Search Business Opportunities
Business Categories
Apr, 17 2011

LION'S SHARE IN EDUCATION INDUSTRY

The supplementary education business is much in demand, thanks to the growing need of students and parents alike for developing skills. The demand for quality education has become the need of the hour, especially in the segment of competitive exams, fuell

THE supplementary education industry is gaining momentum with each passing day. Supplementary education is out-of-the box strategy of mainstream education, wherein the categories such as child skill development (through abacus training), online tutoring, test preparation and spoken English are evolving out in a big way, offering viable prospects through franchising. Amongst all other segments in education, supplementary education owns the maximum share.

Earlier, the market for coaching/tutoring services was dominated by locally run-institutes and home-based tuitions. Owing to low quality and poor infrastructure of government-owned institutions, parents and students now prefer private institutions in all spheres. Throwing light on the evolution of test preparation market, Dipanjan Das, Senior Vice President and Member, Management Council, Career Launcher, informs, “For exams like CAT, GRE and GMAT, the market seems to be converging towards metros and tier 1 cities, the fastest growing segment while for government exam category, it's evenly spread across each tier of cities. IITJEE and medical prep industry continues to be fragmented and unorganised.” As per Dr T.K. Bansal, Chairman, Founder of Bansal Tutorials, “The test preparation market has been growing at an average rate of about 30 to 40 per cent per year. The main exams in which the growth is about 50 to 60 per cent are AIEEE, IIT-JEE and CAT.”

Business potential

Currently, supplementary education enjoys a lion's share in the education and training industry by fuelling the demand generated due to lack of regulation in the K-12 segment. Supplementary education providers can take the lead by forging alliances with local schools in the proximity. As per expert's views, the supplementary education is poised for a rigorous growth in the coming years by triggering the path-breaking prospects for edu-preneurs to pick from. Highlighting the catalysts of growth, Das says, “The growth drivers have been the demographic quotient in terms of age group: population mix, growing spending power of the middle class and the demand for quality education as an investment, to compete in the future.”

Franchising

By propelling the marketability of the brand to different territories, franchising is riding high on success. Many coaching/tutoring / finishing institutes are stepping into franchising to fuel their growth and expansion in the Indian market, especially in smaller towns and cities.

As an already proven concept, it acts as a catalyst in attracting skilled edupreneurs, who are passionate to partner with the industry leaders. As per the stringent norms followed by franchisors, the franchisee selection follows a specific criterion that usually varies as per the segment of education they choose to run as a franchise. Das notifies, “We, at Career Launchers, look at partnering with edupreneurs. What we mean is that we look for people with an entrepreneurial mindset and outlook and those who are sensitised towards education to the extent that they must be capable of taking classes.” The strict parameters are also implemented while hiring the right faculty for the franchise centres. As per, Devesh Mathur, Head-Franchise Operations, IMS Learning Pvt. Ltd, “The selection of faculty member is product-specific. Some pre-requisites required to become IMS faculty include excellent oral communication skills and presentation skills, flair for teaching; excellent subject knowledge, and he must be a graduate or postgraduate.”

Informs Shampi Venkatesh, Head, Operations and Channels, ILS (IT), NIIT Ltd, “NIIT imparts a special edge to its partners, particularly in the highly competitive global IT training landscape. Right from the time of induction, our business partners have to undergo a series of training programmes; from technology to marketing to leadership. All trainees go through faculty assessment and certification.” Depending on performance, every year, NIIT selects 20 business partners.

Expansion

Supplementary education is highly competitive as students' demand for education is mounting. With the entry of private bigwigs in the education and training sector, independent institute owners are facing tough competition.

For making way into a new location, franchisors consider different parameters in terms of assorting location with feasible rentals and expected footfalls, their product potential and existing institutes in proximity.

According to Bansal, “To start a franchise of Bansal Tutorials, the investor must possess a carpet area of about 1,600 to 2,000 sq.ft and must invest between Rs 20 to 22 lakh. It does not matter whether they are already from the field or not.” BTPL is targeting to establish centres in all tier I and II cities, including state capitals. “We are planning to start 10 more centres in this fiscal year,” he adds.

For IMS, the space varies from 1,000-2,000 sq.cm and investment ranges from Rs 10 to 30 lakh.

Flip side

Maintaining the brand's image as per guidelines put across by the franchisor, getting required volume of students, offering franchise to the existing owners can turn out to be knotty as they lose the liberty to run the centre as they want, competition faced by franchisees in terms of price points, recruiting the skilled manpower and retaining them are major hassles that are being confronted by the franchisors.

Other challenges that are being faced by the franchisees are lack of promotional/marketing activities that leads to low conversion and walk-ins as it do not match up with the national branding standards generated by the franchisor, regular up gradation of the product/curriculum is required as entrance test patterns changes and skilled manpower is needed to deliver the updated product, managing the staff crisis, soaring real estate prices and picking the ideal location is critical for business success as total return on investment (ROI) counts hugely on the location type.

Mathur, feels, “The franchisees operating in different locations may face problems related to logistics, materials, marketing activities, etc, as these things are centralised. Therefore, the model of the franchisor ensures that these all are effectively managed to minimise the possible complexities.”

Comment
Insta-Subscribe to
The Franchising World
Magazine
For hassle free instant subscription, just give your number and email id and our customer care agent will get in touch with you
OR Click here to Subscribe Online
Daily Updates
Submit your email address to receive the latest updates on news & host of opportunities
Trending
More Stories

Free Advice - Ask Our Experts