If you are planning to open a 10+2 school then do watch this video where Mr. Amol Arora – Expert of Schooling explains the minimum amount of investment required to start a 10+2 school & the potential threats associated with opening a 10+2 school with less than minimum investment. If you are serious about opening a 10+2 school then this video is a must watch for you!!
This question is from Mr. Lalit who says how much is the investment required for 10+2 school?
See, the investment for any school starts with first understanding how much fees you can charge. Because if there’s a good paying potential, of course, then that means parents have high expectations & your investment in infrastructure would be higher.
If however you’re in a rural location where parents can’t pay much then you have to make the economics work at a very low cost as well. See, the land cost you would know in your area. So that’s not something I can comment on.
The second part is the cost of building an infrastructure. Typically, for a 10+2 school, you should build about 15,000 square feet. That’s what I ideally recommend that’s good for about 300-350 kids. And the cost of construction plus interiors varies from 1000 rupees to 3,000 rupees a square feet for the high-end schools. I am setting up a school in Gurgaon it’s costing me about 3,000 rupees a square feet. So you can do the maths: 15000 x 1000 rupees is about one and a half crores and for high-end School 15,000 square feet x 3000 is about four and a half crores. So that’s the cost of infrastructure, you can consider and out of which you should be able to get Bank financing for about 75 percent of that amount or maybe 2/3rd as well. Depending on your credit history, depending on your income tax base, depending on the value of the land that you are mortgaging. So, based on those factors you should be able to get a loan from a bank or the NBFC.
So considering that you can get investment of 75% of that — if the cost of infrastructure basics is about one and a half crores, so that means about one crore you should be able to get from the bank & 50 lakhs you should have in your pocket for infrastructure. And keep about 50 lakh rupees for your initial problem time because there will be times when the admissions are not going to go as per your expectations. You’re not going to reach break-even from the day 1. You will need some operating capital money for the initial few years, perhaps. So, keep about 50 lakhs rupees. So, if you don’t have 1 crore rupees cash in your account, please don’t open a 10+2 school. So, I hope I have answered that question.
There is no upper limit, of course. You can set up a school with 30-40 Crores investment as well make everything high-end. There are schools coming up with even higher investments in that but basically with less than 1 crore rupees you should not enter a 10+2 school no matter how much passionate you are. Unfortunately, that’s the reality of 10+2 school today. Money is very important. It is a capital intensive project anything less than this makes up a preschool, five preschools, make a primary school, make three primary schools, but then only when you have the required capital. I’ve seen many entrepreneurs jump into this sector with 20-30 lakh rupees investment. And after some time they don’t have money to pay the salaries and it just becomes a complete mess. So they fault on their bank loans as a result Bank sometimes then don’t give loans or refuse to give loans for new schools just because people have made this mistake. So, that’s why I’m trying to help you by making this video.
If you have any more questions write them in the comments below. I’ll try and answer them to the best of my abilities. Don’t forget to subscribe. If you’re not done so far, press on the Bell icon as well. I hope I was able to answer that question about investment in 10+2 school. Anything that you want to know or anything that’s not clear. Please ask me. I’ll try my best to answer to the best of my abilities. Good luck in your school project!!