11 Nov 2011
- Written by Carlee McCullough
Services and supplies
Proprietors of education-based operations make myriad purchases, including paper, computers, books, food products and much, much more. On a small level, one could consider becoming a supplier of goods and services. Even better is moving up to a larger scale and becoming a distributor.
With the passage of the No Child Left Behind “NCLB” Act, which mandates annual state testing of public school students in math and science from grades 3-8, students are subjected to more standardized tests than ever before. While the business of testing and scoring is lucrative, the sales of the text books, teaching manuals and practice exams generate even more revenue.
Several companies have cornered the market: Harcourt Educational Measurement designed the Stanford Achievement Test, CTB McGraw-Hill designed the TerraNova Achievement Test (CTBS), Riverside Publishing designed the Iowa Test of Basic Skills (ITBS), NCS Pearson scores the tests, and Educational Testing Service (ETS), which is traditionally known for administering the SAT-college entrance exam, has also entered the market to design and score tests as well. While most of us will not be able to compete with these companies, finding a niche opportunity is all we really need.
Tutoring and supplemental education services
As parents work longer hours and students become more active or experience more challenging school work, the need for tutoring and supplemental education services becomes increasingly more important. Money is definitely being generated in this sector of the business of education.
Kumon Math & Reading Centers and Sylvan Learning Centers are the industry leaders on supplemental education services. Kumon has over 1200 centers in the United States and over 26,000 worldwide, while Sylvan has over 1000 centers in the United States and approximately 75 in Canada.
Although both have years of experience and strong reputations, their strategies and approaches are distinctly different. Kumon stresses a more self—paced, independent learning program in which the student must fully master each concept before learning a new one. There are daily assignments that are timed and graded.
Sylvan offers a more traditional tutoring approach in a classroom style, with the curriculum including reading, writing, math, study skills, and SAT/ACT prep. There is also an online program with live, Internet-based tutoring.
Marketing strategy also separates Kumon and Sylvan. Kumon primarily relies on “word of mouth” promotion while Sylvan advertises heavily. With a relatively low cost of entry, these franchises are likely to continue their growth.
As the world’s largest test prep company, Kaplan rounds out the category by preparing kids for college and graduate school entrance exams. Owned by the Washington Post, Kaplan has experienced phenomenal growth.
There are opportunities in online schools, private schools, montessori schools, home schools and – politics aside – charter schools. As the new kids on the block, interest has been focused on the charter schools, which are directly funded by taxpayer dollars.
Charter school proponents make the case that such schools can educate better and cheaper with smaller classrooms and the enhanced room for creativity that comes into play with fewer mandated requirements. Capable of establishing longer days and longer school years, and with academic flexibility, this form of education appears to be growing in strength.
Computer software and hardware usage have changed drastically in some schools. Some schools have moved to a paperless experience, with work completed on electronic tablets. This innovative approach is a cost saver and efficient. From a business perspective, there is even more business opportunity in the software and hardware.
If you cannot beat them in business after careful research, consider investing in the publicly traded companies. Remember, as we are “On Our Way to Wealthy,” we must diversify our portfolios by thinking out of the box.