BUSINESS PLAN

OPENING A SCHOOL

PROFESSIONAL DRIVERS TRAINING SCHOOL FOR PEOPLE WHO ARE FROM RURAL AREAS .

College Name:Chandragupt Institute Of Management Patna Team Name: Desi Sona Team Members Name:1-Chandra Prakash (email-id: cp2801@gmail.com) Contact:08986702233 2-Gargi Pragya(email-id: grags99@gmail.com) Contact:09661887739

EXECUTIVE SUMMARY Business Type: Opening a professional drivers training school for people who are from rural areas. Mission: By creating values for our customers we create value for ourselves. To ready a driver off the road and on the road. Name of the Entity: JEEVIKA Business Model: This model revolves around filling the skill gap of trained driver of HCV existing in India. Our focus is mainly on filling the skill gap in the road freight segment and that constitutes truck drivers. Those who are in the profession of truck driving are largely illiterate people with no formal training for the job. Most of them are under graduate or even 10th pass and graduate from working as helpers. There are currently 3 million truck drivers for M & HCV in the country and this number is likely to swell to nearly 51 million by 2015. Even if 50 percent of all the drivers in the country are trained then almost 100 institutes would have to be set up in 7-8 years. (Source: skill gaps in the Indian logistics sector: A white paper, KPMG in India). Description of the business:-

The main idea of entering into this arises from the very fact that there will be need of 51 million trained drivers by 2015 and we dont have even handful of trained institutes that can provide drivers of the requisite skill. So it seemed a long term opportunity in terms of sustainability of opening a drivers training institute. Funding sources:- Bank loans, Angel Investors and Private Equity funds.

Services offered at the training centre:We will be offering various training programs according to the required need of the trainees. The various training programs would include training on: how to do safe night driving?; how to increase the fuel efficiency?; training on traffic rules; knowledge of all kinds of traffic signals; training on driving in bad roads and in bad traffic conditions. We will provide training on handling of hazardous goods also.

Marketing Analysis: According to the figures by the Road Safety Cell of the Union Ministry of Road Transport and Highways there were 3.9 lakhs accidents in 2000, 78,911 were killed and 3,99,265 injured moreover the

accident rate is increasing day by day with the rapid urbanisation, India has seen an unprecedented growth of motor vehicles and 77% of these accidents were due to fault of the drivers and most of these drivers were untrained.. Another reason to enter into this business was that market value of HCVs is 250 billion INR and the forecast is that there will be 85% increase in it by 2014 so accordingly the need of trained drivers would also arise so this will provide an opportunity to enter into this training of drivers activity. Through research we found that most of the drivers are from West Bengal and Tamil Nadu as there is high unemployment rate as compared to other states in India.

Marketing Plan:I have assumed that I will start the business in 6 months so I have 6 months for publicity of our training institute. To make people aware that we are opening a professional training institute we will start our advertising activity by: Distributing the Pamphlets at commercial places like Bus stands, railway stations taxi stands, auto rickshaw stands in which all the features, services and benefits that can be derived from our training will be mentioned. Well send our marketing representative to the rural areas where NREGA activity is being carried on, which is a source from where we can find our prospective customers, places where Gram Panchayat is held so that information is disseminated on a mass basis to the villagers, to the employment exchange centres. Advertisements on billboards, Hoardings, advertisement in the regional news papers with the mention of various services being offered and benefits from their services to be received like lowest price in the market without any compromise on quality training, and also about placement assistance.

Operation:Location of operation:-We will be opening our training institute in West Bengal in outskirts of Kolkata as it will be near our production plant which we is are assuming to be planned to set up in West Bengal. The other main reason of setting up a training institute in this region there is high unemployment rate (source:11th Planning Commission).. Operational model:Our training institute will be in an area of 15 acres of land in which there will be classrooms, auditorium, hostel with fooding and lodging with a capacity of around 500 beds, a library, around 2 km of driving track with various road configurations completed with electronic signals, signboards, street lights for night driving, trained instructors to impart theoretical and practical training to the drivers. Financial Model:

We are going to train 500 drivers per month. For the training of 500 drivers we are assuming that we have 250 unskilled drivers and 250 skilled drivers. Our driving school will be open 24 hours to provide all round training of driving in day and night conditions. We have taken 60 trainers because we have calculated that for training of 500 drivers working in three shifts assuming each trainer works for 8 hours in a shift, 60 trainers will be required according to our calculations. As from the market research (source: Union Ministry of Road Transport and Highways report) of Indian HCV market is growing by 22% every year. So we are assuming our business will grow by 15% per year and our expenses will increase by 10% per year.

Total investment for 1st year Cost break-up: Fixed Cost a)land@4 lacs/acre

8.4 crores

15*4=60 lacs

b)labour/salaries of 60 instructors 60*15000=9lac/month and 1.08 @ Rs.15,000/month c) Trucks @10 lac d)Building cost e)Maintenance cost Variable Cost: a)Fuel cost 1600/person(unskilled) 800/person(skilled) b)Marketing cost c)Head Office cost d)Miscellaneous cost Revenue: 15 lac/year 20 lac/year 10 lac/year 3000(unskilled driver)@7000/- 3.2 crores and 48 lac total for unskilled/year and 24 lac for skilled/year. crore a year 25*10=2.5 crore 3 crore 5 lac/year

+3000(skilled)@4000/-

*We are assuming that well get land at the subsidised rate from the government so we have assumed the cost of 1 acre land to be 4 lacs. We are assuming a skilled Trainee would require 100 km of driving to get trained and an unskilled driver would require driving of 200km and mileage of the vehicle is 5km/litre of diesel.

Year 2 Expenses: Head Office cost: 20 lac/year; Marketing Cost: 15 lac/year; Maintenance Cost: 5 lac/year Fuel Cost: 72 lac/year Depreciation on machinery (10%): 25 lacs/year Depreciation on building (5%): 15 lacs/year Miscellaneous cost:10 lacs/year Salary: 1.08 crore Total expenditure: 2.7 crores

1st year growth rate in revenue each year@15% growth rate in expenses each year @10% 8.4 3.2

2nd year

3rd year

4th year

5th year

6th year

7th year

8th year

9th year

10th year

3.68

4.23

4.87

5.60

6.44

7.40

8.51

9.79

11.26

2.97

3.27

3.59

3.95

4.35

4.78

5.26

5.79

6.37

Assuming our total expense will increase by 10% like in the Head Office Cost, Marketing Cost, Maintenance Cost, Fuel Cost, Salary Cost so total expenditure in 2nd year would be 2.97 crores. And for the subsequent years we are assuming that expenses would increase @ 10%.

As our 1st year revenue is 3.2 crores and we have assumed 15% growth in the business our revenue will increase by 15% in the subsequent years. (All the figures given in the table is in crores)

So the total revenue in 10 years=64.97 crores Total expenses in 10 years=48.73 crores So ROI in 10 years=16.24 crores

Break Even Analysis:

From the above table we can conclude that by the end of 5 years we will reach the breakeven point.