Ten Steps to Starting Your Micro or Hybrid School Business
Microschools and hybrid schools are popping up all over the country as everyday entrepreneurs take education into their own hands for their kids or students. It’s an exciting movement for those of us passionate about seeing a change in educational systems! There is nothing quite like seeing parent and teacher innovation bring change to so many kids.
But the legal stuff, the business, stuff, the money stuff…it’s tough to figure out. Do you start a private business? A nonprofit? Will parents homeschool or will you be a licensed school? And how does any of that even play out for the founder?
Many founders will start private schools and state law has a lot to do with this choice. A private school is responsible to fulfill state law for a school which may include teacher qualification, facility regulation, and attendance accountability, among other things. Many founders will decide to instead offer a service to parents who legally homeschool. Way back at the turn of the millenium, ahem, I was in the first wave of this as a high schooler who was registered as a homeschooler in NY state, and did all my classes through a correspondence program. Those were actually the days of VHS tapes. Enough of that, but the point is, that, for a good 30 years, homeschoolers have used outside services of the parents’ choice to provide the required classes to their children.
Micro and hybrid schools are not really much different. A teacher or group of teachers provide some set program for kids who are schooling under their state law as ‘supervisors of home education’. These programs usually operate as independent businesses, either as an Limited Liability Company or as a nonprofit. Operationally they are very similar, but the governance is very different. That is for a different article, but the steps below apply to either business model.
Write your Vision
You will first write a clear vision statement. Who are you doing this for and why? What do you hope to accomplish? This may seem like a superfluous step, but there is something about sitting down and making yourself write down what you are doing and for whom in a few sentences that really helps you focus your vision.
Validate your Market
The most delightful and promising vision won’t work in some places. You need students and you need funds. Once you have your vision clear, you should reach out to some families, do a survey, and otherwise start talking. Hold an informational meeting at a library or park. Ask parents what their pain points are. Listen. Tell them about your vision. Get their feedback. Do this a couple of times.
Don’t forget to check out your competition as well as the demographics around you. A very populated area is likely to have all types of people and enough of them to make your program work, while a sparsely populated area might require a smaller program.
Create a Planning Budget
You want to do this even though you don’t want to do this! A realistic look at the costs of running the program from facility costs to salaries to supplies and insurance is vital for you to assess before you get too far in. This will allow you to know what sort of revenue you will need (through tuition or perhaps fundraising or scholarships) and use that information as you talk to families.
Choose a business structure and file your paperwork
This one can be a bit intimidating, but it doesn’t have to be. As I said, unless you are a legal school, you probably will be choosing between an LLC and a nonprofit. An LLC is simpler. You file Articles of Incorporation with the state, pay a fee, get an EIN from the IRS, and open a bank account. You own the business including any profit (subject to personal taxes). It’s fairly simple.
A nonprofit starts out the same way with filing with the state, getting an EIN, and opening a bank account. But you will need specific language, bylaws, and a Board. The Board will be legally responsible for governance. You will not own the business and if you are on staff as a paid employee, you will not be able to vote (but can attend and participate) in Board meetings. Within about two years after filing with the state, you will need to apply for 501c3 status with the IRS (several hundred dollars plus the accountant fee to do the filing). You will also need to file a 990 each year and books must be kept carefully.
The benefits of a nonprofit are eligibility for grants and the ability ro receive tax deductible donations, the ability to use volunteers as ‘workers’, usually exemption from sales tax, and exemption from corporate tax on any ‘profit’ the business has. It can also be much easier to access facilities such as churches for use since churches can sometimes get in some trouble themselves if they ‘rent’ to a for-profit business.
Find a Facility
Once you have your business entity and your vision and feel confident your market will support it, you will need a facility. Small programs often just meet in the founder’s home or property. Others use churches, community centers, or private property. The search can take a while and I recommend trying to find a place that will serve you for at least 3 years if possible (although the smaller the easier to move, moving takes a ton of time and energy!)
Build your Infrastructure
You will likely need some level of web presence if you are recruiting more than a handful of students. Squarespace is a bit pricey but user friendly. Many people like Wix or Wordpress. You will need a insurances before you open (liability, Director’s and Officers or Professional, property, and possibly worker’s compensation) and you will want systems for taking registrations and managing student information (G Suite with Forms, etc can work just fine for this until you get many dozens of students). Additionally, you will need a payroll system if you have employees and a bookkeeping system to label transactions and invoice tuition.
Again, the smaller the program, the simpler these systems can be. The more kids you have, the more useful a more robust system will make itself.
Recruit Students
You should have had a head start on this if you had your informational meetings early on! Now that you have your systems in place, it’s time to go back to those families and hold another meetings. Take registrations and enrollment fees. Post on social media, bulletin boards, in the local paper, and put up signs! Wherever your potential families are, try to bring awareness and have a meeting. Collect their contact information so you don’t lose them!
Hire Employees
At this point, you should have a good idea of what your program is shaping up to look like in reality. You’ve got your classrooms and some students. If you are more than just a one-person show, you will need to find a couple of employees. (Keep any eye out for my Hiring Workers series for more information on what to look for, contractors vs employees, etc). You can post on craigslist, local social media groups, etc..with a brief description of the position. I recommend looking for people open to your educational philosophy and people with a genuine love of and energy for kids. You will have an application, interview, and then will offer and begin any trainings.
Set up and Open your Doors
At this point, you are just about ready to open. In the weeks before your first day, you will be setting up your physical space as well as making sure your payroll system, insurances, money management and student information systems, and safety policies are all in place. This is a good time to put together a Handbook with communication policies, pickup and drop off procedures, sick and allergy policies, safety policies, and other proactive family communication. Writing it all down ahead of time is nearly always wise!
Have an Open House
Welcome your families with a meet-the-teacher evening, check for any last-minute gaps, and you are now in operation!
The steps are simple, but it is work to implement! Keep your vision in mind and be as organized as you can be. Having a strategic plan from the start and revisiting it regularly can help you keep your priorities straight. Deadlines are your friend. But so is having a lot of grace for yourself!
