Tutor company scores well with aggressive national expansion efforts.
By Sean McFadden
STONEHAM -- When it comes to charting a national expansion plan for his personalized academic tutoring and test-preparation company, Rich Enos follows a textbook formula for growth: reinvestment and emphasis on quality.
Since its inception in 1999, Enos' Stoneham-based company, StudyPoint Inc., has established offices in 10 cities nationally. The company serves students in kindergarten through grade 12.
Revenue for StudyPoint grew to $4.2 million last year from $3.2 million in 2006. This year, it projects revenue to be between $5.5 million and $5.7 million. The company, which employs 32 full-time staff members and 800 part-time instructors, worked with between 2,500 and 3,000 students nationwide in 2007.
Within three to five years, Enos envisions the company operating between 30 and 50 offices.
"Our goal is to be a national leader in tutoring," says Enos, 32, who is co-founder and CEO. "We believe we have a management team in place right now that cold support twice the number of markets we're in. So, some of it is just getting up to scale, in terms of the infrastructure and support we've put in place."
The company has followed what Enos considers a low-overhead business model in regard to its expansion: It will lease a small office space, usually around 500 square feet, and staff up with between one and four employees.
The cost of launching each new office is typically between $75,000 and $100,000, the majority of which is dedicated to upfront investments in marketing, says Enos. Usually he adds, it takes nine to 15 months for an office to break even.
Because of the pace of the growth it's been pushing, the company has been operating at break-even for three of the past five years, Enos said. One year was profitable, and in 2007 StudyPoint posted a slight loss — due to its expansion into three new markets. "That's very much a strategy decision," he says of the company's reinvestment in growth.
A key piece of the company's value proposition, Enos says, is both its personalized approach and the breadth of its service offerings, which include both academic-subject tutoring and test prep &mdash including SAT, ACT and SSAT.
Another factor is convenience: While the majority of StudyPoint's one-on-one instruction is done in the student's home, a small, but growing, percentage of it is being done in private or public school settings. "(The service) has been a terrific tool for my daughter," say Peg Golden, a StudyPoint client and Weston resident. " They have great tutors."
To further ramp up growth, Enos say StudyPoint is currently pursuing equity financing from outside investors. He won't say how much the company is seeking, only that he is seeking "a sizeable amount."
Enos launched the company in 1999 as StudySmart Inc. (the company changed names last year) with co-founder Greg Zumas, who still serves on StudyPoint's board of advisers but is no longer involved in day-to-day operations.
Enos says he and Zumas contributed about $8,000 each to start the company. An SBA loan for $25,000 enabled the partners to launch their second office in Washington, D.C. in 2000.
"I look back now and I think I take for granted just how much, when we were bootstrapping like that, we were really betting the farm on every single marketing initiative we did," Enos says.
Leslie Charm, an adjunct professor at Babson College—whose MBA program Enos entered in 2005—and who is a member of StudyPoint's board of advisers, says, "I think it's a great concept. (Rich) is trying to grow the market and create deliverers of quality tutoring."
In terms of advice, Enos says, "You have to focus on quality from the very beginning. This is a competitive market in which our clients have a lot of options."