Business Overview


A charter school is like an independent school, but it is publicly-funded. They are attractive to educators and parents because they offer a bit more freedom than traditional public schools while still being accountable for producing good results from students and stable financial management from the school itself. Charter schools are an attractive feature in many communities because they give parents and students more of a choice regarding where the students go to school.

Who is this business right for?

This business is perfect for someone with previous experience in public education. Those who have been teachers, principals, or other administrators in a public school are often able to take what they learned from previous experiences in order to help their charter school thrive.

What happens during a typical day at a charter school?

The daily activities of a charter school are very similar to the daily activities of a traditional public school. Teachers spend their days preparing for classes, attending meetings, teaching classes, and taking care of any after-school activities. Administrators help coordinate with teachers, the board of directors, and other relevant individuals and agencies that help promote the school's success.

What is the target market?

While almost anyone can make a great charter school student, the target market is typically upper-middle class or wealthy parents who want to offer their child the best preparation possible for higher education.

How does a charter school make money?

The bulk of the money that a charter school makes comes from the public funds of their state. The school may also receive grants, subsidies, and access to various federal programs. In terms of profit, the executives overseeing charter schools receive a portion of money per student enrolled. Note that your charter school must abide by state laws which can dictate whether your business can legally be for-profit or if it must be a non-profit, although the latter can still yield substantial income.

What is the growth potential for a charter school?

The growth potential of charter schools is very steady, having risen from four to seven percent between 2004 and 2014.

Getting Started


What are some skills and experiences that will help you build a successful charter school?

As mentioned before, any prior experience as a public school educator or administrator is invaluable for this role. To this end, a formal degree in education or a related field is very helpful, as is any networking experience that you may have within your community. Many of the biggest charter schools thrive on donations from wealthy patrons, and your ability to tap into an existing network for potential funding can help your school succeed much more quickly.

What are the costs involved in opening a charter school?

The exact cost of opening a charter school can vary significantly based on the cost of the land, the size of the complex, and the number of students and teachers. For instance, if you anticipate 140 students, you may need a building as large as 20,000 feet. Getting an architect to design such a structure from the ground up may cost as much as two million dollars. A small staff comprised of seven standard teachers, one special education teacher, three teacher's aides, a librarian, and a principal will cost a little over $700,000 per year depending on their salaries. Buying a stock of medical supplies, hardware supplies, toiletries, and various odds and ends may cost as high as $20,000. Stocking a small library with 20,000 books may cost nearly $120,000, and getting the relevant shelving you'll need may cost $5,000. Purchasing computers for the school can cost over $37,000, and furniture (ranging from the standard desks and tables to examination tables and gym wall pads) can easily cost $25,000. Larger appliances such as refrigerators, stoves, dishwashers, and food bars will cost $13,000 or more.

What are the steps to start a charter school?

Once you're ready to start your charter school, follow these steps to ensure that your business is legally compliant and avoid wasting time and money as your business grows:

  1. Plan your business. A clear plan is essential for success as an entrepreneur. A few important topics to consider are your initial costs, your target market, and how long it will take you to break even.
  2. Form a legal entity. Establishing a legal business entity prevents you from being personally liable if your charter school is sued.
  3. Register for taxes. You will need to register for a variety of state and federal taxes before you can open for business.
  4. Open a business bank account. A dedicated checking account for your charter school keeps your finances organized and makes your business appear more professional to your customers.
  5. Set up business accounting. Recording your various expenses and sources of income is critical to understanding the financial performance of your business. Keeping accurate and detailed accounts also greatly simplifies your annual tax filing.
  6. Obtain necessary permits and licenses. Failure to acquire necessary permits and licenses can result in hefty fines, or even cause your business to be shut down.
  7. Get business insurance. Insurance is highly recommended for all business owners. If you hire employees, workers compensation insurance may be a legal requirement in your state.
  8. Define your brand. Your brand is what your company stands for, as well as how your business is perceived by the public. A strong brand will help your business stand out from competitors.
  9. Establish a web presence. A business website allows customers to learn more about your company and the products or services you offer. You can also use social media to attract new clients or customers.

Select your state below for an in-depth guide on completing each of these steps in your home state.

Where can I find a business mentor?

One of the greatest resources an entrepreneur can have is quality mentorship. As you start planning your business, connect with a free business resource near you to get the help you need.

Having a support network in place to turn to during tough times is a major factor of success for new business owners.

Recommended: Fizzle.co offers video courses and a supportive online community of like-minded entrepreneurs. Try one month membership for for free.

What are some insider tips for jump starting a charter school?

One of the best things to do before opening a charter school is to listen to comments parents have been making about the local schools. This lets you learn from others' mistakes and ensure that your school offers an experience the community is otherwise lacking. Make sure not to create a bigger school than you truly want: for many private schools, the small classrooms are considered a very attractive feature because students get more time with teachers, and a really crowded campus can undercut that benefit.

Growing Your Business


How to promote & market a charter school

Marketing a charter school is a little more nuanced than marketing a traditional product. Typically, it involves using a mixture of traditional advertising (via newspaper, radio, and television ads) and social media (such as Facebook, Twitter, and Instagram). In simple terms, the traditional advertisement helps to reach the parents while the social media advertising helps to create a friendly online presence for students to relate to.

Recommended: Get started with local advertising for your business with a $300 credit from Yelp.

How to keep customers coming back

Because your charter school can only accommodate so many students, your advertising should play up that the school is state-of-the-art, boasts a great teacher/student ratio, and that it offers electives and other opportunities the community cannot find anywhere else. After school has started, form a team of ambassadors that can help to represent your school at various community events and spread positive word of mouth. Finally, keep solid records of the achievements of your past students (in terms of college admissions, jobs, and other metrics of your choice) and integrate this into your advertisement, as there is nothing more persuasive than a good success story.

How and when to build a team

Unlike small businesses, a charter school must have a solid team of teachers, aides, administrators, and librarians from the very beginning.

Legal Considerations


State & Local Business Licensing Requirements

Certain state permits and licenses may be needed to operate a charter school business. Learn more about licensing requirements in your state by visiting SBA’s reference to state licenses and permits.

Most businesses are required to collect sales tax on the goods or services they provide. To learn more about how sales tax will affect your business, check out our informative guide, Sales Tax for Small Businesses.

For information about local licenses and permits:

Reduce Personal Liability

Structuring your business as a limited liability company (LLC) ensures your personal assets are protected in the event your business is sued.

What is an LLC?

Form an LLC in 5 easy steps

Earning Potential


How much can you charge customers?

Charter schools do not follow an exact customer/provider model. For the students, the charter school is free. However, the school is funded by both the district and the state on a per-pupil model. Your area may vary, but nationally, charter schools are paid $7,131 per pupil.

What are the ongoing expenses for a charter school?

Your primary ongoing expenses include your monthly loan payment for the school, your teacher's salaries (using our staff estimates above, you would be paying about $60,714 a month), supply costs (whose cost will vary based on needs, but are likely to be $2,000 a month or more), and utilities (which will also be about $2,000 a month or more).

How much profit can a charter school make?

The exact amount of profit you can make depends ultimately on the number of students, how much you receive per student, and any money that might come from charitable donations and wealthy patrons. Overall, though, for-profit education is a market valued at over $1.3 trillion. Combined with the growth of charter schools themselves and their support from the latest Secretary of Education, this venture may prove quite profitable.

How can you make your business more profitable?

One of the downsides to income per pupil being determined by districts and states is that it makes it difficult to increase profits. There are essentially two avenues to become more profitable: expanding the school or securing more donations from parents and various wealthy patrons. The first option will require significant investment, but will ultimately increase the number of students your school serves, thereby increasing your profit. For the second option of soliciting donations, if you have the budget, it may be worth hiring an individual or team whose primary job is securing donations, grants, and other types of funding for your school.

Next Steps

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