Executive Summary To prepare for the examination of financing sources, write a t
ID: 464147 • Letter: E
Question
Executive Summary To prepare for the examination of financing sources, write a two- to three-page (not including the title and reference pages) Executive Summary for a Business Plan. Use the template below to develop your executive summary. You must include a minimum of two scholarly or professional resources to support your summary. The Executive Summary must include: Company Background Here you will provide some information about your company and its primary objective. This information is designed to give your target audience an idea of the services or products that your company provides. This section should be two to three paragraphs. Describe the background of the company. Be sure to address the following questions: What is the company’s principle objective? Where is the company located? When was it founded? Describe the uniqueness of idea: Is the idea an opportunity? Business/Product or Service Describe your product or service in greater detail. If multiple products or services are offered, describe them in the order of significance. This section should be one to two paragraphs. Explicitly, what products or services does your organization offer? What is the order of significance of the products or services? What is the product or service’s stage (introductory, growth, maturity)? (Note: If your company is new, it would be introductory; if it’s ongoing but looking to expand, it will be in the growth phase. If your product or service has reached maturity, it indicates market saturation, and you are seeking funds to change or alter your product to remain competitive.) What are your future plans to further develop your product or service? Protectability of idea: Is a patent needed? The Market Define and describe your market (i.e. athletic apparel, consulting services, business software, and restaurant equipment). You will need to do research and justify to your perspective investors that your product or service is meeting a need that is currently missing in the industry. You need to establish this justification by describing the gaps in the industry and how your product or service closes those gaps. This section should be your largest section because it requires research; three to nine paragraphs. What is the current size of the market? How much of the current market size can you capture (i.e. what percent)? Does your business have current customers or customers that have expressed interest in your product or service? (This is optional but beneficial if there are customers) Capital Requirements Discuss your financial requirements and plan in this section. You will need to provide a clear description about required finances and how your company plans on using funds. It’s always best to overestimate by 30% to cover the cost of areas initially missed. Financial requirements: Are the financial requirements consistent with the business opportunity and targeted market? Funding: Is the idea worthy of external funding; what external funding source are you considering (bootstrapping, angels, venture capital, bank financing, etc.)? How will you use the money?
Explanation / Answer
Executive Summary - The company that I am planning to start will be involved in the area of providing primary education to children in the age group of 2 years to 6 years through opening a chain of pre-schools or play schools. The company will also develop educational materials for children in the age group of 4 years to 11 years that will help them grasp the various mathematical concepts through activities and in a practical manner. The company will be called "NEWGEN EDUCATION".
The company will start operations in California and then will aim to have a pan nation presence through a mix of company owned schools as well as franchise model expansion. The company has just been founded i.e. in June 2016.
The idea is unique as the teaching method that will be used will be unique. The company will be using an eclectic method of education which incorporates the best practices of different methods like play way method, Maria Montessori method etc. The focus will be to develop the left brain as well as the right brain of a child. Another unique concept is the thought of teaching mathematical concepts through activities (and without the use of mathematical formulas). This will make the learning meaningful. The idea is an opportunity as there is a latent demand that is untapped and there is a huge commercial potential for this type of education and learning.
In terms of the stage of the offerings, the stage would be introductory as the company is very new and has just recently started operations. The future plans is that once the offerings are well accepted in the US market, the service offerings of teaching mathematical concepts through activities can be expanded on a global scale.
The idea needs to be protected through a patent. The idea to teach mathematics is an invention and this unique idea will have to be protected through a patent.
The market for my offerings is the market for primary education and the market for after school activities. The activity based mathematics classes will be provided as after school classes. There is a need, in the education industry, to develop both the right and left side of a child's brain. The current focus is to teach the child formulas, derivations etc. where a child uses just a part of the brain. Our offerings would focus on the basics where problems can be solved without using formulas i.e. in a creative manner. My service offering is aiming to fill this gap in the education industry.
The US early education industry is a USD 70 billion and my company hopes to capture a 5% market share of this industry in the first ten year of its operations. Yes, market research that was conducted by the company showed that many people are interested in the service offerings being provided by us in different states in the country.
In the first year of operations we intend to start with just five schools in the state of California. Each school will require an investment of around USD 100,000 to USD 150,000. Thus total investment for the five schools will be in between USD 500,000 to USD 750,000. In terms of funding 40% will be financed by capital provided by me (the owner). So, around USD 200,000 to USD 300,000 will be funded by me from my personal savings. The remaining 60% i.e. USD 300,000 to USD 450,000 will be funded through bank financing. Thus the debt equity ratio will be high initially i.e. 60/40 or 1.5. The debt will be paid off every year and we hope to stabilize at a ratio of 0.8 (debt = 80% of equity). The total funding will be used to raise the infrastructure (fixed assets) and for the initial working capital financing.
Sources for the summary:
1. http://articles.bplans.com/writing-an-executive-summary/
2. http://www.investopedia.com/university/business-plan/business-plan3.asp
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