Terakoya College: A Rural Noto Tutoring School Fell From Nearly 30 Students to 5 After the Earthquake, Yet Kept ¥1.38M in Year-4 Profit

This is the story of a sole proprietorship whose revenue fell ¥1,663,400 from the prior year and still ended in the black. Yuki, the head of “Terakoya College,” an independent-study tutoring school in a rural town in the Oku-Noto region of Ishikawa Prefecture, has published revenue, expenses, profit, and student counts on his blog every year since opening on March 15, 2021. Year four, 2024, was the year of the Noto Peninsula earthquake, and enrollment fell from “just short of the 30-student milestone” at the previous year’s end to an all-time low of 5. The local market itself physically shrank.

A neighborhood business that loses more than 70% of its customers to a disaster would normally be weighing closure. Yet this school’s year-four accounts show ¥2,177,100 in revenue, ¥794,205 in expenses, and ¥1,377,395 in net profit. Average monthly take-home was ¥114,783. Hardly lavish as a living, but the business did not die. Its revenue puts it among the smallest cases, and it offers a rare stress test against an external shock, recorded in actual numbers.

Four years of accounts, side by side

Year three’s gross profit is back-calculated from the decline stated in the year-four post (a gross-profit drop of ¥1,376,578). The ¥3.84M revenue figure is the owner’s own. In other words, the school spent three years growing revenue 1.9x, then was knocked back to roughly year-one levels by the earthquake.

Year one: starting from ¥20,000 a month, earning half the year in January and February

The first year’s monthly revenue teaches two things at once: how slow the ramp is, and how seasonal the trade is. The opening month brought ¥0, April ¥20,000, May and June ¥18,000 each. Revenue only reached ¥151,000 in August with the summer course, then held in the high 100,000s through autumn. Then came exam season: ¥638,500 in January 2022 and ¥377,000 in February. As the owner writes, he “earned half the year’s income in January and February alone”: about ¥1.01M in two months, nearly 50% of the ¥2,035,500 annual total.

Enrollment traced the same shape: zero at opening, 2 students through early summer, 23 a year in. Seventeen of them were third-year middle schoolers. A tutoring school’s revenue hangs on exam-year enrollment times course fees, and that exam cohort graduates away every February. The business resets every March, which is legible in the year-one data alone.

Deducting year-one expenses of ¥1,728,000 (fixed costs of ¥109,000 a month plus about ¥35,000 variable) left ¥307,500 in profit, not enough to recover the just-under-¥800,000 opening cost. The succession case of a 30-year-old tutoring school in Fukuoka also described how hard new-student acquisition is. For an unknown new school, “barely feeds you” is the measured value of year one.

The earthquake year: the recovery curve from 5 to 20

The Noto Peninsula earthquake of January 1, 2024 broke those assumptions. Monthly enrollment ran 5 in January, 8 in February, 13 in March, 20 in April, 21 in May and June, then 17 to 20 for the rest of the year. A roster that had approached 30 at the prior year’s end fell to one-sixth overnight and clawed back to about two-thirds by spring.

That curve reads less like a sales chart than like the pace of the region’s recovery projected onto a roster. The January figure of 5 shows how few households were even in a position to attend, a variable no amount of effort by the school could move. The climb of 8, 13, then 20 tracks the settling of evacuations and relocations.

Recovery did not mean the market came back. By the owner’s account, the town’s elementary and middle school population stood at 280, roughly 20% below the prior year, and the town lost 448 residents in a single year. Twenty students against a shrinking denominator may even represent a higher share, but the absolute ceiling has certainly dropped. Revenue fell ¥1,663,400 from the prior year’s ¥3.84M to ¥2,177,100. Even August’s summer course, the year’s best month, brought ¥320,500.

What made survival possible sits on the expense side, not the revenue side

The reason this year closed in the black is simple: annual expenses total only ¥794,205. The breakdown is rent of ¥480,000 (¥40,000 a month), teaching materials ¥116,057, utilities ¥82,400, consumables ¥52,416, communications ¥28,332, and advertising ¥25,000. With a break-even point just under ¥800,000 in annual revenue, losing nearly half of sales still does not produce a loss.

Low fixed costs do not make a business grow faster. They decide its survival rate under external shocks. That is the general rule this case yields. Among physical businesses, the food truck whose venues vanished in the pandemic could settle for a “pause” precisely because its fixed costs were light. Formats heavy with rent and payroll exit before revenue returns. Terakoya College’s ¥40,000 rent functioned as insurance, purchased at the price of a rural location’s weakness: a small pool of students.

Customer acquisition follows the same structure. Advertising spend was ¥25,000 a year (a paid ad in the local municipal newsletter), plus flyers and friend-referral cards. Instead of investing in web marketing, the school leans on referral channels that cost nothing.

The inconvenient numbers are also on display

Reading this record as a feel-good story would be inaccurate. The absolute profit averages ¥114,783 a month, low compensation for a career of more than ten years in tutoring and school management. The owner has also been running the school while living in temporary post-disaster housing. Gross profit of about ¥2.75M in year three, meanwhile, halved in year four, so the earthquake’s damage is fully visible inside the phrase “stayed profitable.” And with the town’s student population down 20%, the year-three ceiling of nearly 30 students may be out of reach for as long as the market keeps contracting.

Options other than continuing are also limited at this scale. Tutoring schools do change hands, as in the Fukuoka school succession completed in about four months, but such deals work in cities with substantial enrollment. Whether a rural school in a shrinking market finds a buyer is another question.

Conditions under which this endurance structure holds

• Surviving a revenue halving in the black is possible only when fixed costs are held to a fraction of revenue (here, ¥40,000 monthly rent and roughly ¥800,000 in annual expenses)
• Cash flow works in this exam-season trade only when the January-February revenue spike can be smoothed into working capital for the whole year
• Near-zero advertising works only in a small market with few competitors, where referrals actually reach people

The limits deserve their own paragraph. This school’s profit assumes one person who pays himself no salary; it stops working the moment staff are hired. The scale and timing of the earthquake are particular to this case, and no generalization of the form “tutoring schools can withstand disasters” follows from it. What the record shows is one measured data point: the level at which a low-fixed-cost sole proprietorship passed through its worst year.