schoolco company business plan final - share

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This is a business plan. It does not imply an offering of securities. SchoolCo Company Inc. (Schoolers™ Newville) March 1996 Business Plan Copy Number __ This document contains confidential and proprietary information belonging to SchoolCo Company Inc. John Barrymore/Fred Johnson Directors 10 New Drive, Unit 115 Newville, ON A1A 1A1 Canada Phone: (780) Fax: (780) This is a business plan. It does not imply an offering of Securities.

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Page 1: SchoolCo Company Business Plan Final - Share

This is a business plan. It does not imply an offering of securities.

SchoolCo Company Inc.

(Schoolers™ Newville)

March 1996

Business Plan Copy Number __

This document contains confidential and proprietary informationbelonging to SchoolCo Company Inc.

John Barrymore/Fred JohnsonDirectors

10 New Drive, Unit 115Newville, ON A1A 1A1

CanadaPhone: (780) Fax: (780)

This is a business plan. It does not imply an offering of Securities.

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Table of Contents

Executive Summary.............................................................................................................3Company Direction..............................................................................................................6

Present Situation..............................................................................................................6Company Overview.............................................................................................................7

Legal Business Description.............................................................................................7Location and Facilities.....................................................................................................7Management Team..........................................................................................................7Staffing............................................................................................................................9

Market Analysis.................................................................................................................10Market Research............................................................................................................10Market Definition..........................................................................................................10Competitive Analysis.....................................................................................................12

Marketing Plan...................................................................................................................16Positioning.....................................................................................................................16Pricing Strategy.............................................................................................................16Product Strategy.............................................................................................................16Promotional Strategy.....................................................................................................18

Financial Plan....................................................................................................................22Assumptions..................................................................................................................22Financial Statements......................................................................................................22Capital Requirements.....................................................................................................22Use of Funds..................................................................................................................22Exit/Payback Strategy....................................................................................................22

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Executive SummaryCompany DirectionSchoolCo Company Inc. (“SchoolCo”) was incorporated on March 2nd, 1996. The company is the franchisee-designate for a new Schoolers™ education centre that will open in April 1996 in Newville, Alberta. SchoolCo’s activities over the past several months have focused on site selection, market research, franchise training and developing the initial business plan for the franchise.

Schoolers™ was founded in 1998 by Joseph Gainsville in Glace Bay, Alberta. Joseph was a teacher for 20 years before entering the tutoring (supplementary education) industry. Joseph opened the first Acme location in Northwestern Alberta before going on to create his own tutoring (supplementary education) business.

Schoolers™ currently has 10 locations in Alberta. The company’s long term goal is to expand across Canada.

Schoolers™ Mission Statement:Through 100% Canadian curriculum, Schoolers™ Education Centre is a leader in the supplementary education market.

Company OverviewLocation and FacilitiesSchoolers™ Newville will be located at a retail plaza near the intersection of . (Hwy) and Main St. (Hwy) in the city of Newville.

SchoolCo is leasing unit no. 115, which has approximately 1,046 sq. ft. of rentable area.

Unique Selling PropositionSchoolers™ takes a more serious, lasting approach to tutoring (supplemental education). Our philosophy is to promote life-long learning with Schoolers™; helping each child to do better in school, no matter what their needs. With our variety of programs, we can help the student who is far behind or the student who wants to further raise their grades with everything based on a 100% Canadian Curriculum. In addition, Schoolers™ creates bridges between the student, the parent, and the classroom teacher by updating the parent and classroom teacher about the students’ progress at Schoolers™.

Management TeamAn Education Program Coordinator (PC) will manage Schoolers™ Newville on a day-to-day basis. The PC will be a qualified teacher who is responsible for the academic assessment and monitoring of the student’s program. Upon completion of 12, 24 and 36 hours of enrolment the PC will meet with the parents of the student and the classroom teacher on separate occasions. SchoolCo is currently advertising to fill this position. The salary will be $32,000 - $34,000 per year. John Barrymore and Fred Johnson will share strategic planning and administrative duties.

Market AnalysisMarket Definition

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For the purposes of this business plan, the total market is defined as all the current and future households with children within the city of Newville.

The number of households with children in 2001 was approximately 58,000 (57,913). This number consists of 42,955 households containing a couple (married or common-law) with children and 14,958 lone-parent households.1

Market GrowthA study completed in 1995 for the city of Newville projects that the population would grow from the current 1993 estimate of 362,600 to reach 474,700 by 2001 and 678,400 by 20312. This implies compound growth rates of 3.4% per year between 1993 and 2001 and 1.8% per year between 2001 and 2031.

For 1995, the estimated population is 387,860 individuals in 116,265 private households. The estimated number of households with children in 1995 is 69,023.

Target MarketsSchoolCo will focus its marketing efforts on the following target markets:

Trade area households with school age (grades 3-12) children

Trade area students who are performing below the provincial standard, based on EQAO results;

Trade area elementary and secondary students who require assistance in specific subjects or courses

Trade area adults who need to acquire credits for post secondary education and improve/refine) their skills.

Marketing PlanSchoolCo’s marketing objective is to grow its customer base to an average of 40-50 students per month within 12 months of opening.

Products/ServicesSchoolers currently offers 5 “Learning Solutions” programs. They area:

Little Schoolers – for three to five year olds; Homework Study Hall – for students in Grades 3-8 Qualified Tutoring – for students of all ages; Academic upgrading – for students of all ages; and New Horizons – for adult students

Schoolers Newville will offer all of the above programs, except for Little Schoolers.

PriceSchoolers Newville will price its services in line with its major competitors. The current market price range is $40 - $45 per hour.

Promotion

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They will utilize various media advertising, community partnerships, and public relations in order to reach prospective customers.

Financial PlanTo implement its plans, SchoolCo requires external financing in the amount of $120,000 in order to implement all aspects of the marketing plan outlined in this plan.

This will enable SchoolCo to renovate and furnish its leased premises and provide working capital for operations.

The financial projections indicate that SchoolCo will be in a positive cash flow position within 6 months of opening. No further financing is anticipated beyond the initial amounts forecasted in year 1 of this plan. The forecasted financial statements show that SchoolCo will be able to retire the loan within 5 years, or sooner if required.

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Company Direction

Present Situation

Company HistorySchoolCo Company Inc. was incorporated on March 2nd, 1996 and is presently in its growth stage. SchoolCo will be opening a Schoolers™ Learning Centre in Newville, Alberta in April 1996.

Management StatusA Program Coordinator will be hired shortly. The Program Coordinator will be qualified teacher who is responsible for day-to-day operations, academic assessment and monitoring of the student’s program.

This plan foresees the hiring of an additional part time Program Coordinator/Tutor when the average student enrolment reaches 40-50 students per month. It is expected that this will occur in 9-12 months.

Both directors will play an active role in the management of the business. It is expected that John Barrymore will focus on the Canadian curriculum and building relationships within the community and Fred Johnson will focus on marketing and building relationships in the community.

ServicesSchoolCo will initially offer the following services:

Homework Study Hall – for students in Grades 3-8; Qualified Tutoring – for students of all ages; Academic upgrading – for students of all ages; and

These services will be offered in the evenings from 4 pm to 7 pm and on Saturdays from 9 am to 1pm.

Within six months SchoolCo expects to offer the New Horizons program, which focuses on adult students who need to acquire the necessary credits for post secondary education and improve (or refine) their skills . This service will be offered during the day from 9 am to 1 pm.

Unique Selling PropositionSchoolers™ takes a more serious, lasting approach to supplemental education. Our philosophy is to promote life-long learning with Schoolers™; helping each child to do better in school, no matter what their needs. With our variety of programs, we can help the student who is far behind or the student who wants to further raise their grades with everything based on a 100% Canadian Curriculum. In addition, Schoolers™ creates bridges between the student, the parent, and the classroom teacher by updating the parent and classroom teacher about the students’ progress.

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Company Overview

Legal Business Description

Company NameThe legal name of the company is SchoolCo Company Inc.

Legal Form of BusinessOur company is incorporated under the Alberta Business Corporations Act as a private corporation.

Location and FacilitiesSchoolers™ Newville is located in the Commons at Main and Seven Plaza in the city of Newville, Alberta. The location occupies 1,046 square feet, which is leased for $1,917.67 per month for a term of five years. SchoolCo took possession of the property on March 1st, 1996.

The plaza is located within a short drive of highways 16 and 770, two major east- west transportation arteries that run throughout the Greater Edmonton Area.

Furniture and fixtures will include the following:

Office, reception area, Study Hall, Academic Assessment and Classroom furniture;

Computers and office equipment; and Signage

The square footage is allocated as follows:

Reception Area 9 ft X 9 ft. (approx)

Student Area 26 ft X 20 ft sq. ft. (approx)

Student Assessment 8 ft X 10 ft (approx)

Office 10 ft X 12 ft. (approx)

Storage 8 ft X 5 ft. (approx)

Management TeamSchoolCo’s management brings together two successful and experienced individuals with a passion for youth. Most importantly, the team is united in purpose - they share a common commitment to education. The following table lists each of the management team members, their role in the company and their ownership stake.

Name Role(s) Ownership %John Barrymore Director/President 50.0 %

Fred Johnson Director/Vice-President 50.0 %

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Stock AllocationThe company is authorized to issue an unlimited number of common shares. At this time shares have been allocated as shown above.

Management Responsibilities

Directors will share the following duties: Build brand awareness Administer the budget Ensure profitability of the center Focus on marketing , advertising and promotions Administer performance appraisal of staff with coordinators input Follow up with referrals Ensure quality is maintained/ student success/parent satisfaction Perform blind quality assurance checks Ensure resource materials/ students curriculum are maintained and up to

date Maintain connection to the community Conduct weekly meeting with the coordinator and quarterly meeting with

the teachers

Program CoordinatorTo be appointed

Under the direction of the Directors, performs the following duties:

Manage the Schoolers location on a full-time basis Hire, train and supervise Schoolers Facilitate the implementation of marketing strategies Respond to and resolve customer complaints in an expeditious manner Create weekly testing schedule Foster and maintain relationship with the clients, parents, educators and

the local community Other related duties

Advisory TeamOur advisory team currently consists of Darlene Silverton, SchoolCo’s Lawyer and John Edwards, SchoolCo’s accountant.

Management Team BackgroundsThe full biographies of SchoolCo’s management team members are attached separately.

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StaffingSchoolCo Company expects to have 1 full time, one part time and four teachers/Schoolers employees, for the first six – nine months of operations. As the number of students increases, additional staff will be hired and thoroughly trained to ensure that the quality of customer service does not diminish.

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Market Analysis

Market Research SchoolCo’s market analysis was based on secondary market research data. Secondary data sources included Statistics Canada, Edmonton Board of Education and others as acknowledged and referenced throughout this section.

Market DefinitionSchoolCo has defined the potential market as all the current and future households with children within the City of Newville.

According to the 2001 census, the total population of the city of Newville was 325,428 individuals in 97,550 private households. Between 1996 and 2001, the population of Newville grew by 21.3%, making it one of Canada’s fastest growing municipalities.

The number of households with children in 2001 was approximately 58,000 (57,913). This number consists of 42,955 households containing a couple (married or common-law) with children and 14,958 lone-parent households.3

Critical Needs of the MarketSeveral studies have suggested that there is great demand for tutoring services in Canada. Approximately 24% of Alberta parents with school-aged children have recently purchased tutoring services. Additionally, 50% of all Canadian parents say they would hire a tutor as long as it was affordable.

Extent to Which Needs Are Being FulfilledWith respect to the availability of quality tutoring services, SchoolCo does not believe that the needs of the consumer are being fulfilled. Most of the franchised learning centres in the market offer services that are focused on the American school curriculum. Additionally, the competitors do not make any significant effort to communicate with the students’ teachers and school administrators or to actively engage with the community. Schoolers believes that these are critical components to ensuring the success of its programs.

Characteristics of the MarketOur analysis revealed the following characteristics of our market.

GeographicSchoolers Newville is located in Ward 5, which had a population of 32,091 individuals in 10,004 private households in 2001. For 1995, the population and number of households are estimated to be 38,247 and 11,923, respectively.

Source:

3

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Experience has shown that customers prefer not to travel long distances for tutoring. This effectively limits the geographic reach of each learning centre to within a “reasonable distance” from the student’s home. A reasonable distance is assumed to be 10 kilometres (10 minute drive). The total land area of Ward 5 is 8.5 kilometres, however Schoolers Newville is located near the intersection of Wards 1, 2 and 5, so it is reasonable to assume that the location will be able to draw from all three of these areas.

For the purposes of this business plan, Schoolers Newville’s trade area is assumed to be the area bounded by Oiler Parkway to the north, Johnson Road to the east, Smith Parkway to the south and McEdwards Road to the west. This area is approximately 8.3 sq. km in size, allocated amongst the three wards as follows:

Ward Land Area % of Total Land Area

Ward 1 1.5 18%

Ward 2 5.3 64%

Ward 3 1.5 18%

Total 8.3 sq. 100%

The trade area population and number of households is estimated to be 29,472 and 8,737, respectively for 1995. Schoolers looks to draw from approximately 5,000 households4, so the trade area is consistent with the policy and practice of the franchisor.

Presence of ChildrenThe number of households with children in the trade area is estimated to total 5,187.

Propensity To Hire A TutorA recent study found that 50% of all Canadian parents claim they would hire a tutor if it were affordable.5

Based on the above analysis, the size of the current qualified market in Schoolers Newville’s trade area is 2,594 households.

Target MarketsSchoolCo will focus its marketing efforts on the following target markets:

Trade area households with school age (grades 3-12) children;

Trade area students who are performing below the provincial standard, based on EQAO results;

Trade area elementary and secondary students who require assistance in specific subjects or courses

Trade area adults who need to acquire credits for post secondary education and improve/refine) their skills.

4

5

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Competitive AnalysisResearch indicates that there are currently 14 competitors in the Newville market operating out of 16 unique locations. We have divided the competition into the following categories:

A. Franchised Learning Centres (“FLC’s”);

B. Independent Learning Centres (“ILC’s”); and

C. Supplementary Education Practitioners(“SEP’s);

In the following sections, we present descriptions of the main competitors within each category.

Franchised Learning CentresIn the Newville market, there are four franchised Supplementary Education Centres. They are: Math Academy

Kumon Learning Centres

Oxford Learning Centres; and

Sylvan

Name: Math AcademyLocations:,  Newville,  

Distance from Schoolers: 10 KMS

Academy for Mathematics and Science is a 100% Canadian with over 25 years of experience in assisting students of all levels of ability from SK to University entry level in Mathematics, from Grade 11 to University entry level in Science (Chemistry and Physics) and from SK to Grade 8 in Language Arts (English).

Name: Kumon Learning CentresLocations: , NEWVILLE

Distance from Schoolers: 6 KMS

Kumon Learning Centres’ reading and math programs help children master those fundamental skills so important to their overall academic performance.

Name: Oxford Learning CentresLocations: , Newville

Distance from Schoolers: 1.7 KMS

Oxford Learning Centres build academic skills in :

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All subject areas for Grade 9-12 students. SAT testing Summer program

Parent reports School and homework support

Name: SylvanLocations: Newville

Distance from Schoolers: 1.7 KMS

Sylvan offers in-center and online tutoring programs in every grade including help with geometry, general math help, reading skills and more.

Independent Learning Centres (ILC)

There are currently 8 ILC’s in Newville. They are:

Academy Location: Distance from Schoolers: 0.9 KMS

Learning CentreLocation: Newville,

Distance from Schoolers: 8 KMS

Location: Newville

Distance from Schoolers: 3 KMS

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provides individualized supplementary education for elementary, high school aged, and adult students.

Location: Newville, ON Est. Distance from Schoolers: 0.9 KMS

.Location: Newville, Est. Distance from Schoolers: 5.7 KMS

Learning CentreLocation: Newville, Est. Distance from Schoolers: 7 KMS

Learning Centre IncNewville

Learning Centre Inc. offers individual one on one tutoring by certified teachers. Tutoring available in all subjects JK/SK.

Study Skills Math and off to University Science and off to University ESL for adults French and off to University

Summer Academic Camp 3-13 yrs

• French • Thematic units of study • Field trips for experiential learning • English • Social Studies • Physical Education • Math • Science • Drama

They offer full & half-day programs for students ages 2 ½ to 13 years old. All programs teach students communication and leadership skills, and help build self-esteem. Evening tutoring is available.

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Learning Centre

NEWVILLE, Alberta

Provides tutoring and training Services to students from Grade 1 to Grade 12. Subjects covered: English, Mathematics, Science.

Supplementary Education Practitioners(“SEP’s);SEP’s are one person tutoring services, where tutoring usually takes place in the students or Schoolers home or in a third party location such as a church. SchoolCo does not perceive a significant competitive threat from SEP’s

Observations and ConclusionsFrom this analysis, SchoolCo concludes that the competitive threat from Franchised Learning Centres and Independent learning Centres is moderate. SchoolCo will continuously monitor the competitive environment and adjust its strategies where required.

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Marketing PlanSchoolCo’s marketing objective is to grow its enrolment base to an average of 350-400 students by the end of 1997.

SchoolCo’s marketing plan has the following elements:

1. Our positioning strategy will emphasize the uniqueness of the Schoolers brand.

2. Our pricing strategy reflects the competitive nature of the market and the positioning of Schoolers as a market leader.

3. Our product strategy anticipates that the various segments of the market will require different services.

4. Our promotions strategy will focus on timed media strategy, relation- ship building, creating consumer awareness and interest within the community.

The following sections will outline the main elements of the marketing plan.

Positioning

Vision StatementTo help students achieve learning success through connectivity of Parents, Teachers and Schoolers.

MissionThrough 100% Canadian curriculum, qualified teachers, educational system and community connectivity, product scope and affordability, Schoolers™ Education Centre is a leader in the supplementary education market.

Brand PromiseLearning Success

Pricing StrategySchoolCo’s research indicates that the average hourly rate for tutoring service in the market is in the range of $40 - $45 per hour. The company will price within this range.

Product Strategy

Product Description Not all students are struggling in school. There are students who are only beginning to encounter some challenges, students who need a boost to their confidence, and students who are doing well but simply need more practice. Schoolers has created a system that affords the right choices for each student’s situation. These programs continue to help students learn success, which, in the end, is what helps in running a profitable centre.

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Academic UpgradingThe Schoolers system was created to target the individual needs of students and their families and is our most valuable service. It begins with a process of testing each student to identify his or her particular skill gaps. Schoolers uses credible, standardized Canadian assessments that give us the targeted information we need to personalize each student’s program. Each student receives a tailored program entirely based on the provinces curriculum. Personalized programs are offered in reading, math, writing, and study skills.

Math Program Schoolers math program focuses specifically on the skills outlined in the Canadian Curriculum. The initial diagnostic assessment will identify the skill gap. A personalized grade level program is designed according to the students’ mathematical challenges.

Writing ProgramSchoolers writing program was created for students in grade four to adult, and looks specifically at Language Mechanics, Language Expression and Composition. The goal is to improve achievement in all writing skills and to help the student apply these skills to their own writing.

Qualified TutoringSchoolers’ Qualified Tutoring Program helps the student of all grades who has always done well in his or her studies but encounters a course requiring more individual instruction. Targeted mainly towards high school students, Qualified Tutoring is designed for students who have a good grasp of all previous expectations in the curriculum. They are placed with qualified teachers who will guide them through the area of concern.

Study HallSchoolers’ Study Hall Program helps students in grades three to eight complete their homework with the guidance of a qualified teacher. The student attends the centre twice a week for one hour and is supervised by a qualified teacher. The benefits for the student include consistency, independence, and improved study skills.

New HorizonsSchoolers’ New Horizons Program includes many different segments that apply to many different cases. Some of these areas include:

ESL Program: assisting students learn English as their second

language.

GED, SAT and TOEFL Prep: preparing students who are interested in

writing one of these tests.

LMR: providing credit courses for Labour Market Re-Entry

Academic Upgrading: offering adults, along with children and teens,

who are looking to identify and fill the skill gaps they may have.

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These programs allow adults to learn in a supportive environment while improving their job and career potential. Each student receives individual instruction to effectively reach his or her goals.

Learning for a LifetimeEach student who enrols at a Schoolers Education Centre receives a free Schoolers Club Lifetime Membership. Students of all ages and all capabilities benefit by receiving an individualized program to achieve results. As well, each student receives annual progress calls, special offers, discounts for family members and free Progress Testing. Schoolers’ main goal for its students is for them to be learning success for a lifetime.

Promotional Strategy

Advertising and Communications ProcessManagement recognizes that it will have to advertise extensively in order to achieve our marketing objective. Schoolers’ advertising process is based on four key elements:

Planning Ahead Setting Goals Execution; and Reviewing and Collecting Feedback

Planning Ahead SchoolCo plans to use blocking charts, calendars, goal sheets and other

tools to organize our plan; Marketing and advertising will be coordinated so that they are

complimentary to each other; SchoolCo will continually research what is taking place in the community

in order to take advantage of opportunities to participate; All media buy and planned events will fit into the Schoolers brand

promise, mission and vision statement

Setting Goals SchoolCo will set goals relating to the number of inquiry calls, number of

students booked, pamphlets distributed, etc; Goal setting will be based on information learned from other franchisees

to avoid being overly optimistic or pessimistic; Goals will be set for each specific event and for the long term. The short

term goals will be reflective of the long term goals and vice-versa. They will be integrated with each other.

Execution SchoolCo will make every effort to stick with its marketing plan.

Management will stay away from impulsive decision such as purchasing media buy or participating in events at the last minute.

Management will create an execution plan with clear action items to follow. This will provide a checklist to ensure that nothing is forgotten. It will also ensure that events are well organized and prepared in advance.

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Reviewing and Collecting Feedback After each marketing event or advertising campaign, management will

review its goals to see if they were met. Notes will be kept so that if the event or campaign is repeated, necessary changes can be made;

Management will collect feedback from its customers and community members to determine if the marketing and advertising was effective.

Advertising OptionsSchoolCo will consider the following methods of advertising:

Reader Boards

Rink Boards

Community Newspapers and Directories

Newville Board of Trade Members Newspaper

Radio

On-site Signage

Brochures

Billboards

Flyers and inserts

Direct mail-outs

Pamphlets

Promotional items (pencils, pens, clothing, etc.)

Signage in the community

Connecting to the CommunityThe Connecting to the Community initiative will reach out to Schools, Faith Based Organizations, Community Organizations and Institutions and Businesses. The main elements of this plan are outlined below.

Schools

Management will set up meetings with School Board Directors, Principal and Teachers and Trustees to introduce themselves and provide information of what Schoolers is about.

Faith Based Organizations

Management will set up meetings with Faith Based organizations to introduce themselves and provide information of what Schoolers is about. The opportunity to have Schoolers Study Hall program on site for members of the congregation will be explored.

Community Organizations and Institutions

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The following opportunities will be pursued:

Setting up information booths in area community centres; Sponsoring and/or participating in community events Sponsoring different athletic/arts organizations such as: dance studios,

gymnastics teams, sports teams, etc. Sponsoring a reading program offered by the library. Setting up a

reading program if nothing is currently offered; Using door-to-door campaigning as a means of introducing Schoolers to

the community. Hosting small seminars or meetings.

Business Partnerships

Management will consider collaborating with businesses that have similar customer demographics. SchoolCo will add value to the business partnership by offering to host staff meetings, give discounts on services and cross promoting their services in the reception area, if appropriate.

Connecting in the CentreThe Connecting to the Centre initiative will reach out to Students, Parents and Teachers. The main elements of this initiative are outlined below.

Students

Excitement will be created for the students through events in the centre such as jellybean counts, colouring contests and the Schoolers Store;

Holidays will be used to full advantage. For example: Ethnic/ Cultural holiday recognition, Valentines for the students on Valentines Day, Christmas cards, etc;

Keeping students and their families happy will create positive word-of-mouth advertising for the centre.

Parents

Business Partnerships could be used to build benefits for parents; Parent Conferences will be held on a regular basis; Various workshops for parents will be offered. Possible topics include:

identifying children’s skill gaps, learning disabilities, post secondary education, public vs. private schooling, etc.

Teachers/Schoolers

Staff meetings will be used as team building opportunities. Snacks and refreshments will be provided and games and team building activities will be utilized. This will be an enjoyable time to provide staff with information and also to collect feedback;

Excellence will be recognized and rewarded. Staff appreciation will motivate them and help to create a positive atmosphere in the centre;

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Financial Plan

AssumptionsDetailed assumptions are included with the attached financial projections.

Financial StatementsSummary Income Statement

1996 1997 1998 1999 2000

Total Sales $176,060 $842,838 $1,230,406 $1,293,037 $1,334,850% Growth 379% 46% 5% 3%Income from Operations $20,464 $287,420 $493,711 $525,057 $545,220% Growth 213% 72% 6% 4%Net Income after Taxes $12,278 $172,452 $296,226 $315,034 $327,132% Growth 188% 72% 6% 4%

In the Appendix to this Business Plan, we provide the following:

Cash Flow Forecast for 1996 and 1997; and

Projected Statement of Income for the years 1996 to 2000.

Key assumptions

Capital RequirementsTo implement its plans, SchoolCo requires external financing in the amount of $55,000.

Use of FundsThe funding proceeds will be used by SchoolCo to renovate and furnish its leased premises and provide working capital for operations.

Exit/Payback StrategyThe financial projections indicate that SchoolCo will be in a positive cash flow position within 5 months of opening. No further financing is anticipated beyond the initial amounts forecasted in year 1 of this plan. The forecasted financial statements show that SchoolCo will be able to retire the loan within 1 year.

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