1.0 Executive Summary
The purpose of this business plan is to acquire $65,000 of debt capital for the development of a STEM focused consulting firm that will concurrently provide kits of educational products. Deutsch STEM Education Group LLC (“the Company”) was founded this year with the intention of working with multiple schools throughout the country in order to support STEM initiatives that focus on the expansion of science, technology, engineering, and math teaching within public and private schools. Full scale revenue generating operations will commence in the third-year quarter of this year.
Operations
The primary revenue center for the business will come from providing in-depth consulting for both public schools and private schools that are seeking to integrate STEM based programs into their curriculum. For these operations, the Company will typically produce engagement fees of $2,500 to $10,000 depending on the depth of consulting required.
This will be complimented through the sales of STEM focus kits, which will include art supplies, electronic supplies, educational workbooks, as well as other products that focus on technology. The Company will offer these products directly to its clients as well as through multiple online channels. These kits will have an affordable price of $20 to $100 depending on the items within the package.
The third section of this STEM business plan will further discuss the operations of the business.
The Financing
As noted above, the Company is currently in the market for a $65,000 business loan in order to commence operations. A significant portion of his capital will be used for the acquisition of inventory is for the Company’s STEM kits. A moderate portion of the capital will be allocated towards ongoing expenditures related to establishing consulting engagements with public and private schools.
The Future
Given the demand among schools to have proper STEM curriculum into their education systems, the Company will be able to easily expand its operations to a national level. Most importantly, the Company will further expand its STEM kit distribution operations as this can be conducted on a nationwide basis.
Market Overview
Revenue Forecasts
2.0 The Financing
2.1 Funds Required
The $65,000 of debt capital and $35,000 of owner contributed funds will be allocated as follows:
2.2 Management and Investor Equity
The Founder is the 100% owner of Deutsch STEM Education Group LLC.
2.3 Exit Strategies
The sale of this business would have a moderate degree of complexity given that spans two divisions. In all likeliness, the Company STEM kit distribution operations would be sold as a separate asset, which would include the sale of the e-commerce website. For the consulting aspect of operations, the Company would coordinate with a third-party educational firm to acquire the client list. Management was most likely need to stay on for at least a year in order to carry out a proper transition.
3.0 Operations
As discussed in the executive summary, Deutsch STEM Education Group will operate in a dual capacity. As it relates to its consulting operations, the Founder as well as staff consultants will work with public schools as well as private schools to provide guidance on how to properly integrate STEM based initiatives into their curriculum. The Founder has extensive experience within the field of science, technology, engineering, and mathematics and has a complete understanding of the best approach that provides high impact learning for students. The Company will work on both a direct basis at locations as well as on a virtual basis. This will be a very high margin revenue stream for Deutsch STEM Education Group.
These operations will be complimented through the kits at the Company will develop for multiple disciplines related to STEM education. A major component of these products includes Arduinos, Raspberry Pis, and electronics products in order to focus on the technology component of a STEM based education. These products will be directly sold to schools while also on the Company’s e-commerce website.
In the coming years, the Company intends to hire a number of highly qualified educational professionals that will work as consultants for the business. This will allow the Company to achieve significant year-on-year growth.
4.0 Overview of the Organization
4.1 Registered Name
Deutsch STEM Education Group LLC. The Company is registered as a limited liability Company in the State of New Jersey.
4.2 Commencement of Operations
The Company’s STEM consulting and product distribution operations will commence in the third quarter of this year.
4.3 Mission Statement
To provide comprehensive advisory services related to the integration of STEM initiatives into public and private schools.
4.4 Vision Statement
To become the preeminent STEM focused enterprise within the United States.
4.5 Organizational Objectives
• Use multiple forms of advertising including direct outreach with public and private schools to foster consulting engagements.
• Develop ongoing relationships with electronics and art supplies distributors so the Company can offer comprehensive STEM kits.
• Implement proper financial control so the Company can scale to a nationwide basis relatively easily.
• Develop the Company’s website is an educational resource specific for matters related to STEM.
• Provide substantial compensation packages to employees that further the growth objectives in the business.
• Adhere to all requirements as it relates to rendering educational consulting as well as the distribution of STEM kits.
5.0 Market and Industry Analysis
5.1 External Environmental Analysis
This section of the STEM business plan will focus on the current economic climate, the demographic profile, the competition, and the industry.
Inflation has become a major concern with the United States as this is impacting affordability as the prices of products and services continues to increase. It should be noted that numerous government agencies, including the Federal Reserve, have taken a proactive approach to reducing a rate of inflation through fiscal policy.
However, the revenue of Deutsch STEM Education Group will be able to remain stable even during this challenging business climate. Public schools and private schools have large budgets allocated for STEM based initiatives. As such, the business will be able to find a significant audience of elementary schools, middle schools, and high school schools that are seeking these types of services.
5.2 Industry Analysis
As of this year, there are 5,000 companies that are actively involved in providing education based services as well as kits related to STEM. These businesses generate $33 billion revenue of providing jobs to 60,000 people.
The growth profile of this industry is strong. As the United States continues to become a service based in industry, the demand for a STEM based educational initiatives is enormous. Deutsch STEM Education Group will be able to capitalize on this ongoing demand in the coming years.
5.3 Customer Profile
Any public or private school that is seeking to improve their STEM based initiatives is a potential client for the Company. The business will work with any sizes educational organization. As such, it is somewhat difficult to characterize the average client profile given that the demand for STEM based initiatives within schools as ubiquitous.
5.4 Competitive Analysis
The Company is taking a dual approach with operation so that the business can render both educational consulting while concurrently providing a wide range of curated educational goods that will further an individual’s knowledge in these fields.
This will create a substantial competitive advantage for the business as there are very few enterprises that operate in this dual capacity.
6.0 Key Strategic Issues
6.1 Sustainable Operations
Deutsch STEM Education Group will have sustainable operations as a result of the following:
• The Company will be able to operate on nationwide basis through virtual communication channels as well as through product sales.
• The Company will generate substantial contribution margins on the sale of STEM kits.
• The Company can scale its consulting operations by onboarding additional educational professionals.
• Limited competition among STEM based enterprises that operate in a dual capacity.
6.2 Basis of Growth
The Company will expand via the following methods:
• Continued use of search engine optimization and target social media marketing in order to drive sales of STEM kits.
• Integrate additional types of consulting related to public and private schools within the country.
• Continued to expansion the Company’s website to serve as a resource regarding STEM based initiatives.
7.0 Marketing Plan
7.1 Marketing Objectives
• Create numerous amounts of written content for the online platform that it serves as a resource for educational professional seeking to further implement STEM initiatives.
• Frequently attend trade shows and expositions related to education within the United States.
• Use PPC advertising when specific searches related to STEM based education are conducted.
7.2 Revenue Forecasts
7.3 Revenue Assumptions
Year 1
• The Company will launch its STEM consulting operations.
• First year revenue will reach $582,000.
Year 2
• The business will expand its relationships with public schools.
• Revenue will reach $699,000 in year two.
Years 3-5
• The Company will continue to expand its kit distribution.
• Revenue will reach $1.2 million by year five.
7.4 Marketing Strategies
Most importantly, the Company’s website is being positioned as an educational resource regarding all matters related to STEM. This platform will undergo immense search engine optimization that it becomes a well-recognized platform among educators that are seeking to integrate a greater degree of curriculum related to science, technology, engineering, and math. This type of marketing will continue throughout the life of the business.
In addition to search engine optimization, the Company will immediately use pay per click marketing in order to drive traffic to the website. The Company will allocate approximately 40% of its aggregate marketing budget towards this type of advertising.
Management will frequently attend major trade shows specifically for the education community in order to further increase brand-name awareness. Management anticipates that the Company will tend five to six tradeshows per year.
8.0 Organizational Plan
8.1 Organizational Hierarchy
8.2 Personnel Costs
9.0 Financial Plan
9.1 Underlying Assumptions
• Deutsch STEM Education Group achieve a compounded annual growth rate of 20%.
• The Founder will invest $35,000 to establish this educational venture.
• Management will acquire a $65,000 business loan.
9.2 Financial Highlights
• The average engagement for educational consulting will be $3,000.
• The Company will produce contribution origins of 50% on all STEM kit sales.
9.3 Sensitivity Analysis
The Company’s revenues are only modestly sensitive to challenging economic climates given that the vast majority of clients will be public schools and private schools. As these are funded by a municipal tax as well as private tuition, these organizations are less swayed by challenging economic times. The Company will generate substantial contribution margins from its STEM consulting operations, which will fully support the operations of the business.
9.4 Source of Funds
9.5 Financial Proformas
A) Profit and Loss Statement
B) Common Size Income Statement
C) Cash Flow Analysis
D) Balance Sheet
9.6 Breakeven Analysis
9.7 Business Ratios
SWOT Analysis
Strengths
• The Company will produce highly predictable streams of revenue from sales of STEM kits.
• This is a highly scale business that can operate on a nationwide basis for the onset of operations.
• Immense demand among both public and private schools for STEM based initiatives.
Weaknesses
• Moderately high cost related to onboarding clients.
• Payroll expenses will be a major expenditure in the coming years.
Opportunities
• Expansion of the types of STEM kits offered directly to clients as well as through the website.
• Integration of additional consulting services specific for the needs of academic institutions.
Threats
• Continued hiring of educational consultants that work in tandem with the Founder.
• Changes in taxation policy can impact the budgets for STEM based initiatives.
• Tariffs may impact the cost of components within STEM kits.
Risk Analysis
Development Risk – Low
The STEM based service architecture that will be offered by the Company has already been developed by the Founder. The primary matter that needs to be addressed to securing the funding discussed in this document.
Financing Risk – Low/Moderate
The business will generate two primary revenue reams that will fully support the underlying obligation discussed throughout this STEM business plan. These risks are further abated by the highly predictable nature of income generation.
Marketing Risk – Low
The Company will continue position itself as a major educational resource related to STEM based initiatives. This will be complemented through the numerous direct outreach and online focus marketing campaigns discussed in chapter seven.
Management Risk – Low
Management has more than twenty years of experience as a educator. He will be able to bring the operations of this business to substantial profitability with a focus on the generating a nationally recognized brand name.
Valuation Risk – Low
The valuation risk is offset by:
• Predictable income from STEM kits directly to clients as well as through e-commerce channels.
• The large-scale nature of clients and their operating budgets will ensure ongoing demand.
• The business will be able to properly establish growth objectives in each year.
Exit Risk – Low
As noted earlier, the most likely sales scenario would be to sell the two division separately. In this event, the Company will coordinate with several business professionals in order to ensure a fair market value for the Company. This is not expected to occur for at least seven years.