Business Start-up Plan Date:JULY 28, 2009 Team: No.7 Elephant, Shaikh, MZ Background and Explanatory notes Education service providers Public Faith-based, community-based and Non- governmental organizations Private entrepreneurs

Observations & challenges of public education system

continued 3 partners have decide to fill the gap of the felt need for quality education Source of financing is past savings and loans from savings and credit cooperative societies SACCOs and support from their spouses One partner has decided to convert his residential rental premises to use for the school The school will run from nursery (2 years) to end of primary cycle. It will also provide day care centre for working parents having problems of getting reliable child- minders. Other differentiating interventions: additional curriculum including French, Music and computer lessons; maintain small class numbers and employ qualified teachers and pay them well; offer conducive, friendly learning environment

Business Proposal Line of business: Private primary school including kindergarten to be called Legacy Academy Expected date of start-up: January 2010 Location of business: Nairobi, Kasarani Estate

Objectives and opportunities Public primary schools are few and far in between – the government does not invest in building new schools Public primary school classrooms are overcrowded with children-due to lack of enough classrooms and enough teachers Public primary school staff de-motivated due to large classes and low pay and low standards Private school perform better in national examinations-usually out of drilling Large pool of trained unemployed teachers-there has been a moratorium on employment since 1998, but training continues Getting child minders not easy

Business experience Partners have diverse experience and qualification in business management; one of the partners has prior experience in running a commercial college and working as administrator in a private school

Relevant experience, education, certificates and personal background Partner I: trained graduate teacher ;has taught in high school for 12 years Also worked as education supervisor and trainer and holds MEd and MBA ; will be the Administration manager/Principal Partner II: Business Administration and MBA in Marketing; will be the Marketing and Public Relations manager Partner III: B.Comm. (Accounting and Finance); will be the Financial Controller There are qualified certificate and diploma teachers

Detailed products and/or services Offering educational services at kindergarten, pre-school and day care center & Primary education class 1-8. Additional curriculum like computer, music. French language-these are optional in primary but a part of curriculum in secondary cycle.

Strengths Smaller classes for teacher to give personal attention to pupils Public and other schools don ’ t teach additional curriculum like computer, music, French language; usually due to lack of facilities and because it is not examinable at primary level Good location in the middle of a populous estate Premises are owned by one of partners Partners diverse experience and qualification in business management; one of the partners has prior experience in running a commercial college and working as administrator in a private school

. Customers and Suppliers Customers Lower middle level parents with school going children within the estate Lower middle level parents with school going children from other estates Working parents with young children Suppliers Booksellers, Stationary suppliers Transport service providers

Required Funds Land & Building : 30,000 Modification/repairs of sch. bldg : 20,000 Furniture & Fixtures : 10,000 Training equipment –computers: 10,000 LCD projectors : 5000 OHP projectors: 5000 Photocopier : 5000 Printers : 5000 Other office machinery: 5000

Fund Raising Own capitals (Two partners contribute $70,000 each; one partner contributes cash of $30,000 and gives out his premises for business use; value of premises, $30,000)- Total-200,000 Each partner received loan of $10,000 from spouses at no interest repayable after two years of operations. Total-30,000 Grand Total-230,000

Operational Funds 1) Training materials: 10,000 2) Salaries: 72,000 3) Transport services: ) Advertisement: ) Other office expenses: ) Directors allowances: 27,000 7) Depreciation: ) Cash reserve: 6000 Grand total -230,000

Income Forecast (Termly average) Revenues (1) 300x$750=$225,000 All the operating revenues will be sourced from fees paid by the pupils. It is anticipated that in the ten classes (2 nursery and classes 1-8), an average of 30 pupils per class will enroll; at fees of $750 per term (a year has 3 terms). $225,000 per term will be paid-amounting to $675,000 per year.

Operating Expenses Salaries : 6,000x4 = 24,000 Advertising : 5,000x1 = 5,000 Transport services : 5,000x3 = 15,000 Training materials : 10,000x3 = 30,000 Other office expenses : 5,000x4 = 20,000 Directors allowances : 9,000x4 = 36,000 Depreciation : 1,000x4 = 4,000 Total Expenses=134000

Details of operational costs 12 teachers will be employed to teach the 10 classes; average wage is $500 per teacher per month; hence $6000 per month amounting to $72,000 per annum No rent is paid as the premises belong to the partners Advertising expenses are paid once to cover quarter year

Income before tax(1) – (2) $225, ,000= 91,000 Tax: 16/100X91,000=14560 Income after tax=76,440

. Income Forecast in 4 th term Revenues (1) 330x$750=$247,500 The kindergarten class has opened a 2 nd stream due to increasing numbers; tuition fees remains same

Operating Expenses Salaries: 6,500x4= 26,000 Advertising: 5,000x1= 5,000 Transport services: 5,100x3= 15,300 Training materials : 11000x3= 33,000 Other office expenses: 5,100x4= 20,400 Directors allowances : 9,000x4= 36,000 Depreciation: 1,000x4= 4,000 Total Expenses=139,700

Operational costs in 4 th term 1 more teacher has been employed to take care of the extra class opened this year; hence higher salary expense The usage of training materials, office expenses, and transport services are expected to increase due to the extra stream

Income before tax after 4 th term (1) – (2) $247, ,700= 107,800 Tax: 16/100X107,800=17,248 Income after tax=90,552

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