Starting a Language School in Japan

[True Intuition]

I used to live in Japan for 2 years, about 3 1/2 years ago. I taught English and I loved it !!
I've been back to visit once and hardly a day goes by when I don't think about moving back. I still keep in touch with many friends, both Japanese and foreign living in Japan.
With that said.
If I decide to move back I have a very clear and defined goal, to start my own language school. I'm 38.
What are some isues I should concider when moving back at my age and starting a business in foriegn country.

Any experience you have and your thoughts on this our certainly appreciated.
Pete

[Glenski]

Your age is not an issue. The following are.
Location.
Competition.
The fact that many eikaiwas are closing. NOVA just went bankrupt.
Setup costs (building, furniture, rent, materials, lesson plans, advertising, capital, a lawyer and accountant, etc.). Oh, and a visa. You can't sponsor yourself.

Check out the SOHO forum on gaijinpot.com for more info, and heed what Trip Hop has to say.

[True Intuition]

Those are great points.
I certainly would teach again at one of the larger schools, AEON, GEOS, etc.. mainly to get into the rythm of teaching and for visa sponsership and such.
I'm aware of NOVAs situation, that is actually a positive! All those students looking for a new place to learn English.
Competition is everywhere, it pushes us to do better.
Start up costs are an issue. As with any business.
My thoughts are. Am I able to get a business license as a foriegner ?
It's always better for a company to own the space that they are conducting business in as apposed to leasing. Is it dificult for a foriegner to by land (ie. office condo, space for classrooms) for business use?
I will check out soho and see what trip hop has to say.
Thank again !!

[Pachipro]

I had my own English school while I lived in Japan. I bought a small, already established, home English School with about 50 students in the suburbs of Yokohama, but I had to find my own place to continue the school.

I eventually rented a 2LDK apartment in a large apartment complex where most of the students lived.
We then went to the local city hall and registered for a small fee. The city assigned us an accountant at no cost for one year to help us with the business and we were in business. A very simple process.

Since we were a home-based business we did not need to be incorporated or a Ltd co and therefore, did not have the huge fees associated with it.

Seeing the "gold mine" that was around us, we then advertised with fliers in the local paper and, within a few months, had increased the students two-fold to about 100 as that was about all my wife and I could handle without hiring another teacher.

We charged 1,000 yen/hr per student for the 50 min lessons with a maximum of 10 students per class. Classes ranged from Primary schoolers on up to college students and business men. For private lessons we charged 10,000 yen per hr. I taught the conversation while my wife taught the grammer part for entrance exams and such. Do the math. It was great income.

We used two of the rooms for classrooms.

Overall, it was a great income and I never had to leave my home to go to work unless I had private students or when I taught in the mornings at a company.

The accountant was great as he taught us how to use the to laws to our advantage and we paid very, very little tax. (I think he wanted us to retain him after his year was up and we sure did!). Most of our rent was deductable as was the new car he convinced us to buy as a "business vehicle" with a magnetic mat on the doors advertising our school. Our trips around Japan were also tax deductable as they were "outings" with students! I don't know how he did it, but we banked alot thanks to him. If I were ever to do it again-and I might- I would use him again and go the same route!

I sold when the economy was going bust in the late 80's and returned to the US. The person I sold it to is still running it from a house he eventually bought in the neighborhood some 20 years later. Nice to see that the business I continued is still going strong!

Therefore, if you want to teach in Japan with your own business I recommend going the Danchi route and teaching out of your home as:

1. It's convenient, cheap, and costs very little to start up. We just purchased a few long tables with chairs and a white board and some books and some book cases.

2. In an area with many apartment buildings you have a ready-made clientele that would gladly walk a few minutes to your place than take a bus/train to a commercial school. Plus, for them, it's cheaper. That is if there are no other foreigners teaching in or near those apartments.

3. advertising fliers for the local newspaper are cheap and you can even deliver the ads yourself to each mailbox.

4. Once you're established and get a good reputation, word of mouth will spread and you'll be getting phone calls from people who heard about you from a regular student.

5. It's also great for businessmen as they don't have to travel a long distance from their home or pay outrageous fees to major schools for lessons. Saturday afternoons were best for them!

6. With an established teacher in the area who is not there short term, people will be more comfortable in that there will not be a different teacher every six months or so.

As Glenski mentioned, if you are single and do not have a sponsor it will be difficult as you will not be able to get a visa unless you will be working. If you are married and your wife is Japanese it will be a piece of cake.

If you are single, my suggestion would be to first go as a teacher with a teaching visa and begin searching out an area you'd like to settle in and teach. You will probably make some friends along the way who would gladly sponsor a responsible person.

Scope out the competition - the smaller schools and such in the area that is as the major big name schools will not be your competition. They are too far away and charge alot of money. Opt for the suburbs and not the big city. It's easier and the competition is far less. You can find Danchi's (large multi-building apartment complexes) everywhere in the suburbs.

Good luck and stay in touch.

[True Intuition]

That's exactly the kind of response I was looking for.
First off, Great Job on starting a language school that's still going !!!!
The tax breaks are very important to me and they don't sound much diferent than here in the states. Being self employed now I understand how every dollar spent should have some kind of tax break involved.
I like the idea of setting up at home, keeps the costs low.
The price per lesson seems about right.
Your reply is certainly inspiring, and I appreciate your fantastic insight.
I'm still a few months out before making any final decisions but, preperation is the key to success !
Thanks again !

[Pachipro]

I hope it was inspiring because that is the way to go if you want your own business. The other route is too expensive and has to much up front costs. In my case, looking back on it, is was wayyyy toooo easy for that much success and cash in pocket.

Things may have changed today, but from what I've seen with my recent visits, I could do the same thing again in a heartbeat and would probably succeed in the same vein in a large Danchi. The opportunity was ther and always will be there for those that wish to succeed in that fashion. Again, good luck.

[Glenski]

Pachipro,
You wrote that you took over that business while you were living here. What was your visa status then? Different from True Intuition's?

You cannot start a business without having a proper visa. The most straightforward route is work visa named Investor/Business Manager for those without a spouse visa or PR.

Look here for the description
http://www.mofa.go.jp/j_info/visit/visa/04.html

here for the criteria you must fulfill
http://www.mofa.go.jp/j_info/visit/visa/appendix1.html#1

and here for the documents you must submit
http://www.mofa.go.jp/j_info/visit/visa/05.html

and here for the COE application form itself (where you have to list the number of employees, etc.)
http://www.moj.go.jp/ONLINE/IMMIGRATION/16-1-1.pdf

I heard that recently a change was made such that you don't have to lay down 3 million yen as deposit anymore, but you still have to have a certain minimum number of employees (not including yourself).

Go here, too, for more advice.
http://www.gaijinpot.com/c_soho.php

[True Intuition]

Initially my visa would be a standard working visa, humanities I think.
As I said, I would start by being a teacher at one of the bigger schools, GEOs, AEON, etc... as a way of getting back into the flow and to meet new people. During that time is when I would apply for the proper visa.
Glenski, I think it's important that we stay in touch. You sound like a smart and motivated person, that is just the kind of attitude we would love to have encouraging students at the new language school when it's up and running.
What do you say ? Would you like a chance to be a part of a succesfull learning system that is going to have a positive impact on the lives of many people who are going to excell in life because of their ability to speak English ?? :-)
Anyway, thanks again, both you and Pachipro have great insight on this!!

[Pachipro]

Glenski, I did take over the business, but I still had to start from scratch and register it in my name just as if I began it myself. My visa status at the time was a spouse visa which did make it easier to do.

I do not know the laws on changing one's visa if one were going to open a home based business from a working visa. I only know of one person that changed his visa after he graduated college in Japan and opened a home based English school. When I hear back from him I will post what he said.

If you or anyone is going to operate a home based business there is absolutely no need to lay down huge sums of money or deposit just like here in the US. You just register at your local city hall in Japan and pay a small fee. That's it unless things have changed recently.

On the otherhand, if one wanted to open a school in leased office space in a building located near a train station and begin from there, then yes, huge sums would need to be invested and huge fees paid as I know of one person who went that route with a spouse visa.

But to do it as a single foreigner, I don't know. The links (great links BTW) you provided will probably be the best route unless more information from others becomes available.

[Glenski]

Glenski, I think it's important that we stay in touch. You sound like a smart and motivated person, that is just the kind of attitude we would love to have encouraging students at the new language school when it's up and running.
What do you say ? Would you like a chance to be a part of a succesfull learning system that is going to have a positive impact on the lives of many people who are going to excell in life because of their ability to speak English ?
I already have a good job, but thanks for the compliment. You know where to find me if you have more questions.

[Pachipro]

I heard back from my friend and he said that he had to set up a yugengaisha (or a Ltd company) and that he had to have a board of directors that consisted of three Japanese people. He found these people as they were friends and they agreed to help him. He supplied all the funds for the building and fees and asked none of his "Board" for financing.

He said that if he were married at the time he could have gone the route I went and opened a home based business as his school was located in a house he rented away from his official residence.

Anyway, once they were set up as a Board of Directors and the paperwork was approved, they could in turn "hire" him as president and the Board of Directors, or the school if you will, would then be his sponsor and submit the proper paperwork. In other words, he sponsored himself through his school and "Board of Directors". He never had to leave the country to change his visa from a student visa to working visa.

This worked for him, but it may not work today as the laws may have changed, but then again they may not have. My advice would be to read up on what is required to start your own business in Japan and go from there as he got this information from a book he said. It may just turn out that you could do what he did once you make some friends after a year or two.

Anyway, I thought this may help. Good luck