Growing at an annual rate of 20 to 25 per cent, things are certainly looking up for the preschool industry in India. In conversation with ENN, Raman Bajaj, Managing Director – Educomp Childcare Pvt. Ltd, says that the industry today needs correct, meaningful and easily implementable regulation

What are the current trends in the preschool business in India?
Preschool is a nascent market in India, with many families only now beginning to enroll their children for preschool education for the first time. The Indian consumer is becoming highly aware and conscious about the importance of early childhood education as the building blocks (foundation) of learning for future years. There is an increasing demand for scientifically developed preschool curriculum (not just “any” special curriculum). Preschool is a fast growing sector, growing at a CAGR of 20-25 per cent. Within the sector, the ‘organised/ branded’ preschools segment is growing very rapidly at a CAGR of 40-45 per cent, and is one of the fastest growing segments in the education space. Our preschool brand Little Millennium is one of the fastest growing chains of preschools in India with over 250 preschool centres now operating across 65 cities.

What are the different models in preschools? Is any model better over others? Why?
A preschool can be set up either in a franchise model or on one’s own. There are several advantages of franchising which are difficult to come by for entrepreneurs who choose to set up on their own. For example, franchising provides access to a well established brand, access to a scientific well-designed curriculum faster time to launch, proven methodology/ track record, access to established processes & systems, ongoing support & training and ongoing R&D and innovation, among other benefits.

What is the role of franchisee in preschool education in India?
What are the trends? Preschool education needs to be available in every neighborhood, as children in that age cannot travel long distances. Preschools need to be present in every neighborhood, every locality of every city. This is why the role of individual entrepreneurs who take up a preschool franchise, becomes extremely important. It is these franchisees who make it possible for structured and researched preschool curriculum to reach the millions of children all over the country. We are seeing very encouraging growth trends in the market. We are witnessing a rapid spread of organised preschool education to tier II and tier III markets. We are also seeing that more and more women entrepreneurs are coming forward to start preschools. For example, across the chain of Little Millennium preschools, almost 85 per cent of the centres are run by women franchisees.

In view of increasing need for preschools across the country and classes, do you think it should be regulated?
Regulation is not necessarily a bad thing, but what we need is correct, meaningful and easily implementable regulation. We need to work on creating awareness amongst parents regarding importance of early childhood education and improving quality by adhering to minimum quality standards of delivery. We need to work along with regulatory authorities towards regulations that are in the best interests of all stakeholders. There is an increasing demand for preschool education across the country and regulations should not act as a disincentive for education providers to create the supply.

What is the investment required for starting a preschool? How lucrative is the business of preschool business in India?
One of the significant benefits of starting a preschool venture is that it requires low start-up investment. As a result, a well-run preschool can offer high return for the franchisee. The business also has a high operating leverage as franchisees can operate multiple revenue streams form the same fixed cost base (e.g. several preschools offer daycare service as well, as the two go hand in hand). This is also one of the best ventures of owned property centres. Overall, it’s a very lucrative business opportunity for entrepreneurs.

Are franchisees paying a higher royalty in preschools and schools compared to those in professional education?
No.

How many franchisees are planning to continue this business in the long term and what percentage of them are planning to start up their own businesses since they have gained enough expertise and exposure through this opportunity?
Most of the franchisees that we have been working with, plan to continue this business in the long term and a large percentage of them (about 90 per cent) plan to continue the business in partnership with us. The key reason behind Little Millennium partners choosing to continue the partnership even after the contract term is the continued value that we provide on an ongoing basis. Franchisees also see a lot of value in continuous up-gradation of curriculum, access to software systems and process, access to R&D & innovative teaching aids and creative and impactful communication strategies.

Is the franchisee fee higher in preschools as compared to other education verticals?
No. Franchisee fee for preschool segment are the lowest compared to other verticals.

Please take us though different steps of setting up a preschool.
We guide our franchisees at every stage of centre setup and ongoing centre operation. We engage with them right from finding and finalising a suitable location for the preschool, designing the preschool, recruitment of teachers, training, designing the marketing communication, ongoing quality audit, regular training, monitoring and support to ensure the success of the preschool centres

Branded preschools have policies in place to regulate safety, hygiene, curriculum delivery and teachers training, says Vittal Bhandary, Managing Director, Learning Edge India Pvt Ltd. In conversation with ENN, he fears that regulations in the hands of government could lead to corruption

What are the current trends in the preschool business in India?
Preschool education has emerged as the most lucrative segment of the Indian education market. According to the current market, the preschool business is thriving in India with the penetration rate expected to rise at a tremendous rate in forthcoming years. Preschool education in India has gained immense importance over the past years due to increased awareness and affordability among parents.

What are the different models in preschools? Is any model better over others? Why?
There could be slight variations in different models in preschool. This depends on the philosophy and curriculum approach of different brands. At Little Elly, we follow a combination of Montessori and Waldorf method. We feel that our model of curriculum and concept methodology is the best in the industry.

What is the role of a franchisee in preschool education in India?
Franchisee plays a very important role in the preschool industry. Most of the preschool brands reach out across India through the franchisee model. Organised players are adopting the franchisee route because of low upfront investment by them. Franchising is very profitable as it creates new opportunities and increases the area of interest for an aspirant business owner who wants to start his own business and expects a quick return on investment.

In view of increasing need for preschools across the country, do you think it should be regulated?
Presently, there are no laws regulating preschool business and operations in most of India. I personally feel that preschools should not be regulated. Branded preschools have their own way of regulating safety, hygiene, sanitation, curriculum delivery and teachers training. These are part of our policies and we have a robust team to audit this from time to time. The moment these regulations go to a government body, it can lead to a lot of corruption.

What is the investment required for starting a preschool?
For setting up a preschool, you need to invest good amount of money depending on the scale at which you want to operate. The investment ranges between Rs. 8 lakh to Rs. 10 lakh depending upon the location and area chosen.

Are franchisees paying a higher royalty in pre-schools and schools compared to those in professional education?
The royalty in preschool may be slightly high compared to some training institutions. The percentage of royalty is directly related to the support and training mechanism of the brand. There could be brands in our industry that take a lump sum amount at the beginning and don’t support and naturally they may not take royalty.

Have teaching-learning methods changed in preschools? If so, how?
Preschool curriculum framework is designed for continuous in-school guidance and support. To engage our young learners, the teachers should be committed to their own learning and know how to go about it. Presently, teachinglearning methods have transformed immensely in preschools with innovative teaching strategies and technology enhanced learning. In choosing a learning experience for a child, knowing what’s age-appropriate, the teacher is sensitive to every child’s needs. They observe and understand each child’s ability to grasp skills and facilitate the learning process accordingly.n

Aspirational young working parents, their rising expectations from children and the demandsupply gap in terms of domestic help are all factors that are fuelling the preschool business, says Hazel Siromoni, Managing Director of Maple Bear

What are the current trends in the preschool business in India?
Some years ago, there was an IT boom. Similarly, we see that preschool business in India is in its boom stage. But after the IT boom, there was a bust too, which I expect in the preschool business as quality will survive over quantity.

What are the different models in preschools? Is any model better over others? Why?
There are two models primarily. One is self-owned preschools and the other is the franchised model. What is better is more in terms of accountability and quality assurance.

What is the size of preschool education in India?
It is huge and much data is available to determine the exact statistics to size up the industry. But most important is that the size of this business is growing and will continue to grow because of many reasons that favour this growth like aspirational young working parents, taking the risk of making a controversial statement that parenting is becoming more outsourced, greater expectations by parents from their child for being star performers even as young as 2 year old, nuclear families, demand and supply issue as far as domestic help goes etc.

In view of increasing need for preschools across the country and classes do you think it should be regulated?
In my opinion regulation is a good thing which is in the interest of all the stakeholders. What is most important that it is transparent keeping procedures simple and focussed on weeding out unscrupulous preschools.

What is the investment required for starting a preschool? How lucrative is the preschool business in India?
For staring a Maple Bear preschool, investment could be in the range of Rs. 15- 20 lakh depending on the city and the condition of the site identified. It is a good business opportunity. Delivering a good quality programme does not mean you cannot make a viable business.

How many franchisees plan to continue in this business for a long term?
This has increased wherein more and more franchisees are coming into the business for a long term and are looking it as one of their core business. The entrepreneur profile is changing quite drastically from a homemaker to professionals giving up lucrative jobs as IT professionals, financial analysts, bankers, businessmen and women etc.

The organised sector of India’s booming preschool industry is set for a tenfold increase in the coming years; believe Anurag Sharma and Kushal Suri, Executive Directors at Shri Ram Study World. In conversation with ENN, they also say that regulations should be well-thought before being implemented

What are the current trends in the preschool business in India?
The preschool market in India has a huge appetite; there is a huge shortfall in supply of quality preschools, especially those that are children friendly. The market meets only 20 per cent of the total demand, out of which majority are non-branded ‘Mom n Pop’ owned institutes. There is a huge market for good quality, branded preschools in the country.

What are the different models in preschools? Is any model better over others?
Preschools in India could be divided into unorganised sector, organised sector and a K12 school-feeder model. The unorganised sector comprises of the majority of the market, the second being the organised sector which is very small at the moment but has huge potential. The future holds tenfold growth in the organised sector where a lot of foreign players will try to enter the space.

What is the role of franchisee in preschool education in India? What are the trends?
The franchisee plays a key role in this industry. With a steep rise in land prices, the economic viability and returns are very slow if one acquires land and builds the school. However, if the property owner is willing to rent the property, it makes more economic sense for him to take a preschool franchisee as it has a quick payback period and low investment, and can be opened anywhere within vicinity of offices.

In view of the increasing need for preschools across the country and classes, do you think it should be regulated?
In the present scenario, with government regulations and the present economy, profitability in any ongoing business appears meager. There is growing concern that strict ongoing regulation in the education sector shall reduce venture in education profitability leading to fewer good ventures in the field. I’m of an opinion that one should think twice on regulating this industry.

How lucrative is the business of preschool business in India?
The preschool business is the most lucrative business in the organised franchisee businesses in India at the moment. The payback period as compared to manufacturing sector is very fast, the gestation period is low, and it’s the most satisfying business in the service sector.

Global preschool chains are eyeing India for big opportunities.
There are a lot of global preschool chains eyeing the organised sector in the Indian market as there is huge potential. However, there is an impertinent need of the right local partner, who shall implement the curriculum effectively and cultivate awareness about preschool education and its importance in local areas.

Venture capital funds have evinced keen interest in the pre-school sectors.Have they been funded by VCs?
VCs have definitely shown a lot of interest in the preschool industry. There are Singapore, UK, Dubai-based funds which are looking to invest in Middle East, India, Russia, Brazil, China & Africa. The market in these countries is very big, and there is huge space for quality products in the organised sector. The pros of VC funding are the low gestation and fast return period of this industry. However, they are very hard to convince and the due diligence is very strict.

Certain parameters that measure the efficiency and effectiveness of the early education imparted in preschools is essential, believes A S Ganesh, Founder & Managing Director, SMARTKiDZ Educare India Pvt Ltd. Excerpts from an interaction with Elets News Network

What are the current trends in the preschool business in India?
The Indian preschool market is an under penetrated market. Less than 2 per cent of the children go to preschools in India because the awareness is very low about the importance of preschools. To bring about this awareness, we are conducting Positive Parenting Workshops in all the schools of Smartkidz to make a difference.

What are the different models in preschools? Is any model better over others? Why?
Every model of preschools talks about nurturing children, developing their skills, brain development etc., and the approach to teaching- learning in each model is different. Finally, the whole idea of education is the holistic development of the child and should be child-centric, where hygiene and the safety of the child should be given utmost importance.

What is the size of preschool market in India?
The preschool market size during the year 2010-11 had been Rs. 5,000 crore and is likely to cross Rs. 11,000 crore by the year 2015. This segment is growing at the rate of 35 per cent per annum as against the education sector which is growing at the rate of 15 per cent.

What is the role of franchise in preschool education in India? What are the trends?
The franchise should have a flair for kids, enough time to be focussed towards imparting proper education to the child by following the systems and procedures of the company and adapting himself to the present trends in the education by undergoing trainings from time to time. Importantly, a franchise should not look at it only as an aspect of doing business.

What is your USP?
The curriculum is designed while keeping in mind the syllabus for CBSE, ICSE and SSC. This eases the process of admission of the child for the primary section. The curriculum is followed uniformly in all our schools which are helpful for inter- school transfer across states. Another unique feature in Smartkidz is that we provide value-based education which is part of our curriculum.

In view of increasing need for preschools across the country and classes, do you think it should be regulated?
Yes, it should be regulated. Running a preschool business in India provides the freedom to design and adapt the curriculum and has resulted in a lot of variation in the learning programmes. However, there has been no system designed to measure the quality and output of the education programmes that have been designed for these tiny tots. Similarly, there are no parameters for the admission criteria for these schools. Thus, kids enter the schools from various socioeconomic backgrounds, study in varied education patterns and enter primary schools with a variation in knowledge and understanding. It is therefore essential that there should be certain parameters that measure the efficiency and effectiveness of the early education imparted in preschools. This quality assessment helps safeguard early education and helps in regulating the standards of preschool education. By doing so, the unbranded schools which follow little or no norms will be stopped.

What are the laws regulating preschool business and operations?
Preschools come under informal schooling and are not governed by any regulatory body. There is no clear policy for standalone preschools and differs from state to state.

What is the investment required for starting a preschool? How lucrative is the business in India?
The investment for starting a preschool varies from place to place. It starts from Rs. 7 lakh and goes up to Rs. 15 lakh and sometimes more depending upon the location.

The awareness of preschools is increasing at a very fast pace. In many households both parents go to work and being nuclear families, preschool comes as a boon to such parents. Most of the preschools also provide daycare facility and therefore the demand for preschools is increasing very rapidly. More so, the awareness and importance of preschools is spreading to smaller towns resulting in more preschools cropping up in these towns.

Are franchisees paying higher royalty in preschools and schools compared to those in professional education?
The percentage of royalty varies from company to company and generally ranges from 15 per cent to 20 per cent in the preschool industry. The royalty percentage in the professional education also should be more or less the same.

How many franchisees are planning to continue this business for a long term and what percentage of them are planning to start up their own businesses since they have gained enough expertise and exposure through this opportunity?
In case of Smartkidz, 100 per cent of the franchisees who have completed their term of 5 years have renewed the agreement. However, there are dropouts to the extent of 10 to 15 per cent due to their own reasons.

Is franchise fee higher in preschool compared to other education verticals?
In preschool segment, the franchisee fee varies from Rs. 1.5 lakh to Rs.3.5 lakh. However, in other education verticals, it could be as low as Rs. 0.5 lakh and could go up to Rs. 5 lakh for other education verticals.

Have teaching-learning methods changed in preschools? If so, how?
The face of education has changed dramatically over the past ten years or so. The preschool education is the foundation of children’s education. It is a vital aspect of a child’s learning and development. At this stage, the attitude and aptitude that is developed influences their later life. Early childhood education programme asserted the need of very balanced curriculum at preschool which integrates play and work as a basis of the curriculum structure. Education in preschool has been given a more practical approach which has made learning for the child more interesting. Gone are the days when a preschool was a waiting room for children not yet age eligible for regular school admissions. Now-a-days, parents are more concerned with establishing a comfort level with instructors and care-givers in the preschool, than delving into the intricacies of the teaching methodology followed.

In recent times, newer systems and philosophies like the ‘play way’ method and multiple intelligence mapping have also been incorporated into the curriculum up to 6 years. Preschools in India have also adopted best practices of other teaching philosophies such as Waldrof, the Reggio Emilia etc. With new developments in the field of child psychology and early education, there is bound to be continuous innovation and introduction of new practices in preschool teaching methodologies. The key is maintaining an ideal balance of creativity, flexibility and structure that makes learning joyful for the child.

What are the criteria for selecting teachers in your school?
The appropriate qualification of the teacher in education is to be a graduate with fluency in English. Apart from this, the teacher should also have qualities such as patience, listening skills, pleasing personality, initiative, creative and have an open mind for learning. NTT / ECCE trained teachers are generally preferred. .

Global preschool chains are eyeing India for big opportunities to set up their franchisee and also in teacher’s training. What is the profile of people who are engaged in preschool education and franchisees in India?
The basic profile of most people in the branded preschool industry is qualified preprimary educators or with long experience in the industry, but in unbranded schools, it is not the case. Most of the franchisees in the preschool industry are women entrepreneurs and range from 80 to 95 per cent. In case of Smart – kidz, more than 90 per cent of the franchisees are women entrepreneurs.

Last year, people had moved court to bring preschools under RTE’s ambit. What’s your take?
The RTE act does not apply to standalone preschools. However, it applies to preschools run by schools providing elementary education i.e. from class 1 and above. The RTE Act requires every school imparting elementary education to admit in class 1, a minimum of 25 per cent of the class strength belonging to weaker sections or disadvantaged groups to provide free education to such children