This week, the experts at the D.C. chapter of the business mentoring nonprofit SCORE offer advice to a tutoring firm preparing to enter new markets. – Dan Beyers
When Farooq Cheema was growing up his parents were big on education. They engaged a tutor who helped him excel in the subjects he was already good at and bolstered areas where he needed improvement. The positive results were demonstrated in his college application test scores.
“I did not thank my parents at the time, but sure do now,” Cheema said.“What made the learning so effective was the tutor’s ability to understand how I learned and then adapting the study program to match.”
When Cheema was ready to start a company, he formed one based on his experience, calling it Study Sparkz, an in-home, one-on-one tutoring business, focusing on students in grades K-12 in the District, Northern Virginia and the Maryland suburbs.
Cheema, founder and chief executive of Study Sparkz, located in Vienna, Va.
“We have served thousand customers in the past several years and now is time to expand. The biggest challenge is to maintain our small office culture as we grow.
“Our clients are pleased with our proprietary system of matching tutors and students, its our ‘secret sauce,’ and our key differentiator with competitors. It is based on a proprietary algorithm and supported with four business process patents. We have the systems developed and fine-tuned. How do we engage additional staff in additional markets and keep the culture that has made us successful? Our customers stay with us three times longer than industry averages and we need to maintain this excellent customer-company relationship.”
Hal Shelton, SCORE mentor, Washington D.C. Chapter
“With having served thousands of clients already and having successfully matched tutor and students you have proven that your approach works—you have market traction. Here are some items to consider as you consider an expansion strategy:
“You can expand by purchasing an existing business in the target market, franchising your approach or starting from scratch to build the business in the target market. The first two might result in quicker startup, with the third you can best replicate what you now have.”
“As you add staff for these additional markets consider the implications of hiring employees or independent contractors. Again, the employee approach is best for replicating what you have found to be successful, though it may be initially more expensive. In the hiring process, include current staff so the new employee feels part of the team rather than having allegiance just to you.”
“As you design your organization to include additional markets you will need to determine what activities will be performed at those locations and which from the Vienna headquarters. The more that is local, the more there will be the desired folksy appearance, but there will be some loss of control.”
“With thoughtful steps you can minimize the amount of bureaucracy; however, with growth, especially growth in additional markets will come increases in bureaucracy. The challenge is to make the organization effective and responsive.”
“Thanks for the good advice. It prompted us to make some changes as we think about expansion.”
“First, we changed our tutor’s responsibilities and converted them from independent contractors to employees. This change has allowed us to make scheduling more efficient. Our tutors now receive a more reliable flow of work, and they are now more loyal to us. Because of the increased tutor workflow and an improved training program, we are seeing reduced recruitment costs and higher tutor retention rates.”
“Second, we are in the process of acquiring another tutoring company to jump start our multistate expansion. The most important factor in our due diligence is learning about the company’s culture. Fortunately, the company we are looking at shares many of our core values with full-time staff, tutors, and most importantly, our clients and students. The acquisition should allow us to expand seamlessly and without adding overhead.”
“Third, we are making some upgrades to our internal customer relationship management system. These upgrades will automate many rote tasks that our full-time staff is currently engaged in, and will allow employees to focus on the more creative aspects of their jobs.”
SCORE is a nonprofit association dedicated to entrepreneur education. Looking for some advice on a new business, or need help fixing an existing one? The Greater Washington DC Chapter provides confidential counseling and mentoring from more than 50 executives across the region. Contact us at firstname.lastname@example.org or request a mentor at www.washingtondc.score.org.