Education is of paramount importance in the life of every person. Knowledge can only be enhanced if the tools of learning are harnessed and available to everyone who wants to study. The key to knowledge is the availability of resources and books represent the most appropriate source of knowledge. Understanding this, I have been motivated to ensure such resources are available to everyone who needs them. After graduation, most students dispose of their books, believing they have no reason to keep them, despite the fact that many of their peers who are still studying may need these books. Further, the improper disposal of books increases environmental waste.
Considering these factors, I have established a company called ScholarCenter.org the function of which will be to redistribute these books. I have developed a business plan for the best way to do this. The company will target students of all levels who will become buyers and sellers of the company’s products. As such, the plan is to establish a secure online platform that will allow direct but secure transactions between the seller and the buyer. The company will generate revenue from the facilitation of the process by imposing a 10% charge on every transaction, whether buying or selling. Also, the company will purchase a number of books that are in demand and store them in a warehouse for resale. Such books would include: text books, revision materials and electronic resources such as journals and e-books (Alrawi & Sabry, 2009).
There are a great number of citizens in the UAE community who have hailed the development of information technology and related industries. Due to this fact, I believe that the future of online trade is very promising. According to the recent statistics, over 67% of the young people in the Emirates have access to the internet and a chance to look for educational resources online (Alrawi & Sabry, 2009). The infrastructure to do so has also been enabled by the collaboration of banks and the globalization of currencies. Internet users are able to securely transfer funds from their banks to online platforms. However, the opening up of online trading has not been devoid of scams and therefore most people are afraid to give banking and credit card details online. This is one of the major challenges the company may face in its entry into the market. This issue will be addressed later in this business plan as well as safety measures to be taken.
Starting a secure and safe website requires a large investment in terms of start-up capital. The capital is set to be rolled out by the local bank, Central Arabian Bank, as a long-term financial partner of the company. It is through these funds that the company’s fixed assets will be acquired. Further capital will be financed by an entrepreneur who has savings from prior projects and family and friends have offered back-up financial support. Part of the business plan includes an approach to more sponsors in order to ensure that the quality is guaranteed and the company will run smoothly for the next two years. According to the plan, this is the period during which the company may not make profits but needs to sustain its financial obligations to avoid insolvency (Cassar, 2004).
The idea for starting an educational support company came when I discovered the dire need for educational resources and people’s deep desire for education in my native country. The people of Abu Dhabi and Dubai require educational facilitation especially in terms of Western education. Due to the high rate of industrialization in the UAE and the re-invention of the country as a technological and tourist hub, the citizens have been faced with the need to uplift the educational standards of their children (Alrawi & Sabry, 2009). Nonetheless, the price of books cannot be overlooked and remains a drawback. Because the country has a great number of middle-income earners, most families dedicate nearly all their resources to their children’s education. Although my project may not fully subsidize education, being the first of its kind, it will be greatly appreciated and a very practical way to solve the ever-increasing problem of expensive text books. Thus, the mission and objectives of the business are as follows:
Mission: To be a leading company in terms of providing credible and cost-effective learning materials.
Objectives: To be the preferred centre for learning and obtaining resources throughout the country.
The company has a number of short-term and long-term goals. To realise the long-term goals, strict adherence to the company’s ethics and discipline is required. The short-term goals will probably be achieved within the first two or three years of operation and mostly concern avoiding losses or insolvency. Below is a list of the long-term and short-term goals for Scholar Center.org;
The company will be divided into different departments according to spheres of operation. The departments will work in a conveyor-belt-like manner – once one department initiates certain project, it will hand it to the next one. For example: in a normal transaction, the quality control department will clear the seller’s goods and pass them to the accounts department. The accounts department will bill the customer according to the agreed amount and transfer the information to the logistics and shipment department which will arrange for the goods to be shipped to the customers. Thus, very good coordination between the departments is required. The coordination role will be performed by the human resource manager.
The company will be registered by the Registrar of Companies under the Companies Act of 1998. By doing so, the company will be recognized as a legal entity. The company will be a limited corporation and shareholders will be recorded in the constitution of the company as soon as it is established. The company will file returns every financial year and circulate its progress records to the shareholders who will receive dividends when payable.
Another legal aspect to be considered due to the core business of this company is the copyright laws. To avoid infringement of these laws, the company will employ a legal advisor with wide experience in matters related to copyright laws.
The company will be headed by a managing director who will be in charge of operations and oversee all projects. The entrepreneur who is financing the company will be the chairman in the management structure. The company requires a total of 20 permanent employees to start with. The senior employees should have the qualifications outlined below. All employees will also undergo rigorous training to ensure they are qualified enough for the production process, and can meet the company’s mission. Further, the company plans to outsource more than 20 employees on a contract basis. As the company expands, the number of employees will increase and include the regional heads and coordinators. Other important members of staff in this company are the publications officer, database controller, chief systems security analyst, and the premises head (Richason, n.d.).
Senior Management at Scholar Center.org
Other Members (Auxiliary staff)
Considering the core function of the company, we plan to have both an online location and physical premises. The IT management staff will advise on matters pertaining web domains and hosting and as such, the company will ensure that it has a safe and reliable website capable of keeping hackers at bay. This will ensure consumer safety and trust in line with the consumerist approaches. I would prefer the .org domain to be used since as it is perceived to be authentic. An HTTP protocol will be implemented for enhanced security (Timmers, 1998).
The physical offices will be located at one of the city’s prime shopping malls but the exact location is still under consideration at this stage. The offices should be easily accessible for the customers and also be visible to create and sell the image of the company to passing traffic. The sales assistants and regional heads will be work in these offices. Most importantly, we will the public relations and customer care services will be situated in the given location. As rent is one of the inevitable recurring expenditures, the office should be cost-effective especially at start-up stage of the business.
The financial analysis section of this business plan provides the estimated budgetary allocations for these items.
As already discussed, the main tool of trade for the company is a platform where a buyer meets a seller. The company will also purchase from sellers anything related to education but mainly books. As such, either of the two types of transactions may be carried out using the platform – direct purchase from the seller or direct ordering of a book from our online stores. In terms of the latter, the participants are discouraged from exchanging private contact information or phone numbers and communication through the system will be strictly monitored. Since all the transactions should be undertaken by using the system, any exchange of private information will be construed as an attempt to lure customers away. Thus, the system should be designed to be able to detect emails or phone numbers. Also, the chat agents should manually monitor the chats and messages from both sides. The system should automatically deduct the commission fee (10%) for every transaction (Reynolds & Mofazali, 2000).
It is believed that the low commission rate will encourage buyers and sellers to make transactions using the services of the company. After finalising the deal, the seller provides the company with the educational materials being sold and will then be paid. In the case of a buyer, after the deal has been finalized and payment received, including the shipping fee (which will be paid by the client) the book will delivered to the buyer by the logistics and shipment department. By means of such policies, the company will be able to deter fraudsters who may present themselves as potential sellers only to rip-off the customers. The website creates a platform that is trustworthy for both the buyer and the seller. At the same time, the company can also verify the authenticity and ownership of the book, thus protecting the unsuspecting buyer from possible breach of copyright laws.
The company will offer a free transaction to first-time customers and a $10 reward for every fifth transaction carried out with the company. The entrepreneur will also spearhead a ‘refer-a-friend’ programme with a 5% discount for every referral. The company’s payment methods will include credit card billing, direct wire transfer, cash payments and PayPal.
Online warehousing and marketing is a relatively new field in terms of the economy and, as such, little competition is expected. Nonetheless, there are existing players in the industry such as local bookshops and other informal vendors. By establishing proper marketing strategies and entry behaviour, it is expected that the company will flourish and enjoy stability. To get an edge over the informal vendors, the company will invest in advertising that depicts the legality of the company and the advantages of purchasing from a credible seller. For instance, the company may use endorsements from a renowned author for its billboards. Further, it is expected that there will be buy-in from society in terms of acknowledging the initiative as being environmentally friendly as well as cost effective.
According to feasibility studies, the expected market in the selected area of operation, is very ready for the venture. Because of the great demand for educational resources, the price of books is escalating almost daily. The population is also big enough to sustain the business in its initial stages until it matures.
Currently, the major online companies in similar industries are Amazon, OLX and e-Bay. However, these companies do not offer the same services especially as they specialise in all types of merchandise. However, they do have over 15 years’ experience and have obtained much publicity; therefore, a good entry strategy cannot be overlooked if my plan is to be implemented. To do this, we have assessed their strengths and weaknesses and we plan to capitalise on the weaknesses – Scholar Centre.org aims to focus more on market research and advertising. The plan is to bear the competition by becoming the best in terms of production technology, management and corporate social responsibility.
The business is, however, bound to be associated with some strengths, weaknesses, opportunities and threats as shown in the SWOT analysis model. The table below elaborates these aspects.
Table 2 SWOT Analysis
The main target market of the business is the students who it is known have a low income. Most of them belong to average families and are aged between 15 and 23 years. The characteristics of this age group of students are that they have to be very strict with how they use their limited resources and they are oriented to achieving future goals. Most of these students depend on guardians or parents for financial support as they are minors and/or unemployed. The average monthly expenditure of a student may therefore range from $150 to $200. Therefore, it is highly likely that they will appreciate the business since it will offer great help to them in earning extra revenue and/or saving money when purchasing these books.
As sales are made online, the company will earn commission of 10% from both the seller and the buyer. If the order is made directly by the company, it will be assumed that the client has made a direct purchase and the normal forces of supply and demand will affect the pricing. Some books, such as dictionaries, are expected to be in high demand and therefore a higher price will be charged for these books. Once the entrepreneur has bought the book, he/she will conduct a market analysis and establish the new price for the book. The selling price should, however, not exceed 40 percent to avoid being too expensive. The prices for books will vary between $100 and $200.
The warehouses will be situated close to the target market’s (students) residences, the institutions, or in the neighborhood of the office. In preparing for this, meetings with one of the target school’s management are being held to discuss whether the school can make space available for the company to set up one of the warehouses. If this request is accepted, it will significantly facilitate a strategic location for the company (Gordijn & Akkermans, 2001). Online sites will ensure a high level of accessibility by students. The developers should be in a position to develop an effective website that provides a good user experience, is easy to find using search engines and is student-friendly.
Mass media advertising will be proactive in order to broadcast information to the public and enhance people’s knowledge of the products offered. By doing this, the company will be able to secure its market and remind customers of its presence. Competitions will be run on television and radio where the public will able to win gift hampers from the company by answering questions correctly. The print media will offer features of the company where the product and company profile will be highlighted, mostly by using pictorial representation. The company will also advertise on other student-friendly websites such as Google®, Facebook ® and YouTube®.
Billboards and social media will be widely utilized to advertise the website to the public in order to attract traffic. The billboards will have the trademark of the company and the text showing the need to quench thirst from the bottle of educational resources available. Also, the company sales executive will create Facebook, Twitter, Instagram and Google+ accounts in order to advertise and establish connections with the market through the digital platform. The internet accounts on social platforms will promote the importance of the resource and emphasise the need to use the hard earned money properly.
The company is supposed to begin its operation in January, 2016. To achieve this, the company needs to complete all the activities outlined below. Also, the management needs to liaise with the funder to ensure that the loan disbursement is made on time, since this will affect subsequent activities. The table below shows the planned timelines for the business obligations.
The company requires capital in order to set up, start up, run and maintain its operations. As an entity, it has to be self sustaining from loans, investments and operational funds. Initially, the owner has to input a large sum of money to ensure the company acquires its fixed assets (Cassar, 2004). The company will also acquire a loan from Central Arabic Bank, get contributions from the owner’s friends and family and use the owner’s savings.
The financial requirements of the company are:
BANK LOAN: $500,000
CONTRIBUTION FROM FRIENDS and FAMILY: $280,000
OWNER’S SAVINGS: $190,000
Start-up Financial Obligations
The business capital is expected to stagnate for the next two years and rise steadily in the subsequent years. After the first two years, the company’s worth is expected to increase by 150% every financial year. Should this be the case, by 2018 there will have been a 150% return on investment and by 2019, a 300% return on investment will have been generated. However, there are a number of factors that may influence these projections in terms of the external environment such as politics, economic issues, inflation and supply and demand. Therefore, errors may be expected. The scatter chart below shows how the company is expected to perform over the next eight years in terms of worth.
With most of the groundwork having been done, the company will begin its operations as per schedule. The launching ceremony shall be presided over by the minister for education and other respected dignitaries in the field of education. I will take pride in the accomplishment of the company’s goal and will be on the front-line in championing for the same. In the long run, I will ensure that the primary mission and objective of the business remain at the core of its operations despite any situation that may unfold. In brief, I acknowledge that the launch of this project is highly dependent on sponsors and I would like to reinforce my appeal to them to support this futuristic project.