The School of Autism - Research Proposal Example

? Research Proposal of the Executive Summary Children with special needs require special care and assistance to grow as normal kids. Schools of Autism make special arrangements to fulfill these needs. Business plan for school of Autism is a step to address this need. Hand By Hand school of autism provides quality as well as lowers financial pressures on parents of autistic child. The strengths of the school include its strategic planning, well proven management and location advantages. But there are some pitfalls too such as narrow range of courses, low marketing skills hence weaker positioning of brand in customer’s minds. But if the school offers more courses and adopts a more flexible policy it can achieve much more than planned. Threats posed to school include recession in industry as well as changes in government policies or in legislature. Demographic or cultural shifts can also be lethal. Hand By Hand school of Autism will focus on the kids aging from 5 — 12 years with the autism disorder. Business is a venture of four partners where all of them are responsible for equity in the ratio of 1:1:1:1 and for management too. All are business graduates hence understand the processes and plans completely. Specialized faculty will be hired in order to maintain the standards of the school. Class room environment will be of special importance. Courses will be in accordance to the needs. Feedback will be given to the parents on regular basis. Students will have regular sessions with the psychologist in order to examine their mental health. School will help parents diagnose and assess the disorder and help cure it at early stages. School will help the kids with speech therapy, physical education, music education and outdoor activities to overcome their disabilities. School website will contain effective advertising material along with description of services the school is providing. Faculty will be introduced on our webpage to make the parents know about them. Students’ attendance record can also be checked by the parents online. Financial statements are projected at the end and some graphs are given to show the growth and profitability ratios. Vision We aspire to be most reliable and quality oriented autistic institution in Canada with an emphasis upon excellence. With excellence in quality, we also give importance towards lowering the expense of the parents. Thus, we aim to provide quality service at an affordable price. Mission To fulfill our vision we provide an encouraging and conducive to growth environment to the learners along with inculcation of excellent academic as well as extra-curricular skills to make them productive citizens. Our programs are designed in such a way that all around development of the individuals are facilitated. The programs are designed after consulting the doctors and experts. The teachers who will be hired will have significant experience in this area. Table of Contents Executive Summary 2 Vision 3 Mission 3 Industry Analysis 6 SWOT Analysis 6 Porter’s Five Forces Model 7 The Idea 8 The market 9 Competition 10 Value Proposition 10 Market strategy 12 Marketing Objectives 12 Risk 15 Financial 16 Sensitivity 17 Operational Timelines 19 The Team and Advisory Board 20 References 24 Appendix 25 The Industry Every business operates among a group of firms, who produces competing services and products, which is termed as an industry. In simple words, industry can be referred to as a group of organizations, who are dealing in identical services and products. Although there is a significant amount of differences between the competitors, yet every industry has their own set of rules regarding the price, product and distribution (C.A. Rao, B.P. Rao & Sivaramakrishna, 2009). Before starting any new business, it is important for the strategic manager to understand the structure and then decide on the ways in which the firm will be competing with other competitors. Therefore, industry analysis is a critical step in framing the strategies. Strategy is the action plan that shows the way in which the resources will be invested in the business and business opportunities will be utilized optimally (Longenecker et al., 2009). As per the recent reports of National Epidemiologic Database for the Study of Autism in Canada, the number of children suffering from Autism has increased dramatically in three provinces of Canada namely southeastern Ontario, Newfoundland and Labrador and Prince Edward Island. This is possible because of improved diagnosis and wider screening. The experts have suggested that environmental factors are responsible for the increasing rate of autism. The increase ranges from 39 percent to 204 percent depending on the age group and region (Bell Media Television, 2012; 2013). Laurie Mawlam, the spokesperson of Autism Canada claimed that autism is a problem in public health and it requires lots of attention. According to the experts, autism is an emergency in the public health and requires immediate action from the government. Apart from this, the most important thing that needs special attention is that the parents of the autistic children must concentrate on the development of the child, which can lead to improvement of their life. This suggests that more schools required to be opened in the worst hit three provinces of Canada, so that the development of autistic children can be done properly. Therefore, it can be concluded that this industry is a booming one and can create better returns. Industry Analysis SWOT Analysis Strengths: Our strengths would be well thought out business plan along with proven management. An edge over others would be the location advantages and well conceived operational plan backed by adequate financial resources. Weaknesses: Our weaknesses will be in Research and Development field and lagging behind in marketing strategies which ultimately creates a weaker image in customer’s mind. Limited range of courses offered would be another weakness hindering our growth. Opportunities: We can offer additional courses to meet customer needs and grow our sales. Adding other customer segments to our profile would be another advantage that will increase our sales. Expansion of services will help in faster market growth rate. Threats: Less student growth would pose a major threat to us as it is an indicator of low acceptability in market. Declining business cycle and recession in the industry would be another threat that needs a strategic plan to cope with. Growing bargaining power of customers as well as suppliers as well as changing stakeholders’ needs may also pose a serious threat to the business. Porter’s Five Forces Model Porter’s five forces include: 1- Bargaining power of customers 2- Bargaining power of suppliers 3- Competitive forces 4- Barriers to new entrants 5- Development of substitutes Bargaining power of customer varies according to the demand. Costs should be clearly mentioned including tuitions and services to the customers to avoid any ambiguity and reasonable prices should be maintained. Bargaining power of suppliers gets high when services are specialized. Teachers hired from associations or research organizations may cost a lot and that needs to be handled tactically as cost of services would be among major cost after fixed asset costs. Competitive Forces are also critical for any business. Few of our competitors include: Swan Lake school of Autism British Columbia School for Autistic children Society Center of Autistic Children New entrants to the market also pose a major threat as they can copy the operational design or marketing strategy easily. Development of substitutes is also critical as it significantly drops the sale of existing services. The Idea This is business plan related to building a school for autistic children. Autistic children are children with special need that requires special assistance and care in order to grow as normal kids. School of Autism is engaged in providing special arrangements in order to cater their needs. The business plan for such a school is targeted to address this need. Moreover, the increasing number of autistic children in various provinces of Canada makes this business a very special one. This school aims to provide quality services related to teaching and other developmental activities, which will improve the life of the children with special need. High financial cost has been one of the biggest problems from which the parents of the autistic children are seemed to fight. Autistic children receive various types of behavior therapy in order to improve their coping and communication skills, which depend on the time when the diagnosis is made. The cost that is involved in the treatment varies from province to province; but on an average the therapy requires a cost of $60,000 per year. This business will also aim to reduce the financial pressure on the parents. The main idea behind the business is to provide quality along with affordable price to the parents, who are looking for improvement in the child’s life. The market Before starting with any business plan a clear understanding regarding the market in which the business will be operating is very important. The business should closely study the market; identify its target customers as well as their needs and wants. Therefore, before starting the business and framing the strategies it is important that the target market for the business should be decided and the wants and needs of the customers are analyzed properly so that common characteristic can be identified, to which the business will cater. Target customers are the key to survival of the business (Hiduke, 2013). The current market situation is such that the number of children with autism has increased dramatically, which has aroused a major concern not only amongst the parents but also among the government. Parents are now trying to train their children such that, they can lead a normal life like other children. At the same time, the parents are also concerned regarding the costly treatment that the children suffering from autism require. The reports suggest that the increase in the diagnosis of autism is higher among the boys of Newfoundland. The prevalence of autism is seen to level off among the children between the age of two to four in southwest Ontario. Children are diagnosed with autism generally after the age of five years. Thus, Newfoundland and southwest Ontario present two potential markets where the business can grow. However, the business has planned to open its first school in the market of New Brunswick Atlantic Canada area, but has plans to open branches in the above mentioned places too. The business will be targeting the parents who are having low income level and having autistic children between the ages of five to twelve years. Quality assurance is a very important factor that must not be hidden or missed in the case of social care. In the recent year accomplishment of quality through quality assurance has become important while designing, organizing and delivering social care (Morgan, 1996). Competition Competition plays an important role in the success of a business. Evaluating the strategies followed by the competitors will allow the business to design the strategy and direct them to the target customers. Apart from this, an idea about the competitors will also allow them to penetrate the market more easily. The business can gain competitive advantage over the competitors if they are aware of the strategies adopted by the competitors. The situation of autistic education market in Canada is such that this business is having quite a significant amount of competitors. The major competitors between them are Swan Lake school of Autism, British Columbia School for Autistic children and Society Center of Autistic Children. Apart from all these existing competitors, the business also has potential threat from the new players entering into the market. The dramatic rise in the number of children suffering from autism has made this industry quite lucrative for the new players. So the business needs to scan the market from time to time to find out any new threat entering into the market and make changes in their business accordingly. Value Proposition In simple terms, value proposition is defined as the benefit statement for the offering made by the business. In order to construct the value proposition of the business, an in-depth understanding regarding the choice and preferences of the customers should be gained, so that the organization is able to provide a solution to these choices (Hax, 2009; Makakane, 2013). Apart from this, the business also requires to assess their strengths and weaknesses, so that they can work on their weak points and eliminate them. At the same time their strengths can be highlighted so that customers can be attracted using these strengths. Before defining the value proposition of the business, an analysis has been conducted in order to identify the strengths of the business, so that the value proposition of the business can be understood well. Hand By Hand School of Autism is having an advantage of location. The school will be having its branches in locations, which are easily accessible by the customers and at the same time the demand for such schools is also high. The management of the business has huge experience in this area, which would help the business in bringing new innovative ideas and techniques. The business will be starting up with huge amount of capital and excellent operational strategies, which would make the business stand apart from the rest of the school. Apart from these, the main values that the school provides is superior quality services along with lower cost that will reduce the financial pressure, regarding which many of the parents has been struggling long. Hand By Hand School of Autism will not only teach the children but will also diagnose the problems at a very early stage. It will be having 8-10 specialized teachers with specialized counseling and teaching skills. The regular timetable of the children will be designed in such a way that part from the study and co-curricular activities they will also get some time to relax. The furniture will be designed such that they create a nice and comfortable environment for the children and nurture their overall development. At any point of time, the parents can provide feedback regarding any changes that they want in the school. The management will be looking very seriously towards the feedback and will work on them. Special care will be taken regarding the psychological health of the children and will be monitored from time to time. Reputed psychologist will be invited on a regular basis in the school, so that the children can be monitored. Market strategy Marketing is an important function of the business process. Like all other functions that run in a business process, marketing is the function that connects the customers to the business and assists the business in accomplishing its organizational objectives. Marketing is “the process of managing the flow of product from the point of conception to the point of consumption” (Ferrell, 2012, p.7). Apart from this, the process of marketing also encompasses the responsibility of delivering value and managing the relationship with the customers. The marketing strategy is framed such that the marketing objectives of the organization are accomplished Marketing Objectives Customer value and satisfaction Creating strong position To achieve better market share Try to increase growth rate Provides high quality In order to accomplish the marketing objectives, the following strategies are followed by the business. For a school, the services it offers are the main factor that attracts the customers. Hand By Hand School of Autism is planning to attract the parents of the autistic children. The requirement of the parents is a school that has professional faculties, who would not only impart education, but also improve the way the children lead their life through various therapies. The business will be offering superior quality services to the customers at an affordable price. The services that the business will be offering are assessment and diagnosis of Autism disorder, formal education, speech therapy for the children, physical and music education and other outdoor activities. Recently a research has proved that the children who are suffering from autism are seen to benefit heavily from the outdoor classroom. Researchers have proved that children left in green surrounding reduce the symptom of Attention deficit hyperactivity disorder (ADHD) (Gordon, 2013). The school will also have faculties, who are experts and have professional degrees in teaching the children with special need. Apart from this, various therapists will be also appointed on a part time basis that will be taking care of the children. In Canada there is large hue and cry among the parents with children with special need regarding the rising costs, which are difficult to bear (Mayer, 2013). In this regards they are more inclined towards the schools that are providing the services at an affordable price. The price of the services that Hand By Hand School of Autism will be demanding will be maintained at a reasonable standard. It will be fixed after judging the prices charged by the competitors. In order to reduce any type of ambiguity among the customers, the school will be clearly mentioning the cost that they are charging for the services and the tuition they provide. The location where the business will be operating should be set such that they are easily accessible to the customers. The business will be focusing on the market of New Brunswick Atlantic Canada area and on the children with special need. Hand By Hand School of Autism will be operating in such a location where the parents will be getting ample means of communication. Apart from this, for the children, the school will be having their pick and drop facility. The business will be highlighted in this area since there they would find more number of potential customers. In order to promote the business, the organization will be placing advertisements in the television channel and local newspapers. Apart from this, they will be hosting events in various places like book fairs, etc. They will also mark their presence in the city conducting workshops with the parents and their children related to parental care. In these workshops specialized doctors can be brought, in order to suggest the parents how to take care of the children with special needs. The school will also organize certain events in which the children with special needs will be participating. The school will not only concentrate on the academics of the child but also on the extracurricular activities, in order to facilitate the overall development of the child. School website will contain effective advertising material along with a description of services the school is providing. Faculty will be introduced on our webpage to make the parents know about them. Students’ attendance record can also be checked by the parents online. Risk Risk is defined as the possibility of loss. Risk is very common phenomenon in the business. The type of risk can vary from business to business (Saita, 2010; Miles, 2011). The risks that the Hand By Hand School of Autism can suffer are mentioned as follows: Compliance Risk: Compliance risk can occur if the organization fails to meet the laws and regulations related to taxation, health and safety of the employees. Since, it is school therefore the organization needs to keep an adequate amount of safety equipments. Apart from this, the business also requires to keep a watch on any changes that can take place in the laws and regulations. This risk can be mitigated if the business follows all the rules and regulations properly. Employee Risk: Employee risk is related to the human capital employed in the business. This risk is caused if the employees are ill or they are on strike such that the production or the daily operations of the organization are getting hampered. This will also lead to poor customer service. The risk can be mitigated by effective and efficient steps from the human resource department, so that the employees are happy and deeply motivated towards their work. Financial risk: Financial risk is related to the financial aspect of the business such as business transactions. This risk can occur if the business has only one customer base to cater. It may be also caused if the business is running short of capital and has a high amount of loans in the market. This risk may lead to loss of customers and also loss of cash flow in the business. Operational Risk: Operation risk is related to any type of loss resulting from the operational process of the business. Inappropriate record keeping, use of outdated IT system or any type of incident that hampers the day to day operations of the business are the factors that may cause operational risk. In order to mitigate this risk, the organization is required to continuously monitor their day to day operations and replace the backdated system by the new and improved one. Financial Before starting any business it is important to decide on the financial aspect and get prepared to meet any future consequences. A projected income statement and balance sheet are very important while deciding on the budget of the business. This will help in identifying the sources that are responsible for generating income and the resources for which the organization will be incurring costs. While calculating the projected profit and loss statement and balance sheet for the first three years certain assumptions are made by the organization like interest rate has been assumed to be at 10 percent, the long term interest rate is 10 percent and the tax rate has been assumed at 30 percent. The total project cost has been calculated to be as $ 10,000,000 million. The owner of the business has decided to pay 50 percent of the total initial cost and the rest 50 percent will be obtained from the bank loan. The business is expected to generate an income of 55440000 in the first year and that income will increase in the next five years. In the first two years the gross profit is seen to increase while in the third year it is expected to fall. In the fourth and fifth years it will again show a rising trend. However, the profit after tax is expected to show a continuous rising trend after the loss in the initial first year (See Appendix). The balance sheet (See appendix) shows that the total assets of the business will be showing a rising trend. The liabilities will be showing a decreasing trend over the five years. The ratio analysis shows that the current ratio is higher than the industry standard and will increase in the coming years. The higher current ratio indicates that the organization will be having higher current assets that can be easily turned into cash to meet any liability that occurs in the future. However, the organization will not be in a better position as compared to the industry standard in regards to the position of total debt when compared to total assets. Return on equity is also seen to rise. The asset turnover ratio is seen to decrease over the three years which is not good. This shows that the organization is not using their assets efficiently in generating the revenue. The debt to net worth is showing a downward trend, which indicates that the business is mostly financed by retained earnings or investors. The acid test ratio shows that the firm is in good position and this position is seen to improve over the period of three years. Sensitivity SWOT/ Internal Analysis Strengths: Well thought out business plan Location advantages Well proven management Adequate financial resources Well conceived operational strategies Weaknesses: Falling behind in R&D Weak image positioning in customer mind Low marketing skills Narrow range of courses offered Vulnerable to competitive pressures Opportunities: Serve additional customer groups Enter into new market segments Expand courses to meet changing customer needs Diversification of services Faster market growth Threats: Likely entry of new competitors Slower student growth rate Vulnerability to recession and business cycle. Growing bargaining powers of customers Changing stakeholder needs External Factor Analysis Many internal as well as external factors influence business growth and stability. External factors that influence business usually include external environments like industry growth, Legal and governmental factors, social and cultural factor, demographic factors or natural factors such as floods, recessions, earthquakes, etc. Out of these many influences some affect the business adversely. Changing government policies, legislature changes, population or cultural shifts may change the business needs and thus trigger the change in business’ strategic direction. Government Factors: If at any point of time government brings a major change in education policy the school has to follow and thus school has to make changes in its rules too. Legal factors: Any changes in legislature may cause changes in school’s policy and hence affect the business. There should be room for such changes and should be adopted in accordance with the new laws and regulations. Social factors: Rapidly changing social and cultural values may demand changes in school’s courses or teaching methods. Therefore the plan should be flexible so as to meet the changing needs of the customers. Operational Timelines Table 1 Month Particulars 1 2 3 4 5 6 7 8 9 10 11 12 Market research Determining the location Completing legal formalities Construction of school building Setting up furniture and fixtures Promotion Hiring the teachers and other staffs Admitting and commencing the first session The Team and Advisory Board Form of Business: Business is a limited company owned by three members jointly. All of the four members are active partners. There is no sleeping partner. Every partner takes active part in company’s activities and holds the responsibilities assigned to him/her. Authority of control: Waleed is the head of the company who is selected by consensus of board of directors. He is the figurehead of the organization. Members of board of directors head various departments. Democratic style is adopted to elect the chairman of the company. The person who gets majority votes is elected. Board of Directors: There are three board members including chairman of the company. Here are the details regarding background of board members: Waleed S. Alghassab Chairman MBA-Project Management Saeed Alomari Member board of directors MBA-GM MohammadHossein Meyghani Member Board of Directors MBA- IB Roles and Responsibilities: Management has following roles and responsibilities: Name: Muhammad Farzan Arshad Position: Principal Address: Gulfishan colony, Faisalabad Role and responsibilities: Name: Badar Amanullah Position: Head of Finance & Member Board of Directors Address: D-ground, faisalabad Roles and responsibilities: Name: Shafaq Yousaf Position: Head of Production & HR deptt. Address: Tariqabad Faisalabad Roles and Responsibilities: Name: Amina Ghaffar Position: Head of Marketing Dept. And R&D Address: Gulistan Colony, Faisalabad Roles and Responsibilities: References Bell Media Television. (2012). Autism on the rise in Canada, U.S.: studies. Retrieved from Bell Media Television. (2013). As autism rates rise in Canada, doctors search for answers. Retrieved from < http://www.ctvnews.ca/health/health-headlines/as-autism-rates-rise-in-canada-doctors-search-for-answers-1.1264677>. Ferrell, O.C. (2012). Marketing strategy text and cases. 6th Ed. Connecticut: Cengage Learning. Gordon, A. (2013). Kids with autism benefit from outdoor classroom. Toronto Star Newspapers Ltd. Retrieved from . Hax, A.C. (2009). The delta model: Reinventing your business strategy. Berlin: Springer. Hiduke, G. (2013). Small business: An entrepreneur's business plan. Connecticut: Cengage Learning. Longenecker, J.G., Donlevy, L.B., Calvert, V.A.C., Moore, C.W., Petty, J.W. & Palich, L.E. (2009). Small business management: Launching and growing new ventures. Connecticut: Cengage Learning. Makakane, M. (2013). When is enough, enough?: Ten things any aspiring entrepreneur needs to know to start and run a successful business. Indiana: Xlibris Corporation. Mayer, A. (2013). Parents of autistic children 'exasperated' by financial costs. CBC News. Retrieved from . Miles, A. (2011). Risk factors and business models: Understanding the five forces of entrepreneurial risk and the causes of business failure. Florida: Universal-Publishers. Morgan, S.H. (1996). Adults with autism: A guide to theory and practice. Cambridge: Cambridge University Press. Rao, C.A., Rao, B.P. & Sivaramakrishna, K. (2009). Strategic management and business policy. New Delhi: Excel Books India. Saita, F. (2010). Value at risk and bank capital management: Risk adjusted performances, capital management and capital allocation decision making. Massachusetts: Academic Press Appendix Projected Income Statement Year 1 Year 2 Year 3 Year 4 Year 5 SALE 55,440,000 75675600 75675600 97796160 114559033 COST OF SERVICES Payroll (Salaried Staff) 4,614,000 5,075,400 5,582,940 6,141,234 6,755,357 Machine Maintenance 27,000 35,451 44,068 47,291 47,764 Direct Electricity 357,159 392,874 432,162 475,378 522,916 POL 277,200 378,378 378,378 488,981 572,795 Stationary 138,600 189,189 189,189 244,490 286,398 Freight 792,000 1,029,600 1,267,200 1,346,400 1,346,400 Total 50,798,709 53,923,280 57,057,444 60,365,456 63,734,396 Gross Profit 4,641,291 21,752,320 18,618,156 37,430,704 50,824,637 OPERATING EXPENSE Payroll (Admin) 1,236,000 1,359,600 1,495,560 1,645,116 1,809,628 Payroll (Marketing) 648,000 712,800 784,080 862,488 948,737 Fixed electricity 270,220 297,242 326,966 359,662 395,629 Insurance Expense 85,950 77,355 68,760 60,165 51,570 Administrative & FOH 1,663,200 2,285,403 2,300,690 2,993,151 3,529,802 Amortization (Pre-operational Expenses) 46,030 46,030 46,030 46,030 46,030 Depreciation 286,500 286,500 286,500 286,500 286,500 Total 4,235,900 5,064,930 5,308,585 6,253,113 7,067,895 Operating Profit 405,392 16,687,390 13,309,571 31,177,591 43,756,742 NON-OPERATING EXPENSE Financial Charges on Running Finance 892,053 1,914,858 431,845 0 0 Building Rental 1,050,000 1,155,000 1,270,500 1,397,550 1,537,305 Total 1,942,053 3,069,858 1,702,345 1,397,550 1,537,305 PROFIT BEFORE TAX 1,536,661) 13,617,533 11,607,226 29,780,041 42,219,437 Tax 0 3,404,383 2,901,806 7,445,010 10,554,859 PROFIT AFTER TAX -1,536,661 10,213,150 8,705,419 22,335,031 31,664,578 Balance sheet Current Assets Cash 200,000 200,000 6,972,500 26,204,095 55,555,796 Equipment Inventory 2,250 2,954 3,672 3,941 3,980 Up-Front Insurance payment 77,355 68,760 60,165 51,570 42,975 Receivable 8,316,000 11,351,340 11,351,340 14,669,424 17,183,855 Pre-paid building rent 1,155,000 1,270,500 1,397,550 1,537,305 1,691,036 Total 14,432,844 17,809,905 24,947,395 47,886,611 80,168,933 Gross Fixed Assets 2,865,000 2,865,000 2,865,000 2,865,000 2,865,000 Less: Accumulated depreciation 286,500 573,000 859,500 1,146,000 1,432,500 Net Fixed Assets 2,578,500 2,292,000 2,005,500 1,719,000 1,432,500 Intangible Assets Pre-operational Expenses 414,270 368,240 322,210 276,180 230,150 Total 414,270 368,240 322,210 276,180 230,150 Total Assets 17,425,614 20,470,145 27,275,105 49,881,791 81,831,583 Current Liabilities Running Finance 9,574,288 2,159,224 0 0 0 Accounts payable 4,927,724 5,174,169 5,432,935 5,704,590 5,989,804 Total 14,502,012 7,333,394 5,432,935 5,704,590 5,989,804 Long-term liabilities Long-term Loan 0 0 0 0 0 Total 0 0 0 0 0 Equity Paid-up Capital 4,460,263 4,460,263 4,460,263 4,460,263 4,460,263 Retained Earnings -1,536,661 8,676,489 17,381,908 39,716,939 71,381,516 Total 2,923,602 13,136,751 21,842,171 44,177,201 75,841,779 Total Liabilities And Equity 17,425,614 20,470,145 27,275,105 49,881,791 81,831,583 Read More