The online education business is just about to take a giant leap forward. Over the past 3 years the number of kids needing online educational services has expanded tremendously. Even more interesting is the number of families trying to get their children into such programs and out of public schools. The reasons vary, but the reasons range from religious, to quality of education, to expulsion, to court mandated. The good news is that the market for online schools is not yet saturated, and it certainly hasn’t even come close to catering to every niche.
If you ever considered building a program that could be profitable and help young people at the same time, this is your moment. Within the next 3 years the market will become so saturated, only those that decided to take advantage of the market early will be grounded enough to continue confidently. When we started our school back in 2005, there wasn’t a single truly online school to be found anywhere. Now there are dozens, but the vast majority of them are public schools offering programs to prevent drop-outs due to teen pregnancy or family issues and require local residence.
For private online schools, there are no restrictions to residency but they have a major weakness that hasn’t yet been exploited. The vast majority (95% or better) of private online schools are not regionally accredited. If they are, it’s by a bogus, made up accrediting body developed to trick unwitting parents into a sense of security about their educational program. In truth, there is no requirement for elementary or secondary programs to be accredited which is why this is so easy to get around. If there were, no one could home school their child without government interference. But if you are accredited, you would be one of the few truly accredited private schools on the market.
Our original school was able to successfully pull this off within 3 weeks, an unheard of feat when you consider that the accreditation process for most brick and mortar schools takes 18 months to 2 years, plus reviews. The way we did it was to link in as a satellite of another ‘pre-existing accredited school’. In exchange for giving us the opportunity to have our program as an accredited satellite, we offered up $200 per student that wanted to have a regionally accredited transcript. The number of families that requested the accredited transcript? Zero. The end result was being able to offer a truly accredited program to families, but having to produce nothing financially.
What’s more, it is about to become even more simple to file as a nonprofit, tax-exempt school in 2010. Schools are automatically tax-exempt, assuming you can prove you are really running a school with teachers (they don’t have to be state licensed), and a regular schedule. But the fees to file have been creeping up year after year and the wait time is now up to 7 months. This year, the IRS is automating the system for nonprofits and the fee to file will drop from $850 to $200 and the process will be amazingly faster. Think e-filing speeds as opposed to slow boat to China speeds.
What this means, is that you could have an entire school up and running and collecting grant money and tuition in as little as 3 months, with no one teaching but yourself and your spouse. I know this is possible because I’ve done it. Our program started as a little brick and mortar school we started out of our home. We filed the paperwork to start it in August of 2005. By November of 2005 we had our first student and enough tuition money to fund the program, and all of our living expenses for an entire year. What’s even better is that our program only had four students – yes you read that right, four.
In our case, we offered specialty services for younger children that had behavioral challenges. We knew what we were capable of handling and didn’t want to take truly difficult children, but we wanted kids that weren’t functioning in a high ratio setting. We offered individualized service. It was something that we found parents were more than willing to pay for. In an online setting, you would need to charge less, but you are not limited by time or space on the Internet. Ultimately, the direction you take your program is only limited by your drive and your interests.
Successful parents want the very best for their children, and they place them in the best schools. However, many times, those schools are not challenging enough, and parents are looking for something more. We were just about to change our focus to offering gifted programs online when fate intervened. The following year, our intervention program was so successful it caught the attention of the National Center for Juvenile Intervention and was bought out by them. They even offered to let me hold a position on their board if I would assist them in program development and it’s the only reason I would ever share this kind of information on the Internet.
I jumped at the opportunity. Now I mainly consult with them and develop some of their startup programs. In fact, I just finished about a year and a half of working in the Cayman Islands developing school programs. Having lived the life of an expat for many years, I can say that I enjoyed that part of my career more than any other so far. We developed schools and outreach programs and a host of other events on the island. It was amazing.
What struck me most about the experience was how easy it was for people to start up a program overseas. If you wanted an Internet business, it’s amazingly simple. You plug in your computer anyplace that has reliable Internet and you are good to go. But if you want to start a brick and mortar outreach, it’s not that much more difficult in many places. In fact, they go out of their way to help you if there is a local need for your services. So, it’s important to do a bit of homework on the area you want to settle so you can discover the needs and benefits in a given area.
For example, it’s a little known fact that in the Cayman Islands, any new private school automatically receives about $60,000 every year from the government. It doesn’t matter if you have 700 students or 10 students. Plus you get additional funding based on your size. One school on the island even uses self-directed pamphlets they order from the States at a nominal cost to educate the kids which keeps their employee salary costs down. What’s more, there is no customs tax on any educational products entering the country. The only catch is that you have to have a Caymanian business partner to get started and they are easy to find. And there is no shortage of families wiling to pay and enroll their child in a private school because the public schools are rife with fighting and misbehavior.
In reality, starting a nonprofit outreach is the easiest way to get yourself established overseas. The more beneficial to the government, the better off you’ll be (and the more support you will receive). I know of one man in Belize that was given several acres of land for free because he said he was willing to develop it to take care of orphans. All he did was ask. But, an online business avoids all of these hurdles completely. And right now, I am predicting that this is the arena that’s about to expand by leaps and bounds.
Remember, if you have been successful in any area of your life, you can be an effective teacher and run a school. It doesn’t have to specifically be academic. If you have knowledge people are willing to pay for, you have a business. You could start a specialty graphic art academy where you teach kids online and have them email you their assignments. It could be a gifted program. It could be that you were terrible in math but you were great in science and start a specifically science-based online academy. The more specific, the more attention it will draw. This is especially true in Asia where kids go to school and then go to a la carte academic programs for several more hours in the day.
Most online schools are charging somewhere between $75 and $160 per month depending on the amount of time they are accessible to the students. In every case, the rule about them not being accredited applies. So, whatever your pricing strategy is, just remember that adding 100 students to your online school will net you at least a cool $7500/mo – more than enough to live comfortably overseas, even the Cayman Islands which has a fantastic quality of life, but is the most expensive in the Caribbean.
About the author: Dr. Rich Tarbox is the author of the Youth Intervention Program Development Kit and a Specialist with the National Center for Juvenile Intervention. Find him at www.ncji.org