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.
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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.
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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
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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.
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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;
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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.
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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
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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
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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
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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
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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
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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
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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
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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.
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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
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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.
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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.
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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
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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
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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.
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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
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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
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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?
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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
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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
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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
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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
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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
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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
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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.
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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.
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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
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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
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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.
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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
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