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Business Plan
EduCyle Business Plan




Table of Contents
Business Plan .............................................................................................................................................. 1

Executive Summary..................................................................................................................................... 3

General Company Description..................................................................................................................... 5

Products and Services.................................................................................................................................. 6

Marketing Plan............................................................................................................................................ 8

Competition............................................................................................................................................... 14

Niche......................................................................................................................................................... 18

Sales Forecast............................................................................................................................................ 21

Operational Plan........................................................................................................................................ 22

Production................................................................................................................................................. 22

Location..................................................................................................................................................... 24

Legal Environment.................................................................................................................................... 27

Management and Organization.................................................................................................................. 29

Professional and Advisory Support............................................................................................................ 29

Personal Financial Statement..................................................................................................................... 34

Startup Expenses and Capitalization.......................................................................................................... 35

Financial Plan............................................................................................................................................ 36

12-Month Profit and Loss Projection......................................................................................................... 36

Four-Year Profit Projection (Optional)...................................................................................................... 36

Projected Cash Flow.................................................................................................................................. 36

Opening Day Balance Sheet...................................................................................................................... 37

Break-Even Analysis................................................................................................................................. 38

Appendices................................................................................................................................................ 39


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Executive Summary




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                General Company Description

EduCycle’s mission is to recycle, reuse, and repurpose educational media, supplies and
equipment in order to support the learning objectives of educators of all levels, promote
sustainable living, and to strengthen communities by providing resources not easily obtained by
other means.

The business goals of EduCycle is to provide a core set of services to the community that have
educational, 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 purposes

EduCycle, Inc. is a charitable non-profit organization who relies on donations, service and
membership fees, grants and sponsorships to deliver its mission. Operating as a surplus
organization and community education center, Educycle will market items to educators, artists,
community organizations and individuals.




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                                     Products and Services

As 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 provide
professional development seminars, arts and crafts workshops, and sustainable development education
programs, 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 following
services 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 Comparison
Our primary competition will be local educational supply stores and major retail suppliers. We will also
be in competition with online and catalogue retailers who sell educational supplies at retail and wholesale
prices. 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.




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Pricing and Fee Structures

EduCycle 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 other
services. 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 at
wholesale price; allows for 6 additional cardholders to account and free professional development
seminars for each cardholder.

Golden Apple Membership ($49.99/year)
This will include educators and parents who want to purchase products and includes free professional
development 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




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                                             Marketing Plan
EduCycle takes an interdisciplinary approach to supporting the community by bridging the gap between
education and sustainability. The Obama administration has put worth significant effort in both education
and sustainability. In the past couple of years, federal agencies has been shifting their philosophies to
consider long term investments in the environment and education to provide a richer and prosperous
nation for all. Starting in 2010, the Department of Education has started setting the new pace for
education, by becoming leaders in process reform including sustainability. They will be funding more
projects and organizations committed to innovation and improvement of existing processes in the
education system.

Educational Services is the second largest industry, accounting for 13.5 million jobs in 2008 (Bureau of
Labor 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 content
suppliers and professional development of administrators and teachers. Most teaching positions, which
constitute nearly half of all educational services jobs, require at least a bachelor's degree; while some
require a master's or doctoral degree.

Market Trends

General 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.

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            ●   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/Demands
EduCycle proposes to meet the market needs and demands identified below by providing educational
resources to enrich the learning experience for both educators and learners. Access to these resources will
facilitate the change needed to close the educational gap and make the learning environment more
competitive.

            ●   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 Potential
School attendance is compulsory until at least age 16 in all 50 States and the District of Columbia. As a
result, elementary, middle, and secondary schools are the most numerous of all educational
establishments. In recent decades, the government has recognized the importance of educational evolution
and creating a well-defined education system that will result in economic growth and the transformation
of this country.

The Obama administration has launched an education reform campaign demonstrated by the American
Recovery 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;




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                             ○   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 provide
students and teachers with up-to-date and relevant curriculum materials in order to improve the quality of
instruction and the delivery of content material. Unfortunately, states and schools struggle with budget
deficits as a result of recent fluctuations in the economy. Many of the schools that experience the adverse
effects of dwindling budgets are located in underserved and impoverished communities. School systems
are 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 in
the 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 educational
institutions in the private sector. We will partner with local stakeholders to provide training opportunities
for educators which will improve both teaching and learning for underserved populations.

The education industry is rapidly evolving and responds positively to changing trends in technology
creating an increased need for resources and training among students, teachers and administrators.




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Strengths, Weaknesses, Opportunities, Threats

Table 1. Lists the current strengths and weaknesses of EduCycle as well as potential opportunities and
threats 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 costs




According to U.S. Department of Education, Maryland is among 10 winners in President Obama’s “Race
to the Top” grant initiative, bringing up to $250 million in education investments to Maryland’s public



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schools. To overcome financial threats EduCycle will research available or anticipated competitive grants
in the education sector offered by corporations, federal, state and local agencies.

Product


The client base that will potentially benefit from the products and services provided by EduCycle will
include educational institutions, teachers, home-school programs, parents and students. A summary of
demographic information for individuals employed in Education, Training and Library Occupations is
identified 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




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EduCycle 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




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Competition

The following companies have been identified as major competitors in the market.

                                    Table III. Major Competitors
                                                   Learning How
Competitor                     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 Authority
Competitor                     B
                                                   http://www.raymondgeddes.com/
                                                   7110 Belair Rd, Suite 200, Baltimore, MD 21206

                                                   Staples

Competitor                     C                   www.staples.com
                                                   multiple locations

                                                   Walmart

Competitor                     D                   http://www.walmart.com/
                                                   multiple locations

                                                   Carolina Biological Supply Company

Competitor                     E                   http://www.carolina.com/
                                                   Online




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Table IV. Competitive Analysis




Factor        EduCycle          Strengths   Weakness   Competitor A         Competitor B       Competitor        Competitor E        Importance
                                                       (Learning            (Raymond           C (Staples)       (Carolina)          to
                                                       How)                 Geddes)                                                  Customer

Products        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
                                                                                               electronics

Price           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
                                                                                                  offered


Quality       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
              products

Selection       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
                                                                                                electronics


Service          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
                 service


Reliability     Emerging            x                  High consumer        High consumer           High         High consumer           5
                company                                 satisfaction         satisfaction        consumer         satisfaction
                building,                                 ratings            ratings            satisfaction        ratings
               reputation                                                                      ratings


Stability       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



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               stability




Expertise       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
                 expertise

Company        Non-profits          x     Well established    Well established       Well          Well established    4
Reputation       generally                  company             company           established        company
               have a good                                                         company
              reputation for
                providing
                services to
                  address
                   unmet
               community
              needs

Location          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 North


Appearance    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           friendly



Sales         Internet sales,   x          Internet sales,     Internet sales,   Internet sales,    Internet sales,    5
Method            direct                  direct purchase     direct purchase        direct        direct purchase
               purchase                                                           purchase




Credit         None             x              None                None           None             None
Policies

Advertising      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



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        Uses mailing             mailing lists and                      newspapers     mailing lists and
          lists and                   email                                                 email
            email




Image    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




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Niche

EduCycle provides cost effective curriculum materials to individuals, educational institutions and
businesses 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 business
progresses over the next 1-3 years, added emphasis will be placed on sales to urban school districts in
Maryland and the District of Columbia. Although there is a potential for significant profits through direct
sales, greater gross margins are possible through eCommerce. The market analysis shows a broad range of
prospective clients in urban educational setting throughout the nation, covering a wide range of
consumers who are generally interested in discounted educational resources and supplies.



Promotion
Marketing Goals and Objectives
TBD

Overall Marketing Strategy

Our company’s strategy is based on providing the most diverse inventory of
educational resources and supplies to schools in disadvantaged environments. Our
goal is to focus on consumer needs and to capitalize on shrinking budgets in the
educational sector which have resulted in a deficit in curricular materials necessary
to sustain competitive learning environments.



Marketing Strategies

1. Invest in a Website

Gives customers another way to see products or services other than coming into store and setting up a
meeting; provides a fast, inexpensive way to update information and get new details in front of customers.

2. Business cards

Includes website and E-mail addresses on the cards; distribute business cards as a means of networking
among educational professionals

3. Create and maintain a client database.

Get customers' contact information by:

             ●             Collecting         customer business cards in a fishbowl.



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            ●   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 Budget

How 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 Strategy

As an emerging company, EduCycle will use a variety of pricing strategies to increase market share. The
following strategies will prove advantageous to our organization.

Market Penetration Pricing: A pricing technique which involves setting a relatively low initial entry
price, often lower than the eventual market price, to attract new customers. The strategy works on the
expectation that customers will switch to the new brand because of the lower price. EduCycle’s inventory
will be priced relatively lower than the market price to draw in new customers. This strategy will allow
EduCycle to increase market share and sales volume as it is commonly employed by businesses launching
new 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


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             ●
             ● Blocks or delays the competition
.Block Pricing: A pricing strategy in which identical products are packaged together in order to enhance
profits 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 merchandise
Commodity Bundling: The practice of bundling several different products together and selling them at a
single bundle price.
Advantages:

             ●   Educators often need to purchase multiple products to serve a single purpose        (i.e.
                 computer, printer, ink cartridges)
             ●   Generates higher revenue

Price 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 customers

Pricing will be an important factor in giving EduCycle a competitive edge. Our products will be priced
significantly lower than the competition. This is based on the premise that our clients may be facing budget
constraints. As a non-profit, EduCyle seeks to provide clients with necessary educational resources at
prices considerably lower than major retailers.

Proposed Location

Yes. It’s important because of school hours educators need to be able to quickly access the store after or
during 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 baltimore
city 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 vicinity
to them will drive foot traffic, however it is not critical to the success of our organization.




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Sales Forecast
Now 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 marketing
strategies that you have just described, your market research, and industry
data, if available.

You may want to do two forecasts: 1) a "best guess", which is what you
really expect, and 2) a "worst case" low estimate that you are confident you
can reach no matter what happens.

Remember to keep notes on your research and your assumptions as you
build this sales forecast and all subsequent spreadsheets in the plan. This is
critical if you are going to present it to funding sources.




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                                           Operational Plan

EduCycle will operated as a surplus store and reclamation center. The surplus store will exist virtually and
physically. The virtual surplus store will allow members and the general public to shop on the EduCycle
website. Members only will have the privelege of requesting that an item be made available for them for
pick-up in the store for a (48 hour holding period only). The physical store(s) will have a storefront and a
warehouse for storing unprocessed donations and goods that have come in. With the help of volunteers
and staff, unprocessed goods will be salvaged, catalogued, labeled, priced and then organized in the
warehouse 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 be
needed 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 be
sensitive to the commercial and industrial zoning rules of the area. It’s possible that the reclamation center
and the surplus store(s) may exist in separate locations to keep costs low and to meet the needs of the
targeted customers.

Production
Most of the products received will be in-kind donations from vendors, companies, organizations or
individuals. We will supplement the our inventory with the purchase of highly desired items when there is
a demand on a case per case basis.

Because products are not going to be manufactured but reclaimed or bought at wholesale the costs for
production will be minimal and on directly related the costs of the wholesale items and the other
operational costs for the reclamation center.

In the reclamation center, items will be processed in stages to ensure quality control. The definitions
below 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 surplus
store or accepted as an in-kind donation from donors as well as terminology to be used to refer to the
unprocessed and processed items.

Unuseable- items removed from the reclamation center or not accepted as a donation because they are
determined to be unfit. Types of unuseables included in this Reclamation Policy include (but not limited
to):
           ● 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


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            ●   Soiled, stained, sticky, etc.
            ●   Defaced
            ●   Expired product or date sensitive product
            ●   Spoiled or perishable frozen/refrigerated grocery

Pre-Damage Direct Product Costs (Pre-Damage DPC)– Handling and storage costs that occur before
damage is identified as an item moves through surplus distribution. These costs include costs incurred at
the 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 to
the item has been identified and before it arrives at the reclamation center. These costs also include costs
for 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 processed
through a reclamation center. Contained in this formula are major variables such as reclamation center
efficiencies, type of product and processing chutes.

A. Reclamation Program
Invoice 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 item

After 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 a
set 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
EduCyle Business Plan


Inventory will be tracked electronically with an inventory database which will deliver real-time
availability for items made available in the virtual surplus store. All salvaged items will be identified with
a EduCycle label to ensure that they have been quality controlled and are ready to be sold in the surplus
store(s).

Products will be procured through donations and wholesale distributors.

Location
What 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 : The
warehouse/reclamation center can be in a separate location of the surplus store. Scenario 2: The
warehouse/reclamation center and surplus store are in the same location. In either location the
warehouse/reclamation

Warehouse/Reclamation Center

Physical 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/bathroom
Surplus 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 disposal
Access:

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 surplus
store (depending on the scenario) the location of the warehouse/reclamation must be accessible to trailer
trucks, forklifts, dump trucks and other industrial equipment. The surplus store will need to be accessible
to 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 shipping
centers?

For the surplus store the parking should be easy for members and non-members to have access to the
store. For staff and volunteers there should be designated parking. For the warehouse/reclamation center
parking for staff and volunteers should be designated.


                                                  23 of 38
EduCyle Business Plan


Include 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 Store




Scenario 2: Combined Warehouse/Reclamation Center and Surplus Store




                                                 24 of 38
EduCyle Business Plan




Cost: 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 become
part of your financial plan.

Scenario 1: Separate Warehouse/Reclamation and Store

Warehouse/reclamation costs

Rent: $14 - $40 sq/ft * 1500 sq ft. = $21,000 - $60, 000 annually or $1750 - $5000 monthly

Electricity: $500 - $1000 monthly

Water: ?

What will be your business hours?

7am - 7pm Mon - Fri

8am - 4pm Sat & Sun




                                               25 of 38
EduCyle Business Plan




Legal Environment
Describe 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?

Suppliers
Identify key suppliers:

            ●  Names and addresses
            ●  Type and amount of inventory furnished
            ●  Credit and delivery policies
            ●  History and reliability
Should 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
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 Receivable

If you do extend credit, you should do an aging at least monthly to track how much of your money is tied
up in credit given to customers and to alert you to slow payment problems. A receivables aging looks like
the following table:

                                                                                                             Over 90
                    Total        Current               30 Days         60 Days           90 Days
                                                                                                             Days
Accounts
Receivable Aging



You 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 Payable

You should also age your accounts payable, what you owe to your suppliers. This helps you plan whom to
pay and when. Paying too early depletes your cash, but paying late can cost you valuable discounts and
can damage your credit. (Hint: If you know you will be late making a payment, call the creditor before the
due 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 Days
Accounts Payable
Aging




                                                   27 of 38
EduCyle Business Plan



                             Management and Organization
Professional and Advisory Support
List 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 Clerk


Job Titile: Executive Director

Function: · 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 the

organization's philosophy, mission, strategy, and its annual goals and

objectives

Reports to: Board of Directors

Major Functions/Accountabilities:

1. Board Administration and Support -- Supports operations and

administration of Board by advising and informing Board members,

interfacing between Board and staff, and supporting Board's evaluation

of chief executive

2. Program, Product and Service Delivery -- Oversees design,

marketing, promotion, delivery and quality of programs, products and

services

3. Financial, Tax, Risk and Facilities Management -- Recommends

yearly budget for Board approval and prudently manages



                                              28 of 38
EduCyle Business Plan


organization's resources within those budget guidelines according to

current laws and regulations

4. Human Resource Management -- Effectively manages the human

resources of the organization according to authorized personnel

policies and procedures that fully conform to current laws and

regulations

5. Community and Public Relations -- Assures the organization and its

mission, programs, products and services are consistently presented in

strong, positive image to relevant stakeholders

6. Fundraising (nonprofit-specific) -- Oversees fundraising planning

and implementation, including identifying resource requirements,

researching funding sources, establishing strategies to approach

funders, submitting proposals and administrating fundraising records

and documentation.

Job Description                Director of Operations

The Director of Operations will be responsible for enhancing the internal organization
processes and infrastructure that will allow EduCycle to continue to grow and fulfill its
mission. The Director of Operations will manage the following functions:

Financial Management and Oversight

Working with the Director of Finance, manage and oversee all financial and business
planning

activities, including:

o Direct and administer all financial plans

o Oversee business policies and accounting practices

o Review and analyze financial reports

o Support and advise the Executive Director in decision making

o Lead and support organizational budgeting proces



                                              29 of 38
EduCyle Business Plan


Oversee 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 Resources

Works to manage and oversee the human resource function for EduCycle, including:

o Recruitment, hiring, and compensation

o Benefits administration and oversight

o Professional training and development, including new employee orientation

o Retention strategies

o Regulatory oversight and legal compliance

Ensuring that the human resource function is properly resourced and represented within the

senior management team.

Operations

Oversee risk management and legal activities: letters of agreement, contracts, leases, and
other legal documents and agreements

Business insurance: procurement, monitoring and management

Information technology – works to ensure the ongoing maintenance and updating of
information systems and infrastructure, including hardware and software.

Organizational reporting and monitoring: provide guidance and leadership through
management of the EduCycl metrics and measurement reporting process

Office management: oversee administrative functions for EduCycle office and warehouse

Ensure the smooth daily operations of EduCycle

Board of directors – works with the Executive Director to provide staff support and guidance
to EduCycle. Acts as staff liaison to relevant board committees

Qualifications

Minimum of a BA, ideally with an MBA

Strong operational experience: ideally has worked in a senior management role for 10+
years in a



                                           30 of 38
EduCyle Business Plan


socially responsible organization with progressive experience leading to at least three years

experience in operational/administrative management

Demonstrated experience in financial planning and analysis with previous experience
overseeing human resources, information technology, and legal



Job Description               Office Manager

The Office Manager reports to the Senior Administrative Officer and is responsible for
providing

office management services to the First Nations Office. This includes maintaining office
services

and efficiency, supervising office staff and maintaining office records.

RESPONSIBILITIES

(Major responsibilities and target accomplishments expected of the position including the
typical problems

encountered in carrying out the responsibilities.)

1. Maintain office services

Main Activities:

Design and implement office policies

Establish standards and procedures

Organize office operations and procedures

Supervise office staff

Monitor and record long distance phone calls

Prepare time sheets

Control correspondences

Review and approve supply requisitions

Liaise with other agencies, organizations and groups

Update organizational memberships

Maintain office equipment


                                            31 of 38
EduCyle Business Plan


2. Supervise office staff

Main Activities:

Assign and monitor clerical and secretarial functions

Recruit and select office staff

Orient and train employees

Provide on the job and other training opportunities

Supervise staff

Evaluate staff performance

Coaching and disciplining staff




                                           32 of 38
EduCyle Business Plan



                      Personal Financial Statement
Include personal financial statements for each owner and major stockholder,
showing assets and liabilities held outside the business and personal net
worth. Owners will often have to draw on personal assets to finance the
business, and these statements will show what is available. Bankers and
investors usually want this information as well.




                                  33 of 38
EduCyle Business Plan



                  Startup Expenses and Capitalization
You will have many startup expenses before you even begin operating your
business. It’s important to estimate these expenses accurately and then to
plan where you will get sufficient capital. This is a research project, and the
more thorough your research efforts, the less chance that you will leave out
important expenses or underestimate them.

Even with the best of research, however, opening a new business has a way
of costing more than you anticipate. There are two ways to make allowances
for surprise expenses. The first is to add a little “padding” to each item in
the budget. The problem with that approach, however, is that it destroys the
accuracy of your carefully wrought plan. The second approach is to add a
separate 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 how
much to allow for contingencies. If you cannot get good information, we
recommend a rule of thumb that contingencies should equal at least 20
percent 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 detail
how much will be contributed by each investor and what percent ownership
each will have.




                                    34 of 38
EduCyle Business Plan



                                 Financial Plan
The financial plan consists of a 12-month profit and loss projection, a four-
year profit and loss projection (optional), a cash-flow projection, a projected
balance sheet, and a break-even calculation. Together they constitute a
reasonable estimate of your company's financial future. More important, the
process of thinking through the financial plan will improve your insight into
the inner financial workings of your company.

12-Month Profit and Loss Projection
Many business owners think of the 12-month profit and loss projection as
the centerpiece of their plan. This is where you put it all together in numbers
and 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 forecast
sales, cost of goods sold, expenses, and profit month-by-month for one
year.

Profit projections should be accompanied by a narrative explaining the major
assumptions used to estimate company income and expenses.

Research Notes: Keep careful notes on your research and assumptions, so
that you can explain them later if necessary, and also so that you can go
back 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-Year
Profit projection is for those who want to carry their forecasts beyond the
first year.

Of course, keep notes of your key assumptions, especially about things that
you expect will change dramatically after the first year.

Projected Cash Flow
If the profit projection is the heart of your business plan, cash flow is the
blood. Businesses fail because they cannot pay their bills. Every part of your
business plan is important, but none of it means a thing if you run out of
cash.

The point of this worksheet is to plan how much you need before startup, for
preliminary expenses, operating expenses, and reserves. You should keep
updating it and using it afterward. It will enable you to foresee shortages in



                                    35 of 38
EduCyle Business Plan


time to do something about them—perhaps cut expenses, or perhaps
negotiate 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 a
forward look at your checking account.

For each item, determine when you actually expect to receive cash (for
sales) or when you will actually have to write a check (for expense items).

You should track essential operating data, which is not necessarily part of
cash flow but allows you to track items that have a heavy impact on cash
flow, 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 need
more start-up capital. This plan will also predict just when and how much
you will need to borrow.

Explain your major assumptions, especially those that make the cash flow
differ from the Profit and Loss Projection. For example, if you make a sale in
month one, when do you actually collect the cash? When you buy inventory
or materials, do you pay in advance, upon delivery, or much later? How will
this affect cash flow?

Are some expenses payable in advance? When?

Are there irregular expenses, such as quarterly tax payments, maintenance
and repairs, or seasonal inventory buildup, that should be budgeted?

Loan payments, equipment purchases, and owner's draws usually do not
show on profit and loss statements but definitely do take cash out. Be sure
to include them.

And of course, depreciation does not appear in the cash flow at all because
you never write a check for it.

Opening Day Balance Sheet
A balance sheet is one of the fundamental financial reports that any business
needs for reporting and financial management. A balance sheet shows what
items of value are held by the company (assets), and what its debts are


                                    36 of 38
EduCyle Business Plan


(liabilities). When liabilities are subtracted from assets, the remainder is
owners’ equity.

Use a startup expenses and capitalization spreadsheet as a guide to
preparing a balance sheet as of opening day. Then detail how you calculated
the account balances on your opening day balance sheet.

Optional: Some people want to add a projected balance sheet showing the
estimated financial position of the company at the end of the first year. This
is especially useful when selling your proposal to investors.

Break-Even Analysis
A break-even analysis predicts the sales volume, at a given price, required
to recover total costs. In other words, it’s the sales level that is the dividing
line 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 expressed
as a percent of total sales.)

Include all assumptions upon which your break-even calculation is based.




                                      37 of 38
EduCyle Business Plan



                                  Appendices
Include 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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Edu cyclebusinessplan revised

  • 2. EduCyle Business Plan Table of Contents Business Plan .............................................................................................................................................. 1 Executive Summary..................................................................................................................................... 3 General Company Description..................................................................................................................... 5 Products and Services.................................................................................................................................. 6 Marketing Plan............................................................................................................................................ 8 Competition............................................................................................................................................... 14 Niche......................................................................................................................................................... 18 Sales Forecast............................................................................................................................................ 21 Operational Plan........................................................................................................................................ 22 Production................................................................................................................................................. 22 Location..................................................................................................................................................... 24 Legal Environment.................................................................................................................................... 27 Management and Organization.................................................................................................................. 29 Professional and Advisory Support............................................................................................................ 29 Personal Financial Statement..................................................................................................................... 34 Startup Expenses and Capitalization.......................................................................................................... 35 Financial Plan............................................................................................................................................ 36 12-Month Profit and Loss Projection......................................................................................................... 36 Four-Year Profit Projection (Optional)...................................................................................................... 36 Projected Cash Flow.................................................................................................................................. 36 Opening Day Balance Sheet...................................................................................................................... 37 Break-Even Analysis................................................................................................................................. 38 Appendices................................................................................................................................................ 39 2 of 38
  • 4. EduCyle Business Plan General Company Description EduCycle’s mission is to recycle, reuse, and repurpose educational media, supplies and equipment in order to support the learning objectives of educators of all levels, promote sustainable living, and to strengthen communities by providing resources not easily obtained by other means. The business goals of EduCycle is to provide a core set of services to the community that have educational, 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 purposes EduCycle, Inc. is a charitable non-profit organization who relies on donations, service and membership fees, grants and sponsorships to deliver its mission. Operating as a surplus organization and community education center, Educycle will market items to educators, artists, community organizations and individuals. 4 of 38
  • 5. EduCyle Business Plan Products and Services As 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 provide professional development seminars, arts and crafts workshops, and sustainable development education programs, 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 following services 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 Comparison Our primary competition will be local educational supply stores and major retail suppliers. We will also be in competition with online and catalogue retailers who sell educational supplies at retail and wholesale prices. 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. EduCyle Business Plan Pricing and Fee Structures EduCycle 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 other services. 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 at wholesale price; allows for 6 additional cardholders to account and free professional development seminars for each cardholder. Golden Apple Membership ($49.99/year) This will include educators and parents who want to purchase products and includes free professional development 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. EduCyle Business Plan Marketing Plan EduCycle takes an interdisciplinary approach to supporting the community by bridging the gap between education and sustainability. The Obama administration has put worth significant effort in both education and sustainability. In the past couple of years, federal agencies has been shifting their philosophies to consider long term investments in the environment and education to provide a richer and prosperous nation for all. Starting in 2010, the Department of Education has started setting the new pace for education, by becoming leaders in process reform including sustainability. They will be funding more projects and organizations committed to innovation and improvement of existing processes in the education system. Educational Services is the second largest industry, accounting for 13.5 million jobs in 2008 (Bureau of Labor 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 content suppliers and professional development of administrators and teachers. Most teaching positions, which constitute nearly half of all educational services jobs, require at least a bachelor's degree; while some require a master's or doctoral degree. Market Trends General 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. 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/Demands EduCycle proposes to meet the market needs and demands identified below by providing educational resources to enrich the learning experience for both educators and learners. Access to these resources will facilitate the change needed to close the educational gap and make the learning environment more competitive. ● 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 Potential School attendance is compulsory until at least age 16 in all 50 States and the District of Columbia. As a result, elementary, middle, and secondary schools are the most numerous of all educational establishments. In recent decades, the government has recognized the importance of educational evolution and creating a well-defined education system that will result in economic growth and the transformation of this country. The Obama administration has launched an education reform campaign demonstrated by the American Recovery 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. 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 provide students and teachers with up-to-date and relevant curriculum materials in order to improve the quality of instruction and the delivery of content material. Unfortunately, states and schools struggle with budget deficits as a result of recent fluctuations in the economy. Many of the schools that experience the adverse effects of dwindling budgets are located in underserved and impoverished communities. School systems are 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 in the 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 educational institutions in the private sector. We will partner with local stakeholders to provide training opportunities for educators which will improve both teaching and learning for underserved populations. The education industry is rapidly evolving and responds positively to changing trends in technology creating an increased need for resources and training among students, teachers and administrators. 9 of 38
  • 10. EduCyle Business Plan Strengths, Weaknesses, Opportunities, Threats Table 1. Lists the current strengths and weaknesses of EduCycle as well as potential opportunities and threats 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 costs According to U.S. Department of Education, Maryland is among 10 winners in President Obama’s “Race to the Top” grant initiative, bringing up to $250 million in education investments to Maryland’s public 10 of 38
  • 11. EduCyle Business Plan schools. To overcome financial threats EduCycle will research available or anticipated competitive grants in the education sector offered by corporations, federal, state and local agencies. Product The client base that will potentially benefit from the products and services provided by EduCycle will include educational institutions, teachers, home-school programs, parents and students. A summary of demographic information for individuals employed in Education, Training and Library Occupations is identified 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. EduCyle Business Plan EduCycle 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. EduCyle Business Plan Competition The following companies have been identified as major competitors in the market. Table III. Major Competitors Learning How Competitor 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 Authority Competitor B http://www.raymondgeddes.com/ 7110 Belair Rd, Suite 200, Baltimore, MD 21206 Staples Competitor C www.staples.com multiple locations Walmart Competitor D http://www.walmart.com/ multiple locations Carolina Biological Supply Company Competitor E http://www.carolina.com/ Online 13 of 38
  • 14. EduCyle Business Plan Table IV. Competitive Analysis Factor EduCycle Strengths Weakness Competitor A Competitor B Competitor Competitor E Importance (Learning (Raymond C (Staples) (Carolina) to How) Geddes) Customer Products 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 electronics Price 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 offered Quality 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 products Selection 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 electronics Service 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 service Reliability Emerging x High consumer High consumer High High consumer 5 company satisfaction satisfaction consumer satisfaction building, ratings ratings satisfaction ratings reputation ratings Stability 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. EduCyle Business Plan stability Expertise 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 expertise Company Non-profits x Well established Well established Well Well established 4 Reputation generally company company established company have a good company reputation for providing services to address unmet community needs Location 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 North Appearance 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 friendly Sales Internet sales, x Internet sales, Internet sales, Internet sales, Internet sales, 5 Method direct direct purchase direct purchase direct direct purchase purchase purchase Credit None x None None None None Policies Advertising 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. EduCyle Business Plan Uses mailing mailing lists and newspapers mailing lists and lists and email email email Image 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. EduCyle Business Plan Niche EduCycle provides cost effective curriculum materials to individuals, educational institutions and businesses 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 business progresses over the next 1-3 years, added emphasis will be placed on sales to urban school districts in Maryland and the District of Columbia. Although there is a potential for significant profits through direct sales, greater gross margins are possible through eCommerce. The market analysis shows a broad range of prospective clients in urban educational setting throughout the nation, covering a wide range of consumers who are generally interested in discounted educational resources and supplies. Promotion Marketing Goals and Objectives TBD Overall Marketing Strategy Our company’s strategy is based on providing the most diverse inventory of educational resources and supplies to schools in disadvantaged environments. Our goal is to focus on consumer needs and to capitalize on shrinking budgets in the educational sector which have resulted in a deficit in curricular materials necessary to sustain competitive learning environments. Marketing Strategies 1. Invest in a Website Gives customers another way to see products or services other than coming into store and setting up a meeting; provides a fast, inexpensive way to update information and get new details in front of customers. 2. Business cards Includes website and E-mail addresses on the cards; distribute business cards as a means of networking among educational professionals 3. Create and maintain a client database. Get customers' contact information by: ● Collecting customer business cards in a fishbowl. 17 of 38
  • 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 Budget How 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 Strategy As an emerging company, EduCycle will use a variety of pricing strategies to increase market share. The following strategies will prove advantageous to our organization. Market Penetration Pricing: A pricing technique which involves setting a relatively low initial entry price, often lower than the eventual market price, to attract new customers. The strategy works on the expectation that customers will switch to the new brand because of the lower price. EduCycle’s inventory will be priced relatively lower than the market price to draw in new customers. This strategy will allow EduCycle to increase market share and sales volume as it is commonly employed by businesses launching new 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. EduCyle Business Plan ● ● Blocks or delays the competition .Block Pricing: A pricing strategy in which identical products are packaged together in order to enhance profits 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 merchandise Commodity Bundling: The practice of bundling several different products together and selling them at a single bundle price. Advantages: ● Educators often need to purchase multiple products to serve a single purpose (i.e. computer, printer, ink cartridges) ● Generates higher revenue Price 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 customers Pricing will be an important factor in giving EduCycle a competitive edge. Our products will be priced significantly lower than the competition. This is based on the premise that our clients may be facing budget constraints. As a non-profit, EduCyle seeks to provide clients with necessary educational resources at prices considerably lower than major retailers. Proposed Location Yes. It’s important because of school hours educators need to be able to quickly access the store after or during 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 baltimore city 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 vicinity to them will drive foot traffic, however it is not critical to the success of our organization. 19 of 38
  • 20. EduCyle Business Plan Sales Forecast Now 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 marketing strategies that you have just described, your market research, and industry data, if available. You may want to do two forecasts: 1) a "best guess", which is what you really expect, and 2) a "worst case" low estimate that you are confident you can reach no matter what happens. Remember to keep notes on your research and your assumptions as you build this sales forecast and all subsequent spreadsheets in the plan. This is critical if you are going to present it to funding sources. 20 of 38
  • 21. EduCyle Business Plan Operational Plan EduCycle will operated as a surplus store and reclamation center. The surplus store will exist virtually and physically. The virtual surplus store will allow members and the general public to shop on the EduCycle website. Members only will have the privelege of requesting that an item be made available for them for pick-up in the store for a (48 hour holding period only). The physical store(s) will have a storefront and a warehouse for storing unprocessed donations and goods that have come in. With the help of volunteers and staff, unprocessed goods will be salvaged, catalogued, labeled, priced and then organized in the warehouse 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 be needed 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 be sensitive to the commercial and industrial zoning rules of the area. It’s possible that the reclamation center and the surplus store(s) may exist in separate locations to keep costs low and to meet the needs of the targeted customers. Production Most of the products received will be in-kind donations from vendors, companies, organizations or individuals. We will supplement the our inventory with the purchase of highly desired items when there is a demand on a case per case basis. Because products are not going to be manufactured but reclaimed or bought at wholesale the costs for production will be minimal and on directly related the costs of the wholesale items and the other operational costs for the reclamation center. In the reclamation center, items will be processed in stages to ensure quality control. The definitions below 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 surplus store or accepted as an in-kind donation from donors as well as terminology to be used to refer to the unprocessed and processed items. Unuseable- items removed from the reclamation center or not accepted as a donation because they are determined to be unfit. Types of unuseables included in this Reclamation Policy include (but not limited to): ● 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. EduCyle Business Plan ● Soiled, stained, sticky, etc. ● Defaced ● Expired product or date sensitive product ● Spoiled or perishable frozen/refrigerated grocery Pre-Damage Direct Product Costs (Pre-Damage DPC)– Handling and storage costs that occur before damage is identified as an item moves through surplus distribution. These costs include costs incurred at the 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 to the item has been identified and before it arrives at the reclamation center. These costs also include costs for 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 processed through a reclamation center. Contained in this formula are major variables such as reclamation center efficiencies, type of product and processing chutes. A. Reclamation Program Invoice 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 item After 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 a set 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. EduCyle Business Plan Inventory will be tracked electronically with an inventory database which will deliver real-time availability for items made available in the virtual surplus store. All salvaged items will be identified with a EduCycle label to ensure that they have been quality controlled and are ready to be sold in the surplus store(s). Products will be procured through donations and wholesale distributors. Location What 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 : The warehouse/reclamation center can be in a separate location of the surplus store. Scenario 2: The warehouse/reclamation center and surplus store are in the same location. In either location the warehouse/reclamation Warehouse/Reclamation Center Physical 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/bathroom Surplus 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 disposal Access: 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 surplus store (depending on the scenario) the location of the warehouse/reclamation must be accessible to trailer trucks, forklifts, dump trucks and other industrial equipment. The surplus store will need to be accessible to 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 shipping centers? For the surplus store the parking should be easy for members and non-members to have access to the store. For staff and volunteers there should be designated parking. For the warehouse/reclamation center parking for staff and volunteers should be designated. 23 of 38
  • 24. EduCyle Business Plan Include 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 Store Scenario 2: Combined Warehouse/Reclamation Center and Surplus Store 24 of 38
  • 25. EduCyle Business Plan Cost: 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 become part of your financial plan. Scenario 1: Separate Warehouse/Reclamation and Store Warehouse/reclamation costs Rent: $14 - $40 sq/ft * 1500 sq ft. = $21,000 - $60, 000 annually or $1750 - $5000 monthly Electricity: $500 - $1000 monthly Water: ? What will be your business hours? 7am - 7pm Mon - Fri 8am - 4pm Sat & Sun 25 of 38
  • 26. EduCyle Business Plan Legal Environment Describe 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? Suppliers Identify key suppliers: ● Names and addresses ● Type and amount of inventory furnished ● Credit and delivery policies ● History and reliability Should 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. 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 Receivable If you do extend credit, you should do an aging at least monthly to track how much of your money is tied up in credit given to customers and to alert you to slow payment problems. A receivables aging looks like the following table: Over 90 Total Current 30 Days 60 Days 90 Days Days Accounts Receivable Aging You 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 Payable You should also age your accounts payable, what you owe to your suppliers. This helps you plan whom to pay and when. Paying too early depletes your cash, but paying late can cost you valuable discounts and can damage your credit. (Hint: If you know you will be late making a payment, call the creditor before the due 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 Days Accounts Payable Aging 27 of 38
  • 28. EduCyle Business Plan Management and Organization Professional and Advisory Support List 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 Clerk Job Titile: Executive Director Function: · 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 the organization's philosophy, mission, strategy, and its annual goals and objectives Reports to: Board of Directors Major Functions/Accountabilities: 1. Board Administration and Support -- Supports operations and administration of Board by advising and informing Board members, interfacing between Board and staff, and supporting Board's evaluation of chief executive 2. Program, Product and Service Delivery -- Oversees design, marketing, promotion, delivery and quality of programs, products and services 3. Financial, Tax, Risk and Facilities Management -- Recommends yearly budget for Board approval and prudently manages 28 of 38
  • 29. EduCyle Business Plan organization's resources within those budget guidelines according to current laws and regulations 4. Human Resource Management -- Effectively manages the human resources of the organization according to authorized personnel policies and procedures that fully conform to current laws and regulations 5. Community and Public Relations -- Assures the organization and its mission, programs, products and services are consistently presented in strong, positive image to relevant stakeholders 6. Fundraising (nonprofit-specific) -- Oversees fundraising planning and implementation, including identifying resource requirements, researching funding sources, establishing strategies to approach funders, submitting proposals and administrating fundraising records and documentation. Job Description Director of Operations The Director of Operations will be responsible for enhancing the internal organization processes and infrastructure that will allow EduCycle to continue to grow and fulfill its mission. The Director of Operations will manage the following functions: Financial Management and Oversight Working with the Director of Finance, manage and oversee all financial and business planning activities, including: o Direct and administer all financial plans o Oversee business policies and accounting practices o Review and analyze financial reports o Support and advise the Executive Director in decision making o Lead and support organizational budgeting proces 29 of 38
  • 30. EduCyle Business Plan Oversee 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 Resources Works to manage and oversee the human resource function for EduCycle, including: o Recruitment, hiring, and compensation o Benefits administration and oversight o Professional training and development, including new employee orientation o Retention strategies o Regulatory oversight and legal compliance Ensuring that the human resource function is properly resourced and represented within the senior management team. Operations Oversee risk management and legal activities: letters of agreement, contracts, leases, and other legal documents and agreements Business insurance: procurement, monitoring and management Information technology – works to ensure the ongoing maintenance and updating of information systems and infrastructure, including hardware and software. Organizational reporting and monitoring: provide guidance and leadership through management of the EduCycl metrics and measurement reporting process Office management: oversee administrative functions for EduCycle office and warehouse Ensure the smooth daily operations of EduCycle Board of directors – works with the Executive Director to provide staff support and guidance to EduCycle. Acts as staff liaison to relevant board committees Qualifications Minimum of a BA, ideally with an MBA Strong operational experience: ideally has worked in a senior management role for 10+ years in a 30 of 38
  • 31. EduCyle Business Plan socially responsible organization with progressive experience leading to at least three years experience in operational/administrative management Demonstrated experience in financial planning and analysis with previous experience overseeing human resources, information technology, and legal Job Description Office Manager The Office Manager reports to the Senior Administrative Officer and is responsible for providing office management services to the First Nations Office. This includes maintaining office services and efficiency, supervising office staff and maintaining office records. RESPONSIBILITIES (Major responsibilities and target accomplishments expected of the position including the typical problems encountered in carrying out the responsibilities.) 1. Maintain office services Main Activities: Design and implement office policies Establish standards and procedures Organize office operations and procedures Supervise office staff Monitor and record long distance phone calls Prepare time sheets Control correspondences Review and approve supply requisitions Liaise with other agencies, organizations and groups Update organizational memberships Maintain office equipment 31 of 38
  • 32. EduCyle Business Plan 2. Supervise office staff Main Activities: Assign and monitor clerical and secretarial functions Recruit and select office staff Orient and train employees Provide on the job and other training opportunities Supervise staff Evaluate staff performance Coaching and disciplining staff 32 of 38
  • 33. EduCyle Business Plan Personal Financial Statement Include personal financial statements for each owner and major stockholder, showing assets and liabilities held outside the business and personal net worth. Owners will often have to draw on personal assets to finance the business, and these statements will show what is available. Bankers and investors usually want this information as well. 33 of 38
  • 34. EduCyle Business Plan Startup Expenses and Capitalization You will have many startup expenses before you even begin operating your business. It’s important to estimate these expenses accurately and then to plan where you will get sufficient capital. This is a research project, and the more thorough your research efforts, the less chance that you will leave out important expenses or underestimate them. Even with the best of research, however, opening a new business has a way of costing more than you anticipate. There are two ways to make allowances for surprise expenses. The first is to add a little “padding” to each item in the budget. The problem with that approach, however, is that it destroys the accuracy of your carefully wrought plan. The second approach is to add a separate 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 how much to allow for contingencies. If you cannot get good information, we recommend a rule of thumb that contingencies should equal at least 20 percent 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 detail how much will be contributed by each investor and what percent ownership each will have. 34 of 38
  • 35. EduCyle Business Plan Financial Plan The financial plan consists of a 12-month profit and loss projection, a four- year profit and loss projection (optional), a cash-flow projection, a projected balance sheet, and a break-even calculation. Together they constitute a reasonable estimate of your company's financial future. More important, the process of thinking through the financial plan will improve your insight into the inner financial workings of your company. 12-Month Profit and Loss Projection Many business owners think of the 12-month profit and loss projection as the centerpiece of their plan. This is where you put it all together in numbers and 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 forecast sales, cost of goods sold, expenses, and profit month-by-month for one year. Profit projections should be accompanied by a narrative explaining the major assumptions used to estimate company income and expenses. Research Notes: Keep careful notes on your research and assumptions, so that you can explain them later if necessary, and also so that you can go back 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-Year Profit projection is for those who want to carry their forecasts beyond the first year. Of course, keep notes of your key assumptions, especially about things that you expect will change dramatically after the first year. Projected Cash Flow If the profit projection is the heart of your business plan, cash flow is the blood. Businesses fail because they cannot pay their bills. Every part of your business plan is important, but none of it means a thing if you run out of cash. The point of this worksheet is to plan how much you need before startup, for preliminary expenses, operating expenses, and reserves. You should keep updating it and using it afterward. It will enable you to foresee shortages in 35 of 38
  • 36. EduCyle Business Plan time to do something about them—perhaps cut expenses, or perhaps negotiate 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 a forward look at your checking account. For each item, determine when you actually expect to receive cash (for sales) or when you will actually have to write a check (for expense items). You should track essential operating data, which is not necessarily part of cash flow but allows you to track items that have a heavy impact on cash flow, 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 need more start-up capital. This plan will also predict just when and how much you will need to borrow. Explain your major assumptions, especially those that make the cash flow differ from the Profit and Loss Projection. For example, if you make a sale in month one, when do you actually collect the cash? When you buy inventory or materials, do you pay in advance, upon delivery, or much later? How will this affect cash flow? Are some expenses payable in advance? When? Are there irregular expenses, such as quarterly tax payments, maintenance and repairs, or seasonal inventory buildup, that should be budgeted? Loan payments, equipment purchases, and owner's draws usually do not show on profit and loss statements but definitely do take cash out. Be sure to include them. And of course, depreciation does not appear in the cash flow at all because you never write a check for it. Opening Day Balance Sheet A balance sheet is one of the fundamental financial reports that any business needs for reporting and financial management. A balance sheet shows what items of value are held by the company (assets), and what its debts are 36 of 38
  • 37. EduCyle Business Plan (liabilities). When liabilities are subtracted from assets, the remainder is owners’ equity. Use a startup expenses and capitalization spreadsheet as a guide to preparing a balance sheet as of opening day. Then detail how you calculated the account balances on your opening day balance sheet. Optional: Some people want to add a projected balance sheet showing the estimated financial position of the company at the end of the first year. This is especially useful when selling your proposal to investors. Break-Even Analysis A break-even analysis predicts the sales volume, at a given price, required to recover total costs. In other words, it’s the sales level that is the dividing line 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 expressed as a percent of total sales.) Include all assumptions upon which your break-even calculation is based. 37 of 38
  • 38. EduCyle Business Plan Appendices Include 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