Money talks

Entrepreneur, Sept, 1997 by Frances Huffman

You've heard all the buzzwords: global marketplace, global network, global this, global that. Yes, the world is getting smaller, and these days, no one blinks an eye when an American boasts of doing business with China, marketing a product in the Ukraine or setting up shop in the land down under.

By the same token, foreigners are coming to the United States in record numbers to do business and study. In the 1995-96 school year, 453,000 foreigners attended a U.S. college or university, compared with just 154,000 in 1974-75. And that's not counting the hordes of business executives who traverse the Atlantic or the Pacific each year to do some wheeling and dealing American-style.

Sometimes the only thing standing between a foreigner and the American dream is the perplexing English language, with its fast-changing slang and impossible pronunciations. What other language has so many pronunciations for a single letter? For native English speakers, it's no problem, but for the rest of the world, it can be a real tongue twister.

Now, what's considered a stumbling block to foreigners has opened a wealth of opportunity in the States for schools that teach English as a second language (ESL).

* LEARNING THE LINGO

Sure, most foreigners can learn English in their own countries, but simply hitting the books is far different from speaking, understanding and doing business with fast-talking natives. Learning the language in an English-speaking country takes top priority with many foreign business executives and students. And thanks to the near-worldwide appeal of the American culture, American English edges out the snootier British English and all other variations.

"American English is definitely the most popular among people who want to learn English. Most people who want to study English want to come to the States," says Ellyn Levine, owner of the English Language Center in Boston. Levine has been in the ESL business since 1978 when she opened her first school in Los Angeles after being laid off from teaching English at the University of California, Los Angeles (UCLA).

"I really liked teaching, and I didn't want to ever get laid off again. And the only way to avoid that was to be my own boss," says Levine, echoing the sentiments of thousands of other business owners. The teacher's former colleagues at UCLA began referring their international students to Levine's center, and her business was underway.

Seeing an increasing demand for ESL, Levine began adding more schools in 1990 and today has four locations, two of them in the Boston area, the others in Los Angeles and Santa Barbara, California. Levine's business, which brings in more than $5 million annually, isn't the only ESL school on a growth track. "Back in 1990, there were only a few ESL schools in Boston," says Levine. "Now there are about 15."

* ABC'S OF ESL

Talk about a booming business. "The market's potential is endless," says Gail Raimi Dreyfuss, adding that about three-quarters of people worldwide aren't native English speakers. Dreyfuss founded the Wisconsin English Second Language Institute (WESLI) in Madison, Wisconsin, with husband Jeff in 1981.

At WESLI, which is conveniently located near the University of Wisconsin, most ESL students generally fall into one of two categories: college-bound students and business executives. "We both had Ph.D.s in linguisitics, but we couldn't find two university jobs in the same city," says Dreyfuss. "We decided to start an English school and did all the teaching ourselves. By sheer luck, we got 50 students when we opened."

Today, WESLI has so many students and so much business, the Dreyfusses don't have time to teach anymore. That task is left to a teaching staff of 35.

Some ESL entrepreneurs may have linguistics backgrounds, but you don't need a related degree or even a license (except in a few states) to open an English school. Just ask Joe Stipek. He got his first taste of teaching English as a tutor to business executives in France in 1988.

Upon his return to the United States, he took a job with an ESL school in Texas, and in 1991, he and his wife purchased the school and began expanding it. Today, Intensive English Institute (IEI) is based in Portland, Oregon, has six locations nationwide, about 400 students and 50 teachers, and brings in about $5 million in annual revenues.

As for why Stipek wanted to purchase that first school, "I saw that the industry was expanding - there's a huge increase in the number of foreign students coming to the U.S. - and with the right marketing, I knew IEI could expand as well."

* KNOW THE RULES

Finding clients for ESL schools requires a lot of get up and go. Traveling overseas to meet with study-abroad agencies, colleges and universities ranks high on the marketing to-do list. Some ESL schools use agents in foreign countries to cull clients, while others advertise in foreign publications to get the word out to potential students.

Smart marketing, yes, but unfortunately, that isn't always enough to seal the deal. Other factors over which ESL school operators have little control can come into play. Uncle Sam's immigration policy has a hand in the success or failure of ESL schools on American soil, as does the exchange rate of the dollar and relations between the U.S. government and foreign countries. All these factors can stand in the way of even the most effective marketing plan.