INTRODUCTION
The Indian education system, although growing fast, still has a lot of gaps and is inequitable, especially in rural areas. With the increasing aspirations of rural people to provide good education to their children, the need for coaching centres has increased. These centres provide tuition to students beyond school hours and often provide support in specific subjects or specific entrance tests. With the increasing demand for specialized skills, coaching centres also provide classes on computer literacy, personality development, spoken English, etc. This is a service-based enterprise that can start with an investment as low as INR 75,000 and generate jobs for at least 3 skilled workers.
MARKET POTENTIAL
The private coaching industry in India earned revenue of over INR 20 billion in 2020. Its decentralized nature facilitates access to learning facilities for students in semi-urban and rural areas. India has the highest number of school-going students in the world ~ 250 million (2020) and 55% of them have a private tutor outside the school. With the booming Indian education-tech industry and shift to technology-enabled education post-COVID-19 pandemic, the coaching centres are expected to transform into IT-enabled hubs for quality education and learning. The market size of the coaching industry in India is expected to reach INR 40 billion by 2022, growing at a CAGR of 35%.
FUNDING SOURCE
Under the programs supported by the Development Alternatives Group, such enterprises have been financed by Sahiyogini Mahila Mandal (a Cluster Level Federation), with an average loan size of INR 40,000.
BUSINESS ECONOMICS
FIXED CAPITAL (One Time Expenditure)
| MACHINERY & EQUIPMENT | AMOUNT (in INR) |
| Student Chair (30 units @ INR 300) | 9,000 |
| Tutor Chair (@ INR 300) | 300 |
| Tutor Table (@ INR 2,000) | 2000 |
| Whiteboard (@ INR 1,000) | 1000 |
| Printer (@ INR 9,000) | 9000 |
| Laptop (@ INR 30,000) | 30,000 |
| TOTAL | 51,300 |
WORKING CAPITAL (for a 2-month cycle)
| STAFF AND LABOUR | AMOUNT (in INR) |
| Entrepreneur’s Salary (@ INR 12,000/month) | 10,000 |
| UTILITIES & OTHER EXPENSES | AMOUNT (in INR) |
| Rent (@INR 7500/month) | 15,000 |
| Electricity (1000 units @INR 7) | 7000 |
| Phone/Internet Bill | 1,000 |
| Stationery (10 units @ INR 100) | 1,000 |
| Marker (10 units @ INR 25) | 250 |
| White Paper Bundle (3 units @ INR 150) | 450 |
| Duster (2 units @ INR 30) | 60 |
| Marketing Cost | 5000 |
| Repair and Maintenance | 500 |
| Miscellaneous | 500 |
| TOTAL | 54,760 |
FINANCIAL SUMMARY (Annual)
| FINANCIALS | AMOUNT (in INR) |
| Fixed Cost | 51,300 |
| Working Capital (for each cycle of 2 months duration) | 54,760 |
| Total Enterprise Set-Up Cost | 1,06,060 |
| Revenue (per annum) | 3,60,000 |
| Total Expenditure (annual working capital) | 3,38,560 |
| Enterprise Profit (per annum) | 31,440 |
| Payback Period (in months) | 20 |
BASIC ASSUMPTIONS
- Working days: 26 days per month (8 hours shift)
- Each cycle consists of 2 months; 6 cycles in a year
- Average revenue: INR 60,000/cycle
| Particulars | Quantity | Selling Price/Item (in INR) | Amount (in INR) |
| Students AttendingCoaching | 30 | 2000 | 60,000 |
Note: All figures mentioned are indicative and for reference purpose only. Development Alternatives Group bears no liability for accuracy. For any further information, please contact Development Alternatives on +91-11-2654-4100 or +91-11-2654-4200.
Star Entrepreneur
Pushpendra Vanskar from Niwari, Madhya Pradesh, had always felt the need of a local coaching center to provide quality education to students in his village. Having realised the business opportunity and with encouragement from his friends and family, he opened a Maths and Science coaching centre in 2016. Through his service-based enterprise, he has been able to:
- Increase his monthly income from INR 6,000 to INR 18,000 (3-fold increase)
- Create 2 jobs locally
- Provide quality education to 40 students from 3 villagers