Business Plan Algorizm

EXECUTIVE SUMMARY:
This business plan deals with the opening of a profit 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
created in education sector in recent years due to the
introduction of Centralized Admission Policy (CAP) for
Intermediate classes. This business plan will function on two
main aspects: One is opening of a college for intermediate
students and secondly as a tuition center for O/A levels
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 management team that comprises of highly qualified
teachers. The future goals of the institution i.e. expending its
campuses throughout the city are also brought into
highlight. The market potential of the ACC is although low
but still it is quite profitable as projected in the financial
statements. The main competition is with government
colleges but hardly any competition prevails with private
institutions. There is a high scope for O/level coaching
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.

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Three years final projections are included in this business

plan. The projected financial statements include Income
statements, Balance Sheets and Cash flow statements.

I have named the institute as Algorizm College and

Coaching center. It is named on a Muslim scholar, Ibn Al-
Musa 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 will work. The
strategy of the company and in fact the whole business plan
will work on these firm groundings. Since the inception of
centralized admission policy (CAP) a new opening has been
created in the educational sector. This centralized admission
policy works on certain basis, which are fruitful for the
opening of private college. Some of the characteristics of
this CAP include:

 The admissions are strictly on merit basis.

 Every government college has a certain percentage of
marks allocated for admission.
 Students need to clear all the papers of class 10th in order
to get admission in the colleges.
 Quota system and admission to colleges on regional basis
has been eliminated.

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 No shifting or transfer is allowed once a particular college

is assigned to a student.

These some of the characteristics have aroused 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 do not have any good reputation. This mainly
happens with students who secure low percentages in the
prerequisite exams. These students then prefer private
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
center that is our second function. O/level education 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
tuitions and individual are expensive, a group coaching
system will be beneficial to students.
Now since the opportunity and need is now defined we
will formulate our business strategy on this basis. Our
Institute will work as a college in the morning and a coaching

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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 given
admission on that. As per about the coaching center 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
secondary education. The campus will be a state of art
facilities as per the board requirement with most modern
computer, physics, chemistry and biology labs. Affiliation
with board of secondary education is essential requirement
for running a college at this level. There are certain
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
Nazimabad. The reason for that is there are not many
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 will be more beneficial. North Nazimabad 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 ventures such as these have been successful
specially colleges and tuition center open separately. But
this is a unique kind of combination and idea that is much
safer than any other form of business.

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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 reputation 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 Impart Knowledge with utmost sincerity and

devotion

 Create individuals with high caliber and skills.

 Achieve academic excellence.

 Culture of professionalism must prevail.

 To achieve the basic aim of imparting standard

education.

 To make our student worth human beings who will

contribute to the well being of nation.

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Management Team:

It is very essential for venture such as this to have a

highly skilled and professional team otherwise this venture
can end up as a bad dream. Properly selected team of
individuals is necessary. The ACC management team will
comprise of highly professional teachers and professors who
have credibility in the market. Renowned teachers and
professors who have vast experiences in the field will be the
part of the team. An individual who has the experience of
running an institution will administer the ACC. A retired
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 British education system will be preferred. These

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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
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
and 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 or two. The main competition that we face is with
government colleges, which are cheaper, and some do have
very good reputation. But one point that favors us 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

catering the needs of O/Level students. Thus hardly 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.

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Market research and analysis have shown that there 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 hand. Remember that our target market are those
students who prefer private colleges either because of not
getting admission in desired government college or for any
other purpose such as distance.

The total number of customers along with potential

customers in the first three years of the ventures is shown in
the bar chart below:

6000

5000

4000
Total no. of
3000
customers
2000 Potentail
customers
1000

0
1st year 2nd 3rd year
year

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The total number of customers along with potential

customers for coaching is shown in the bar chart below:

800
700
600
500 Total number of
customers
400
Potential
300 customers
200
100
0
1st Qtr 2nd 3rd
year year

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It is the love of teaching and the affection toward this

profession has led me to write this business plan. 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.

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 Proper evaluation of the student will be done

throughout the academic period.

 Greater emphasize will be on the 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 on regular basis so as to create much 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

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done. For the coaching center some form of the

advertisement will be done throughout the 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. Keeping all the constraints in mind more effective

ways of communication, which has low costs, will be used.

In our promotion we will try our best to get good

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

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who will study more than three subjects. Students will be

motivated through these incentives and others that will be

introduced from time to time.

ASSUMPTIONS RELATED TO FINANCIAL PROJECTIONS

1. The fee charged from college students is RS 1000.

2. The fee charged from coaching center is RS 500 per
subject.
3. We have projected 100 students for the first year in
college and 50 students for coaching center.
4. I have assumed that every student in the coaching
center is studying 2 subjects
5. Rent of the premise is RS. 10,000 per month with a
deposit of 100,000.
6. Assumed that 5% of the total fees would be our
receivables.
7. An annual affiliation expense is RS. 10,000 with initial
cost of 30,000.
8. In the second year project strength is 150 students for
college and 100 students for coaching.

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9. In the third year projected number of students for

college is 200 and 100 for coaching.
10. Fee receivables from the first year to third year
increases from 9000 to 30000.
11. In cash flow statement operating activities are
evaluated.

Projected Income Statement For the First Year:

Tuition fees (college) 1200,000

Tuition Fees (coaching) 600,000
Total income 1800,000

Less Expense:

Advertising 200,000
Salaries 700,000
Rent 120,000
Utility Expense 300,000
(Elect, gas and telephone)

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Office Expense 80,000

Depreciation Expense 5,000
Affiliation Expense 10,000
Miscellaneous 50,000
Total Expense 1465,000
Net profit 335,000

Projected Balance Sheet for the first year:

Fixed ASSETS:

Furniture 100,000
Less: prov for depreciation (5%) 5000
Total 95000

CURRENT ASSETS:
Fees Receivables 9000
Deposit (Refundable) 100,000
Cash at bank 3, 21,000
Cash at hand 10,000
4, 50,000

Current Liabilities:
None Nil

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4, 50,000
5, 45,000

Financed BY:

Capital Balance 210,000

Less: Drawings Nil
Add: Net profit 335,000 5, 45,000

Projected Cash Flow for the First year:

Net Income 3, 35,000

ADD: Depreciation 5000
Less: Fees Receivables 9000

Cash Flow from Operating activities 3,

31,000

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Projected Income Statement For the Second

Year:

Tuition fees (college) 1800,000

Tuition Fees (coaching) 1200,000
Total income 30, 00,000

Less Expense:

Advertising 200,000
Salaries 1200,000
Rent 120,000
Utility Expense 350,000
(Elect, gas and telephone)

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Office Expense 100,000

Depreciation Expense 5,000
Affiliation Expense 10,000
Miscellaneous 55,000
Total Expense 2,040,000
Net profit 9,
60,000

Projected Balance Sheet for the Second year:

Fixed ASSETS:

Furniture 100,000
Less: prov for depreciation (5%) 10,000
Total 90000

CURRENT ASSETS:
Fees Receivables 20,000
Deposit (Refundable) 100,000
Cash at bank 9, 00,000
Cash at hand 54,000
1,074,000

Current Liabilities:

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None Nil

1,074,000
1,164,000

Financed BY:

Capital Balance 204,000

Less: Drawings Nil
Add: Net profit 9, 60,000 1,164,000

Projected Cash Flow for The second year:

Net Income 9, 60,000

ADD: Depreciation 5000
Less: increase in Fees Receivables 11000

Cash Flow from Operating activities

954,000

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Projected Income Statement For the Third

Year:

Tuition fees (college) 2,400,000

Tuition Fees (coaching) 1800,000
Total income 4,2,00,000

Less Expense:

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Advertising 200,000
Salaries 1500,000
Rent 180,000
Utility Expense 350,000
(Elect, gas and telephone)
Office Expense 120,000
Depreciation Expense 5,000
Affiliation Expense 15,000
Miscellaneous 60,000
Total Expense 2,430,000
Net profit 1770,000

Projected Balance Sheet for the Third

year:
Fixed ASSETS:

Furniture 100,000
Less: prov for depreciation (5%) 15,000
Total 85000

CURRENT ASSETS:
Fees Receivables 30,000

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Deposit (Refundable) 100,000

Cash at bank 17, 00,000
Cash at hand 65,000
1895,000

Current Liabilities:
None Nil

1,895,000
1,980,000

Financed BY:

Capital Balance 2, 20,000

Less: Drawings 10,000
Add: Net profit 1,770,000
1,980,000

Projected Cash Flow for the Third year:

Net Income 1770,000

ADD: Depreciation 5000
Less: increase in Fees Receivables 10000

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Cash Flow from Operating activities 1,765,000

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