National economies are dependent on education. Statistics reveal that nations with highly educated populations often experience increased economic stability though with a few exceptions. Business schools shape the careers of individuals by equipping them with necessary management tools. The need for education is therefore fundamental to meet the needs of the market. Nature Business School will initially serve graduate students intending to access quality, customized MBA programs, which fit their schedules and payment preferences. Despite being located in London, the institutions prime focus will be on prospective clients from Italy and Sweden. This paper focuses on the key aspects that will shape the proposed business school establishment.
Opening a business school is capital intensive and requires plenty of resources. Quality is fundamental in provision of education and hence must be prioritized in institutions offering the same. Additionally, funding is critical to provision of quality education. Having noted the interest by various organizations across Europe in partnering with educational institutions, the corporations will be approached for funding supplementation (Covin & Slevin, 2006: 40). This will be done by encouraging them to collaborate with the institutions in order to develop curriculum focused on the market demands. Additionally, individual sponsors interested in investing in education sector will be targeted as prospective investors. 40% of funding will however be provided by myself. Based on the funding targets mentioned above, the school will be jointly owned by various corporations, individual funders, and me in form of shares. Planning is a fundamental tool in ensuring business objectives are adhered to and adequately met (Eric et al., 1993: 56).
The estimates for start-up of the school are illustrated below. The amount intended for start-up will mainly cater for construction of lecture rooms, offices and IT labs (Business Plan Questions and Answers, 2010: 10). Additionally, funds will be required for setting up a website from where most overseas programs will be administered to clients via online resources. Staffing funds will also be necessary to build a strong team of education and support staff (Covin & Slevin, 2006: 43). The business will also require initial cash reserves and additional facilitative assets. The remaining cash will be utilized in rental of properties in respective markets..
The table below summarizes the start-up requirements and funding needs. Initial start-up will be relatively expensive considering that offering the program will require heavy technological and assets investment. Additionally, it must be acknowledged that initial start-up plans will make provision for expected future expanded programs. Licensing expenses are also considered in the initial expenses of the business.
Funding at business start-up
|Start-up Expenses to Fund||$136,000|
|Start-up Assets to Fund||$359,000|
|Total Required Funds||$495,000|
|Non-cash start-up assets||$115,000|
|Start-up cash requirements||$244,000|
|Starting Date Cash Balance||$144,000|
|Liabilities and Capital|
|Other Current Liabilities||$0|
|Additional Investment Requirement||$0|
|Total Planned Investment||$495,000|
|Total Capital and Liabilities||$495,000|
|Total Start-up Expenses||$306,000|
|Other Current Assets||$0|
This businesses headquarters will be located in Westminster area of London city (Barman, 2010). It will be equipped with a state-of-the-equipment to facilitate provision of education within the institution and via online services. The site for construction will be identified based on a number of factors including:
- Serene learning and office environment.
- Ease of accessibility.
- Availability of space for development of an easily accessible parking lot (Croft, 2002: 32).
- Access of high officials during the working days.
- Reduced competition presence.
These are in line with our goal of provision of high quality services to our clients at affordable prices. They will be expected to facilitate consumer satisfaction within the educational institution and the quality of education it provides.
The main objective is to provide the consumers with quality education, both in class and online. Inline education is meant for overseas clients and is intended to sit their schedules and job demands.
The basic features that will constitute the business will include:
- Online education systems and lecture materials.
- In-school lecture
- Administration of the institution
- Collaboration center.
The institution will strive to offer quality and affordable education customized to meet the customer schedules and time requirements. Flexibility will therefore be a fundamental part of our mission.
Products and Services
Though the ultimate goal is to offer a range of business related educational courses, currently the focus will be on MBA program which will run both on part-time basis and full-time programs. The MBA will be offered both online and within the schools premises. The full time program will be undertaken within the premises while part-time will run both online and within the institutions, as evening and morning classes. However, given our initial focus on Sweden and Italy, most of the anticipated clients are expected to enroll for the part-time program via online facility. Additionally, clients will be offered a flexible payment schedule whereby they can pay the fees in three installments per session. This is expected to attract the working clients who intend to individually fund their education from salary and maintain their work schedules.
London and Europe have a vast number of colleges and universities, which offer business courses. These colleges and universities are expected to offer competition to our institution. The expected major competitors are New London College, William’s College, Imperial College, Thames Valley University, and London School of business among others. These institutions offer both full time and part time courses in business and more specifically MBA programs. They present real competition to our target market given their long presence and experience within the market. However, despite various competitors offering similar products, our flexible program and affordable payment schedules are expected to win us clients within our target markets. Additionally, we intend to invest heavily on marketing to ward off possible strong competition from the other schools offering the course.
Our target market will be based in Italy and Sweden. These markets are chosen due to the vast number of educated persons seeking to further their studies. Our target within these markets will however narrow down to the working population and the recently graduated students intending to further their education and experience. Out target market will therefore be categorized as such:
Middle Income Earners
These will include persons who earn medium income and hence are not able to pay large sums of money at the same time for their tuition and hence intend to find flexible institutions which allow flexible payment.
Tight scheduled work force
This group is characterized by persons whose working periods is tight and lack adequate time to dedicate to full time education advancement. These people will therefore be in dire need of flexible learning programs accessible from their places of work and at home in advancement of their education.
Recently Graduated Students
Recently graduated students often lack adequate funds to pay large sums of money into their MBA program and have to save before accessing it. This program will allow them to save within the program by accepting installment payments.
Client growth forecast
As our target customers will be offered with variety of payment and study options, client growth is expected to remain constant within the first five years. The following the projected growth for the first two years of operation.
|Middle Income Earners||20.00%||16.67%|
|Tight scheduled work force||20.00%||11.11%|
|Recently graduated students||20.00%||0.00%|
Our market will be segmented on basis of our target clients who include the middle income earners, the tight scheduled work force, and the recently graduated students (Croft, 2002).
Our pricing strategy is similar to our competitors though, we will offer flexible payment plans which will ensure that clients are able to manage with their monthly earnings and hence no need for loans and borrowings which often take clients aback (Covin & Slevin, 2006: 79). In prior survey, we realized that most clients prefer flexible payment arrangements that allow them to pay fees using customized plans.
Advertising and Promotional Plan
Our advertising procedures will include the following:
- Objective setting.
- Preparation of budget for advertising initiative.
- Strategy formulation.
- Evaluation of advertising strategy employed.
Setting advertising objectives
It all begins with setting of an objective. The first step is to set the advertising objective. An advertising objective is used to relay the specific tasks, audience, and time to be accomplished (Jerome, 1975: 3).
Our advertising objective will be firstly to inform the consumers and after a certain period of time it will be for reminding. The rationales behind the objectives are:
- As we are introducing a new learning institution in the market, our advertising will be informative. The primary objective is to build public demand.
- We will also do persuasive advertising by saying that we offer best quality education and flexible payment schedules (Don, 1993: 45).
- Reminder advertisement will include use of social sites, existing clients and media (both print and visual)
Setting the advertising budget
We will have a large marketing budget ($5000) considering that we are new market entrants. The large budget is due to the need to build our own market from the scratch in addition to getting some clients from competitors (Kraten, 2007:57).
Developing advertising strategy
Two major elements will be important in development of an advertisement budget (Don, 1993: 45):
- Creating advertising message.
- Selecting advertising media.
Advertisement campaign evaluation
This will involve constant evaluation of the effects that our advertisement have on consumers (George, 1994:56). Sales effects are also affected by many other factors like product features, price, satisfaction etc. But the communication effects solely depend on the advertising (George, 1994:57). After opening the institution, the number of students enrolling each semester and the frequency of visits to our website will give evidence of effective communication (Barney, 1986: 1236).
Experienced staff and proprietors within the education field.
Incorporation of technology into learning process.
New entrance hence starting from a point of market disadvantage.
Enlarged education market in Sweden and Italy.
Increased need for educational advancement within the existing work force.
Competition from seasoned and well known institutions.
The sales forecast are expected to grow by the years according to a report released on the current hotel market trends.
|Sales Forecast (in thousands)|
|Direct Cost of Sales|
|Total costs of part-time courses||£1980||£2000||£2100||£2400||£2800|
|Total Costs of full-time courses||£720||£760||£770||£790||£80,500|
|Subtotal Direct Costs||£2700||£2760||£2870||£3190||£360,500|
The school will require various personnel to facilitate its operations. These will include educators and support staff to facilitate the process of education. To ensure smooth running and professionalism in the school’s operations, various personnel will be recruited. An overview of personnel expenses is illustrated in the table below:
|Year 1||Year 2||Year 3|
|Store and maintenance staff||£5350||£5390||£5420|
Monitoring process our plan is paramount to its success (Stern, 2008:90). Lots of logistics are necessary and therefore a strong monitoring and evaluation team will be put in place. The team will be expected to adhere to strict deadline dates and report any planning variations early enough to the management.
A marketing audit will be performed to ensure that the budget allocated for the activities are being used in the right direction and not wasted by the responsible people (Ginter, 1987: 7). This is increase the trust of share holders and investors in our company and will be very helpful to our company in terms of finances. This trust will create a loyalty for our customers and consumers towards our brand and our products. In audits, our advertisement revenues will be monitored (Zaltman, Deshpande, & Moorman, 1992: 17). Our all finances will be monitored which will be used in the growth of the company to ensure that the finances are utilized in the right direction.
Inadequate start-up period
A major risk that the business is vulnerable to is the possibility of extended start-up period. There is a probability that our projections might not fall within the projected two year period into profitability (Zaltman, Deshpande & Moorman, 1993: 90). However, this is catered for by the extended budgeting made for a three year period to cushion us against any fluctuations. Operational contingency is specifically included in the budget to cater for any shortfalls that may bring along financial obligations.
Getting client is a fundamental challenge that we have to reckon with more so considering that we are new entrants into they market (Zaltman, Deshpande, & Moorman, 1992: 18). Possibility of not getting the targeted client base within the specified period cannot be ignored (Naresh & David, 2010). Mitigation is based illustrated by the marketing strategies describe earlier and the heavy investment on marketing as seen in the start up resource allocation plan.
Our major competitors introduce measures to curb our entry into the market by introducing products similar us in a bid not to loose clients to us (George, Kress & John, 1994: 56). This challenge we intend to counter by the unique serene environment we offer that will be attractive to our new client regardless of substitute products from our competitors.
It is vital to note that the first one year will be crucial to our success and will present increased risk to our operations. However these risks will be expected to decline and eventually settle at minimal acceptable levels as our business operations pick up.
In conclusion it is important to note the business will be dependent on the commitment and efforts of the staff and hence much focus will placed on staff recruitment to ensure that high levels f professionalism are observed throughout its operations., it viability is largely dependent on the ability to convince clients that what we offer is of quality and comes in better packages that what our prospective competitor have to offer. Additionally, being new entrants into the market, advertisement is given priority as it is considered key to growth of the business (Cruikshank, 1987: 43). This effort is expected to yield continuous business growth and expansion with more students enrolling over the years. Furthermore, the plan to offer flexible payment plans is expected to offer the prospective a lucrative package that allows the liberty to work and learn at the same time without having to acquire heavy educational loans that come with interties to fund the education.
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Cash flow statement for the first year
|Operations cash influx|
|Sales Tax, VAT, HST/GST Received |
|Sales of Assets||£0||£0||£0||£0||£0||£0||£0||£0||£0||£0||£0||£0|
|Expenditures from Operations|
|Payments of bills||£55||£55||£42.605||£44.086||£39.218||£39.017||£33.045||£17.527||£17.425||£17.41||£16.954||£16.954|
|Subtotal t on Operations||£34.050||£34.050||£76.105||£77.586||£72.718||£72.517||£56.545||£41.027||£40.925||£40.91||£40.454||£40.454|
|Additional Cash Spent|
|Sales Tax, VAT, HST/GST Paid Out||£0||£0||£0||£0||£0||£0||£0||£0||£0||£0||£0||£0|
|Repayment of Borrowing||£0||£0||£0||£0||£0||£0||£0||£0||£0||£0||£0||£0|
|Liabilities Principal Repayment||£2.5||£2.5||£2.5||£2.5||£2.5||£2.5||£2.5||£2.5||£2.5||£2.5||£2.5||£2.5|
|Purchase Other Assets||£0||£3||£1||£0||£3||£0||£2||£||£2||£0||£0||£0|
|Net Cash Flow||£73.45||£70.45||£30.40||£29.91||£32.78||£64.98||£88.96||£106.47||£136.58||£266.59||£637.05||£73.45|