The business plan was ranked by Prof. Rama Velamuri as one of top three ideas of the class of 2013 PGPMAX at ISB. The plan suggests to establish Skills Training Centers for Entry Level Jobs in Services Sector. Group of six classmates were kind to have chosen my ideas, reserach and helped develop it into a realistic business plan.

1. Business Idea
Skills Training Centers for Entry Level
Jobs in Services Sector

2. 98%
Problem
Only 2% of Indian population is formally trained

3. Business Opportunity
• 767 million Indians 15-59 years as of 2011
• Skill shortage, unemployment a huge challenge
• Skilling industry is expected to be USD 100
billion
• India needs 500 million skilled population by
2022
SOURCE: FICCI, E&Y Report

4. Value Proposition
• To provide educated unemployed youth
with job oriented training
• To provide industry semi-skilled labor
reducing their training expenses and
attrition rate
• Bring corporate structure and a scalable
model for a nationwide chain of centers

5. Huge Untapped Potential
Only 2% of Indian population is formally trained
SOURCE: FICCI, E&Y Report

6. Population pyramid - 2011 and 2025
SOURCE: FICCI, E&Y Report

7. External Environment
• Market
• Government policy environment highly supportive
• Rs. 1000 Crores for skill development in Union Budget 2012-13
SOURCE: FICCI, E&Y Report

8. External Environment
• Competition
• Currently there are no large scale established
players, except in-house training facilities
• Number of players is high ( > 10,000) but
• Competition is fragmented and unorganized
• Competition can co-exist because of huge
demand

9. Business Model
• Set up training centers in Tier 2 and Tier 3 cities
• Course duration
• Up to 6 months
• Part-time,
• 3 days a week
• Up to 4-8 courses per center
• Course fees – Rs. 15,000-30,000 per course
• Half to be paid by prospective employer and
half by student
• Customized multi media course content
• 100% placement guarantee to students

10. Business Model
• Positioning
• Position against formal long duration expensive courses
which over-serve the market
• Example
• A 3 year course in Hospitality management costs Rs
160,000
• This gets the student a Rs 8,000 job
• The student is over-served with the 3-year course
• Our offering (maximum Rs 30,000 of which student pays
Rs 15,000) is enough
• Student is assured of the job because of our corporate
tie-ups
• Flexibility in course content and structure to remain relevant
to industry needs

11. External Environment
• Challenges
• No accredited certification being offered
• Overcome by giving placement guarantee,
and low or no fees for student
• Recruitment of trained faculty
• Overcome by standardizing content and get
it developed by world class providers
• Cost of infrastructure
• Overcome by keeping fixed costs low e.g.
rent space instead of buying

12. Skills Development Center Structure
• 5000 square feet space
• Rent space
• Staff to consist of
• 1 Center Manager, 3 Trainers, 1 Counselor, 1
Accountant, 1 Business Development Manager and
3 Front Office personnel
• Capital Expenditure - ~Rs 10 Lakhs/year
• Operating Expenditure - ~Rs 44 Lakhs/year
• Course/Content development cost - Rs 1.5 Lakh/year

13. Year 1 Plan
• First center in Nashik, Maharashtra as Proof of
Concept
• Courses – Year 1
• Real Estate- Sales Executive
• Hospitality- Hotel Manager
• Organized Retail- Sales Executive/Stores Manager
• Content being developed with IL&FS, Mumbai
• Sign MOUs with leading corporates – a movie
exhibition chain, a soft drink manufacturer – to assure
100% placement
• Minimize fixed costs, and hence do not own any real
estate

14. Critical Success factors
• Successful Proof of concept: Nashik Center
• Successful tie up with Corporates for placement: Preliminary
interest from leading movie exhibition chain and soft drink
company for semi-skilled employees
• Supply: Attracting good quality students
• Geographical spread : Focus on Tier 2 and Tier 3 cities in
Maharashtra, Tamil Nadu, AP and Karnataka
• Execution : Requirement analysis, front end tie up through
business development, high end audio/visual content

15. Sales & Market StrategyBranding
Job oriented
training
100% Placement
Professional
trainer and
sophisticated
delivery
MarketPositioning
Affordable, job
oriented training in
Tier 2/3 cities
Position against
formal long
duration expensive
courses
SalesStrategy
Collaborative
efforts with
colleges and
schools
Business
development
team for
corporate clients

16. Team
• Team with industry contacts, experienced with project
execution and fund raising
• Members:
• Mehraj Dube
• Sreedhar Challa
• Sekhar Chebolu
• Bipeen Valame
• Dhiroj Padhy
• Kamal Gianchandani

17. Financial Projections
Assumptions
• 20 Centers in 5 years
• Each center runs 2 batches every day with a maximum class strength of
50
• There can be 4 batches in a year
• Projections based on up to 60% occupancy
• Rs 10,000 per student fees from prospective employers assumed in
financial projections
• Rs 5000 fees assumed from students
• All centers will be based on the same design to give a consistent look
everywhere
Government subsidy not incorporated in financial projections. Any
subsidy received will be additional profit

18. Financial Projections
Item Year1 Year2 Year3 Year4 Year5
Cities 1 2 6 10 20
Capex 1,805,000 800,000 3,120,000 4,720,000 11,800,000
Opex 4,395,000 8,066,201 19,849,573 30,859,585 61,988,659
NetRevenue (3,800,000) (2,866,201) 9,430,427 18,420,415 70,211,341
Courses 4 4 6 6 8
Batches 2 2 2 2 2
MaximumCapacity(students) 400 800 3600 6000 16000
Numberofstudentstrained 160 400 2160 3600 9600

19. Investment
• Funding Requirement: Rs. 85 lakhs (2 years CAPEX
and OPEX)
• Promoters Contribution: Rs. 55 lakhs
• Investment opportunity: Rs. 30 lakhs for 5% stake
• Exit Strategy and possible options:
 Strategic Sale to leading man power
hiring/training player in 2-3 years
 Venture Capital funding to scale up

20. Thank You