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Apr, 06 2012

OFFERING SUPPLEMENTS FOR BIZ GROWTH

To succeed in a competitive examination is no more a child's play. If you desire to rake in extra bucks in supplementary education industry, cash in on this lucrative sector, as it already enjoys a bigger slice of the education industry pie.

THE field of education today has become very competitive. Students have to appear in board examinations, aspiring for high scores. They must also strive to get through the entrance tests for admission at a prestigious institution. This puts pressure on them. Moreover, parents also want to enhance the mental skills of their children. Here, the role of supplementary education becomes significant. Building child's self-confidence, improving his skills through systems like abacus calculations, developing his personality and offering him coaching services are the areas catered to by supplementary education in India. Currently, categories such as child skill development, coaching, tutoring and test preparation are gradually flourishing. Besides supporting formal education (Pre-schools & K-12 segment), the supplementary education segment is branching out in a big way.

Whether it is for clearing board examinations, or the medical or non-medical entrance tests, the demand for coaching classes has risen offering business opportunities in this segment. India's supplementary education segment today has the largest share in the education space, as it's been growing at a faster rate.

About the market size of this segment, Prof. Jagdish Walawalkar, MD, Ideal Classes Pvt. Ltd, said: “The market for coaching-classes forms 64 per cent of the non-formal education industry, and the tuition market, in turn, forms 80 per cent of the total coaching class opportunity. It claims that the franchising sector in India is growing at a swift pace of 35 -38 per cent per annum.”

Growing tribe of edupreneurs

For edupreneurs, franchising has always been regarded as the apt business model. India's supplementary education industry is highly organised as it is led by top-notch players such as SmartQ, Promise, Ideal Classes Pvt. Ltd, Vidyalankar, Career Launcher, and a host of others.

On tapping the potential growth of supplementary education segment in India through franchising, Dipanjan Das, Senior Vice President & Member-Management Council, Career Launcher, said: “It has helped us in providing quality education, spreading reach, and has enabled a fusion of academics and entrepreneurship.”

Stressing on the growth of test preparation category through franchising, Jagdish of Ideal Classes, said: “The informal and supplementary education has the King's share of education franchising. Professional and vocational skills are the most franchised in education category, capturing almost 33 per cent of the total share, followed by IT training.”

Franchise report card

Currently, Ideal Classes operates its units in 43 cities with 34 franchise and 9 company-owned outlets. An Ideal Classes centre would require space of 800 sq.ft with investment starting from Rs 4 lakh to Rs 6 lakh. For scaling up their presence across the country, the company will be adding at least 50 centres across B & C cities.

Career Launcher also has its footprint in 110 cities, with 175 being a blend of franchised and company-owned format. The company prefers to open its institutes near schools and colleges. About its expansion plans, Dipanjan Das said: “We are planning to open 40 odd centres.”

Invest in franchise support

Once a franchise deal is clinched, franchisors render their complete support to its franchisees through a set of extensive training systems. IDEAL maintains quality standards at the franchisee-owned branches by taking such steps as deputing quality teachers, providing study materials and technology, etc.

Similarly, Career Launcher focuses on providing counseling, business development, soft skills and academic training to its franchisees.

Challenges & strategies

The franchisees may face problems related to logistics, course content and their franchisor's marketing initiatives. Therefore, a centralised logistic process with predefined procedures and deadlines is the way out.

Besides, a stiff competition from the unorganised market, delivering quality content, and inability of conversion franchisees to maintain the brand's standards are some of the other obstacles.

About the challenges they faced while setting up their organisation, Dipanjan Das cited customer apprehension regarding quality maintenance as one of them. Therefore, they select business partners carefully and provide them business assistance in key areas.

However, Jagdish Walawalkar of Ideal Classes feels the education sector is likely to witness consolidation, competition and rise in standards. He also believes that every company's marketing strategies differ. About franchisee's share in marketing expenditure, Walawalkar said: “We spend almost 15 lakh in advertisements and charge 50 per cent from the franchisees.”

The underlying message is that the supplementary education industry's growth looks promising. This is what Career Launcher's Dipanjan Das also believes. “It should grow at a 25 per cent Compound Annual Growth Rate over the next five years,” he said. Besides, the industry is also anticipated to be more organised with time. Therefore, the supplementary education industry is poised for a faster growth. Franchising is being hailed as the safest route for edupreneurs to earn enduring profits.

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