BUSINESS PLAN

kadam – The first step towards a new beginning…….

(A SCHOOL FOR THE ELDERLY)

By:

AVIPSHA BANERJEE (02-15-003)

SIDDHARTH BEHL (02-15-006)
GROUP - 12

PGDM - I (Division - A): 2007-09

Submitted to:
Prof. Radha Iyer
8th April, 2008

K.J. Somaiya Institute of Management Studies and Research

Mumbai-400077
Business Plan: Kadam- A school for the elderly

TABLE OF CONTENTS

Sl. No. Topics Page No.

1 The idea 2
2 The product 2
3 Analyzing the market and industry 3
attractiveness
3.1 Market Domain 3
3.2 Industry Domain 5
3.3 Team Domain 6
4 Research findings 6
5 Locality and facilities 7
6 Business Model 7
7 Manpower planning 7
8 Performance measures and targets 9
9 Marketing plan 10
9.1 Brand strategy 10
9.2 Communication strategy 10
9.3 Creative strategy 10
10 Action plan 10
11 Pricing of the courses 13
12 Profit and loss analysis 14

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Business Plan: Kadam- A school for the elderly

1. THE IDEA
Very often we hear from our friends and also experience it ourselves, that with most
youngsters being away from home due to work or studies, their parents call them up
seeking help on simple computer related tasks like creating a file in windows or some
troubleshooting. Aged people don’t find themselves very comfortable with the usage of
technology. This makes us wonder that it would be highly beneficial if there was some
arrangement where they could learn these skills which they missed out in their younger
days. Further, it has been observed that people in the said age group, especially after
retirement often have plenty of time but little to do to while away time. So, it would be
even better if this same place could provide them with facilities that would keep them
occupied so that they would probably miss being with their children a little less.
kadam – a school for the elderly; is a novel concept of starting a school for the elderly
citizens. The school would be one of its kinds, imparting skills like computer literacy,
music & dance, yoga and many more such skills, catering exclusively to people in the age
group of 50 years and above. The idea of such a school seeks to fill the above mentioned
gap and utilize the opportunity to start an entrepreneurial venture.

Before venturing into the same, it is important to evaluate the attractiveness of the
offering. The seven domains model proposed by John W. Mullins is used to analyze the
venture and is illustrated below.

2. THE PRODUCT
Kadam is a school meant exclusively for senior citizens, catering to the different needs of
the said customer segment. The institution would be offering a series of courses which
are as follows:
The institution aims at providing courses like:

Computer literacy – beginner level as well as advanced
This course would be taught thrice a week. The course outline would include:
• Basics of computing
 Starting up and shutting down a computer
 Familiarity with the operating system
 Minor troubleshooting
• MS Office
 Microsoft Office (Word, Excel, PowerPoint)
 Using Paint
 Teaching some games on the computer (Like Solitaire, Spider Solitaire,
Minesweeper, etc.)
• Internet
 Using Internet for e-mails, voice chat (Like Google Talk, Net Phone, etc.)
• Advanced courses
 Tally for accounting

Yoga and light exercises in order to help them stay fit.

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Business Plan: Kadam- A school for the elderly

This course will be taught on a daily basis. There is a common trend now among all
people to do exercises in the morning to keep them fit and this has been taken care of
by means of the one hour Yoga session every morning.

Courses on Music and Dance

This course will be taught on weekends.

Workshops on financial awareness, training on usage of mobile phone, etc.

In addition to the above said courses, it is planned to hold workshops on healthcare
and nutrition. These would be done free of cost and would be done by reputed
doctors.

3. ANALYZING THE MARKET AND INDUSTRY

ATTRACTIVENESS
Any successful entrepreneurship comprises of thorough understanding of the market, the
industry and the team dynamics. Both the market and the industry needs to analyzed at
both macro and micro-levels.
MARKET INDUSTRY
MARKET INDUSTRY
ATTRACTIVENESS ATTRACTIVENESS

MACRO-LEVEL
ABILITY TO
PROPENSITY FOR TEAM DOMAIN EXECUTE ON
RISK
CSFs

CONNECTEDNESS IN VALUE CHAIN

MICRO-LEVEL

TARGET SEGMENT
BENEFITS AND SUSTAINABLE
ATTRACTIVENESS ADVANTAGE

Fig: Seven Domain Model

3.1 Market Domain

The market comprises of the potential customers who have the willingness and ability to
buy the service.

At a macro level, making a conservative estimate based on the population of people

above the age of 60 years, the number of potential customers boil down to 1600.

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Business Plan: Kadam- A school for the elderly

At present some of these people who

Population of India – 1.136 billion
Population above 60 years (5%) – 56800000
Population in urban areas (28%) –
16000000
Population in 4 metros
(1%) – 160000
Potential Market
(1%) - 1600
be picnics, birthday celebrations, health camps and many more of such events to keep
these people engaged.
take Yoga classes pay around Rs.
200 per month and any computer
course cost around Rs. 4000.00 for a
beginner’s module. Our services
have been priced competitively
keeping these in mind.
At a micro level, we consider that
the idea is different from the other
offerings in the market because no
institution of this kind exists
exclusively for the elderly people.
The school will not only provide
new skills, but will also be a place
where these people can enjoy and
while away time happily. There will

Initially the school will start at two locations in Mumbai, where surveys conducted have
given a positive response; the areas being Ghatkopar and Goregaon. The aim will be to
maximize the number of customers availing PRODUCTS
this service through active promotion
campaigns. The growth strategy of EXISTING NEW
every business be it new or established
needs to be in line with its products and E
X
the markets it plans to reach out to. I
S MARKET PRODUCT
T
Based on the said classification, M I
PENETRATION DEVELOPMENT

any strategy may be grouped in to A R

N
G

any one of the four quadrants of K

the Ansoff’s matrix which deals E
with new or existing markets and TS N
MARKET
DEVELOPMENT
DIVERSIFICATION
E
products. W

Kadam would focus on market

penetration for the first one year of its
operations and then look for introducing new courses (e.g., instruments, different forms
of dance) taking into consideration the feedback from customers. This would basically be
the product development phase. In the third year of operations, the aim will be to opt for
new markets in other areas of Mumbai and also in metros and tier – II cities. So the next
stage is that of market development. Finally, the major step would be to diversify to new
locations with new services.

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Business Plan: Kadam- A school for the elderly

3.2 Industry Domain

A better analysis of the competitive

situation in the industry at a macro
level can be done using the Porter’s
five forces model.

The forces that shape the competition

are best explained using Michael
Porter’s Five Forces Model. The
configuration of the five forces differs
from industry to industry. In this case,
the power of suppliers and customers
are more benign compared to the
threat posed by the competitors and
substitutes.

Rivalry among competitors: The
major competitors would be local yoga classes, computer courses offered by
institutions like NIIT, Aptech, etc or taught at home by either these people’s children
or relatives. Competitors would also include teachers who come home to teach
painting or music.

Threat of substitutes: The substitutes would be activities that could be anything other
than those offered by the institute. A substitute need not be from the same industry
and thus it may even be reading newspapers, watching TV, spending time with
family, visiting friends, cooking, stitching, listening to music or religious talks, etc.
Substitutes limit the profit potential by putting a cap on the prices. If the customers’
switching cost to the substitute is low, then it definitely poses a threat; as is the case
in this business.

Threat of new entry: The threat of entry holds because the entry barriers are low as
this is a service-oriented offering with no high- technology product involved, no
major distribution network required, no major government restriction and low
switching costs. Therefore the model can be duplicated with not much difficulty.

Threat of bargaining power of suppliers: As such no threat from suppliers is
anticipated.

Threat of bargaining power of buyers: This institution has a strong differentiation in
terms of the service that it offers – a single window for a wide range of courses. But
the low switching costs and price sensitivity (since most customers will be retired /
non-working people) are some issues that need to be tackled.

Analyzing the industry from a micro level it can be seen that the idea does not have a
unique sustainable advantage in terms of any patent or any superior organizational
processes. The advantageous position for the venture comes from the first mover
advantage, that, it is the only integrated service provider offering a variety of services, all
under one roof.

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Business Plan: Kadam- A school for the elderly

3.3 Team Domain

The team domain and its contribution towards success or failure of the idea need to be
viewed in three perspectives:

Mission, aspirations and propensity for risk – The mission of kadam is to seek to
provide a single stop solution for people to learn new skills, which they could not
learn in their younger days. The school helps these elderly students learn new skills
and thereby lead a more fulfilling and youthful life. The venture calls for a high
degree of risk taking capability but the same can be accommodated in view of good
returns on little initial investment.

Connectedness in value chain – On the supplier side is the faculty involved and the
various support staff, not posing much of a difficulty. The real challenge lies in
changing the customer’s mind in terms of getting them acceptable to the idea of such
a service.

Ability to execute on CSF’s – The most critical factor in ensuring the success of the
idea is the ability to convince the people about the idea and how it is better from the
series of courses offered by independent operators.

4. RESEARCH FINDINGS
To determine the feasibility of the concept and to understand the consumers better, a
survey was conducted across 4 cities in India. A questionnaire was administered to 124
respondents in the cities of Mandi (Himachal Pradesh), Mumbai, Calcutta and Chennai.
The respondents were randomly chosen from individuals in the age group of above 50
years of age (The target segment of consumers).

The data collected was analyzed using SPSS and following are the major findings of the
survey:

Out of 124 people surveyed 92 indicated their willingness to join such an institution,
indicating 75 % success rate.
A region wise analysis of the data indicates a greater acceptance of the idea in smaller
towns as compared to metros. The same needs to be further substantiated with the
help of more surveys in tier – II cities and smaller towns to determine the market
feasibility.

Gender appears to be a major factor in determining the willingness to join. While 72
% of the males have shown their inclination, while 88 % of the female respondents
have shown their consent.

It was seen that people in the higher income group, have shown a positive response
towards joining such a course.

Around 24 % stated that money is not an issue for such a course.

Timings for the course appears to be another factor important in the decision making
process. Approximately 70 % of the respondents have indicated the preference for
morning courses, while only 17 % have shown the preference for evenings. Only 4 %
said that timings were not an issue for them.

Only 20 % said that traveling up to any distance would not be a concern for them.
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Business Plan: Kadam- A school for the elderly

Attractiveness of the various courses – Computer literacy and yoga appear to be the
hot favorites.

Location of such an institution appears to be a concern, especially in metros. Around
57 % of the respondents have shown willingness up to 1 Km only indicating distance
being a major factor in the decision to join. Thus the idea of providing conveyance
can be looked into.

Certain segments of population (Within a particular geographical area) have shown a
greater inclination for courses related to financial literacy.

5. LOCATIONS AND FACILITIES

In the initial stages we plan to start at two locations in Mumbai – Ghatkopar and
Goregaon (based on the favorable response received during the surveys conducted).
Depending on the initial response, we would be moving on to different locations (Tier –
II cities and semi-urban areas may be looked upon as potential markets) in future. The
premises would be taken on rent and all furniture (Computer tables, chairs etc.), office
equipment would be purchased. Approximately 1500 sq. ft area is being considered for
each unit.

6. BUSINESS MODEL
The business model is based on the idea that each of these units would act as separate
profit centers and manage its operations independently. The basic courses offered would
remain same throughout with minor modifications to account for regional preferences
(Say people in a certain area may have preference for advanced computing courses while
yoga may be preferred elsewhere). The figures relating to the growth and associated costs
are an average for one single unit (All units are expected to operate on similar lines with
minor variations across).

7. MANPOWER PLANNING
Based on the above business model, the organization structure has been designed. Each
unit shall have an Area Manager who will manage the day-to-day operations of the units
and would be reporting on weekly basis to us. The unit will have six teachers (as already
stated in Table 4). Each unit will have support staff like an accountant who will also
manage the reception, attend to the customers and all other routine jobs. Other than this,
there will be a housekeeper cum caretaker for each unit. Being a start-up, it is expected
that we have to do a lot of work ourselves, like the financial management, marketing and
also recruiting. As the organization grows, the number of employees will increase
accordingly to manage the workload. Thus the organization chart, which is quite a flat
structure initially, is as follows:

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Business Plan: Kadam- A school for the elderly

Based on locations

Fig 7: Organization Chart

The roles and responsibilities along with the qualifications required for the Accountant is
as follows:

Roles and responsibilities of Qualification

Accountant

• Maintain the accounts • Graduate in Commerce

• Handle all front office work • Prior work experience of
• Report to Area Manager on daily minimum 2 years as an
basis accountant of around 2 years
The essentials considered while recruiting teachers are:

Teachers

• Need to be graduates or diplomas in their respective fields

• Good communication skill
• Require lot of patience
• To be able to handle students of the said age group

The roles and responsibilities along with the qualifications of the senior management that
is us, is as shown:

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Business Plan: Kadam- A school for the elderly

Roles and responsibilities of Senior Qualification

Management

• Marketing related activities • MBA in Marketing / Finance

• Managing investments and finances • Prior work experience in sales
• Strategic Planning and operations of around 3
• Cross- check all reports submitted years
by Area Managers
• Weekly review
• Continuous interaction with
customers for feedback

The roles and responsibilities along with the qualifications required for the Area Manager
is as follows:

Roles and responsibilities of Area Qualification

Manager

• Manage day-to-day operations • Graduate in any discipline

• Keep track of no. of customers
enrolling each course
• Check accounts of the unit, the
accountant will report to him
• Report to senior management on
weekly basis
• Prior work experience in
managerial/ administrative role of
minimum 2 years
• Good communication skills

8. PERFORMANCE MEASURES AND TARGETS

To keep a check on the operations and measure the performance of the institution, some
objectives have been set. Feedback is to be taken on a continuous basis. The success of
the venture is to be measured in term of the following:
• To enroll at least 20 students in all three categories per month in the first year of
operations
• To achieve a CAGR of 30% in revenues over 3 years
• To breakeven within one year of operations

Based on these targets being achieved or not the next course of action shall be decided
and targets revisited.

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Business Plan: Kadam- A school for the elderly

9. MARKETING PLAN
The initial response towards the project is greatly dependent on the marketing strategies
adopted. The implementation aspect of the strategies is covered in the next section. The
different strategies are as follows:

9.1 Brand Strategy

To start with and to build a brand image for itself, the institution would initially set up
at two locations initially that have shown the best response in the market research.

Build an emotional connect with the target audience.

The idea that the school is meant only for the senior citizens needs to be marketed
properly.

Project an image of not just provider of services but as a way of life.

To promote “The one stop solution for a variety of activities” as a differentiating
factor from other such service providers.

9.2 Communication Strategy

To use the word of mouth to reach out to newer markets.

Influence the decision maker.

Tie ups with insurance and health sectors.

9.3 Creative Strategy

To use various promotional schemes to reach out to newer markets.

10. ACTION PLAN

The name “kadam – The first step towards a new beginning…….” needs to
be promoted aggressively. The idea behind choosing “kadam” as the brand name has
been to signify the fact that just as a person does not stop walking throughout his life,
similarly learning never stops. This could be promoted by means of contests in
several places frequently visited by old age people.

Advertising on the local TV channels and newspapers.

Hoardings and banners in areas such as jogger’s parks and areas frequently visited by
the targeted customers.

Direct selling to customers who had given a favorable response to the survey.

Promotional schemes such as:
• 10% discount to the first 5 customers.
• Free yoga classes for a period of one month to the first 15 customers.
• Special scheme for couples – 10% discount on the total fee.
• Use events such as free health check up camps as a means of reaching out and
promoting the idea to the target customers.

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Business Plan: Kadam- A school for the elderly

Tie up with old age homes are proposed at later stages – Providing the services at
discounted prices.

Special prizes for winners of monthly competition – “Mera Idea Sabse Acha - MISA”
competition.

Customers availing a host of services (At least two) would be provided with services
like bill collection and payment for their homes, free of charge.
The idea of providing conveyance can be looked into, especially in case of metros, where
traveling large distances appears to be a major concern.

11
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Business Plan: Kadam- A school for the elderly

11. PRICING OF THE COURSES

The prices for each of the courses mentioned are enlisted below. All the figures shown
below are monthly charges and in rupees. The course fees are as follows:
Computer
Yoga Music Workshops
Literacy

Daily 350

Weekends 200 Only on

Table 2 Table 3
monthly basis
Thrice a week 300
Fig: Table 1
The monthly charges in rupees of computer courses are as follows:

Basics of Advanced
MS Office Internet
Computing Courses

Daily 1400 900 1800 1500

Weekends 1700 1100 2200 1500

Thrice a week 1600 1000 2000 1500

Fig: Table 2

The monthly charges in rupees for music courses are as follows:

*
Classical Singing Classical Dance Instrumental

Daily 1200 900 1800

Weekends 1500 1000 2000

Thrice a week 1100 750 1600

Fig: Table 3
* - The incumbent has to arrange for his own instrument

The workshops would be held on an independent basis and would cover things like

Financial awareness

Training programs on mobile usage
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Business Plan: Kadam- A school for the elderly

The pricing of the workshop would be decided on a case by case basis, depending upon
the courses offered. It is proposed to have one workshop every month.

12. PROFIT AND LOSS ANALYSIS

The monthly expenses (in Rs.) are as follows:

Year 1 (in Year 2 (in Year 3 (in
Rs.) Rs.) Rs.)

Rent of space 40000 42000 45000

Computers on rent (6
nos.) 8000
Instructor / faculty
Computer (2
Instructors) 20000 25000 30000
Yoga 5000 5000 5000
Music 3000 3000 3000
Instrumental music 3000 3000 3000
Dance 4000 4000 4000
Area Manager 15000 16500 18000
Accountant 7500 8250 9000
Electricity charges 5000 5000 5000
Telephone & internet
charges 10000 10000 10000
Housekeeping &
caretaker 5000 5000 5000
Transportation facility May be provided in the future
Others 5000 5000 5000

TOTAL MONTHLY
EXPENSES 130500 131750 142000
Fig: Table 4

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Business Plan: Kadam- A school for the elderly

The yearly one-time investments (in Rs) to be made are as follows:

Year 1 Year 2 Year 3

Quantity Unit cost

(Nos.) (Rs.) Total (Rs.)

Security deposit for

the rented space 100000

Computer 4 25,000 100,000 150000 150000

Computer furniture 10 1500 15,000 9000

Other furniture - - 30000 20000 20000

Books & reading

material 25000 25000 25000

Miscellaneous 20000 20000 20000

TOTAL ANNUAL
INVESTMENT 290,000 215,000 224,000
Fig: Table 5

The expected course participation is as follows:

Year 1 Year 2 Year 3

Computer literacy

Basics of computing 30 40 60

MS Office 25 32 45

Internet 30 40 60

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Business Plan: Kadam- A school for the elderly

Advanced courses 5 9 15

Music & Dance Classical singing 10 15 22

Classical dance 5 10 15

Instrumental music 6 10 15

Yoga 45 50 50
Fig: Table 6

The projected revenues (in Rs.) as follows:

Year 1 Year 2 Year 3

Computer
literacy
Basics of
computing 48000 64000 96000

MS Office 25500 32640 45900

Internet 61200 81600 122400

Advanced
courses 7500 13500 22500

Music & Dance

Classical singing 12800 19200 28160

Classical dance 4400 8800 13200

Instrumental
music 10800 18000 27000

Yoga 12150 13500 13500

Workshops May vary from one workshop to another

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Business Plan: Kadam- A school for the elderly

Total monthly
revenue 182350 251240 368660
TOTAL
ANNUAL
REVENUE 2188200 3014880 4423920

CAGR 37.78% 46.74%

Fig: Table 7
The estimated profit and loss statement (in Rs.) is as follows:

Year 1 Year 2 Year 3

INCOME
Revenues from
various courses 2188200 3014880 4423920
Other income
(Workshops etc.) 100000 100000 100000

Total income 2288200 3114880 4523920

EXPENDITURE

Wages & salaries 420000 480000 540000

Rent for space 480000 504000 540000

Loan repayment 110000 130000

Advertising &
marketing expenses 400000 450000 500000

Others 396000 300000 300000

Total expenditure 1696000 1844000 2010000

PROFIT 592200 1270880 2513920

Fig: Table 8

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