Start a Preschool in India – The Business Plan
Every locality now houses more than one Pre School and with every vacation going by you see the number increasing. A small concept of creche has taken shape of a formidable business called Preschool. There are players who have done brisk business like Zeekids, Roots2Wings, Little Millenium, Bachpan, Treehouse, Hello Kids, Shemrock Feathers, Kangaroo Kids, Birla, Euro Kids, Little Fingers, Globe Toters, Eager Beavers, Jumbo Kids, Makoons, Wonderkids, Blossoms etc. The list in endless and growing.
There has been an incredible adoption of the concept at both the levels
- Seekers – People wanting to start this business
- Users – People wanting to send their kids to PreSchools
The sector can operate as a private enterprise thus clearing it from the issue of starting a Not for profit trust or a society. The business itself comes with very light baggage in terms of investment – Low Franchise fee and Low infrastructure cost encouraging lot of entrepreneurs to start. one doesn’t require people too qualified to operate this business thus make it easy to recruit and run such enterprise. Obviously the catch becomes scalability, customer business life and low cost of entry for rivals.
Now coming to the business plan (sort of Project Report) for such an enterprise, below are my inputs
- 2500 – 3000 sq. ft. of built-up area, preferably on the ground floor in a residential locality.
- Some open space for play area becomes an added advantage
- Franchisee Fee: Rs 2.5 lacs ~ Rs 5 Lacs depending upon the franchise
- Teaching aids and materials: Rs 3.5 lacs ~ Rs 5 Lacs for all 4 classes(Play group, Nersury, KG 1 and KG 2).
- Teachers Training: Rs 5618 ~ Rs 10,000 (some brands charge it some don’t; most of the established players do)
Support from the company / franchise / Brand:
There are two aspects which really helps inexperienced in this business pick up the ropes one is Content & Curriculum and the other is Designs and Promotion Materials. Because these are the two things which really costs money and for a Small entrepreneur it is difficult to invest in content research and professional designing.
Besides that this is what Company’s representative shall tell you in the sales pitch –
- Content and Curriculum
- Teaching Aids
- Facilitators (Teachers) Training & Orientation
- Commercial Training & Counseling Tips
- Competitors Analysis & Data
- Regular Visits by Academic experts
- Branding & Positioning
- Providing Operational Inputs & Product Up-gradation
- ERP for managing day to day operations of the school
- Digitized and license based curriculum and manual
- Guidelines -Traffic Building, Marketing and Promotional Material
- Required guidelines & assistance in maintaining Hygiene & Safety
- Nutritional Inputs
- Continuous Value Addition
Revenue Sharing : 15% royalty will be charged by the company on the fees collection rest 85% will be the franchisee share.
|SCHOOL FEE COLLECTION||@||1st Year||2nd Year||3rd Year||4th Year||5th Year|
|No. of Students||60||100||150||200||250|
|Student Fee (a)||35000||2100000||3500000||5250000||7000000||87,50,000|
|Operational Expenditure (Opex) :|
|Salary (Chief Learning Officer)||8000||96,000||1,05,600||1,16,160||1,27,776||1,40,554|
|Salary ( 3 Teachers)||6000||2,16,000||3,60,000||6,00,000||7,20,000||9,00,000|
|Salary (3 Aaya)||3000||1,08,000||1,44,000||1,80,000||1,80,000||2,16,000|
|Marketing(as per requirement)||2,00,000||1,00,000||1,00,000||1,00,000||1,00,000|
|Student Kit & Uniform|
|Total Expenditure (b)||13,41,000||17,09,200||23,37,970||28,37,064||34,12,905|
|Net Profitability (a-b)||7,59,000||17,90,800||29,12,030||41,62,937||53,37,095|
|Day care - 12 to 4 pm|
|DAY CARE||@||1st Year||2nd Year||3rd Year||4th Year||5th Year|
|Day Care Kids||20||30||40||50||60|
|Fee Collection (c)||20000||4,00,000||6,00,000||8,00,000||10,00,000||12,00,000|
|Food and Milk||-||-||-||-||-|
|Total Expenditure (d)||1,68,000||1,68,000||1,92,000||2,52,000||2,76,000|
|Total Income (c-d)||2,32,000||4,32,000||6,08,000||7,48,000||9,24,000|
|Activity / Hobby Classes ( 5 - 8 PM)|
|ACTIVITY CENTRE(Yoga/Music/Dance etc)||@||1st Year||2nd Year||3rd Year||4th Year||5th Year|
|Evening Activity Kids||30||40||50||60||70|
|Fee Collection Û monthly||1000||3,00,000||4,00,000||5,00,000||6,00,000||7,00,000|
|50 % to Partner (f)-total expense||50%||1,50,000||2,00,000||2,50,000||3,00,000||3,50,000|
|Total Income (e-f)||1,50,000||2,00,000||2,50,000||3,00,000||3,50,000|
|Total Income (a+c+e)||28,00,000||45,00,000||65,50,000||86,00,000||1,06,50,000|
|Total Expenditure (b+d+f)||16,59,000||20,77,200||27,79,970||33,89,064||40,38,905|
|CAPITAL EXPENDITURE (CAPEX)|
|Teaching Aids Materials (TAM)||350000|
|Interior - Exterior and marketing||200000|
Doesn’t matter what business you start, till the time you can manage your expectation from it, you will stay happy. For this business also, one has to realise their are issues with scalability, sharing of royalty, low shelf life of customer, low intellect workforce requirement, costs always under stress due to low entry barrier by the competition etc.
If you can make peace with all the above, this business is here to stay and growing.
I am also now a partner with a School consulting company which helps budding educators or investors start school or gain access to help related to school. The help could be in the form of Turnkey School Consultation, Detailed Project report, Project Finance, Business Plan consulting, Recruitment planning, Infrastructure consultation, Affiliation Consultation, Teacher’s Training, Academic and Curriculum Planning. I now have a decade of work experience. I strongly believe in improving every day and I have tremendous respect for people who pursue their dreams with undying passion and enthusiasm.
I have worked in Mumbai for about 6 years as a Marketing-Media professional which has helped me in shaping what I am today. I am Chemical Engineer with an MBA in Marketing.
You can know more about me at www.linkedin.com/in/abhineysingh
You can mail me on firstname.lastname@example.org or call me on +91 70002 40006. This number is also on watsapp.
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