Abstract
The proposed Charter Business School is a business located in the city of New York within the education sector. The business targets to offer tailored business training courses and will charge $50 per unit. The estimated cost of starting the business is $106,500 that will attract returns of $150,000 at the end of the first financial year. The business is expected to break-even within the first year of operation. The marketing and financial plans were created within the projections for the first financial year.
Summary
The goal of the proposed Charter Business School is to be a leading center of excellence in business education within the city of New York. The mission is value addition in the dynamic field of business training through creation of tailored courses to meet the market demands. The key success factors for the business are quality, reliability, and affordable pricing of business-related educational services. The objectives of the business are proactive design of tailored business courses, promotion of e-Learning, and creation of an ideal and holistic education environment that fulfill the desires of students.
Introduction
Overview of Business Venture
My business venture involves establishing a new charter business school in New York City. The institution will be located in the Clinton Hill section of Brooklyn, a popular destination for its diverse residential streets, various bars, and exotic cuisines to eat from (Bulkley & Wohlstetter, 2004). Clinton Hill is home of the art and design school Pratt Institute, which show cases beautiful art work from its students. Clinton Hill is a neighborhood located in the north central area of Brooklyn Clinton Hill is named after Governor Dewitt Clinton. The service I will be providing for this business venture will be creating a basic financial literacy curriculum for middles-school students in 6th to 8th grade (Kindle, 2010). Even though the area may seem like a wealthy neighborhood, the vast majority of working class from moderate and low income segments. The area has various schools such as Success Academy and Brooklyn Prospect Charter. Although these schools are popular, neither of them is offering financial literacy training.
Company Background and Industry Overview
The Clinton Hill area is a diverse mixed population of residents. 55 % of the residents are White and Asian and 45 % are of African American descent. The Clinton Hill area is changing it has had a significant increase in population with an increase in gentrification and a growing middle of population. The average household income in this area is $76,498 and the net worth of an average household is $617,225. I want my business venture in this area because Clinton Hill is a friendly neighborhood due to the beauty of its architecture and the proximity of the transportation networks (Passy, 2017). The business venture I will operate is called Charter Business School and will be located in the District 13 as a tuition free innovative center for financial literacy to middle school students.
Strategic Analysis: Charter Business School
The business’ competitive edge will be the overall difference in offering tailored financial literacy learning as opposed to most charter schools that are focused on improving academic and operational quality. However, the modern student needs to learn more than common core and achieve high test scores (Marsh & Wohlstetter, 2013). Students today need to be educated in financial literacy to get more opportunities and grasp valuable skills in money management.
Statement of CA Goals
In this strategic project, my first short-term goal is to create valuable learning resources to create dimensional classes as part of the quality assurance policy. The second objective is to address the current business learning gap by teaching basic financial literacy skills to middle school students (Foster, 2017). The third goal is to do constructive research for the business venture through creation of financial and marketing plans (Wohlstetter, Smith, & Farrell, 2013). The final goal is to seek information about financial literacy and why it should be taught in the proposed school. My first long term goal is to learn the rules, policies, and regulations in operating a business venture (OECD, 2017). The second long-term goal is to meet the needs on financial literacy that are not being met in the other schools (Passy, 2017). In meeting these needs, I will work with the National Financial Literacy Council, who will be funding of this program. I will also apply for a loan to finance any deficit.
Planning Phase
Plan of Action
Business Environment Analysis
Since the Clinton Hill business education market is dynamic and consists of several competitors, it is predicted that barriers to entry will include expensive taxes and compliance permits from the local government. Moreover, the high capital, training, and marketing costs will slow the process of entry. Several factors will affect the business operational environment such as product, features, and benefits. For instance, duplication of similar products offered by other competitors would limit the Charter Business School’s expansion capacity since customers will have perfect substitute services (Passy, 2017). In addition, provision of customized and tailored financial literacy products will improve on the quality aspect and win the confidence of potential customers. Lastly, the vocational training services, on-campus library, and book sales/leasing services will ensure that the business has diverse sources of revenue. The most important feature of the Charter Business School products is that they are tailored and customized to meet the needs of each student at the individual level. Moreover, the low cost-price-tag will ensure that customers are guaranteed affordable top quality training (Kindle, 2010).
The targeted market for the proposed business consists of students within the 6th and 8th grades in need of financial literacy training courses. These customers are spread across the Clinton Hill region and the entire New York City. The demographic characteristics of targeted customers include traits such as being between the age of 10 years to 18 years and belonging to all economic classes in New York. The school targets male and female students from all social and family income levels. The major competitors of the business are Success Academy and Kipp Charter School (Passy, 2017).
Managing Financial Information and Analysis
Cost of Doing Business
Expected revenue
The business targets offer chartered business courses to more than three thousand students on a yearly basis. The average charge for each unit will be $50. This means that the school will collect about $150,000 at the end of the first financial year.
Expected revenue= Number of customers * cost of each unit=$3,000*50=$150,000
The Charter Business School, New York
One Year Income Statement
Balance Sheet
As of 30th December, 2019
Statement of changes in equity
As of 30th December, 2019
Return on investment = Gains – Investment costs
Investment costs
Return on investment for the business
Gains $150,000
Investment cost $106,500
Gains – Investment costs $43,500
Therefore, return on investment is 43,500/106,500 = 14.99%
From the above financial estimations, the charter school is expected to break-even before the end of the first financial year. Therefore, through proactive financial planning, the charter school may be able to accurately forecast future profits and costs associated with asset depressions and running the school. The proposed charter school should review the funds required against existing share contributions in order to correctly estimate and balance the risks and losses.
Operational Plan
The business will be operated from a single location with classes. Tutors will teach from 8.00am to 2.00pm. Each class will last for 45 minutes. There will be a tea and lunch breaks at 10.30am and 12.30pm. The courses will be designed from the different financial literacy materials and government publications. The school will have a customer care service desk for inquiries from 8.00am to 4.00pm daily (Kindle, 2010). The business location was selected because of its spaciousness and presence of transport, communication, and social amenities.
The proposed rent and other facilities are estimated at $35,000 per year. The business will get the necessary licenses from local authority to comply with health, safety, and zoning regulations for educational services. The business targets to employ 6 personnel for the first year of operations after which more staff members will be recruited on a need basis. The recruited personnel will be skilled in business related education fields. Most of the materials to be used will be sourced from within, thus no need for inventory buildup or suppliers. The courses will be offered on a pay-as-you-learn basis, thus there will be no need for any credit policy (Passy, 2017). The school will partner with local educational organizations to offer advisory support in the form of an advisory board.
Marketing Plan
Industry/Market Research and Growth Potential
The market research was important because understanding the market dynamics are vital in determining sales and public awareness effectiveness towards developing concrete product knowledge for potential students within New York. Since the business will be located in the region of Clinton Hill, a quick survey was carried out on the number of schools offering similar services, potential clients, and the general population. The findings revealed that 55 % of the residents consist of Whites and Asians while 45 % are of African American descent. The average household income is $76,498. There is no school offering the vocational financial training services to grade 7 and 8 students (Passy, 2017). Therefore, the proposed venture in Clinton Hill will capitalize the market gap. The proposed plan will function on a strong distribution network through presence in strategic locations. The New York market is strategically located and has many offices, government buildings, hotels, and other amenities that attract the potential clients. In addition, the city of New York has well-developed infrastructure such as internet connection, electricity, proximal communication and commuter services. The New York education sector is estimated to be worth more than $300 million (Passy, 2017).
Consumer Analysis
The propose business will target to capture 1% of this market over a period of five years. This will be possible since the current statistics indicate that there are very few schools offering tailored financial literacy services within the Clinton Hill region. The demand for customized business-related courses is high, especially for primary students during vocational holidays. The local schools have more than 10,000 potential clients between the 6th and 8th grades. In the last ten years, the growth in the business education market is estimated at 10% annually. It is projected the trend will continue to grow in the foreseeable future (Passy, 2017). Thus, Charter Business School will have ready and expanding market for its products. Through proper marketing, the proposed business has unlimited growth potential to other regions beyond New York since potential clients are scattered in the entire region.
Competitive Analysis
The proposed Charter Business School will be strategically located within the proximity of New York City that has an expansive education market and potential. Since the business has unique and customized business courses tailored to meet individual needs, the impact of competition will be very minimal. Moreover, the Charter Business School has relatively low operational costs as estimated in the financial projections and high consistent returns. Therefore, its success in the New York education market will be determined by the level of trust and loyalty among targeted students as summarized in chart 1. Since the school plans to create a strong organizational network with potential students, it is likely to survive and thrive in the New York education market (Kindle, 2010). In addition, the school has tangible potential for expansion beyond the current location.
Competitive Advantage and Disadvantages of Products and Services
The Charter Business School will be positioned as a fairly-priced education center that offers tailored business courses. This strategy will ensure that the competitive factors are positive skewed to take advantage of mass enrollment and advancement of different units. Through competitive pricing for different services and education products, the school will be in a position to develop uncompromised trust and cult-like following among students. As a result, as capture in chart 2, the business is likely to be economically sustainable in the short and long-term in the process of market share expansion (Wohlstetter, Smith, & Farrell, 2013). However, in case of limited funding, the quality of product bundle will be affected since the success of the business is dependent on external sources of capital.
Image of Products/Services and Pricing
The Charter Business School will embrace multiple branding strategies to create different courses and tailored vocational training services that suit the needs of different customers. For instance, the business courses will be differentiated by the academic level, skill set, and content to appeal to different customers. In addition, the vocational training services will be customized to address specific needs or skill requirements of the applications. Through partnership with other local colleges, the short educational exchange programs will improve on the school’s visibility. The multi-branding strategy will guarantee market survival and strategic expansion beyond the primary targeted customer segments. The price for each business unit is set at $50 to make them affordable and attractive to potential customers (Wohlstetter, Smith, & Farrell, 2013). As captured in image 1, the flyer for the products and services include business training and supportive learning.
The proposed products will be priced using the first-mover pricing model. The units will be introduced at a price of $40 per business course after which the price will be increased to $50 upon successful market entry (Kindle, 2010). This method of setting prices was selected since the business needs to attract as many clients as possible.
Product/Service Strategies
The product and service lines for the Charter Business School will be angled on the objective of reliable and quality outcomes that are self-sustaining. The primary educational services the school will provide include vocational training, business courses, research, and sale of academic materials. The expansive product bundles will ensure that customers have access to desired learning needs. In addition, the school will host an expansive and well-equipped on-campus library for students. These strategies are aimed at internalizing the customer-centricity business model for sustainable operations.
Distribution, Location, and Promotional Strategies
The Charter Business School will be located in a strategic region of Clinton Hill in the cosmopolitan New York City. The central location was meant to cluster the operational and service delivery strategies for effective management. The school will offer free parking services to attract more clients. The business has a reliable physical address to not only win the confidence of potential clients, but also create an ideal known learning center. Distribution services will be managed by the Everfi digital technology Company and the National Financial Council, which were selected and contracted through a competitive bidding process (Kindle, 2010). The school will adopt a proactive and flexible promotional strategies such as online and offline advertisements to appeal to different customer segments. For instance, the school will print banners, posters, and fliers to distribute within the city of New York (Wohlstetter, Smith, & Farrell, 2013).
ппThe business will also rent two vans mounted with speakers and digital display screens to promote its educational services. The school will create different promotional activities such as offering discounts, rewards, and coupons for students who meet certain registration requirements. In addition, the school will offer tuition discounts for a successful referral. Through direct, database, and online marketing, the school’s e-learning activity awareness is expected to grow tenfold. The school will depend on online marketing through social media because it is affordable and most likely to reach the targeted clients. Social media will be used every day through the company web pages on social platforms such as Facebook and Twitter. The advertisement messages will project the image of a holistic and warm learning environment with ideal financial literacy training services for primary level students. As captured in the financial focus, the promotional budget on a monthly basis was estimated at $500, which is equivalent to $6,000 per year.
References
Bulkley, K., & Wohlstetter, P. (Eds.). (2004). Taking account of charter schools: What’s happened and what’s next? New York, NY: Teachers College Press.
Foster, A. (2017). 7 reasons why financial planning must be taught in schools. Web.
Kindle, P. (2010). Student perceptions of financial literacy: Relevance to practice. Journal of Social Services Research, 36(5), 470-481
Marsh, J.A., & Wohlstetter, P. (2013). Recent trends in intergovernmental relations: The resurgence of local actors in education policy. Educational Researcher, 42(5), 276-283.
OECD. (2017). PISA 2015 results (volume IV) students financial literacy. Paris, France: PISA OECD Publishing.
Passy, J. (2017). This country has the most financially literate teens-and it’s not the U.S. Web.
Wohlstetter, P., Smith, J., & Farrell, C.C. (2013). Choices & challenges: Charter school performance in perspective. Cambridge, MA: Harvard Education Press.