Education Franchise ROI Calculator

Business Flow

Particulars

Amount (INR)

CAPEX - Capital Expenditure

Franchise Fee

1214000

Rental Advance

Interior Infrastructure

Centre Launch and Marketing

Operational Expenditure OPEX

Center coordinator Salary

1350000

Teacher,attendant Salary

Rent

General Expense

Product Pricing

Fee structure

63,900

Student kit price

Tuition fees

Sales

Actual Enrolment

Revenue

Total revenue

Profit

Net Profit

Return On Investment

ROI

What is ROI (Return on investment) for preschool franchise?

As an educational entrepreneur, there are two goals your venture must achieve. Firstly, you must be able to provide good education and a strong foundation to your students. Secondly, your venture must make a profit. You would have invested a considerable amount of money into setting up a preschool and unless it offers good return on your investment, the venture will not be able to run for long.

What is ROI?

Return on Investment (ROI) measures the return on an investment to determine its efficiency. This is typically expressed in terms of a ratio or percentage. The higher the ROI, the better the investment.

How to calculate ROI ?

ROI calculation is very straightforward. You will need to know two main metrics:

  • Operational Expenditure (Opex)

  • Net Revenue

As the name suggests, operational expenditure refers to expenses that must be made to operate the preschool. This includes salaries of teachers, attendants, etc, utility expenses such as electricity, water and telephones, rent and other miscellaneous expenses.

The revenue generated by each student is the sum of tuition and other fees payable by each student. To calculate the revenue earned by the preschool, this sum must be multiplied by the number of enrolled students. Thus, your preschool's ROI is dependent on the number of students studying there.

To calculate net revenue, you must subtract the operational costs from the total revenue earned.

The ROI formula

ROI %= (Net revenue-Opex)/Opex

Let's take an example to understand this better.

Assume the total operational costs of running a preschool to be Rs 13,50,000 and the revenue earned from each student to be Rs 64,000.

If your school has 50 students, the total revenue earned would be Rs 32,00,000.

The Net revenue would be Rs 32,00,000 – 13,50,000 = 18,50,000

ROI = 18,50,000-13,50,000 / 13,50,000 = 37.04%

ROI CALCULATOR

What is a good ROI for preschool franchise ?

As the number of students enrolled increases, so does the ROI. There may be a marginal increase in operational costs- you may need to hire more teachers but the increase in total revenue would be considerably higher.

This may tempt educational entrepreneurs to simply increase the number of students they can admit but this may not always be a good idea. Remember, there are 2 goals an educational entrepreneur must meet. The quality of education provided must always meet the highest standards. Rapid expansion can affect these standards. This is why schools limit the number of students per class.

The ideal ROI you should aim for is between 40-50%

Are you ready to start your preschool?

Owning a preschool franchise is a matter of great pride. This is an investment not only for yourself but in the future of our country. After all, you will be the one responsible for building an educational foundation for little ones. Little Ville offers franchisees help with curriculums, teacher training, infrastructure, marketing and more. That's what makes it one of the most preferred educational franchises in India. If you’re ready to take the first step, we’ll be there to support you all the way.

Start Your Little Ville Preschool Franchise