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Business Principles Back Growth of K-12 Schools

Local private schools that are run on basic business principles have plans to expand in ventures that charge upward of $1,000 a month, with more customers born every day.

The schools have begun to operate more like commercial enterprises as education offerings have changed in the last generation to include online, charter schools and other options.

Operator-educators couple curriculum and commerce: They target a niche, fill a need, and build bottom lines in a competitive market.

LePort

For instance, a surgeon named Dr. Peter LePort founded LePort Schools in Fountain Valley in 2000.

It now enrolls 1,250 students at 11 campuses that serve preschool through eighth grade, about 1,100 of them at seven sites in Orange County, including five in Irvine, where it’s now based. Two Irvine sites total about 38,000 square feet in the Irvine Spectrum area.

LePort expanded last year to North San Diego, the South Bay and San Francisco, where it plans to open its 12th campus in January with an expected enrollment of 130 to 150.

“Our strategy is to cluster,” said Heike Larson, vice president of outreach.

She said LePort aims for three to four preschools in each market to feed students into higher grades.

LePort will also repurpose buildings—two Irvine sites were formerly restaurants.

Larson said it wants to establish a local high school in the next four to five years.

Its next new market is Brooklyn, N.Y., in fall 2015. It’s far afield but in line with its strategy: Establish a new cluster in growing areas tough for competitors to enter. In Brooklyn, for instance, the school is in historically protected buildings.

“Complicated sites means competition is less,” Larson said. “Fewer schools will touch it.”

Peter LePort is still on the board, and family members work there.

The company has added investors, and the executive team has equity.

Business Plans

Anaheim-based Fairmont Private Schools is another for-profit school here.

It was founded in 1953 by Garden Grove schoolteacher Kenneth Holt and his wife, Helen, and expanded by growth and acquisition to five local campuses that together cover preschool through one high school, Fairmont Preparatory Academy in Anaheim.

“We’re an independent, family-owned, for-profit school that hires the best and generates outcomes, no matter what,” said Chief Executive Robertson Chandler.

The Holts’ son David Jackson is an owner, and the third generation is also involved. Keeping it in the family makes growth slower because there’s no outside equity, Chandler said.

Still, Fairmont enrolls about 2,000 students.

The five sites are run like a business under an umbrella company called Fairmont Education Group. The group’s international unit has about 650 full-time students in a joint diploma program with five schools in China. Six more schools are contracted there but have not yet launched.

The group also has an online-oriented company called Thesys International, whose offerings include English-as-a-second-language teaching for 1,600 students in California and professional development courses for teachers.

“We operate on multiple platforms at different levels for different markets,” Chandler said.

He also said Fairmont plans to grow.

Fairmont Prep will offer a fully online high school by the fall of 2015, said Headmaster Robert Mendoza.

Tuition for a full-week program—there are other schedules—runs from about $10,000 a year for preschool students to $18,000 a year for middle school students. Industry sources estimate its high school tuition to be about $22,000 annually.

Nonprofit Profits

Eastside Christian Schools in Fullerton is a nonprofit, but Head of Schools Kim Van Geloof said that like any business, it looked at its community and how to serve it.

It is in ethnically and socio-economically diverse areas, and the school is faith-based though not church-run.

Tuition is $7,000 to $9,000 a year, and 70% of students get financial aid.

Eastside has four sites—three preschools and a main K-12 campus—with 390 students.

“We’ve created a school that is realistic to our community, that’s nonprofit but self-sustaining,” Van Geloof said.

She said the students at Eastside run an aquaponic organic garden, and the fruit, vegetables and herbs—berries, zucchini and jalapeno among them—that it produces go to prepare a meal for a number of underprivileged people.

Students are working with a landscape architect to redesign the garden before the next planting, according to Van Geloof.

Next up: researching if it would be more profitable to sell the crops at a farmer’s market and buy food instead.

The school also shows some agility in how it serves students: It employs “leveling”—bringing students up or down a grade as needed at its full K-12 campus—and focused learning for kids who show business aptitude or interest.

“We take kids with particular strengths where there isn’t a ‘curricular path,’ ” Van Geloof said, and devise teaching on that basis.

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