MANAGING YOUR CENTRE
In almost all Kumon conventions, nothing is ever said about “marketing” or “profitable management”. Do you ever wonder why? In fact, at the 50th Kumon convention in Tokyo Japan, a Japanese instructor was allegedly overheard to say that it is now a policy in Japan that no female age 50 and over; and no male instructor shall be granted a franchise to open a centre. Why would a male applicant be refused to become an instructor regardless of qualification? Is it because in the native culture, it would be a shame for a man not to earn a decent wage to support his family?
In North America, you are now obliged to run a centre in a commercial establishment. This means that you must be willing to commit yourself to a lease agreement unless you happen to be rich enough to buy your own building. And if you are “that rich”, what the heck are you doing slaving yourself for pittance! J
LEASE NEGOTIATIONS
Before setting out to find a place to open a centre, there are a few things to consider.
· Parking space – are there enough to accommodate your requirements?
· Net or Gross – leasing rates are usually quoted “net or gross” of expenses. Save yourself the agony of finding out later what your real cost is by knowing who is responsible for “operating” expenses, such as property taxes, utility bills, maintenance and servicing of air conditioning and heating appliances, upkeep of internal & external lighting fixtures, alarms & security, etc. Leasing rates are usually quoted at $ per square foot which is why it is important to know details.
· Learn to negotiate – know who you are dealing with: owner of the building or leasing agent. There is a difference. A leasing agent is paid commission usually based on the leasing contract and will therefore want the highest rate. The owner of a building wants a good solid and reputable tenant with an outstanding ability to pay rent. A school brings traffic to a location exposing the site to potential customers for other tenants. This builds goodwill. If you point this out to a lessor, you have a chance to negotiate a better term.
· Consider economics – look into the past history of the site as well as future prospects. Because you are running “a business”, you want to make sure that your enrollment prospects are there. Saving on lease expense cannot be your only consideration. If you locate in an area where there is only industrial expansion for the future, it would be a bad deal. If the site is in close proximity to a possible high density dwelling development, it might be a great deal. (Lease rates are based on usage and occupancy. “Retail” spaces are prime; warehouse and industrial spaces “no frills” are cheapest.)
Choosing where to locate your school is critical. Your prospects are families and children. They are your bread and butter. Know how big this community is; how many schools are there in the area.
GOALS
Perhaps this should be the first consideration for anyone planning to open a centre or any business for that matter.
Running a business purely on emotional or altruistic motive could have a disastrous consequence unless you happen to be a Bill Gates, a Warren Buffet, or a Jim Patterson. Until that stage in one’s life where he/she has reached that level of “self-actualization”, most of us engage ourselves, first and foremost, to “earn a living”. That is reality.
Ironically, many of us are driven to act based on emotional appeal. This is preached in many sales seminars. Insurance salesmen are most accomplished in this aspect. They don’t sell “life insurance”; they sell “the agony of a child facing the world not only without a father but without education”. They sell the “pain of a widow having to sell the house and live in a basement apartment.” They tell stories about a “child crying because she can no longer be with her friends at a private school”. Oh, there are many more “stories” that sell million dollar policies.
That is what happened at the 50th Kumon Party in Tokyo. They sold 10,000 delegates with “a father’s love for his son”; the “power to change the world-one child at a time”; a grade 8 student who can now “do calculus”. Oh, don’t get me wrong. There are so many wonderful things about the Kumon Method. We have been hearing about them for the last 50 years!
But as you get back to your home, you must face reality.
If you have no goal for your centre, you are like a ship without a rudder. You would be unable to steer yourself clear of disasters; including – what you would do should you get disabled, grow old, retire, or die.
So where do you start? Zig Ziglar, Anthony Robbins, Brian Tracy, and other motivational speakers have an identical response: “take account of where you are at in this stage in your life and map out a plan to be where you want to be 5, 10, 15 years from now.”
YOUR KUMON STATISTICS
Take account of your Kumon business:
1. What is your gross tuition income?
2. Subtract from this the following:
o Your royalty payment
o Your lease expense
o Your utility bills
o Salaries of your staff
o Travel expenses
o Credit card expenses
o Advertising, promotion, entertainment expenses
o Your office expenses
o Taxes you have to pay
3. What you have left is your net cash/disposable income from which you pay for your rent and living expenses
Now, take the amount in (3) above and divide it by the number of hours you spend at your centre. This will return your earnings “rate per hour”. How does this compare to the “minimum wage” in your area?
With this result, are you able to put away “for a rainy day”? If you can, calculate the future value of this “savings” at (x)% for 60 months (5 years); 120 months (10 years); or 240 months (20 years). Will this be enough for you to retire? Here is a neat place you can do your calculation: http://www.dinkytown.net/java/CompoundSavings.html
If the results are dim, start making real plans now.
LIVE YOUR DREAM
Live your dream. Close your eyes. Fast forward to your future. Where are you now? What kind of a life do you have? How many rooms are there in your home? How comfortable are you? How close or how far away are you from Kumon? …..Oh, Ok, I am just kidding about the last one. J
This exercise (above) would create a perspective of your own vision of what you want to achieve. Napoleon Hill, in his book, “Think and Grow Rich” says that “thoughts are things”. The next thing that will happen is what pre-occupies your mind. That is so true. Just think about everything you have done in the past and you will realize that just immediately prior to an act that is where your mind was.
Therefore, if you want 500 or 1000 students in your centre, “live that perspective”. But before you get carried away with “dreaming”, get back to reality.
Here you are in the future. You are now close to retirement. How much basic income would you need? Go to: http://www.dinkytown.net/java/RetirementPlan3.html to determine how much capital and income you would need to retire.
That is your starting point in your planning.
POWER TO CHANGE THE WORLD 