How Teach Away leveraged the financial crisis to double its business

Making the recession work for you

 
Teacher answering a girl in a primary school class
(Digital Vision/Getty)

You could say the 2008 financial crisis was a teachable moment. For many companies, the meltdown taught tough lessons about over-leveraged positions and unsustainable business models.

But a select few learned how to make the most of a crummy situation. Case in point: Teach Away Inc., which ranks 37th on the 2014 PROFIT500. As the unemployment numbers piled up and governments shed workers, the Toronto teacher-recruitment firm watched its fortunes soar, transforming a seemingly modest business into a grand global opportunity.

In 2009 and 2010, as jobs in the U.S. grew increasingly scarce, applications from aspiring teachers—especially younger people who saw little opportunity to land a full-time gig at home—poured in. The growing supply of potential teachers—as well as professionals from other fields who wanted to switch careers and work abroad—meant Teach Away could pursue more placement opportunities abroad.

“During 2008 to 2010, we were able to more than double our operations worldwide,” says David Frey,  who, alongside his brother Rene, runs the company which was founded by their eldest brother Kevin and his wife Katarina. “Our business has proven to be relatively recession proof due to our global diversification, and our involvement in the education sector,”

In that period, the number of resumes the firm received jumped 150%. Meanwhile, the company aggressively re-invested its profits, especially in international sales and development. The strategy brought more growth. In 2011, Teach Away made headlines in Houston when, soon after news broke that the State of Texas would lay off hundreds of teachers in the Houston area, the company announced plans to recruit 1,000 teachers to be deployed overseas.

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The company had zeroed in on Abu Dhabi, in the United Arab Emirates, as a region scrambling to find English teachers. The country was in the midst of a major push to deliver several core subjects in English instead of Arabic. The education ministry needed to recruit thousands of teachers on two-year contracts, earning as much as US$70,000-a-year tax free; the successful applicants didn’t need to speak Arabic, but they had to be comfortable in an unfamiliar culture. Moving quickly, Teach Away set up a recruitment office in Houston to sign up the newly laid off teachers in that city.

The company, since then, has steamrollered forward, with revenues growing by 25% per year. David says the firm has 40 employees, 200,000 teacher resumes in its databases and about a thousand teachers in the field at any given time. Teach Away’s clients—education ministries, colleges, and other organizations that provide ESL training—are situated in more than 50 countries around the world, including the Middle East, Asia and Eastern Europe.

The Freys sought to distinguish their company from other teacher placement firms by effectively delivering turnkey instructors. The company does all the recruiting, interviewing, paperwork and cultural preparation for the ESL instructors who will, in turn, be placed with client organizations.

Teach Away traces its roots to a perceptive observation. In the early 2000s, David, fresh out of college, and a third brother Kevin, noticed that lots of people their age were going abroad to teach English. “We realized there might be a market for sending teachers overseas,” says David.

The Freys came by their interest in teaching honestly. Their mother is a school principal; their father, a college instructor. A sister teaches at the University of British Columbia and a grandmother taught kindergarten. David has an international business degree, and spent time studying in Bangkok. René, who has an education background, joined the company in 2008.

At the beginning, before the company had a web presence, the Frey brothers traveled relentlessly, jetting all over Southeast Asia, cold-calling schools and colleges that hired ESL teachers. “You sleep on floors and do whatever it takes to make it into a country,” says David.

René adds that they scoured the international education press, looking for news about government initiatives to boost English-language teaching. When they found something, he says, they immediately began hustling to line up meetings with relevant officials and then jumped on a plane with their presentations.

Unlike many export-oriented upstart firms, they pursued contracts in several regions simultaneously, reckoning it was critical to ensure they didn’t have all their commercial eggs in one basket. “As our business is involved with sending people overseas we needed to ensure that we are diversified across many countries and regions to avoid the risks of things like flu outbreak, terrorist attacks, war in the region, government unrest, natural disasters, etc.,” says David. “Any one of those things can derail an entire years worth of recruitment in the blink of an eye.” (In recent years, in fact, Teach Away has established sales offices in New York City, Australia, Edinburgh, China, and Vancouver, with another planned for Abu Dhabi.)

In the first several years, the Freys did all the selling in person, tapping their contacts for “warm introductions” to decision-makers and officials. René points out that they always over-prepared for these initial encounters, gaming out different scenarios and bringing various versions of their marketing collateral. From those initial meetings, he adds, they’ll try to determine precisely what the potential customer wants and recast their materials for the request-for-proposals process.

Understanding foreign business culture is another vital part of establishing the company’s bone fides. In some countries, such as Georgia, business is transacted over a meal, with lots of drinking. In others, gift giving is part of the process. And observing even subtle mannerisms makes a difference with clients.

In the Middle East, David says, it’s important not to shake hands or eat with the left hand. Such cultural knowledge won’t seal the deal, Rene observes, but failing to understand decorum may serve to disqualify you even before you formally submit a bid for a contract.

That savoir faire extends to the crucial business of negotiating prices—“when to push and when to accept,” says David. Dealing with a Kuwaiti client recently, for example, he knew he shouldn’t discount the price too much during negotiations because in Middle Eastern business culture, such a move signals the buyer that he’s discounting the value of the service.

Rene offers one other piece of salient advice for companies trying to win business abroad when they’re competing with local firms: don’t coast. “The first time you get an international contract, it’s not going to be easy.” When your firm gets the second one, he says, “treat it as if it’s your first contract ever.”

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