Objective of the Article
To learn how to start a coaching institute business
Key Learnings from the Video
- Business Idea – Coaching Institute
Coaching institute is an evergreen business because students will always need help with their studies and they always want to learn. BYJU’s, Aakash Institute, Allen career institute, FIITJEE are some of the famous coaching institutes wherein lakhs of students are acquiring knowledge to pursue a better career.
For example:
The ICS coaching centre founded by Mr. Parimal Kumar has approximately 2.5 to 3 lakh students. The students are coached for bank PO and government jobs.
Mr. Parimal Kumar started his journey from being a teacher in a coaching institute. After that, he formed his first batch of only 5 to 10 students but gradually, his institute grew, and now, it has lakhs of students.
Although the business starts at a small level, it can grow to a larger extent. For example, BYJU’s is a $12 billion (or Rs. 90,000 crore) company. BYJU’s has purchased Aakash Institute by paying Rs. 7,000 crore. Allen Career Institute in Kota has Rs. 3,000 Crore turnover.
- Steps to Start a Coaching Institute
i. Match your knowledge and market demand: Identify your knowledge area and its market demand. Start the coaching institute with one or two subjects only.
ii. Location: The location should be at the hub of coaching institutes as students visit this area. This will help you in marketing at a low cost. You may need to pay a little high rent. So, select the location where the footfall of the audience already exists.
iii. Proper infrastructure: A coaching institute should have a proper infrastructure. It should atleast have space for a classroom with a capacity of 20 -25 students. The classroom should have all the required items like whiteboards, blackboards, projectors, seating space, space for counsellors, meeting room, attractive interior, etc.
iv. Content: Coaching institute’s business is highly dependent on the content that they provide to their students. You should focus on the following things while framing the content:
Reading material quality
Pre-test quality
Post-test quality
Content delivery style
Books should have pictures and relevant examples
Number of tests
Focus on content delivery because it ensures the retention of business and success of students.
- Costs Related to the Coaching Institute Business
The tables below show the CAPEX and OPEX related to a coaching institute:
CAPEX
Value
Business incorporating fees
Rs. 10,000
Security deposit for premises (2 Months)
Rs. 50,000
Equipping the office (computers, printers, projectors, markers, pens and pencils, furniture, telephones, filing cabinets, and electronics)
Rs. 1,25,000
Website
Rs. 15,000
Additional Expenditure such as Business cards, Signage, Adverts, and Promotions
Rs. 25,000
CCTV Camera
Rs. 15,000
Total
Rs. 2,40,000
OPEX
M0
M1
M2
M3
M4
M5
M
Students
10
15
20
25
30
35
Course/Students
2
2
2
2
2
2
Fees/Course
2,000
2,000
2,000
2,000
2,000
2,000
Total Revenue
40,000
60,000
80,000
1,00,000
1,20,000
1,40,000
Rent
25,000
25,000
25,000
25,000
25,000
25,000
Salary Staff
40,000
40,000
40,000
40,000
40,000
40,000
Utility
10,000
10,000
10,000
10,000
10,000
10,000
Admin
5,000
5,000
5,000
5,000
5,000
5,000
Marketing
10,000
10,000
10,000
5,000
5,000
5,000
Cost
2, 35,000
90,000
90,000
90,000
85,000
85,000
85,000
Loss
2, 35,000
50,000
30,000
10,000
0
0
0
Profit
0
0
0
0
15,000
35,000
55,000
You should run business operations smoothly to achieve the breakeven. In this business, you can achieve the breakeven within 6 months, which is not possible in other businesses.
Similarly, you can do projections in your local area for a coaching institute business like how many students you can get, how much fees they can pay, how many teachers you can get, what will be the cost of location, etc.
- Key Points of Coaching Institute Business
i. Don’t try to teach all subjects: To start the coaching institute, pick only one or two subjects as you do not have a grip on all the subjects and you also need to prepare content, pre-test, post-test, etc.
ii. Train the teachers: Train the teachers you have hired on how to deliver the content. Do brainstorming with teachers while creating the content. This helps in knowing the loopholes in the content and how to improve it.
iii. Don’t get excited with the increasing numbers of customers: Always take admission of students as per the capacity of your institute. Do not overcrowd the institute because it will hamper the quality of service and leads to negative marketing. Gradually, increase the number of students in the institute, enhance the execution speed, and scale up your business. Hire teachers and train them to speed up the growth of the institute/business. Never compromise with your services.
iv. Keep a close eye on the competition and costing: Keep an eye on your competitors to determine what new they are doing, etc. You should also focus on costing else the profits will turn into losses. This will help in running the business smoothly.
v. Take regular students’ feedback: The success of the coaching institute depends on the success of the students. You should create a mechanism to take regular feedback from students on different parameters like content, teaching style, speed of the teacher, etc. Regular feedback will help you to determine the corrective measures required, improve the service, and scale up your business.
vi. Allocate budget for rewarding toppers: Maintain a budget to reward the toppers of the coaching institute. Use the pictures of toppers with rewards in your marketing campaigns. All famous institutes like BYJU’s, Allen, Aakash Institute, FIIT-JEE, etc. follow the same strategy. Awards and rewards to toppers of your institute will encourage other students to take admission in your coaching institute.
Coaching institute business depends on:
Your skills
Skills of your teachers
Content
It is a comparatively easy business in which you do not have to produce or manufacture anything.
Key Outcomes of the Video
Frame a business model of your coaching institute business to make it successful
Focus on the content quality and skills of teachers to provide good services to students
Take regular feedback from students to improve your services
Key Learnings from the Video
1. Business Idea – Coaching Institute
Coaching institute is an evergreen business because students will always need help with their studies and they always want to learn. BYJU’s, Aakash Institute, Allen career institute, FIITJEE are some of the famous coaching institutes wherein lakhs of students are acquiring knowledge to pursue a better career.
For example:
The ICS coaching centre founded by Mr. Parimal Kumar has approximately 2.5 to 3 lakh students. The students are coached for bank PO and government jobs.
Mr. Parimal Kumar started his journey from being a teacher in a coaching institute. After that, he formed his first batch of only 5 to 10 students but gradually, his institute grew, and now, it has lakhs of students.
Although the business starts at a small level, it can grow to a larger extent. For example, BYJU’s is a $12 billion (or Rs. 90,000 crore) company. BYJU’s has purchased Aakash Institute by paying Rs. 7,000 crore. Allen Career Institute in Kota has Rs. 3,000 Crore turnover.
2. Steps to Start a Coaching Institute
i. Match your knowledge and market demand: Identify your knowledge area and its market demand. Start the coaching institute with one or two subjects only.
ii. Location: The location should be at the hub of coaching institutes as students visit this area. This will help you in marketing at a low cost. You may need to pay a little high rent. So, select the location where the footfall of the audience already exists.
iii. Proper infrastructure: A coaching institute should have a proper infrastructure. It should atleast have space for a classroom with a capacity of 20 -25 students. The classroom should have all the required items like whiteboards, blackboards, projectors, seating space, space for counsellors, meeting room, attractive interior, etc.
iv. Content: Coaching institute’s business is highly dependent on the content that they provide to their students. You should focus on the following things while framing the content:
- Reading material quality
- Pre-test quality
- Post-test quality
- Content delivery style
- Books should have pictures and relevant examples
- Number of tests
Focus on content delivery because it ensures the retention of business and success of students.
3. Costs Related to the Coaching Institute Business
The tables below show the CAPEX and OPEX related to a coaching institute:
| CAPEX | Value |
| Business incorporating fees | Rs. 10,000 |
| Security deposit for premises (2 Months) | Rs. 50,000 |
| Equipping the office (computers, printers, projectors, markers, pens and pencils, furniture, telephones, filing cabinets, and electronics) | Rs. 1,25,000 |
| Website | Rs. 15,000 |
| Additional Expenditure such as Business cards, Signage, Adverts, and Promotions | Rs. 25,000 |
| CCTV Camera | Rs. 15,000 |
| Total | Rs. 2,40,000 |
| OPEX | M0 | M1 | M2 | M3 | M4 | M5 | M |
| Students | 10 | 15 | 20 | 25 | 30 | 35 | |
| Course/Students | 2 | 2 | 2 | 2 | 2 | 2 | |
| Fees/Course | 2,000 | 2,000 | 2,000 | 2,000 | 2,000 | 2,000 | |
| Total Revenue | 40,000 | 60,000 | 80,000 | 1,00,000 | 1,20,000 | 1,40,000 | |
| Rent | 25,000 | 25,000 | 25,000 | 25,000 | 25,000 | 25,000 | |
| Salary Staff | 40,000 | 40,000 | 40,000 | 40,000 | 40,000 | 40,000 | |
| Utility | 10,000 | 10,000 | 10,000 | 10,000 | 10,000 | 10,000 | |
| Admin | 5,000 | 5,000 | 5,000 | 5,000 | 5,000 | 5,000 | |
| Marketing | 10,000 | 10,000 | 10,000 | 5,000 | 5,000 | 5,000 | |
| Cost | 2, 35,000 | 90,000 | 90,000 | 90,000 | 85,000 | 85,000 | 85,000 |
| Loss | 2, 35,000 | 50,000 | 30,000 | 10,000 | 0 | 0 | 0 |
| Profit | 0 | 0 | 0 | 0 | 15,000 | 35,000 | 55,000 |
You should run business operations smoothly to achieve the breakeven. In this business, you can achieve the breakeven within 6 months, which is not possible in other businesses.
Similarly, you can do projections in your local area for a coaching institute business like how many students you can get, how much fees they can pay, how many teachers you can get, what will be the cost of location, etc.
4. Key Points of Coaching Institute Business
i. Don’t try to teach all subjects: To start the coaching institute, pick only one or two subjects as you do not have a grip on all the subjects and you also need to prepare content, pre-test, post-test, etc.
ii. Train the teachers: Train the teachers you have hired on how to deliver the content. Do brainstorming with teachers while creating the content. This helps in knowing the loopholes in the content and how to improve it.
iii. Don’t get excited with the increasing numbers of customers: Always take admission of students as per the capacity of your institute. Do not overcrowd the institute because it will hamper the quality of service and leads to negative marketing. Gradually, increase the number of students in the institute, enhance the execution speed, and scale up your business. Hire teachers and train them to speed up the growth of the institute/business. Never compromise with your services.
iv. Keep a close eye on the competition and costing: Keep an eye on your competitors to determine what new they are doing, etc. You should also focus on costing else the profits will turn into losses. This will help in running the business smoothly.
v. Take regular students’ feedback: The success of the coaching institute depends on the success of the students. You should create a mechanism to take regular feedback from students on different parameters like content, teaching style, speed of the teacher, etc. Regular feedback will help you to determine the corrective measures required, improve the service, and scale up your business.
vi. Allocate budget for rewarding toppers: Maintain a budget to reward the toppers of the coaching institute. Use the pictures of toppers with rewards in your marketing campaigns. All famous institutes like BYJU’s, Allen, Aakash Institute, FIIT-JEE, etc. follow the same strategy. Awards and rewards to toppers of your institute will encourage other students to take admission in your coaching institute.
Coaching institute business depends on:
- Your skills
- Skills of your teachers
- Content
It is a comparatively easy business in which you do not have to produce or manufacture anything.
Key Outcomes of the article
- Frame a business model of your coaching institute business to make it successful
- Focus on the content quality and skills of teachers to provide good services to students
- Take regular feedback from students to improve your services