Burgeoning Preschool Industry

The rise in nuclear families and increase in disposable incomes have led to greater demand for quality preschools even in small towns and non-metros. Still preschool industry is in nascent stage in India with around 1.1% enrolment in comparison with France or Scotland where preschool enrolment is 100 percent. There is a mushrooming growth of preschools in India over last decade but only 17% of Indian preschool market belongs to the organised sector. This segment is attracting investments from private players.
According to a research report published in 2011 “Indian Preschool Market Forecast”, Indian preschool market has been witnessing rapid growth for the past few years on the back of rise in disposable income, rising number of working mothers, increasing trend of nuclear families, and escalating demand for high quality preschool education for toddler. However, low market penetration and low barriers to entry along with the increasing awareness, popularity, and propensity of young working professionals to pay, are some of the drivers, which suggest that the market offers considerable opportunity for investors. Moreover, it is expected that, the preschool market will reach to USD 1,833 Million by 2014, growing at a CAGR of around 13% during 2011-2014.
The preschool Industry is growing at a very fast pace that is 36% per annum as against the education industry growth of 15% er annum, which means that the parents are understanding the importance of early childhood education.

Drivers, Challenges and Trends

Alok Kumar Modi, Chairman, Maple Bear The franchise should have the will to follow the directions, manuals and curriculum to the hilt and should not try and innovate his ownstuff. The partners should also stick to  the core strength of the group by not cutting corners and would then benefit from the structure  provided by the group and ultimately profits would follow if the processes are thoroughly followed

Kopal Maheshwari, Founder and Chairperson, Little Einstein, “The opportunity is huge in preschool industry. The industry is growing at 36% and branded preschools are growing at much faster pace. This opportunity is best suited for entrepreneurs as it is low risk low investment model and you need to spend only 4-6 hours a day to operate preschool, giving you ample time to spend with family and pursue other opportunities.”

Starting a Preschool
Looking at the tremendous potential of preschools it makes great economic sense market to open a preschool through franchise model India. Various models exist under organised industry in preschool are direct chains, through franchise model and extended K-12 school.
There are various benefits that the franchise model offers such as the opportunity to be associated with established brand, which helps in attracting more kids. Further the franchisors provide curriculum support, training support, set up support, branding and marketing support, etc. One major advantage of this business model is sharing of expenses, knowledge, experience, brand image, as well as technical expertise.

Ajay Gupta, Chairman, Bachpan School

The quality standards of Bachpan are maintained through all the franchises across India by making franchises a part of the system and not by belting out penalties. We believe in having a healthy relationship with our franchises so that they have a continuous support from us for running a successful business

Key Preschool Franchisors

Requirements for taking franchise
Different franchisors have different requirements and deliverables. Typically a preschool needs minimum space requirement 1,000-2,000 sqft and Initial investment starts from around Rs 500,000 along with trained personnel. Location also plays an important role. The franchise needs to work out all the important details including investment, profit sharing and revenue models with the parent company.

Roadblocks
Trained Manpower: There is massive scarcity of teachers in the playschools space. The teachers are no longer Just Montessori trained but also have passion to continuously learn and unlearn. Preschool owners look for teachers who want to learn continuously and like the concept of being with small children. The people who have good communication skills and can reach out to the children at a tender age. The people with these traits can be trained according to the curriculum requirements of different preschools.
A S Ganesh, Founder And Managing director, Smart KidZ on the vast shortage of teachers in the preschools, “Teachers with B.ED / ECCE qualification are very few, so we suggest the Franchisees to appoint teachers who are graduates with good communication skills. We provide an intensive training which educates them about the child psychology, new trends of teaching methodology and concepts. We believe in the warmth and affection the teacher gives to the child rather than her qualifications. To facilitate the untrained teachers, we provide NTT Program approved by the AIECCE – Government of India.”
These schools organise regular training programs to fine tune the teachers about role plays, classroom coordination, handling the inquisitiveness of the children and the way to handle kids so that they learn all the things in a playful and handy way.
The quality audits in the classroom helps in identifying the various loopholes and these are then passed to the training module. The training takes care of teaching the teachers all aspects of providing quality and fruitful interaction with the children under her care. The group also believes in constantly appraising and appreciating the good work done by the teachers.

There is more awareness about childhood development and the importance of learning in this age group   Anita Rao, Founding Director and the Managing Director, Educational Catalysts India Pvt Ltd

The regulation will in a way help us to grow rather than being a hindrance Pritam Aggarwal, Hello Kids

This opportunity is best suited for entrepreneurs as it is low risk low investment model  Kopal Maheshwari, Founder and Chairperson, Little Einstein

Need for Better Regulation
The government is planning to introduce regulations for pre-schools as well. Most of the branded Preschool segment would put cap on the fly by night kind of operators of school those who want to make quick money. These players expects that regulations must bring standardisation in quality and safety, then it would help in bringing good players in the field and also help in keeping the standards maintained.

Initial investment starts from
around `500,000

Pritam Aggarwal, Owner, Hello Kids, “I believe the regulation should be introduced with immediate effect as it will help in providing visibility to the big players who are already there in the market for a long time now. The regulation will in a way help us to grow rather than being a hindrance. If RTE comes into play it might rule the fee structures and other aspects, but at the same time it will act as a boost to the upcoming franchise to venture into pre-school business as the number of students attending preschools will increase.”

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