Total Investment To Start A Preschool

February 12, 2019

Preschool business is one of the most profitable businesses that could be established even at the low capital. You would not have to spend a huge amount of money as a capital opening a preschool. But this business would definitely yield you higher returns in the form of huge profits and goodwill in the market.

So if you are someone who wants to run a business at a low capital then we would recommend you to open a preschool. Establishing a preschool would not require excessive capital but instead would provide you huge returns and that too for a longer period of time. As we could see from the recent circumstances and conditions that display the need for such playful education environment for the toddlers. Parents now focus on providing their children overall development from the very beginning. They want to provide their children an educational upbringing and knowledgeable environment that could make their children a better human being in the future.

You could choose a new identity and name for your playschool or you could opt for the franchise of a well-established and reputed school that has already garnered enough reputation and goodwill in the market. If you want to know about the costs involved in both of these methods of establishing a preschool then you have definitely landed to the write article.

This article would provide you the total investment and the costs that would be required to establish a preschool.

  • In case of franchising:
  • If you are an entrepreneur who wants quick returns without establishing the market for the playschool then you could opt for the franchise of a reputed playschool like SMARTSCHOOLJUNIOR. These reputed playschool’s franchise would provide an already established market area and the much required trust and goodwill in the market. However there are many other costs involved in establishing a preschool under the franchise agreement. These costs are specified in the franchise agreement and they have to be paid attention in order to establish a franchise based preschool.

    Some of the costs that are involved are as follows:

  • Fees of the franchise: It is the fee that a parent company demands from the new franchisee. A new franchise or the entrepreneur of the playschool has to pay a certain amount to the franchisor in order to use their name and reputation in their new playschool. It is only a once in a lifetime payment that is paid in return of the franchise agreement. Generally it is not more than 3 lakhs in the case of preschool but could exceed this amount depending upon the goodwill of the parent company or the franchisor.
  • Royalty: It is the amount paid by the franchisee to the franchisor. It is a certain percentage of the total revenue produced by the franchisee that has to be paid to the franchisor. Generally this percentage is not more than 25% of the total profits. This amount is paid annually and hence could cost the entrepreneur to transfer their profits to the parent company.
  • Establishment costs: Another cost that would cost a huge amount of money is the establishment costa of the branch of the reputed playschool. These costs could be further classified into infrastructural costs incurred on the furniture, building, machines, labs , carpenters etc. This is one of the costs that require maximum percentage of the capital invested. It could generally range between 4-6 lakhs depending upon the infrastructure.
  • These are some of the costs that are involved in the establishment of the preschool under the franchise agreement. These costs would surely add to the expenditure but would generate higher and quick profits in return.

    Franchise is a great idea but the entrepreneur should follow the franchise agreement sincerely and should adopt the latest technology, innovations and inventions. The entrepreneur should enter into the franchise agreement only with that preschool chain that has reputation in the market and could help the entrepreneur to generate more profits.

  • Setting up your own preschool:
  • Another method of establishing a preschool is setting up a preschool on your own. This method of establishing a preschool would involve huge costs and dedication in order to create a place for the preschool in the market. But once the preschool is established and is known in the market, and then the entrepreneur enjoys huge surplus and profits for the long term. Setting up your own preschool provides you the opportunity to enjoy all the profits alone and without sharing it to third parties. You are the sole owner and authority of the play school. But again there are many costs that are involved in the establishment of a new playschool.

    Some of the costs involved in the establishment of a preschool are as follows:

  • Infrastructural costs: One of the most important costs that consumes more than 50% of your capital. Infrastructural costs is that cost which is involved in preparing the infrastructure of the company that is building, furniture, stationery, interiors etc. of the playschool. It should be kept in mind that the building of the playschool represents the atmosphere you are going to provide to the toddlers.
  • Licensing and documentations: This is also a major head that is included in the costs of setting up an own play school. This involves the cost of procuring the license from the authorities and the providing all the necessary documents to the municipal corporation along with the fees. This head involves all the fees related to the filing and registering the playschool.Check out our NCPCR blog on www.smartschooljunior.com for more details
  • Promotion and staff expenses: It is also a major head that involves a huge percentage of capital involved. It provides all the salaries and expenditure on the staff and on the promotion of the playschool. It also includes the expenditure on creating a market for the playschool. This is also an important investment as without creating a market for the playschool, a new playschool would not be able to yield better profits. Go for brands, which provide good marketing support in terms of marketing kits, promotional kits etc.

The above mentioned costs are some of the costs that are involved in the establishment of own preschool. It should be kept in mind that you have to promote your preschool and should provide world class facilities in order to attract children and guardians to generate profits. Initially you may suffer normal profits but eventually as your preschool starts creating a market for itself would yield higher returns.

Establishing a preschool is undoubtedly a great idea not only in the monetary terms but also it provides you the opportunity to serve the country and the society by providing them a base or a foundation of education. In this type of business you neither have to spend a huge amount of money nor there any complex legislations and compliances. For a successful preschool you should just possess the dedication , determination and devotion towards the establishment, expansion and development of the playschool.

 

Author is an educational counsellor at SmartSchool Junior, India’s Leading Preschool Chain. For FREE business advice about preschool business call +9189270-89270

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