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How to Start a Charter School Business

Are you interested in starting a charter school successfully? If YES, here is a complete guide to starting a charter school with little money and no experience plus a sample charter school business plan template.

It isn’t enough that you just take up the ambition of wanting to start a charter school. It is extremely expedient that you first search inward to be sure that you want to do this. How may you be able to do this? You have got to first have a penchant for teaching children. Having this in place, means that you have already laid a foundation and are keen to follow through on your interest.

What is a Charter School?

A charter school is basically an independently operated public school that has greater flexibility in its mode of operations, in return for greater accountability for performance. While a charter school system is a local school district that operates under the terms of a charter between the State Board of Education and the local school district.

The system receives flexibility from certain state rules and regulations in exchange for greater accountability with greater emphasis on school-based leadership and decision-making.

What’s the Difference Between a Charter School and a Public School?

The basic difference between charter school and other public schools is that charter schools are classified as public schools of choice.

It means that each household has the option of choosing them for their wards if they so desire. Charter schools are known to operate with freedom from some of the regulations that are enforced upon district schools in the united states.

Furthermore, it is the practice for charter schools to be held accountable for academic results and for upholding the promises they made in their charters.

As a matter of fact, they are required to demonstrate performance in the areas of academic achievement, financial management, and organizational stability. This is so because if a charter school fails to meet the set performance goals, the school is likely going to be closed down.

It is important to state that there are different types of charter schools; charter schools can vary a great deal when it comes to their design and the results they want to achieve.

Lastly, there are no barriers as regard those who can start a charter school in the United States; Philanthropists, parents, community leaders, social entrepreneurs, religious organizations, businesses, teachers, school districts, and towns can submit a charter school application to their state’s charter authorizing entity.

Steps to Starting a Charter School Successfully

1. Understand the Industry

History has it that it was Minnesota that wrote the first charter school law in the United States of America in 1991 and the first charter school to be approved is called Bluffview Montessori School in Winona, Minnesota, starting full operations in 1992.

It is on record that the first charter school to operate in the U.S. was City Academy in St. Paul. Ever since 1991, 43 states and the District of Columbia have approved the establishment of charter schools.

Interesting Statistics About the Industry

From the statistics released to the public last year (2015), there are 165 registered charter schools, with over 41,000 students attending in Minnesota.

Statistics also has it that in 2014-2015 academic school year, a total number of 6,700 public charter schools were able to serve about 2.9 million students throughout the United States of America. In 2011 / 2012 school calendar year, well over 500 new public charter schools opened their doors, to an estimated increase of 200,000 students.

2015 marks the largest single-year increase ever recorded in terms of the number of additional students attending charter schools in The United States of America.

From the figures released in December of 2011 approximately 5,600 public charter schools enrolled an estimated total of more than 2 million students across the United States. This figure is equivalent to a 13% growth in students in just one school year, even though well over 400,000 students remain on the awaiting – lists to attend the public school of their choice.

About a decade ago, August 2005 to be specific, a national report of charter school finance undertaken by the Thomas B. Fordam Institute, a pro-charter group, found out that across 16 states and the District of Columbia—which collectively enrolled 84 percent of that year’s one million charter school students—charter schools receive about 22 percent less in per-pupil public funding than the district schools that surround them.

Another research that was conducted in 2010 also found out that charter schools received 64 percent of funding over their district counterparts, averaging $7,131 per pupil compared to the average per pupil expenditure of $11,184 in the traditional public schools in 2009/ 2010 school year when compared to $10,771 per pupil at conventional district public schools.

Despite the fact there has been steady increase in the numbers of charter schools in the U.S., there are still rooms for entrepreneurs cum educationist who are looking towards owning a charter school to come into the industry.

As a matter of fact, the flexibility in running a charter school and perhaps the joy of educating people in unique ways is part of the encouragement and motivations that endears entrepreneurs cum educationist towards starting their own charter schools.

2. Conduct Market Research and Feasibility Studies

  • Demographics and Psychographics

Throughout the United States, pupils in charter schools have similar demographic and psychographic characteristics as pupils in the local public schools.

As a matter of fact, in some states in the U.S., charter schools serve considerably higher percentages of minority or low-income students than the conventional public schools. In the United States, it is the practice for charter schools to accept new students by both random selection and via public lottery.

It is important to state that on the average, charter schools tend to be smaller than conventional public schools; they are usually fewer than 200 students and charter schools often tend to exist in urban locations, rather than rural.

Another important demographic factor is that charter schools tended to be to a certain extent tends to be more racially diverse, and they enroll slightly fewer students with special needs or limited English proficiency than the average schools in their state.

3. Decide Which Niche to Concentrate On

These are some of the niches you can find in the book club industry;

  • Virtual Charter School (Online Charter School)
  • Bricks and Mortar Charter School
  • Charter School for the Disable (Children With Special Needs)
  • Charter School for Mathematics, Science and Technology Inclined Students
  • Charter School for Performing Arts
  • Charter School for the Blind
  • Charter School for Gifted Children

Please note that this industry is flexible and with creativity, you can create your own niche as long as it helps to fill a need in the society.

The Level of Competition in the Industry

No doubt there are competitions amongst charter schools in the U.S. For example in 2004, the National Bureau of Economic Research made public data that indicated that charter Schools increase competition in a given jurisdiction, hence improving the quality of conventional public schools within the same location.

The fact that charter schools gets funding based on the numbers of students that enrolled in the school and also the overall performance of the school encourages healthy competition amongst charter schools in the U.S.

4. Know Your Major Competitors in the Industry

These are some of the well – known charter schools in the United States of America;

  • Bluffview Montessori School in Winona, Minnesota
  • Metro Deaf School
  • Community of Peace Academy
  • The Mainstreet School of Performing Arts
  • City Academy in St. Paul
  • BASIS Scottsdale
  • Gwinnett School of Mathematics, Science and Technology
  • American Indian Public High School
  • International Studies Charter High School
  • Pacific Collegiate School
  • Sturgis Charter Public School
  • Raleigh Charter High School
  • Liberty Common Charter School
  • Archimedean Upper Conservatory Charter School
  • SusQ-Cyber Charter School in Pennsylvania (Virtual Charter School)
  • Cyber Village Academy in Minnesota (Virtual Charter School)
Economic Analysis

When you are looking towards starting a charter school, you should be aware that it is not a venture that can spin money like any other business which is why you must get your economic analysis right before pursuing your goal of establishing a charter school.

It is a fact that there is a strong demand for charter schools from the private sector in the United States of America. Usually, charter schools operate as non – profit organizations. On the other hand, the facilities in which they operate from are largely owned by private landlords.

Hence, this asset class is generating interest from real-estate investors who are looking towards the development of new schools. Good enough, both state and local governments have also shown readiness to help with financing of charter school.

5. Decide Whether to Buy a Franchise or Start from Scratch

If you are looking towards starting a charter school, then you are left with one option – that is to start from the scratch. There are no franchise for charter schools for now.

Besides, if you are able to meet the requirement in the state you intend obtain your charter, you can successfully own a charter school in the United States.

6. Know the Possible Threats and Challenges You Will Face

Some of the possible threats and challenges that you are likely going to face when starting a charter school is obtaining accreditation from the school board in you district / state or the Charter management organizations (CMOs). It can be truly be challenging securing a charter for your school.

Other threats and challenges that you are going to face is competing with other schools for funding. The truth is that your school must always meet the performance standard set by the governing authority for charter schools. Besides if you school do not meet the expected standard, you can lose your charter.

7. Choose the Most Suitable Legal Entity (LLC, C Corp, S Corp)

Starting a charter school is more of a social service / philanthropic services than a business which is why you have more of nonprofits owning running charter schools in the United States. So when it comes to choosing a legal entity to use for your charter school, then you should consult Charter management organizations (CMOs) in your state to guide you on the best legal entity to use.

On the average, when it comes to choosing a legal entity for your school you have the option of choosing from sole proprietorship, general partnership, and a limited partnership. It is important to clearly state that these different forms of legal structure for school has its own advantages and disadvantages; which is why you must weigh your options properly before making your choice.

These are some of the factors you should consider before choosing a legal entity for your school; limitation of personal liability, ease of transferability, admission of new owners and investors’ expectation and of course taxes. If you take your time to critically study the various legal entities to use for your school, you will agree that Limited Liability Company; an LLC is most suitable.

8. Choose a Catchy Business Name

Basically, it is the practice for charter school to choose their names based on the essence or goal of starting the school and also the location where the school is located. Aside from the, there is no hard and fast rule when it comes to choosing a name for a charter school.

So if you are looking towards starting your own charter school, then you have the opportunity to choose a name that falls within the following pattern;

  • Gifted Children Charter School
  • Asheville Charter School for the Blind
  • New Mexico Mathematics, Science and Technology Charter School
  • Portland Charter School
  • Grace – Field Community Charter School
  • Classic Arts and Crafts Charter School
  • Slum to Success Charter School
  • Mainsail Commercial Charter School
  • Huston Boys Charter High School
  • Inner City Charter School
  • 24 Tech Online Charter School

9. Discuss with an Agent to Know the Best Insurance Policies for You

The fact that starting a charter school is more of a social service than a business, does not meant that you won’t purchase the required insurance policy insurance cover. You can consult your insurance broker to advice you on the appropriate insurance policies to buy for your charter school; they are in the best position to give you such advice.

Here are some of the basic insurance covers that you should consider purchasing if you want to start your own charter school in the United States of America;

  • General insurance
  • Health insurance
  • Liability insurance
  • Workers Compensation
  • Overhead expense disability insurance
  • Business owner’s policy group insurance
  • Building Insurance

10. Protect your Intellectual Property With Trademark, Copyrights, Patents

If you are considering starting your own charter school, usually you may not have any need to file for intellectual property protection / trademark. This is so because the nature of the industry makes it possible for you to successful run the business without having any cause to challenge anybody in court for illegally making use of your school’s intellectual properties.

But if you just want to protect your school’s logo and other documents or software that are unique to you. Then you can go ahead to file for intellectual property protection. If you want to register your trademark, you are expected to begin the process by filing an application with the USPTO. The final approval of your trademark is subjected to the review of attorneys as required by USPTO

11. Get the Necessary Professional Certification

When it comes to professional certification for charter school, it is important to mention that the requirements vary from state to state. For example, in the state of New Jersey, all teachers must be certified, and in the state of New York, despite the fact that the state does not require that 100 percent of teachers be certified at each charter school, the rules under the “No Child Left Behind” Law mean that teachers need to get their licenses with reasonable speed.

So also, in the state of Massachusetts, charter school teachers are required to attain Highly Qualified teacher status as dictated by the “No Child Left Behind” Law by owning a bachelor’s degree and demonstrating broad knowledge on subject matter competence in the subjects they teach.

12. Get the Necessary Legal Documents You Need to Operate

These are some of the basic legal document that you are expected to have in place if you want to run your own charter school in the United States of America;

  • Certificate of Incorporation
  • Business License
  • Business Plan (School Plan)
  • Non – disclosure Agreement
  • Employment Agreement
  • Employee’s Handbook (optional)
  • Operating Agreement for LLCs
  • Insurance Policy
  • Contract documents (for vendors / shipping partners)
  • Online Terms of Use (for online consignment stores)
  • Online Privacy Policy Document (for online consignment stores)

13. Write a Business Plan

If you are considering starting a charter school in the United States, then you must be ready to come up with a good and highly sellable business plan which is referred to as school plan in this context.

A Business plan (school plan) is the blue print of your business (the school you intend running); it is a strategic document that can aid you to successfully set up your school and also administer / manage the school. It is not enough to just write a business plan (school) for the sake of writing one, your business plan (school plan) should be able to pass reality check; you must put relevant facts, figures and statistics into consideration when writing your business plan (school plan).

The truth is that, the main aim of writing a business plan (school plan) is not just for the sake of having a business document (school plan) in place; but to have a detail guide on how to effectively set – up, run and manage your charter school. Your school plan should outline and cover strategies on how you intend to operate your school.

When writing your business plan (school plan), ensure that you are moderate when it comes to setting projections on academic performance expectations et al. These are some key factors that you should also consider when drafting your business plan (school plan);

Executive summary and the problem you want your charter school to solve

You are expected to write about the concept of your charter school, descriptions of your charter school and the kind of students you want to admit, your charter schools’ vision statement, and mission statement, the community your charter school will be located, how you intend getting parents to enroll their children in your charter school, admission guidelines and perhaps why parents should choose your charter school over other charter schools in the community or state.

Other key components that should not be missing in your charter school plan are your genre (niche), SWOT analysis, marketing and survival strategies, costing and financial projection, management techniques, expansion strategies, publicity and advertising strategy, budget and start – up capital generation, teachers’ recruitment and empowerment strategies et al.

14. Prepare a Detailed Cost Analysis

First and foremost, before your school becomes charter and start getting funding and support from the government and local government, the school must first of all be in existence. In essence you are expected to go through to the process of establishing a school and perhaps successfully run the school for a period of time before applying to become charter in the state where you are operating from.

So therefore, you must source for start – up capital for your school and the expenses you are going to incur will be same as what is obtainable in the location you intend setting up the school. When it comes to starting a small scale school in the United States of America, the following expenditure should guide you;

  • The Total Fee for incorporating the school in the United States – $750.
  • The budget for the mandatory insurance policy cover, permits and license – $5,000
  • The Amount needed to acquire a suitable school facility that can accommodate the numbers of students you are expecting, labs, staff rooms and open field(Re – Construction of the facility inclusive) – $75,000.
  • The Cost for equipping the school; setting up a labs and studios (computers, printers, fax machines, furniture, telephones, filing cabins, safety gadgets, lab equipment, studio equipment, public address system and writing boards et al) – $50,000
  • The Cost of Launching your charter school official website – $600
  • Cost of acquiring the first supply of books (workbooks and textbooks) and other educational materials – $2,000
  • Budget for paying at least 10 employees (teaching and non – teaching staffs for 3 months and utility bills – $50,000
  • Additional Expenditure (Business cards, Signage, Adverts, brochures and Promotions et al) – $2,500
  • Miscellaneous – $1,000

Going by the report from the research and feasibility studies, you will nothing need less than $300,000 to set up a small scale private school in the United States of America. You will need over five thousand U.S. dollars to successfully set – up a medium scale private school in the United States.

If you are considering starting a large scale private school with standard facility and highly qualified teachers under your payroll, then you should look towards budgeting well over one million United States Dollars.

15. Raise the Needed Startup Capital

Just like public schools, charter schools are also tuition-free. They are financed according to student enrollment levels and they receive public funds on a per student basis. In some states in the U.S., states like Alaska, Colorado, Minnesota, and New Jersey, they receive less than 100 percent of the funds allocated to their conventional counterparts for school operations. In other states, especially states such as California, extra funds or loans as the case may be are made available to them.

However, in most states in the U.S., charter schools do not receive capital funds to finance their facility expenses; they are expected to finance the maintenance of their facility. Charter schools are also entitled to federal categorical funding for which their students are eligible, such as Title I and Special Education funds. So also, the federal legislation also make grants available to help charter schools take care of their start-up costs.

It is important to also state that charter school funding is controlled by each state. In most of the states in the U.S., charter schools are financed by transferring per – student state aid from the school district where the charter school student lives.

On the average, charter schools on receive less money per – student than the corresponding public schools in their areas, nonetheless, the average figure is debatable because some charter schools do not enroll a proportionate number of students that require special education or student support services.

Funding differences across districts remain significant in most states that use local property taxes for revenue. Charter schools that are financed based on a state – wide average may have an edge if they are located in a low- income community, or be at a disadvantage if located in a high- income community.

Furthermore, some charter schools are not expected to provide transportation and feeding services for their pupils. Over and above, it is the Federal Elementary and Secondary Education Act, Part B, Sections 502–511 of the United States of America that authorizes funding grants for charter schools in the United States. Well in most cases, before your school becomes charter, you are expected to at least set up the school and run the school for a while hence the need to raise start – up capital.

The rule of thumb when it comes to financing a start – up business idea, is to write a good business plan. If you have a good and workable business plan in place, you may not have to labor hard before convincing your bank, investors and your friends to invest in your business; with a good business plan and good managerial skills, they can tell if their investment will be safe under your watch.

Here are some of the options you can explore when sourcing for start – up capital for your private school;

  • Raising money from personal savings and sale of personal stocks and properties
  • Raising money from investors and business partners
  • Sell shares to interested investors
  • Applying for Loan from your Bank / banks
  • Pitching your business idea and applying for business grants and seed funding from donor organizations, government and angel investors
  • Source for soft loans from your family members and your friends.

16. Choose a Suitable Location for your Business

When it comes to choosing a location for your charter school, there are loads of factors that you should consider if you want to make good success from your endeavor. Here are some of the basic factors you should consider before finally pitching your tent in any location;

The demographic composition of the location. The demographic location is amongst the top factors you should consider before choosing a location for your charter school. For instance, if you are looking towards setting up a charter school for the visually impaired people, it will pay you to choose a location where there are a good numbers of visually impaired people, so also if you are looking towards setting up a school for children with special needs, then you school for a location where you can easily attract children with special needs. But if you are looking towards starting an online charter school, then location might not be an issue for you.

The serenity of the location. Since what you want to do is to help students achieve academic success, then you should look towards securing a location where there is less noise and disturbance et al.

Another factor that you should consider when sourcing for a location for your charter school is a location where you are likely going to face lesser or no competition from another charter school. It is advisable to locate your charter school in a district where there is no charter school that is offering same services.

Lastly, ensure that you do not choose a location meant for retirees when shopping for a location for your charter school. Choose a location with loads of baby boomers et al.

17. Hire Employees for your Technical and Manpower Needs

The nature of charter school you want to establish should determine the technical and manpower details that you should put in place. For instance the technical requirement for setting up a mathematics, science and technical charter school is going to be different from that of an art and craft related charter school. So also, if you are looking towards starting an internet base charter school, the technical and manpower requirement is going to be different.

In view of that, if you are looking towards a mathematics, science and technical based charter school, then you should make provisions to build a well – equipped science labs and also hire competent science and technical trained teachers.

As regards the facility; to be on a safer side, if you have the finance you can acquire or lease a facility as against renting for short period of time if you want to set up a charter school. With that, you will have the opportunity of re – structuring the facility to fit into your design and taste.

Lastly, when it comes to the numbers of employees that is required to start and run a charter school, it depends on the nature and size of charter school you want to start. On the average, you would need between 10 – 15 teachers / non – teaching staff members to effectively run a small scale charter school in the United States of America.

18. Write a Marketing Plan Packed with ideas & Strategies

The success of your charter school is one of the basic criteria that will qualify you to continue to get funding from the government and part of the criteria that will determine the success of your charter school is the continuous enrollment of pupils in your school. The truth is that you can lose your charter if you fail to meet the expected requirement for a charter school.

It takes a good marketing idea and strategy for you to be able to convince parents to enroll their wards in your charter school and of course it takes good marketing ideas and strategies for you to be able to secure a charter for your school in the U.S.

Here are some of the platforms you can utilize to market your charter school;

  • Introduce your school by sending introductory letters alongside your school brochure to your target market (parents within your school location)
  • Advertise your school in relevant educational related magazines, radio stations and TV stations (make yourself available for talk shows and interactive sessions on TV and Radios)
  • List your school on yellow pages / local directories
  • Attend schools related expos, seminars, and book fairs et al
  • Leverage on the internet to promote your school

19. Develop Iron-clad Competitive Strategies to Help You Win

If you are conversant with schools cum charter schools in the United States, you will quite agree that there are healthy competitions amongst them. The truth is that, the best charter schools also attract more funding than their counterpart and also charter schools that are performing below required expectations can be delisted from the list of charter schools and they will stop getting financial support from the government.

So if you are looking towards staying competitive in the industry, then you should try as much as possible to hire highly competent teachers that can impart knowledge, enroll students with the willingness to learn and ensure that you school as the facility, equipment and environment that can make it easier for pupils to learn and understand.

Lastly, ensure that you make provision for training and retraining of your teachers; with that, they will be able to perform as expected by them

20. Brainstorm Possible Ways to Retain Clients & Customers

Aside from getting parents to enroll their wards in your school, your ability to retain students who are registered in your school is key factor that will guarantee that you continue to receive financial support from the government. The truth is that, if parents are not satisfied with the academic performance of their wards, they are likely going to withdraw their wards from your school and enroll them in other schools within same location.

Over and above, if you want to increase student retention in your school, then you must ensure that students in your school are well taught so that they can favorably compete with their counterparts in other schools whenever they have to write national or state based exams. Parents should be able to see improvement on their wards; that is basically what you need to do to stay afloat.

Beyond every reasonable doubt, if students from your school are always coming top in national exams, you are definitely not going to struggle to get parents to enroll their wards in your school as a matter of fact, you would have to set – up a screening committee and introduce strict screening test in order to turn down some students because you will always get more students requesting to enroll in your school than your facility can accommodate.

21. Develop Strategies to Boost Brand Awareness and Create a Corporate Identity

If you are in business and you are not deliberate about boosting you brand and communicating your corporate identity to the general public, then you should be ready to take on whatever the society portray your business to be. One of the secret of larger corporations is that they are willing to spend big money year in and year out to boost their brand awareness and to continue to communicate their corporate identity.

If your intention of starting a charter school is to grow the charter school beyond the location the school is located and to have a charter school brand that is recognized in the whole of the United States of America, then you must be ready to spend money on promotion and advertisement of your charter school brand.

In promoting your charter school brand and corporate identity, you should leverage on both print and electronic media. As a matter of fact, it is cost effective to use the internet and social media platforms to promote your charter school brands, besides it is pretty much effective and wide reaching.

Another strategy is to sponsor relevant educational related TV and radio programs, advertise your charter school in educational related magazines and newspapers and also ensure that your school logo / signpost are positioned in key locations in the city where the school is located.

22. Create a Suppliers/Distribution Network

The nature of charter school does not warrant for suppliers / distribution networks.

However, it is necessary to ensure that you lay down strategies that will help you attract appreciable numbers of students at the beginning of every school year, and also to ensure that you have a conducive school environment / working environment that will not only help you attract some of the best teaching staffs in your state, but also to retain them.

23. Tips for Running a Charter School Successfully

Despite the fact that running a school is kind of a routine because similar activities are done year in year out, the fact remains that it is not as easy as it looks from the outside, it requires dedication and hard – work to successfully run a charter school.

The truth is that, irrespective of the kind of business you run, your ability to get all the members of your team (both teaching staff members and non – teaching staff members) on same page at all times is one of the keys you need to put in place in order to successfully run the organization.

As the head teacher, principal, proprietor / proprietress or president of a charter school, it is your responsibility to give direction to the charter school. Part of what you need to do is to ensure that you create time for staff meetings; a time where challenges, feedback, projections and relevant issues are discussed. The staff meetings could be daily, once in a week or once in a month but it must be consistent.

Carrying out appraisals on a regular basis and training you’re your teaching and non – teaching staff members will help you run your charter school effectively. Encourage your staff members to pursue certifications in their various area of teaching specializations; it will help your organization’s profile and of course it will help the individuals. You can choose to sponsor some of the certifications or pay part of the fee. It will serve as encouragement to your staff members.

Lastly, you should keep your doors open for suggestions from members of your team and you should be willing to reward excellent performance as at when due; it will encourage healthy performance amongst your staff members.