Entrepreneurship Project on Business Model

Of

Legacy Academy
(Kindergarten & Crèche Centre)

SUBMITTED TO: SUBMITTED BY:

Prof. Naval Arora Swati Gupta

Monica Agarwal
INTRODUCTION OF COMPANY AND TEAM

LEGACY ACADEMY a Georgia Daycare and Child Care Learning Center seeks
to empower children to be the best they can be! It’s the best Georgia infant
education and is Georgia's leading infant and toddler education specialist. Legacy
academy offers franchisee to investors all over the world. Franchise operation is
not for everyone but it is one of the most secure forms of business operation
available for those with good business skills and a desire to be successful by
following a proven system. At present legacy academy has given franchisees in
Georgia, Florida, Tennessee, Texas and North Carolina. Our company will take
Franchisee of legacy academy and operate it in Jaipur city, India. The company
will provide one of the best crèche and kindergarten facilities in the city.

Kindergarten is a form of education for young children which serves as a

transition from home to the commencement of more formal schooling. The goal of
early childhood education should not be to fill the child with facts from a pre-
selected course of studies, but rather to cultivate his own natural desire to learn. In
the classroom, this objective is approached in two ways: first, by allowing each
Child to experience the excitement of learning by his own choice, rather than by
being forced; and second, by helping him to perfect all his natural tools for
learning, so that his ability will be at a maximum in future learning situations.

Crèche is care of a child during the day by a person other than the child's legal
guardians, typically performed by someone outside the child's immediate family.
Crèche is typically an ongoing service during specific periods, such as the parents'
time at work. Day care is provided in crèches or by a nanny caring for children in
their own homes. It can also take on a more formal structure, with education, child
development, discipline and even preschool education falling into the fold of
services. Some child minders care for children from several families at the same
time, either in their own home or in a specialized child care facility. Some
employers provide nursery provision for their employees at or near the place of
employment.

TEAM

The school will be formed Mr. Sandeep Gupta, Swati Gupta, and Monica Agarwal.
Mr. Sandeep Gupta is in teaching professional since past ten years. He has sales,
marketing and management background within the industry having spent seven
year at Shemrock School, leading pre- school in Delhi. Swati Gupta and Monica
Agarwal have recently completed their Master in Business Administration. Along
with these three members two people will come from Legacy Academy, Georgia
.they will help the team initially in obtaining necessary finance, choose the best
site, build and begin operating the new center. They will also provide training to
its teachers and staff so that high standard and quality of Legacy Academy is
maintained.

Vision

Helping kids to develop and enquiring mind and an ability to mix and get along
with others so that they are able to enter primary school with confidence

Mission statement

• To serve our children, families, staff, and communities in a manner that

positively impacts their lives.

• We believe in so doing, our programs will set the standard for early
childhood care and education.
 • We are committed to providing ongoing professional development for our
staff, for they are a key ingredient in the quality program at LEGACY
ACADEMY.

The members will take loan from Bank for funding of initial investment. People
from Legacy Academy will help the team in getting loan.

MARKET OPPORTUNITY

The purpose of the family as a social institution in all societies whether simple or
complex is to perpetuate the society by providing it with new members, to protect
the child until he is able to take care of himself and to train him in socially
acceptable behavior. In Indian societies the duty of taking care of infants usually
rests on women. Thus women in the traditional system were by social and
physiological make-up responsible for child rearing and home keeping. However
With the dawn of modernization, it became difficult or almost impossible for some
Mothers to fully cater for their babies as it used to be. These days women role is
changing. There are increasing numbers of women in Jaipur who are working. This
without doubt makes it important for them to have access to day care centre close
to their work place. It appears that reverse is the case as they are still not able to get
crèche centers of their choice within the work environment in Jaipur.

The current problems/ need in the market are:

 Increase in the number of working women

Number of working women in Jaipur are increasing and at the same time
their concern for quality education and need for day care facilities is
increasing.
 Increase in nuclear families
With the breaking up of joint family system and the increased phenomenon
of nuclear families, working women need support in terms of quality,
substitute, and care for their young children while they are at work.

 Radical change in societal attitude towards preschool education

There’s been a radical change in societal attitudes towards pre-school
education in the past seven years or so. Now it is valued as a transitional
platform which prepares and enthuses children for primary school and life-
long learning. Neuroscience studies have clearly demonstrated that
experiences in early childhood have a significant impact on brain
development. A child’s earliest experiences impact her ability to think,
speak, learn and establish relationships. The quality of a child’s experiences
during this critical period establishes the foundation for future cognitive and
social development

 Lack of sophisticated schools in Jaipur

There has been slow growth of Crèche/ Daycare facilities in Jaipur resulting
in failure to meet the needs of working mothers in terms of extent, content
and quality of services. Though there are number of kindergarten in Jaipur,
but institutes which provide combination of both school and crèche facility
are not available. The current kindergartens in Jaipur do not meet those
standards which legacy Academy aims to achieve.
SWOT Analysis

The following SWOT analysis captures the key strengths and weaknesses within
the company, and describes the opportunities and threats facing the Legacy
Academy.

Strengths

 A sophisticated and effective learning system.

 Excellent training programs that all employees must participate in.
 An educated customer base that recognize the benefits that the Legacy
Academy offers.
 No direct competitors in Jaipur providing such facilities
 A goodwill and reputation Legacy Academy, Georgia

Weaknesses

 A lack of visibility due to the newness of the operations.

 The ability to attract and keep well trained employees.
 The inability to perfectly forecast demand of services relative to the number
of employees on staff at any one time.

Opportunities

 A growing market with a large percentage of target customers not yet aware
of the Legacy Academy
 Increased revenue as more and more people is working, thereby unable to
care for their children during the day.
 As the number of children served grows, fixed costs are spread thinner over
a larger customer base.
Threats

 Competition from already established facilities that improve their service

offerings to be more competitive to Legacy Academy
 Unfounded "public scares" regarding child care.
 Legal liability issues, either one large suit against Legacy Academy, or
significant increases in premiums due to changes within the operating
environment of the industry

OFFERING AND COMPETITION

Legacy Academy will offer upscale child care services and an advanced collegiate
based curriculum designed for kids ages 4 months to 4 years .Normal operating
hours will be 7 am to 6:30pm, Monday through Friday - with observance of all
major legal holidays. Early drop-off service will be offered as needed.

Legacy Academy exists to provide premier child care services that are aimed at
enhancing traditional day care methodologies and integrating extracurricular
interests (such as arts and crafts, dance, theatre and gymnastics) into one
comprehensive program. Our activity based collegiate curriculum is
specifically tailored for children and mirrors the arts and sciences taught at
colleges, universities and vocational schools around the nation. We offer state-of-
the-art technology programs in leading-edge facilities which help prepare students
for the technology age in which they live. Our general and "continuing" education
programs help mentor and tutor students through "main school" homework
assignments and provide a base of understanding and interaction to ensure success
in future educational endeavors. Finally, our developmental programs reinforce
basic social, listening, independence and motor skills and prepare students for
future related interaction.

All of our learning and child care services employ technology, partnerships,
professional services and other activities that support and promote higher learning.

In addition to the extensive services and curriculum offered, the institute will
also offer weekend specialty classes for children and adults and planned family
activities in the community it serves. Legacy Academy will also offer children
birthday party hosting services, providing great activities for kids and an easy
experience for parents. Activity instructors will be assigned for these events and
will lead the activities, ensuring a memorable celebration.

Service Description

Upon its opening legacy academy will offer four basic services in Jaipur:

 Full-time Child Day Care

 Part-time/After School Care (including drop-off and pick-up)
 After School Tutoring
 Drop-In Care

Additional services

Legacy academy will also provide additional services which include

• Canteen
• Medical facilities
• Pick and drop facilities
• Extracurricular activities
 Competitive edge

The company start with a critical competitive edge in Jaipur : there is no

competitor in our market that is offering our concept, quality of educational
program and child care services. Our educational approach is unique. Our
positioning on these points is very hard to match, but only if we maintain
the focus in our strategy, marketing, business development, and fulfillment. We
should be aware that the tendency to dilute this expertise with bargain
shopping could weaken the importance of our competitive edge, but we must
continue to bolster our value proposition.

No competitor offering our concept

– Custom made services

– Innovative learning program

– Accessibility

– professionalism

– safety

MARKET

Legacy Academy has a focus on meeting the local need for child care services
within Jaipur. Children are taken in flexibly on either a full-time or part-time
basis. The Legacy Academy is targeting one specific customer group, the middle to
upper class, double income professional families. These groups of families have
both parents working, not allowing them time to raise their child during the day.
These groups has the money for child care, and are willing to spend a little extra to
get a higher level of care.

This customer segment has already begun teaching its child advanced concepts like
reading, singing, socialization, etc. The Legacy Academy will continue to develop
the children's skills. This customer group is typically made up of two professional
parents. This would explain why the parents 1) have the money for more
sophisticated child care, and 2) are ambitious in terms of their children's learning
and development.

Target Market Segment

Nuclear Families

With the breaking up of joint family system and the increased phenomenon of
nuclear families, working women need support in terms of quality, substitute, care
for their young children while they are at work.

High middle income families

Price, service, certification and reputation are critical success factors in the child
care services industry. Legacy Academy will compete well in market by offering
competitive prices, high-quality child care services, and leading-edge educational
programs with certified, college-educated instructors, and by maintaining an
excellent reputation with parents and the community they serve. Target
customers are dual-income, middle-class families who value the quality of
education and child care Legacy Academy provide for their children, ages 4
months to 4 years.
On conducting a survey regarding the matter –

Full-Time Working Couples

The company wants to establish a significantly large full-time regular client base in
order to establish a healthy, consistent revenue base to ensure stability of the
business. Customer relations are extremely important, as it is imperative to keep
the parents pleased in order
to keep their children in the
daycare center.

Part-Time Workers /
Drop-Ins

Part-time workers and drop-

ins comprise approximately
20% of revenues. While this
market is not the primary focus, sufficient flexibility to handle this secondary
market is important to producing supplemental revenues.

BUSINESS MODEL

A business model draws on a multitude of business subjects, including economics,

entrepreneurship, finance, marketing, operations, and strategy. The business model
itself is an important determinant of the profits to be made from an innovation. A
mediocre innovation with a great business model may be more profitable than a
great innovation with a mediocre business model.
The business model is simply a working description that includes the general
details about the operations of a business.

There are major six components of Business Model:

1) Value Proposition

What makes Legacy Academy different from many programs is our decision to
limit enrollment to small group size approx.25 with more than adequate staff to
ensure a satisfying experience for children and families. For shy or introverted
children, it is sometimes a struggle to find a comfort level in a large group. Our
staff understands child growth and development and makes a point to adapt their
style of interaction to the specific needs of your child. We offer uniquely premium
child care services, as measured by the curriculum and activities offered,
experience and educational level of the instructors & parents involvement.

2) Market Segments

Legacy Academy will compete well in market by offering competitive prices,

high-quality child care services, and leading-edge educational programs
with certified, college-educated instructors, and by maintaining an excellent
reputation with parents. Children’s are taken in flexibly on either a full time or part
time basis

 Full time working couples

The ongoing trend of Jaipur reveals that the full time working couples are
comparatively less but approximately comprise of 30% of total client base.
  Part time working couples
Part time working couples will become a major client base i.e.
approximately 50%.

 Others
There are some other families also for whom high quality education is
important or who what to provide a very strong base education to their
children, comprise of approximately 20%.

3) Value Chain structure

Value is primarily a combination of quality, service and price. Value Chain

Analysis is an organized approach to explore the progress of competitive
advantage. The chain consists of a series of activities performed by a firm in the
creation, development, marketing & support of its product or services. The
product or service offering will be successful if it delivers value and satisfaction
to the target buyer who chooses between various market options on the basis of
what they perceive to hold most value.

 Inbound logistics
As for the legacy academy, the inbound logistics are children aged
4months to 4 years old who are enrolled to study pre-school education.

 Operations
Legacy Academy exists to provide premier child care services that are
aimed at enhancing traditional day care methodologies and integrating
extracurricular interests (such as arts and crafts, dance, theatre and
 gymnastics) into one comprehensive program. Our developmental
programs reinforce basic social, listening, independence and motor skills
and prepare students for future related interaction.

 Outbound logistics
The outbound logistics of the kindergarten is when the children graduate
from basic pre-school education at the age of 4 where they are prepared
and trained to be able to cope with primary school education.

 Marketing & sales

Marketing in the child care industry depends largely on reputation and
referral. In India, Word of mouth is the best instrument of marketing &
promotion strategies as people rely on their neighborhood more rather
than print & media advertisements. The company will be giving more
emphasizes on providing quality care so that good word of mouth can be
spread.

 Services
Basically, Legacy Academy provides education from the level of nursery
(age 2) to the level of pre-school education (age 4). Apart from the usual
learning modules, the kindergarten also provides activities as arts and
crafts, dance, theatre and gymnastics. We offer state-of-the-art
technology programs in leading-edge facilities which help prepare
students for the technology age in which they live.
  Human Resource Management
In Legacy Academy, all the employees are appreciated for their services
and usually rewarded for their work by giving them quarterly bonuses,
annual dinners, group holidays and increment on their pay. The teachers
are also sent for special Montessori workshops (if available) to be able to
improve on their teaching skills. The administration of the kindergarten is
in charge of employing new employees who is seen to have a bright
future at the kindergarten and the principal is responsible to keep all the
employees in line and also motivated to be able to provide the best
learning experience to the children.

 Technological Development
As the public is more aware of the growth of information technology
these days, technology plays an important role to gain the competitive
advantage. By implementing the use of technology into the business
organization, it enables any organization to reduce cost and also maintain
a good competitive advantage. Example of existing technology that is
currently used at the kindergarten are student management system, using
email as a form of communication between the two branches and to
parents, having a website as a form of communication between the
parents and the kindergarten, the use of a fax machine, photo-copier and
also computers for the use of staff, teachers and student.

4) Revenue generation and margins

o School fees
o Canteen
o Medical facilities
 o Pick & drop facilities
o Extracurricular activities

5) Position in value network

Legacy academy is operating on a franchisee model. There are various kinds of

services provided by the academy i.e. transportation, food & beverages, medical
services and extracurricular activities. Among these, facilities as pick & drop and
canteen will be outsourced.

6) Competitive strategy

There’s not a single competitor in Jaipur providing specialized kindergarten &

crèche services but there are some others who are either providing pre-school
education or providing education from primary to higher education. Competitors of
legacy academy are Dolphin preschool, Turtles, Bachpan, Euro kids and Subodh
School.

Legacy Academy’s competitive edge is four-fold:

 Specialized training
The facility can only be as good as the teachers and assistants. With this in
mind, The Legacy academy has a specialized training program that all
teachers and assistants are put through so they are proficient at teaching the
specific programs that the academy has developed for kids age two to four.
The employees are put through an intensive week long course and only after
they pass the intensive training will they be allowed to work with the
children.
 Innovative learning programs
Typical learning programs for kids this age focus on specific traits and only
work on one trait/ skill at once. While this is successful in reinforcing the
skill, it is often very difficult for the child to appreciate the interrelationships
of the different skills. Consequently, the child can learn the skill, but has
difficulty in applying the skill when faced with multiple stimuli. Then the
child tends to shut down out of confusion. Therefore skills are necessarily be
taught together, just as we would expect to encounter them in real life, the
children are able to assimilate the new task into their skill set much quicker.

 Custom made services

Services will be provided to children’s as well as their families according to
their needs. For ex. Pick & drop facility will be provided according to their
need.

 Safety
One of the goals of Legacy Academy is to provide a safe environment for
children and to give parents a sense of security when their children are in our
care. We take this commitment seriously and have systems in place to ensure
This goal is carried out.

 Classrooms and common areas are equipped with closed circuit

cameras to Allow constant monitoring by parents and management
 The entry of each school is equipped with a magnetic lock and coded
key pad for added security. A staff person is centrally located to
Screen visitors upon arrival
 A fence surrounds all of our playgrounds and gates remain secured.
SALES/MARKETING PLAN

The Legacy Academy is targeting a very specialize niche in child care space. With
this in mind, The Company must then carefully communicate it's services if the
company is to be patronize by this target segment. What will be communicated are
Legacy Academy competitive advantages: specialized training of the staff and
innovative learning programs. If the targeted parent hears and understands these
advantages, they will more likely be willing to switch to Legacy Academy
services.

Company’s sales approach would preferably be indirect sales strategy as the main
focus is to introduce new capabilities & criteria that the competitor may not have
and targeting those competitive advantages mainly available for buyer’s evaluation
criteria.

Marketing Strategy

Marketing in the child care industry depends largely on reputation and referral. In
India, Word of mouth is the best instrument of marketing & promotion strategies
as people rely on their neighborhood more rather than print & media
advertisements. The company will be giving more emphasizes on providing quality
care so that good word of mouth can be spread.

Promotion Strategy

We will depend on client referrals, community exposure and direct mail

campaigns as our main way to reach new clients. As we change strategies,
however, we need to change the way we promote ourselves:
 1) Advertising

We'll be developing our core positioning message: “Early Child Care

Development and Education Excellence” to differentiate our service from
the competition. We will be placing advertisements in newspaper and
magazines like India Today

2) Sales Brochure

Our theme and curriculum will help sell the school to prospective clients.

3) Referral scheme

Our main strategy for promotion will be referral scheme. In India we have
noticed people get influenced more by what their friends and relative say ,
rather what is been advertised in newspaper and television. So, based on this
belief referral scheme will be used to promote school and to get admissions
of more number of students. This scheme will include providing 10 percent
discount on monthly fees of students, whoever gets 2 students as referral for
admissions.

4) Direct Mail

We will send quarterly direct mail campaigns to the working women in

Jaipur and we will also offer monthly calendars for parents.

Marketing Programs

Our marketing effort will include an application fee waiver, free children ID
cards, T-shirts and a welcome party sponsored and hosted by Legacy Academy.
Positioning Statement

For families who value the importance of higher education and quality child care
services, Legacy Academy offers a great alternative to traditional child care
services and specific interest based programs. Unlike those programs, Legacy
Academy combines child care services with a modified collegiate level curriculum,
just for kids!

Pricing Strategy

Legacy Academy must charge appropriately for the high-end, high-quality

educational and care giving services we offer. Our revenue structure has to
support our cost structure, so the salaries we pay to assure quality services must be
balanced by the revenue we charge. Basically value based pricing will be followed
i.e. how customers perceive or value or product.

We will be price competitive in the market we serve; however, we will not

subscribe to the "low price leader" concept. The quality of our service will support
the prices we charge.

Sales Strategy

Legacy Academy will sell its standard theme, services and offerings, separating
itself from traditional daycare-only offerings.

We will be a one-stop shop for child care services, advanced learning and
specialized program offerings. We will also be active in building a solid reputation
with parents. By succeeding in these areas, we expect to begin seeing
an operational net profit in month nine of the 1st year, while increasing enrollment
by 32% monthly for the first 8 months and gradually thereafter, until our maximum
allowed capacity is reached.

PRODUCT/SERVICE DEVELOPMENT PLAN

Legacy Academy will start-up as a kindergarten & crèche centre which is for the
children from age of 4 months to 4 years and as far as future prospects are
concerned, the company is planning to make following developments

- Increase the number of branches in Jaipur as well as throughout India

Legacy Academy will start-up as a single branch in Jaipur. But, within the
time span of 2 years company aims to increase its branches in Jaipur as well
as throughout India. With the increase in number of working women and
growing importance of education the demand for Legacy Academy will
definitely enhance

- Start primary school

Legacy Academy will initially start up as a Kindergarten & crèche centre but
soon after achieving good amount of response, it’ll set up an elementary
school so that
ROAD MAP

Sales and Marketing Objectives

• Grow the number of customers by 25% annually.

• Build customer loyalty through superior service and educational/

development systems.

• Increase the referral rate by 5% per quarter.

Sales Forecast

As the following table shows, the company plans to deliver sales of approximately
Rs. 36, 00,000 in the first year, Rs.54, 00,000 in the second year, and Rs. 80,
00,000 in the third year plan implementation.
FINANCIAL STATEMENT

Break – even analysis

The Break-even Analysis is based on the monthly revenue and expenses of

operating and managing Legacy Academy

Monthly expenses

Fixed cost = 2,50,0000

Variable cost = 2, 50,000

Total expenses= 5, 00,000

Monthly revenue

Fees per student = 15,000

Total number of students =20

Total revenue = 3, 00,000

Difference

5, 00,000-3, 00,000 = 2, 00,000

Number of students required to break even

2, 00,000/15000 = 13.3

So, Legacy Academy needs at least 14 children to more to break even

Pro forma Profit and Loss:

Year 1 Year2 Year3

Sales 36,00,000 54,00,000 80,00,000
Direct cost of sales 2,00,000 3,50,000 6,00,000
Other production expenses 0 0 0
Total cost of sales 2,00,000 3,50,000 6,00,000
Gross margin 34,00,000 50,50,000 74,00,000
Expense
Payroll 12,00,000 16,00,000 21,00,000
Sales and marketing expenses 7,00,000 4,00,000 4,00,000
Depreciation 0 0 0
Leased equipment 2,00,000 3,00,000 4,00,000
Certification and inspection 1,00,000 1,50,000 2,00,000
Utilities 2,00,000 3,00,000 4,00,000
Insurance 2,00,000 3,00,000 3,50,000
Rent 12,00,000 12,00,000 15,00,000
Payroll taxes 1,50,000 2,00,000 3,00,000

Other 0 0 0
Total operating expenses 39,00,000 44,50,000 56,00,000
Profit before interest and tax (5,00,000) 6,00,000 18,00,000
EBITDA (5,00,000) 6,00,000 18,00,000
Interest expense 80,000 40,000 20,000
Tax incurred 0 50,000 1,50,000
Net profit (5,80,000) 5,10,000 16,30,000
Pro forma Cash Flow:

Year 1 Year 2 Year 3

Cash received
Cash from operations
Cash sales 36,00,000 54,00,000 80,00,000
Subtotal cash from operations 36,00,000 54,00,000 80,00,000
Additional cash received 0 0 0
Sales tax, VAT received 0 0 0
Net current borrowings 0 0 0
Net other liabilities 0 0 0
Net long term liabilities 0 0 0
Sales of other current assets 0 0 0
Sales of long term assets 0 0 0
New investment received 0 0 0
Subtotal cash received 36,00,000 54,00,000 80,00,000
Expenditures
Expenditure from operations
Cash spending 32,00,000 38,00,000 50,00,000
Bill payments 8,00,000 10,00,000 13,50,000

Subtotal spend on operations 40,00,000 48,00,000 63,50,000

Additional cash spent 0 0 0
Principal repayment of current borrowing 0 0 0
Other liabilities principal repayment 0 0 0
Long term liabilities principal repayment 2,00,000 2,50,000 2,50,000
Purchase other current assets 0 0 0
Purchase long term assets 0 0 0
Dividends 0 0 0
Subtotal cash spent 42,00,000 50,50,000 66,00,000
Net cash flow (6,00,000) 3,50,000 14,00,000