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PROJECT FEASIBILITY REPORT

OF

KIDS MONTESSORI HOME

AT

CHABAHIL, KATHMANDU, NEPAL


* *** *** *** *** *** *** *

Prepared by:

Ramesh Regmi
Kids Montessori Home
Kathmandu

1.0 Executive Summary


The purpose of this business plan is to raise the bank loan of Rs.3,500,000 for the development of a Montessori School while showcasing the expected financials and operations over the next three years. The Kids Montessori Home. (the Concern) is a Chabahil based entity that provides early childhood education to customers in its targeted market using the Montessori system. The Concern was founded by Mr. Ramesh Prasad Regmi and his family members.

1.1 Products and Services


The Montessori School will provide students (age 3 through 5th grade) with a specialized form of education that was developed by Dr. Montessori. Unlike traditional teaching methods, this style provides students with an interactive approach to learning that focuses on independent problem solving, selfdiscovery, and nature intensive learning. This teaching method has become extremely popular over the last one hundred years, and has proliferated worldwide. There are approximately 7,000 Montessori schools operating worldwide. The third section of the business plan will further describe the services offered by the Montessori School.

1.2 The Financing


Mr. Ramesh Prasad Regmi is seeking to raise Rs. 3,500,000 from your esteemed organization as a business loan. The interest rate and loan agreement are to be further discussed during negotiation. This business plan assumes that the business will receive a 3 year loan with a 15% fixed interest rate. The financing will be used for the following: Development of the Concerns Montessori School location. Financing for the first six months of operation. Capital to purchase FF&E. Mr. Regmi will contribute Rs.1,500,000 to the venture.

1.3 Mission Statement


The Montessori School provides a quality Montessori educational background that influences and supports life long learning for children in the Baudhanath, Chabahil.

1.4 Mangement Team


The Concern was founded by Ramesh Prasad Regmi. Mr. Regmi has acquired experience in the early childhood education industry. Through his expertise, he will be able to bring the operations of the business to profitability within its first year of operations.

1.5 Sales Forecasts


Mr. Regmi expects a strong rate of growth at the start of operations. Below are the expected financials over the next three years.

1.6 Expansion Plan


The Founder expects that the business will aggressively expand during the first three years of operation. Mr.Regmi intends to implement marketing campaigns that will effectively target individuals with children within the target market.

2.0 Concern and Financing Summary 2.1 Registered Name and Corporate Structure
Kids Montessori Home, The Concern is registered as an entity with the Kathmandu Metropolitan City in Ward No. 7, Chabahil Kathmandu Metropolitan City.

2.2 Required Funds


At this time, the Montessori School requires Rs.3,500,000 of debt funds. Below is a breakdown of how these funds will be used:

Particulars
Lease Hold Improvement Computer & Accessories Furniture & Fixtures Office Equipments Other Assets Software Exps Working Capital Cash Total Owners Investment Debt Finance

Actual Cost (in NRs.)


850,000.00 100,000.00 1,112,000.00 350,000.00 128,000.00 45,000.00 1915,000 500,000 5,000,000 1,500,000 3,500,000

2.3 Investor Equity


Mr. Regmi is not seeking an investment from a third party at this time.

2.4 Management Equity


Ramesh Prasad Regmi and his family owns 100% of the Kids Montessori Home.

2.5 Exit Strategy


If the business is very successful, Mr. Regmi may seek to sell the business to a third party for a significant earnings multiple. Most likely, the Concern will hire a qualified business broker to sell the business on behalf of the Montessori School. Based on historical numbers, the business could fetch a sales premium of up to 4 times earnings.

3.0 Products and Services


Below is a description of the services offered by the Montessori School. 3.1 Montessori School Services The Concern provides students with an alternative style of education developed by Maria Montessori, MD. This unique methodology of teaching focuses specifically on the development of the child, and provides them with an atmosphere where they can learn through both traditional teaching and selfdirected learning. This section of the business plan will provide an overview of the Montessori method of teaching. As stated above, this style of teaching was developed by the Italian educator and physician, Dr. Maria Montessori in the early 1900s. Over the last one hundred years, her unique methods have led to the creation of more than 7,000 schools worldwide (400 in Nepal) that use her philosophy to educate students. Almost 98% of these schools are private entities. The primary goal of a Montessori education is to provide children with a stimulating environment where students are free to explore subjects and appreciate learning during the course of their tutelage. The philosophy of Dr. Montessori seeks to instill a love of learning that does not end when a childs education is completed.

4.0 Strategic and Market Analysis 4.1 Economic Outlook


This section of the analysis will detail the economic climate, the Montessori School industry, the customer profile, and the competition that the business will face as it progresses through its business operations. Currently, the economy is coming out of a difficult economic period. The job picture has improved and lending has resumed to small businesses. As such, the demand for private schooling services has increased. Additionally, parents that work will always require schooling services and as such the business will be able to remain profitable and cash flow positive at all times.

4.2 Industry Analysis


In Nepal, there are approximately 400 Montessori schools that operate within the country. A vast majority of these programs are operated as not-for-profit entities. The tremendous popularity of this alternative teaching method has allowed these institutions to grow steadily over the last twenty years. Schools that specialize in providing Montessori education make up 4% of the aggregate private elementary and secondary school market. Typically a Montessori school charges tuition based on the age of the student. In the Nepal, the average yearly tuition charged for this type of schooling is Rs.20,000 per year for fulltime student enrollment. These fees can vary significantly depending on the per capita income of the schools specific market.

4.3 Customer Profile


The Montessori Schools average client will be a middle to upper middle class man or woman living in the Concerns target market. Common traits among clients will include: Annual household income exceeding Rs.500,000 Lives or works no more than 15 miles from the Concerns location. Will spend Rs.2,000 per month on Montessori School services.

5.0 Marketing Plan


The Montessori School intends to maintain an extensive marketing campaign that will ensure maximum visibility for the business in its targeted market. Below is an overview of the marketing strategies and objectives of the Montessori School.

5.1 Marketing Objectives


Continually enroll in different local programs to provide educational grants to The Montessori School on a monthly/yearly basis. Develop new marketing strategies for generating additional enrollment. Continue to maintain a strong relationship with local community.

5.2 Marketing Strategies


The Concern will maintain a reasonable print advertisement campaign in Chabahil area publications and newspapers to generate visibility for parents seeking to enroll their students in a Montessori program. Mr. Regmis intention is to build the school as one of the premier Montessori educational facilities in the Chabahil area, which will lead to significant word of mouth referrals during the first three years of operation. As stated earlier, the Montessori style of education and teaching is a prominent alternative to a traditional public or private school education. Parents that are specifically seeking this type of service will actively search for Montessori schools in their area. As such, the Concern will primarily market itself as a Montessori school and provides prospective parents of students with an abundance of literature regarding the schools commitment to this style of teaching.

6.0 Organizational Plan and Personnel Summary 6.1 Corporate Organization

7.0 Financial Plan 7.1 Underlying Assumptions


The Owner will acquire Rs.3,500,000 of debt funds to develop the business. The loan will have a 5 year term with a 15S% interest rate.

7.2 Sensitivity Analysis


In the event of an economic downturn, the business may have a decline in its revenues. However, the demand for parents that want to enroll their children in Montessori Schools is increasing steadily. As such, the Montessori School will be able to remain profitable and cash flow positive at all times despite certain drawbacks in the economy. 8.0 Other Income Source of the Business Owner

8.1. Income from Cooperative Society Mr. Regmi has invested 1000 shares of Rs. 100 each amounting to Rs. 100,000 in Heaven Saving an Credit Cooperative Limited. Mr. Regmi will receive Dividend when the Company makes profit @15%. 8.2 Salary Income from Maharajgunj Medical Campus Mr. Ramesh Regmi is an employee of Institute of Medicine, Maharajgunj Medical Campus, Tribhuwan University in the General Administration Section. His Gross salary and allowance is Rs. 200,980 per annum as per the Confirmation letter issued by the employer. 8.3 Pension Income of late. Madhav Prasad Regmi Mrs. Kamala Regmi, the mother of Mr. Ramesh Prasad Regmi receives monthly pension of Mr. Madhav Prasad Regmi, her Husband. The monthly amount received is Rs,8145/- contributing total annual income of Rs.97740/8.4 Agriculture Income: For maintaining the Household Expenses, Mr. Regmi has sufficient Income from Agriculture.

9.0 Collateral Security


The Following properties with respective Fair value of the Assets could be considered as the Collateral Security for lending the amount to Mr. Regmi. Property Description a. Land at Bistachap 3, Plot No. 155 with total area of 715-0-0 Ropani b. Building Fair Value of the Property (in NRs) 19,050,000

2,000,000

10. Conclusion
Based on the above analysis,Business Loan may be sanctioned to Mr. Ramesh Regmi for the promotion and operation of His School.

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