PLAY SCHOOL BUSINESS

PLAY SCHOOL BUSINESS

PLAY SCHOOL BUSINESS

Taking up play school business is a business stance that is gaining popularity among the entrepreneurs of India. The primary reason this venture as a business is gaining popularity is because of its lucrative nature in terms of low investment, even lesser legal compliances and huge outcome. Once settled, this business does not give you the stress like recessions and low impacts. Healthcare and education are two such sectors which are least affected by any kind of economic crises

Analysis of the Market

The business model has a good cash inflow and potential of seeing substantial growth based on the entrepreneurial drive driving it. The potential of growth in this sector is humongous. Following are a few graphs that will show the potent growth in this business filed. Accordingly, the competition in the market is also substantially high.

Structuring a playschool business in India – Process Chart

But no matter how lucid and easy going business field one might be in, one certainly needs a good business plan to grow aggressively in the market. As it is commonly said, a stagnant business/product is as good as a dead business. Therefore, to start a business too, one needs a good business structure. Here are a few items that are supposed to be in the checklist in starting a playschool business:

Selecting a business model
When one plans to start a playschool business in India, he has two options in hand i.e. either start his own venture or take up a franchise. Both of them have their own set of advantages and disadvantages. On getting a franchisee, there are certain benefits like there are certainly advantages like: There is no requirement of aggressive marketing or campaigning that is taken care of by the brand-name holder. The terms set out in the agreement for setting up a business model is easier and has very low investment criteria. Let us take a look at the top franchisors and the criteria they site Required investment for CIPS Playschool is just Rs. 5 to 10 lakhs and the required floor area is 1000-25000 square feet The return on Investment assured by this franchise is easy to achieve and are considerably high. The risk factor involved in such franchise business is very less. Professional support in terms of setting up the school (pre-defined infrastructure, staff and administration), managing it, getting market recognition etc. are some advantages of having a brand franchise.
Commercials
One of the important aspects before venturing into legal formalities is to have the commercial structure clear. What could be the source of funds? How much of debt or equity needs to be injected in the business:
Investment Required
Land and Building – Ranging from 1000 square feet to 2500 square feet approx. Capital Investment – Ranging from Rs. 3,00,000 to 10, 00,000 (depends on the scale of business.) Furniture like plastic chairs, tables and classroom equipments amounting to 40,000- 80,000 Play equipments like rockers, slide etc. Also book racks, wall hangings and staff furniture needs to be considered. The Return on Investment as quoted from famous franchises is approximately 2 to 3 years depending on the franchise and the scale of the business. Setting up a franchise is easier. The process is as follows:
A simple forms needs to be filled in their website
They are going to conduct the survey if one meets their criteria to select a favourable location, do the marketing and campaigning. You will be able to start a playschool with their guidance at every step. The factors that need to be taken care of are as follows: Geography – Parents till the initial stages of the growth of the child do not want to send their children far, therefore it has to be in a residential area with open spaces around. Again depends on the locality. Demographic Profile – Once the location is fixed, than one needs to look for the demography of the area. A place with a nuclear family would be more likely to send their children to play school than places with joint family where the child mostly gets its education from elders. Also it is advisable to keep a tap on the type of income group people that live there. It will help set the fee structure. Market Survey – Conduct a survey to find out the potential number of students and the preference of the kind of playschool.
Break Even Point
Step 1: From the industry standard, let us keep the Break Even Point (where both Fixed Cost and Variable Cost are absorbed) at 1.5 years The Fixed Cost is assumed at initial stage as INR 7, 00,000 (FC) The Variable Cost is expected to be 4, 00,000 (TVC) Also, we set a target to break-even our business in 1.5 years. Step 2: Find out the annual fees that your competitors are charging to estimate your fees. Let’s assume that the fees charges would be INR 25,000 per student and the number of students to be X. Therefore the Total Revenue (TR) would be INR25, 000X. Step 3: Contribution = TR – TVC 25,000X — 4, 00,000.’ Step 4: We have kept the break even timeline as 1.5 years. Whatever is earned over and above our variable costs, will be used to cover the fixed expenses. Post that all earnings would be to be profits of the institution Divide FC by Contribution to get your breakeven period in years. Therefore we get the following equation: 700,000 / (25,000X — 400,000) = 1.5. The value of X stands as 34.67. Thus we need at least 35 students for first 1.5 years to realise all costs. Even after the breakeven point, the profit will be INR 4, 75,000.
Legal Formalities
In case of playschools, the legal compliances are very minimalistic. Thus the cost of litigation that may arise out of such process is also very less. The Shops and Establishments Act is not applicable In case of playschools, the Act is silent and one can run your playschool without a registering under Shops and Establishment Act. Running it in a residential area: Most playschools are located in residential areas. The first thing that needs to be looked into is whether the rental agreement permits it. Also, if it is an apartment or consortium or society apartment, the bye-laws of the apartment/association/ society consortium should be looked into for permits to run a playschool. Otherwise, there is no running a playschool in residential premises. Requisite permission has to be taken from the society it is operating in. It has been decided by Courts in different states that a chartered accountant, yoga teacher and lawyer can carry on their work in residential premises so there is no reason why a playschool cannot be carried on as well, as long as the disturbance to neighbours is minimized
Selecting a business model
take up a franchise. Both of them have their own set of advantages and disadvantages. On getting a franchisee, there are certain benefits like there are certainly advantages like: There is no requirement of aggressive marketing or campaigning that is taken care of by the brand-name holder. The terms set out in the agreement for setting up a business model is easier and has very low investment criteria. Let us take a look at the top franchisors and the criteria they site Required investment for CIPS Playschool is just Rs. 5 to 10 lakhs and the required floor area is 1000-25000 square feet The return on Investment assured by this franchise is easy to achieve and are considerably high. The risk factor involved in such franchise business is very less. Professional support in terms of setting up the school (pre-defined infrastructure, staff and administration), managing it, getting market recognition etc. are some advantages of having a brand franchise.