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Opening a K-12 school demands investments of the proportion that only prudent budgeting and financial planning can help to optimize. Smart investors always do due diligence to make informed choices about putting their money into the ventures that will yield expected returns.
For anyone planning to start a K-12 school in India, it’s very important, first and foremost, to peg the expectations right. Aspirations of quick returns and speedy breakeven on investment are unrealistic. The best analogy to school opening that I can think of is planting a tree. You first prepare the soil for the seed and then you nourish the seed to grow into a sapling and then into a sprawling tree. The process is long but the fruit of patience is sweet.
Seth Anandram Jaipuria School, which is one of the leading school franchises in India, makes this process easy to navigate for the investors who come with realistic expectations and a genuine aspiration to run a school long time. We layout a clear path to starting a franchise school through initial investment and then gradually growing the return on investments to break even the operational expenditure (OPEX) and capital expenditure (CAPEX) in the years to come. Here is how it all charts out:
- To open a K12 school, one must have land spanning 2.5 acres to 3 acres
- The initial investment ranges between Rs. 8 crore to 10 crore
- The total project cost would range between Rs 12 to 15 crore
- The payback period on OPEX is about 3 years
- The payback on CAPEX starts 8 years onwards
Having understood these basics, we can dive into the nitty-gritty of budgeting and financial planning of Seth Anandram Jaipuria K12 School to ensure timely returns. The good thing about starting a franchise school under the banner of a reputed brand like Seth Anandram Jaipuria Group of Schools is that one gets the high launchpad to capture the market from the get-go. This high launch helps in quick initial returns and low cost of acquisition of students or spends on marketing. Once a good launch is ensured, smart budgeting and financial planning become crucial.
Fee Structure planning plays an important role in financial management. The majority of OPEX recovery and breakeven depends upon the fee structuring. The school must, however, comply with the state fee policy, if any.
Capex investment should be planned meticulously. It is usually wise to phase out the construction of the school building.
Meeting Parents’ Expectations
One fact of the present-day education scenario is that parents and students expect new facilities year over year. The investor should keep that in mind while planning a school, as it helps in retention, marketing, and creating extra facilities beyond school hours too.
Parents also expect and negotiate for fee waivers in the initial years of a school’s running. The investor should make a provision for such possible waivers in financial budgeting.
Abiding With State Policy
Each state has its rules and guidelines for schools. For instance, as per the fee policy of Uttar Pradesh, a school can use 15% of funds for commercial use. Hence, it’s important for the school to make the plans accordingly so as not to land in trouble at later stages.
Availing Systemic Provisions
An investor may not initially be able to afford to pay the salaries to teachers as mandated by state norms. Here, an affidavit may work as documentary proof that the investor may provide state pay norms to the teacher after the stability of the school and a consolidated salary as mutually agreed upon can be given.
In addition to these measures, Seth Anandram Jaipuria School actively provides financial guidance and counsel to all its partners so that the franchise school grows to become not only a going concern but a profitable venture.
Jaipuria Group of Educational Institutions