LSC

MANAGEMENT SKILLS and ENTREPRENEURSHIP

MBA - Semester One Lecturer: Dr. Rejendra Kumar

Omer Erkam Karatsanli L0409KGKG1011

04 JANUARY 2012
OBJE EDUCATION COMPANY LSC

Table of Contents
1. Executive Summary .................................................................................................... 3 2. Business Description ................................................................................................... 3 3. Produce and Services .................................................................................................. 4 4. Market Analysis .......................................................................................................... 5 5. Competition ................................................................................................................. 6 6. Marketing Strategy ..................................................................................................... 6 7. Management ................................................................................................................ 7 8. Organizational Structure ........................................................................................... 8 8.1. Personnel Plan .................................................................................................. 8

9. Technology ................................................................................................................... 9 10. Financial Plan .............................................................................................................. 4 10.1. 10.2. 10.3. 10.4. Break-even Analysis ....................................................................................... 10 Projected Profit and Loss ................................................................................ 10 Projected Cash Flow ....................................................................................... 10 Balance Sheet .................................................................................................. 11

11. Appendices ................................................................................................................. 12 12. References .................................................................................................................. 16

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1. Executive Summary
Obje Education Company, unlike a typical foreign language school, will provide a unique education for foreign language and accommodation through the medium of Obje Homes. Obje Education is the response to a rising foreign language desire. The community needs: (1) to learn a useful foreign language, and (2) an accommodation that is clean, safe, and useful. Obje Education's goal is to present to students a fast, unique, and entertaining education atmosphere for worldwide education. An Obje Home will be suitable for two students and one teacher. The foreign language education will be given at homes. It means education and accommodation will be together in one place; home. Moreover students and their teacher can be friend, which is of significant importance to learn real life foreign language. At the beginning, Obje Education Company will rent the headquarters and decorate the headquarters, and rent fifty education homes and decorate education homes. Investors will provide the cost of starting. Customers will be found immediately through the medium of advertisement and partner agencies. The prime targets of Obje Education Company are principally to address wealthy people for foreign language education. The headquarters of Obje Education Company will be Oxford Street, where is the heart of London. All activities are checked from the headquarters, such as payments, registrations, staff, and so on. Furthermore, customers can participate in activities via the internet website, which is also checked from the headquarters. We are in belief that this system is promising and profitable in the short run. Financial details were calculated for three years, which are addressed in the financial plan section on the business plan (Coke, 2002, p. 314).

2. Business Description
Obje Education Company will render serve customers with a strong and reformist system for efficient foreign language education by home environment and well educated teachers. Obje Education Company, soon to be located within education homes in various parts of London-s- city centre, will offer unparalleled and intensive but comfortable and enjoyable education. Obje Education Company will provide full service for a foreign education, English lessons, accommodation, nourishment and all kind of social activities. Obje Education Company will appeal to all individuals whose desire is foreign language education. The special foreign language homes, and the friendly staff that Obje Education Company provides, will interest to the audience that want to learn by living
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foreign languages. This educational format will captivate both younger and older members of the education community who will expeditiously gain interest in the unique resources like a home learning (Lancaster, 2011, p. 112.). Students of Obje Education will stay in Education House that have four bedrooms and all these rooms for two students and one teacher; a teacher who will be like a friend for two students. A student will study two hours in one-to-one tuition format, followed by one hour of conversation with another housemate and teacher. In addition to that they will have breakfast together between 9-11 am. Totally, each student will study five hours per day with the teacher. Obje Education is a privately held Limited Liability Corporation (http://www.thecompanyltd.com, 2001). Omer Erkam Karatsanli, the constituent of Obje Education, is the majority owner. Emre Topkara, Sefa Saltabas, all hold minority stock positions as private investors. Obje Education will make deals with the strongest education agencies from different countries all around the world so as to bring students to London. Obje Education's start-up costs will cover renting and decorating the headquarters in Oxford Street, renting and decorating fifty sums of foreign education homes in zone 2, salary of staff, advertising, making a web site which is suitable for online applications, capital to cover losses in the first year and up costs.

3. Produce and Services

Obje Education Company, we work to provide the most efficient learning schedule possible for the foreign language students. Everyday will consist of two hours breakfast time which is like a free time but also beneficial, followed by two hours English lesson time, and finally one hour conversation time with a weekly theme - generally about an article or a book. Most people wake up between 8:00 and 9:00 am. At 9:00, all of the foreign language students will sit down to have a breakfast until 11:00 am. After the breakfast, the English lessons will start. Each day, the program begins with the two hours English lesson for first student and then moves to one hour conversation for both students. Once and for all, second student takes two hours English lesson. The times can change if the teacher and students agree to change. The program is not affected by bank holidays, weather conditions and so on. The household can even study their lessons at the weekend if the teacher is suitable. During the lesson, publications by Oxford, and the internet are used. At least once each week, the household will watch an original English DVD (brought by the teacher) with subtitles, together in the evening. All food served will be meet the guidelines set forth by the Food Standards Agency. (http://www.food.gov.uk, 2003) The officials of Obje Education Company will bring the
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necessary foods to education homes i.e. on a weekly basis. In addition, the contracted company of Obje Education Company Fresh Up Cleaning Company (http://www.freshupcleaning.co.uk, 2010) will clean our education homes twice a week. It is a goal of this education that the foreign language students and their teachers can be friends. After lessons, the foreign language students can study their homework and go outside or whatever they want.

4. Market Analysis
The foreign language education (especially English) is an increasing section of todays business world and education circles or even daily life necessitated by the increase in globalization which is evolution of communication. In London and the surrounding areas, these individuals who are interested in foreign language are mainly between the ages of 16 and 55 years old with a median age of 23.6. The greater part have completed high school and many have varying degrees of college education. In addition to that the Language Travel magazine estimates that there were 622,256 Foreign Language students attending foreign Language schools in the United Kingdom. If we assume that the average number of students attending accredited and non-accredited institutions is the same, the total number of student attending any privately operated foreign Language schools stands at 1.168 million, which is approximately 6% greater than our estimate (http://www.hothousemedia.com, 2011). During the whole period, the foreign language students spend (most students spend between 3,000 and 7,000 monthly) a good amount of money for one-to-one English tuition in the UK. These people are wealthy enough to afford one-to-one private tuition or these people must work to our partner corporation while they are studying for foreign language. The research conducted exposes the following: The inhabitant of foreign language students between 16 and 55 years old is 500.000 within the surrounding the central of London. %8 (40.000) of these 500.000 students are studying in a one to one education system. These foreign students seek quality and efficient foreign language education to improve their skills. Students of this type is generally do not work, which demonstrates that they have enough money for foreign education.

Obje Education Homes will serve foreign language students, and be open 24/7 .Students can come our education homes for our attractive and unique education system with peace of mind.

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5. Competition
There are approximately 532 foreign language schools accredited by Accreditation UK. English UK estimates there to be some 390 privately operated non-accredited foreign Language schools in addition to the 532 privately operated accredited institutions. This implies that there are approximately 912 privately operated accredited and non-accredited English language schools across the U.K. (http://www.bis.gov.uk, 2011). However, the main competitors in the high class foreign education are St. Nicholas College of London, Richmond Language Training, St George International Ltd, Victoria School of English, and London School of English. These schools are located in or close the city center area, and target a similar section to Obje Education (i.e. high class, one to one education and address to the rich people). Competition from one to one foreign language education comes from locally-owned businesses as well as national firms. There are lots of foreign language education companies which give lecture with high class around the world. Larger, foreign language education schools, such as Zoni Language Centres and ALP could threaten also a competitive to Obje Education Company, yet Obje Education will stay in the heart of English. Due to intense competition, foreign language companies must look for methods to differentiate their position of business from other competitors in order to obtain and resume a competitive advantage. The constituent of Obje Education Company realizes the demand for diversification and powerfully believes that combining a foreign language school with daily life area is the secret of success. The fact that no Education homes are established in London, presents Obje Education with a chance to seize the window of opportunity and create a special and profitable niche in the market (Lancaster, 2011, p.99.). Obje Education Company will be the first foreign language home in the world. Obje Education will clearly differentiate itself from the strictly normal foreign language schools in London by providing the customers with unique service that is the golden opportunity to learn foreign language from your friend at home.

6. Marketing Strategy
Obje Education will position itself as an upscale and unique foreign language education company in the market of education. It will serve high-quality foreign language education and accommodation special services at a competitive price which with high class education companies. Due to the number of foreign language schools in London, it is of importance that Obje Education sets fair prices for its language learning and accommodation. Obje Education will use advertising as its main source of high class partner agencies. Furthermore, ads placed in The Guardian, The Times, The Independent, and The Sun will
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help build customer awareness. Along with the ad, there will be a coupon entitling one to have a one-day trial course of foreign language education. The most distinctive aspect of Obje Education is to provide foreign language education and accommodation together in one place. Therefore, Obje Education will use an advertising catchy slogan which is "learn English from your friend at home" rather than an empty slogan. This slogan will show the dichotomy between Obje education and other competitors (Kotler, 2005, p. 460.). Education system of Obje Education will be an innovative approach in the market because of diversity. This is why, Obje Education will create its own market that competitors will try to come this market. It means that Obje Education is not going to put their shoulder to the wheel (Kotler, 2005, p. 587.).

7. Management
The main management team consists of Mr. Omer Erkam Karatsanli, General Director; Mr. Yusuf Sahin, Marketing Director; Mr. Osman Safa Bursali, Education Director; Mr. Yasar Sahin, Staff Director; and Mr. Osman Engin Gursoy, Financial Director. Mr. Omer Erkam Karatsanli, General Director and Owner. The General Director is selected by the board of directors from shareholders. Responsible for general administration : Decisions of the board and carry out tasks given by the board. Oversee weekly operations, special affairs, and project planning, working intimately with each program coordinator. Together with the Financial Director, develop and control the annual budget for board consent including necessary improvements. Mr. Osman Safa Bursali, Education Director. The Education Director is hired by the General Director. Liabilities include, but are not limited to: Carry out tasks assigned by general director. Education Personnel management. Supervision of Education staff. Develop and implement education program. Coordinate students. Mr. Yusuf Sahin, Marketing Director. The Marketing Director is hired by the General Director. Liabilities include, but are not limited to:

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Carry out tasks assigned by General Director. Management of all marketing activities Develop network of partner agency within the education community. Website maintenance. Measure effectiveness of marketing activities. Mr. Yasar Sahin, Staff Director. The Staff Director is hired by the General Director. Liabilities include, but are not limited to:

Carry out tasks assigned by General Director. Serve as liaison between staff and General Director. Staff Personnel management. Inventory management of education and office supplies. Development of administration standards and procedures related to general staff development. Coordinate work on annual audits.

Mr. Osman Engin Gursoy, Financial Director. The Financial Director is hired by the General Director. Liabilities include, but are not limited to:

Manage network finances and reporting, including Obje Education Houses. Oversee the arrangement of the annual report of activities as well as financial reports. Together with the General Director, develop and control the annual budget for board consent including necessary improvements Coordinate with the General Director, management of grants, special projects, and financial management.

8. Organizational Structure
Our main team includes five directors, three assistants for each director, fifty teachers, five secretaries, ten representatives of a foreign country, five transport staff, two cleaning staff, and two security staff. Staff positions are changing, full-time and part-time. We currently have 79 persons serving in our company.

8.1.

Personnel Plan

Assistants of directors: These people are responsible to help directors for about all matters. They are team of director (Full-time position for all employees, approximately 140 hours each per month.).

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Teachers: All Teachers must have experience working with student through. Teachers will stay in education homes and give tuitions to students (Full-time position for all employees at 150 hours each per month.). Representatives of a foreign country: These people are responsible for the connection of foreign countries (Part-time position for all employees, 60 hours each per month.). Secretaries: These people are in charge of responsible from secretaryship and registration of student (Full-time position for all employees, 200 hours each per month.). Transport staff: These people are responsible from transporting student from airports to homes, as well as foods to homes (Part-time position for all employees, 60 hours each per month.). The personal salary plan tables of Obje Education can be seen in Appendix 1.

9. Technology
Our company will use the highest technology in its own category. Obje Education Companys homes are smart homes (http://www.smarthomesystems.com, 2008). All Obje houses have a main computer in the living room, and the fastest internet connection with wireless system. Additionally, there is a Dolby True HD home cinema system to watch weekly films in our homes. We will provide a comfort life to our customers; furthermore we will also save a lot of time for students as well as natural resources (electricity, water, natural gas etc.), and labour. Thus, it is clear that this is a money saving and energy saving attempt. Obje Education Company will use its own CRM Software and Financial Accounting Software, which are created by Bisar Information Technology Corporation (http://www.bisar.com.tr, 2011). That is, we can observe payments, personal development of our students, and our business progress with the high technology. Moreover, we have a website that is interactive for our customers. The customers of Obje Education Company can visit the website not only for registration but also subsequently to make their payments, as well as to monitor their performance.

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10.Financial Plan
The following subtopics present our financial plan (for first and second years with fifty homes, third year with sixty homes). (Barrow, 2008, p. 259.).

10.1.

Break-even Analysis

The following table and chart summarize our break-even analysis. The break - even analysis graph of Obje Education Company can be seen in Appendix 1.
Break-even Analysis Monthly Units Break-even Monthly Revenue Break-even Assumptions Average Per-Unit Revenue Average Per-Unit Variable Cost Estimated Monthly Fixed Cost 28 280,000 10,000 1,200 134,400

10.2.

Projected Profit and Loss

The projected profit and loss statement is one financial document which shows the quantity of profit or loss you forecast your business to create in future periods. It will be a beneficial tracking tool for neutrally determining whether your company is likely to make a profit and continue or generate losses and finally fail (Pike, 2006, p. 48.). The projected Profit and Loss for Obje Education Company is showed in the accompanying table. The three yearly pro forma profit and loss tables of Obje Education Company can be seen in the appendix 2. The profit monthly graph of Obje Education Company can be seen in Appendix 3. The profit yearly graph of Obje Education Company can be seen in Appendix 4.

10.3.

Projected Cash Flow

The cash flow is revenue or expense stream that changes a cash account over a certain period. Cash inflows generally arise from one of three activities (operations, financing or investing) although this is also consisting as a result of contribution or gifts in the condition of personal finance.

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Cash outflows consist from investments or expenses. This holds true for both personal and business finance. Measurement of cash flow can be used for calculating other parameters that give information on a company's value and situation (Borrow, 2008, p. 220.). The three yearly pro forma cash flow tables of Obje Education Company can be seen in the appendix 7. The cash flow projection illustrates that provisions for continuing expenses are adequate to meet needs of Obje Education Company as the business generates cash flow adequate to support operations. The cash flow monthly graph of Obje Education Company can be seen in Appendix 6.

10.4.

Balance Sheet

Balance sheet is a financial statement that shows a company's liabilities, assets and shareholders' equity at a certain point in time. A balance sheet is generally showed as a "snapshot of a company's financial situation. (http://www.investopedia.com, 2011) These three balance sheet sections give a useful idea to investors about company's receivables and payables. Additionally, investors can see the amount of Paid-in Capital by paid the shareholders. The three yearly pro forma balance sheet tables of Obje Education Company can be seen in the appendix 8.

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11.Appendices
Appendix 1

Personnel Plan Directors Teachers Assistants Secretaries Representatives Transport Staff Cleaning Staff Security Staff Total People Total Payroll Year 1 240,000 1,200,000 270,000 75,000 120,000 54,000 19,200 36,000 79 2,014,200 Year 2 240,000 1,200,000 270,000 78,750 120,000 56,700 20,160 37,800 79 2,023,410 Year 3 252,000 1,260,000 286,200 82,687 126,000 59,535 21,268 39,690 79 2,127,380

Appendix 2

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Appendix 3

Pro Forma Profit and Loss

Sales

Direct Cost of Sales Other Total Cost Of Sales Gross Margin Gross Margin % Expenses Payroll Sales and Marketing and Other Exp. Depreciation Utilities Payroll Taxes Other Total Operating Expenses Profit Before Interest and Taxes EBITDA Interest Expense Taxes Incurred Net Profit Net Profit /Sales

Year 1 6,000,000 1,680,000 0 1,680,000 4,320,000 72.00% 2,014,200 400,000 50,000 180,800 302,130 0 2,947,130 1,372,870 1,422,870 0 274,574 1,098,296 18.30%

Year 2 6,000,000 1,680,000 0 1,680,000 4,320,000 72.00% 2,023,410 400,000 60,000 185,200 303,511 0 2,972,121 1,347,879 1,407,879 0 269,575 1,078,304 17,97%

Year 3 7,200,000 2,016,000 0 2,016,000 5,184,000 72.00% 2,307,380 200,000 80,000 226,330 346,107 0 3,159,817 2,024,183 2,104,183 0 404,837 1,619,346 22.49%

Appendix 4

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Appendix 5

Appendix 6
Pro Forma Cash Flow Year 1
Cash Received

Year 2

Year 3

Cash from Operations Cash Sales Cash from Receivables

Subtotal Cash from Operations

6,000,000 0 6,000,000 0 0 0 0 0 0 0 6,000,000 Year 1 4,094,200 180,800 4,275,000 576,704 0 0 0 0 0 0 4,851,704 1,148,296 1,548,296

6,000,000 0 6,000,000 0 0 0 0 0 0 0 6,000,000 Year 2 4,103,410 185,200 4,288,610 600,086 0 0 0 0 0 0 4,888,696 1,111,304 2,659,600

7,200,000 0 7,200,000 0 0 0 0 0 0 0 7,200,000 Year 3 4,523,380 226,330 4,749,710 750,944 0 0 0 0 0 0 5,500,654 1,699,346 4,358,946

Additional Cash Received Sales Tax, VAT, HST/GST Received New Current Borrowing New Other Liabilities (interest-free) New Long-term Liabilities Sales of Other Current Assets Sales of Long-term Assets New Investment Received
Subtotal Cash Received Expenditures

Expenditures from Operations Cash Spending Bill Payments

Subtotal Spend on Operations

Additional Cash Spent Sales Tax, VAT, HST/GST Paid Out Prncpl. Rpymt. of Current Borrowing Other Liabilities Principal Repayment Long-term Liabilities Principal Rpymt. Purchase Other Current Assets Purchase Long-term Assets Dividends
Subtotal Cash Spent Net Cash Flow

Cash Balance

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Appendix 7

Appendix 8
Pro Forma Balance Sheet Year 1
Assets

Year 2

Year 3

Current Assets Cash Accounts Receivable Other Current Assets

Total Current Assets

1,548,296 0 0 1,548,296 250,000 50,000 200,000 1,748,296 Year 1 120,500 0 0 120,500 150,000 270,500 500,000 50,000 1,098,296 1,918,796 1,148,296 1,918,796

2,659,600 0 0 2,659,600 250,000 110,000 140,000 2,799,600 Year 2 125,800 0 0 125,800 150,500 276,300 500,000 1,148,296 1,078,304 2,726,600 3,002,900 2,726,600

4,358,946 0 0 4,358,946 300,000 190,000 110,000 4,368,946 Year 3 143,380 0 0 143,380 170,000 313,380 500,000 2,226,600 1,619,346 4,345,946 4,659,326 4,345,946

Long-term Assets Long-term Assets Accumulated Depreciation

Total Long-term Assets Total Assets Liabilities and Capital

Current Liabilities Accounts Payable Current Borrowing Other Current Liabilities

Subtotal Current Liabilities

Long-term Liabilities
Total Liabilities

Paid-in Capital Retained Earnings. Earnings

Total Capital Total Liabilities and Capital Net Worth

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12.References
Coke, A. (2002) Seven Steps to a Successful Business Plan. New York: Amacom Lancaster, G. and Massingham, L. (2011) Essentials of Marketing Management. Abingdon: Routledge Limited Liability Company Formations (2001) [Online] Available From : http://www.thecompanyltd.com ( Accessed: 02 December 2011) Safety Fresh and Hygiene (2003) [Online] Available From :

http://www.food.gov.uk/safereating/ ( Accessed: 18 December 2011) Up Cleaning (2010) [Online] Available From :

http://www.freshupcleaning.co.uk/ ( Accessed: 09 December 2011) The Global Market 2010Fresh Up Cleaning (2010) [Online] Available From : http://www.freshupcleaning.co.uk/ ( Accessed: 25 December 2011) Hancox N. (2011) The Global Market 2010, Study Travel Magazine, Issue 206 (December), pp. 24-25 [Online] Available From :

http://hothousemedia.clikpages.co.uk/LTM/December2011/ ( Accessed: 20 December 2011) Conlon G. & Litchfield A. & Sadlier G. (2011) Estimating the Value to the UK of Education Exports, BIS Research paper, Number 46 (January), pp. 51-52 [Online] Available From : http://www.bis.gov.uk/assets/biscore/higher-education/docs/e/11-

980-estimating-value-of-education-exports.pdf ( Accessed: 15 December 2011) Kotler, P. & Wong, V. & Saunders, J. and Armstrong, G. (2005) Principles of Marketing. 4th European Ed. England: Pearson Education Limited Smart Bisar Home Systems (2008) [Online] Available From :

http://www.smarthomesystems.com/ ( Accessed: 26 December 2011) Bilgi Teknolojileri (2011) [Online] Available From :

http://www.bisar.com.tr/ENG/index.htm

( Accessed: 18 December 2011)

Barrow, C. & Barrow, P. and Brown, R. (2008) The Business Plan Workbook. 6th Ed. Great Britain: Kogan Page Limited Pike, R. & Neale, B. (2006) Corporate Finance and Investment: Decisions & Strategies. 5th Ed. Edinburgh Gate: Pearson Education Limited Balance Sheet (2011) [Online] Available From :

http://www.investopedia.com/terms/b/balancesheet.asp#axzz1iRGcqwW5 ( Accessed: 25 December 2011)

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