The Financial Realities of Running a Microschool: What Every Education Entrepreneur Needs to Know

By: Jennifer Kempin | March 2025

At a recent gathering of microschool owners, an expert from a well-known microschool incubator shared one of the most crucial lessons she has seen play out time and time again: set your tuition high enough to sustain your school, including paying yourself a salary, without relying on outside funding. Too many new school founders, afraid to charge too much, undervalue their work and set tuition too low. The result? They struggle and eventually close, unable to sustain the vision they worked so hard to build.

Just as she finished speaking, a new edupreneur jumped in, shaking her head. “I agree with most of what you’re saying,” she said, “but you have to cut the first few families a break. They’re taking a risk on you. You might even have to lower tuition just to get people in the door. Otherwise, how do you even prove your concept?”

I could see some heads nodding around the room, and I get it—on the surface, it sounds reasonable. But here’s the catch: she hadn’t actually opened a school yet. The expert, who had worked with dozens of microschools, had seen this approach play out before, and the pattern was clear. Schools that started too low struggled to raise tuition later without losing families. They backed themselves into a financial corner and, more often than not, ended up closing their doors far too soon.

This moment highlighted a deep-rooted challenge in the microschool movement: the “teacher mindset.” Educators are driven by a passion for learning, innovation, and child-centered experiences. But that same mindset often leads us to make business decisions that undermine our ability to sustain our schools. Running a microschool isn’t just about providing an amazing education—it’s about ensuring the financial stability that allows you to keep doing it for years to come.

I struggle with this same teacher mindset in my journey as an education entrepreneur, but I have one big advantage. The year before I started my microschool, I launched my own consulting business, helping small businesses streamline their operations. This gave me a front-row seat to the financial decisions that make or break a business—outside of education.

I’ve leaned on that experience, along with insights from other entrepreneurs, to make financial decisions that have kept my school financially viable. To date, we’ve operated successfully without a single grant or outside donation. Here’s how I did it:

1: Start Small

Every time I’m asked what advice I’d give to someone starting a microschool, my answer is always the same: start small.

The most successful microschools I’ve seen follow this principle. I began by homeschooling my son for a year before expanding to include other children. You don’t have to follow my exact path, but consider starting with a small group—perhaps your own kids and a few from your community. Maybe you already tutor children and can expand those sessions into a full program.

Starting small has several benefits:

Lower Overhead: Many microschool founders start in their homes, garages, or community spaces before investing in a dedicated location. This keeps costs low and allows you to prove your model works before committing to expensive leases and materials.
Refining Your Niche: I initially thought I’d be marketing to homeschoolers, but I quickly realized most of my families were coming from traditional schools. That insight changed the structure of my program, and I was glad I figured it out before committing to a full-time facility.
Delaying Hiring Until Necessary: By starting small, I didn’t have to hire staff right away. When the need for an assistant finally arose, I already had tuition funds in place to pay them. I didn’t have to stress about covering a salary before my school was financially ready.

2: Set Your Tuition Higher Than You Think

Alright, hear me out. I didn’t just pull a high tuition number out of thin air, and you shouldn’t either. But let’s be honest—every microschool owner I’ve met has wished they could offer their program for free. We’re educators, not business moguls. The problem? Free doesn’t keep the lights on, and “a little more than free” isn’t going to cut it either.

Right now, in Pennsylvania, sending a child to a microschool is a privilege. And while organizations like PaFEC are fighting to change that, your school can’t be the one to single-handedly make microschooling accessible to all by charging too little. You have to charge enough to cover your costs and sustain your school long-term. Later on, when your school is thriving, and you have extra funds or land that great grant, you can start offering scholarships or discounted tuition. But in the beginning? Your first priority has to be making sure your school survives. And yes, that means tuition might need to be higher than what feels comfortable.

Here’s how to set tuition:

Determine Your Salary Needs: Know the absolute minimum you need to make, a comfortable number, and a future goal.
Calculate Overhead Costs: This includes rent, insurance, materials, and any other recurring expenses. In my case, I spend under $300 per year on insurance, $500 per new grade level on curriculum, and about $1,000 on supplies at the start of the year.
Assess Your Student Capacity: Based on your space and structure, how many students can you realistically serve?
Do the Math: Take your salary + expenses and divide by the number of students you can support. That’s your baseline tuition.

That final number might seem high at first. You might feel uncomfortable charging it, especially in the beginning. Some people will say those first families are “taking a risk” on you, so you should give them a discount. But here’s another way to look at it: those first families get the most personalized experience your school will ever offer. They have a direct hand in shaping your program. They get more one-on-one time with you than families who enroll later. It’s only a risk if you treat it like one.

3: Be Strategic About Curriculum Costs

Choosing the right curriculum can make a significant financial difference. I lucked out that the curriculum I was already set on was Waldorf education, which emphasizes reusable, high-quality materials and minimal technology. This means I purchase a grade’s curriculum once and use it year after year. I don’t have to replace expensive workbooks, upgrade software, or buy new textbooks annually.

Curriculum costs can quickly spiral out of control if you aren’t careful. Before committing to a specific approach, consider:

Long-Term Costs: Will you need to buy new materials every year, or can you reuse what you already have?
Tech Dependence: Online programs often come with recurring subscription fees. Are they worth the cost, or can you achieve similar results with a lower-cost alternative?
DIY vs. Packaged: Some microschool owners create their own curriculum to save money, while others invest in high-quality pre-made programs. Find a balance that works for you.

4: Things You Can’t Rely On

There are a few common ideas floating around the microschool community that I want to clear up—things you shouldn’t rely on.

Grants: Grants are wonderful if you get one, but don’t count on them for your survival. You will often hear microschool owners thanking different foundation for the money they got to start up. Yes this does happen for some schools. But then there are schools like ours that don’t receive start up funds and we make it just fine. Even if you do land one, it’s important to remember it’s not something you can depend on long-term.
Side Hustles: Some people manage to turn their microschool into a whole business empire—starting podcasts, selling curriculum, and creating spin-off products. While that sounds great, it’s not the typical path, and it certainly doesn’t happen overnight. Don’t bank on side hustles to keep your microschool afloat unless they’re already established—running a microschool is demanding enough on its own!

Final Thoughts

If you’re passionate about microschools, you likely have a heart for children and a relentless drive to create something better. That’s an incredible force, but passion alone won’t pay the rent, buy supplies, or keep your school running long enough to make the impact you dream of. You have to think like both an educator and an entrepreneur.

Start small, be intentional about your tuition, and make smart financial decisions that ensure sustainability—not just survival. The more financially stable your school is, the more lives you can touch, the more children you can help, and the longer your impact will last.

Your mission is powerful—but only if your school is still standing years from now to fulfill it.