Case study : English conversation study group business

By | 2014/03/29

A business model of a English conversation study group at Tokyo.

There are many this kind of English practicing organizations existing in Tokyo.

Without any English native people, only Japanese people come together at a coffee shop to practice English conversation.

Participants pay 500 yen (5 UDS) as attending fee and also afford their own coffees to get a chance to speak and discuss in English for 1.5 hours.

Standing in the shoes of coffee shops, it’s usually not allowed to book the seats, but the study group organization made it to sign contracts with those coffee shops to keep enough seats for attenders.

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By considering the merits, participants earn a chance to practice with such a low cost. For the coffee shops, they earn lots of customers outside the busy hours (late evening on weekdays and morning on weekends). Then the study group organization collects 500 yen from all participants.

A everybody-win business model!

Simple calculation about the profits. 500 yen per attendant , average 10 people a time and 15 times a week, then the total sales are 75,000 yen (750 USD) per week.

The cost is only the coffee fee for volunteer staffs, which can be around 7,500 yen (75 USD) from 500 yen for one and 15 times a week. There is no cost for other operation since an automatic booking system has been ready on line.

Weekly profits are 67,500 yen (675 USD) and 270,000 yen (2,700 USD) monthly!

Low costs and good returns!

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However, the founder doesn’t make it for money, so , with low speed, it actually took 6 years to make it the scale today.

Generally speaking, it is easy to analyze a well-developed business. Most businesses look easy to do and earn money. But we have to understand that those businesses we see today are all survivors from drastic competitions.

Most businesses have a period of extremely difficult time at the beginning.

Taking the English study group as an example, at the beginning they need to find and ask people to come to talk English and pay for it. They also need to find some volunteer staffs to operate this group. Besides, they needs to negotiate with coffee shops to hold seats for their group as well.

I can image that they must have failed many times in recruiting and negotiation with coffee shops.

Even many business models do look easy to do, but I believe every single business model has to pass uncountable difficulties one by one to grow like it is today.

See article in English list here

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