| Written by Kathlen Tan |
| Monday, 26 July 2010 00:00 |
Chee Kok Chan, Chee Kok Chan, Chairman and founder of ELSI Sdn Bhd
Chairman and founder, ELSI Sdn Bhd
Nature of business: English language centre
Students (2009): More than 6,000 at ELS, and 7,000 at sister company Just English (language centres within schools)
Revenue (2009): RM30 million
Number of centres: Six (Penang, Johor Baru, KLCC, Bukit Bintang, Petaling Jaya and Subang Jaya)
How did you get the idea of starting an English language centre?
I was a recruiting agent in the early 1980s, recruiting students for schools in Canada. In 1990, I got more involved, beyond being just an agent — we operated a private pre-university school in Canada. In 1983, we brought the first Canadian Pre-U programme into Malaysia, which is currently running at Taylor's University College. When we were preparing students for higher education overseas, we noticed that a number of students faced problems academically and socially because of their weakness in the English language. So we decided to prepare post-Form 5 students for a year or two over here first. A good foundation in the language would help them succeed and get into better schools. ELS came to mind as I had dealt with them when we were in the US. What was interesting was its Intensive English programme, which could prepare students in the shortest time possible to achieve the proficiency level they need. That's why we started this programme.
How did you fund the business?
We started with very limited funds. I had to mortgage my first house to start this business. Investment-wise, I wish we had had more money then, but being conservative, we didn't believe in borrowing too much. So we started off with small centres, occupying premises of about 4,000 sq ft and limiting intake to around 100 students per centre. So the initial investment was not really fantastic but the hard work and commitment we were willing to put in helped us grow from there. Today, we easily occupy more than 50,000 sq ft of space, with 100 classrooms.
What was the initial investment?
About RM140,000, which was self-funded, including initial cash payments for renovation and furniture. We didn't take on any loans and I believe when we started out, there was no seed funding or grants available.
What were some of the initial challenges?
Enrolment. As with any new business or franchise, ELS was unknown in Malaysia then. Furthermore, when you have an American English background, you're competing with the Queen's English locally, so it was difficult to convince students that we were teaching the same English! Also, students were used to doing English [lessons] for three hours a week then [under other language programmes] so when they had to come in for six hours a day [for our Intensive English programme], they questioned why. We overcame the challenges because of our experience in education — the parents of the students trusted us, which was very important as they provided a lot of support. It was through word of mouth that our venture took off.
So how did you resolve the issue of American English usage?
At the time, if students wanted to go to Canadian and Australian universities, TOEFL [Test of English as a Foreign Language] was the requirement. It didn't matter whether the student took up British or American English — universities still required TOEFL or O-level English because IELTS [International English Language Testing System] wasn't in place then. And even though our textbooks were written in American English, the teachers were always ready to explain to the students the difference between British and American English.
Currently, you have six language centres. What are your plans and objectives for ELS International?
We started off with preparing Malaysian students for overseas studies but today, our synergy is different. Following the government's idea of making Malaysia a regional education hub, the majority of our centre's students — 80% of our total enrolment — are foreigners studying in Malaysia. So we definitely want to expand in this area. Of course, there are limitations. Unlike other products where you can increase the manufacturing line, in the language or service industry, you have to first prepare yourself in terms of having qualified teachers, which is key to our success. We prefer experienced teachers so we can't expand too fast. However, now we feel there is a need for us to work closely with tertiary institutions. We're talking to a few private and public universities to see whether we can set up language schools within their campus, which is in line with the ELS model in the US.
What was your revenue for last year?
We're still very small and like I said, we started out as a family business. Revenue was less than RM1 million 20 years ago but today, we've hit over RM30 million. We're happy that we're able to achieve 15% to 20% growth each year.
Was business affected by the economic crisis?
Yes, but we're lucky. Last year, even though the economy was bad and our enrolment was down 4%, luckily for us, we adjusted our tuition fees so revenue has in fact gone up. But we're very careful about our expansion. We feel that education is recession-proof but we're dependent on so many factors, such as students from different countries. For example, while the South Korean student intake in Malaysia has dropped, we see more Middle Eastern students. That gives us the flexibility to focus on where we can attract students from.
What are your tips for budding entrepreneurs?
At the end of the day, you must have passion. This industry is not easy. Building trust in your name and brand takes time. Behind the number of students who come to your centres, there is a lot of work to be done. You have to make sure you're up to date with how youngsters like to learn today. At the same time, you have to build human resources with good, committed teachers who are hard to come by. But like most businesses, you will be successful if you are committed and passionate, and have the patience to wait for the results instead of giving up.
This article appeared in Management@work, the monthly management pullout of The Edge Malaysia, Issue 813, Jul 5-11, 2010.
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