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Written by Elma Steven | Updated on March, 2024

Language School Business Plan

Executive Summary

Overview:  Chumkriel Language School (CLS) is a Cambodian-run grassroots organization that aims to offer affordable education and support to the local community. CLS provides a wide range of educational programs and community assistance to the inhabitants of Chumkriel and the adjacent rural towns to help them improve their life skills. CLS is staffed by Cambodians who understand the significance of teaching their neighbors and providing a good example. Chumkriel Language School aspires to instill in the community the conviction that education and self-improvement will lead to future chances for education and work. This is accomplished through developing life and professional skills, teaching English, and offering support and encouragement to families.

Mission:  CLS provides life-changing possibilities for Chumkriel and nearby community youngsters to achieve a brighter future for themselves and their families.

Vision: To give students the real-world skills that will enable them to progress and make a substantial and important contribution to their communities via education and training.

Industry Overview: By 2027, the global market for English language learning will be worth $54.92 billion. The English language learning market is predicted to increase at a CAGR of 6.2 percent between 2020 and 2027, reaching $54.92 billion.

Financial Overview

Language School business plan financial overview

Financial Highlights

Current ratio612233242
Quick ratio611223140
Interest coverage ratio8.211.114.2
Debt to asset ratio0.
Gross profit margin51%51%53%53%53%
EBITDA margin12%14%21%22%22%
Return on asset5%6%13%14%14%
Return on equity5%6%16%17%17%

Fund Usage

Language School investment Capex

Industry Analysis

Learners develop the capacity to learn many languages via language learning. Bilingualism gives you a competitive advantage and serves as a cultural bridge. Furthermore, as students migrate to other countries in search of higher education, offline, hybrid, and online language learning courses are becoming increasingly popular to improve communication skills. The integration of artificial intelligence in e-learning, the rising importance of English for business and professional reasons, an increase in investments for English language learning start-ups and small businesses, and the low cost of English language learning applications contribute to the overall growth of the English language learning market. However, worries over data security and privacy are projected to stifle the English language learning market’s development.

Many students who go to another nation or city to attend a language course desire more than simply a formal language education, which is why language Plus programs are becoming more popular. Students may get the language instruction they desire while also getting an enjoyable experience with language Plus programs. Nonetheless, they are concentrated on the student’s field of studies, such as medicine or business. These are often known as language Plus programs since they provide a benefit in addition to basic language instruction.

Revenue for the Language Instruction industry declined an estimated 6.2% in 2020 alone due to falling demand amid a sharp decline in international travel. However, as demand for travel picks up in line with the improving economy and drop in coronavirus cases, industry revenue will increase by an estimated 9.6% in 2021. As the economy has expanded over the majority of the five years to 2021, per capita disposable income has increased at a rate of 3.0%, leading to strong demand for industry products over the majority of the five years. In 2020, however, falling corporate profit, consumer spending, and travel demand had mitigated gains from prior favorable macroeconomic conditions.

Language School business plan industry analysis

Language + activity programs are popular among students who want to study English, German, Italian, or Spanish, as seen in the graph above. Language + activity programs will combine language instruction with some immersion experience, such as culinary excursions and photography sessions and visits to local sights. Language schools often choose activities that are popular in their area.

Language courses that contain a professional component are another popular choice under language Plus programs. Speech + business, language + marketing, and even language + medical are examples of frequent language Plus industry programs.

These programs are becoming more popular among professionals as globalization grows more prevalent and English becomes the universal language in many professions such as business, medical, and education. Individuals working in a specific field may study English (or any other language) while also learning the terminology and vocabulary used in their sector via language + industry programs.

Another popular trend is language programs grouped by age group, such as classes for persons aged 40 and up, 50 and up, 60 and up, etc. The baby boomer generation is particularly fond of these shows. They want a program that connects them with others who share their beliefs and interests and who wish to study at the same speed as them.

Language programs organized by age group are similar to language + activity programs. They enable kids to attend language classes while engaging in exciting, age-appropriate activities with their peers.

Be careful to address each age group’s interests, problems, and requirements when selling language programs grouped by age group. Assume it’s a group of 65 years old or older. In such a scenario, keep in mind that some people may have health conditions or mobility challenges that make walking or standing for long periods more challenging. It is critical to communicate how the program will address their requirements. As a general guideline, you should emphasize the possibility of meaningful social connection with like-minded individuals, the ability to meet intriguing people from all over the world, and any other particular advantages your program provides.

Marketing Plan

Language School business plan promotional budget

Content Marketing: Create a blog on the website with material catering to prospective customers of Chumkriel Language School (CLS).

Discounts: Provide multiple rewards or incentives where members of Chumkriel Language School (CLS get a deal if they successfully recommend someone.

Social Media: Engage and promote on Twitter, publish news on Facebook, and utilize Instagram to promote curated photos of your space and events.

SEO (Search Engine Optimization) Local SEO makes it easier for local consumers to find out what you have to offer. It creates trust with potential members seeking what your place offers.

Email Marketing: Sending automated in-product and website communications to reach out to consumers at the right time. Remember that if your client or target views your email as really important, they are more likely to forward it or share it with others, so include social media share buttons in every email.


Language School business plan organogram

Financial Plan


Language School Business Plan Financial Plan

Break-Even Analysis:

Language School business plan financial plan

Income Statement:

Item 19,21759,117175,410415,277781,357
Item 234,701222,558660,3681,563,3942,941,580
Item 34,06719,56146,43278,519114,905
Total annual revenue47,985301,236882,2112,057,1893,837,842
% increase528%193%133%87%
Item 13602,2596,61715,42928,784
Item 24803,0128,82220,57238,378
Item 352,00065,00078,00091,000104,000
Item 47203,6158,82216,45823,027
Item 5140,000336,000560,000840,0001,120,000
Item 660,000144,000240,000360,000480,000
Item 732,00061,33385,533112,153141,435
Total Cost of Revenue285,560615,220987,7941,455,6121,935,625
as % of revenue595%204%112%71%50%
Gross Profit-237,575-313,984-105,583601,5781,902,218
Item 128,00096,800154,880175,692193,261
Item 275,000105,000120,000120,000120,000
Item 336,00096,000108,000120,000120,000
Item 48,00012,00012,00012,00012,000
Item 53,83918,07444,11161,716115,135
Item 63,35912,04926,46641,14476,757
Item 75,60010,00012,90415,03417,376
Item 86,66714,00022,06730,94040,701
Total selling & admin expenses166,464363,924500,428576,525695,230
as % of revenue347%121%57%28%18%
Net profit-404,039-677,907-606,01125,0521,206,987
Accumulated net profit-404,039-1,081,947-1,687,957-1,662,905-455,918

Cash Flow Statement:

Net profit before tax-$404,039-$677,907-$606,011$25,052$1,206,987
Item 1$4,333$5,417$6,500$7,583$8,667
Item 2$11,667$28,000$46,667$70,000$93,333
Item 3$6,250$8,750$10,000$10,000$10,000
Item 4$3,000$8,000$9,000$10,000$10,000
Item 5$667$1,000$1,000$1,000$1,000
Total payables$25,917$51,167$73,167$98,583$123,000
change in payables$25,917$25,250$22,000$25,417$24,417
Item 1$320$1,506$3,676$5,143$9,595
Item 2$360$1,807$4,411$8,229$11,514
Total receivables$680$3,314$8,087$13,372$21,108
change in receivables-$680-$2,634-$4,773-$5,285-$7,736
Net cash flow from operating activities-$334,536-$569,958-$468,280$203,311$1,423,180
Item 1$16,000$13,200$14,520$15,972$17,569
Item 2$20,000$22,000$24,200$26,620$29,282
Item 3$28,000$22,000$14,520$10,648$11,713
Item 4$96,000$88,000$72,600$79,860$87,846
Item 5$20,000$22,000$24,200$26,620$29,282
Net cash flow/ (outflow) from investing activities-$180,000-$167,200-$150,040-$159,720-$175,692
Net cash flow from financing activities$400,000$440,000$484,000$532,400$585,640
Net (decrease)/ increase in cash/ cash equivalents-$114,536-$297,158-$134,320$575,991$1,833,128
Cash and cash equivalents at the beginning of the year-$114,536-$411,693-$546,014$29,978
Cash & cash equivalents at the end of the year-$114,536-$411,693-$546,014$29,978$1,863,105

Balance Sheet:

Item 1$16,000$29,200$43,720$59,692$77,261
Item 2$20,000$42,000$66,200$92,820$122,102
Item 3$28,000$50,000$64,520$75,168$86,881
Item 4$96,000$184,000$256,600$336,460$424,306
Item 5$20,000$42,000$66,200$92,820$122,102
Accumulated depreciation$44,267$129,600$250,104$408,231$607,743
Net non-current assets$135,733$217,600$247,136$248,729$224,909
Accounts receivables$680$3,314$8,087$13,372$21,108
Total current assets-$113,856-$408,380-$537,927$43,349$1,884,214
Total Assets$21,878-$190,780-$290,791$292,078$2,109,122
Account payables$25,917$51,167$73,167$98,583$123,000
Total liabilities$25,917$51,167$73,167$98,583$123,000
Owner’s equity$400,000$840,000$1,324,000$1,856,400$2,442,040
Accumulated net profit-$404,039-$1,081,947-$1,687,957-$1,662,905-$455,918
Total equities-$4,039-$241,947-$363,957$193,495$1,986,122
Total liabilities & equities$21,878-$190,780-$290,791$292,078$2,109,122