Like many of you, I've had a number of summer jobs going to university. One of them included working for a construction firm building houses. I don't claim to be a great carpenter, but one adage a foreman shared with me always stuck - 'measure twice and cut once'. This same ethos applies to organizations considering starting new programs or even new schools. You need to envision what you want to build and then measure market demand for your new entity and costs/resources associated with its development in a detailed business plan before you move forward (and begin the cutting).
However, on too many occasions HEG has been brought into a project after a client has begun Feasibilitythe process of starting a new school or program (or even opened it) without gauging whether the entity is feasible or sustainable. They make unfounded decisions with no basis for their operational/educational/financial benchmarks and have to either make reactive adjustments on the run or finally shut the program down when they realize there's not enough sustainable demand (or funds) to keep it open. Can you imagine building a house without a blueprint. But it happens in the education market.
If you plan on opening a new school, be it K-12 or post secondary, you need to ensure you've done your 'measuring' before launching your school. There's so much at stake. Have you done your homework to ensure your school model will be sustainable in your market? Is there a large enough market willing to pay for the program and services you're offering? Is the tuition fee you're charging reflective of operational costs and short-falls in your initial years of operation? And if you're a for-profit, will there be a reasonable pay-back period to your investors and realistic profits? Once you launch your school, there's no turning back. And in school marketing, word-of-mouth is still the number one marketing tool, so you don't want to stumble right out of the gates.
If you're planning to start a new school, or even expand your established school, you need to complete the necessary research and due diligence to formalize your educational-operational-governance-finance model and determine whether there is demand in your market for the educational program you're envisioning. From there you need to quantify the costs associated with starting and operating your school to break-even point, and the value it will return to your founders and investors.
You don't want to be caught in the trap of building your school and hoping students and parents will show up. The risk is too high, and frankly, irresponsible. However, it happens.
A market~feasibility study and business plan should formalizes your school's educational / operational / business / financial model, determine its feasibility in your market, start-up capital requirements,
five-year operational budget, internal rate of return (profit), facility-site requirements, and conveyance of the proposition to your investment and/or founding group. The rationale behind the Study and Business Plan is to consolidate the scope of your formation project through an extensive business case analysis to finalize the educational, operational, and business framework, quantify HR, facility/land requirements (and costs), enrollment demand, start-up and capital requirements, break-even point, pay-down to investors, internal rate of return, and net income. Upon conclusion of the Study, you can clearly assess the project's feasibility and optimal model for development, and pre-operation milestones as per the four-step model i.
The rationale behind completing a Market Study and Business Plan is to formalize the scope of the formation project through an extensive on-site business case analysis, market review, and identification of the critical elements and costs associated with developing your school. Upon conclusion of the Study, you have a blueprint to guide you through the entire school formation process.This allows you to move forward fully informed and prepared and not make gut decisions with no data.
An effective market~feasibility study and business planning should determine the optimal market for your school and financial projections within the Business Plan, focusing on:
- Formalization of the school model:
- Market demand;
- Educational program(s);
- Accreditation requirements and licensing;
- Potential combinations of grades for each stage of development;
- Human resource considerations;
- Infrastructure requirements;
- Funding requirements;
- Management team, governance model, and organizational chart.
- Determine target market(s), enrollment projections, and marketing and admissions plan;
- Review the business case for the establishment of a school in the Client's designated market;
- Financial costs/assumptions for start-up budget and five-year financial plan;
- Corporate and investment/funding structure;
- Address issues/strategies to ensure a successful start-up and operation of the school:
- Develop a Business Plan, providing an Executive Report, recommendations, and costing profile with an overview of demand for the proposed school, capital requirements, profits, investment pay-down, and the 'blueprint' to move forward.
HEG is recognized as the leader in the development of market~feasibility studies and business plans. We've experience with projects over $150 million in new cities in Asia to smaller non-profit schools. We've worked with for-profit and non-profit clients in North America, Asia, Europe, Middle East, and Africa. Our team's work has spanned over 100 school development projects totaling more than $1 B.
Douglas, if you would like to build a solid foundation and develop a sustainable school, and would like to find out more about HEG's market~feasibility study and business planning services, please contact HEG directly by sending an email to firstname.lastname@example.org or calling HEG at 1-604-868-0002.
To your success,
Halladay Education Group