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Edu cyclebusinessplan revised

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Edu cyclebusinessplan revised

  1. 1. Business Plan
  2. 2. EduCyle Business PlanTable of ContentsBusiness Plan .............................................................................................................................................. 1Executive Summary..................................................................................................................................... 3General Company Description..................................................................................................................... 5Products and Services.................................................................................................................................. 6Marketing Plan............................................................................................................................................ 8Competition............................................................................................................................................... 14Niche......................................................................................................................................................... 18Sales Forecast............................................................................................................................................ 21Operational Plan........................................................................................................................................ 22Production................................................................................................................................................. 22Location..................................................................................................................................................... 24Legal Environment.................................................................................................................................... 27Management and Organization.................................................................................................................. 29Professional and Advisory Support............................................................................................................ 29Personal Financial Statement..................................................................................................................... 34Startup Expenses and Capitalization.......................................................................................................... 35Financial Plan............................................................................................................................................ 3612-Month Profit and Loss Projection......................................................................................................... 36Four-Year Profit Projection (Optional)...................................................................................................... 36Projected Cash Flow.................................................................................................................................. 36Opening Day Balance Sheet...................................................................................................................... 37Break-Even Analysis................................................................................................................................. 38Appendices................................................................................................................................................ 39 2 of 38
  3. 3. EduCyle Business PlanExecutive Summary 3 of 38
  4. 4. EduCyle Business Plan General Company DescriptionEduCycle’s mission is to recycle, reuse, and repurpose educational media, supplies andequipment in order to support the learning objectives of educators of all levels, promotesustainable living, and to strengthen communities by providing resources not easily obtained byother means.The business goals of EduCycle is to provide a core set of services to the community that haveeducational, economic, and environmental benefits.Services include : Recycle Media – in partnership with local municipalities to ensure that unwanted media such as cds/dvds, books, tapes, art supplies, etc… get processed for recycling or proper waste disposal. Repurpose Media – by engaging local artists, individuals, businesses and schools, collected materials can be used for non-educational ventures Reuse Media – materials collected will be made available to the community for educational purposesEduCycle, Inc. is a charitable non-profit organization who relies on donations, service andmembership fees, grants and sponsorships to deliver its mission. Operating as a surplusorganization and community education center, Educycle will market items to educators, artists,community organizations and individuals. 4 of 38
  5. 5. EduCyle Business Plan Products and ServicesAs a surplus organiation, EduCycle aims to provide materials, media and supplies to educators, artists,community organizations, and individuals. As a community education center, EduCycle, will provideprofessional development seminars, arts and crafts workshops, and sustainable development educationprograms, for its members.Products available through EduCycle include: ● Office supplies ● Art & Drafting Supplies (i.e. crayons, markers, etc.) ● Classroom decorations ( i.e. boarders, posters) ● Electronic devices (graphing calculators, computers, printers, microscopes, probes, photogates) ● Furniture (Desks, Chairs, bookshelves, file cabinets) ● Sporting Equipment (tennis rackets, soccer cleats) ● Sporting Apparel (i.e. track pants, soccer jerseys) ● Gardening supplies ● Biological specimens for dissection (.ie. frogs, fetal pigs, etc.)EduCycle will also provide services that support educational processes and systems. The followingservices will be provided: ● Professional Development Seminars : (i.e. Integrating Technology in the Classroom) ● Salvage and Reclamation Services : donated items will be evaluated and reclaimed in our warehouse or recycled ● Sustainable Development Education : Programs aimed at educating and engaging the community in learning about the trade-offs between resource use and quality of life.Competitive ComparisonOur primary competition will be local educational supply stores and major retail suppliers. We will alsobe in competition with online and catalogue retailers who sell educational supplies at retail and wholesaleprices. The following retailers have been included in our competitive analysis: ● Walmart, Staples and Office Depot are major “one-stop-shop” retailers that offer a wide variety of office supplies, furnishings and electronic equipment and have several locations throughout the city. ● Local educational supply stores such as Learning How provide a wide variety of curricular material and educational supplies. There are two stores in the Baltimore area. ● The list of competitors for online and catalogue retailers include Raymond Geddis and Company and Carolina Biological Supply. 5 of 38
  6. 6. EduCyle Business PlanPricing and Fee StructuresEduCycle will be a member based organization which will retail annual memberships to educators,organization and individuals. Members will be allowed to shop at our free store and participate in otherservices. Memberships will be priced according to the following three tiers:Executive Membership ($149.99/year)Available to youth-organizations, program administrators, allows for the purchase of products atwholesale price; allows for 6 additional cardholders to account and free professional developmentseminars for each cardholder.Golden Apple Membership ($49.99/year)This will include educators and parents who want to purchase products and includes free professionaldevelopment seminars.Community Supporter Membership ($29.99/year)This will include individuals, parents, artist, and other community supporters.The following pricing structure will be implemented for services provided by EduCycle: • Executive Membership additional cards : $20 per card (expires when executive membership expires) • Professional Development Seminars: $25/hour available to members and non-members • Recycling and Reclamation Services: Free 6 of 38
  7. 7. EduCyle Business Plan Marketing PlanEduCycle takes an interdisciplinary approach to supporting the community by bridging the gap betweeneducation and sustainability. The Obama administration has put worth significant effort in both educationand sustainability. In the past couple of years, federal agencies has been shifting their philosophies toconsider long term investments in the environment and education to provide a richer and prosperousnation for all. Starting in 2010, the Department of Education has started setting the new pace foreducation, by becoming leaders in process reform including sustainability. They will be funding moreprojects and organizations committed to innovation and improvement of existing processes in theeducation system.Educational Services is the second largest industry, accounting for 13.5 million jobs in 2008 (Bureau ofLabor and Statistics). The educational services sector consists of a single subsector, Educational Services:North American Industry Classification System 611 (NAICS 611). This industry consists of schools,colleges, universities and various private institutions. It may also include ancillary education services,such as after-school tutoring, charter schools, special or alternative education, educational contentsuppliers and professional development of administrators and teachers. Most teaching positions, whichconstitute nearly half of all educational services jobs, require at least a bachelors degree; while somerequire a masters or doctoral degree.Market TrendsGeneral trends in the Educational Services Sector are as follows: ● Institutions use Internet-based technology to conduct lessons and coursework electronically, allowing students in distant locations access to educational opportunities formerly available only on site. ● Many local and State governments have authorized the creation of public charter schools, in the belief that, by presenting students and their parents with a greater range of instructional options, schools and students will improve academic achievement. ● On March 14, 2011, President Obama’s made a recent call to the reform of the Bush-era education policy “No Child Left Behind”. Under the law as it currently stands, schools are graded on a pass-fail scale based on the results of standardized tests administered to students. Failing schools, many of which serve low-income communities are penalized, and often shut down or turned over to a charter operator or private firm. The Obama administration is pushing for a major overhaul in this policy by September 2011. ● Academics are playing a more important role in career and technical curricula, and programs are being made relevant to the local job market. Often, students must meet rigorous standards set in consultation with private industry before receiving a certificate or degree. 7 of 38
  8. 8. EduCyle Business Plan ● Expanding Science, Technology, Engineering and Math (S.T.E.M.) education which focuses on increasing S.T.E.M. literacy so all students can think critically in these subject areas. There is a push to improve the quality of math and science teaching so American students no longer are outperformed by those in other nations. There is a need to expand STEM education and career opportunities for underrepresented groups, including women and minorities.Market Needs/DemandsEduCycle proposes to meet the market needs and demands identified below by providing educationalresources to enrich the learning experience for both educators and learners. Access to these resources willfacilitate the change needed to close the educational gap and make the learning environment morecompetitive. ● Increased need for a trained and educated workforce. ● Growing need to develop lifelong learners interested in acquiring new knowledge and upgrading skill sets to respond to rapid technological and economic changes. ● Increased need to improve education by donating instructional equipment, lending personnel for teaching and mentoring, hosting visits to the workplace, and providing job- shadowing and internship opportunities. ● There is a current trend to increase student achievement in math and science resulting in a growing need to increase S.T.E.M. education/programs. ● Just 74.9 percent of U.S. students who were freshmen in the fall of 2004 graduated from high school on time in 2008 (National Center for Education Statistics). There is a growing need to increase the number of students graduating from high school.Growth PotentialSchool attendance is compulsory until at least age 16 in all 50 States and the District of Columbia. As aresult, elementary, middle, and secondary schools are the most numerous of all educationalestablishments. In recent decades, the government has recognized the importance of educational evolutionand creating a well-defined education system that will result in economic growth and the transformationof this country.The Obama administration has launched an education reform campaign demonstrated by the AmericanRecovery Reinvestment Act. The Act has earmarked the following funds for educational reform: ● $5 billion for early learning programs, including Head Start, Early Head Start, child care, and programs for children with special needs. ● $77 billion for reforms to strengthen elementary and secondary education, including $48.6 billion to stabilize state education budgets (of which $8.8 billion may be used for other government services) and to encourage states to do the following: ○ Make improvements in teacher effectiveness and ensure that all schools have highly-qualified teachers; ○ Make progress toward college and career-ready standards and rigorous assessments that will improve both teaching and learning; 8 of 38
  9. 9. EduCyle Business Plan ○ Improve achievement in low-performing schools, through intensive support and effective interventions; and ○ Gather information to improve student learning, teacher performance, and college and career readiness through enhanced data systems. ● $5 billion in competitive funds to spur innovation and chart ambitious reform to close the achievement gap. ● $30 billion addressing college affordability and improving access to higher education.Currently in the education industry, there is a need to improve the quality of instruction and to providestudents and teachers with up-to-date and relevant curriculum materials in order to improve the quality ofinstruction and the delivery of content material. Unfortunately, states and schools struggle with budgetdeficits as a result of recent fluctuations in the economy. Many of the schools that experience the adverseeffects of dwindling budgets are located in underserved and impoverished communities. School systemsare exploring every resource in an effort to maintain the instructional integrity of their programs.EduCycle has the potential to provide tangible resources necessary to help close the achievement gap inthe U.S. education system. With state and local funds dwindling, our model allows schools, organizations,and ancillary education services to gain the resources necessary become competitive with educationalinstitutions in the private sector. We will partner with local stakeholders to provide training opportunitiesfor educators which will improve both teaching and learning for underserved populations.The education industry is rapidly evolving and responds positively to changing trends in technologycreating an increased need for resources and training among students, teachers and administrators. 9 of 38
  10. 10. EduCyle Business PlanStrengths, Weaknesses, Opportunities, ThreatsTable 1. Lists the current strengths and weaknesses of EduCycle as well as potential opportunities andthreats to its operations. Strengths Weaknesses 1. Provides discounted/free materials to 1. Educators purchase institutions in need instructional materials 2. Provides professional development primarily during two opportunities to individuals in the seasons (fall and spring) education sector 2. Unestabllished brand and 3. Economic fluctuations result in an reputation increased need for affordable educatioal 3. Lack of experience in the resources and training opportunities. industry 4. Increase in funding initiatives for education reform. Opportunities Threats 1. Growing trend in educational reform. 1. Start-up capital 2. Increased need for technology integration and training. 2. Securing donors 3. Growing interest S.T.E.M. education. 3. Copycat businesses 4. Partners ( city, county, etc.) with vested interest in education reform. 4. Rising Operating Costs due to real estate and municipality taxes 5. Utility costsAccording to U.S. Department of Education, Maryland is among 10 winners in President Obama’s “Raceto the Top” grant initiative, bringing up to $250 million in education investments to Maryland’s public 10 of 38
  11. 11. EduCyle Business Planschools. To overcome financial threats EduCycle will research available or anticipated competitive grantsin the education sector offered by corporations, federal, state and local agencies.ProductThe client base that will potentially benefit from the products and services provided by EduCycle willinclude educational institutions, teachers, home-school programs, parents and students. A summary ofdemographic information for individuals employed in Education, Training and Library Occupations isidentified in Table II. Table II. Demographic Profile Targeted Local State National Customers Population 18, 651 171,755 8,235,725 Average Age Median income $39,263 $42,318 $37,042 Male 30.9% 26.8% 26.6% Female 69.1% 73.2% 73.4% Source: U.S. Census Bureau, 2005-2009 American Community Survey 11 of 38
  12. 12. EduCyle Business PlanEduCycle Features and Benefits • Surplus of salvaged, reclaimed, donated and purchased items • Access to professional development seminars and workshops • Sustainable living education • Access to a network of community supporters, educators and artist • Pick-up and transportation of donated items • Online store and delivery of items 12 of 38
  13. 13. EduCyle Business PlanCompetitionThe following companies have been identified as major competitors in the market. Table III. Major Competitors Learning HowCompetitor A The Shops at Kenilworth, 872 Kenilworth Drive, Towson, MD, 21204, USA http://learninghow.com/ 1583 Sulphur Spring Road, Suite 101, Baltimore, MD, 21227, USA Raymond Geddes and Company, Inc. - The School Store AuthorityCompetitor B http://www.raymondgeddes.com/ 7110 Belair Rd, Suite 200, Baltimore, MD 21206 StaplesCompetitor C www.staples.com multiple locations WalmartCompetitor D http://www.walmart.com/ multiple locations Carolina Biological Supply CompanyCompetitor E http://www.carolina.com/ Online 13 of 38
  14. 14. EduCyle Business PlanTable IV. Competitive AnalysisFactor EduCycle Strengths Weakness Competitor A Competitor B Competitor Competitor E Importance (Learning (Raymond C (Staples) (Carolina) to How) Geddes) CustomerProducts Emerging x Limited amount Diverse Diverse Diverse subject 5 company of subject inventory, inventory of specific seeking to specific Limited office inventory in establish products, limited technology supplies, math and solid electronics inventory classroom science inventory inventory materials and electronicsPrice Products x Products prices Products offered Products Products offered 5 offered at at regular retail, at wholesale prices at at regular retail wholesale teacher discount prices regular retail, prices offered teacher discount offeredQuality Offers a mix x High quality High quality High quality High quality 4 of new and new products new products new products new products gently used productsSelection Emerging x Limited amount Diverse Diverse Diverse subject 4 company of subject inventory, inventory of specific seeking to specific Limited office inventory in establish products, limited technology supplies, math and solid electronics inventory classroom science inventory inventory materials and electronicsService Smaller x Average quality Average quality Average High quality 4 company service, unable service, unable quality service with the with ability to to handle high to handle high service, ability to handle offer quality, volume volume unable to high volume personalized handle high level of volume serviceReliability Emerging x High consumer High consumer High High consumer 5 company satisfaction satisfaction consumer satisfaction building, ratings ratings satisfaction ratings reputation ratingsStability Emerging x Highly Highly Highly Highly 3 company established, established, established, established, which is financially financially financially financially establishing secure entity secure entity secure entity secure entit financial 14 of 38
  15. 15. EduCyle Business Plan stabilityExpertise Emerging x Moderately Moderately Moderately Highly trained 4 company trained staff trained staff trained staff staff which is knowledgeable knowledgeable knowledgeabl knowledgeable establishing in general in general e in general in content stability, information information information specific reliability and information expertiseCompany Non-profits x Well established Well established Well Well established 4Reputation generally company company established company have a good company reputation for providing services to address unmet community needsLocation Central x Only teo Online store and Online store Online store 5 location; location in the physical and physical potentially in Baltimore area location location station NorthAppearance Clean, bright, x Clean, bright, Clean, bright, Clean, bright, Organized 5 well- well-organized well-organized well- catalogue and organized environment environment organized website, user environment environment friendlySales Internet sales, x Internet sales, Internet sales, Internet sales, Internet sales, 5Method direct direct purchase direct purchase direct direct purchase purchase purchaseCredit None x None None None NonePoliciesAdvertising Partners x Not a visible Uses major Not a visible 3 directly with force in forms of force in educational advertising, media for advertising, institutions maintains clients advertising maintains clients for base during peak such a base during peak advertisng; seasons; uses circulars in seasons; uses 15 of 38
  16. 16. EduCyle Business Plan Uses mailing mailing lists and newspapers mailing lists and lists and email email emailImage Reputable x Major Established Major Major 5 organization corporation teacher store corporation corporation founded, providing providing a providing providing owned and limited selection grade and diverse diverse selection operated by of educational content specific selection of of content educators. materials educational educational specific materials materials, educational electronics materials and and office electronics supplies 16 of 38
  17. 17. EduCyle Business PlanNicheEduCycle provides cost effective curriculum materials to individuals, educational institutions andbusinesses seek to improve learning experiences for students in grades K-12.EduCycle will focus on local school districts to establish its name in Baltimore City. As the businessprogresses over the next 1-3 years, added emphasis will be placed on sales to urban school districts inMaryland and the District of Columbia. Although there is a potential for significant profits through directsales, greater gross margins are possible through eCommerce. The market analysis shows a broad range ofprospective clients in urban educational setting throughout the nation, covering a wide range ofconsumers who are generally interested in discounted educational resources and supplies.PromotionMarketing Goals and ObjectivesTBDOverall Marketing StrategyOur company’s strategy is based on providing the most diverse inventory ofeducational resources and supplies to schools in disadvantaged environments. Ourgoal is to focus on consumer needs and to capitalize on shrinking budgets in theeducational sector which have resulted in a deficit in curricular materials necessaryto sustain competitive learning environments.Marketing Strategies1. Invest in a WebsiteGives customers another way to see products or services other than coming into store and setting up ameeting; provides a fast, inexpensive way to update information and get new details in front of customers.2. Business cardsIncludes website and E-mail addresses on the cards; distribute business cards as a means of networkingamong educational professionals3. Create and maintain a client database.Get customers contact information by: ● Collecting customer business cards in a fishbowl. 17 of 38
  18. 18. EduCyle Business Plan ● Partner with local retailers of educational supplies. Encourage customers to drop of business cards in a fishbowl by offering a monthly drawing and giving the winner a discounted or free item from your business. ● Hold seminars on topics related to urban education. ● Register participants and maintain their contact information in database. ●4. Use database to connect with customers at least six times every year. ● Send out two newsletters a year. Distribute newsletters during the busiest seasons of the year, ie. end of summer and during the Spring. Include website and E-mail addresses in the newsletter and encourage readers to use them. ● Send two direct-mail postcards a year. These postcards will announce sales or simply contain a greeting. ● Hold two special sales or celebrate two unusual holidays a year. Use the Spring Equinox to mark a special sale or Back-to-School week to sell school and office supplies. ● Create a monthly electronic newsletter. Will be used as a marketing strategy to update consumers on new inventory and sale items.Promotional BudgetHow much will you spend on the items listed above?Before startup? (These numbers will go into your startup budget.)Ongoing? (These numbers will go into your operating plan budget.Pricing StrategyAs an emerging company, EduCycle will use a variety of pricing strategies to increase market share. Thefollowing strategies will prove advantageous to our organization.Market Penetration Pricing: A pricing technique which involves setting a relatively low initial entryprice, often lower than the eventual market price, to attract new customers. The strategy works on theexpectation that customers will switch to the new brand because of the lower price. EduCycle’s inventorywill be priced relatively lower than the market price to draw in new customers. This strategy will allowEduCycle to increase market share and sales volume as it is commonly employed by businesses launchingnew goods and services into the marketplace.Advantages: ● Targets price sensitive customers, which will attract new buyers ● ● Creates positive branding with new customers who will share the opinions with potential customers 18 of 38
  19. 19. EduCyle Business Plan ● ● Blocks or delays the competition.Block Pricing: A pricing strategy in which identical products are packaged together in order to enhanceprofits by forcing customers to make an all or none decision to purchase.Advantages: ● Caters to the educators who frequently purchase items in bulk. ● Company sells a higher volume of merchandiseCommodity Bundling: The practice of bundling several different products together and selling them at asingle bundle price.Advantages: ● Educators often need to purchase multiple products to serve a single purpose (i.e. computer, printer, ink cartridges) ● Generates higher revenuePrice Lining: The practice of offering merchandise in a given category at certain prices. ○ Microscopes at $25, $35, $50 ○ Upper tier is better quality premium brand ○ Middle tier is for average priced brands ○ Lower tier for price-conscious customers.Advantage: ● Provides pricing options for a variety of customersPricing will be an important factor in giving EduCycle a competitive edge. Our products will be pricedsignificantly lower than the competition. This is based on the premise that our clients may be facing budgetconstraints. As a non-profit, EduCyle seeks to provide clients with necessary educational resources atprices considerably lower than major retailers.Proposed LocationYes. It’s important because of school hours educators need to be able to quickly access the store after orduring school hours.The place of business must be convenient to our members/constituents. The interior spaces must be well-lit, clean, well-organized and inviting for the surplus store. The location should be in the central baltimorecity corridor or within the 695 beltway ring.The image of the storefront should be minimalist, clean, open airy and well-lit and organized.The store will be fully-stocked and organized and accessible.Competition exists in the form of physical stores such as retailers and other surplus agencies. Our vicinityto them will drive foot traffic, however it is not critical to the success of our organization. 19 of 38
  20. 20. EduCyle Business PlanSales ForecastNow that you have described your products, services, customers, markets,and marketing plans in detail, it’s time to attach some numbers to your plan.Use a sales forecast spreadsheet to prepare a month-by-month projection.The forecast should be based on your historical sales, the marketingstrategies that you have just described, your market research, and industrydata, if available.You may want to do two forecasts: 1) a "best guess", which is what youreally expect, and 2) a "worst case" low estimate that you are confident youcan reach no matter what happens.Remember to keep notes on your research and your assumptions as youbuild this sales forecast and all subsequent spreadsheets in the plan. This iscritical if you are going to present it to funding sources. 20 of 38
  21. 21. EduCyle Business Plan Operational PlanEduCycle will operated as a surplus store and reclamation center. The surplus store will exist virtually andphysically. The virtual surplus store will allow members and the general public to shop on the EduCyclewebsite. Members only will have the privelege of requesting that an item be made available for them forpick-up in the store for a (48 hour holding period only). The physical store(s) will have a storefront and awarehouse for storing unprocessed donations and goods that have come in. With the help of volunteersand staff, unprocessed goods will be salvaged, catalogued, labeled, priced and then organized in thewarehouse reclamation center for presentation in both the physical and virtual store.EduCycle will be operated with the combination of paid staff and volunteers. Staff and volunteers will beneeded to operate the surplus store(s) and the reclamation centers.Because there will be a surplus store and a reclamation center, the location of EduCycle will have to besensitive to the commercial and industrial zoning rules of the area. It’s possible that the reclamation centerand the surplus store(s) may exist in separate locations to keep costs low and to meet the needs of thetargeted customers.ProductionMost of the products received will be in-kind donations from vendors, companies, organizations orindividuals. We will supplement the our inventory with the purchase of highly desired items when there isa demand on a case per case basis.Because products are not going to be manufactured but reclaimed or bought at wholesale the costs forproduction will be minimal and on directly related the costs of the wholesale items and the otheroperational costs for the reclamation center.In the reclamation center, items will be processed in stages to ensure quality control. The definitionsbelow based on guidelines established in the 1990 Joint Industry Report for Product Reclamation Centers(“JIR”) will help our staff and volunteers identify items that will not be made available in our surplusstore or accepted as an in-kind donation from donors as well as terminology to be used to refer to theunprocessed and processed items.Unuseable- items removed from the reclamation center or not accepted as a donation because they aredetermined to be unfit. Types of unuseables included in this Reclamation Policy include (but not limitedto): ● Unlabeled or mislabeled product ● Improperly sealed product ● Over/short weight or partially filled product ● Broken glass ● Crushed, dented, or collapsed product ● Swollen cans ● Manufacturer withdrawal ● Moldy package ● Rusted can ● Leakers 21 of 38
  22. 22. EduCyle Business Plan ● Soiled, stained, sticky, etc. ● Defaced ● Expired product or date sensitive product ● Spoiled or perishable frozen/refrigerated groceryPre-Damage Direct Product Costs (Pre-Damage DPC)– Handling and storage costs that occur beforedamage is identified as an item moves through surplus distribution. These costs include costs incurred atthe warehouse/reclamation center, during transportation to the store, and at the store itself.Post-damage Handling Costs (Post-Damange Handling) – Costs that typically occur after damage tothe item has been identified and before it arrives at the reclamation center. These costs also include costsfor handling items that have been identified as damaged in the warehouse.Reclamation Center Processing Costs – Handling and storage costs that occur as an item is processedthrough a reclamation center. Contained in this formula are major variables such as reclamation centerefficiencies, type of product and processing chutes.A. Reclamation ProgramInvoice Cost: Based on EduCycle’s Supplier list cost.Pre-Damage DPC: Based on JIR guidelines (approximately 6% of the list cost)Post Damage Handling: $.128 per item (JIR guideline) Reclamation Center Costs: Operations Through Scan: $.15 per item. (JIR guideline) Processing Chute: Based upon Supplier disposition.Processing Chutes : Recycle: $.050 per item Disposal: $.070 per item Salvage: $.040 per itemAfter items have been identified as salvageable, they will be labeled with an EduCycle inspection sticker,then sorted, organized and scanned for tracking in the inventory database.EduCycle staff and volunteers are committed to excellent customer service by providing members with aset of services that ensure educational or recreational goals are being met.Services for members include : ● In-Store pickup ● New arrival notification ● Project Ideas and Service Learning Showcase ● Craft Workshops ● Inventory control 22 of 38
  23. 23. EduCyle Business PlanInventory will be tracked electronically with an inventory database which will deliver real-timeavailability for items made available in the virtual surplus store. All salvaged items will be identified witha EduCycle label to ensure that they have been quality controlled and are ready to be sold in the surplusstore(s).Products will be procured through donations and wholesale distributors.LocationWhat qualities do you need in a location? Describe the type of location you’ll have.There are two scenarios for operation of the warehouse/reclamation and surplus store. Scenario 1 : Thewarehouse/reclamation center can be in a separate location of the surplus store. Scenario 2: Thewarehouse/reclamation center and surplus store are in the same location. In either location thewarehouse/reclamationWarehouse/Reclamation CenterPhysical requirements: ● Amount of space = at least 1500 sq. ft ● Type of building = warehouse with loading dock ● Zoning = industrial ● Power and other utilities = electricity/water/waste disposal/recycling/bathroomSurplus Store (physical)Physical requirements: ● Amount of space = at least 500 sq. ft ● Type of building = storefront ● Zoning = commercial ● Power and other utilities = electricity/water/waste disposalAccess:Is it important that your location be convenient to transportation or to suppliers?Due to the need for the shipping and receiving of donations and transportation of items between surplusstore (depending on the scenario) the location of the warehouse/reclamation must be accessible to trailertrucks, forklifts, dump trucks and other industrial equipment. The surplus store will need to be accessibleto members to shop.Do you need easy walk-in access?Walk-in access for the store is imperative; for the reclamation center walk-in access is secondary.What are your requirements for parking and proximity to freeway, airports, railroads, and shippingcenters?For the surplus store the parking should be easy for members and non-members to have access to thestore. For staff and volunteers there should be designated parking. For the warehouse/reclamation centerparking for staff and volunteers should be designated. 23 of 38
  24. 24. EduCyle Business PlanInclude a drawing or layout of your proposed facility if it is important, as it might be for a manufacturer.Scenario 1: Separate Warehouse/Reclamation Center and Surplus StoreScenario 2: Combined Warehouse/Reclamation Center and Surplus Store 24 of 38
  25. 25. EduCyle Business PlanCost: Estimate your occupation expenses, including rent, but also including maintenance, utilities,insurance, and initial remodeling costs to make the space suit your needs. These numbers will becomepart of your financial plan.Scenario 1: Separate Warehouse/Reclamation and StoreWarehouse/reclamation costsRent: $14 - $40 sq/ft * 1500 sq ft. = $21,000 - $60, 000 annually or $1750 - $5000 monthlyElectricity: $500 - $1000 monthlyWater: ?What will be your business hours?7am - 7pm Mon - Fri8am - 4pm Sat & Sun 25 of 38
  26. 26. EduCyle Business PlanLegal EnvironmentDescribe the following: ● Licensing and bonding requirements ● Permits ● Health, workplace, or environmental regulations ● Special regulations covering your industry or profession ● Zoning or building code requirements ● Insurance coverage ● Trademarks, copyrights, or patents (pending, existing, or purchased)Personnel ● Number of employees ● Type of labor (skilled, unskilled, and professional) ● Where and how will you find the right employees? ● Quality of existing staff ● Pay structure ● Training methods and requirements ● Who does which tasks? ● Do you have schedules and written procedures prepared? ● Have you drafted job descriptions for employees? If not, take time to write some. They really help internal communications with employees. ● For certain functions, will you use contract workers in addition to employees?Inventory ● What kind of inventory will you keep: raw materials, supplies, finished goods? ● Average value in stock (i.e., what is your inventory investment)? ● Rate of turnover and how this compares to the industry averages? ● Seasonal buildups? ● Lead-time for ordering?SuppliersIdentify key suppliers: ● Names and addresses ● Type and amount of inventory furnished ● Credit and delivery policies ● History and reliabilityShould you have more than one supplier for critical items (as a backup)?Do you expect shortages or short-term delivery problems?Are supply costs steady or fluctuating? If fluctuating, how would you deal with changing costs?Credit Policies ● Do you plan to sell on credit? 26 of 38
  27. 27. EduCyle Business Plan ●Do you really need to sell on credit? Is it customary in your industry and expected by your clientele? ● If yes, what policies will you have about who gets credit and how much? ● How will you check the creditworthiness of new applicants? ● What terms will you offer your customers; that is, how much credit and when is payment due? ● Will you offer prompt payment discounts? (Hint: Do this only if it is usual and customary in your industry.) ● Do you know what it will cost you to extend credit? Have you built the costs into your prices?Managing Your Accounts ReceivableIf you do extend credit, you should do an aging at least monthly to track how much of your money is tiedup in credit given to customers and to alert you to slow payment problems. A receivables aging looks likethe following table: Over 90 Total Current 30 Days 60 Days 90 Days DaysAccountsReceivable AgingYou will need a policy for dealing with slow-paying customers: ●When do you make a phone call? ●When do you send a letter? ●When do you get your attorney to threaten?Managing Your Accounts PayableYou should also age your accounts payable, what you owe to your suppliers. This helps you plan whom topay and when. Paying too early depletes your cash, but paying late can cost you valuable discounts andcan damage your credit. (Hint: If you know you will be late making a payment, call the creditor before thedue date.)Do your proposed vendors offer prompt payment discounts?A payables aging looks like the following table. Total Current 30 Days 60 Days 90 Days Over 90 DaysAccounts PayableAging 27 of 38
  28. 28. EduCyle Business Plan Management and OrganizationProfessional and Advisory SupportList the following: ● Board of directors (5 members = 3 quorom) ● position descriptions for : ○ Executive Director ○ Director of Operations ○ Director of Development (optional) ○ Office Manager ○ Warehouse Manager ○ Administrative Assistant ○ Warehouse ClerkJob Titile: Executive DirectorFunction: · To implement the strategic goals and objectives of the organization· With the chair, enable the Board to fulfill its governance function· To give direction and leadership toward the achievement of theorganizations philosophy, mission, strategy, and its annual goals andobjectivesReports to: Board of DirectorsMajor Functions/Accountabilities:1. Board Administration and Support -- Supports operations andadministration of Board by advising and informing Board members,interfacing between Board and staff, and supporting Boards evaluationof chief executive2. Program, Product and Service Delivery -- Oversees design,marketing, promotion, delivery and quality of programs, products andservices3. Financial, Tax, Risk and Facilities Management -- Recommendsyearly budget for Board approval and prudently manages 28 of 38
  29. 29. EduCyle Business Planorganizations resources within those budget guidelines according tocurrent laws and regulations4. Human Resource Management -- Effectively manages the humanresources of the organization according to authorized personnelpolicies and procedures that fully conform to current laws andregulations5. Community and Public Relations -- Assures the organization and itsmission, programs, products and services are consistently presented instrong, positive image to relevant stakeholders6. Fundraising (nonprofit-specific) -- Oversees fundraising planningand implementation, including identifying resource requirements,researching funding sources, establishing strategies to approachfunders, submitting proposals and administrating fundraising recordsand documentation.Job Description Director of OperationsThe Director of Operations will be responsible for enhancing the internal organizationprocesses and infrastructure that will allow EduCycle to continue to grow and fulfill itsmission. The Director of Operations will manage the following functions:Financial Management and OversightWorking with the Director of Finance, manage and oversee all financial and businessplanningactivities, including:o Direct and administer all financial planso Oversee business policies and accounting practiceso Review and analyze financial reportso Support and advise the Executive Director in decision makingo Lead and support organizational budgeting proces 29 of 38
  30. 30. EduCyle Business PlanOversee reporting and monitoring of organizational performance metrics.Provide overall financial oversight and monitoring.Ensure that relevant financial data is presented to the Executive Director.Human ResourcesWorks to manage and oversee the human resource function for EduCycle, including:o Recruitment, hiring, and compensationo Benefits administration and oversighto Professional training and development, including new employee orientationo Retention strategieso Regulatory oversight and legal complianceEnsuring that the human resource function is properly resourced and represented within thesenior management team.OperationsOversee risk management and legal activities: letters of agreement, contracts, leases, andother legal documents and agreementsBusiness insurance: procurement, monitoring and managementInformation technology – works to ensure the ongoing maintenance and updating ofinformation systems and infrastructure, including hardware and software.Organizational reporting and monitoring: provide guidance and leadership throughmanagement of the EduCycl metrics and measurement reporting processOffice management: oversee administrative functions for EduCycle office and warehouseEnsure the smooth daily operations of EduCycleBoard of directors – works with the Executive Director to provide staff support and guidanceto EduCycle. Acts as staff liaison to relevant board committeesQualificationsMinimum of a BA, ideally with an MBAStrong operational experience: ideally has worked in a senior management role for 10+years in a 30 of 38
  31. 31. EduCyle Business Plansocially responsible organization with progressive experience leading to at least three yearsexperience in operational/administrative managementDemonstrated experience in financial planning and analysis with previous experienceoverseeing human resources, information technology, and legalJob Description Office ManagerThe Office Manager reports to the Senior Administrative Officer and is responsible forprovidingoffice management services to the First Nations Office. This includes maintaining officeservicesand efficiency, supervising office staff and maintaining office records.RESPONSIBILITIES(Major responsibilities and target accomplishments expected of the position including thetypical problemsencountered in carrying out the responsibilities.)1. Maintain office servicesMain Activities:Design and implement office policiesEstablish standards and proceduresOrganize office operations and proceduresSupervise office staffMonitor and record long distance phone callsPrepare time sheetsControl correspondencesReview and approve supply requisitionsLiaise with other agencies, organizations and groupsUpdate organizational membershipsMaintain office equipment 31 of 38
  32. 32. EduCyle Business Plan2. Supervise office staffMain Activities:Assign and monitor clerical and secretarial functionsRecruit and select office staffOrient and train employeesProvide on the job and other training opportunitiesSupervise staffEvaluate staff performanceCoaching and disciplining staff 32 of 38
  33. 33. EduCyle Business Plan Personal Financial StatementInclude personal financial statements for each owner and major stockholder,showing assets and liabilities held outside the business and personal networth. Owners will often have to draw on personal assets to finance thebusiness, and these statements will show what is available. Bankers andinvestors usually want this information as well. 33 of 38
  34. 34. EduCyle Business Plan Startup Expenses and CapitalizationYou will have many startup expenses before you even begin operating yourbusiness. It’s important to estimate these expenses accurately and then toplan where you will get sufficient capital. This is a research project, and themore thorough your research efforts, the less chance that you will leave outimportant expenses or underestimate them.Even with the best of research, however, opening a new business has a wayof costing more than you anticipate. There are two ways to make allowancesfor surprise expenses. The first is to add a little “padding” to each item inthe budget. The problem with that approach, however, is that it destroys theaccuracy of your carefully wrought plan. The second approach is to add aseparate line item, called contingencies, to account for the unforeseeable.This is the approach we recommend.Talk to others who have started similar businesses to get a good idea of howmuch to allow for contingencies. If you cannot get good information, werecommend a rule of thumb that contingencies should equal at least 20percent of the total of all other start-up expenses.Explain your research and how you arrived at your forecasts of expenses.Give sources, amounts, and terms of proposed loans. Also explain in detailhow much will be contributed by each investor and what percent ownershipeach will have. 34 of 38
  35. 35. EduCyle Business Plan Financial PlanThe financial plan consists of a 12-month profit and loss projection, a four-year profit and loss projection (optional), a cash-flow projection, a projectedbalance sheet, and a break-even calculation. Together they constitute areasonable estimate of your companys financial future. More important, theprocess of thinking through the financial plan will improve your insight intothe inner financial workings of your company.12-Month Profit and Loss ProjectionMany business owners think of the 12-month profit and loss projection asthe centerpiece of their plan. This is where you put it all together in numbersand get an idea of what it will take to make a profit and be successful.Your sales projections will come from a sales forecast in which you forecastsales, cost of goods sold, expenses, and profit month-by-month for oneyear.Profit projections should be accompanied by a narrative explaining the majorassumptions used to estimate company income and expenses.Research Notes: Keep careful notes on your research and assumptions, sothat you can explain them later if necessary, and also so that you can goback to your sources when it’s time to revise your plan.Four-Year Profit Projection (Optional)The 12-month projection is the heart of your financial plan. The Four-YearProfit projection is for those who want to carry their forecasts beyond thefirst year.Of course, keep notes of your key assumptions, especially about things thatyou expect will change dramatically after the first year.Projected Cash FlowIf the profit projection is the heart of your business plan, cash flow is theblood. Businesses fail because they cannot pay their bills. Every part of yourbusiness plan is important, but none of it means a thing if you run out ofcash.The point of this worksheet is to plan how much you need before startup, forpreliminary expenses, operating expenses, and reserves. You should keepupdating it and using it afterward. It will enable you to foresee shortages in 35 of 38
  36. 36. EduCyle Business Plantime to do something about them—perhaps cut expenses, or perhapsnegotiate a loan. But foremost, you shouldn’t be taken by surprise.There is no great trick to preparing it: The cash-flow projection is just aforward look at your checking account.For each item, determine when you actually expect to receive cash (forsales) or when you will actually have to write a check (for expense items).You should track essential operating data, which is not necessarily part ofcash flow but allows you to track items that have a heavy impact on cashflow, such as sales and inventory purchases.You should also track cash outlays prior to opening in a pre-startup column.You should have already researched those for your startup expenses plan.Your cash flow will show you whether your working capital is adequate.Clearly, if your projected cash balance ever goes negative, you will needmore start-up capital. This plan will also predict just when and how muchyou will need to borrow.Explain your major assumptions, especially those that make the cash flowdiffer from the Profit and Loss Projection. For example, if you make a sale inmonth one, when do you actually collect the cash? When you buy inventoryor materials, do you pay in advance, upon delivery, or much later? How willthis affect cash flow?Are some expenses payable in advance? When?Are there irregular expenses, such as quarterly tax payments, maintenanceand repairs, or seasonal inventory buildup, that should be budgeted?Loan payments, equipment purchases, and owners draws usually do notshow on profit and loss statements but definitely do take cash out. Be sureto include them.And of course, depreciation does not appear in the cash flow at all becauseyou never write a check for it.Opening Day Balance SheetA balance sheet is one of the fundamental financial reports that any businessneeds for reporting and financial management. A balance sheet shows whatitems of value are held by the company (assets), and what its debts are 36 of 38
  37. 37. EduCyle Business Plan(liabilities). When liabilities are subtracted from assets, the remainder isowners’ equity.Use a startup expenses and capitalization spreadsheet as a guide topreparing a balance sheet as of opening day. Then detail how you calculatedthe account balances on your opening day balance sheet.Optional: Some people want to add a projected balance sheet showing theestimated financial position of the company at the end of the first year. Thisis especially useful when selling your proposal to investors.Break-Even AnalysisA break-even analysis predicts the sales volume, at a given price, requiredto recover total costs. In other words, it’s the sales level that is the dividingline between operating at a loss and operating at a profit.Expressed as a formula, break-even is:Break-Even Sales Fixed Costs= 1- Variable Costs(Where fixed costs are expressed in dollars, but variable costs are expressedas a percent of total sales.)Include all assumptions upon which your break-even calculation is based. 37 of 38
  38. 38. EduCyle Business Plan AppendicesInclude details and studies used in your business plan; for example: ● Brochures and advertising materials ● Industry studies ● Blueprints and plans ● Maps and photos of location ● Magazine or other articles ● Detailed lists of equipment owned or to be purchased ● Copies of leases and contracts ● Letters of support from future customers ● Any other materials needed to support the assumptions in this plan ● Market research studies ● List of assets available as collateral for a loan 38 of 38

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