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Do many legalities and high investment pose as an impediment in the opening of K-12 schools? We take you through the intricacies of entering the K-12 space.
Anything to do with education is a sensitive subject. Parents and government all get extra cautious for the right reasons. More so, it also becomes a part of the social structure and therefore comes with some bit of social responsibility. Certain regulatory provisions may sound a bit tight but then government has no choice as many K-12 operators have also compromised a lot on their social commitments and obligations.
However, investments in K-12 can be very satisfying and rewarding both financially and emotionally, provided you get the right understanding and balanced expectations.
One needs to keep in mind that investments in K-12 can be a challenging subject, especially if fresh investments have to be made on land or the price expectations are comparable to commercial rates. Most come with ancestor land or school reservation land which brings down the overall costs. Of late, there are many who have the appetite and the patience and are willing to make fresh investments as they figure out it is a long-term project.
Having said that I must admit, investors in K-12 need to understand the following perspective:
= Break-even in K-12 projects may take a couple of years
= Initially the returns will be slow
= Initial returns may fall short of alternate investment options
= K-12 investments have to be considered over a long-term return horizon
K-12 investment is a decision of the heart and the mind. If the objective is only commercial and the view very short term, it may not match up to your expectations. But, if viewed with a balanced approach it can be reasonably satisfying both financially and emotionally.
Like any new project, one needs to look at minimising the risks. The best way of minimising the risks in K-12 and pre-schools is to look at partnering with proven brands as franchisees. The advantages of franchising are that the franchisor has a brand, can show you the right way to invest and lower overall project costs, bringing in academic differentiators to expand faster; giving you amazing tips to lower your school running costs. In the long run, this would give you tremendous returns far better than the cost of franchising. The opposite of that is equally true. The cost of not partnering with an expert can be much more than you can imagine, including failure of the project and all your investments going waste.
Also, remember, franchisees associated with the premium brands break even early or on a better note. Billabong High from the owners of Kangaroo Kids pre schools is one such example. Today it is the most premium successful chain in India and abroad with more than 100 centers. Brands like Billabong can also bring immediate numbers and faster enrollments.
Partnering with a successful brand can give you a huge head start and lower your overall costs in the long run. K-12 space is getting highly competitive and differentiations are non-existent. New operators have to be extremely careful and cautious.
Raj Grover, Chief Mentor, Kangaroo Kids Education
Raj Grover is a proficient CEO turned entrepreneur with extensive experience across global corporations like Nestle, Wrigley’s, HMV and the STAR TV group.
Early 2000, Raj took this entrepreneurial leap and co-partnered with KKEL- Billabong to launch a mid-priced, globally bench-marked model of International schools. A few years later, Raj took another leap, this time in the affordable school segment, demonstrating a whole new opportunity to build a chain of high quality, low cost, sustainable schools.