A good estate of affairs

21st June 1996 at 01:00
Feel fed up but still like children and have some spare cash? Then maybe it's time to buy your own school. Gerald Haigh reports

In my last year at college, it struck a small group of us that we might buy and run our own school. We had the right combination of subject skills, and all the project needed was for one of us to marry a nurse, something which in the early Sixties seemed actually more difficult to avoid than to accomplish.

In the end we lacked the necessary entrepreneurial courage, and meekly shuffled off to do the probationary year. The dream, though, lives on for some teachers, especially those who feel stuck and fed up but who still like children. In many a staffroom, it seems, at least one person is secretly making enquiries about buying a school. Not that they will talk about it.

The evidence comes from Peers Carter, who runs, with his wife Susan, School Transfer Consultants (STC) - in effect, a confidential estate agency for privately owned schools. A typical enquirer, according to him, is "a disenchanted teacher who has reached 35 to 40 and wants to run a school in the way he or she thinks best".

Another typical scenario is that "the children have left home, and a husband and wife think that perhaps they can sell their house and do something together."

But many of those who bother to pick up the phone, turn out to be what the used-car trade calls "tyre-kickers" - people who ask all the questions but, deep down, know they are never going to write the cheque. They may phone STC on and off for up to five years without ever really getting to the point. As Peers Carter puts it: "This is a market filled with dreams."

So what do you need to make the dream into reality? According to Peers Carter, your starting point will be Pounds 100,000 in cash. This is because a viable school is probably going to cost at least Pounds 250,000 and the bank won't be as helpful as you might hope. "Banks are not terribly clued up about schools - it's just not something they know about. Most of them won't lend beyond 60 per cent of the total."

Mr Carter finds this attitude surprising, given that a good private school is a sound business opportunity. "You get your money in advance and you have your customers for up to seven years. It's not the road to quick riches, but you can make a long, slow buck. You'd think the banks would welcome a long-term investment in people, but they'd rather fund a clothes shop."

The first approach to STC brings a confidentiality agreement to be signed, and a request for a CV and an indication of your budget. Then you are sent a "sketch list" which provides short descriptions of dozens of schools, including price, profits and the number of pupils, but not the location. The list makes fascinating reading: "Successful, co-educational preparatory school in well laid-out and attractive premises," reads a typical entry. "Little local competition. Excellent academic results. Good reputation. Good catchment area." This school, with room for 200 pupils and with 150 on roll, is going for Pounds 610,000.

Further up the scale is a "Traditional BoardingDay Preparatory School in exceptional scenic setting. Large and valuable property with extensive grounds and playing fields. Well established. 200 pupils. The available profits are Pounds 80,000." And the price? A cool Pounds 1.1 million.

For an even bigger sum, although more modestly described, is a "Large nursery, preparatory, secondary school. Small profits. Very valuable freehold. Price: Pounds 2.25 million."

"We usually have between 40 and 50 schools on our books," Peers Carter explains. Prep schools, it seems, are the most popular, although, he says, "some stick for one reason or another, because everyone wants something in the Midlands or near the M25."

The schools are not named, and the location is only vaguely indicated, because this is a market that needs to work under the protection of confidentiality, if not total secrecy. Teachers and parents after all, tend to be unsettled by the sight of the headteacher showing buyers around. Prospective customers, therefore, "have to sign confidentiality forms. And we ask them not to speak to banks in the locality," Peers Carter says. The first visit, to look over the property, will be made out of school hours. "Then when they want to see the children working they go as a prospective parent."

Colin McGarrigle, a former independent school headmaster, underlines the need for confidentiality. "It doesn't take much to start the jungle drums beating and make parents vote with their feet. They just say, 'There's trouble at t'mill, we're off.' Falling rolls are the death of schools." Peers Carter confirms this. "Parents panic unnecessarily. In fact, a school will usually improve under a new proprietor with new ideas," he says.

Colin McGarrigle, having retired early, has looked at buying his own school. "You miss the buzz, and I wanted to buy a sensible little school where I could work my butt off."

But how can you tell that you are actually being offered a "sensible little school" as opposed to something out of an Evelyn Waugh novel? "The hard-nosed answer," according to Colin McGarrigle, "is to start by looking at the balance sheets". Beyond that, "look at the children's faces, and at the wear and tear of the place and whether there's a general smell of lavatories about." This might not be exactly what Peers Carter has in mind when he says, "an experienced teacher can sniff the atmosphere", but he was effectively making the same point.

Like the Carters, Colin McGarrigle is sure that a school is never going to be a source of great wealth. "If you go into it with the idea of making money written all over you then it soon communicates itself to everyone." It seems clear, in fact, that a couple who give up two teaching jobs - earning perhaps Pounds 50,000 a year between them - would probably have to be in the private school business a very long time before they saw anything like the equivalent income in profit.

Owning a private school is a business proposition like any other, demanding a lot of hard work - "living on the campus and working through the holidays with a paintbrush," is how Colin McGarrigle puts it. He has not taken the plunge - yet.

For some teachers who start out keen to buy, the stumbling block is realising that one day they will have to sell up. Having taken the plunge and invested all, there still comes a time when real retirement is unavoidable and without a guaranteed sale the financial future may seem scarily uncertain. Coming to terms with that, from the word go, demands some willingness to take a risk - not always part of a good teacher's personality.

An essential quality in the business of buying and running a school is being good at judging people. "If you have 100 children, then perhaps only seven of these represent your profit," says Susan Carter. "Lose ten of them and you're in trouble." So, if and when a family gets into arrears with fees, "you have to make a decision whether to keep them because you believe they will pay eventually." This is the kind of judgment she is "astonishingly good at", according to her husband.

The complexities involved underline the advantage of being able to work as a team of two, with complementary skills. Peers Carter believes that "it's a great thing for a couple especially if one of them has business nous." He speaks from experience here, because he and his wife got into the school property business by taking over The Bronte School for 85 pupils in Gravesend, Kent, when it seemed likely to close on the retirement of its former owners. The building is a 20-room Victorian pile with a garden. Across the road are 17 acres which the Carters rent for playing fields. "We've run it for 18 years, " Peers explains. "All our own children have been through it, and it's given us an immense amount of fun and satisfaction."

School Transfer Consultants is at Haydon Cross, Dale Road, Southfleet, Kent DA13 9NX. Tel 01474 534151

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