Study Place in Brazil...Almost passive income

[guitmg]

Hi there! I've decided to start this thread to motivate me to complete the tasks I need to start this business and also to get feedback from this great community.

I'm a 25 years old lawyer in Brazil, but I hate what I do. Being a lawyer in Brazil is not as glamorous as in the US.

Anyway, about the business: In Brazil (and I'd really like to know how does it work in other countries), in order to work for the government you have to pass a test that, for the high paying jobs, is really really difficult. So if anyone wants to be a judge, a public attorney, a prossecutor and things like that, they usually study for years and years until they are able to pass the tests.

The thing is that everyone wants to get the public job down here. Specially if you have a law degree (witch is really easy to get in Brazil), I'd say that 95% of the parents will encourage their children to study for these public tests. The salary is good (something around 25k/month in our money witch is about $7k) remembering we are in a third world country, but the best thing about a public job is that, once you are in, it is almost impossible to be fired. So you pass the test, you make good money, you don't really have to work hard since no one can fire you only because you are lazy, and when you retire the government will pay you the same salary you used to make when you were working. Good enough for most Brazilians.

So, as I said, people usually study long hours a day for years until they finally pass the test and get the job. Most of the people study at home. Some take online or physical preparation courses and also do a lot of reading and exercises. Many don't work and live by their parents while studying.

The thing is many people doesn't like to study at home. They always get distracted by stuff, their parents call them all the time and things like that. Public libraries are not a thing down here. They are old, noisy, don't have wifi etc. People just don't study on libraries on a regular basis.

So a I was talking to a friend of mine who is studying and she said she was renting a space to study. She said it was the only one she knew here in my city and there were no more available spaces do be rented.

The place looks like this:

You go there and rent one box. Every box has illumination, power supply and the place has good wifi and air conditioning.

The business: rent a big empty room and put those boxes there and rent to people who study for public tests. I will charge them by turns (morning, afternoon and night). They can rent for one turn or all of them. The place will be open from 7am to 22pm 7 days a week.

Other ways for monetizing: I need help on this. The place will have a separated space where people can eat and rest a bit. So I'm thinking about selling food there too. Maybe get a vending machine, idk. The thing is I want it to be as passive as possible and keeping the costs low. Because of that, I wont have any employees. Another thing I've thought about was to have a copy machine there because the students take copies of books and stuff. I'd have a machine where I could set a password for each one of them and they use the machine by themselves and i'll charge them every week. Any other ideias of how to extract more money out of it?

Next steps: I'm finishing a web dev course on udemy. I know a bit about html, css and wordpress. My plan is to finish the site and start advertising on facebook. I want to build an e-mail list even before actually starting to rent the place and buy the stuff. I plan to offer 50% off the first three months for people who opt-in. The thing is I wanna test de audience first but I really really think there is a huge market for it in my city. I live in a big city, around 3 million people. A quick search on facebook audience insights give me an audience of 150k people. All I need is to get 50 people to rent the boxes and it's a good start. As i said, the other place that existis is already out of boxes to rent. So there is demand.

I know this may not be a fastlane business, but it is something that can make me money and give me the free time to work on something that's really going to make me rich. As I said before, after I open the business and get the clients, it's gonna be almost passive income.

Well, i think that's enough for a start. I'll keep updating this thread and I'd really appreciate your ideias about the business.

 

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[Carnage]

Sounds like a good idea since you say that public libraries are not a viable option for studying there.
How much does it cost to rent a big room like that in your city?
And how much are people paying for a session in the place that already exists?
Since you said you dont want employees, will you be sitting in the room all day?
You could serve coffee there as another way to produce income.

 

[Choate]

Any other ideias of how to extract more money out of it?

I like the idea, but I'd prefer if this read: Any other ideas how to provide more value? Here's why:

1. Despite it being a one man show, there are other concerns to think about. How will you keep it clean? What about security? There are other costs associated with running a coworking space, which are either going to eat into your time or profits. Are you going to let someone rent out a space where someone just left an empty pizza slice and spilled soda? No, so you either are going to have to clean that up yourself (bye bye passive income) or hire a cleaning service (more expenses).

2. I think the idea of having 3 time slots a day is chasing money. You're telling me I have to pay to study until noon but then have to pay again to stay there? I would let people study for the day, or break it up into two timeslots at most. How are you going to differentiate from something like Starbucks (yes there's Starbucks in Brazil for those who don't know), libraries, or other local coffee shops? And how would you ensure people don't overstay, or make sure they pay their dues? Is there a penalty if they stay an extra hour?

3. I'm not sure the box idea is the way to go. A quick search on Google for "modern coworking space" shows wide open areas, various arrays of tables, unique spaces, etc. A cubicle stifles creativity and is going to severely limit you to people studying for these tests, instead of opening up the market to potential entrepreneurs, freelancers, and more. You might have one section with 10 "boxes" but maybe the rest is opened up to enhance creativity and encourage teams or groups of friends to sign up.

Just some food for thought.

 

[RSN]

Are you from Belo Horizonte? Your avatar tells me so lol.
Another mineiro here.
It may sound weird to many people but it makes complete sense to Brazilians and you know you already have market validation because of your competitor.

Of course you want as much passivity as you can get, but them who is going to manage and secure the place? I don't think many women would fell comfortable being possibly alone with a strange man around in a place with no stuff, maybe you can get students to work part time for cheaper then full time employers.

How much are your competitors charging per hour or block? How much are people willing to pay for such service?
If the demand is there and the price is right, it may be just the first of a chain or maybe a franchise model. And that my friend, is very very Fastlane .

Concursos (the exam) and the people wanting a safe government job aren't going away anytime soon.

Good lucky.

GALOOOOOOO!!!!!!!!!!!

 

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[Xavier X]

I like the idea, but I'd prefer if this read: Any other ideas how to provide more value? Here's why:

1. Despite it being a one man show, there are other concerns to think about. How will you keep it clean? What about security? There are other costs associated with running a coworking space, which are either going to eat into your time or profits. Are you going to let someone rent out a space where someone just left an empty pizza slice and spilled soda? No, so you either are going to have to clean that up yourself (bye bye passive income) or hire a cleaning service (more expenses).

2. I think the idea of having 3 time slots a day is chasing money. You're telling me I have to pay to study until noon but then have to pay again to stay there? I would let people study for the day, or break it up into two timeslots at most. How are you going to differentiate from something like Starbucks (yes there's Starbucks in Brazil for those who don't know), libraries, or other local coffee shops? And how would you ensure people don't overstay, or make sure they pay their dues? Is there a penalty if they stay an extra hour?

3. I'm not sure the box idea is the way to go. A quick search on Google for "modern coworking space" shows wide open areas, various arrays of tables, unique spaces, etc. A cubicle stifles creativity and is going to severely limit you to people studying for these tests, instead of opening up the market to potential entrepreneurs, freelancers, and more. You might have one section with 10 "boxes" but maybe the rest is opened up to enhance creativity and encourage teams or groups of friends to sign up.

Just some food for thought.

I disagree that having three time slots is inherently "chasing money." Perhaps, you didn't get the intended operating model.

Your suggestion is like going to Starbucks and:

1. Being told you can only order a gallon of coffee. Nothing smaller. <-- INCONVENIENT for you (you don't want a damn gallon).
2. At the same time, Starbucks is selling the gallon of coffee at the price of a small coffee. <-- TERRIBLE for their bottom line.

Combine these two things, and you have the recipe for a shitty business about to go bankrupt.

That said, such businesses (this one, cyber cafes, co-working spaces etc) have to offer incremental time blocks.
1 hour, morning, afternoon, evening, overnight etc. It is crucial they do. They are not providing airbnb accomodation.

 

[Choate]

I disagree that having three time slots is inherently "chasing money." Perhaps, you didn't get the intended operating model.

I understand the intended operating model.

The thing is I want it to be as passive as possible and keeping the costs low. Because of that, I wont have any employees.

"Any other ideias of how to extract more money out of it?"

it is something that can make me money and give me the free time to work on something that's really going to make me rich

His intended operating model is ME. Make ME money. Give ME time. Cost ME nothing. His focus flipped 180 degrees from them (who they are, why they need this, and so forth) into how he can extract the most amount of money while doing the least amount of work.

He can charge by the hour, split it up 6 different ways, have 3 sessions per day, offer a monthly membership, or give Groupon discounts. He lost me when he went from talking about his customer to talking about how it would inconvenience his life to provide value to them.

What is going to allow him to fill it with 50 customers every day?

a) Asking how to extract more money out of it, providing as little value as possible while maximizing profits, focusing on cheap one-off's like vending machines and copymachines?

Or

b) Asking how to provide more value to the student who is going to be sitting in there? What could set you apart? Things like 24 hour availability, comfortable seating, a clean environment, safe check in system (need a card to swipe in), sound proof conference room, some kind of deal with a local restaurant/food delivery service/grocery store, and so forth.

I think he has a great idea but is asking the wrong questions.

 

[Xavier X]

@Dark Water
Perhaps, you can get your point across more effectively by not addressing me as the OP.

While the OP placed emphasis on the monetization, the overall idea offers specified value.
He is not trying to build a co-working space for creativity, like you're egging him on to.

He is trying to create a facility which removes "distractions" and not one that adds to it - like a co-working space.

I'm not saying you're making an invalid point by suggesting value over money-chasing.
However, the specific aspect you chose to call the OP out on (time blocks) with regards to this, was invalid.

 

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[Choate]

@Dark Water
Perhaps, you can get your point across more effectively by not addressing me as the OP.

While the OP placed emphasis on the monetization, the overall idea offers specified value.
He is not trying to build a co-working space for creativity, like you're egging him on to.

He is trying to create a facility which removes "distractions" and not one that adds to it - like a co-working space.

I'm not saying you're making an invalid point by suggesting value over money-chasing.
However, the specific aspect you chose to call the OP out on (time blocks) with regards to this, was invalid.

In my experience with dozens of co-working spaces in the past, I have never come across one that charges by the day, much less time segments. So for me to hear that you would charge for 4 hours - it sounds cheap. Like a ripoff. In Boston (where real estate is a premium), you can get a coworking space for $300/month, and some would even offer 24/7 access at that price, in a good location in the middle of the city. So I think I have a very valid point when I say, whoa - why are you trying to charge students for hours instead of days or months?

Considering it was immediately preceding his wildly monetization thoughts, it further enhanced my notion that it was merely to increase revenue.

His very target market is: "Most of the people study at home. Some take online or physical preparation courses and also do a lot of reading and exercises. Many don't work and live by their parents while studying."

So nobody works or has ever held a job, they just study and hold out while being supported by family in order to land that one big government job. His sample size of 1 is a friend, who may or may not be an outlier.

In a third world country, how big is the target market of families who can afford for their children to not only forgo working a job, but also to pay for them to study in a cubicle? If that is the case, perhaps they would've sent them to educational institutions or abroad.

Sure, having nothing but a cubicle and some silence may be enough value to entice those studying to pay for 4 hours at a time. But if they don't hold a job and their families already disrespect their time by interrupting them often (as noted in the OP), how will they convince their parents to see the value in a cubicle? That's why I don't think its time to talk about vending machines or copiers just yet but the overall concept, and how a co-working space (you can always have a silent section with cubicles) would attract a bigger audience who may actually be able to pay for it afterall.

 

[guitmg]

Sounds like a good idea since you say that public libraries are not a viable option for studying there.
How much does it cost to rent a big room like that in your city?
And how much are people paying for a session in the place that already exists?
Since you said you dont want employees, will you be sitting in the room all day?
You could serve coffee there as another way to produce income.

Thanks for helping!

I will spend something around 2,5k for a 100m² place which is enough for 50 boxes and lunch and relax space.

The price varies depending on the plan you choose. To give you an average price, my competitor charges 200 a month for 2 turns on a trimester plan. But there are 1 and 3 turns plans, monthly and semester plans. The cheapest one is 150 (1 turn on a semester plan) and the most expensive one is 260 (3 turns on a monthly plan).

At first I can stay there, as I'm willing to quit my job as a lawyer. Quiet place where I can focus on other projects. But my real plan is to make one of my students like a monitor. i don't charge him and he is responsible for the place.

The thing is there is nothing to do there. The first time I went to visit my competitor, the owner wasn't there and there were no employees either. Once the place is opened, the student goes there sit on his chair and study. They bring their food from home or maybe buy it from the vending machine. Idk. i really feel like there is no need for me to be there once the thing is up and running well.

 

[Pedro Henrique]

I am also from Brazil and think that's a good niche.

 

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[guitmg]

Hey @Dark Water and @Xavier X thank you very much for the feedback.

I think the way I've talked about the business and the monetizing thing kind of caused a miss perception of things.

I totally think about providing value to the student. Actually my goal is to provide such a nice place for them to study that maybe I can even charge more than my competitors and the clients will still be there.

A cleaning person is already included in my planning. The place will be super clean, quiet, with sound proof windows and doors, nice temperature, comfortable chairs and everything. Please don't get me wrong! i don't want to rip my clients off and extract their money by any means. I am pretty aware that the best possible service is the way to go.

So, after providing them with a lot of value, then I thing about getting the most out of it for me. And also providing more value to them. Like my competitor only has a tiny lunch place with a table, some chairs, water font, microwave and a refrigerator. I think that the vending machine also adds value do the student. I'm offering one more service and also making money out of it. Same as the copy machine. I think it will be nice for them to make a quick copy when they need.

Talking more about the business model, it cannot be like a co-working. We have several nice and modern co-working places down here and I am pretty confident that the people studying for the public test are not going there to study. A place for this kind of students has to be specifically made for them. They don't want the phone ringing, they don't want people coming and going all the time. They need a extremely quiet place. We are talking about people who sit on a chair and study 8, 9, 10 hours a day everyday of the week.

I don't want to compete with the co-workings. It is a different business.

And about dividing the day into turns, it's not like I'm going to charge people for the extra hour. Actually I think I need to explain the pricing model a little bit.

I am not going to be dealing with a different person coming to the place everyday. It is going to be like a gym membership. The student is going to pay a monthly value that is going to vary according to the plan he chooses. So I'm going to offer 1, 2 or 3 turns plans and they can be monthly, trimester os semester plans. The monthly plan is going to be more expensive than the trimester plan that is more expensive than the semester one.

Dividing into turns is also good for the student. Some of them may not want to spend the whole day there, so they can pay less for a 1 or 2 turns plan.

That is the pricing model my competitor is using. I think it makes sense and could not come up with a better model yet. Not saying it is the best model, just couldn't think of any better.

About the demand, I think it really is there. Please notice that we are a third world country but we aren't a poor country. A middle class family here lives comfortably. The average monthly fee I am thinking about is around R$200/month (about $58). It is just a little bit over the price people pay for going to the gym, for example. Let's say a middle class family making around 10k/month is willing to invest 200 on their kid if they see the value in that. As I said, I live in a 3 million+ people city and all I need is 50 people at first.

Loved the ideia about the safe check in system. Definitely going to implement that. Safety is a concern but that are a few things to be mentioned: the room is going to be on a comercial building that has access control. We are going to have cameras in the place. But the major thing is: there are going to be the same 50 people there everyday. It's not going to be like a library or starbucks where people come and go all the time. Every student is going to be there for at least a month.

Also the deal with the restaurant or delivery is really good to think about and it got me thinking about deals with the online preparation courses too. Thank you very much!

 

[guitmg]

Are you from Belo Horizonte? Your avatar tells me so lol.
Another mineiro here.
It may sound weird to many people but it makes complete sense to Brazilians and you know you already have market validation because of your competitor.

Of course you want as much passivity as you can get, but them who is going to manage and secure the place? I don't think many women would fell comfortable being possibly alone with a strange man around in a place with no stuff, maybe you can get students to work part time for cheaper then full time employers.

How much are your competitors charging per hour or block? How much are people willing to pay for such service?
If the demand is there and the price is right, it may be just the first of a chain or maybe a franchise model. And that my friend, is very very Fastlane .

Concursos (the exam) and the people wanting a safe government job aren't going away anytime soon.

Good lucky.

GALOOOOOOO!!!!!!!!!!!

Ohhh boy! How nice is is it to have another Galo doido here! Yes I'm from BH.

I think I've answered the safety question already. There are going to be the same people everyday going there. Cameras can also provide some safety. But you will get my point here. They are all going to be middle class law bachelors that are studying to became a judge os something like that. Once people get to feel the environment there will not be place to fear.

At my competitor, people leave their books and note books on the table between days.

And yes, I do think about making a few students like "monitors" so they can help someone out, reset he modem when the internet is down, add paper to the copy machine and that kind of stuff.

 

[Xavier X]

In my experience with dozens of co-working spaces in the past, I have never come across one that charges by the day, much less time segments. So for me to hear that you would charge for 4 hours - it sounds cheap. Like a ripoff. In Boston (where real estate is a premium), you can get a coworking space for $300/month, and some would even offer 24/7 access at that price, in a good location in the middle of the city. So I think I have a very valid point when I say, whoa - why are you trying to charge students for hours instead of days or months?

Considering it was immediately preceding his wildly monetization thoughts, it further enhanced my notion that it was merely to increase revenue.

His very target market is: "Most of the people study at home. Some take online or physical preparation courses and also do a lot of reading and exercises. Many don't work and live by their parents while studying."

So nobody works or has ever held a job, they just study and hold out while being supported by family in order to land that one big government job. His sample size of 1 is a friend, who may or may not be an outlier.

In a third world country, how big is the target market of families who can afford for their children to not only forgo working a job, but also to pay for them to study in a cubicle? If that is the case, perhaps they would've sent them to educational institutions or abroad.

Sure, having nothing but a cubicle and some silence may be enough value to entice those studying to pay for 4 hours at a time. But if they don't hold a job and their families already disrespect their time by interrupting them often (as noted in the OP), how will they convince their parents to see the value in a cubicle? That's why I don't think its time to talk about vending machines or copiers just yet but the overall concept, and how a co-working space (you can always have a silent section with cubicles) would attract a bigger audience who may actually be able to pay for it afterall.

First question for you is.. have you ever traveled to, and experienced a third world country for more than a week or two?
(This does not include going on a cruise or staying on a resort).

So I think I have a very valid point when I say, whoa - why are you trying to charge students for hours instead of days or months?

Not quite.
That's a purely straw man argument. You imagined something he didn't suggest, and then criticized that thing.

It's exactly like someone saying they want to launch a hotel or an airbnb property.
Then another responding:
"whoa - why are you trying to charge people for days instead of months or years only? Like it's done in traditional real estate rental."

These are different business models. The consumable chunks are served different.

So whatever experience you have with co-working spaces (while related) does not directly apply to this.
Why? It is NOT a co-working space.
In addition, co-working spaces in most third world countries DO offer daily rates.
The fact you haven't come across it doesn't mean it's not there.

p.s: I also live in Boston, but don't subscribe to the appeal of co-working spaces.

 

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[windchaser]

Hi, I think the concept is good, the need is real and you just need to figure out what your customers really want and make adjustments. The best way to know is to ask them. I would suggest that you conduct some interviews on people studying for the exams and ask them what they look for an value.
In my country, Spain, those exams are very popular as well and I have several close friends who have done them or are studying for them.
My two cents from what I hear from them are the following:
Many of them can study at their home with no distractions but instead choose to go to a library or somewhere public, and the main reason is to have some type of social interaction and moral support. That is why I am not so fan of the cubicles, maybe some cubicles (isolated in part of the roomby am door or something when you look for deep concentration but also keep some social space that enables human interaction or at least seeing people.
The majority of people who study for these exams (at least the ones that I know) Study an average of 8 hours a day some even more, so I am not so certain that the slots are such a great idea, maybe two could work or at least offer a discount if they get the whole day, as your public they will be the ones that know best.
Another thing that you should consider is, as was mentioned in some posts, is the cleaning and security. Especially for women, this is an important issue, I wouldn't go to and place that has no security and all to study and told concentrate. Also, you would need to control who enters.
As for additional ways of monetize it, I would change the framing to what other services do my customers value? Maybe you don't even have to sell anything additional, but having services others don't offer, such as printing, wifi or coffee could enable you to charge more and attract more customers.
Good luck in your venture!!

 

[Choate]

First question for you is.. have you ever traveled to, and experienced a third world country for more than a week or two?
(This does not include going on a cruise or staying on a resort).

So whatever experience you have with co-working spaces (while related) does not directly apply to this.
Why? It is NOT a co-working space.
In addition, co-working spaces in most third world countries DO offer daily rates.
The fact you haven't come across it doesn't mean it's not there.

As I said in my original post, "Just some food for thought." I admit, I don't have my PhD in Shared Work Environments in Third World Countries. While the co-working suggestion may not have been feasible in this situation, it seems a few other of my ideas may have helped out, and for that I am grateful I could provide value in some way. OP, thanks for clarifying your value proposition. Its much better to see that than, "how to monetize a needy group of people?", which I mistakenly took your first post for.

 

[Bitfocal]

Im from Brazil as well and I'm not sure that it is a great ideia. If you get a 150m2 room, 15x10m, let's say you put 48 boxes there (8 boxes on each line, 2 2-sided lines in the center and 2 single-lines on the wall). Lets say also you charge 150$/month each customer who'd like to study full time and you manage to rent all the 48 boxes. (In Curitiba, south of Brazil, these kind of business charge around 150$ for that). So the monthly revenue would be 7,200$.

Companies who operare this kind of business successfully here usually are classroom courses whose main business is teach and prepare students for the exams in the first place. Dont think rental model for study only would work well as the main revenue stream.

 

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[guitmg]

Im from Brazil as well and I'm not sure that it is a great ideia. If you get a 150m2 room, 15x10m, let's say you put 48 boxes there (8 boxes on each line, 2 2-sided lines in the center and 2 single-lines on the wall). Lets say also you charge 150$/month each customer who'd like to study full time and you manage to rent all the 48 boxes. (In Curitiba, south of Brazil, these kind of business charge around 150$ for that). So the monthly revenue would be 7,200$.

Companies who operare this kind of business successfully here usually are classroom courses whose main business is teach and prepare students for the exams in the first place. Dont think rental model for study only would work well as the main revenue stream.

Thanks for sharing your thoughts, but I could not understand why you don't think it is a good business.

Yes, your calculations are going in the right direction but the revenue is supposed to be higher as (i) some costumers only rent the box for one turn, so the same box can be rented for another person and (ii) we will have extra income from food, copy machine etc.

But the one thing that makes me really wanna work on it is the fact that there is already one place like that here in BH. And it is already out of boxes.

The thing is, this is not going to make me rich, I know that. This is something that is gonna give me some income and free time to work in other business.