How to Build a Realistic Budget for Your Hybrid or Micro School
One of the most common questions I get from founders starting a hybrid or micro school is: “How do I set up a budget that works?” A strong, realistic budget is the foundation of a sustainable program. Without it, you risk undercharging, underpaying yourself, and ultimately burning out.
Step 1: Understand Your Expenses Before You Start
Before you start enrolling students, you need a clear picture of what your program will cost. This helps you:
Provide families with an accurate ballpark for tuition.
Avoid underestimating the resources you’ll need.
Ensure sustainability from day one.
Start by separating one-time startup costs—like filing state paperwork, consulting calls, or initial facility setup—from recurring yearly expenses. Record these early expenditures in your business account and leave a paper trail for reimbursement.
Step 2: Facility Costs
Your facility is often your biggest expense. Key categories to consider:
Rent: Ensure it fits your program’s needs.
Cleaning: Determine if it’s included in your lease or a separate line item.
Furnishings & Equipment: Tables, chairs, bookshelves, and classroom storage. You can thrift or buy used in your first year, but plan for replacement or upgrades in future budgets.
Fundraising can sometimes cover these one-time costs, making it easier to manage your tuition rates.
Step 3: Insurance & Compliance
Insurance is essential for liability and peace of mind. Consider:
Director’s and professional liability insurance
Student liability coverage
Property/renter’s insurance for your materials
Workers’ compensation if you have employees
These recurring costs must be factored into your tuition calculations.
Step 4: Technology & Administration
Even in a small program, technology can save you time. Budget for:
Bookkeeping software (Wave Apps, QuickBooks)
Payroll services (Gusto, OnPay)
Website and domain fees (Squarespace)
Student information platforms (for admissions, tuition, and record-keeping) (Our School Hangout, Spark, Brightwheel)
If you’re very small your first year, paper forms or Google Forms can suffice, but plan for digital systems as your enrollment grows.
Step 5: Supplies & Curriculum
Supplies fall into two main categories:
General classroom/office supplies: Paper, pens, printer ink, basic office equipment.
Classroom materials: Art, science, or project-based learning materials in addition to everyday items like paper.
Curriculum costs can vary depending on your educational philosophy. Decide what the school purchases versus what parents provide for home use. Consider small grants for extra and supplementary items, but make sure your necessary core curriculum is covered.
Step 6: Pay & Salaries
Staffing is often the largest line item. Include:
Your salary as founder/director
Teacher and aide salaries
Payroll taxes (approx. 10% of total salaries)
Wages or contract pay for specialized roles or part-time tasks
Think three years ahead: what does your staffing look like at full enrollment, and how will you grow sustainably?
Step 7: Training, Morale & Professional Development
Budget for your team’s growth and morale:
Teacher training time and professional development for you
Board training
Teacher appreciation events or gifts
These line items are small in cost but significant for retention and program quality.
Step 8: Build in a Cushion
Unexpected expenses happen. Always build in at least a 10–20% buffer to cover:
Student dropouts
Additional supplies
Any unforeseen costs
This ensures your school can operate smoothly without financial stress.
Step 9: First-Year Adjustments
If enrollment is lower than expected in your first year, you may need to temporarily handle some tasks yourself—like invoicing manually—but include all these expenses in your budget so you can scale sustainably. There are other ways to tighten your belt the first year, but it is better to cut here and there after including all the items than to try to add them in later. You must have a sustainable tuition and you must know your break- even class size and your cost per student.
