- July 5, 2017
- Posted by: eroconnew
- Category: General reading
When we talk about undertaking feasibility study for a school project, it is very different than how feasibility studies are for other projects such as industrial projects, factory set ups, hotels etc as the feasibility is done to gauge whether the venture could be set up at the location or not. In India, in case of a school project, the feasibility is always in terms of kind of school to be introduced at a particular location and right budget to start. Arriving at a right budget is upon assessment of Volume addition trend prevailing in that area. The volume addition trend will be the guiding number in determining the project size.
Second important aspect is assessment of cost of land versus Investment in the project ,therefore a detailed project report for a school project will help you in understanding not just the market dynamics but will also set the right investment size at a particular location.
The vital questions which get answered through a feasibility study is
- What is the catchment area from where the students are to be pulled?
- What is the market segment for which the school is being introduced?
- The pay capacity of the market segment long with the spending mentality of the market segment towards education
- Determination of the level of exposure of the market segment in terms of facilities being provided by the existing competitors catering to our target market segment.
- Detailed Competitor Analysis and understanding the mindset of the market dynamics.
- What shall be your school’s concept note, market entry strategy, facility plan, USP creation.
- Projected potential and volume addition trend of the target market
- What should be the Project Budget
- What shall be the right direction and approach for investment of funds to get the desired outcome
When you are able to answer the above questions, then are you able to work out on the finer details of the venture plan.
As a promoter, it is very important for you to understand the required investments to be made. When we talk here about required investments, it is about the effective utilization of the available budget to create the best outcome which is balanced in terms of being a complete product offering to the market. The success and sustenance of school project depends on the word of mouth in the market. A positive word of mouth could only be created when you continuously work towards formation of a positive feedback in the market in terms of the facilities being provided, implementation of curriculum as planned, school academic progress, the development of the students and on the results. But again, first year admissions are heavily dependent on the infrastructure that you develop and hence whatever constructed should project the complete concept as planned. So as a promoter, a definite and detailed project planning is required determining the utilization of funds in what all directions to come up with a balanced product for the market and accordingly establish the foundation of a successful venture.
Erocon, the best consultants in the country and having done feasibility study and planning for over 200 school ventures, generally segregate their report into volumes.
Volume I deals with the Recommendations of the project. Post our research and survey team visit the site and work out gathering all possible inputs to analyse the data and accordingly conclude our recommendation on the kind of venture to set up at the given location along with detailed concept note, market entry strategy, USP creation, recommended fee structure, projected volume addition trend for next 10 years, associated and phase wise infrastructural plan.
It is extremely important for the clients to understand in terms of what they are required to construct in the first year determining their exact investment in terms of development of the infrastructure along with keeping provision for 1st year of working capital expenses. All of it is dependent on the volume addition trend of the location and the market, age group of students expected to be added on to thereby determining the necessary facilities to be provided in the initial years of school operations and infrastructural plan along with HR plan for 10 years as prepared by Erocon is in line with the occupancy in school as expected and projected post detailed market study thereby safe guarding clients from over spending on development of unnecessary infrastructure.
Erocon develops a model where the promoters are required to invest for the Year 1 development of the school post which all the phase wise expansions are carried out over a horizon of 10 years and are funded through the school income surplus thereby developing a self sustainable growth model while making sure that our clients do not have to spend for the future expansions.
Post approval of clients on Erocon’s Recommendation of the project, Volume 2 is worked, which is the economics of the project. Under this volume, detailed costing is worked for the school as accepted and approved by clients. Here the year 1 detailed expenses and investment amounts are worked out along with recommended free structure for all classes as planned for next 10 years adjusting for inflation’s. Based on the fee structure, we work out on the account receivables. The expenses are worked out in terms of what all facilities as planned for school and when to make them operational and on the HR Plan as prepared determining the Pre and Post Operational Cost.
Erocon works out on the Loan repayment schedule and accordingly on the detailed Profit and Loss Account for next 10 years taking into account the phase wise expansion plan expenses and loan repayment amount. The profit and loss account are accordingly adjusted after accounting in for all factors as planned for the school over a 10 year horizon thereby giving our clients the reflection for the performance of the school for next 10 years.
Detailed Project Planning report post a feasibility study and market survey by Erocon helps promoters and clients understand on the market dynamics of the location where they could be planning to start a school venture. As already mentioned and as you would have figured out, it is very important to invest your energies and funding into the right direction while determining the type of school workable at the given location or else the promoters would always remain directionless and not know what to do to with the venture.