Do You Need To Develop A Market Study & Business Plan For A New School?

Hi, How's your summer going so far? Here in Vancouver we're enjoying temperatures in the low-80's with clear blue skies and low humidity. I spend my time between our house here in the farm country south of Vancouver and our cottage in the US peninsula of Point Roberts. I'm pleased to share that HEG is signing off on another Market Study and Business Plan for a new for-profit K-9 IB School in Malaysia. Next is a Feasibility Study and Business Plan for a new Tribal School in Alabama. A critical element before starting a private school or university is to gauge the market demand for the envisioned school and quantify the investment capital needed within a detailed formation and five-year operational budget. This process determines whether there is demand for the specific school program and tuition fee at that specific location, what it costs to open that school, and whether it's a sustainable operation (and if the founder's pockets are deep enough). I've witnessed at least 10 schools close over the last 12 months; some established, some new. What their closures indicate to me is two fold: People are not buying what they're selling. In other words, parents and students are not attracted to the educational program being offered at that school; and The Directors and Board of the school are not operating the school within a financially sustainable business model. If you're thinking of starting a new school, or have an established school, you owe it to yourself to ensure that you can statistically quantify what your market wants, what fees it is capable of paying, and ensuring that the revenue 'coming in' matches or is less than the expenses 'going out.' I know this sounds pretty simple, but why did all those schools close while others didn't? It's just simple supply and demand and responsible governance! Is your group thinking of starting a new school? Today I'm going to share with you the process to develop a market-feasibility study and business plan, which ensures that you're better prepared to open your school. Please read on to find out more. To your success,   Doug Halladay President Halladay Education Group P.S. Don't forget to go to our secure Online Store to invest in our Strategic Planning or Start-A-School Toolkits.

Developing A Market-Feasibility Study & Business Plan

At HEG, we're strong believers in due diligence when starting a school. We believe that the rationale behind developing a school should be based on quantifiable data rather than emotions. There are a number of qualitative and quantitative survey tools you can use to determine the level of demand for your school (e.g., focus groups, phone surveys, online surveys, mail surveys). The purpose of the Market-Feasibility Study is to provide statistically-based data to help answer the following questions: What is the level of demand for your school? Who is the target market? What is the likelihood of parents enrolling their children at your school? How many students will enroll? What will prevent families from enrolling? What level of tuition would they pay? Will they need financial aid? What is the impact of pricing on enrollment? What is the response to the educational programs What will generate confidence in a brand new private school? This process allows HEG to evaluate your project's capacity for success, markets for enrollment, and ensure clarity in the development of your business plan and start-up preparation. We view the market-feasibility study like building the foundation of a house; you need to establish all the building blocks before you commit your putting resources and capital into building the school. Once you've hard data for projected enrollment demand, we then develop the business plan, which includes proformas for the start-up budget and five-year operational budget. The plan illustrates the opportunity, program requirements, demand, time lines and benchmarks, facility needs, leadership structure, start-up costs, operational budget, and investment structure. An effective Market-Feasibility Study and Business Plan will determine the best location, capital requirements for start-up and operating budget, feasibility of the proposed school model in that regional market, facility/site requirements, and convey the proposition to your financing group. The rationale behind the Study and Plan is to first consolidate the scope and scale of your formation project through an extensive business case analysis and identify the elements and costs associated with developing your school and tasks associated with opening it. Our four-step development model focuses on the following stages: Market-Feasibility Study & Business Plan Development Plan Implementation of University Formation Plan Operation, Management, & Ongoing Support Our process with meeting the Client onsite to establish the key elements of your school, including: vision and mission, timelines, tuition, facilities, staffing, corporate structure and goals, values, and educational program. We then conduct the market study. After the study has been conducted, demographic and community information has been gathered and data analyzed, we then deliver a Feasibility Report addressing the key questions above and then a Business Plan to determine start-up costs and five-year operational budget based projected enrollment. The business plan focuses on: School model Pricing Strategy for Tuition Positioning And Competition Admissions And Enrollment Human Resources Formation Overview Location, Facilities, and FF&E Detailed Proforma Financial Statements and Budgets (Payroll, Capital Contributions, Financial Statement, IRR, Income Tax Loss Carry-Forward, Development Costs, Revenue, Procurement, Depreciation and Amortization, Administration Costs, Physical Plan and Maintenance Costs, Land Acquisition and Mortgage) HEG and our experienced team are well suited and experienced to help assess and lead the development of your school. By utilizing our quality controls, it ensures proper planning, development, and operation of your institution, delivery of a world-class curriculum, and assurance that your school will be sustainable. When you think about all those schools that closed in the last year, my guess is that they didn't do their homework. Many of the clients that we complete the study and business plan for never open their schools. We think it's better to spend a little money now than waste a lot of money later. On the other hand, we provide the blue print for you to build a solid foundation for a sustainable school. NEXT STEP If this article strikes a note with you, and you feel that your group needs to help developing a market/feasibility study and business plan, then you should seriously consider our services. If you'd like to learn more about how we can help your organization, please email  HEG or call  our direct line at +1-604-868-0002 to find out more.