I have respect for Horatio Leafblower and the spirit of his answer. Flying is still one of those crafts that is passed from one individual to another. I like that this has remained so for the last hundred years and keeps going as we progress into the 21st century. If it weren't for those passionate pilots who decided to teach others, many here just wouldn't be flying. And I think that this is very much visible in the way schools are run: they seem to be those homegrown businesses that revolve around one or two key individuals whose skills shine airside but look a bit amateurish landside. I like the spirit but I don't think many will be able to survive the massive red-tape in the Australian GA landscape without streamlining their business.
By the way I am very interested in the economies of running a flight school. @Horatio Leafblower: would you be willing to share some specifics?