Business Plan

Business Busin ess Plan

Algorizm Algori zm

EXECUTIVE SUMMARY: This business plan deals with the opening of a prof it it making educational institution. This kind of moneymaking business is very secure and profitable in Pakistani environment. In this plan I have discuss in detail the opportunity that has been crea create ted d in educ educat atio ion n sect sector or in rece recent nt year years s due due to the the intr in trod oduc ucti tion on of Cent Centra rali lize zed d Ad Admi miss ssio ion n Poli Policy cy (CAP (CAP)) for for Intermediate classes. This business plan will function on two main aspects: One is opening of a college for intermediate stud student ents s and seco second ndly ly as a tuit tuitio ion n cent center er for for O/A O/A level levels s student. The main purpose of the input of dual function is to properly utilize the premise that is college in the morning and tuition center in the evening. The strategy that the ACC will adopt is discussed along with the manage managemen mentt team team that that compri comprises ses of highly highly qualif qualified ied teachers. The future goals of the institution i.e. expending its camp ampus use es throug rougho hout ut the city are also broug ought into nto highlight. The market potential of the ACC is although low but still it is quite profitable as projected in the financial stat st atem emen ents ts.. The The main main comp compet etit itio ion n is with with gove govern rnme ment nt colleg colleges es but hardly hardly any compet competiti ition on prevai prevails ls with with privat private e inst in stit itut utio ions ns.. Ther There e is a hi high gh sc scop ope e for for O/le O/leve vell coac coachi hing ng center. Our service will be different in many respects such as low cost, highly qualified teachers and better environment for students. The promotion strategy using different forms of media along with its consistency using different styles are sought out.

Hamdard Institute of management Sciences

1


Algorizm Algori zm

Three years final projections are included in this business plan plan.. The The proj projec ecte ted d finan financi cial al stat statem ement ents s inclu include de Incom Income e statements, Balance Sheets and Cash flow statements. statemen ts.

I have named the institute as Algorizm College and Coaching center. It is named on a Muslim scholar, Ibn AlMusa Khwarizmi.Khwarizmi who is considered as the father of mathematics. In order to define the strategy of the company it is essential to understand the basis on which the institute institute will work. The strategy of the company and in fact the whole business plan will work work on these these firm groundi groundings ngs.. Since Since the incept inception ion of centralized admission policy (CAP) a new opening has been created in the educational sector. This centralized admission poli policy cy work works s on cert certai ain n basi basis, s, whic which h are are frui fruitf tful ul for for the the opening of private college. Some of the characteristics of this CAP include:  The

admissions are strictly on merit basis. Every gover governm nment ent coll colleg ege e has a certa certain in perc percent entag age e of  Every marks allocated for admission.  Students need to clear all the papers of class 10 th in order to get admission in the colleges.  Quota system and admission to colleges on regional basis has been eliminated.


2




Algorizm Algori zm

No shifting or transfer is allowed once a particular college is assigned to a student.

These some of the characteristics have aroused certain certain kinds of problems and difficulties for the student. Students with Low percentage are specially the key victims. Even students with higher percentages are also suffering one or the other way. Many students are given admissions in those colleges that are very far away from their homes and add to that those colleges colleges do not have any good reputation. reputation. This mainly happens with students who secure low percentages in the prereq prerequis uisit ite e exam exams. s. Thes These e stud student ents s then then prefe preferr priv privat ate e colleges as they are convenient to them and standard of private colleges are far much better then that of government. Students with high percentages also do prefer private colleges, which have good reputation; DHA College is the best example in this context. This is the need or the opportunity for us on which we will formulate our company strategy. Now it is important to evaluate the need of O/level coaching cente centerr that that is our our second second funct functio ion. n. O/le O/level vel educ educat atio ion n has taken hype during recent years and many now do prefer British system of education to the local education system. Taking tuitions is a trend in Pakistan and more then 90% of students at this level do prefer taking tuitions. Since home tuiti tuitions ons and and indi indivi vidu dual al are expe expens nsiv ive, e, a group group coac coachi hing ng system will be beneficial to students. Now since the opportunity and need is now defined we will will form formul ulat ate e our our busi busine ness ss st stra rate tegy gy on this this basi basis. s. Our Our Institute will work as a college in the morning and a coaching


3


Algorizm Algori zm

center in the evening. This institute will give admissions to the students on the basis of their prerequisite examination. Students with minimum 60% can apply and will be b e given admi admiss ssio ion n on that that.. As per per abou aboutt the the coac coachi hing ng cent center er no conditions will be implied on admissions. Admissions will be given until the desired potential strength is completed. The Algorizm College will be affiliated with board of higher seco second ndar ary y educ educat atio ion. n. The The camp campus us will will be a st stat ate e of art art facilities as per the board requirement with most modern comput computer, er, physic physics, s, chemist chemistry ry and biolog biology y labs. labs. Affili Affiliati ation on with board of secondary education is essential requirement for for runni nning a coll ollege ege at this leve evel. There ere are certai rtain n requirements and an annual fee charged by the Board for the enrollment of students. The best locality for such kind of institute could be North Nazi Nazim mabad abad.. The The reas reason on for for that hat is there here are not not many any private colleges in this area. Secondly North Nazimabad is almost the center of Karachi and is easily accessible from all parts of the city. A prime location such as near to the main road road wil will be more more benef enefiicial cial.. Nort orth Nazi Nazim mabad abad and and its adjoining areas are highly populated and thus increase our potential market. Since our company is a start up relaxations in admissions will be given till few years after which higher stress would be on creating a good impression in the market. In past past vent ventur ures es such uch as these hese have have been een succe uccess ssfu full specia specially lly colleg colleges es and tuitio tuition n center center open open separat separately ely.. But this is a unique kind of combination and idea that is much safer than any other form of business.


4


Algorizm Algori zm

The profit margins are quite high as per industry analysis but highly depend on how efficiently the institute is being run. The future plans of ACC will be to first make reputat ion in the market and then expend through opening branches in all parts of the city. It is expected that it is almost takes a decade for proper expansion.

Mission Statement OF ACC:



To

Imp Impart art

Knowl nowle edge

with

utm utmost ost

since ncerit rity

and

devotion 

Create individuals with high caliber and skills.



Achieve academic excellence.



Culture of professionalism must prevail.



To achieve

the basic aim of imparti rting standa ndard

education. To  To

make make our our st stud uden entt wort worth h huma human n bein beings gs who who will will

contribute to the well being of nation.


5


Algorizm Algori zm

Management

Team:

It is very essential for venture such as this to have a highly skilled and professional team otherwise this venture can can end end up as a bad bad drea dream. m. Prop Prope erly rly sele select cted ed team team of indivi individua duals ls is necess necessary ary.. The ACC manage managemen mentt team team will comprise of highly professional teachers and professors who have have cred credib ibil ilit ity y in the the mark market et.. Reno Renown wned ed teac teache hers rs and and professors professors who have vast experiences experiences in the field will be the part of the team. An individual who has the experience of runni running ng an inst instit itut ution ion will will admi admini nist ster er the the ACC. ACC. A retire retired d principal of a government college is one of the best available options in my consideration. The ACC management team will have approximately 10 to 15 employees. At first most of the teachers will be hired on part time basis with fewer permanent ones. But as soon as more strength of students develops more teachers will be recruited on permanent basis. The team of ACC will consist of individuals who are highly qualified and experts in their field. For college those teachers or professors will be preferred who have taught in some renowned colleges and whose names are it self an institution. For coaching center teachers who are well verse with with Brit Britis ish h educ educat atio ion n sy syst stem em will will be prefe referr rred ed.. Thes These e


6


Algorizm Algori zm

teachers for coaching center will be hired on commission basis i.e. a particular amount will be given on per student basis. The commission will range from 30 to 60% depending d epending upon the caliber of teachers. The market for ACC will be the student who cleared Metric examinations, both boys and girls. The potential market of ACC will be of students mainly residing in North Nazimabad a nd the adjoining areas i.e. Nazimabad, North Karachi and Gulshan. Market research and analysis have yield that there are more than 5000 students in these areas for college and more than 250 students for coaching center. Market competition with private colleges do prevail but not at a great extent. There are very few private colleges and add to that they do not have a very good reputation except one one or two. wo. The The main ain comp ompetit etitiion that hat we face face is wit with government colleges, which are cheaper, and some do have very very good good reput reputat atio ion. n. But But one poin pointt that that favors favors us even even within this context is that there are hardly two good reputed government colleges in our targeted area. There is hardly any coaching center that is specially cateri catering ng the the need needs s of O/Le O/Leve vell stude student nts. s. Thus Thus hard hardly ly any any competition prevails but there are home tutors available who charges much more than what we will be charging. Hence our service will be much more attractive to students than our competitors. Add to that we will be providing them all the convenience under one roof i.e. they will be taught every subject by professional teachers at one place and at low fees.


7


Algorizm Algori zm

Mark Market et rese resear arch ch and and anal analys ysis is have have sh show own n that that ther there e is annually an increase of 5% in the enrollment from previous year. Accessing the market competition I believe we have potentially 2% of the total customer in our hand in the first year. The percentage is very low because many still prefer government colleges and we have a tough competition in our our hand hand.. Reme Rememb mber er that that our our targ target et mark market et are are thos those e students who prefer private colleges either because of not getting admission in desired government college or for any other purpose such as distance. The The total otal numb umber of customers ers along ong with potent ential customers in the first three years of the ventures is shown in th e bar chart below: 6000 5000 4000 3000

Total no. of customers

2000

Potentail customers

1000 0 1st 1st year year

2nd 2nd 3rd year year


8


The

total

Algorizm Algori zm

number

of

customers

along ong

wit with

poten otenti tial al

customers for coaching is shown in the bar chart below:

800 700 600 Total number of customers

500 400

Potential customers

300 200 100 0 1st 1st Qtr

2nd year

3rd year


9


Algorizm Algori zm

It is the love of teaching and the affection toward this prof profes ess sion ion has has led led me to writ write e thi his s bus usiiness ness plan. lan. The tutorial service that we will provide will be of high excellence and above all will be a benefit to them. The highly skilled management team is the asset of ACC. Some of the salient features of our service include: 

Students will be taught by highly Qualified teachers



It will be the best provided service in relation with cost charged to students.


10




Proper

Algorizm Algori zm

evaluation

of

th e

student

will

be

done

throughout the academic period. 

Greater emphasize will be on the grooming grooming of students to make them better citizens.

 The

use of information technology and Islamic studies

will be the highlight. 

Consistency and standard of education will be the first priority.

Different forms of media will be used to promote the ACC among the target market. The promotion of ACC will be done done on regu regula larr basi basis s so as to crea create te much much more more awareness among the people. The promotion for college and center will start two months before the launch. And once it is launched much more frequent advertising will be


11


done.

Algorizm Algori zm

For

the

coaching

center

some

form

of

the

advertisement will be done throughout the year year but for college it will be only done during admission days. Hoardings will be placed in the major localities around the

ACC

premises

with

some

attractive

textures.

Pamphlets will be distributed at major locations such as at Inter board Office. Regular advertisements will be given on reputed newspapers such as Dawn, News, Jung and etc. etc. Keep Keepin ing g all all the the cons constra traint ints s in mind mind more more effec effecti tive ve ways of communication, which has low costs, will be used. In our our prom promot otio ion n we will will try our our best est to get get good ood students enroll in ACC. For that in our promotion we will urge students to get enroll in ACC and good students will get scholarships that may be up to 50% of the tuition fees. Discounts will be given in the coaching to those students


12


Algorizm Algori zm

who will study more than three subjects. Students will be motivated through these incentives and others that that will be introduced from time to time.

ASSUMPTIONS RELATED TO FINANCIAL PROJECTIONS

1. The fee charged charged from college college students students is RS 1000. 1000. 2. The The fee charge charged d from from coac coachi hing ng center center is RS 50 500 0 per per subject. 3. We have have proje project cted ed 10 100 0 stud student ents s for for the the firs firstt year year in college and 50 students for coaching center. 4. I have have assu assume med d that that ever every y st stud uden entt in the the coac coachi hing ng center is studying 2 subjects 5. Rent Rent of the the prem premis ise e is RS. 10 10,0 ,000 00 per mont month h with with a deposit of 100,000. 6. Assume umed that hat 5% of the total fees wou would be our receivables. 7. An annual affiliat affiliation ion expense expense is RS. 10,000 10,000 with initia initiall cost of 30,000. 8. In the second year year project project strength strength is 150 students students for college and 100 students for coaching.


13


Algorizm Algori zm

In the the thir third d year year proj projec ecte ted d numb number er of st stud uden ents ts for for college is 200 and 100 for coaching. 10. Fee rec receivables fro from th the fir first yea year to third third year increases from 9000 to 30000. 11. In cash flow statement operating activities are evaluated.

9.

Projected Income Statement For the First Year:

Tuition fees (college) Tuition Fees (coaching) Total income

1200,000 600,000 1800,000

Less Expense: Advertising Salaries Rent Utility Expense (Elect, gas and telephone)

200,000 700,000 120,000 300,000


14


Algorizm Algori zm

Office Expense Depreciation Expense Affiliation Expense Miscellaneous Total Expense Net profit

80,000 5,000 10,000 50,000 1465,000 335,000

Projected Balance Sheet for the first year: Fixed ASSETS: Furniture Less: prov for depreciation (5%) Total

CURRENT ASSETS : Fees Receivables Deposit (Refundable) Cash at bank Cash at hand

Current Liabilities: None

100,000 5000 95000 9000 100,000 3, 21,000 10,000 4, 50,000

N il


15


Algorizm Algori zm

4, 50,000 5, 45,000

Financed BY: Capital Balance Less: Drawings Add: Net profit

210,000 N il 335,000

5, 45,000

Projected Cash Flow for the First year:

Net Income ADD: Depreciation Less: Fees Receivables

3, 35,000

Cash Flow from Operating activities 31,000


5000 9000 3,

16


Algorizm Algori zm

Projec Projecte ted d Incom Income e State tateme ment nt Fo For r the the Seco Second nd Year:


1800,000 1200,000 30, 00,000

Less Expense: Advertising Salaries Rent Utility Expense (Elect, gas and telephone)

200,000 1200,000 120,000 350,000


17


Algorizm Algori zm

Office Expense Depreciation Expense Affiliation Expense Miscellaneous Total Expense Net profit 60,000

100,000 5,000 10,000 55,000 2,040,000 9,

Projected Balance Sheet for the Second year: Fixed ASSETS: Furniture Less: prov for depreciation (5%) Total

CURRENT ASSETS: Fees Receivables Deposit (Refundable) Cash at bank Cash at hand

100,000 10,000 90000 20,000 100,000 9, 00,000 54,000 1,074,000

Current Liabilities:


18


Algorizm Algori zm

None

N il 1,074,000 1,074,000 1,164,000

Financed BY: Capital Balance Less: Drawings Add: Net profit

204,000 N il 9, 60,000

1,164,000

Projected Cash Flow for The second year: Net Income ADD: Depreciation Less: increase in Fees Receivables

Cash Flow 954,000

from

9, 60,000

Operating


5000 11000

activities

19


Algorizm Algori zm

Proj Projec ecte ted d Inc Income Statement For the Third Year:


2,400,000 1800,000 4,2,00,000

Less Expense:


20


Algorizm Algori zm

Advertising Salaries Rent Utility Expense (Elect, gas and telephone) Office Expense Depreciation Expense Affiliation Expense Miscellaneous Total Expense Net profit profit

200,000 1500,000 180,000 350,000 120,000 5,000 15,000 60,000 2,430,000 1770,0 1770,000 00

Pro Projecte ected d Balan lance Sheet heet for the Thir Third d year: Fixed ASSETS: Furniture Less: prov for depreciation (5%) Total

CURRENT ASSETS: Fees Receivables

100,000 15,000 85000 30,000


21


Algorizm Algori zm

Deposit (Refundable) Cash at bank Cash at hand

100,000 17, 00,000 65,000 1895,000

Current Liabilities: None

Nil 1,895,000 1,980,000

Financed BY: Capital Balance Less: Drawings Add: Net profit 1,980,000

2, 20,000 10,000 1,770,000

Projected Cash Flow for the Third year: Net Income ADD: Depreciation Less: increase in Fees Receivables

1770,000


5000 10000

22


Algorizm Algori zm

Cash Fl Flow fr from Op Operating ac activities


1,765,000

23

Business Plan

Recommend Documents