Commercial Challenges Preventing Growth in Education Businesses | Executive Search & Leadership Insights for Education

Alex Lockey

Alex is Managing Partner at Bolt, leading executive searches and board advisory work for education and training businesses.

Over the years, I’ve seen the stunted growth in the education business space. Based on my experience, I’ve broken down the main commercial challenges stopping education businesses from scaling. I also suggest leadership strategies which I believe can help unlock sustainable, long-term growth.

Why Scaling Education Businesses is Harder Than It Looks

At first glance, education businesses appear perfectly positioned for fast growth. They tick so many boxes:

Consistent demand for high-quality education and training.
A strong, mission-driven product which leaves a lasting impact.
Secure steady income from established sources including government contracts, subscriptions and employer partnerships.

However, many of these companies seem to experience a stall in growth when they reach between about £10M - £50M in revenue.

So what’s holding them back?

It is not down to a lack of demand. The need for quality education, ongoing training, and upskilling is greater than ever, especially with digital learning and lifelong skills now expected from employees.

It is not the quality of the product, either. Many businesses deliver excellent outcomes and have a solid track record. But they still struggle to translate that success into consistent growth.

The truth is, that the biggest roadblocks often come down to commercial, structural, and leadership issues.

I’ve seen this countless times and, ultimately, it can chip away at a company's valuation and exit plans. The good news is that fixes are easier to come by than one might imagine. It requires business leaders to take a high-level view and pair this with people and process changes.

Over-Reliance on Government and Grant Funding

Many education providers depend heavily on government funding, whether it’s from the Apprenticeship Levy, Adult Education Budget (AEB), or Skills Bootcamp funds.

While these funds are crucial, they can also create a shaky foundation for long-term growth.

The key problems are:

Policy changes (which we have seen in the past), result in lost revenue almost overnight. I can recall countless examples of business interruption and also ultimate business failure from a policy shift or failure around regulation.
Shifts in compliance or funding priorities leave many providers scrambling to replace income.
Over-dependence on public funds makes it hard to move towards models that rely on private or employer-based income.

How can education businesses fix this?

Use government funding as a boost, not a foundation. It should be a fuel source, not the whole engine.
Develop other streams of revenue. This might include employer-led training, B2B partnerships, and direct consumer learning products.
Embrace scalable business models such as subscription-based learning, enterprise partnerships, or tech-enabled training that bring in predictable, recurring income.

Structural Challenges to Growing Revenue

Despite strong demand, many education companies falter as they try to advance past the middle mile of revenue. Common stumbling blocks include:

Sales models that are too transactional, focusing on one-off deals rather than long-term, multi-year contracts. I see a lot of this in apprenticeship providers who build their revenue operations around learner acquisition. Salespeople are targeted and incentivised on learner headcount achieved per month and tend to overlook wider partnership opportunities and larger deals.
Relying on a single revenue channel, and missing the chance to diversify into employer partnerships or subscription sales.
Poor control over margins and pricing: I’ve seen underpriced services, which force companies to chase volume, which isn’t always sustainable.

To overcome these challenges, companies should look to:

Shift sales efforts towards lasting, high-value relationships rather than chasing quick wins.
Consider outcome-based pricing models where the fee is linked to results for learners or businesses.
Establish and implement a solid pricing strategy which puts customer lifetime value and customer centricity at the heart of everything, encouraging renewals and referrals.

The Leadership Bottleneck: Evolving Beyond the Founder

Many education businesses are born from the passion and vision of a driven founder. In the early days, that passion and vision can drive excellent outcomes for learners. But as the company grows, the skills needed often change dramatically.

At a certain point, it isn’t just about having more customers. There are limits to how far passion can take a business. It’s important to move from a founder-led model to a fully scalable organisation.

This requires a change to the modus operandi:

Leaders should step back from day-to-day operations and focus on strategic growth.
Establish a balance between education expertise and commercial know-how within the organisation.
Build a clear succession plan, ensuring the business stays on track, even if the founder steps aside.

Making this Transition

The founder must become a strategic CEO who builds robust systems and revenue streams.
Hire leaders who understand both the education side and the commercial side of the business.
Plan carefully for leadership change so that the transition strengthens the company rather than causing disruption. This is often such a sensitive issue, requiring humility and introspection from founders to get it right. Having empathetic support from good strategic advisors will be a catalyst to success when a founder is handing over their baby.

Selling to Enterprise and Government Clients Is Tough

Securing contracts with large employers or public sector clients is seen as a golden ticket for many education businesses. But selling into these markets is no walk in the park.

Challenges are numerous, including:

Lengthy and unpredictable sales cycles: Sometimes contracts take months or even years to finalise.
Decision-making is driven by strict procurement rules, compliance checklists, and cost efficiency rather than innovation.
The need to get onto pre-approved vendor lists. This is often a tough nut to crack.

What can businesses do?

Develop an enterprise sales playbook. This should include long-term pipeline planning, dedicated leadership for big accounts, and systems that align with slow government procurement cycles.
Understand your market segments clearly: For instance, what different types of employers or government agencies look for when they buy education services. Put yourself in their shoes.
Use data and real results to tell a story, focusing on tangible outcomes like productivity gains or improved retention.

Remember: Institutions are not buying education for its own sake, they’re buying results.

Failure to Build a Digital-First Model

Many education businesses were built on traditional, hands-on delivery models. They rely on in-person training, manual processes, and outdated systems that make it hard to scale quickly.

Key issues include:

A heavy reliance on face-to-face sessions, limiting opportunities in new geographic markets.
Processes that are too manual, leading to higher costs and inefficiencies as the business grows.
A slow pace of technology adoption. This results in sales, learner engagement, and operational efficiency can lag behind.

How can Educational Businesses Cope?

Invest in modern SaaS platforms and automation. This reduces admin work and improves both learner engagement and the overall efficiency of your operations.
Build a flexible, hybrid model that is not limited by location or instructor availability.
Tackle operational scalability early on: Upgrade your processes and get rid of legacy systems before they become a stumbling block.

Misalignment Between Investors and Operators

A challenge that is often overlooked is internal friction. This stems from investors and the operating team failing to see eye to eye. Education companies sit at a crossroads between mission-driven impact and commercial growth, which can lead to disagreements on strategy or timelines.

Common problems include:

Investors who desire rapid returns, while operators are focused on long-term sustainability.
Struggling to balance profit with the desire to maintain a strong educational mission.
Disagreements over capital allocation: How do you balance investment in innovation versus expanding sales teams or improving operations?

These can be overcome by:

Creating clear value plans that balance growth expectations with the reality of scaling operations.
Bringing in leaders who understand both commercial growth and impact-driven education models.
Aligning incentives within the team and with investors so that everyone is aiming for the same long-term goals.

Final Thoughts: It’s All About Commercial Execution

The education market is thriving. With employers prioritising upskilling and learners actively seeking quality education, the opportunities for growth are massive. However, scaling goes beyond having a great product or delivering strong outcomes, it requires building a commercially resilient, professional, and efficiently operated business.

The education companies that succeed in scaling will be the ones that:

Diversify their revenue streams to avoid over-relying on government funding.
Develop structured, long-term sales and pricing strategies that sustain high margins.
Evolve leadership that can balance mission with commercial discipline and plan for smooth transitions.
Master the slow, bureaucratic sales process that exists in enterprise and government markets by focusing on outcomes and clear value.
Build digital-first models that make it easy to scale operations, regardless of the speed of growth in the market.

At the heart of it, leadership, both in how the company is managed and in aligning with investor expectations, is the key. With the right leadership team, an education business can go from plateauing at £20M to emerging as a category leader worth £100M+.

Where Does Bolt Search Fit?

At Bolt Search, we work with education businesses to help them find and develop the leadership talent needed for sustainable growth. Sometimes, the challenge is finding the right executive who can bridge the gap between a mission-driven model and a commercially scalable business. Other times, it’s setting up a structure that supports scale.

Time and again I encounter founders and investors who undervalue the commercial rigour required to scale and its link to enterprise value. It should be equally weighted alongside all of the crucial elements of an education business: learner outcomes, pedagogy, compliance etc.

If you feel that leadership misalignment, skill gaps, or a weak commercial strategy are slowing your growth, let’s have a chat. The right leadership and structure might be exactly what your business needs to move beyond its current plateau.

Unlocking the Next Growth Phase

Scaling an education business isn’t as simple as it might first appear. It involves juggling multiple challenges, from over-reliance on public funding to outdated business models, and leadership transitions to the lengthy sales cycles in public and enterprise sectors.

But there is a solution. To unlock the next growth phase, companies need to start by rebalancing revenue streams, rethinking sales approaches, embracing digital operations, and ensuring strong, aligned leadership.

If you’d like to discuss how to tackle these challenges, we’re happy to share our insights and experience.