How to Decide if There is a Market for a School?

In this blog, I will help you to choose the right market for the school or any other educational institution. Now that you are thinking of opening a school, you may have some ideas in mind that ‘I want to open a school in a particular area or near my residence’. But what should be the factors that you should consider?

First of all, some people feel if there are already many schools or playschools, I should open there. Sure, if you are using that strategy when there is a lot of competition already and you want to open a new playschool then that means you have to go in with ‘something different’. The benefit of such an area is that there are already existing playschools – which means there is a market potential.

However, you must keep one thing in mind: you must go to these schools, tuition centres or whatever market you want to enter as an enquiry and see the number of enrollments. It’s not just enough to have a large number of centres, what truly important is the total number of enrolled students. If there is a high enrollment then it is the market you should consider.

But you should only enter that market if you have something unique to offer. It’s no point entering a market like that with a similar offering to what is already available out there. Then only a few parents will choose your school. So, you should make your product 50% better at the same price that everybody else is charging.

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Let’s take a theoretical example. If it is 50% better in your eyes, in the parents’ eyes, it will look about 20-25% extra. Therefore, you should aim for 50% better than what is already there. But how would you achieve that? A bigger campus, maybe better infrastructure, better curriculum, better brand, whatever you can. Think from the parents’ perspective and choose a good strategy. This works in a market where there are already a large number of players.

The next scenario involves an area of the city where there are no established preschools, primary schools or whatever kind of school you are opening. Now there could be several reasons for the absence of schools in such regions. One is, of course, the market is just not there, that means there is no population there or the density is very low.

So ,there is no point in opening a school in an upcoming area. There are a lot of areas called the ‘upcoming areas’ where 5000 flats are supposedly planned, one thousand plots are going to come. But when will they come, maybe 5 years or 10 years from now? You can set up an institution today and wait for people to come. That is a very risky strategy. You should only do that if you have money that you wish to park.

But if you look at the ROI of that investment, it is very low. So if you want to use a strategy, do it only if you have excess capital to invest. The second reason why there could be fewer admissions is there are a lot of areas where retired people live. Now retired people’s children are staying outside, they have moved to the US, they have moved to other areas and there are not a lot of jobs over there. So, it is very important that you should see that there should be jobs in such areas as well. So it is not just the density it is also the job. If there are jobs that means there is a working population who have children, who have young children as well who are likely to send their children to your school.

Now if you find the area like that where there are no existing playschools or schools, then do your research one level deeper than what is peripherally available. Just don’t say this there are no schools here if I open I will be successful. You should as I said check whether there is a population over there and whether they can afford the school. One way to check the affordability is by looking at the plot sizes, is it very small. Look at the number of cars in that area that is a good indicator of affluence. You can do that just like spending half an hour driving around. You can have an idea of whether people can spend a school or not. 


Sometimes what happens is people can’t afford, so there may be numbers but that affordability is not there. Then also, you should check when you go around that area, you can start your search in the morning at 8 o’clock. I know all this is hard work but trust me when you are going to be spending a lot of your hard-earned investment, efforts, you would like to make the right decision. So just spend one morning to check and see where the school buses are going. Sometimes, what happens is that a lot of buses from an area are going to a far off area because there is no good school in that area. As you would expect, that’s an ‘ideal market’ to tap. So, if you do this hard work before opening your school, the results would be very high.

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Suppose you are opening a school in a small town where there are no decent schools, you should ask around, ask the people where do their children go and count the number of buses as well. If it is a playschool, check the number of children who are going to far off distances. Let’s try to understand it in simpler terms. You can just wait at the major intersection and see the outflow of children because at 9 o’clock the direction will tell you which way the children are going. And around after 12 to 2, the children will be coming towards their residences or 2:30 or 3 as per the area.

So, even one day of research is going to save your years of efforts. I know this sounds like hard work but please do this before opening any institution. And if you do your homework properly, the rate of success will be much more! If the already existing schools are struggling and you open another school over there, the chances of success will be much lower. As I said earlier, if there are many schools, you should look at the enrollments. If the enrollments are good, go with the good offering,  disrupt the market and take control of all the children in that area.

Thus, if you could offer a much better school at the same price that competition is offering, then why will your school doesn’t do well. Think about these things before you open any school in any area.

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