An Algorithmics partner in Latin America opened their real books for three consecutive months — every payment received, every expense paid. The pattern: month 1 lost $700, month 2 lost $570, month 3 turned a $781 profit. Startup was $10,563, mostly borrowed, and the full quarter still ended $489 short. Month three is profitable; the quarter is not. Anyone promising a one-quarter payback has never run one.
This is not a model or a projection. It is one real center's actual accounts. Here is the whole period in three lines:
Month 1 — fit-out and a holiday intensive. 38 students, $2,365 collected, $3,065 spent. Result: –$700.
Month 2 — school year opens, a second venue starts. 46 students, $2,570 collected, $3,140 spent. Result: –$570.
Startup investment was $10,563, almost all borrowed. Across the full quarter the center is still $489 short. Month three is profitable, the quarter is not.
How many teachers do you need, and what do they cost?
Two people on payroll served 46 students. Four served 64. That is smaller than most people expect. In month two the center paid two staff a total of $560. In month three, when the second venue opened and enrollment jumped, a second full teacher joined at $400/month and two part-time people were added at $100 and $310 — total payroll that month: $1,290.
The shape of that team is worth copying:
One senior teacher who also carries the academic side, paid $420–480 and present from day one.
One more full teacher, hired only when a second location actually opened.
Two part-time people for the rest.
Nobody was hired in advance of the students.
Across the quarter, payroll came to $2,895 — an average of $965/month, and the largest single category at 33% of everything collected. The number to hold onto: in month three the center paid about $20 per student per month for teaching, against an average fee of $60. Roughly a third of what a parent pays goes to the person standing in front of the child.
What share of costs was marketing, and why was it so small?
Marketing was 4% of everything the center spent — $379 across three months, against $9,319 of total expenses. The budget said $300/month; they spent under half of it, almost nothing in month one, and 37 new students still enrolled in month three.
The reason is one line further up in the ledger. The groups ran inside an existing private school, and that school received 21–23% of everything collected — $1,995 over the quarter. That is where the students came from: the parents already trusted the building, the schedule already fit their week, and nobody had to be convinced to drive across the city on a Saturday morning.
So the 4% is not a benchmark to copy. It is the consequence of paying 23% for a space that already had children in it. Read those two numbers together or you will misread both:
If you already own an education center with parents in it, your cost of finding students is close to zero, and your ramp is far shorter than this case.
If you start with no audience, you will pay either 20–25% of revenue to a venue partner, or a real advertising budget. What does not work is planning for neither.
What happened with rent?
Rent left in one payment, before the doors opened: $2,445 covering deposit, keys, and roughly six months in advance — in a month when the center collected $2,365. The business plan had rent as a monthly line of $400. The plan was right about the amount and wrong about the timing — and timing is what closes new centers.
Because of that prepayment, no rent appears in the monthly accounts for the rest of the quarter, which is one reason month three shows a profit. The real cost structure is $400/month heavier than the ledger suggests, and month seven will feel like a step backwards.
What did appear from month two were the costs that ride along with a space: maintenance, waste collection, electricity, internet — small individually ($267 in month two, $310 in month three), and they only start once you are operating.
The wider point: the center paid for space two different ways at once. Its own office cost ~$400/month plus utilities. The teaching space inside the host school cost 23% of revenue — more than four times as much in proportional terms. But the expensive one came with students attached. That is the trade, and it is usually the right one at the start.
Before you sign anything, ask what the deposit and advance terms are, and hold that money separately from your equipment budget. It is the first number that surprises people.
What do you pay every month, and what do people forget?
Eight things, in the order they hurt:
Payroll — ~$965/month average, the largest category. It grows in steps when you open a location, not smoothly.
The venue share — 21–23% of collections if you teach inside someone else's building. It started before the students did: $535 went to the host school in month one, when enrollments were almost zero.
The franchisor payment — $372–661/month, paid for the previous period with a fixed component. By month three it took under 10%. Fixed payments are expensive when you are small.
Utilities — $260–310/month, appearing from the month you open and rising as you use the space.
Marketing — $100–270/month here, and only that low because of the venue partnership.
The fit-out tail — carpentry, desks, switches, cables, a voltage regulator: $1,414 across three months, most of it after opening. Add 15–20% to your equipment budget for spending that lands once you think you are finished.
Permits and paperwork — $214 over the quarter, $185 of it in a single month. Ask a local operator what a center actually pays, not a lawyer. Lawyers quote the statute; operators quote the queue.
Municipal fees and bank charges — small, recurring, and never in anybody's business plan.
What almost went wrong
One thing — and it's not about the product. A quarter of month-one billing was never collected. The center invoiced $3,155 and collected $2,365. The $790 left unpaid was most of a month's teacher payroll, sitting in other people's pockets. By month three that figure was $80, or 2%. Nothing about the classes changed — only who chased the payments and on what day. It is the cheapest problem on this list to fix and the most expensive one to leave.
Who this is easiest for
Owners of an existing education center start from a much better place: space, furniture, admin staff, and parents already exist, removing most of the $10,563 and most of the ramp. The real question isn't startup cost — it's how many current families will add a second program.
People leaving a corporate job should look at the low point (the center wouldn't have survived month two without a cushion), not the startup figure. The business worked — but it needed a reserve.
Marketing professionals have a genuine edge, but not in acquisition (4% of the budget). It's in collections, retention, and renewal pricing — which is where the $781 came from.
Technical specialists should re-read the payroll section. Teaching every group yourself to save 33% means teaching every group by week six and running nothing else. The technical part of this business is the part you can already do.
Frequently asked questions
How many teachers does a kids' coding school need?
Two staff served 46 students and four served 64 in this case. One senior teacher from day one at $420–480/month, a second full teacher only when a second location opened, and two part-time people. Payroll averaged $965/month.
How much does a coding center spend on teachers per student?
About $20 per student per month against an average fee of $60 — roughly a third of what a parent pays.
What percentage of an education center's budget goes to marketing?
Four percent in this case ($379 across three months). It was that low because groups ran inside an existing private school that received 21–23% of revenue and supplied the students.
How much rent should I expect to pay up front for an education center?
This center paid $2,445 before opening — deposit, keys, and about six months in advance — against a monthly rent of $400.
What monthly costs do new education centers forget?
Utilities that start only after opening, a fit-out tail of 15–20% of equipment cost arriving post-launch, permits and paperwork, municipal fees, bank and currency charges, and repayment of any loan used to open.
When did this center become profitable?
Month three, with 64 students and $3,895 collected against $3,114 spent.
The same numbers for your city
Every figure above belongs to one market with its own prices, rent, and currency behavior. Yours will differ — and the differences matter more than the similarities.
We'll build the same three-month picture for your city: local price points, local payroll and rent, the number of paid seats you need to break even, and the reserve that gets you through month two. It takes about two working days and costs nothing.
Tell us your city and whether you already have a space and an audience — those two facts change the answer more than anything else. This center is one of more than 500 Algorithmics partner schools, and the shape of the first quarter repeats with unusual consistency: two months of investment, a third month that turns, and a fourth that tells you whether you built a business or bought a job.