The Migration Company (TMC): Making Every Contract Pay Its Way

02Why did TMC's margin swing with every batch?

The trouble sat in how money came in and went out. TMC earned its revenue per student, but paid for teaching by the hour. Each batch was capped at 15 to 20 students, and instructors were paid per session whatever the headcount.

So the teaching bill for a batch is largely fixed once it starts, while revenue rises and falls with enrolment. When demand is uncertain, the margin on each batch swings with how many seats are filled.

An illustration, with round numbers that are not TMC's: say a batch costs ₹2 lakh to teach and each student pays ₹20,000. Ten students cover the cost exactly. Eighteen students bring in ₹3.6 lakh and leave ₹1.6 lakh. Seven students bring in ₹1.4 lakh and lose ₹60,000.

The same classroom and the same teacher can make money or lose it depending on two or three empty chairs.

A fixed price per student ignores that swing.

04What did the three-year model and the budget add?

Alongside the pricing work, SRF built an integrated three-year financial model. It brings revenue from both lines of business together with costs allocated by department.

Those departments are the direct cost of delivery, sales and marketing, and general administration. The model also carries working capital assumptions, a cash flow forecast, breakeven analysis and a plan for how much capital the company needs.

The model gave leadership and investors a view of the burn rate, the monthly cash the company uses. It also showed the points at which the business scales, and whether it can sustain itself over time.

For the fundraise, SRF turned the model into a 12-month operating budget. Revenue targets follow the enrolment assumptions, and each department has spending limits. The budget sets out expected EBITDA, roughly operating profit before interest, tax, depreciation and amortisation. It also maps expected cash flow, which shows how many months the money will last.

That budget became the base for investor discussions. It is the kind of planning our FP&A team builds: a budget the business runs on month to month.

06How did TMC expand abroad without betting the company?

Tie growth to the cost of each nurse placed

SRF formalised the Recruit, Train, Deploy pipeline so that demand, training capacity and placement economics stayed inside set profitability limits. Partnerships with hospitals and consultants were structured to give TMC better sight of demand.

Placements now run against set thresholds and a cost cap per nurse. They exist so that expansion stays profitable, one nurse at a time.

Set hard limits before entering Europe

For growth abroad, TMC set up a joint venture in Europe. SRF gave it its own financial plan and breakeven model, with expense limits and controls on cost per nurse.

It also carries stop-loss rules: points agreed in advance at which spending stops if results fall short. The venture launched with all of these in place, and it is judged on whether each placement makes money.

08What should a founder who sells seats in a batch learn from TMC?

TMC's problem is common to any business that fills a fixed slot: a classroom, a cohort, a training programme, a bus. The cost arrives when the slot runs. The revenue depends on how many people turn up.

• Know the breakeven headcount for every batch before you quote a price. If you cannot say how many seats pay for the teacher, you are guessing.
• Write the price as a range tied to enrolment. A cost-recovery clause in the contract protects the margin when a client sends fewer people than promised.
• Treat dependence on one client, especially one who is also an investor, as a risk to reduce. TMC set itself a 60% target and went further, to about 40 to 45%.
• Build a budget you check every month and report to investors every quarter. When revenue misses, you then know by how much and why.
• Put limits on expansion before it starts. A breakeven model, a cost cap per placement and a stop-loss point let a new venture fail small if it has to.

If your margins move with every batch, start with why unit economics is a strategy question. When you are ready to raise, our VC and PE fundraising team starts from a model and budget like these.