Low-Cost Private Schools Knowledge Framework | Business model 7. MARKET POSITIONING 7A Competition / Demand How much competition is there from other local private/NGO/government schools? What value do poor families and children see in schooling? What percentage of their household income are parents willing to spend on education? What is the capacity to pay for education services for the poorest families? 7B Customer research / Marketing How is the school catchment area determined? What type of surveys are used to evaluate interest in a school opening? How is the school marketed prior to opening? 7C Attraction Mechanisms What is the relationship between the chain and its customers (parents)? How well are existing customers engaged (by communication, for example)? How are new customers recruited (eg. marketing)? What is the proximity of the business to its customers?
Low-Cost Private Schools Knowledge Framework | Business model 8. REVENUE AND COSTS 8A School fees / Payment Is payment scheduled in a way that helps caregivers manage the household budget? What do target customers think of the price? How does the price differ according to student circumstances? Who pays for the students? How often are they charged? What payment mechanism is used? What mechanisms are in place to address non-payment? Is there a school meals programme built into the cost? 8B Costs / Salaries How much does it cost to establish a new school? What are the ongoing costs of operating the school? How much do the costs vary each year? How do the costs at the school level break down (salary versus. non-salary)? What are the variable versus fixed costs? What is the per student cost? What is the tax status? How do teacher salaries compare to other schools? 8C Administration / Surplus How much is spent on central administration? What is the ratio of administrative to school costs? How much is spent on research and development?
Low-Cost Private Schools Knowledge Framework | Business model 9. FINANCE 9A Valuation What is the chain currently valued at? How much debt does the chain have? How does Pearson value the chain? What opportunity is there to invest? 9B Investors How has the chain been financed to date? What is its level of debt versus equity? How does the chain acquire real estate and infrastructure? Are these assets owned or leased? Is the title of the land owned? Is the chain locally or internationally owned? Are the schools franchised or directly managed? Is there the opportunity for expansion through School Head share participants? 9C Balance sheet ’ How many students are needed for a school to break even? How profitable is the chain (what is the profit margin/return on investment)? What is the marginal student profitability? How are profits handled (eg. Reinvestment)? Is there profit-sharing for school staff?