This sample, miniature business plan summary article briefly x-rays the setup and running of a private secondary school in Nigeria. In this article we would be exploring the opportunities and some notable challenges facing operators of private secondary schools in Nigeria as well as startup expenses and first year sales projection.
Secondary
schools like many other types of schools are very profitable businesses to run
in Nigeria. An investment of over 266 million naira into this business can
yield 6 times more in profit within 7 to 10 years. The first 5 years are
usually rough for a new school but once it has gained acceptance, it would
become a highly profitable business recouping the total investment many times
over. The business is a cash cow that means it is capable of growing on its own
once there is adequate enrollment to support the business.
Introduction
Secondary schools form the bridge between primary education
and tertiary education. In Nigeria just like in many other countries, government
run secondary schools are becoming increasingly overburdened with huge public
demand and overworked but underpaid teachers. What’s more many secondary
schools have decaying and poor quality and inadequate facilities and equipment
(broken doors, leaking roofs, no windows, empty laboratories, no books in
library etc). Situation is so bad that going to a public secondary school is no
different from not going to one at all at least for more than 90% of public
school graduates. There is little evidence of them ever receiving an education.
There is also very little motivation for teachers to show up
at school or to do their jobs, the management is often corrupt and incompetent
and there is a lot of abuse of resources and priviledges common with civil
servants that you would find in such schools. The list of problems associated
with public secondary schools is so bad that private secondary schools become
the solution to these problems. The so called public model secondary schools
are grossly inadequate and no better than most well run private secondary
schools.
Demand for
Secondary School Education in Nigeria
Every Nigerian parent knows the importance of Education
especially secondary education in Nigeria. At the very least finishing
secondary education is a good start to most careers because it offers one
opportunity for semi-skilled employment – clerical roles, corporate guards,
drivers, front desk officers, personal assistants, sales girls etc. People who
earn these job roles whether in the civil service or private employment can
slowly move up the corporate ladder as they garner work experience and further
their education overtime. But it doesn’t end there. Every parent would want
their children to become doctors, business executives, lawyers or university graduate
because of increased career prospects. A secondary school leaving certificate
is one of the requirements for proceeding for further education at the tertiary
level. That means it is almost compulsory for parents to enroll their kids and
wards.
Business and
Investment Opportunities for Secondary Schools in Nigeria
But private secondary schools can be expensive for most
Nigerian parents. In some cases school fees can go as high as 6 million naira
per annum pers child for elite private schools or on average between 600,000
naira to 3 million naira per annum for most standard private schools and it
doesn’t cover other expenses such as; boarding fees, extracurricular
activities, excursion fees among other levies. The owners of these schools are
smiling to the bank because the profit margin on secondary schools is very high
- provided there are enough enrollments to sustain the operating costs. Picture
a secondary school charging 1.5 million naira per year with 400 enrollments
that is 600 million naira per annum with approximately 150 staff, the school
should be fetching the owner at least 180 million profit per annum as expenses
would like not exceed 30 million naira per month times 12 months in year.
·
Low standard of public secondary education, makes the
demand for quality private secondary schools imperative
·
Growing acceptance of many private secondary schools
as partners or agents for overseas based university admissions
·
Increasing population of middle class families
·
Rising middle class family population
·
High number of educated middle aged parents
·
Rising Urbanization
·
The role of quality secondary education in securing
overseas University admissions
·
Corporate employment by most educated Urban city
Some Challenges
of Running Private Secondary Schools in Nigeria
·
High cost of infrastructure
·
High cost of Educational materials, learning aids,
tools and equipment
·
Low morale among teaching staff
·
Examination malpractice
·
Overrating paper qualification to vocational training
·
Unsound academic curriculum
·
Huge overhead costs
·
Setting realistic school fees
These among other notable challenges make it difficult for
investors to make headway in raising adequate revenue and profits from running
standard private secondary schools in Nigeria.
What kind
of Secondary School are you looking to setup?
This is a straight forward question. If you are intending on
setting up a secondary school in Nigeria first question naturally would be is
it day or boarding? Both day and boarding schools have their advantages which
you must carefully examine to determine which you would opt for. The second
question is will it be co-educational or simply all boys/girls? Again each system
has it unique challenges and benefits. Also are you going to run a wholly
Nigerian based curriculum or a mixture of Nigerian and foreign curriculum? There
are other factors that go into deciding which secondary school type is suitable
for you. Location, scale, background of promoters, ideology of the promoters, target
market, identified market need etc.
How much
does it cost to setup a standard secondary school in Nigeria?
A standard private secondary school in Nigeria must meet the
requirements of 21st century learning environment, curriculum and
management system. That means they must be up to date, well equipped and
properly managed in line with 21st century system. Failure to meet
up will only force your school to be like majority of low standard secondary
schools in Nigeria. An international standard secondary school can create
insane amount of income for the owners. In this example we are assuming that
this standard secondary school will be
A Sample Startup
Expenses Summary
|
Item |
Cost |
|
Main school building (30 classrooms, 4 labs, ICT
and Music room and 6 offices) |
90,000,000 |
|
Lab Setup equipment and tools (biology, physics,
chemistry and woodwork) |
2,000,000 |
|
ICT equipment and tools (ICT lab infrastructure,
PCs for admin, marketing and research etc) |
8,000,000 |
|
Music Room Setup (with music instruments, books
and tools) |
3,600,000 |
|
Classroom Furniture |
9,600,000 |
|
Classroom Learning Aids |
1,800,000 |
|
Electrical gadgets and Electronics ( |
6,600,000 |
|
2 School Buses |
8,000,000 |
|
Decorations and designs |
3,600,000 |
|
Office Furniture |
2,400,000 |
|
Canteen utensils, tools and equipment |
1,200,000 |
|
Stationery |
1,800,000 |
|
Store Setup |
1,600,000 |
|
Sick bay |
600,000 |
|
Reception area setup |
1,000,000 |
|
Security post |
1,500,000 |
|
Multi-purpose sports center (tennis court,
football field) |
10,000,000 |
|
Hostel Facility |
12,000,000 |
|
Car park |
3,600,000 |
|
Assembly Hall |
6,000,000 |
|
Admin block with staff room |
6,000,000 |
|
Home Economics Lab |
1,200,000 |
|
Staffing requirements (1 year payroll etc) |
36,000,000 |
|
2 years’ running expenses |
18,000,000 |
|
Other expenses |
24,000,000 |
|
Total |
266,100,000 |
First Year
Projection
This projection assumes that the
private school will achieve 120 enrollments within the first 12 months and
would charge 1.2 million naira per annum. The proposed location is Abuja and
the school would grow rapidly from 3rd or 4th year so
that initial low ROI would be overcome by the 5th year in the worst
case.
|
1st year Sample Financial
Projection for a private Secondary School |
|
|
Item |
Figure |
|
Gross Revenue |
NGN 144,000,000 |
|
Cost of sales |
NGN 12,000,000 |
|
Operating expenses |
NGN 66,000,000 |
|
Profit Before Tax |
NGN 36,000,000 |
|
Profit After Tax |
NGN 25,200,000 |
|
Retained Profit |
NGN 25,200,000 |
|
Breakeven month |
10th month |
|
Payback |
6th or 7th year |
|
ROI |
9.5% |
Are you interested in setting up a private
secondary school in Nigeria and need a bankable business plan written for you?
Give me a call: 0803 206 4106 or email me on: paulonwueme@gmail.com to have one
prepared for you.
|
Other Sample Business Plans
in Nigeria |
|
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