This blog has always been based on a simple proposition: TBI (The British Institute) is a fraudulent, delusional and rapidly declining company which is the sick man of the Indonesian TEFL industry. Over the past several years we have attempted to document in its decline by compiling and cross-checking all the information we have accrued about their business. Over the past twelve months or so, there have been more and more signs of its deterioration. Indeed, one insider informed us that only two of their schools were profitable these days. A whopping fourteen out of sixteen are running at a loss.

Now it is possible that some of this comes down to the perennial TBI vice of tax and royalty evasion, but there have been many other signs that their finances are on the ropes. For a while, the most telling of these were wage freezes and the laying off of staff. The decision to drive out the long-term Director Mariam Kartikatresni also set off warning bells. However, what really signaled to us that the problems were acute, especially in the capital, was the decision to close down TBI Sudirman, a prestigious branch right in the financial district, and the accompanying decision to move out of their flagship school at TBI Kuningan. Just three years ago their plans were for a robust expansion all over Indonesia. To lose TBI Sudirman and TBI Kuningan simultaneously is an unthinkable setback which would have been beyond their worst nightmares in 2012.

Yet we would argue that they have long been delusional about their prospects and performance. In truth, they have been heading towards the ditch for many years. To really understand this, you need to look at the signs of business failure which have been mounting for some time. The most importance of these is probably under-performance.

FINANCIAL UNDER-PERFORMANCE

Financial under-performance means that:

• your market share and reputation are being lost;

• your turnover is stagnant or reducing;

• your profits are stagnant or declining and, sooner or later, the first losses are being reported.

The warning dials have been flashing red on this one for years. For example, in 2013 we received a copy of the financial statement from TBI Bekasi Sun City. It showed that the school made a miserable 1.2 billion rupiah in revenue in 2012. In other words, the total revenue before costs were taken out was around $120,000 a year. Now compared to many of TBI’s competitors that was just peanuts, and it was massively down on what the school was earning in 2008. The same pattern could be seen in 2013 at TBI Kelapa Gading where students were exiting in droves under the farcical mismanagement of Nunu Pratama.

However, the big picture is even more devastating for this company. When Global Bahasa collapsed in early 2015, newspaper reports said that 4 billion rupiah in revenue had been taken during the three months that their most recent branch had opened. Just one branch! Let’s just compare that to TBI Bekasi. A Global Bahasa branch had raked in more than three times as much money in one quarter as TBI Bekasi was making in a year! And the under-performance of TBI Bekasi was no isolated case. Few of the TBI franchise schools were at all successful.Some were even smaller than TBI Bekasi.

Therefore we find a situation where newcomers to the TEFL industry, many of them without a coherent curriculum or certified teachers, were still able to get many times the revenue of TBI. There were huge amounts of customers looking for English classes in Indonesia, but the market had simply decided that TBI was not the place to go. They were losing market share and moving downmarket at the same time. TBI had become the sick man of the Indonesian TEFL industry and its vital signs were getting weaker and weaker.