|Often in this industry, people talk with genuine affection about their job and the colleagues that they count as friends. Loyalty and friendship still count for a lot in an industry that is worth, in the English language teaching sector alone, at least US$9 billion (see Language Travel Magazine, October 2006, page 26).
There is another factor that has helped shape the industry, testified to by many of the entrepreneurs who contributed to this article: a genuine passion for education and international exchange. Indeed, it is easy to make the assumption that a commitment to educational excellence and exchange has led to commercial success for many business operators.
Business models and strategies for growth seem to have come second to a genuine belief in the educational products being sold. Till Gins, Director of the OISE Group and owner-operator of one of the largest language teaching enterprises in the industry, makes this point emphatically. “I was just interested in what I was doing and I knew what I wanted to see delivered,” he says of his first foray into English language teaching in 1973.
Today, the OISE Group represents a network of 10 own-brand language schools around the world and owns or co-owns another 16 language schools in the UK, Spain, Canada and the USA. Its turnover in 2005, according to Brian McCallen Research, was US$53.7 million (see Language Travel Magazine, March 2007, page 7).
Some other industry entrepreneurs developed their business successfully by starting off operating as an agency and then branching into the language school domain. One example is Dutchman, Rene de Jong. Now working for a company called Internet Advantage, de Jong built up the Don Quijote chain of Spanish language schools and then sold his company which he later ran with his sister to Enforex in December 2004 (see Language Travel Magazine, February 2005, page 6).
He relates, “After having studied business, I went to Salamanca to learn Spanish to improve my opportunities to get a job in exports and ‘travel on the job’. I had the time of my life.” Friends of his started a language school in Salamanca a year later and suggested that he represent their school alongside his regular job. “Soon, I saw the potential and left my job to start a language travel agency full-time for Spanish language courses only,” continues de Jong. “In the second year I sent 1,240 students to Spain. Price and quality were low and complaints came to me as an agency. This made me decide to start my own language school.”
Salamanca became the chosen destination for the first Don Quijote school in 1989 as it was, at the time, the most popular of the 15 locations offered by de Jong’s agency. “I wanted to offer a great place to work, where people feel a passion for their work and want to make sure that all clients go home happy,” he says.
Another major player in the industry that started off as an agency-and-language-school combined is EF, founded by Swede, Bertil Hult, in the 1960s. “EF Education was founded in Sweden in 1965,” details the company’s corporate website. “Our concept was straightforward: take local high school students to England to learn English. It was a simple idea on-site language and cultural studies but one with an enormous future.”
A further example of an entrepreneur is Antonio Anadon, who started the Spanish language school chain, Enforex, initially as an agency operation in 1989. “We became, in four years, one of the top 10 study abroad organisations in Spain,” relates Anadon. “We still have this business in our group.” With Spanish language schools throughout Spain and Latin America and with Enforex also owning the Don Quijote chain, Anadon inspires commendation from other entrepreneurs. For example, Andrew Mangion of EC says, “This company’s growth is nothing short of amazing.”
Mangion himself represents a particular type of entrepreneur one who has taken over the reins from a parent to continue driving forward a language school business. He states, “This is a people business and [my advice is that] you had better love people or get out of the business.” He continues, “EC has always been quality focused and keenly listened to its clients.”
EC was originally set up as the Malta-based European Centre for English Language Studies in 1991 by Mangion’s mother, Marguerite, along with some outside investors and now represents an international group with schools in six destinations in four countries and servicing well over 60,000 student weeks per year. Mangion remembers that when he joined the company in 1997 he found “a company I felt had tremendous opportunity” although, at the time, it was turning over just 3,000 student weeks.
Very soon, Mangion had bought a major share in the business, as well as buying out the other partners on behalf of his family. “I see myself more as an entrepreneur who bought a company that happened to be partly owned by my family,” says Mangion. “The family remain on the board as non-executive directors and have always given me and my team a large amount of latitude and trust in running the company.”
Other examples of entrepreneurs continuing a family business include the Quinn family in Ireland, which operates CES Swandean in Ireland and the UK; Juan Manuel Sampere of Estudio Sampere in Spain continuing the work of his late father, Alberto; and Mark Lindsay, who continues to run the company set up by his parents in the 1950s namely St Giles International.
Another candidate to add to this group is David Immanuel of Langauge Studies International (LSI), although he reveals that he took over LSI from his father who had bought Language Studies Ltd, as it then was, in 1970, almost immediately. “Why my father bought this business was never explained to me and unfortunately it is now too late to ask him,” says Immanuel. “I literally ‘came for the day’ in 1970 and have stayed for 36 years.”
A newly qualified accountant at KPMG back then, Immanuel explains that he remodelled what was a loss-making school on the example of Berlitz, primarily offering one-to-one courses for executives. “It turned out to be a good decision,” he says. “Those were the days when companies regularly sent executives on four-week crash courses and we were teaching up to 20 languages in the London school at any one time.”
LSI, as it became known in 1987, expanded into group courses in 1975 and opened its first US school in 1980. Immanuel relates that this is the decision of which he is most proud; deciding to open a US school just as cheap UK£99 (US$196) “walk on” air fares were introduced by the airline, TWA. “I thought that this might be the time for young Europeans to diversify from Bournemouth when preparing for the [Cambridge] FCE and so it proved when we opened in Berkeley, California,” he says, suggesting that LSI was the first British company to open a school in the USA.
Taking risks and innovating
Paul Lindsay of St Giles International, who set up the company in 1954/55 and now works for the St Giles Educational Trust while his son, Mark, oversees the company, asserts that for any company to be successful, “you’ve got to have a bit of confidence to take risks, and if you have good judgment, this may pay-off”. He also cites a move into the US market as an example of risk-taking that paid off. Two years later than LSI, in 1982, St Giles opened its first year-round school in San Francisco, having previously operated summer courses on the campus of the University of Massachussetts in Amherst.
“The pound was really strong in 1981 and it had gone up so much that it was almost putting people off coming here that was one reason to open the school,” he says. “It was a real risk as I had no experience of working or running a business in the USA. We literally walked the streets until we found some premises.” Another innovativation that St Giles estimated to be the fifth-largest English language teaching company in the UK, according to the latest research from McCallen introduced in the 1960s, relates Lindsay, was language laboratories. “We were one of the first schools to have a private language laboratory in the 60s,” he says. “I remember seeing all these machines in a small room and deciding to invest in this!”
Other industry entrepreneurs paint a similar picture of keeping ahead of the competition with such innovative thinking. In New Zealand, Frances Woolcott is one of the original pioneers of the English language teaching industry there, setting up Languages International in the mid-1970s when “there were no dedicated ELT schools in New Zealand”. She explains that “it was a natural competitive wish to be as successful as anyone in the world that led us to introduce the Cambridge (then RSA) teacher training programmes to New Zealand in the 80s.”
Geographic determination and customer service
In smaller ELT destinations, early entrepreneurs worked hard to put their countries on the map as well as their businesses. Woolcott says that in the early days, her thinking was, “If Japanese and Swiss students travel to Cambridge and California, why not New Zealand?”
The same is true of Rosemary Quinn, who founded the Centre of English Studies (CES) in Ireland in 1979 when she was still a full-time drama teacher. “The school started off with 14 students in 1980 and has grown enormously over the years,” she says. “As adult numbers increased, I realised there was a market ready to be tapped and we moved to the city centre [of Dublin] in 1990.”
CES now has two adult teaching centres in Dublin and 12 additional centres during the summer, and in 2005, it became the first Irish English language school to expand outside of the country, buying Swandean School of English in the UK, which has two year-round schools and two summer centres. Quinn, whose three sons now work in the business, remembers that early marketing trips were difficult. “I remember going to Japan on an Enterprise Ireland trade mission in 1988,” she recalls. “I was the only woman on the delegation and Ireland was only a dot at the side of the map. Every agent visit was a geography lesson first and then a sales pitch.”
Speaking of the company’s success, Quinn echoes the observations made by many others: “Don’t have money as your objective,” she says. “Customer satisfaction is the most important goal.” Lindsay has a similar standpoint, going so far as to say, “I don’t really like the term industry when talking about education”, although he does acknowledge that this viewpoint could be seen as old-fashioned. “I’m very attentive to what goes on in the classrooms,” he asserts. “Mark has brought his business acumen to the company. He values the educational side of the business of course but also the technological innovations.” Lindsay also observes that it was his son who developed the important role that agencies play in the business.
Building business with agencies
Nearly all of the entrepreneurs interviewed for this article testify to the crucial role of agencies in helping build up language school businesses. In Spain, Anadon whose company turns over close to e40 million (US$56 million) a year speaks of the “great partnerships” he has had “with all people who helped and supported us from the very beginning”. Quinn simply says, “Building relationships with agents overseas is key to the language school business.”
Another entrepreneur who has been in the language travel business for nearly 25 years is Alberto Sarno, who started the Sprachcaffe company with his brother Marcello in 1983 in Germany. Sprachcaffe now operates schools in 25 cities and five agency offices. Alberto Sarno recounts that the company originated as a local language school and agency. “When we realised that students [in Germany] were very eager to study during their holidays, we decided to set up a language camp abroad,” he relates. “Our language school in Frankfurt became also the agency for this camp.”
The Sprachcaffe business model has remained slightly different to other operators. Firstly, the agency-and-school structure of the company remains a significant student recruitment method for Sprachcaffe schools, and secondly, the company was a pioneer in terms of offering accommodation on-site and trying to make the educational experience more of a holiday camp than a school.
“Our classrooms were more like living rooms where students would enjoy communicating or a cosy café and classes were small,” says Sarno. “Our students loved it and were impressed by the enormous progress they made. Later on, we were also among the first to offer apartments instead of host families.”
James Swift of Germany-based LAL Group is another entrepreneur who deserves a mention for setting up a company that owned agency chains and language schools. The LAL group currently operates two divisions: five schools owned and managed by the group and LAL Sprachreisen, an agency division. LAL in turn is now owned by European tour operator, FTI.
Alternative angles and corporate investment
While Sarno saw the scope for a well targeted holiday product, and for more independent accommodation choices, another entrepreneur who saw a different commercial advantage in the industry was Andrew Colin, who sold Study Group International in 1999 to the Daily Mail General Trust for an estimated UK£44 million (US$87 million). He started in the industry in 1990 with the acquisition of Bellerbys College for just UK£1,000 (US$1,980), and his contribution to the industry was to see and market the link between language learning and further onward education opportunities. Today, Bellerby’s College is a successful sector of Study Group’s business, which is now owned by Australian company Champ Private Equity (see Language Travel Magazine, October 2006, page 6).
“I wouldn’t have thought about opportunities in education unless I had been introduced to the sector by other people,” says Colin, who is an example of an entrepreneur selling out successfully to corporate investment, a move emulated by David Jones of Aspect who bought and combined Aspect and Nord Anglia ILA with the backing of venture capitalists in August 2000 (the company was sold to Kaplan last year see Language Travel Magazine, December 2006, page 7).
“I am very glad they did [introduce me to the industry],” continues Colin, “because via Study Group and now with [a new venture] Into University Partnerships (IUP), it has been possible to create structures and frameworks that not only succeed commercially, but also offer great benefits to universities and, of course, students.”
Prognosis for the future
Colin is confident about the future. He sees increases in trans-national education flows and the emergence of new study destinations such as China, the Middle East, Malaysia and Singapore. “I see a continued consolidation of operators and agencies and a consistent demand for better quality,” he notes. “Maturing markets which is the situation we are in reward quality operators but punish others, which is great news for IUP.”
Speaking from the perspective of a Spanish language school, Juan Manuel Sampere of Estudio Sampere observes, “I think study abroad will grow and grow for the next 20 years. It is easier than ever to travel abroad and people value intercultural knowledge and experience.” Sarno is also upbeat about his business and sector of the market: “I am very optimistic,” he says. “People will never stop travelling and learning and cheap airfares will support this.”
Expanding in new directions
Once an entrepreneur, always an entrepreneur it seems, as a number of people in the industry who helped build up and develop significant businesses have since sold their companies to concentrate on a new business angle or direction.
One such example is Alyson Moore in Australia, who set up the Australian College of English (ACE) in Sydney, NSW, Australia, and oversaw the growth of the business, expansion into Asia and subsequent sale to the Australian College of Languages (ACL) in August 2004 (see Language Travel Magazine, December 2004, page 7). Since the sale of this business, Moore has started an agency, Abbey Language Travel, offering outbound language travel services and work and travel programmes from Australia and New Zealand.
Moore relates that since the launch of the company in February last year, growth has been slow, but enquiries and bookings for 2007 have been very encouraging. “Of course, starting a new business is slow,” she says. “However, as Australians and New Zealanders are intrepid travellers, I believe there should be a good market to develop. When the [market] does take off, I expect growth to be strong, and it’s a matter of building an organisational base which can respond to the demand.”
Rene de Jong is another example of an entrepreneur trying a new tack in the same market. He now runs a company called Internet Advantage offering search engine optimisation and search engine marketing for language schools as well as other companies, and says he believes that with the market moving more towards “mainstream” tourism, “the industry will have to learn how to present their products more simply”.