Business Plan

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1. Executive Summary

This report aims to provide a business plan for DBG Company’s establishment and the early stage, which is a distance education and ICT service company. The investment project is significantly potential in Philippine. It shows clearly that the company will recover within four years. Also, there is a great profit for the long-term consideration. The report begins with background of the entrepreneurial venture, and then analysis about creating the new business’s factors which consist of: management problem, marketing issue, rivalry analysis, financial estimate, risks and potential challenges involved. This business plan submits to a risky capitalist, and to fund from capitalist which in favor of the DBG Company.

Table of contents

1. Executive Summary 1
2. Introduction 1
3. Description of Entrepreneurial Venture 2
4. Management 2
5. Marketing 3
6. Competitor analysis 3
7. Financial Analysis 4
8. Key risks and challenge 7
9. Conclusion 7
10. Bibliography 8

2. Introduction

The development of ICT

Information and Communications Technology, known as ICT, not only include telecommunication, IT and media in a broad sense, but also various kinds of video industries, transmission and networking that relied on monitoring and control functions (Smith, 2008).

As an essential term of many academic institutes, ICT is thought to be the extended version of Information technology (IT). With a new tendency, many companies have their innovation on promoting ICT (Kandiri, 2011). Among the undeveloped centuries, new ICT is largely recognized as a tool that can transform economies and social devolopment.

ICT and distance education

Distance education can provide professional education anytime and anywhere. ICT can promote distance education all over the world. ICT benefits various aspects of educational dynamics, which are famous in the education literature (McMahon, 2009). For instance, teaching-learning progress, managing classrooms, work capacity, education research, and administration in school are the beneficiaries, since it can enhance students’ critical thinking skills and academic performance, also can assist teachers in teaching-oriented activities and work-life balance, improve school administration, and encourage research (Carle, Jaffee and Miller, 2009).

Philippines education situation

In Philippines, ICT, especially the distance education, is fast transforming economies and social development. Many adults benefit from this model of education programs, and most of them are provided or funded by the government and foreign NGOs in Philippines (McDonald, 2009). In June 2011, a report on the Philippines Education Sector by VSO Philippines forecasts the progress, potential challenges and future priorities in Philippines given the economic conditions and social factors at present. The conclusion could be drawn that Philippines needs more formal distance education. It is a potential market worth investment (Smith, G).

The purpose of report

The company will build a company named DBG to use ICT to develop distance education in Philippines, with total 15million dollar capital investment. Also, the company percent of the capital is from Philippines government. As for the company’s function, it aims to make the earnings of Philippines’ education to the level of Brand in the same period. Through the construction of several years, it also makes the brand become more famous and influential, and expends the developing scale of the company (McDonald, 2009).

In addition to following a venture capitalist, finding money from the venture capitalist to support the growth of the company is also the purpose of this plan, which will create the entrepreneurial business, management problem, marketing issue, rivalry analysis, financial estimate, risks and potential challenges of the DBG Company.

3. Description of Entrepreneurial Venture

Through the ICT tools and the distance education, as the core of it plan, DBG will improve the current academic situation and help students in Philippines, using the investment of 15million. With this scalable business model, DBG can be able to provide the distance education distribution up to millions of students in this country.

The following two parts are essential in the business plan:

The first part is about the government. As a developing country, the technical aspect in Philippines is relatively low. This company will make an effort on transportation for agriculture, education, and government information service for the local government.
Besides, examination and upgrading of Philippines government the company site will be helped by the ICT experts. All those aspects can be serviced online, so that people in rural areas can connect to the network with a better convenience.

The second part is about education. The plan will be achieved firstly in some countries that have backward resources in education, such as Indonesia, Philippines, and the Sri Lanka. Students in poor areas will be benefited a lot from it (Yang, 2009). Using the ICT techniques and collaborating with some of the famous universities in the world, DBG Company will improve the existing computer that suitable, through adding some of the company’s online academic courses (McDonald, 2009).

4. Management

As management support, a team of talented, experienced and organizational expert in Philippines will develop DBG. Further, the company will make efforts on technical and operational aspects.

The another task of DBG is to find a suitable CEO, who must have a very good comprehension in using and recognizing Sri Lanka’s technological and educational system. Also this person has to satisfy the requirements other aspects and can be advanced in the further several years. As the method of selection, it will be a pool of extraordinary candidates in or outside the country. This occupation can be found after the company is established.

Personnel

Training

When they are admitted to DBG Company, employees will receive training orientation consist of:

Overview of company background and organizational culture
Clarification of company policies
Introduction of current situation in company and future development and plans
Development of essential skills namely teamwork, communication, time management skills
Creation of a diversity-working environment

Employee profile
All employees must be:
Enthusiastic about the job
Equipped with required knowledge in education
Highly skilled in IT
Hard-working and able to work independently
Ability to work under pressure in a fast-paced environment

5. Marketing

The ICT industry is one of the main service industries in the Philippines, which is different from the electronics or semi-conductor industries. Since it was expanded rapidly in the past decades, it launches new product with increased rates. Even though the country made progress in improving infrastructures, Philippines is not so advanced as other nations, and it has its own disadvantage in terms of application and use of ICT (Samuelsson, 2006).

6. Competitor analysis

The method to identify itself from the other competitors is to analyze them. Judging competitor, on the foundation of the extent to which their value offering to the market, can be absorbed as a substitute for the DBG’s value offering. (Birnbaum, 2004) After researching the ICT industry in Asia countries through public and Internet information, the following direct competitors have been identified which already operating in the segments.

ICT is a new technology in Philippines. Therefore, there will be no competitor for a while. After join the market, DBG faces transnational corporation competitors.

DBG has been contending against its main competitors in the following ways:
Innovative
Collaboration
Maintain its high quality in a cost effective way
Make full use of high- technology.

Existing educational enterprise
Fragmentation: The industry is fragmented with no dominant firms. No one firm has captured enough of the market share to invest the level of capital that would be needed to compete with DBG.

Poor technology: Since the development of science and technology in this country is slow and poor, this educational company is lack of advanced technology supporting. These two companies would not have a great impact on DBG market, but they have successfully attracted many students, DBG need to make efforts on gain market from them (Kaur, 2012).

7. Financial Analysis

1.
|Cost at the begin |
|License cost250 |
|Partner cost 150 |
|Legal cost 650 |
|Equipment cost: 0 |
|Computer equipment 6,500 |
|Office equipment 5,400 |
|House renting 5,300 |
|Inventory purchases100,000 |
|Basic furniture |
|Computer 40,000 |
|Shuttle bus 60,000 |
| |
|Variable expenses |
|CEO 20,000 |
|Modern equipment 5,000 |
|Market 5,411 |
|Part- time worker salaries 150,000 |
|Sales bonuses 1,500 |
|Sales commission 8,000 |
|Employee salary 60,000 |
|Travel expense8,500 |
|Miscellaneous selling expense 1,000 |
|Total selling expense 259,411 |
| |
|Fixed expenses |
|Administration3,000 |
|Insurance 10,600 |
|Licenses 1,200 |
|Office salaries 41,000 |
|Owner payments 66,000 |
|Rent 30,200 |
|Utilities8,120 |
|Miscellaneous administrative expense400 |
|Total administrative expense 164,720 |
| |
|Assets 18,719 |
|Modern equipment and machine 17,555 |
|Interest Expense on assets1,164 |
|Liabilities |
|Loan 0 |
|Accounts payable |
|Owner equity 0 |
| |
|Total cash paid out 554,400 |

2.
|1. Liabilities 0 |
|2. Sales (revenues) |
|Sales income 4,000 |
|Services income 564,000 |
|Sales and services 5,000 |
|accounts receivable 0 |
|3. Equity |
|Owner investments 0 |
|Paid- in 25,000 |
|Sale of stock 0 |
|Venture Capital 0 |
| |
|4. Miscellaneous income |
|Interests 1,250 |
|Loan received 0 |
|5. Long- term assets 0 |
|6. TCash on hand 0 |
| |
|Total cash available Before sales= 595,250 |
|After product sales= 599,250 |

* From the Asian development Bank.

3. Break- even analysis
Break- even point= (Fixed costs + (variable costs/ revenues)* sales

The BE point was 288, 444

4. The payback schedule
1-2 years: The team will focus on core technology development and the infrastructure and equipment of working, which is the most important stage.
3-4 years: Continue to strengthen the construction of basic equipment and advertising to attract more students.
5-6 years: To occupies most of the market share. Focus on develop the enterprise culture.
7-8 years: To be the leader in the industry. Promoting the value of brand.

| |Interest |Net profit |
|1-2 years |No payback |No payback |
|3-4 years |10% |15% |
|5-6 years |15% |10% |
|7-8 years |15% |20% |

As this table the company can see clearly that at the beginning, our company won’t get profit. This is because the company put most attention on build the basic equipment and put many advertises into market. In the following years, there will be a larger profit.

8. Key risks and challenge

Organizational risks
Management: The Company has very small scale of employees in the early stage, so the burden of employees is too heavy, which may contribute to resentment and complains. How to mitigate these problems is the challenge. The company has a plan to attract the high-performance staff to the company, which can also explore the further development of existing employees.

Currency risk: with the global economy and the currency, it will be harder to make more money in Philippines.

Enterprise risks
Market:
As just entering the market, our company may have difficult in introducing new way to education into the Philippines market that will require a change in purchasing habits.

Pricing strategy:
Less experience on service pricing and customer spending habits is the challenge when the company just enters the market.

Branding:
The Company expects his own brand, with its great quality of service. And product quality and customer service will be the focused points for the increasing plan of brand.

9. Conclusion

The investment project has great potential in Philippines. The report shows clearly that the company will recover cost in 4 years. Also, there is a great profit in a long term. Therefore, the company could consider the feasibility of the plan for investment.

10. Bibliography

Birnbaum, M. 2004, ‘Human research and data collection via the Internet’, Annual Review of Psychology, vol. 55, pp 803-4

Carle, C, Jaffe, D and Miller, D. 2009, ‘Engaging college science students and changing academic achievement with technology: A quasi-experimental preliminary investigation’, Computers & Education, vol.52, No2, pp. 376-81.

Kandiri, J. 2011, ‘ICT Policy in Kenta and ways of improving the existing ICT policy’, Personal Australia, NSW

Kaur, J. 2012, ‘Importance of ICT and E-Governance Security’, Global Journal of Computer Science and Technology, vol. 12, No 2, pp 1-10

McDonald, B. 2009, ‘Appropriate Distance Education Media in the Philippines and Mongolia’, Technical Evaluation Report, vol. 10, No 3, pp 5-7

McMahon, G. 2009, ‘Critical thinking and ICT Integration in a western Australian secondary school’, Educational Technology & Society, vol.12, No4, p 269

Samuelsson, J. 2006, ‘ICT as a change agent of Teaching, Education and Information Technologies, vol. 11, No1, pp 71-9

Smith, G. 2008, ‘The effects of ICT use in education’, Education, vol.24, No3, pp 95-9

Yang, C. 2009, ‘A successful technology integration in schools to improve the effectiveness of elementary school administration’, In Proceedings of World Conference on Educational Multimedia, Hypermedia and Telecommunications 2009, p1098