Right School Fess: This is also a reason why some schools are not growing. You may think this is a simple task but it is not so. It requires great skill for you to do this effectively. Some schools without this skill have increased their school fees and sent their customers away. Some have charged low fees to woo customers but have shot themselves in the foot as a result of this.
- Improper Use of Money: This is a big “sin” amongst schools. If you are making #5 today, you must learn to manage this very well so that it can make you #500 tomorrow. You need a proper accounting system in your school and a good knowledge of how to use the money you make in your school business.
School businesses should not struggle but thrive. We hope you can critically at this report and make corrections where necessary.
This report was put together by the Business Research team of Zarepath Publishing. Zarepath Publishing is the parent onwer of NowNowBooks (this website where you are reading this report).
Contact us here to obtain our full guide, “How Schools Can Make More Money In Their School Business” You can also WhatsApp 08034300979