Last week, Simon Connell, COO of Educate, spoke at the Education Investor Conference about Educate’s experience of commissioning schools overseas. Simon has put together his top five tips for investors and operators looking to open schools in frontier countries.
- Choose your partners carefully. Most international school projects will be joint venture with a local partner. Thorough due diligence on that partner, their reputation and their capacity to deliver on their promises is essential.
- Accept that budgeting is often an art rather than a science due to the immature markets for goods and services leading to volatility in pricing. Calculating costs and returns on investment with any degree of confidence is difficult and the budget holder’s expectations need to be managed carefully.
- It is important to conduct thorough and tailored local market analysis to determine the size of your customer base in your catchment area. This can take a long time especially if the school proposition represents a new concept to the customer base. Relying solely on published data is a dangerous strategy.
- The stroke of a pen can change a business model. The litmus test as to whether to enter a new country should be determined by how robust the rule of law is. Education investment really is the long game and it is key to have a level playing field. A change in government policy can ruin your business model overnight.
- Stick to the devil you know. Relationship building with local stakeholders and government takes time. However, once trust is established the dialogue becomes more constructive that investment pays off. It therefore makes sense to leverage this rather than spread resource across a number of different countries.