Essay

Business Plan Draft

Student’s Name

Institutional Affiliation

Executive Summary

English Zone is a small start up educational establishment that will be located in the city of Boston. It is a business that expects to capture the heart of loyal Kazakhstan students moving into the United States and is seeking to learn the English language at affordable rates. As a business English Zone is seeking to create a very strong market position in the city, and this is based on the extensive teaching knowledge that has been exhibited by the proprietor, which can be so important in this competitive environment. English Zone seeks to offer its services at prices that are competitive and at the same time meets the demands of the middle income students moving into the United States from Kazakhstan.

As a business it will start as a sole proprietorship with no need for incorporation, it will be owned and run by its proprietor and owner. The proprietor has developed extensive knowledge in the field of teaching English language to people of his native Kazakhstan. The proprietor has been in a position of a teaching facilitator in other institutions of English language learning. It is therefore important to note that this individual will be bringing in a lot of experience in teaching native students the English language. At the start the proprietor will be the only employee but later will seek to bring in new employees as the amount of revenue and size of the school will continue to expand.

The company will offer the English language learning services to the students as the only form of learning in the institution. This is a business that will cater for all the clients through the provision of adequate customer services, which are tailored to the needs of the consumers who are the students. The information that is taught in this institution will be direct from the tutor who is of Kazakhstan background with the ability to understand the background and context through which the learning should take place. Looking at the market, the US foreign language education sector is witnessing what analysts have described as rapid expansion. The education environment in Boston has ensured that several students are coming in with the intention of gaining university education from the institutions around and it is important that an English school should be made available for the foreign students.

English Zone intends to create a wide customer base, and due to this will look to concentrate the business as well as marketing among the local students who come to Boston, this will make us quit dominant in the target market. It is through this regular supply of clients that the business will be able to gain a regular flow of revenue. This will be amidst the high level of competition which will be posed by the other players.

Section 1: Business Plan

Company Description

This is a business institution that is intended to operate in the education industry, English for Foreigners Sector. This institution will be a startup company which will be run as a sole enterprise in the first year with a view of expansion in the future. The institution will be located in Boston and will target students of Kazakhstan origin who will have moved to the United States in search of higher education in the Universities.

The institution will start within a small leased premise which will be further widened according to the strategic plan over the years. The first year will see the proprietor act as the manager and the staff of the institution due to the limited budget. The services that are offered by this business are basically educative and will ensure that the students can be able to learn better in the United States university through understanding how to communicate in English. The most specific group of students as has been stated already is students who are coming into Boston from Kazakhstan with the intention of learning in the local universities.

The Business Objectives

For the next three years the following are the business objectives that are intended by the management of English Zone:

Achieve a five percent growth in revenue every year for the next three years
Make an expansion in terms of creating branches within Boston
To be the only low cost institution in the entire Boston

Mission

The mission of English Zone is to offer high quality, comprehensive and convenient English course for a lower cost. The most important aspect of English learning is grasping communication; it is the goal of the institution that the graduates will be able to communicate effectively and efficiently as they pursue education

Key Success Areas

This institution intends to hit the highest success point in history through offering the lowest cost form of English communication learning, with no peer in the entire Boston region. The most important aspect is that the business will use its success in the first year to create more branches and projects in the subsequent years. The main endeavors that the business will be mostly concerns with in raising its success are:

To be able to lower the operational costs in order to increase the gross margins up to more than 66%
The proprietor should be able to act as the cost manager responsible to ensuring that the operational costs are down
Create a cost reduction scheme that is comprehensive and will be sustainable over the years
Pursue aggressive measures that aid in gaining more students, pulling them away from the other form of competition

Industry Analysis and Trend

This business will be set up in the higher education industry where there are several players such as Boston University and Kaplan International. Education industry is critical in the United States and the foreign language sector is one which is developing with every single passing day. The number of foreign students from Kazakhstan alone is estimated to be around 2000 every year. This makes the whole industry to be so lucrative though highly competitive. The main target market in this industry is the foreign students from Kazakhstan who come to the United States to further their education.

The most critical needs of the customer who are the student are is institution which can be able to teach them the language in the cheapest and most flexible means. In flexibility it means that the course should be structured in such a way that the students are able to learn according to their own needs and prescriptions. The majority of the group of students whom this institution will be targeting is those who are from Boston City as this is where the institution will be located.

The market is Boston is made up of more than 50 foreign language institution but there is none which has basically narrowed down to teaching only foreign students from Kazakhstan. This will be the first institution to do so. The estimated number of students who are admitted to the institutions who are from Kazakhstan is estimated at 2000 students per year and the forecasted growth is anticipated at 5% based on the demographic analysts. This institution targets a 5% growth every year of the market share of the students which is anticipated to be at 400 students annually.

The logic behind my estimated gain of 5% is the amount of fee that is charged in this institution which is different from what is charged in other institutions such as Boston University and Kaplan International. The same will be important when it comes to ensuring that the business is able to breakeven in the long run.

Target Market

The market that is being targeted by this institution is segmented into that which ranges from the middle to the upper income earners. It is this group of people that are doing so much when it comes to getting education in order to aid them move from one status or to suit that which they are already in even better. The most important people that will be targeted are the local residents in Boston who have come in to stay or even to study. The age means that those who stay will basically is young people up to the age of thirty years.

The market will also be made up of education tourists who come into Boston. The main target market in this industry is the foreign students from Kazakhstan who come to the United States to further their education. English Zone will be an English school that will target foreign students from Kazakhstan who come over to the United States to have college and university education. The school will be located in Boston City and will target foreign Kazakhstan nationals in the city and its environment. The students that are targeted should be aged from around 17 years up to 30 years. The students must be about to speak in dialects that are spoken in Kazakhstan ethnic, this will make it possible to teach them through their dialects.

Competition

There are three main competitors who the business will go head to head in order to have a piece of the market that is anticipated to grow at the rate of 5% every year. The biggest form of competition is Boston University which is an educational institution that is located in Boston that offers different courses to local and foreign students. This institution has been in existence for quite a while and therefore unlike the other competitors, it has gained a reputation among the clients. The second biggest form of competition is Kaplan International situated at in Downtown Boston and one can be able to visit them at Northeastern University.

The third form of competition is ELS, Boston Downtown located on Tremont Street; it is at the crossroads of Downtown Crossing and Beacon Hill. This institution is situated at a place that is flooded with several universities which makes it easy for the organization to get access to students who come around looking to gain university education. This is a factor which has contributed to the growth of the institution over the past few years. The three set of institution are so competitive due to the fact that they have been in the industry for a while and they have been able to set a brand that usually is difficult to compete against especially for a young institution as this one.

The overall competition is increasing in the industry with different institutions getting registration to offer English classes to foreign legion of students. Even though the competition has been high, this has not been able to push the market leaders out of business due to having the following characteristics.

Competitor #1: Boston University

This is an educational institution that is located in Boston that offers different courses to local and foreign students. This institution has been in existence for quite a while and therefore unlike the other competitors, it has gained a reputation among the clients. The organization does not have to carry out much advertisement due to the decent name that they have created. The level of educational services that they offer is not only limited to English language but also other disciplines.

Competitor #2: Kaplan International

Kaplan International is situated at in Downtown Boston and one can be able to visit them at Northeastern University. The language courses that they offer are for students who are 18 years and above. The institution is also located at Boston Fenway and Harvard Square. The fact that the institution has been able to find different sites where they are able to set up their different centers makes them accessible to several students.

Competitor #3: ELS, Boston Downtown

This is an institution that is located on Tremont Street; it is at the crossroads of Downtown Crossing and Beacon Hill. This institution is situated at a place that is flooded with several universities which makes it easy for the organization to get access to students who come around looking to gain university education. This is a factor which has contributed to the growth of the institution over the past few years.

Strategic Position and Risk Assessment

Strategic position in any typical sense refers to how one intends to position themselves in relation to the competitors. What the business intends to do in order to position itself as the main alternative for the students is to create a price that will be able to suit most of the consumers who are within the middle income earning level and up to the higher income earners. The other most important aspect that will be utilized is the location of the business. Basically this institution has intention of teaching people within Boston City therefore it will be located in areas that will be easily assessable by them. The biggest part of the business is the services that will be offered, there is need for this business to act uniquely when it comes to the services that are offered. The first aspect that is strategic is the flexibility when it comes to the mode of learning as well as the timing in learning.

Risk assessment basically can be stated as those issues that may have negative impact on the business. The example that may affect this business may include the changes in regulations set by the commission on higher education which may end up affecting the business heavily. The other risk may be a reduction of number of students from Kazakhstan due to government policies on immigration which may be negative to students from Kazakhstan who may intend coming to United States. Risk factors are unique to the business and if something goes wrong, it means that English Zone will go down, with the main part of its formation falling.

Section 1: Marketing Plan & Sales Strategy

The needs of the market will be analyzed before the marketing structure is created in the business. Most of the foreign students need trainers whom they can relate to in native background, an environment that they may not be able to get from other institutions that offer English lessons. The industry has experienced a rapid growth, and there are several students who are coming into the United States and seeking to learn how they can be able to communicate in English while they pursue their tertiary education. English Zone will take a position where the students can be able to enjoy the entire learning process.

English Zone will be an English school that will target foreign students from Kazakhstan who come over to the United States to have college and university education. The school will be located in Boston City and will target foreign Kazakhstan nationals in the city and its environment. The students that are targeted should be aged from around 17 years up to 30 years. The students must be about to speak in dialects that are spoken in Kazakhstan ethnic, this will make it possible to teach them through their dialects. This school will be accommodative of both gender (male and female) and their income should not be in excess of what is earned by middle class in Boston City which is around $50,000 to $74,000.

Demographic Information for the company

Consumer	Business
Age Range: 17 years-30 years	Industries: Education & Development
Income Range: $50,000 to $74,000	Sector: Foreign Language
Gender: Male and Female	Years in Business: None
Occupation: Student	Revenues: $100,000 per annum
Marital Status: N/A	Number of employees: Two
Family Size: N/A	Number of Branches: One
Ethnic Group: Kazakhstan	Square Footage: 89.63mi²
Level of Education: High School Graduate	Company Ownership: Sole Proprietorship

Market Competition

English Zone as a school firm that will be venturing into the field of profitable education in Boston will have to deal with competition from Boston University, who carry on an English program which is referred to as IEP. The other competitor will be Kaplan International which offers three language programs in Boston, and lastly the ELS which is Boston Downtown language center with several other centers. The basis of competition is basically on the number of students who find our services to be more qualitative and affordable in terms of costs. The most important thing that must be considered as basis of competition according to English Zone is the cost.

Most students may not be able to afford the amount which is paid among the established institutions such as Boston University. In our capacity as English zone we can state that we compare to the rest of competitors as the only organization that can be able to offer quality for a lower cost. Unlike the other competitors we have found a certain market group in the name of foreigners from Kazakhstan. The barrier to entry is based on the legal requirement that institutions in this industry must be registered or accredited by the Commission for Higher Education, and also there is need for local operation license.

The strategy that has been used by English Zone is not as aggressive as some business might have done in dealing with established firms. Looking at my main competitors such as Boston University, they are established and have a name that they can rely upon in gaining clients at my expense. The only strategy that I have crafted which I believe will be able to work to my favor is to narrow down my target clientele. The decision is that my organization will only deal with a small group of students from Kazakhstan, where the system will be structured to fit the need of each and every student unlike in the other institution where students are from different countries and speak different dialects. As a small organization that is trying to find a ground for itself, this is a niche in which I believe will enable the school to develop year after another to even include other different forms of study.

Market Share Distribution

Competitor	% of Total Revenue	% of Students Population	Trend of Market Share
1. Boston University	Above $1 million	56%	Increasing
2. Kaplan International	Above $500,000	20%	Increasing
3. ELS, Boston DT	Above 400, 000	11%	Increasing

Historically Boston University has been the market leaders due to the fact that as a University they understood the influx of foreign students who were coming into the country with the intention of learning but did not have a proper grasp of the English Language, and therefore there was need to equip them with the knowledge which would be important in this aspect. This has been the reason as to why Boston University has been able to do well in the industry. It is important to note though that Kaplan International has been able to come into the business and it is giving Boston University a run for its money. They have been able to gain ground when it comes to the market share and now they stand at 20% of the entire market share, which is a rise from 15% which was the figure a few years ago (Barrow & Barrow, 2012).

The Five Fs

Functions

English Zone will be an educative institution which intends to create resources through teaching English language to foreign students from Kazakhstan. It is an institution whose function will be basically to create a learning environment for students from Kazakhstan with the need to learn better English that would enable them pursue their university education.

Finances

The capital that will be invested into this venture basically will include my savings which I was able to acquire during my time as a teacher, and loans from financial institutions. The amount of startup capital that will be needed is approximated at around $75000. This involves money for lease of property, license and advertising.

Freedom

Our students will be able to choose the day and time which they believe they can be able to learn effectively and effectively. Unlike most institutions where the timetable is set by the institution, in the case of English Zone the students themselves will dictate the time which they find proper to attend learning sessions. This is the most important message that I believe will attract most of our target groups.

Feelings

The students will find an environment that will give them a free feeling and atmosphere to learn. This will be a place where the students can be able to share their experiences with each other and ask questions in their original dialect with ease.

Future

This institution has to start as a small startup due to the amount of capital and time that is needed, but the anticipation is that as the years go by the institution will be able to admit more students and therefore there will be need to expand the capacity in terms of teaching staff.

Marketing Vehicle

In order to attract the target clientele which is basically made up of foreign students, there is need to come up with social media addresses and other electronic means of communication. The first important thing is that I will be able to create a Website, (www.EnglishZone.com) which will give information about the services that we offer, the amount of charges and advantages that we have over the rest of the group. The primary objective of the website is to sell the institution to students who form the main part of the clients. The main idea is to start the website under the free webhosting due to the fact that it may be quite expensive to create to go for paid up hosting.

After the business is able to pick up so well and the clients are increasing, then I will be able to shift from the free webhosting. This institution will also make use of Newsletters which will be sent annually to potential clients through their emails. The newsletters will be sent half annually with proper indication of new services as well as changes to the systems. Majority of the students approximated at 95% use social media such as twitter and Facebook, it will be important for English Zone to grab the opportunity and meet these students through social media.

Mini Project Deliverable 2: Operation, Technology, and Management Plan

a. Operations Plan

The operational plan makes a description of how the English Zone will structure its process and how it will actually carry out the parts that have been created in the entire business plan. There must be an execution strategy that will prevent the entire plan from being useless. It is therefore important part of English Zone when it comes to its success, in helping the financiers and employees

Location

The key facilities and Service Provision Process

The most important facility that I will need for the institution is a building in which I will host the students. The other facility that is important is the website through which the students will be able to access information about the courses and the classes that are offered in our institution.

Cost and Efficiency

The amount that will be required for the start of the institution has been estimated to be around $70,000. In order to ensure efficiency I will start with only me as the teacher but later on when the institution grows I will hire more people.

Competitive Advantage is based on the fact that I have been able to select a single group of people to whom my services will be based upon. The biggest problem that I will have to overcome is the competition that is created through other players in the industry.

Rationale for Competitive Advantage

It will be important to understand that this will be a small business which will start by relying on leased premises. This will be cheaper compared to the cost of what other institutions have invested in terms of building or leasing premises. It is important to understand that after the first year, the business is expected to grow, and this growth will mean that the resources will be stretched and the management will need to ensure that they offer quality and at the same time meet all the demand. The biggest capacity in the second year is expected to be at 75% which will continue to grow year after another.

The most important strength of this business is that it will concentrate on a small group of clients, which is a factor which ensures that there is efficiency and quality delivery. The weakness comes in when we refer to the amount of finances which my business will invest. The only way through which English Zone can be able to stay up to date with developments in the industry is through the social media and checking out the opinions from the website.

Technology Plan

Software Needs: English Zone will need a website in which students and the staff will be able to get information about the organization. This is important as a platform through which the different parties can be able to communicate.

Hardware needs: It will be important for the business to acquire one computer from which I will be able to operate the online needs of the institution and update the students concerning issues that affect them directly.

Telecommunication Needs: The business will need a functional email and a mobile telephone hotline through which customers and suppliers can be able to communicate with the business.

Management and Organization

Key Management and Employees

This business will be managed by the proprietor as the only employee of the business. This will be so due to the amount of resources that is available for the business. After the first year, there will be need to get a single employee to help with the administration. It is not easy though to administer a business of this magnitude solely.

The business forecasts that after the first five years, the management team will be stretched with few other people in administrative position and probably this is what is anticipated after the first years.

Ethics and Social Responsibilities

Ethical behavior has to be intrinsic in English Zone, it is our belief that we must be able to operate in a manner that is able to respect the needs of all the stakeholders, and can create an overall benefit for the society. English Zone will be built on enviable reputation which is built on transparent and ethical principle. We believe in adopting the best of ethical practices in measure of corporate governance which has continued to be adopted over the years.

Accountability as well as transparency will be an integral part of the manner in which the business will be operated. The business anticipates that later even as it grows, it will be able to be a caring employer, which respects those human rights of the employers at workplace and out of work. English Zone ethos, the visions and the goals of the company serve as guiding philosophies with which the entire business will be operated. It is the code of conduct that will be used as the ethical roadmap in all the operations for the current times and the future.

English Zone Code of Conduct

The values as well as the principles which will govern English Zone will be deployed based on the implementation of the company codes of conduct. This will be intended to serve the as the guide for the proprietor and any other future employees when it comes to the values and the ethics on the professional and personal conduct.

Leadership: The proprietor will also be the manager of the business due to the size of the business. The proprietor will rely on the help of an ethics director who will guide him on the important ethical directions

Communication and Awareness: The pre-requisite for any future employee will be to agree to and respect the needs of the customers. There will also be employee ethics awareness training workshop which will be carried out at intervals

Evaluation of code’s effectiveness: The code of ethics program will be to ensure that the initiatives are evaluated and reviewed.

Structure of Compliance: Zero tolerance is the basis for ensuring that the standards of governance are met, and the whistleblower policy will be important in that respect

The integration of ethics into the company business plan will be based on different aspects of what we are meant to stand for as per the mission and vision, the purpose of the institution and the values that the business is built upon. In order to be ethical the following facts are considered at the start of every year;

The articulation of the purpose of the organization

The new legal requirements that are needed by the business and which are vital in our relation with the people and the government

It is important to consider the expansion of the business and the large number of new constituents who may be able to influence how well different activities are done in the business

The other concept that this business considers is the reward structure and whether it is very appropriate, it is important to ensure that the employee feels that the reward that is offered is within the effort that they have put in.

The other important thing that the ethics of this business is concerned with is how we will be able to measure the performance. It is through a proper measure of performance that the business will be able to reduce any form of dissatisfaction by the employees. The other concern is how the institution will be able to give back to the Boston Community based on the amount of efforts that have been put in by the entire community in making sure that the institution is stable, operational and can meet its goals. It is vital that as a business we are able to give back to the society over what they have been able to make available to us.

The Financials

Sources and Uses of Funds

For a company such as English Zone which is a startup there are different sources of finances which can be used by the proprietor in order to ensure that the business is well established. The most important thing is to determine which source of financing will be suitable for the business; it has to be a source of finance which will not push the entrepreneur so much in terms of paying it back (Paish, 2008). The important concern therefore will be on the amount of interest that should be paid back.

The best way that startups have been able to survive is through starting small and working their way up the ladder. Small scale startups such as English Zone means little capital needs which can be obtain form the proprietor’s own savings. The design is small scale and therefore little money will be able to jump start the business. This institution at the start will not be able to have access to big loans that are accessed by regular loans facilities. They are therefore eligible for micro loans which would range up to $25000 and take few weeks for approval (Sharma, 2010).

There are institutions which may also be willing to offer personal loan that ranges up to $100000 based on how well the proprietor will be rated in terms of credit liability which is demonstrated through the ability to pay the loan. In the case of English Zone the scale will not allow it to build its own premises at the onset and therefore there will be need to find a source of capital through leasing the building which will act as the premises just as will be illustrated in the company financials (Paish, 2008).

This will also be advantageous due to the fact that the business will benefit from the tax deductions. The other source of capital that can be very important for the business is gaining cash advances. This actually is not treated as a loan but it has the ability to provide the needed working capital for the future. This is important capital which will be important in aiding the business get out of the difficult times at the early times.

The money at this point is referred to as the startup capital is used by the business in a certain way. The first important use of the money will be to lease a space from where the school will be taking place. There are different furniture and equipment which will also be needed by the business such as chairs, tables, and administration desk. There is also need for legal and professional fees as well as accounting services which the proprietor may not have personally.

Plans and Assumptions

The most important thing when coming up with the financials of the business is to create figures and to anticipate that the business will pick up as expected. The biggest assumption that most startups make is that the revenue will flow as provided in the forecasted cash flow and that they will be able to pay their obligations as they fall due (Sharma, 2010). The other assumption that is made by the business is that the operations and logistics that make the backbone of the business will not fail to flow as it has been anticipated and put down in the business plan. It is important to assume that no phenomenon both natural and socially instigated will prevent the business from moving on as anticipated

The Break Even Analysis

Break Even Analysis refers to that part of Cost, Volume and Profit analysis which is concerned with how the business will be able to create revenue which is enough to meet the fixed cost in totally. It refers to that point where the total cost is equal to the total revenue and the profit that is made by the business is zero. It is usually determined through determination of the contribution margin and the fixed cost, and the two are divided by each other to determine the breakeven point.

In determination of the breakeven point it is also important to look at the amount of revenue with which the business has budgeted and how much they can be able to deviate from the budgeted amount and still be able to operate through the creation of what is referred to as the margin of safety. It is not easy though to determine in advance how much the fixed cost will be in the first year of operation since in this case much of the cost have not already been stabilized.

The information below is just an indication of how the breakeven is expected to be for the business.

BEP = Fixed Cost/Contribution Margin

Service Price per Student=$500

Variable Cost per Student=$250

Fixed Cost=$100000

The BEP=$100000/($500-$250)

Units of Service=400

The number of students in the initial year who will be needed for the purpose of the business meeting the breakeven point is approximately 400

References

Barrow, C., & Barrow, P. (2012). The business plan workbook (Seventh ed.). London: Kogan Page.

Blackwell, E. (2008). How to prepare a business plan (5th ed.). London: Kogan Page.

Paish, F. (2008). Business finance, (4th ed.). London: Pitman

Sharma, N. (2010). Business finance. Jaipur, India: ABD.