1. Collage of Business and Economics
Department of Management
(MSc in Management Extension Program)
Business Plane Assignment for the course Innovation Management and
Entrepreneurship
By
Mikealay Desta
Zerihun Necho
Yitbarek Mezemer
Debes G/egziabher
To
Instructor, Dr. Worku Tuffa
Date, May 14, 2017
Addis Ababa - Ethiopia
2. Network Tutoring Agency
Mission
• Networking learners with the subject matter they need to master by assigning legible
tutors at their convenience time and places via applying a unique and innovative
approach .
Objectives
• Improve operating capacity by full-time commitment in the business and delivering service
into wide geographical areas year by year.
• Increase net profit margin progressively through Year 3 by increasing customer groups.
• Grownup the business into consultancy and Training center in the coming 4 to 6 years
Key Success Values
• Developing learning methods fitted with their minds .
• Promotion of our services
• Definite understanding of client needs
• Conducting the impact assessment of behavioral changes
• Avoiding the fear for the loss of vendor trust by both sides
3. 2. Business Overview and Ownership
• Network Tutoring Agency is a startup firm, which will focus on providing a
networking access between tutors who want to teach, and the clients who are
looking for a tutor.
• It will be established by a team of three entrepreneurs.
• And is legally licensed partnership business with which each member will have
to register equal shares.
• On top, this will operate in the Megacity of Ethiopia by situating its office 4 kilo
round about.
Business Start-up
Rental Cost per months , Promotion expanses , Yearly internet
posting payment Administration Costs ,Yearly license renewal
payment and Other expense are totally assumed to Birr 16,000 as
well it requires also Total Assets Birr 24,000
4. 3. Product and Service
Opportunity: Evidently, tutoring service is listed as one of the top 16 industries for
launching a new business
-with annual growth rate of 7% (2014).
-therefore, a tutor agency as a good business idea not only being it has growing demand
but also it is problem worth solving for the society at large.
1.Problem worth Solving
This day's Experience has shown that many of the students are looking for tutors to
overcome the limitations that they have about the subject matter and b/c they need to
master it.
Though there are individuals who give tutoring sessions, we sensed that this is not yet
enough to address the desire of the titanic and emerging market need and still this way of
delivery by its nature is problematical in view of the fact that;
•Families/clients who seek the service are diving with inflated prices, lacking link
with effective tutors who could certainly guide their Childs and at large facing with
fear of Vendor Trust and this can also terrify the tutor too.
5. Our Solution
Likewise, this agency is expected to offer easy access to tutoring services for
different field of studies by making its services ready mail for its kings by reducing
both side switching costs.
coming up with a legal personality that can entirely erode the both sides fear trust
being by its standing can be suing and be sued.
quality education emphasize being the tutors will be assigned based on their
competence results & given adequate inductions
and this has got benefit to the employment opportunity of massive tutors.
employ a Systematic Analysis, a problem-solving method that students can apply
to a wide range of subjects
Finally, clients will be of worth full by paying a reasonable price
•Per Individual tutoring 120 Birr/hour
•Per two group of people at a time 100 Birr each/hour
•Per three group of people at a time 80 Birr each/hour
•Per four group of Network people at a time 70 Birr each/hour
•Per five group of people 60 Birr each/hour
6. Validation of Problem and Solution (Opportunity) by
DIFA Model
A lot families have the interest/willingness and ability to pay since they give
the impression of being set money aside for tutoring. This is therefore, an
evidence for the existence of full Demand (the actual or potential customer
need, with ability to pay).
grow big enough to expand into other areas, such as running teaching,
training and consulting centers and striving business that a product, service or
technology can be provided with an Innovative Future.
charges the client for the tutor plus the commission on top and operating at a
very low cost will enable the agency as Attractive as being bear a good benefit
& interest for the founders.
And also, found to be Feasible given the technology & resources exist.
7. 4. Market Analysis
Market
Analysis
1st year 2nd year 3rd year
Growth
Graduate 2% 45 46 47
Undergraduate 7% 76 81 87
Secondary
School
10% 1,100 1,210 1,331
Elementary
school
5% 468 491 516
Total 1,689 1,829 1,981
This is, therefore, while the secondary school segment will
remain as a core focus of the agency, much time will be dedicated
to promotion to this segment
and as an agency, it will offer its services to all of its target
markets including for those colleges diploma level students by
enhancing its operating competence.
8. Competition and Business analysis
Service Business Analysis; Show that while the need for tutoring exists, the
majority of tutoring delivered in the market are inefficient and not well
thought-out as well as have not legal guarantees.
Thus far what sets our firm separately is it's worth-problem solving
withstand and the attention paid to its clients.
Competition; If truth be told, majority of the competition comes from one-
on-one tutoring conducted by family relations, there is no organized
tutoring service and agency available.
However, as the business looks to expand and introduce to existing
market, there may sonly appear few organized competitors.
network tutoring agency will develop a website to put its assessment
and customer communication efforts at ease.
9. Differentiation (SWOT) Analysis
STRENGTH:
Uniqueness; we stand as unique alternative of tutoring
Good composition of Partners; founders have leaning
experience and difference background (Business & IT
professionals)
Low capital Requirement; low overhead to
start & high customer reach
Existence of Systematic impact
assessment method and vendor trust
WEAKNESS:
Time: Just for the time being the founders will do
everything
Lack of capital; all start ups will be raised by
funding/loans
Lack full commitment; founders may work this
on par time since working for other institution at full time
base.
lack of steady information sharing
system with clients
OPPORTUNITY:
Growing Demand; the demand for tutoring is
aggressively increasing from year to year
Untapped Market; existence of full & unexploited
demand.
Availability of Intranet; for fast, mass and easy
communication with Customers.
Rich Market Resource; existence of significant
number of tutors/par timers
THREAT:
Competition; resulted from the law cost of
entry and exist to or from the market
Internet cost escalation: due to the need
for more internet space as it enhances its operation
and dollar value variation.
Eradication of technological
innovations.
SWOT
10. 5. Marketing Strategy and Implementation
Competitive Edge
The absence of tutoring agency or well-organized tutoring center providing such a
needed service to the target market will give us an edge that will help us to survive for
some time in the coming.
Thus, Network Tutoring Agency will influence its competitive edge to control a mass
market share By providing advantages for clients including individualized and group
tutoring, a foundation of trusted and competent tutors, conveniently tie together with
tutors, and the Systematic Analysis
Marketing Strategy
the success of our marketing strategy depends on the selection of our right media,
the right message (speak relief, identify pain, show uniqueness, and benefit) and
getting the right target at the right time. And this will be done by;
Print Business Cards
Post in Community/ Public Square;
Get Involved in Schools;
Know important school Dates;
Internet Marketing;
11. Sales Strategy
Sales Forecast
Sales 1st year 2nd year 3rd year
Graduate 64,800.00 66,096.00 67,418.00
Undergraduate 109,440.00 117,101.00 125,298.00
Secondary School 1,584,000.00 1,742,400.00 1,916,640.00
Elementary school 673,920.00 708,666.00 744,099.00
Total Sales 2,432,160.00 2,634,263.00 2,853,455.00
Direct Cost of Sales 1st year 2nd year 3rd year
Graduate 48,600.00 49,572.00 50,563.50
Undergraduate 82,080.00 87,825.75 93,973.50
Secondary School 1,188,000.00 1,306,800.00 1,437,480.00
Elementary school 506,190.00 531,499.50 558,074.25
Subtotal Direct Cost of
Sales
1,823,040.00 1,975,697.25 2,140,091.25
12. 6. Management & Personnel Plan
Even though, the project has stated for the purpose of the class
attainment; its mission got beyond and the founders are really
empathetic to get it down into the ground within the upcoming few
couple of months.
The founders diverse educational background and day job working will
provide them with numerous advantages to succeed their mission.
They are quite skilled at surveying people and determining what is the
most effective in their area of interest like in acquisition, customer
handling, and coaching and these skills are key for the agency’s
service.
Personnel Plan For 3 Consecutive years
1st year 2nd year 3rd year
Founders Birr 36,000 Birr 54,000 Birr 72,000
Other (2 in number) 0 Birr 48,000 Birr 48,000
Total People 3 5 5
Total Payroll Birr 36,000 Birr 102,000 Birr 120,000
13. 7. Financial Plan
Important Assumptions
General Assumptions
1st year 2nd year 3rd year
Working hours/week 3hrs 3hrs 3hrs
Working hours/month 12hrs 12hrs 12hrs
Sales Monthly/individual 1,440.00 1,440.00 1,440.00
Interest Rate 7.00%
Tax Rate (yearly) 30.00% 30.00% 30.00%
Other 0 0 0
Break-even Analysis
{Break-even= Fixed Cost/Margin %} OR {Break-even= PQ=VQ+FC}
Assumptions; - Price = Birr 120/hour
Estimated Monthly Fixed Cost = Birr 18,000
Average Percent of Variable Cost = 0 .75%
14. Projected Profit and Loss
262,842
281,818
305,736
230,000
240,000
250,000
260,000
270,000
280,000
290,000
300,000
310,000
1st year 2nd year 3rd year
Profit Yearly
-10,000.00
0.00
10,000.00
20,000.00
30,000.00
40,000.00
50,000.00
60,000.00
70,000.00
80,000.00
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
Grose
Margin
Net
Profit
Gross Margin & Net Profit Monthly
15. 8. A Business Model
Customer Group
Elementary to graduate school
students
And
Par-time Tutors
Business Model for Tutoring Agency
Sales Income
Birr 120/hr for each &
Birr 1,440/month for individual
base and average monthly sales=
202,680.00
Created Values for Clients
-Building Trust
-Cost and waste of time Minimization
-Systematic Assessments of leanings
-Creating Bond of communication in b/n
& among
-Reasonable Pricing
-Employment opportunity for tutors, etc…
Projected Sales
1st year = 2,432,160.00
2nd year = 2,634,263.00
3rd year = 2,853,455.00
Variable Costs
Average Percent of Variable
Cost = 0 .75%
Key Ratios
Gross Profit margin = 25%
Net profit margin = 10.7%
Breakeven sales monthly = 72,000.00
Breakeven volume monthly = 50 students
Overhead Costs
Estimated Monthly Fixed Cost
(including rental, promotion, &
other administrative costs) = Birr
18,000
Total Costs
Monthly Total cost = 170,010.00
Gross profit = 50,670.00
Net profit before taxes and interest
= 32,670.00
