Tuition Business Lesson #9: Failure To Have An Exit Plan

When we started, the team was filled with dreams and aspirations that with our combined talent and hard work, we would give other tuition centres in Singapore a serious run for their money. We would expand to one, and then two, and maybe to five centres in Singapore. After that we would just keep teaching and teaching, and perhaps train up teachers to duplicate what we do.

Dream Too Small

On hindsight, I can see that our vision was too small. We only thought about five centres, and only thought about setting up in Singapore. Some might say, well, nothing wrong with that, you gotta walk before you can run. Yes, I totally agree with being grounded and being realistic. However, when we set out to do something, we were free to dream about the end goal. If we set our mind about having 5 centres, that would frame our thinking, and would affect all our business decisions. Setting small visions would not benefit the business.

For example, if we had set our vision to have 30 centres instead of 5 centres, we would know that investors relations, branding, marketing, systems, talent pipeline, training program, trademark, etc, all these would be important.

If we set our mind to “let’s try to set up 2 centres first”, then we would do things differently. We would seek to use our own profit to plough back into the business, we would focus on teaching every student ourselves, we would see no point in investing in branding, marketing and partnership. Outsourcing would seem like being lazy. We would be subtly shaping ourselves into a two-centres business.

Work Till We Drop

We also overestimated our stamina in running the business ourselves. We did not consider the idea of selling it off to a buyer at one point.

There are more than one way to exit a business but most of the team were not familiar with these options. We only knew of one way to grow the business, that was, to teach well, to enrol more students, to train more teachers, to teach even more students, and to expand to another centre when there would be a waiting list.

Looking back, we should have attended more business courses together. It would have exposed us to more options, widen our network, let more people know about our brand, and inspired us to ask good questions about the team and the business. But this was easier said than done, because majority of the team did not see the need to upskill themselves. They were also too busy teaching day-in and day-out. Working in the business had consumed them.

It was interesting to note how we treated our partnership contract. It was typed out and signed for sure, but it was not legally binding. I remembered proposing to get a lawyer to draft a legal document, but the team was not interested, citing that the fees were too expensive. In the end, this became a big uncertainty when I wanted to exit.

LEARNING POINT:

Failing to consider how to exit also caused us to not think about whether the business is sell-able. In our case, the business was worth nothing to investors despite our student base and our nicely renovated premise, because we do not have a system that could run without us. In the end, I learnt a painful lesson, that we the expert teachers are not assets in the business. Teaching team, systems, brand, and intellectual properties are.