Big education thrives in small rooms
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Feb, 04 2012

Big education thrives in small rooms

Like any other industry, small formats in the education and training industry are gaining ground too due to rising constraints related to buying a space or even renting it.

AS consumer preferences are shifting in terms of developing child's skills, affordability and investment, franchisors have to put their thinking caps on to bring in business opportunities that are easy to operate. By way of small formats like abacus training, many investors have been successful in ensuring triple profits through franchising route.

On commenting about his take on the trend of foraying into diversifying into small formats, Rajnikant Rao, Co-founder and CEO of SmartQ, believes, “Small formats help both the consumers (students/ parents) as well as franchise owners. Parents find it easier to choose from a portfolio of available services (education or otherwise) suiting their pockets and needs. Franchisors find it easier to attract franchisees since the investments are small, thus helping them grow quick.” He adds that franchisees too like smaller formats since they are able to balance it out with their other commitments.

On agreeing to him, P V P Kumar, Director, Skills Education Academy, says, “Low start-up investment, good RoI and easy to start set-up are some factors which influence the success of small formats.” The major growth driver is that it requires negligible investment starting from Rs 20,000 to Rs 10 lakh. Also, the area for starting the venture ranges between 150 sq.ft and 700 sq.ft. Another reason that works wonders is that it is highly replicable and one can expect returns at a faster rate.

Business potential

Nowadays, small formats in education sector have opened up gates of feasible opportunity for everyone - be it college/grad school pass-outs, women or even retired professionals, allowing them to work with comfort. Brands such as Smart Q, Promise, Aloha India, Genius Abacus and Vedic Maths, Skills Education Academy, Brain O Brain, Brain Train and many more rely on franchise route for replicating success.

Without a doubt, experts believe that education concepts operational via small formats like developing child's skills through abacus training or nurturing the child's overall personality have become the talk of the town in no time and the industry too is growing like never before. Informing as how the concept of child skill development is set to make strides, Kumaran K, Chairman & MD, Aloha India, says, “There is certainly a demand for post-school mentoring. This need also arises from the fact that individual children do not get sufficient attention from the school teachers due to the large class sizes, more specifically in urban areas. The demand for post-school mentoring has led to the development of several innovative products such as abacus and multimedia education.”

Commenting on the same, Raji Reddy K, Founder & CEO, Genius Abacus & Vedic Maths says, “The current market size for skill development in India is projected to grow almost 10 times, albeit over a smaller base. Multimedia in schools, child skills development, IT training and E-learning, preparatory and vocational studies, though relatively small segments, are increasing rapidly.”

Upside

Operating an education business via small formats is relatively new but franchisors expanding through the same are writing their own success stories. When asked about the altering trend in education domain, Gulraj S Shahpuri, Founder, Promise, says, “As the need to have ground floor, main road footage is increasing, the rental prices are also increasing in high-visibility locations, many franchisors felt that the only way they could achieve their goals was to find ways to fit their concepts into smaller formats.” While, Reddy believes, “Entrepreneurs are diversifying into small sector businesses like day care centres, abacus and vedic maths training, and children personality development because of low investment and more profit. Franchising system is one of the lucrative businesses for not only business tycoons but also for youth, unemployed and educated women. Small format opens new business opportunities for young businessmen to grow independently and to serve a better society.”

Other reasons behind switching to small formats are that not every franchisee has the capability to invest money in large business venture. Brand replication becomes easier as franchisor endows with complete training and support and furthermore, it is low on cost and assures good returns.

Commenting on the franchisees' profiles they would like to partner with, Rao states, “Women in the age-group of 30 to 45 years, graduates with good work experience, good communication, who have been in the locality for many years and have good networking.” Skills Education Academy prefers to partner with educated housewives, school teachers, VRS holders, home tuition centres, play / preschool centres, college students and part-time job seekers. Operating a skill development centre not only allows in achieving a break-even in small time but it calls for lower over-head costs.

Be it a service industry or retail, location is what matters. Hence, it's extremely important that a franchised centre must be opened in the right location that intends to assure extra bucks. For Skills Education Academy, an ideal franchisee centre should be located in residential locality.

Downside

Every business, be it big or small, goes through an array of challenges. As per Kumaran, “There is a dearth of individuals and institutions that are committed to professional child skill development.” Advising franchise investors, Kumar says, “Before investing in a franchise, investors are advised to do a thorough study of the companies offering franchise for such programmes with respect to content and quality of the programmes, profitability on investment and support to the franchisees, etc.”

Child Skill development is not a child's play, it is important for the franchisor to pass on the timely support to the franchisee on upgrading the course materials and training manuals. On providing a training support, Rao adds, “We provide our instructors with methodology training where they get trained in handling the concept of SmartQ. Detailed content training for each level is to be completed by an instructor prior to conducting the level class. Periodically, feedback from instructors' community is shared with one and all.”

Road to success

On an expansion front, Aloha India is running 1,200 unit franchisees pan-India (except Bihar and Orissa). Moving further, Aloha India expects to expand by doubling i.e. 2,400 unit franchisees in pan-India with special drive in southern and north eastern states and also looking for good partners in MP, UP, Chhattisgarh and Jharkhand. Besides this, metros cities will also remain on their expansion radar. At present, SmartQ operates 50 franchise outlets in 15 cities. Marching ahead, Rao is quite optimistic about adding 200 more in its portfolio and expanding their brand's footprint in about 40 cities. On the other side, Skills Education Academy operates 270 plus centres and they expect to open 500 centres in all over India.

At present, Promise runs more than 50 centres across India. Going ahead, the company will be partnering with the schools. Genius Abacus and Vedic Maths is currently running 250 franchises all over India and 7 overseas franchises in USA, UK, Canada, Thailand, South Africa, Israel and Turkey. Reddy adds, “Our future plans are to implement Abacus and Vedic Maths in each and every corner of India and abroad too, with the help franchising system.”

It's a much sought-after industry. So, in the coming times, the small formats in education sector are set to thrive with a bang as children's need for supplementary education is endless.

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