Part Two of Four:
Creating a Business Plan and Finding Funding
Write a business plan for your private school: Create a 5-year business plan, including operational plans (such as financial and marketing) and educational plans (such as educational focus, curriculum, implementation and assessment). The plan should also detail planned accomplishments such as expanding the campus or offering new grades.
Whether your school is nonprofit or for-profit, a business plan will help by setting the school on a successful path.
A sound business plan will also inspire confidence—and generosity—in your potential financial donors.
Determine the budget for the school: When setting up a budget, plan for a variety of expenses, including: leasing a facility, legal licenses and permits from the state educational board; hiring faculty members, staff, and a business consultant; and marketing and promoting the school.Reach out to other private schools in the community and ask to review their budget. This will give you an idea of a private school’s annual costs.
Your committee accountant or financial specialist should help with the budget. If you don’t have a financial specialist on your committee, seek expert financial advice.
Starting a private school from scratch is an expensive undertaking. On average, starting a private school in the U.S. costs $1,000,000. The same undertaking in the U.K. costs, on average, £9,300,000.
Secure funding for your private school: If you are operating as a non-profit, solicit contributions by asking for donations from foundations, applying for grants and establishing donations from private donors. If you’re operating for-profit, student tuition will provide the majority of the income. Set a tuition rate that will cover the school’s expenses without being prohibitively steep.
When soliciting funds from financial partners, show potential investors your business plan. This will clarify to them that you know what you’re doing and that your private school is worth serious investment.
Incorporate your for-profit private school as a business: Most private schools incorporate and apply for tax-exempt status. You’ll need to officially create the for-profit private school as a business and register the school with your state at least 1 year before opening its doors to students. File the appropriate paperwork with your Secretary of the State and the IRS.
If you have an attorney on your founding committee, ask them to handle this step. Their professional expertise will be invaluable.