Issues and Ideals in Partnership in New School Project

Vinod Kakumanu
Aug. 31, 2019, 4:54 p.m.

There remains a possibility of disagreements and even conflict of interest between partners in a business venture, likewise in a school project where several promoters come together, partners may find themselves at cross-purposes sometimes. In this article we are trying to delve into the nature and dimensions of such partnerships based on insights gained from our experience in the arena. The franchisee-franchisor relationships are excluded from the present discussion. Certainly, K-12 school project in India are not typical business ventures, they are intended embodiments of vision rather than projects based purely on pragmatic commercial considerations. Inflexible equations of supply and demand are not exactly what the school ventures are based on. Having said that, it must be acknowledged that sustainability of a school project cannot be compromised, ostensibly for an ideal or vision. The financials of a project and returns on investments are the subjects which need attention of the primary stakeholders mainly the partners.

Types of possible partnerships

School projects constitute one of the very few ventures in which partnership do not necessarily mean partnership in the actual investment. It can very well be the partnership of different set of expertise, of common vision and different strategies, yet the partnership in the asset or investment is the type of partnership wherein issues of unbridgeable nature arise frequently and often pose risks which are existential in nature.

The problems that can possibly arise

A rented property/land— the mandated lease duration by the boards of education for a school land is 15 years minimum, it is not advisable to leave the room for any uncertainty in the clause of renewal as it is highly likely to cause radically difficult issues unless the arrangement is purposefully tentative and a shift of the location has been planned all along.

Capital investment can be made by several partners. If one or more of them decides to withdraw from the project midway for any reason the project can be seriously jeopardized. It is seen that investors get impatient more often than expected and decide to throw in the towel after they sense that the project is not faring as well as they hoped.

The least common scenario which is equally if not more serious arises when partners disagree with regard to the vision of the institution or the strategies being employed to reach the vision. If a common ground is not sought in time the school might suffer irreparably in performance and reputation.

There are other scenarios where lapses in understanding can cause disturbance or even derailment. The operational partners who are in charge of different departments for instance transport, recruitment, asset management etc. may too have a falling out.

What is needed for a successful and lasting partnership?

Like-mindedness is of course desirable in partners foraying into the K-12 education sector. It must be understood that motives must not be too divergent.

It is desirable for the partners to have different distinct sets of expertise. To be resourceful and knowledgeable in various areas is important. A leader must be chosen from among the partners for coordination of functions for the establishment and management of the school and all the partners must be ready to complement the functioning of the leader.

The partners who are investing capital into the school must realize and come to terms with the fact that though schools are not loss making ventures, returns are slow to come by and they should be ready to wait until the school comes of age in terms of capacity and functioning.

The investors should know that in the early stages school might not be able to function and grow on its own revenue, it might require cash injections from time to time. This necessitates a corpus fund of sorts for the development of the school until it becomes self-sufficient.

It is necessary to have reasonably good insight into the school business for all the partners as the knowledge of the gradual nature of the progression of schools precludes disappointment.

If partners have mutually complementing sets of expertise, the partnership flourishes and so does the project.

School is not a typical business which is run on profit and loss considerations solely. It is ultimately an instrument for social development, a means to make a mark and leave a legacy. if such are the motives school opening is a great proposition and commitment to it is bound to show as India is need of great schools.