Eight Crucial Differences in Business Models Between Microschools and Traditional Schools

Smaller budgets don’t always equate to lower quality learning, especially in the world of microschools. In fact, with intentional planning and strategic decision-making, microschools can provide an equally rich, if not more personalized, learning experience compared to traditional schools. As someone who has spent the last seven years with my leadership team evolving the business model of The Forest School: An Acton Academy and The Forest School Online, I’ve seen firsthand how we can respond to the needs of our learners and the demands of the market by continuously refining our approach.

Microschools, by design, offer flexibility that larger institutions can’t always match. Whether they are district, private, or charter schools, microschools foster close-knit learning communities where parents, learners, and staff collaborate around shared values and educational goals. However, to sustain a successful and scalable model, there are key business differences between microschools and traditional schools that leaders need to consider. Below are eight critical distinctions, along with practical strategies for building sustainable microschool organizations.

1. Roles: Everyone Wears Multiple Hats

In microschools, everyone takes on a variety of roles. For example, at The Forest School, our COO also serves as the Athletic Director, our high school Guides double as college counselors, and our Apprentice Guide in PreK captures photos for social media. In traditional schools, these responsibilities would be split across different departments or staff members. But in a smaller setting, the volume of work isn’t overwhelming because the school community is smaller.

Practical Strategy:

To make this work, you need to hire people who are flexible and adaptable. During the recruitment process, be clear about the multiple roles staff will play and assess their capacity for managing diverse tasks. Build in time for regular cross-role collaboration to help with knowledge sharing and burnout prevention. Additionally, leaders can design systems that help streamline tasks, such as scheduling software that integrates different duties or using communication tools that simplify collaboration.

2. Software and Curriculum Negotiations

Traditional educational software companies often don't have pricing structures designed for microschools. The cost of purchasing the same software that larger schools use can become unsustainable if the same per-student pricing model is applied. As a result, microschools must be creative in negotiating rates or banding together with other small schools to lower costs.

Practical Strategy:

One approach is to work directly with vendors to negotiate lower prices specifically for microschools. When vendors understand the growing trend and potential market for microschools, they are more likely to offer discounts. Alternatively, collaborate with other microschools to share accounts or licenses to meet minimum requirements, which will enable you to split costs and make high-quality resources more accessible. Leaders should also stay current on open-source or low-cost educational tools that can replace more expensive software options.

3. Tailored Staffing and Learning Environments

In a traditional school, each classroom is expected to fit into a general mold. There’s a math class, an English class, and a specific number of students per teacher. However, microschools are more likely to tailor their environments to each learner’s needs. This flexibility allows leaders to allocate staff more strategically. For example, at The Forest School, we may adjust the number of Guides (our term for teachers) based on specific Studio needs, and learning environments may shift each year depending on student interests and emerging technologies.?We even have a fully remote Resource Guide who takes care of many different kinds of asynchronous work, such as providing learners feedback and building transcripts.

Practical Strategy:

Leaders in microschools should be responsive to both their learners and their staff’s strengths. Rather than adhering to rigid staffing formulas, build schedules and teaching assignments that maximize Guide expertise and learner curiosity. Some years we’ve had two Guides per Studio. Other years, just one. Other years, one and one-half per Studio. It all depends on needs and goals. Conduct annual reviews of your staffing model to ensure it aligns with current learning needs, and be open to adjusting roles, space, and even curriculum to better serve your students.

4. Budget Allocation: Prioritizing Experiences Over Facilities

In traditional schools, a large portion of the budget often goes toward maintaining large buildings, sports complexes, and facilities that may be underutilized. Microschools, with smaller learner populations, tend to prioritize spending on learning experiences rather than facilities. This could mean more funds going toward hands-on learning materials, experiential trips, or specialized workshops rather than building maintenance or expensive campus upgrades.

Practical Strategy:

Focus your budget on what will directly impact the learning experience. For example, you could allocate more funds to field trips, guest instructors, or community partnerships that enhance real-world learning opportunities. You don’t need the fanciest buildings to provide a rich learning experience. Leaders should also look into shared spaces—such as partnering with local businesses, libraries, tennis centers, places of worship, or community centers for extracurricular activities or events—rather than investing in costly infrastructure.

5. Community Engagement as a Core Resource

Microschools often rely heavily on community engagement—parents, caregivers, local professionals, and businesses become a key part of the school’s extended network. This engagement not only fosters a sense of ownership but also allows schools to leverage community resources that are often untapped in traditional settings. While we’ve partnered with many organizations for learner-led Quests, our most common partners are Trilith and the City of Fayetteville, for whom our learners have designed community gardens, golf cart paths, and bridges. Parents and caregivers often host, or lend their social capital to introduce our learners to professionals who can host, real world apprenticeships. We also bring in parents as experts to give learners real-world feedback on their work.

Practical Strategy:

Actively cultivate a culture of partnership with your community. Create avenues for parents and local professionals to contribute to the school, whether through volunteerism, teaching workshops, internships, or mentoring students. For example, if a parent owns a local business, they might sponsor an event or offer internship opportunities to students. Organize regular events where families can share their expertise or hobbies with the learners. I like to say our parents and caregivers can SIW and SIS. That is, we Share Ideas Willingly and Steal Ideas Shamelessly when it comes to good parenting. This approach builds a strong support network that can supplement both academic and operational needs.

6. Scalable Growth: Flexibility Over Fixed Structures

Traditional schools often have rigid growth models that rely on adding more classrooms, teachers, and administration when expanding. In contrast, microschools can grow more fluidly. For instance, adding a new learning Studio or program might require little more than hiring one additional Guide or rearranging current resources rather than an extensive investment in infrastructure. This allows for more nimble scaling based on demand. Personally, I’ve found Harvard Business School's Discovery Driven Planning process to be immensely helpful in this regard.

Practical Strategy:

Build your growth plan to be scalable without major capital investments. For example, instead of adding permanent classrooms, consider portable or flexible learning spaces that can be adapted for multiple uses. When planning staffing, anticipate flexible positions that can expand to meet the needs of more students or new Studios. Leaders should also continuously evaluate the market demand and add capacity in small, manageable increments, ensuring the school's growth remains aligned with its mission and community values.

7. Admissions: Casting a Wider Net vs. Fitting a Specific Mold

In both public and private microschools, admissions processes play a role. Public charter schools, public magnet schools, and district-run microschools use admissions criteria to select families, while private microschools often look for specific qualities in students, such as academic performance, behavior, or cultural alignment. Whether in public or private settings, admissions often center around "fit." However, microschools offer an opportunity to think beyond a narrow definition of "fit." Instead of focusing solely on immediate alignment with the school’s culture or expectations, they can cast a wider net by admitting learners who show potential to grow into the school’s vision. This approach demands a strong onboarding process, ongoing parent education, and intentional cultural immersion, helping families and learners adapt and thrive in the microschool's unique learning environment.

Practical Strategy:

Develop a robust onboarding process for both learners and parents to help them understand and embrace the school's philosophy. Host regular parent education workshops (at Forest we do monthly in-person and virtual coffees eg) and provide resources that explain your educational model and how families can support their child’s growth within it. Immersing new learners and families in your school’s culture early on can build alignment over time, rather than expecting immediate fit at admission. Casting a wider net expands access to your learning environment but also strengthens your community as families and learners grow alongside your school’s vision.?

Leaders should also consider how they communicate the school’s vision during the admissions process. Instead of focusing on whether a learner already fits your mold, emphasize how your school’s approach will help them grow into their best self—academically, socially, and emotionally—through your unique learning experiences. By growing your team’s capacity to bring families along on this journey, you expand your pool of potential learners and increase the impact your school can have on a diverse range of students.?

8. Multiple Revenue Streams: Ensuring Sustainability and Access

While microschools often—and probably should—depend on tuition as their main revenue source, relying solely on this model can limit accessibility for families and create financial instability. To increase both inclusivity and sustainability, microschools can explore multiple revenue streams and consider implementing a sliding scale tuition model. This approach helps make the school more accessible to diverse families while reducing dependency on annual fundraising for operational costs.

Practical Strategy:

To diversify income, microschools can explore several potential revenue streams. For example, selling in-house curriculum to other educators provides an external source of income. Additionally, participating in state tax credit or voucher programs, or enrolling in state-authorized special needs scholarship programs, can bring in helpful funds. If the school owns property, renting out spaces to camps, places of worship, or other organizations during off-hours can create another income source. Another tactic is to set tuition higher than the average per-pupil cost, building in inherent scholarships that allow the school to offer financial aid without overextending its budget. By diversifying revenue streams in these ways, microschools can foster long-term sustainability while keeping education accessible to a wider range of families.

The microschool business model doesn’t mirror the traditional one, nor should it. Each year, we evolve our model at The Forest School: An Acton Academy and The Forest School Online based on what we learn from the market and from our learners. For example, I once believed our educator salaries would align with those of local public and private schools. However, I now realize that the role of a Guide—someone who facilitates innovative signature learning experiences—demands a unique set of knowledge, expertise, and skills. It’s essentially a new type of job that requires rethinking how we frame salaries and promotions.

Adapting the business model regularly is a core strength that allows microschools to remain sustainable and continue delivering high-quality education within a smaller budget. By understanding these key differences and approaching them with strategic planning, microschool leaders can build nimble, financially solvent organizations that thrive and grow in a dynamic educational landscape.

Interested in designing—or redesigning—a learner-driven environment? Sign up for one of our Institute's two virtual cohorts this year.