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1.0 Executive Summary
The purpose of this business plan is to raise and examine the allocation of $250,000 for the development of a Montessori school that will be based in New York City, New York. Montessori School, LLC (“the Company”) was founded by Janice Jones. The Company will offer its services to students that are in kindergarten through 5th grade. The business, in all facets of operation, will apply the principles developed by Maria Montessori over a century ago. The business will have ten students per class. One of the major advantages that the Company will have is the low student-to-teacher ratio.
1.1 The Services
The primary revenue center for the business will come from the ongoing tuition payments that will be made by parents that want to enroll their children at the Montessori School. These fees will be $15,000 per year on average. The Company will have six classes in operation at any time. Total enrollment will be 60 students (K through 5th grade).
Beyond the Company’s standard academic calendar, the Company will also offer summer camp programs. This will allow the business to generate substantial revenues between June and September. This will also provide smoothness for the school’s revenue streams.
The third section of the business plan will further describe the services offered by the Montessori School.
1.2 Financing
At this time, the Founder is seeking $250,000 in order to establish operations in New York City. This loan will carry a 10 year term with an anticipated nine percent interest rate. The financing will be used for the following:
- Montessori school location development in New York City.
- Working capital
- Furniture, fixtures, and equipment.
The Founder and her financial partners will contribute $50,000 towards the development of the business. Given the highly predictable income that will be generated on a monthly basis, the Montessori School could easily acquire expansion financing as necessary. However, it is not anticipated that the Company will need any funding beyond the capital sought in this document.
1.3 Mission Statement
Management’s mission is to develop Montessori School, LLC as a preeminent school that provides a strong foundation for educational and personal growth for young people in New York City.
1.4 Management Team
Janice Jones is a highly experienced educator that has worked in teaching and managerial capacity within a Montessori school. She will be able to establish the operations of this educational center with a focus on growing profitability.
1.5 Sales Forecasts
1.6 Expansion Plan
By the end of the first year of operation, Management anticipates that the Montessori School will reach maximum capacity. After the fifth year of operations, the Founder may seek to develop additional locations within New York City to accommodate demand.
2.0 Company and Financing Summary
2.1 Registered Name and Corporate Structure
Montessori School, LLC.
2.2 Required Funds
Ms. Jones is seeking $250,000 in order to establish the operations of the school. The funds are to be used for the following:
2.3 Investor Equity
The Founder will provide the necessary down payment to start operations.
2.4 Management Equity
Janice Jones currently retains a 100% ownership interest in Montessori School, LLC. She also serves as the member of the limited liability company.
2.5 Exit Strategy
If it is financially prudent to do so, Ms. Jones will hire a qualified business broker to sell the school to a third party. Most likely, an existing educational company would acquire the business. This event is not expected to occur within the first three years of operation. Most likely, a business sale would occur around the 10th year of operations.
3.0 Operations
As stated in the executive summary, the Montessori School will be actively involved with providing an immense degree of academic instruction using the guiding principles of Maria Montessori. Full capacity is expected to occur within the first year of operation. The Company will have 60 students enrolled in the program at any given time. The business will comply with all state laws regarding curriculum development and implementation. Montessori School, LLC will employ eight teachers.
The Montessori School’s summer program will be a highly lucrative profit center for the business. These camps will run from June through late August. The activities during these months will include music appreciation, art, and physical activities. Many of the Company’s teachers are expected to work as counselors during these months.
The Company will require that all teachers and facility staff undergo an extensive background check before they are permitted to work at the school. The Company will work with a third party background check and license verification firm in order to ensure that all teachers maintain currently licensure to operate within the State of New York.
4.0 Strategic and Market Analysis
4.1 Economic Outlook
Montessori schools remain in immense demand among parents that want to provide their students with this type of education. These businesses, once maximum capacity is achieved, have few economic risks beyond standard operations.
The US economy is strong. The issues related to the COVID-19 pandemic have been resolved. Inflation rates are rapidly declining, and interest rate declines are expected to occur soon as well. The US Federal Reserve has indicated that they will continue to implement policies that will control inflation.
It should be noted that the Montessori School will target upper-middle to upper income earning families that are less swayed by negative changes in the economy. This will ensure profitability at all times.
4.2 Industry Analysis
Currently, there are 3,200 companies that own and operate one or more Montessori school locations. These schools are part of the overall early childhood education industry. As a whole, these companies produce over $15 billion of revenue. Approximately 200,000 people are employed as teachers and support staff at these schools.
The growth rate of the Montessori school industry is expected to remain strong given the continually increasing wealth of the US population. Only a severe economic recession would impact the industry.
4.3 Customer Profile
The following profile will be used when marketing the Montessori School to the general public:
- Annual household income ranging from $100,000 to $300,000
- Lives within two miles of the Company’s New York City based location/
- Will spend $15,000 per annum on tuition
For a Montessori school, you will need to examine several market characteristics including household income, the average number of children per household, median home value as a gauge of wealth, and the number of people that will be able to afford the tuition within your market.
4.4 Competition
Competition among Montessori schools is expected to increase. These businesses also face competition from Waldorf schools and other types of private schools such as Friends schools. In this section of the business plan, you will need to document how you intend to differentiate your Montessori school from other early childhood education centers. This business plan focuses heavily on a low student to teacher ratio. You can also include additional information about how you intend to create other competitive advantages such as hosting summer camps.
5.0 Marketing Plan
Given the level of competition that these schools face in any given market, the business will need to implement a wide-ranging marketing campaign in order to drive enrollment at the Montessori school.
5.1 Marketing Objectives
- Develop Montessori School, LLC as one of the preeminent early childhood teaching facilities in New York City.
- Use social media and search engine optimization to create brand name awareness.
- Develop referral relationships with educational professionals.
5.2 Marketing Strategies
The Company intends on using numerous marketing strategies that will create brand name awareness for the Montessori School in the New York City market. The business will distribute sales literature within the target market radius to households that have young children. The Company will also foster ongoing relationships with real estate brokerages and agents that will provide referrals when new families move into the area.
In regards to the Company’s website and social media presence, this aspect of marketing will occur during the development period. This will allow families to enroll with the school for the upcoming academic year. The website will be developed by a professional web design firm. Content rich information, photos, and videos will be integrated into all facets of the website. Videos of the facilities will be uploaded to YouTube and shown on the Company’s website as well as social media pages. The Company will also maintain an presence on LinkedIn in order to recruit properly qualified teachers that can offer their services at the location.
The Company will also develop referral relationships with educational professionals and childhood psychologists in this market. Of special importance will be relationships with psychologists and therapists that will recommend that their client attend a Montessori school in order to have a more controlled and comprehensive educational environment. These referrals will be an invaluable source of business for the Company.
Management will enroll the Montessori School among numerous professional organizations and associations that focus on early childhood education.
5.3 Pricing
The Montessori School will charge $15,000 per annum. Summer camps will be $1,200 per month.
6.0 Organizational Plan and Personnel Summary
6.1 Corporate Organization
6.2 Payroll
7.0 Financial Plan
7.1 Underlying Assumptions
The Company has based its proforma financial statements on the following:
- The Montessori School will have an annual revenue growth rate of 7% per year.
- The business will acquire $250,000 via a SBA loan to start the school.
- The Founder will invest $50,000.
7.2 Sensitivity Analysis
The Montessori School’s revenues are only modestly sensitive to economic recessions. The business is targeting wealthier people in this market, and they are less swayed by negative economic changes. The Company will have highly controllable fixed operating costs, which will further ensure that the business can repay its loan while remaining profitable at all times.
7.3 Source of Funds
7.4 Tax Assumptions
7.5 Profit and Loss Statement
7.6 Cash Flow Analysis
7.7 Balance Sheet
7.8 Breakeven Analysis
7.9 Business Ratios
