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Distance Education Company - Business Plan Example

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Summary
This business plan "Distance Education Company" focuses on Strategic International Learning (SIL) which is a distance learning company that offers courses on the Bible and complementary alternative medicine. SIL operates from a scalable, remote proprietary and centrally hosted virtual campus…
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Distance Education Company
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Extract of sample "Distance Education Company"

International Business Plan for a Distance Education Company Introduction Strategic International Learning (SIL) isa distance learning company that offers courses on the Bible, as well as complementary alternative medicine, CAM, online. SIL operates from a scalable, remote proprietary and centrally hosted virtual campus. The company generates content licensing, E-learning tuition revenues, E-commerce, email marketing, and investor valuations (Johnson 44). SIL strives to be the biggest provider of Bible and CAM content on the internet. In order to succeed, SIL needs to have online tools that are fully interactive and easy to use. User satisfaction is an ultimate priority. It also needs to leverage its market position in Bible content and CAM knowhow and transfer this into E-learning courses, which in turn, will result in profits through its PYUT virtual campus. Its sales strategy must be flexible and easy to administrate in order to accommodate its requirement to run a lean organization (Fischler School of Education and Human Services 154). Finally, the offered E-learning should establish the company’s presence as a major market player in it niche by not only retaining older customers, but also attracting new ones. Market Analysis There is a high prevalence of alternative medicine use, as well as expenditure on the same, in the developing world. At least sixty percent of the population in most developing countries, in sub-Saharan Africa, with over $1.5billion used on CAM in developing countries annually (Goldstein 54). This prevalence and expenditure in CAM increased gradually and steadily from 2001 to 2011. The system for delivery of health care is undergoing a paradigm shift with pioneers of CAM now being acknowledged. Data mined from health-oriented websites gives some general information on the target market for CAM. These websites attempt to address new and medically proven, as well as scientifically valid non-drug and non-surgical treatments to relieve pain and restore full bodily functioning. They also address surgery free and drugless cures, which they provide on their websites. Additionally, over one million sufferers visit these websites annually and pay extortionate rates to download information regarding alternative medicine. Proven alternative research into alternative medicine is now available on numerous ailments including enhancement of longevity, safer hormone treatments, cancer treatment without radiation or chemotherapy, and normalization of diabetes induced high sugar levels (Goldstein 55). Most doctors in the developing world do not have training, time, or staff resources to handle alternative medicine in the developing countries. Most providers of health care have trouble keeping up with professional reading without having to learn more regarding alternative medicines. Patients in developing countries, which now are the fastest growing market for internet-enabled mobile phones, are increasingly turning to the internet for information on symptoms and diseases (Keegan 67). At the grass-root level, demand for alternative medicine driven by patients before the disease gains pace has gained momentum over the last few years. Leading futurist medicine advocates, including Dr. Eisenberg of Harvard Medical School, point to various factors regarding the future of medicine in the developing world. The consumer now drives totally the demand for physical well-being and CAM is health care’s next wave. Additionally, CAM shows all the signs of social reform (Keegan 67). Resulting from this demand and new information supply, the internet-literate consumers of health care are now ahead of health care providers (Rakel et al 22). “Traditional” medicine is attempting to catch up to the consumer. SIL aims to become a vital and important provider of information to academic institutions, governments, and corporations. The World Wide Web and the internet are vital in the delivery of information seamlessly and instantly around the developing world to B2B clients, who are in need of providing this information that consumers seek so eagerly. Courseware in E-learning is a key system of delivery in the training of professionals in academic institutions, government, and corporations in the provision of accurate information on CAM (Moore & Greg 45). E-learning is ranked as the most promising and fast growing market segment in the education industry. The primary target markets for SIL’s E-learning products and services are inclusive of four vertical markets. These are providers of alternative medicine courseware, which are corporate identities who provide other entities with CAM training and content courseware. In addition, health professionals who need to provide information regarding CAM to their associates and peers (Moore & Greg 49). In addition, these products will also be aimed at healthcare institutions, including academic and government facilities that need to give CAM courseware to their patients, collaborators, and staff. Finally, SIL will also target Christian seminaries and theological markets who wish to provide and/or train on Bible content to sympathizers of their respective religious dominations. From 2001 to 2011, the number of adults in sub-Saharan Africa who utilized alternative medicine rose from 12% of the population to 39% of the population and is expected to keep rising (Micozzi 34). Visits to CAM practitioners rose from 75 million to over 100 million. Total spending on alternative medicine in 2011 was $1.5 billion it raised from half a million in 2001. During this period, visits to primary health care providers dropped by 4%. The demand for alternative medicine and therapy is noteworthy because of the low rates of insurance for the service, especially among the literate working population in these countries. Private corporations and academic institutions have adopted a posture that is more proactive in regards to implementation of basic and clinical research and the development dietary supplements. Dietary supplements have been on an upward trajectory in the developing world (Micozzi 35). Financial Plan This business plan is an E-learning and internet venture that is dependent on the financial prospects of developing countries and their parallel growth in the E-learning and internet world. In order for it to work financially, SIL has to increase schedule valuation in order to bring in added capital (Dlabay et al 22). The tables below define investor’s investing offerings. More specifically, the plan visualizes a valuation of $20 million pre-money with an IRR of approximately 180% for every investor during this round. The exit strategy for the company will be an IPO to be held in 2016 that should value the company at $80 million or $150 million if the valuation is based on conservative sales multiples or conservative earnings of 2 and 10 respectively (Connolly 45). Important general assumptions are that SIL will see continued growth of internet use and E-learning in the developing market. At least 10% of the population in developing nations are currently using the internet, which is expected to grow to 20% by the year 2015 (Moore & Greg 56). Therefore, E-learning is a potential growth market and is expected to double within five years. At $1 billion in 2011, corporate E-learning is expected to hit at least $2 billion by 2015. In addition, there will be sustained support from the financial markets meaning that E-learning companies will continue to grow in spite of the melt down being seen with internet companies (Moore & Greg 56). The increase in valuation is vital to SIL’s financial strategy. Budget Assumptions All areas of budget Material Assets Leasehold Improvements The improvements that are to be done should adapt to the requirements of the company Laboratory Equipment The company assumes that there are centralized laboratory facilities Immaterial Assets Package, image, website & Corp Costs are related to the creation of websites, presentation materials, brochures and the logo Own Intellectual Property This includes the preparation, international and national filing, and maintenance of patents. The average cost of this per major patent family will be $15k in the first year, $25K in the 2nd, and 40k in the 3rd. This assumes that there will be an average of two new patents for every year during the period of the plan. Corporate Software Management, accounting, and scientific software leases and purchases Capitalizable expenses of R& None, all these will be costed out (Stutely 63) Human Resources Non-executive Board directors The plan assumes that board compensation will only be given to non-executive officers Scientific Advisory Board It is assumed that SAB membership and board of directors compensation, which can not be cumulated Salaries If, for example, salaries cost equal 67% of total HR costs then there should be balanced distribution among social, leaving indemnities and other costs. It assumes that the cost of salaries will equal 56% of all Human Resource costs with the balance distributed among leaving indemnity, social and other costs. (Stutely 64) Profit & Loss Sales This plan assumes a 5% growth per month in courses sold in the period No. Of Starting Courses sold per month 3,750 Monthly growth rate 105% Average per every person E-learning courses tuition revenues $500.00 Additional revenues 20% of tuition in aggregate from E-learning revenues in year 1, 15% in the 2nd, and 10% in the 3rd. E-Train-the Trainer Revenues This is assumed at 7% of the tuition from E-learning in the 1st year, 4% in the 2nd, and 3% in the third Portal Development Revenues This is assumed at 7% of the tuition from E-learning in the 1st year, 4% in the 2nd, and 3% in the third Email marketing fees 4% of revenues from E-learning tuition in the 1st year, 2% in the 2nd, and 2% in the 3rd. Product sales revenues 3% of tuition from E-learning in the 1st year, 2% in the 2nd, and 15 in the 3rd. (Stutely 64) Balance Sheet Accumulated Depreciation 20% per year Receivables & Payables 30 days and 90 days Equity Offering 6,000,000 Retained Earnings All losses are carried forward VAT Payments & Credits Credits will be done as they occur after they balance out with the VAT credits. VAT credits in turn are brought forward as current assets (Stutely 65) Exit strategy and Financing We expect that valuation during this round, based on pre-money NPV, should be around $35 million. IRR 180% NPV Discounted at 15% $ 41 Value of company post money Less New Money Invested Pre-IPO $6 million $35 million Value of company pre-money (Stutely 66) The table that is included below is indicative of an ending valuation in the 3rd year that will be between $355 million and $524 million, which will be dependent on the various multiples that are used, for instance, either sales or earnings. Year 1 Year 2 Year 3 Earning multiples 10 10 10 Pre-IPO valuation in millions of dollars 64 161 356 Sales Multiples 2 2 2 Pre-IPO valuation in millions of dollars 179 300 524 (Stutely 66) Works Cited Connolly, Michael. International Business Finance. Oxford: Taylor & Francis, 2012. Print. Dlabay, Les. & James C. International business. Mason : Cengage Learning, 2010. Print. Fischler School of Education and Human Services. Distance learning: for educators, trainers, and leaders. Ann Arbor: ProQuest Information and Learning Company, 2012. Print. Goldstein, Douglas. E-healthcare : harness the power of internet e-commerce & e- care. Gaithersburg : Aspen Publ, 2010. Print. Johnson, Judith. Distance education : the complete guide to design, delivery, and improvement. New York : Teachers College Press, 2009. Print. Keegan, Lynn. Healing with complementary & alternative therapies. Albany : Delmar Thomson Learning, 2011. Print. Micozzi, Marc. Fundamentals of complementary and alternative medicine. St. Louis : Saunders/Elsevier, 2011. Print. Moore, Michael. & Greg, Kearsley. Distance education: a systems view of online learning. Belmont : Wadsworth Cengage Learning, 2012. Print. Rakel, David. & Nancy, Faass. Complementary medicine in clinical practice : integrative practice in American healthcare. Sudbury : Jones and Bartlett , 2009. Print. Stutely, Richard. The definitive business plan : the fast-track to intelligent business planning for executives and entrepreneurs. Harlow : Financial Times Prentice Hall, 2011. Print. Read More
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