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So You Wanna Start a Hagwon?

So You Wanna Start a Hagwon?

March 22, 20104324Views

By Lee Scott

A little over a year ago, I started thinking about opening my own English academy in Seoul. As the spouse of a Korean citizen, it was relatively easy for me to get an F visa (F-2-1 visas are issued to spouses), and after a couple of years of marriage, it is possible to upgcartoonsmallrade that to the F-5 visa (permanent legal resident). Among other things, this visa allows me to permanently live in Korea (even if I get divorced,) vote in elections (haven’t yet) and own a business. There are a couple of different ways you can go about opening your own academy in Korea. I am only familiar with the route I took, but even that route was partially shrouded in a mysterious fog, so typical of this peninsula many of us call home.

“Byzantine” was the word my colleague used at my first job working for a Korean school. We were both sitting in the tiny office we shared, located on the 3rd floor of the relatively new (but ancient feeling) building in what used to be the foreign quarter of a large city in China. This man had worked for the school for about a year, essentially creating their English department from the ground up, while managing a Korean teacher who spoke fluent English, and a New Zealander who was married to a local and had been teaching illegally for a few years. It was my first experience with a culture that would at times amaze me and at other times baffle me. Two years later, right before I left that school, another colleague left me with a rather bleak view about education in Korea: “If I think about all the things I hate about the system, it makes me not want to be a teacher.” Many people — maybe you and I included — have to become quite tolerant of elephants in the rooms we inhabit.

After leaving China, I moved to Seoul in 2004. I worked in a small academy in east Seoul for a few months. One doesn’t talk about “dirty secrets,” at least not openly, but if you have worked in a language institute in Korea, you might have suspected that not everything was 100% above-board. I won’t disabuse you of your suspicions — more about that later.

So at the beginning of 2009, with a baby arriving soon, I began the mini-quest that is involved with opening your own English language institute (in Seoul, anyway). The players involved are your local “Gu” (district) office, the Korean tax service office, the Seoul Metropolitan Office of Education and your local branch of the Seoul police.

flash_imgIt is not easy to find the proper sequence of steps necessary for getting all the jots and tittles in the proper places on the myriad forms one gathers during this process. The fact that many of the steps are independent of one another and many of them are dependent on preceding steps adds a level of headache that only a practiced project manager, schooled in the critical path method (CPM) , armed with some kind of CPM software, could really map out. I do have that kind of training, but at that time, I didn’t have the inclination (nor did I anticipate ever writing anything like this) to document the process thoroughly. What you are reading will be a travelogue of sorts, a fond reminiscence of a meandering journey, sometimes harrowing, sometimes mildly amusing, mainly annoying, but ultimately gratifying. And that was just getting the license!

I really should begin at the beginning. Late in 2007, I began to have a severe case of “senioritis” while working at my job. I had been working for a prestigious foreign language high school in Seoul for three years, hired by one principal (a man I knew and respected) but never getting to work for him — turns out he jumped ship a month after pulling the trigger on hiring me. Working there had its plusses. I loved the students I taught at this school. They were a great pleasure to teach.  It was a relatively stable job and even though the starting wage (I say wage and not salary, because we were paid only for the hours we spent in class) was the same wage they had been paying since 1997, it wasn’t the worst in Korea.  It was pretty close to where I lived, so commuting wasn’t a chore, and I liked most of my colleagues.  But no matter how much all that weighed in favor of continuing to work there, the overall level of dissatisfaction I felt with the principal overwhelmed it.  To be fair, I realize that we had become stuck in a kind of negative feedback loop.  He started out by doing the normal things principals here do (i.e. distrust native speakers as teachers).  He has very good reason for this: many people who come here to teach are not qualified, oftentimes lack any kind of experience at all (recent college grads), and are also often merely adventurers wanting to experience Asia on someone else’s dime. This is a laundry list of stereotypes that all of the native speaking English teachers who work in Korea (and elsewhere in Asia) decry as being unfair.  I suppose that stereotypes are always unfair, but they come to be accepted for some reason.  In this case, they come to be accepted because it has happened just that way many times in the past.  Even this school, prestige notwithstanding, had had its share of foreign troublemakers.  Should the good teachers be punished because of the bad apples?  Of course not, but even principals are just human.  So even though I understand why we were micromanaged (little notes would appear on our desks, with new things we were to do or not to do), and consistently (albeit intermittently) surveilled during classes, it created stress.  The stress I felt was manifesting itself in physical symptoms, headaches and back pain that was inexplicable — inexplicable that is until they mysteriously disappeared a few weeks after I had quit.

After deciding to open my own place, I needed to find a location. I asked a friend of mine if he had any real estate broker friends. I was hoping to get some kind of good-ol’-boy deal, if something like that existed in Korea. I guess it would be “good-ol’-ajjoshi.” Location, location, location.  Is that the way you write it?  Maybe it should be a series of exclamations.  You pay a premium to be in the high profile areas.  The southern part of Seoul is extremely expensive, and home to many big-brand name language schools.  That’s the big time.  The second tier of language schools (almost as prestigious as the ones down south) are way up north.  That’s where our place was to be located.  My friend contacted me a couple of days later and told me he had found an academy space available for lease right away. My wife and I traveled to northern Seoul to take a look at it. For us, as neophytes, this place seemed to be too good to be true. The space was fully furnished as an English language academy and the price was affordable.  It’s true that it was off the main drag, but it was close to tons of apartment villages and several schools. We couldn’t believe our good luck. A note about furnished spaces: If you want to rent a space that has previously been used for the same business, and may have existing clients (students) and furnishings, you will pay an “authority fee.” This fee will vary, according to the number of students (if any, of course) and the nature and cost of the furnishings, the interior design, etc. It could range from $3000 up to $20,000 (or possibly more, but that would have to be for a really really big operation.) Now there is some wiggle room on this kind of authority fee, but basically it’s in bad taste to try to negotiate it down too much. If you feel you are being overcharged, of course you should haggle. It is in the leasor’s best inDSC01557terest to try to get the same kind of business in there, because if they can’t, they’ll have to pay to revert to the interior design of the previous state before they moved in. That kind of deconstruction remodeling can be expensive, depending on the size of the establishment, so that is the amount of room you have for your haggling. It’s up to you to decide if they are asking too much for the fixtures. For us, it seemed reasonable. We didn’t get any existing students.  Korean leases usually involve a large deposit ($20,000 to $100,000 is common) and then a monthly rental fee.  Our place was near the bottom of that range.  The monthly rental fee for our place is about $500.  All together, it cost us about $75,000 to get started.

After finding a location, it was then possible to get my own license, the business license, my tax identification number and have the academy rezoned. This last part was a major hassle. Since private language academies are invariably in commercial spaces, it is necessary to rezone them every time they reopen. Even though the previous tenant at my new location had been an English language institute, the very moment they closed their doors, the place reverted back to commercial zoning. That meant I needed to get an official to recertify that the location was qualified to be a language academy. If that strikes you as absurd, join the club.

The tax number was extremely easy to get and straight-forward. Once I had established my academy with the office of education, the tax office folk were perfectly willing to set me up. Naturally, the tax folk have their acts together.

I mentioned getting my academy established with the office of education. That part is quite tricky. It required me to travel back and forth between the local–Gu office and the office of education multiple times, since they couldn’t be bothered to reveal more than one step at a time to me (even on things that could be done independently). It is on this particular point that I wish I had made copious notes about the proceedings. I understand now why some law offices make big money by shepherding would-be education entrepreneurs through this process. I was lucky enough to have a genius sister-in-law who not only did all the initial research on the process, but basically tour-guided me through it, all the “extra” trips notwithstanding. I will say this about the education office people: if you are nice to them, they will be nice to you.

A noteworthy part of this process involves reporting your pricing structure hag5to the office of education. There are laws in place to protect consumers from price gouging by language academies. These laws are typically thrown out the window by most large academy chains, or they simply do not apply. It appears to be common practice to stay within the letter of the law, but somehow creatively make it possible to charge enough to be able to operate your business in addition to making a living for yourself. I will leave it to your imagination how that is done. Also noteworthy are the various levels of academy that are licensed. The giant chains are language academies, the top tier. These are the academies that are able to sponsor people for E visas in Korea. Below them are the smaller operations. Legally, I am not able to hire any other teacher in my academy. My space is only big enough for a one teacher show. Further, I can only have eight students per class period. These requirements are in place to protect the large academy chains from competition brought by smaller independent organizations.

The process of setting up the academy is rigorous, but certainly nothing that will dampen the spirits of even a person of normal-levels of optimhagwon2ism. It wasn’t until I had opened and started to face the grim reality of how to attract students that my real test had begun.

To be continued~

Lee Scott is from Oklahoma and has taught in China and Korea. He’s a film buff, a lover of good ol’ rock ‘n roll classics like Jim Croce’s “Bad Bad Leroy Brown,” and a cyclist of Seoul’s streets.

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