X - post Landry Academy Financial Problems?

[cjzimmer1]

1. LLC does not protect you from tax debt unless it is an LLC that has elected to be taxed as a corporation, rather than taxed as a partnership.  The former is less common, as it comes with the same kind of complications that other entity types bring. Thus: Any tax owed is owed by the owner.

 

2. If you are collecting fees in advance of performing the service, you essentially have what is called "Unearned Revenue." This is actually a liability.  From a tax perspective, it is possible to not pay taxes on this Unearned Revenue.  When you actually perform the service, the unearned revenue must be reclassified to Earned Revenue, or in accounting parlance -- it gets "recognized."  If Landry Academy never bothered to recognize the revenue when services were actually performed, then they collected cash, never recorded it as revenue, and basically failed to pay income tax on a lot lot lot of revenue. This is called fraud.  And you can be guilty of fraud, even it's just that your records are disorganized. It can be difficult to keep track of unearned revenue and then recognize it at the right time.

 

3. A prepaid model of this type can only last so long as it is growing.  If the amount of prepaids owed exceeds growth, then - imagine this - you have a semester which is 100% comprised of students who paid last year or some other time -- meaning no revenue is coming in and yet you have to still provide the service and incur the costs of doing so. This is when you collapse.  You either collapse because you actually collapsed (as in, used the money and don't have it anymore), or because the government collapses you for collecting prepaids and then failing to keep it in an escrow account or otherwise holding it until recognized.

 

I guarantee you that farm is up for auction and this business is closing not just because of contractor misclassification.  There's a big debt owed to the IRS here and it has to do with income tax/revenue AND/OR the prepaid cash was not held in escrow until recognized and they literally do not have the money to keep operations going.

This is very helpful.  Thank you.

 

[AngelaAHLevy]

Re: 2.)

If I remember correctly, the same goes for gift certificates. I used to work for a small speciality shop that sold tons of gift cards at the holidays and Mother's Day. The owner of the business always complained how gift cards created an accounting nightmare and that gift cards are not considered "profit" at the time of purchase.

 

This is correct. Gift Cards are referred to as "Prepaid Revenue," aka Unearned Revenue.  Large multi-billion dollar corporations have trouble with this too, they just have deeper pockets to recover with. I have audited and found significant issues with a corporation so large that at least 50% of the people reading this have one of their products in their home.  Mistakes can be as costly as fraud.

 

[CruzinMom]

I am a (former) teacher at Landry, and I just stumbled on this thread.  I teach German I and German 2.  I plan to continue teaching to finish the year.  But we were just told about the closing about an hour before parents - so I am praying about where/how to finish the year.  If you need either of these courses, feel free to contact me.  Faith Cruz   faith-full@juno.com

 

Landry is  (was) full of wonderful teachers who are great at what they do & really love their students.  The vast majority finished first semester without pay. 

 

I am in prayer for the teachers, the students, and for Greg & his wife.  I don't believe he intentionally did anything wrong.  I think he must have had some poor business/tax advice. 

 

This school was his life - it must be a devastating loss. 

 

 

[Renai]

I am a (former) teacher at Landry, and I just stumbled on this thread.  I teach German I and German 2.  I plan to continue teaching to finish the year.  But we were just told about the closing about an hour before parents - so I am praying about where/how to finish the year.  If you need either of these courses, feel free to contact me.  Faith Cruz   [email protected]<script data-cfhash='f9e31' type="text/javascript">/* */</script>

 

Landry is  (was) full of wonderful teachers who are great at what they do & really love their students.  The vast majority finished first semester without pay. 

 

I am in prayer for the teachers, the students, and for Greg & his wife.  I don't believe he intentionally did anything wrong.  I think he must have had some poor business/tax advice. 

 

This school was his life - it must be a devastating loss. 

 

It has been a huge blow to many.  :grouphug:

 

Can you cross-post your message to this thread? http://forums.welltrainedmind.com/topic/633309-so-options-2nd-semester-since-landry-has-closed/. People are looking for alternatives.

[Guest]

<snip>

 

Likewise with Veritas last night and their offer to give grace and extend the hand of God to the LA community.  The fact is - we are a target market for VP too, and they offered a discounted service in hopes of gaining significant market share and securing future revenue.  It's the same reason milk is discounted at the grocer!

 

Again - this is not bad, but let's don't be naive about it!  I think it's ok to keep a warm heart and remain faithful in our community while also participating shrewdly in a business transaction as consumers, just as these businesses are doing so.

 

 

 

My husband and I just had this discussion last night. The companies that step up are making good business decisions to try and help everyone out- it's being noticed on multiple fronts. I'm not saying they aren't operating somewhat out of magnanimity, but they're basically gambling on gaining future business out of it. It's shrewd and I like it. :) 

 

I also liked your part about taking the Lord's name in vain. I hadn't thought about that previously in that way. Interesting thoughts coming from that. 

[MyThreeSons]

Are the teachers themselves at risk for any kind of IRS penalty? 

[AngelaAHLevy]

Are the teachers themselves at risk for any kind of IRS penalty? 

 

Only if, upon receiving their 1099's, they did not report that income and pay taxes on it.  As a 1099 worker, you are responsible for paying regular income tax, 100% of FICA and AND a self employment tax.   (The 2nd half of FICA and the SE tax are the share that would have been paid by an employer if not self employed).  If anything, the teachers could have a claim against LA for the SE taxes that they paid which, if the IRS deems they were actually employees and not contractors, should have been paid by LA.

And -- We talk about "taking God's name in vain" and think it refers to using OMG.  But that's doesn't seem all that hard, does it, to not utter God's name casually like that?  I have long felt that we should dig a little deeper and see with clear eyes that taking God's name in vain is a far more insidious practice -- far more tempting, far more potentially gainful.  It is ok for a business to say "these are our values, we'll share them," but we should be wary of any business that positions themselves as a blessing to the community or striving to be one.  Any business' number one goal should be to remain in business (e.g. pay their bills, and keep going for as long as the owners wish to keep going) by serving their customers and stakeholders (owners!) well. And if the owners view God as the primary stakeholder, then great!!! 

 

I think this is fantastically well said.  I would, however, clarify it to say that a business may have any number one goal they choose, just so long as they are up-front about it.  I would respect a business that would prefer to shut down rather than violate some core  principle.

 

Sadly, we don't know what actually happened here -- there's been a lot of speculation, but no specific communication from the founders.

 

I think that, had they been forthright from the start of the financial troubles, the community would have extended a lot of grace to the teachers and administrators; and perhaps worked to keep LA solvent.

[StephanieZ]

Google up "affinity fraud" if you want a sad education on how businesses use "affinity"/shared interests/shared values to con people. Utah is a hotbed of affinity fraud because of the LDS values of trusting in other LDS folks makes them sadly susceptible to this sort of thing. 

 

Personally, I think a $50 credit towards a $300-500 class is just a small marketing gimmick. I don't fault Veritas or any other company from wanting a piece of the Landry pie that is imploding, and they/anyone can't afford to eat the losses that Landry has created, and no one can afford to teach a $500 class for $75 . . . 

 

Frankly, I'd encourage people to take their religion out of their business decisions to as large an extent as possible. I mean, sure, choose ethical companies that treat people right, but don't trust blindly just because someone shares (or claims to share) your religion or values. 

 

I have a local friend who has suffered YEARS of serious financial difficulties all because he was scammed by a fellow church member, another Christian man. This friend hired this Christian contractor to build him a big horse arena, and the contractor did a horrible job, leaving him to have to re-pay to have the roof redone so it wouldn't fall down, and then the rest of the project was left incomplete. What was NOT incomplete was the big cash payments my friend had made and the HUGE mortgage he was left with. He could have (and should have) sued the contractor, or even just gotten hard with a lawyer letter . . . But "he's a good Christian man . . . and he'd lose his home . . . and he's older and close to retirement. . . " meanwhile, my friend barely scrapes by for years with this huge mortgage for a building that wasn't complete so can't provide the cash flow (boarding horses) to pay for it . . . he and his wife are childless, and probably can't afford to have a baby, and live in a crappy trailer and definitely have not one penny of emergency resources, etc . . . It just makes me mad as hell. They're really good people, and, to me, that Christian contractor USED their goodness to take advantage of them. Evil, IMHO. Anyway, I just couldn't get over how this very religious, very good man, this friend of mine, could come to believe that it was the Christian thing to do to let someone rip him and his family off so badly. Seems like a big huge scam to me. So, anyway, that's my 2c. 

 

 

 

Edited December 31, 2016 by StephanieZ

[itsheresomewhere]

Google up "affinity fraud" if you want a sad education on how businesses use "affinity"/shared interests/shared values to con people. Utah is a hotbed of affinity fraud because of the LDS values of trusting in other LDS folks makes them sadly susceptible to this sort of thing. 

 

Personally, I think a $50 credit towards a $300-500 class is just a small marketing gimmick. I don't fault Veritas or any other company from wanting a piece of the Landry pie that is imploding, and they/anyone can't afford to eat the losses that Landry has created, and no one can afford to teach a $500 class for $75 . . . 

 

Frankly, I'd encourage people to take their religion out of their business decisions to as large an extent as possible. I mean, sure, choose ethical companies that treat people right, but don't trust blindly just because someone shares (or claims to share) your religion or values. 

 

I have a local friend who has suffered YEARS of serious financial difficulties all because he was scammed by a fellow church member, another Christian man. This friend hired this Christian contractor to build him a big horse arena, and the contractor did a horrible job, leaving him to have to re-pay to have the roof redone so it wouldn't fall down, and then the rest of the project was left incomplete. What was NOT incomplete was the big cash payments my friend had made and the HUGE mortgage he was left with. He could have (and should have) sued the contractor, or even just gotten hard with a lawyer letter . . . But "he's a good Christian man . . . and he'd lose his home . . . and he's older and close to retirement. . . " meanwhile, my friend barely scrapes by for years with this huge mortgage for a building that wasn't complete so can't provide the cash flow (boarding horses) to pay for it . . . he and his wife are childless, and probably can't afford to have a baby, and live in a crappy trailer and definitely have not one penny of emergency resources, etc . . . It just makes me mad as hell. They're really good people, and, to me, that Christian contractor USED their goodness to take advantage of them. Evil, IMHO. Anyway, I just couldn't get over how this very religious, very good man, this friend of mine, could come to believe that it was the Christian thing to do to let someone rip him and his family off so badly. Seems like a big huge scam to me. So, anyway, that's my 2c. 

I agree.    

[StephanieZ]

Are the teachers themselves at risk for any kind of IRS penalty? 

 

My understanding is that if you are a 1099 worker, you must pay "both sides" of the SS/Medicare taxes and of course income taxes. All pretty straightforward at tax time . . . We've had some 1099 income over the years and handled it easily enough with TurboTax and/or basic CPA help.

 

BUT, if they were paid 1099 and SHOULD HAVE BEEN regular W-2 employee, then, I *think* they'd actually be off the hook for the employer side of things . . . AFTER the IRS reclassifies them based on an audit, etc. Essentially, the employer is totally responsible for fixing/making right the employer error. 

 

So, the teachers just have to deal appropriately with whatever tax forms they get. . . and open any future letters from the IRS, etc, but the teachers themselves should NOT face any negative gov't actions based on the employer misclassifying them. Essentially, the employees are the victims in the misclassification, and they are treated as such. If they end up being reclassified, they might even get a refund of some sort some how some day. 

 

NOTE: I'm not a CPA, not an attorney, and have never actually had to deal with the IRS personally other than sending in forms and checks, lol. I've just researched the 1099 vs w2 issue a good bit as it is relevant to our own business. 

[GoVanGogh]

Google up "affinity fraud" if you want a sad education on how businesses use "affinity"/shared interests/shared values to con people. Utah is a hotbed of affinity fraud because of the LDS values of trusting in other LDS folks makes them sadly susceptible to this sort of thing.

 

Personally, I think a $50 credit towards a $300-500 class is just a small marketing gimmick. I don't fault Veritas or any other company from wanting a piece of the Landry pie that is imploding, and they/anyone can't afford to eat the losses that Landry has created, and no one can afford to teach a $500 class for $75 . . .

 

Frankly, I'd encourage people to take their religion out of their business decisions to as large an extent as possible. I mean, sure, choose ethical companies that treat people right, but don't trust blindly just because someone shares (or claims to share) your religion or values.

 

I have a local friend who has suffered YEARS of serious financial difficulties all because he was scammed by a fellow church member, another Christian man. This friend hired this Christian contractor to build him a big horse arena, and the contractor did a horrible job, leaving him to have to re-pay to have the roof redone so it wouldn't fall down, and then the rest of the project was left incomplete. What was NOT incomplete was the big cash payments my friend had made and the HUGE mortgage he was left with. He could have (and should have) sued the contractor, or even just gotten hard with a lawyer letter . . . But "he's a good Christian man . . . and he'd lose his home . . . and he's older and close to retirement. . . " meanwhile, my friend barely scrapes by for years with this huge mortgage for a building that wasn't complete so can't provide the cash flow (boarding horses) to pay for it . . . he and his wife are childless, and probably can't afford to have a baby, and live in a crappy trailer and definitely have not one penny of emergency resources, etc . . . It just makes me mad as hell. They're really good people, and, to me, that Christian contractor USED their goodness to take advantage of them. Evil, IMHO. Anyway, I just couldn't get over how this very religious, very good man, this friend of mine, could come to believe that it was the Christian thing to do to let someone rip him and his family off so badly. Seems like a big huge scam to me. So, anyway, that's my 2c.

My DH worked for a company that went under because their cheif financial officer knowingly did some very unethical things... That chief financial officer is also on the board of directors for a Christian private school in this area. He is thought very highly of because of his role in this school. When I hear his name mentioned in Christian circles in this area, it makes my skin crawl beacuse I know what he did to the business my husband worked for. Yet no one locally would believe that he isn't a well respected Christian business man... Gag.

[Xahm]

Yeah, a "great Christian guy" embezzled at least a quarter million from the church I grew up in. The fraud went back further than the available records, so we know it was more, just not how much. It didn't turn me away from the faith, but it did make me much less trusting of people.

[Mrs Twain]

Has Landry announced to their families that they shut down? The last email I got from them said they were having problems but were trying to fix them. The only reason I know they shut down is from talking to you people on WTM.

 

I looked at my son's Landry dashboard, and it looks normal, as if his spring class is on as usual. I wonder if a lot of the Landry families don't know that the school is shut down.

[OneStepAtATime]

Has Landry announced to their families that they shut down? The last email I got from them said they were having problems but were trying to fix them. The only reason I know they shut down is from talking to you people on WTM.

 

I looked at my son's Landry dashboard, and it looks normal, as if his spring class is on as usual. I wonder if a lot of the Landry families don't know that the school is shut down.

Yes I got an email from Greg Landry saying that the school was closing.  It was official.

 

Here it is:

 

Dear Landry Academy Family,

(I'm sorry if you receive this more than once)

 

As I mentioned in my last email message earlier

this week, we have been struggling to keep Landry 

Academy alive. After exploring many options that would 

potentially allow us to keep our doors open, we have

reached the point of no longer being able to operate. 

This is not how we envisioned our dream of Landry 

Academy ending. It is with much sadness that we close 

the doors of Landry Academy. We know this places you

in a difficult position - we're very sorry.

I have been working hard on a solution that I hope you 

will carefully consider. I have arranged for Veritas Press 

to work with you directly on special arrangements and

pricing for both the spring semester and for the 2017-2018 

school year. They have been very understanding of this 

situation and are willing to give you some credit for our

online classes and generic semesters for which you

are registered.

 

We'll send you a separate email message today with details 

of the arrangement we've made with Veritas Press online

classes.

 

It will take some time for us to go through student

and family accounts for intensives, trips, classes,

etc. Thank you for your patience and understanding. 

We are not able to issue refunds right now. It will also

take time for us to be able to process transcript 

requests, etc. 

 

We are very grateful for you - families who have

loved, supported, and encouraged us for years. We

know so many of you personally and many of you

are like family to us. Thank you for your continued 

support, patience, and prayers as we work through 

the details of closing Landry Academy.

 

Greg

 

Greg Landry

Founder and Director, Landry Academy

 

Edited December 31, 2016 by OneStepAtATime

[itsheresomewhere]

Has Landry announced to their families that they shut down? The last email I got from them said they were having problems but were trying to fix them. The only reason I know they shut down is from talking to you people on WTM.

 

I looked at my son's Landry dashboard, and it looks normal, as if his spring class is on as usual. I wonder if a lot of the Landry families don't know that the school is shut down.

One of the many things that are upsetting to people is that the emails are not going to everyone. You are not the only one according to multiple sites to not have gotten the email.

[OneStepAtATime]

One of the many things that are upsetting to people is that the emails are not going to everyone. You are not the only one according to multiple sites to not have gotten the email.

I'm not sure how they are distributing emails/linking email addresses.  The early email stating they were having difficulties went out to some right away and not others.  I didn't get that one for over a day.  Suddenly I then got it 3 times in a row.  Then again later that evening for a fourth time.  The one I posted above others got way earlier than I did, some got much later and some have not yet seen.  I am puzzled as to how they have it structured.  It is very frustrating for info to be so erratically distributed.

[fourisenough]

1. LLC does not protect you from tax debt unless it is an LLC that has elected to be taxed as a corporation, rather than taxed as a partnership.  The former is less common, as it comes with the same kind of complications that other entity types bring. Thus: Any tax owed is owed by the owner.

 

2. If you are collecting fees in advance of performing the service, you essentially have what is called "Unearned Revenue." This is actually a liability.  From a tax perspective, it is possible to not pay taxes on this Unearned Revenue.  When you actually perform the service, the unearned revenue must be reclassified to Earned Revenue, or in accounting parlance -- it gets "recognized."  If Landry Academy never bothered to recognize the revenue when services were actually performed, then they collected cash, never recorded it as revenue, and basically failed to pay income tax on a lot lot lot of revenue. This is called fraud.  And you can be guilty of fraud, even it's just that your records are disorganized. It can be difficult to keep track of unearned revenue and then recognize it at the right time.

 

3. A prepaid model of this type can only last so long as it is growing.  If the amount of prepaids owed exceeds growth, then - imagine this - you have a semester which is 100% comprised of students who paid last year or some other time -- meaning no revenue is coming in and yet you have to still provide the service and incur the costs of doing so. This is when you collapse.  You either collapse because you actually collapsed (as in, used the money and don't have it anymore), or because the government collapses you for collecting prepaids and then failing to keep it in an escrow account or otherwise holding it until recognized.

 

I guarantee you that farm is up for auction and this business is closing not just because of contractor misclassification.  There's a big debt owed to the IRS here and it has to do with income tax/revenue AND/OR the prepaid cash was not held in escrow until recognized and they literally do not have the money to keep operations going.

 

I have thought all along that the REAL problem is likely not the classification of teachers as ICs vs. employees, but rather the business model of selling prepaid credits at deep discount for future service. It absolutely 'smelled like' a ponzi scheme which prevented me from ever considering purchasing any credits. I'm glad to see someone, who appears to know what she's talking about, address this issue. If it sounds too good to be true (a high-quality, year-long, live online class for $100), it probably is. I'm not saying I'm smarter than anyone who got 'taken in'; I'm just always skeptical of things that don't stand up to reason/logic.

[h2bh]

I haven't gotten the second e-mail saying they are closed either. It is hard to process this and not having official news just makes it harder. One of my kids was going to start with Landry this spring for an elective because a friend at church gifted us the free generic. She bought in bulk. I'm sad for so many effected by this.

[OneStepAtATime]

I have thought all along that the REAL problem is likely not the classification of teachers as ICs vs. employees, but rather the business model of selling prepaid credits at deep discount for future service. It absolutely 'smelled like' a ponzi scheme which prevented me from ever considering purchasing any credits. I'm glad to see someone, who appears to know what she's talking about, address this issue. If it sounds too good to be true (a high-quality, year-long, live online class for $100), it probably is. I'm not saying I'm smarter than anyone who got 'taken in'; I'm just always skeptical of things that don't stand up to reason/logic.

I agree, I think this is probably the bigger issue by far.  FWIW, though, when I first started homeschooling and people recommended Landry I was not put off by the generics.  I probably should have been at least a little concerned. I run our family business so I am somewhat conversant with businesses.  However, the school had been around a while, many people had had great experiences with Landry and many had used the generics with no issues at all.  They also (at least when I bought them) limited how many you could purchase so I assumed the school had a sound business model and knew how many discounted classes they could feasibly offer per year.  Landry was not a fly by night operation or I would never have considered it.  Even though I should have probably delved deeper into their financial model I bought generics, too.  They were great.  We used those generics many times to make on-line classes affordable.  The kids have taken classes with Landry several times over our homeschooling career and most of those classes were real gems.  I agree, though, in hindsight their model was unsustainable.  

[Lanny]

I have thought all along that the REAL problem is likely not the classification of teachers as ICs vs. employees, but rather the business model of selling prepaid credits at deep discount for future service. It absolutely 'smelled like' a ponzi scheme which prevented me from ever considering purchasing any credits. I'm glad to see someone, who appears to know what she's talking about, address this issue. If it sounds too good to be true (a high-quality, year-long, live online class for $100), it probably is. I'm not saying I'm smarter than anyone who got 'taken in'; I'm just always skeptical of things that don't stand up to reason/logic.

 

 

+1    I  told my wife about this thread, several times, in the past week or so.  I am sad, for the people who've lost $, and also for the students who are now scrambling to find courses from another provider. And, for the teachers and the parents of the students.      I told my wife, imagine, for example, if we'd purchased a Groupon with a huge discount for some business or service and hundreds or thousands of other people, who'd also purchased the Groupon, showed up on the same day and they had no cash flow.  A multi million dollar business can survive that, but not a small business.  I believe the businesses that sell on Groupon limit the number of discounts they will sell. For example, last week, for the Ice Skating rink, they only sold that Groupon for one day, although it was good for months.  And with the Groupon, it would have been a few dollars less for us, but it was not a huge saving, over the price we paid, paying when we arrived there.  

 

Here's a school in Spain, on Groupon, advertising up to a 95% discount. I have no idea of whether or not the school exists or is reputable, but at this time, it shows they have sold 418 of these and that they are available for almost 8 hours more.    https://www.groupon.com.co/deals/eneb-cursos-2-157

 

IMO any business that offers discounts like that is either not going to provide the service or the product. or their business is going to fail quickly, unless they have deep pockets and have the $ to sustain it and subsidize their customers.   

[Random]

I am going to explicate a specific phrase in your post which is so very pervasive in our largely faith-based homeschool community. (This is not an attack on you or your choice Random!  I just think this phrase is worth discussing).  

 

Make no mistake folks - these homeschool programs are MULTI-MILLION DOLLAR BUSINESSES and we are the target market.  This is NOT bad, but we cannot allow ourselves to buy into these buzzy phrases about service and being a blessing and sharing our heart, etc.  Businesses.  Run by people who are passionate about their purpose, mission and target market? Sure. But businesses!!!!!

 

Likewise with Veritas last night and their offer to give grace and extend the hand of God to the LA community.  The fact is - we are a target market for VP too, and they offered a discounted service in hopes of gaining significant market share and securing future revenue.  It's the same reason milk is discounted at the grocer!

 

Again - this is not bad, but let's don't be naive about it!  I think it's ok to keep a warm heart and remain faithful in our community while also participating shrewdly in a business transaction as consumers, just as these businesses are doing so.

 

And -- We talk about "taking God's name in vain" and think it refers to using OMG.  But that's doesn't seem all that hard, does it, to not utter God's name casually like that?  I have long felt that we should dig a little deeper and see with clear eyes that taking God's name in vain is a far more insidious practice -- far more tempting, far more potentially gainful.  It is ok for a business to say "these are our values, we'll share them," but we should be wary of any business that positions themselves as a blessing to the community or striving to be one.  Any business' number one goal should be to remain in business (e.g. pay their bills, and keep going for as long as the owners wish to keep going) by serving their customers and stakeholders (owners!) well. And if the owners view God as the primary stakeholder, then great!!! 

 

I completely understand what you are saying.  It's one reason I'm more protective of my younger children at church than I am at nonsectarian events.  (please, I hope no one misunderstands me.  I trust the leadership at my church, but I also know that predators like to take advantage of these situations.)

 

But, like someone else said, how is this different from a groupon-type situation?  There is an amusement park (small family owned business) in my area that is usually $25 per person to get in.  Twice a year, they offer a groupon that is $5 per person admission.  I don't find that suspicious, at all.  I also don't worry about them closing their doors because of it, you know?

 

I also respect anyone's right to open a business and make a profit.  I know VP turns a tidy profit.  They never discount anything, except shipping in January.   I WANT these people to make a profit and don't mind at all that I'm paying for a service I find valuable.  I own a business, too, and I'm certainly not doing it for fun! or even to be a blessing! LOL 

 

Anyway,  it's just a sad situation all around. 

 

I feel awful for all of us.  Even the Landrys.  It appears they are losing everything.  At least I've only lost some money, and not my reputation and my business. 

Edited December 31, 2016 by Random

[CadenceSophia]

 

But, like someone else said, how is this different from a groupon-type situation? There is an amusement park (small family owned business) in my area that is usually $25 per person to get in. Twice a year, they offer a groupon that is $5 per person admission. I don't find that suspicious, at all. I also don't worry about them closing their doors because of it, you know?

 

The amusement park has nearly fixed costs once they build all the infrastructure so getting as many people through the doors is the goal. The $5 admission day is marketing but if they get 3-5x the usual number if people, it may not even be a loss, especially factoring in what you'd spend on food once you get there. Completely different from a year long class with fixed number of students, one teacher who needs to be paid a salary + that class needs to bring in more than the teacher's salary to keep the lights on so to speak - technology, admin staff, etc.

But, like someone else said, how is this different from a groupon-type situation?  There is an amusement park (small family owned business) in my area that is usually $25 per person to get in.  Twice a year, they offer a groupon that is $5 per person admission.  I don't find that suspicious, at all.  I also don't worry about them closing their doors because of it, you know?

 

I think this is a good question, and it is one of degrees for me.

 

First, if your groupon, like the most-discounted LA generics, wasn't valid until more than a year after you purchased it, wouldn't that be a bit more suspicious?

 

Second, as in the WTM group buy, the most discounted generics were only available if you bought 100 at once, strongly encouraging people to buy as much as possible.  Most groupons have some limited number.

 

Third, I think the amusement park, like the ice rink, has pretty high fixed costs, no matter how many customers they have, and very little per-customer costs.  That is, if 300 paying customers show up, they probably have to pay about the same amount of staff as if 100 customers show up.  For an on-line synchronous class, it is almost the complete opposite, there's almost no fixed cost, and pretty high variable costs:  There's a pretty small limit on the class size.  Once you have more than, say, 20 students in a class, you have to pay a teacher to run a new section.  I'm very curious how much the teachers were paid.  If a class of 10 students had everyone paying the most-discounted, $50/semester rate, that's not much for a semester's worth of teaching, grading, etc.

[Random]

The amusement park has nearly fixed costs once they build all the infrastructure so getting as many people through the doors is the goal. The $5 admission day is marketing but if they get 3-5x the usual number if people, it may not even be a loss, especially factoring in what you'd spend on food once you get there. Completely different from a year long class with fixed number of students, one teacher who needs to be paid a salary + that class needs to bring in more than the teacher's salary to keep the lights on so to speak - technology, admin staff, etc.

 

True.  I think I hear what you are saying, and I agree. 

 

However, the amusement park example was just an imperfect comparison.  I've seen similar marketing campaigns for things like mani/pedi, exercise classes, sporting-participant events like bike races & triathlons, hotel rooms, restaurant meals, museum admissions, and on and on.

 

I was just trying to explain why I didn't think the discounted 'generic semesters' was a huge red flag.

 

At any rate, it does seem like selling the generics is just one line in a very complicated story.

[GoVanGogh]

The amusement park has nearly fixed costs once they build all the infrastructure so getting as many people through the doors is the goal. The $5 admission day is marketing but if they get 3-5x the usual number if people, it may not even be a loss, especially factoring in what you'd spend on food once you get there. Completely different from a year long class with fixed number of students, one teacher who needs to be paid a salary + that class needs to bring in more than the teacher's salary to keep the lights on so to speak - technology, admin staff, etc.

Exactly. Most groupons limit how many they sell or how often you can purchase/use them. I have used groupons for services and they generally assume repeat business without a groupon plus additional purchases when there. People are often of the mindset of - I got this cheap, now I can afford xyz. We went rock climbing on one groupon and bought refreshments above what we might have otherwise. I would assume that is very true with an amusement park offering deep discount on one day - get people in cheap once so they want to come back and pay full price, get families to come in and purchase food and maybe souvenirs. I recently bought a groupon to a cycle studio and have already bought additional classes for them without a discount because the place was so wonderful, plus - because I told friends about the place - three of my friends have now gone and fallen in love with the place. I think for many small businesses, groupons are an effective form of advertisement. Get your name out there and get people in that want to come back and pay full price.

[GoVanGogh]

I think this is a good question, and it is one of degrees for me.

 

First, if your groupon, like the most-discounted LA generics, wasn't valid until more than a year after you purchased it, wouldn't that be a bit more suspicious?

 

Second, as in the WTM group buy, the most discounted generics were only available if you bought 100 at once, strongly encouraging people to buy as much as possible. Most groupons have some limited number.

 

Third, I think the amusement park, like the ice rink, has pretty high fixed costs, no matter how many customers they have, and very little per-customer costs. That is, if 300 paying customers show up, they probably have to pay about the same amount of staff as if 100 customers show up. For an on-line synchronous class, it is almost the complete opposite, there's almost no fixed cost, and pretty high variable costs: There's a pretty small limit on the class size. Once you have more than, say, 20 students in a class, you have to pay a teacher to run a new section. I'm very curious how much the teachers were paid. If a class of 10 students had everyone paying the most-discounted, $50/semester rate, that's not much for a semester's worth of teaching, grading, etc.

Re: third point and my above mention to groupon

We have done groupons to rock climbing, cycle classes, yoga classes, etc.

Their expenses are very much pre-set and it doesn't matter if 10 or 40 people are there for a class, if they have capacity. It may be better financially to get 40 people in at a discount than 5 or 6 paying full cost.

The thing is, though, successful businesses know where that make it or break it point is and advertise and market toward their success. They know how much they can discount for the sake of getting more customers vs what will put them under.

[73349]

Also, I think a school is a much harder model to Grouponize than a lot of other kinds of business. The amusement park can hold huge numbers of people. (I worked at one for a couple of years. We could serve 36 people per minute on my ride alone.) The hair or nail salon requires you to book an appointment when someone is available to serve you. But a school course is for a minimum of four months, it needs more employees as the number of participants rises, and people are not necessarily going to come back another day (or year) if the course they need is full. Plus there is no way to upsell the customer who does participate.

[SonshineLearner]

I only bought 100.00 worth of credits.  My more immediate concern is for my son's German class.  He is in 9th grade and does NOT want to re-start with another foreign language but the only reason I consented to German was because of Landry!  So I feel very concerned now.  What will I do?

 

But I REALLY feel for SpeedMom.

Perhaps she can do something without Landry??? 

[historymatters]

 

I only bought 100.00 worth of credits. My more immediate concern is for my son's German class. He is in 9th grade and does NOT want to re-start with another foreign language but the only reason I consented to German was because of Landry! So I feel very concerned now. [9/quote]

 

 

Did you find your German teacher? Info about Faith Cruz is on the other WTM s/o 2nd sem. Post sream and Susan Gleason is at Excelsior.

Edited January 1, 2017 by historymatters

[OneStepAtATime]

It is awesome to me how quickly many teachers have found new homes for their classes and how quickly things are getting established so students can start at least close to on time. I know a lot of people have been working hard behind the scenes over a holiday period to try and help. Cudoes to everyone pitching in to desiminate information and help others out.

 

If you are still seeking a teacher/class definitely check out the other thread mentioned above. Lots of things are pulling together.

[mamamoose]

There are government laws about how employers must treat employees. These are protections for the employees. The (reasonable, IMHO) concept is that employers are the ones with more power, and so employees should get some protections. These are protections like overtime pay, health insurance rules, workers receiving breaks, non discrimination, worker safety, etc, etc.

 

Also, employers are required to pay $$$ towards various government safety nets for their employees. Employers pay about 7% of salary towards SS & Medicare taxes and also pay for worker's comp insurance, unemployment insurance, etc. These safety net programs protect employees in case of on the job injury or not-at-fault unemployment, among other things.

 

If you allow a business/employer to turn their "employees" into "independent contractors", you are allowing that employer to save a lot of $$ and paperwork headaches, while the employee loses out on $$ and also important (sometimes critical) workplace protections/safety net.

 

If you want to advocate for changes to worker protections, feel free. But, it's not reasonable to say, sure, protect some employees, but let an employer classify folks as protected (employee) vs not protected (IC) at their own discretion . . . That leaves all the power in the hands of the employer and makes no sense, IMHO.

 

I own a business. We have a dozen or so employees. We occasionally use an independent contractor for "relief" veterinary services -- the fill in vet who works a few days when dh is on vacation . . . There is a major $$ savings in keeping a vet as an IC vs an employee, so this topic comes up a LOT in management circles, so I've read about it a lot. It is 100% to business owner's responsibility to understand and follow tax law. I guarantee you that any business the size of an online school with many teachers has a CPA to do taxes and provide advice. This is "on them" and I'd have little sympathy for them . . . I'd never expect a teacher to understand the ins and outs of IC vs employee status, considering the majority of employers and long-term IC contractors barely understand it!

 

Also, FWIW, any business offering big discounts for long term packages paid in advance is sketchy IMHO. Especially in homeschooling, it's sketchy to encourage folks to commit to years of classes when we all know family and individual needs can change rapidly. A moderate discount to reward loyal customers is one thing, but deals encouraging folks to prepay for years of classes is crazy. Essentially, it's a pyramid scheme where they were pulling in advance tuition and spending it on current needs . . . So, IMHO, see that as a big fat warning sign to not get lured in to schemes like this!!

Actually, being an independent contractor has perks as well. We pay our ICs about 135% of what we pay our employees, and they can deduct all sorts of personal items they use for their business as an IC--mileage to and from work, hotels for travel, etc. and since social security isn't a sure thing, an IC can pay less SS and more into an actual retirement/savings. So while I see how some could see it as a way for the business to save money, it's not entirely one-sided. You can also pay unemployment if your IC is set up correctly so if you can't find work or it goes upside down, you can have a plan B. It always bugs me when people say the employer has the power because this country has turned that upside down entirely. Ask me how I know. 🙄

[luuknam]

Actually, being an independent contractor has perks as well. We pay our ICs about 135% of what we pay our employees, and they can deduct all sorts of personal items they use for their business as an IC--mileage to and from work, hotels for travel, etc. and since social security isn't a sure thing, an IC can pay less SS and more into an actual retirement/savings. So while I see how some could see it as a way for the business to save money, it's not entirely one-sided. You can also pay unemployment if your IC is set up correctly so if you can't find work or it goes upside down, you can have a plan B. It always bugs me when people say the employer has the power because this country has turned that upside down entirely. Ask me how I know. 🙄

 

Realistically though, there are laws that govern who you can classify as an IC or as an employee, just like there are laws about minimum wage. Just because someone is willing to work for $1/hour, doesn't mean you can hire someone and pay them $1/hour. If you don't like those laws, you can lobby to change them, but you can't just break them and expect the government to be cool with it.

Edited January 1, 2017 by luuknam

[StephanieZ]

Actually, being an independent contractor has perks as well. We pay our ICs about 135% of what we pay our employees, and they can deduct all sorts of personal items they use for their business as an IC--mileage to and from work, hotels for travel, etc. and since social security isn't a sure thing, an IC can pay less SS and more into an actual retirement/savings. So while I see how some could see it as a way for the business to save money, it's not entirely one-sided. You can also pay unemployment if your IC is set up correctly so if you can't find work or it goes upside down, you can have a plan B. It always bugs me when people say the employer has the power because this country has turned that upside down entirely. Ask me how I know. 🙄

 

Sure, there are some potential benefits to being an IC, especially if you are paid a premium that helps make up for your lost benefits. If you are tax-savvy enough to manage these things and in a high enough tax bracket for them to matter, then, sure there are some benefits to being an IC. LEGALLY, it is NOT an optional thing to be an IC or a W-2 employee, however. There are specific rules that make you ONE or the OTHER . . . choosing to self-select your preferred category puts you at risk of tax/legal problems . . . in particular, on the side of the EMPLOYER, as that's who legally controls this decision. 

 

We've been employees, and we're now employers. IME, we have a lot more power as employers than we did as employees. I'm not saying that employees have no power nor any responsibilities, but I definitely respect the fact that the balance of power is tipped in my favor as the one with the firing authority and the check signing authority . . . Yes, I have heavy responsibilities, but I also have a lot of power. 

 

Your situation may differ, but IME, I definitely believe that the balance of power favors the employer, and so I take that seriously and respect the outsized power I have in that role, which means I am especially diligent about considerately considering the impacts of my/management actions on the employees. 

 

ps. If you really feel like your employees have more power than you do . . . Then I suggest doing some management training/courses/reading a book or two . . . You shouldn't feel that way! Even though managing human beings is a miserable aspect of most management jobs (at least it sure is to me), it is critical, and being confident and authoritative is critical to success and ease of management . . . I totally get that employees can make you miserable, lol, but really, you shouldn't feel that you aren't in control! 

[snowbeltmom]

Actually, being an independent contractor has perks as well. We pay our ICs about 135% of what we pay our employees, and they can deduct all sorts of personal items they use for their business as an IC--mileage to and from work, hotels for travel, etc. and since social security isn't a sure thing, an IC can pay less SS and more into an actual retirement/savings. So while I see how some could see it as a way for the business to save money, it's not entirely one-sided. You can also pay unemployment if your IC is set up correctly so if you can't find work or it goes upside down, you can have a plan B. It always bugs me when people say the employer has the power because this country has turned that upside down entirely. Ask me how I know. 🙄

Could you explain what you mean by the bolded?  In my state, an employee and employer would each pay 1/2 of the social security tax that an employee would owe to the government, while an IC would have to pay the entire SS tax himself.  As a result, an IC pays double the SS tax that someone classified an employee would pay.  Is this not how it works it every state?

[emzhengjiu]

Could you explain what you mean by the bolded?  In my state, an employee and employer would each pay 1/2 of the social security tax that an employee would owe to the government, while an IC would have to pay the entire SS tax himself.  As a result, an IC pays double the SS tax that someone classified an employee would pay.  Is this not how it works it every state?

 

An IC can offset the part of the SS / medicare tax the employer would otherwise pay as a deduction.  It lowers the effective percentage paid.

 

 

[mamamoose]

Laws differ by states. In the state in which we live, employers have way fewer rights than employees. For example, it's virtually impossible to fire someone here without a year's worth of documentation. We can also not fire someone for finding out they were stoned on a rooftop while at work. We can not fire them for driving our work vehicle while intoxicated without a second chance. In my opinion, these are no-brained violations and should allow for immediate dismissal. Not the case, however.

 

As for the laws governing when you can use an IC vs when you can use a w-2 employee, I believe it would have to do with contractual difference. For instance, if LA contracted a teacher for a set fee to teach a certain class based on certain criterion I don't see how they could be required to w-2 them. Now, if they then changed the class specificis and it increased or decreased their needed hours, without a change in contract and thus, an opportunity to renegotiate pay, that would be illegal but that's contract law, not pay law, I think.

[StephanieZ]

Laws differ by states. In the state in which we live, employers have way fewer rights than employees. For example, it's virtually impossible to fire someone here without a year's worth of documentation. We can also not fire someone for finding out they were stoned on a rooftop while at work. We can not fire them for driving our work vehicle while intoxicated without a second chance. In my opinion, these are no-brained violations and should allow for immediate dismissal. Not the case, however.

 

As for the laws governing when you can use an IC vs when you can use a w-2 employee, I believe it would have to do with contractual difference. For instance, if LA contracted a teacher for a set fee to teach a certain class based on certain criterion I don't see how they could be required to w-2 them. Now, if they then changed the class specificis and it increased or decreased their needed hours, without a change in contract and thus, an opportunity to renegotiate pay, that would be illegal but that's contract law, not pay law, I think.

 

:svengo:

 

Do you live in CA? LOL

 

LOL, I live in WV.

 

Your examples of un-fireable offenses seem rather bizarre!!! Are you talking about not being able to fire w/o being vulnerable to a successful unemployment claim?? I know that varies a lot state-to-state.

 

Or do you mean that you actually can NOT fire for those offenses w/o you/the company being liable for wrongful termination or some similar offense? That would really, really stink. Whoa.  

 

Tell me what state you are in, and maybe I can google you up some more hopeful guidance. Maybe you just need some better written guidelines/handbook . . . and some "written warnings" . . .

 

I know that in any place I've heard of in the US, you can fire for any offense you like (so long as it's not a protected class or you have some contract in place), but the liability for unemployment will vary a lot place to place . . . BUT, paying higher UE rates is WAY worth getting rid of a toxic employee! Let them have UE if that's what you have to do -- but, goodness, don't keep them on staff!!

 

If you are correct that you truly can't fire for those sorts of offenses, I wouldn't want to be in your shoes!! Can you move your business?

 

In our position, we would HAVE to fire anyone for either of those offenses, as we hold DEA-controlled drugs/licenses, so we'd be in deep-doo-doo with the Feds if we didn't prevent substance abusers from being in our employ / having access to controlled drugs. We have a duty to protect the controlled drugs, and not having drug abusers on staff is part of that duty.

 

We can fire anyone for any reason at any time, EXCEPT for the obvious discrimination issues (i.e., we can't fire someone for being in a protected class). Now, if I fire someone because of something super petty such as I don't like the color of shoes they wear to work, I'm gonna' get pinged for unemployment . . . but if I fire them for reasonable "cause" (which any of your examples would be, given I've documented my employment guidelines/handbook, given warning, etc) . . . then I won't even get pinged because they'd never get UE approved once I submit my rationale for the termination. NOTE: I *could* even get away with something petty like firing someone for the wrong color shoes, so long as I'd given written warnings about requiring the "right" color shoes . . . But, if I never warned them, and then I fired them . . . I would get pinged for UE if they filed for it. 

[GoVanGogh]

True. I think I hear what you are saying, and I agree.

 

However, the amusement park example was just an imperfect comparison. I've seen similar marketing campaigns for things like mani/pedi, exercise classes, sporting-participant events like bike races & triathlons, hotel rooms, restaurant meals, museum admissions, and on and on.

 

I was just trying to explain why I didn't think the discounted 'generic semesters' was a huge red flag.

 

At any rate, it does seem like selling the generics is just one line in a very complicated story.

Re: groupons for events like bike races and triathlons

I saw a groupon several days ago for a half marathon I plan to run in March. Today, I went back to see how good of a deal the groupon was. The groupon listed event pricing as $109.99 value, groupon price of $99. Looking at the event's website, actual price is $99.99. So the groupon value is inflated and the savings are only 99 cents.

I do wonder about that with other groupons. I bought a groupon to a cycle studio for $39 for four visits. It lists $85 as the original price, making it $21.25 per visit. That is the absolute max price listed on their website for a drop-in class.

But now that I go to the cycle studio, I am getting package offers of $75 for 5 visits, making it $15 per visit. My groupon deal was still a good purchase at only $9.75 per visit. But it is highly unlikely anyone is actually paying the $85 price listed as the original price on groupon.

[RootAnn]

I think a better analogy would be like Audible credits. You buy a generic credit that you can use on a $5 audiobook or a $35 audiobook (although some require two credits). The biggest difference in analogies is buying bulk credits ahead of time that you can't use for more than a year from now. If you have 16 unused Audible credits in your account and Audible goes under, do you get your $ back?

[mamamoose]

:svengo:

 

Do you live in CA? LOL

 

LOL, I live in WV.

 

Your examples of un-fireable offenses seem rather bizarre!!! Are you talking about not being able to fire w/o being vulnerable to a successful unemployment claim?? I know that varies a lot state-to-state.

 

Or do you mean that you actually can NOT fire for those offenses w/o you/the company being liable for wrongful termination or some similar offense? That would really, really stink. Whoa.

 

Tell me what state you are in, and maybe I can google you up some more hopeful guidance. Maybe you just need some better written guidelines/handbook . . . and some "written warnings" . . .

 

I know that in any place I've heard of in the US, you can fire for any offense you like (so long as it's not a protected class or you have some contract in place), but the liability for unemployment will vary a lot place to place . . . BUT, paying higher UE rates is WAY worth getting rid of a toxic employee! Let them have UE if that's what you have to do -- but, goodness, don't keep them on staff!!

 

If you are correct that you truly can't fire for those sorts of offenses, I wouldn't want to be in your shoes!! Can you move your business?

 

In our position, we would HAVE to fire anyone for either of those offenses, as we hold DEA-controlled drugs/licenses, so we'd be in deep-doo-doo with the Feds if we didn't prevent substance abusers from being in our employ / having access to controlled drugs. We have a duty to protect the controlled drugs, and not having drug abusers on staff is part of that duty.

 

We can fire anyone for any reason at any time, EXCEPT for the obvious discrimination issues (i.e., we can't fire someone for being in a protected class). Now, if I fire someone because of something super petty such as I don't like the color of shoes they wear to work, I'm gonna' get pinged for unemployment . . . but if I fire them for reasonable "cause" (which any of your examples would be, given I've documented my employment guidelines/handbook, given warning, etc) . . . then I won't even get pinged because they'd never get UE approved once I submit my rationale for the termination. NOTE: I *could* even get away with something petty like firing someone for the wrong color shoes, so long as I'd given written warnings about requiring the "right" color shoes . . . But, if I never warned them, and then I fired them . . . I would get pinged for UE if they filed for it.

we had not specified drug use/abuse or driving while under the influence in our employee handbook because it sure seemed like a no-brained considering it's illegal but when a joint fell out of the pocket of an employee on a roofing job, our attorney suggested we write Him up rather than fire him and then find "safer work" until we could catch him at it because we would be set up for wrongful dismissal. That's all fine and good but that means finding a druggie work at the same rate of pay and slows down production...and puts other employees in danger.

[Lanny]

One of the sad things about the collapse of LA, to me, after reading many of the posts in this thread and the Chat thread,  is that they apparently continued taking money from people, until very recently. If that is t rue, I do not believe that someone who claims to be religious, who claims to believe in "The Golden Rule", or the "Ten Commandments" or God, would do, to innocent customers. Knowingly doing that to innocent people makes them victims and it is very intentional. That is not something decent people do to other people.  That's something criminals do to other people. There are good and bad people, in every religion. Christians, Jews, Muslims, etc.

[itsheresomewhere]

One of the sad things about the collapse of LA, to me, after reading many of the posts in this thread and the Chat thread, is that they apparently continued taking money from people, until very recently. If that is t rue, I do not believe that someone who claims to be religious, who claims to believe in "The Golden Rule", or the "Ten Commandments" or God, would do, to innocent customers. Knowingly doing that to innocent people makes them victims and it is very intentional. That is not something decent people do to other people. That's something criminals do to other people. There are good and bad people, in every religion. Christians, Jews, Muslims, etc.

Some of those defending him for still taking money believe that he couldn't possibly known until last week he needed to close. Or my personal favorite was the theory he was targeted because of who won in the election not that this was done in 2014. Some really do not want to see the lake on the other side of the tree.

[OneStepAtATime]

I dont pretend to know what really happened behind the scenes or what the Landrys were being advised to do before they had to close their doors but the fact that people were still able to send in money and purchase generics and classes and trips and intensives and camps right up until the last week before the closing announcement seems very unethical even if it was legal or was needed for financial reasons or whatever. I feel for everyone affected, including the Landrys. I seriously doubt they started this endeavor to steel from people or harm anyone. Those that know them say they care deeply and are devastated at how this turned out. Still, I am extremely unhappy with how things were handled and how badly this will affect many in our homeschooling community.

[Lanny]

I dont pretend to know what really happened behind the scenes or what the Landrys were being advised to do before they had to close their doors but the fact that people were still able to send in money and purchase generics and classes and trips and intensives and camps right up until the last week before the closing announcement seems very unethical even if it was legal or was needed for financial reasons or whatever. I feel for everyone affected, including the Landrys. I seriously doubt they started this endeavor to steel from people or harm anyone. Those that know them say they care deeply and are devastated at how this turned out. Still, I am extremely unhappy with how things were handled and how badly this will affect many in our homeschooling community.

 

I bolded a few of your words.   Them doing that, in the last weeks before they closed, was stealing from their customers. "needed for financial reasons or whatever" just delayed the actual closing a few more days. That was intentional and that was not something a decent law abiding person would do. Not something a religious person would do.   Some of the people in this thread have lost USD $6K, $5K, $4K, $1.2K if my memory is correct. That's only the people who participated in this thread. The total amount of $ that may have been lost by the victims and teachers is probably staggering. The whole thing is very sad, for the victims who were ripped off, for the students, for the teachers and even for the Landry's, who apparently were decent people, in the past..  

[speedmom4]

One of the sad things about the collapse of LA, to me, after reading many of the posts in this thread and the Chat thread,  is that they apparently continued taking money from people, until very recently. If that is t rue, I do not believe that someone who claims to be religious, who claims to believe in "The Golden Rule", or the "Ten Commandments" or God, would do, to innocent customers. Knowingly doing that to innocent people makes them victims and it is very intentional. That is not something decent people do to other people.  That's something criminals do to other people. There are good and bad people, in every religion. Christians, Jews, Muslims, etc.

 

This is what continues to bother me as well. On the multiple Facebook groups that are discussing the Landry Academy situation I have heard such gut wrenching tales about teenagers who have worked for years to earn enough money for overseas trips only to lose thousands of dollars that THEY earned. The twist in the knife is that Landry Academy was taking payments into the month of December. They knew what was coming down the line but continued to take money from innocent and oblivious customers. 

 

I have also learned that their land is up for auction in TN, actually saw the link. That doesn't happen overnight. 

[Guest]

Two things about running an online academy, from an in-the-trenches perspective...

 

One great advantage of an online school is that you can recruit talent from anywhere, as long as your teachers have a good Internet connection. HOWEVER...taking those teachers on as full-time employees is a nightmare unless they're in your state. Having a full-time employee in another state means that you have to file huge amounts of additional state-specific paperwork, pay unemployment/workers'-comp/etc. for EACH state in which you have regular employees, be responsible to EVERY state's employment conditions, and so forth. Our Press once had full-time employees in Washington State and New York State. We are still, ten years later, trying to convince both states that no, we no longer have to pay $$$$ in random fees; no, we haven't skipped filing paperwork; no, we don't have to answer their surveys...Our CPA strongly recommended that we no longer have any full time employees outside of Virginia. We can hire teachers in other states, but only on a carefully-negotiated contract basis that doesn't require full-time status. I wouldn't have realized this in the early days.

 

Second: Running an online academy is not unlike running a restaurant: More customers means higher payroll and not that much more to put into overhead and fixed costs.  The more students you have, the more teachers you have to hire--and if you're conscientious and want good people, that's a lot of payroll. Most of the tuition brought in by additional students SHOULD be spent paying teachers properly. The amount of "extra" that's available, post-teacher-pay, for administration, software & tech support, etc. doesn't go up very much even when your enrollment doubles, triples, or more. Having lots of new students all at once is actually a great way to go out of business.

 

It's a hard field, and it needs careful management, good accounting, and good financial advice. And if you're doing a decent job, you have to charge decent tuition. Great online teaching for a bargain price is an illusion. As with most things in life, you end up getting what you pay for.

 

My $.02 on a rainy New Year's holiday.

 

SWB

[MeAndTheBoys]

This is what continues to bother me as well. On the multiple Facebook groups that are discussing the Landry Academy situation I have heard such gut wrenching tales about teenagers who have worked for years to earn enough money for overseas trips only to lose thousands of dollars that THEY earned. The twist in the knife is that Landry Academy was taking payments into the month of December. They knew what was coming down the line but continued to take money from innocent and oblivious customers. 

 

I have also learned that their land is up for auction in TN, actually saw the link. That doesn't happen overnight. 

 

. . . not to mention the science books they started pre-selling in October.  I fell for it and bought a Chem book because I had been wrestling over our Chem choice for next year, and I was so at peace, this came right at the time I needed it and looked like my solution--to use Landry's book, online class, and do an intensive.

 

They sold the textbooks in October for $75 each (marked down from $95) or the whole 6-book set for like $300 or so.  THAT now, in retrospect, looks like a crazy last-minute money-making scam.  It's the one thing I have hope for getting $$ back from my credit card company since it's a "tangible item" never received--

 

B

[OneStepAtATime]

Two things about running an online academy, from an in-the-trenches perspective...

 

One great advantage of an online school is that you can recruit talent from anywhere, as long as your teachers have a good Internet connection. HOWEVER...taking those teachers on as full-time employees is a nightmare unless they're in your state. Having a full-time employee in another state means that you have to file huge amounts of additional state-specific paperwork, pay unemployment/workers'-comp/etc. for EACH state in which you have regular employees, be responsible to EVERY state's employment conditions, and so forth. Our Press once had full-time employees in Washington State and New York State. We are still, ten years later, trying to convince both states that no, we no longer have to pay $$$$ in random fees; no, we haven't skipped filing paperwork; no, we don't have to answer their surveys...Our CPA strongly recommended that we no longer have any full time employees outside of Virginia. We can hire teachers in other states, but only on a carefully-negotiated contract basis that doesn't require full-time status. I wouldn't have realized this in the early days.

 

Second: Running an online academy is not unlike running a restaurant: More customers means higher payroll and not that much more to put into overhead and fixed costs.  The more students you have, the more teachers you have to hire--and if you're conscientious and want good people, that's a lot of payroll. Most of the tuition brought in by additional students SHOULD be spent paying teachers properly. The amount of "extra" that's available, post-teacher-pay, for administration, software & tech support, etc. doesn't go up very much even when your enrollment doubles, triples, or more. Having lots of new students all at once is actually a great way to go out of business.

 

It's a hard field, and it needs careful management, good accounting, and good financial advice. And if you're doing a decent job, you have to charge decent tuition. Great online teaching for a bargain price is an illusion. As with most things in life, you end up getting what you pay for.

 

My $.02 on a rainy New Year's holiday.

 

SWB

I appreciate you weighing in.  I have not been comfortable with the idea that this whole process should be easy or obvious when dealing with something as complicated as an on-line school.  I actually have no issues with the possibility that something like this could easily start to snowball without the creators of an on-line school realizing the mistakes they might be making.  Goodness knows my mother, our CPA, and even our lawyer made many mistakes trying to run the family business after my father died and NONE of it was intentional.  We were dealing with a very complex situation with no easy path.  

 

I absolutely do not believe that the Landrys started out to try and hurt anyone at all.  I think also, from what I have heard, that they very much were trying to save the school right up until the end.  I think the mistakes they made were innocent.  I do not fault them for making those initial mistakes.  BTDT.  It happens, sadly.  I wish with all my heart it HADN'T happened, but life doesn't always go the way we planned.

 

What seems so wrong in all of this is still taking money right up until the very end, even though it must have been obvious behind the scenes in those last few weeks that the school was probably going to close.  I assume someone was advising them to do this but whoever advised them to do so was unethical, IMHO.  The school was in trouble before Fall classes even began.  And I really wonder why products were being pushed and purchases were being made even into December when at such a late date they MUST have realized that those products and services almost certainly would never come to pass.

Edited January 2, 2017 by OneStepAtATime

[mom2scouts]

 

Second: Running an online academy is not unlike running a restaurant: More customers means higher payroll and not that much more to put into overhead and fixed costs.  The more students you have, the more teachers you have to hire--and if you're conscientious and want good people, that's a lot of payroll. Most of the tuition brought in by additional students SHOULD be spent paying teachers properly. The amount of "extra" that's available, post-teacher-pay, for administration, software & tech support, etc. doesn't go up very much even when your enrollment doubles, triples, or more. Having lots of new students all at once is actually a great way to go out of business.

 

It's a hard field, and it needs careful management, good accounting, and good financial advice. And if you're doing a decent job, you have to charge decent tuition. Great online teaching for a bargain price is an illusion. As with most things in life, you end up getting what you pay for.

 

My $.02 on a rainy New Year's holiday.

 

SWB

 

 

 

What seems so wrong in all of this is still taking money right up until the very end, even though it must have been obvious behind the scenes in those last few weeks that the school was probably going to close.  I assume someone was advising them to do this but whoever advised them to do so was unethical, IMHO.  The school was in trouble before Fall classes even began.  And I really wonder why products were being pushed and purchases were being made even into December when at such a late date they MUST have realized that those products and services almost certainly would never come to pass.

 

 DH and I owned a business for years and I understand that cash flow can be a real problem. Selling credits years into the future at a reduced price the way LA did was just pushing the problem into the future. Increasing cash flow in the present meant that some day the amount of money coming in would be significantly less than what was needed. If the IRS came in and levied fines, that may have been the final blow. The massive discounts offered this year and taking money into December may have been a last ditch, desperate attempt to save things. The Landrys may be good people, but desperate times make people act in desperate (and often unethical) ways and I think they were wrong to keep taking money after it was obvious things weren't going to work out.