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Business Plan

E-Knowledge Lanka (Pvt) Ltd

“New Wave to Sri Lankan learning Community”

Date – 21st April 2008

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Table of Contents

1.0 Executive Summary 2 1.1 Overview of the Market 2 1.2 Technical and key personnel 2 1.3 Financial Overview 3

2.0 Detailed Business plan 2.1 Industry Analysis 4

2.2 The future success 5 2.3 Back Ground of the Business 6 2.4 The functional areas of the business 6

2.5 Sources of competitive advantage of the business 9 3.0 Marketing Plan 11

3.1 Market Analysis 11 4.0 Pricing Strategy 13 5.0 Advertising and promotional strategy 15 5.1 Advertising 15

5.1.1 Offline 15 5.1.2 Online 15

5.2 Personal selling 16 5.3 Predicted Media Cost 16 6.0 Service Strategy 17

6.1 Advisory services 17 6.2 Orientation Program 18 6.3 E-Learning materials 18 6.4 Online seminars 19 6.5 Advertising from institutions 19

7.0 External Market Influences 19 7.1 Technology and the Business 19

8.0 Competitors 20 9.0 Strategic analysis 20

9.1 SWOT for the Business 21 9.2 Segmentation Targeting and Positioning 21

10.0 Operational Plan 22 10.1 Daily Operations 22 10.2 Location 23 10.3 Management and Organization 23

10.4 Personnel 24 10.5 Structure of the Organization 25

11.0 Financial Plan 26 11.1 Income and Expense forecast for 3 years 27 11.2 Balance Sheet Forecast for 3 years 28 11.3 Cash Flow Forecast for 3 years 29

Our Team Appendix-1

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1.0 Executive Summary

The business “e-Knowledge Lanka” will help those who are interested in obtaining

knowledge in Sri Lanka. The business could be based on online and offline but most of

the functional areas contain online business. The web domain would be

www.eknowledge.lk.

The business is totally focused on Sri Lankan Education industry. This is both free and

paid service for the students. The E-Knowledge will help Sri Lankan institutions to

promote them.

This business can be divided into two major areas such as education and other related

services through online and offline. The business consists of approximately 80% online

and 20% offline activities.

1.1 Overview of the Market

The Sri Lankan education industry is a fast growing field. At present all are aware about

the value of solid education. There are institutes and individual persons who offer

education service for the people. But they fail to maintain the quality at a certain level.

They only focus on making profit or money. But if the market can be studied well and

provide valuable services to the students this will bring a better prestige and help the

organization to make money as well. Also the market consists of separate players eg-

tuitions, higher education institutes but the market doesn’t carry any of the players who

concentrate at a wide range of services through virtual world. The market has a better

potential because in future we are going to live in a virtual world. All the activities will

be undertaken through virtual life.

The business strategic actions which will take the business to success are totally the effort

made on branding. Also the strategic decisions made on the following areas such as

marketing mix, segmentation targeting and positioning should be the key factors to

achieve a successful business. There are web sites in Sri Lanka with good contents and

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information, but they are not successful due to lack of concentration on branding and

promotions.

1.2 Technical and key personnel

In this business there are more managerial key players. The marketing manager should

focus on capturing the market. The technical manager is responsible to look at the

technical stuffs such as data bases, site functionality. There should be a manager for

accounts and finance. The key personnel chart could be as follows;

Post Areas to looked at

Directors Monitoring all the business area

Manager – Marketing Getting clients, students, career guidance offers,

advertisement etc

Manager – Web site Designing, developing, checking the site

Manager- Accounts and Finance Responsible for the cash flow

Manager – Technical Date base, proper development and site functional

Panel of Professionals Handle all kind of educational activities- contract

basic

1.3 Financial Overview

This is a medium scale business that requires 6 million initial starts up cost. Since this is

highly depend on the technological aspect we have to invest much on computer

equipment and accessories We assumed/hoped this 6 million amount of capital can be

raised through the issue of shares among individual or through the investment of a highly

established organization. This capital requirement could be attained by the way of Bank

loan too, but we have not considered that option in our evaluation. If we have

successfully broadened the business in the first year we could expect a 15 % and 20%

growth in the first and second year respectively. This could lead the organization to

manage the cash –flow in an efficient manner and offer a better return on the capital

invested.

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Detailed Business plan

2.1 Industry Analysis

Sri Lankan education sector can be divided into the following categories.

� Primary Education

� Secondary education

� High School

� Professional Education

� Degree Programs (Local and foreign)

� MBA

� PHD

The sector consists of following activities. Primary education will be from year 1-5.

Secondary education starts from year 6 to Ordinary level and the high school represent

Advance level in Sri Lanka. The above mentioned are based on local education system, if

we consider the international system the same can be applied but the way of teaching

could be different. The scopes on the primary and secondary education are low for the

local education system. But for International schools the size of segments are low but can

be targeted well.

Both International and local higher school studies can be considered as a good target

because those are the stages people look for better potential advices to grow. The student

will be happy if they can get good guidance from a recognized professor or lecturer.

Then the next could be the professional education sector such as CIM.CIMA, ACCA.

Etc. The graduate schools contain of local and foreign universities and also the MBA

programs. At present the 0rganisations focus on the training and development at the

working point. Also apart from education the sector has a demand for better student

consultant and advisers the education related career guidance also comes to play a major

role.

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The trend is always growing. These days’ people know the value of education. Education

and other related fields are growing. The education level of women had increased. People

live in rural areas are more concerned on education these days. Number of tutorials are

increasing, the level of personal classes growing, the professional education field

increases. Students are seeking for knowledge and guidance. So the industry always

shows a good growth rate.

There are firms who carry orientation, training and development program for their

employees. Most of the Sri Lankan organizations realize the value of knowledge

management and learning culture.

2.2 The future success.

Currently Sri Lankan online market doesn’t show a better growth rate but in future it will

.People are going to live in a virtual life. This is already adopted in foreign countries but

in Sri Lanka it is still growing. In future the knowledge seeking will happen online in Sri

Lanka. These days people more aware about online studies. The organizations are started

to practice e-learning. In future the trend for the following will definitely take place.

Internet penetration in Sri Lanka is increasing and most of the Internet service providers

target with more broadband facilities. So home connection will grow in future, which will

make a good path to the virtual businesses.

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2.3 Back Ground of the Business

Mission Statement of the business

“To be the prominent virtual organization to add value to all learning citizen”

Goals and objectives of the business

Goals

• To position ourselves as a number one e learning provider in Sri Lanka

• Connecting all the people who seek for knowledge and guidance

• Building a strong e-learning community in Sri Lanka

Objectives

• Getting at least 200,000 people to use our service

• Capture minimum number of 100 organizations in Sri Lanka as our clients in

T&D, orientation programs

• Set up our unit in Sri Lankan schools - 50 local and 10 international schools

2.4 The functional areas of the business

The functional areas of the business can be the followings

1- Student advisory services

Through online students can request for advices from the professionals employed

by us. The advisory services can be divided in to the following areas such as

school level, Graduate schools and others. Students those who are facing

difficulties in their education can request for guidance through our web. They can

book a time when they need the service. Using online teleconferencing method

they can talk to our expertise. If the students need to get common guidance can go

through and frequently asked questions. Also every week there will be online

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seminars for students which they can watch and listen live or can watch the

recorded version.

Eg- If a student who completes A/Ls and looks for a better guidance for his/her

future then through our web he need to select the adviser he preferred and select

the area of advice and then book a time. If more students prefer to book a

particular adviser, the interested parties could be placed on one category for the

advice teleconferencing.

At this service level we need to assure the quality and the education of the

advisor.

As part of an offline strategy we can make our guidance unit separately in every

school. For schools the service could be free of charge based on the sponsorship

we collect. Using this offline strategy we can target rural areas as well.

Also people who look for professional’s advices can be given like how to face and

interview, brain storming session, selecting your future career, the better

education you can follow etc. we can Offer the viewers a maximum number of

articles to go through. If it’s a better article which has more value the member

could create online membership system to read it.

Eg- Those who get a premium membership can have unlimited access to

e-education resources.

2- Online seminars.

At present Sri Lankans are less aware about online seminars. But in future the

need for online seminars is going to be increased. Using expertise we can

undertake online seminars and charge the people who view it. The membership

might be premium, normal. Those who get premium membership can access

online seminars unlimited.

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This can be targeted for International school students as well. They are well aware

about internet study. Using contracts with International schools the teachers can

recommend us as a learning tool for their study. Example if a London O/L comes

we can arrange online seminars for the students who take exam at that time. Or

else there is another way to conduct this seminar

Eg- Arranging an online seminar in a school hall which will enable the students to

hear and see our expertise who is conducting the seminar. Also the students can

use our technology and raise questions and obtained the answers for same from

the expertise.

3- Orientation program

Organization can create their profile with us. If they need us to make orientation

program for them we can make the arrangements. Using the personalized areas

pages they can request for orientation and training programs for their employees.

The orientation can be done by our expertise in whichever field requested by

them.. For this we should have the base of all professionals in Sri Lanka. Even if

any universities wish to arrange orientation program for the new intakes, this

could be organized by us.

4- Foreign Contacts

We can make agreement with foreign universities in order to give more

opportunities for the Sri Lankan students. By using organization sponsorship we

can send the top Sri Lankan students to the foreign universities. Eg- Top

university student. Also for students who wish to follow foreign education can

contact us regarding the courses. A separate consultancy can be done for them.

We should include all the foreign university bases in our date base. So we can

provide people valuable information.

5- Study articles and e-resources for students.

We can publish Sri Lankan books, articles, research papers, news and other

educational stuffs for viewers. Eg- Like emeraldinsights.com, marketingprof.com

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etc. We can publish articles on current market trends and the education trends in

the web site.

6- Advertising

Sri Lankan institutions who want to advertise with us can do so. They can

advertise the courses they provide and a completed profile about them. Students

who seek for education can go through the details from our web and apply or

contact through online. An online customer care executive can answer questions

from the viewers through chat system or by requested call number. Even if we are

on offline the viewer can leave messages to take a call back for them.

2.5 Sources of competitive advantage of the business

In Sri Lanka there is no business exist which targets Education sector. The sources of

competitive advantage of the business are

1- Professionals we contact (University Professors & lecturers, Industry experts,

consultants etc) we should try to capture all the well known professionals in Sri

Lanka.

2- The high technical website connected with data base

3- Service excellence

4- Search Engine Optimization

5- First business in Sri Lanka.

The service is totally giving high value to the users. The service should be in high quality

and should keep up the time. The ways in which the business create values are

• More feature in the web site.

Eg- Online customer care, good site functionality, quick loading and downloading

• High Security online payment system.

• As a virtual business there will be continuous innovation which increases the

customer value.

• Promised service on promised time.

• Increase the possibility of e learning in Sri Lankan students.

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• Create an edge in organizational level training and development.

• User preferred methods of services

The business is depending on more factors to get it in the success point. The major

factors which will make the business success are

• Attractive professionals web site

• Recognized individuals ( Professors, lecturers etc)

• Technology

(Database, tracking, etc)

• The price we charge

• The service quality

• The marketing communication

When taking the key success factors generally the product web site play a major role. The

web should load quickly; the viewer’s should be able to access the web very easy, trusted

purchase, quick downloading and the physical appearance of the web. The service is

again depending on the professionals we have. The people like professionals, university

lecturers, experienced industrialists etc. Also the proper internet development is

important for the business success for tracking the details of visitors, sales, visitors’

segmentation etc.

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3.0 Marketing Plan

3.1 Market Analysis

The business marketing can be divided into two. One is individual marketing and the

other organization marketing. The target market is shown in the following diagram.

e-knowledge.lk

The market contains all categories of students in Sri Lanka.

If we take the students market, special target would be the people who complete O/L and

A/L. The scope of targeting less than the above grade is low because the need for 3rd

party guidance is low. The parents provide the fullest support for their children. Student

consultancy is very important in the age mentioned above. Because sometimes student do

not express their problem and questions to their parents freely and this is the age most of

the students struggle themselves. The principle is the same for both local and

international students. At these level students who seek for online material is less except

in an International school.

Individual Organization

1- Students ( O/L, A/L both local and international)

2- School leavers 3- Undergraduates 4- Graduates 5- MBA followers 6- PHD Education

Seekers 7- Foreigners

1 – Organizations (Those who concentrate high on employee training and development) 2- Firms seek for orientation program 3- Schools (International) 4- Universities

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Also when ever people complete their A/L definitely they look for better guidance. The

value of guidance is very high if it has been given by a talented and recognized advisor.

The increased concern on education creates demand for better education consultancy and

advisory service. The scope exists for online because the professionals will not be able to

visit the particular school during their busy schedule. But if the student books the service

on online he/she can view it through online in the night as well. The professional we

recruit may give the guidance by staying at home.

Also if we take the school leaver market the chances of targets are high. There are people

who struggle to take a decision on their professional studies, some look for work advices,

some people seek for foreign chances, and some are undecided what to do. What ever the

education even it’s local or foreign definitely people look for their future guidance. This

level market contains the activities like looking for foreign universities, works,

professional courses etc.

Undergraduate market contains greater opportunity for us. They are the highest

information seekers. The number of Sri Lankan webs who provide information related to

Sri Lanka is very low. Also undergraduate greatly look for career guidance in most of the

instances. The online seminars will be very useful for them. The seminars can be

conducted in all the education area. They also can be targeted with job opportunities

based on our client base.

Graduates are people who seek for MBA programs and future career guidance. Most of

the graduates those who just passed the universities generally look for better advice and

consultancy. Because they are not sure which filed of work they have to actually target.

MBA and PHD followers are small target but they can also be attracted with research

papers. They can upload their researches and other stuffs to their member page. If they

want to levy a charge for their papers, this can be done. A charge could be levied from

the viewers and this amount could be remitted to the owner of the article.

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If you take the business sector the opportunity lies in the training program level. At

present most of the organizations highly concern on giving training for their employees.

These training programmes could be arranged by us at the request of the employers and a

charge could be levied for this service.. This is a kind of Offline activity. But all the

contacts will be done through online. At the final confirmation the representatives will

visit the organization and make further arrangements. (Foreign Contact)

There are universities who seek for student orientation but lack in arranging suitable

person. Like an intermediary we can connect them with our top professionals.

4.0 Pricing Strategy

Advisory Service Charges

Primary Education

Local Schools 1500Rs

International Schools 3000Rs

Secondary Education

Local Education 1500Rs

International Schools 3000Rs

Higher Education

Local Education 2000Rs

International Schools 4000Rs

School Leavers 5000Rs

Undergraduate

Local University 8000 Rs

Foreign University(

Situated in Sri Lanka)

12000 Rs

Graduates and MBA seekers 15000Rs

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Advertising Charges

Banner in Our web site 5000 Per Month

Business Profile – If it has a profit focus 100,000 Rs Per Semi

Sponsorship Vary

Sub Domain 10000 Per Month

Links 3000 Per Month

Online Seminars Charges ( annually)

Premium Membership 20,000 Rs

Platinum Membership 10,000 Rs

Silver Membership 8,000 Rs

Orientation Program Charges ( Per Program)

Full Service 200,000Rs

Half Service 100,000 Rs

University services – Local 20,000 Rs

Foreign 50,000 Rs

Articles Access Charges

Premium Membership 20,000 Rs Per year- Unlimited access

Month Membership 2000 Per Month – Limited access

Foreign Education Guidance Charges

Full Service- With Registration Based on the total cost

Consultancy Services 25,000 Rs

Note- the price mentioned here might depend on the individual or professional as well.

The quality, the education level also play a role when determining the price.

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5.0 Advertising and promotional strategy

This can include both above and below the line strategy. The promotional mix could

contain both online and offline activities.

5.1 Advertising –

5.1.1 Offline

News Paper advertisements can be published. The print media should be targeted with all

the with education section, business sections etc. The print media advertising could be

targeted with the followings publications such as The business weeks, LMD, university

publications, newspapers education weekly attachments, Organizational publications etc.

Also when targeting the firms with advertising program we can publish our leaflets in

their notice board. Street bill boards and banners near our targets can be hanged.

5.1.2 Online

In Sri Lanka search for education materials and related stuffs are high. So we can run

PPC campaigns in Google, Yahoo and MSN. When ever a search comes based on Sri

Lankan education or topics we can be display our web in the top result. Also in the online

PPC advertising bidding is generally low. With reasonable bidding we can come up in the

position. Eg- 0.8 $ per click. If it costs more for us can adopt to pay per click action and

we have to pay for the Google or Yahoo if there is any action happen in our web site.

The targeted key words could be Sri Lankan education, education Sri Lanka, education in

Sri Lanka and all the words related to education. Our results can be displayed when some

one makes search regarding Sri Lankan education and learning.

Sri Lanka is in a boom in the social networking sites. People regularly go for Facebook

and other social Medias. We can send Facebook flyers to capture Sri Lankans, which we

have to pay when an action happen in our web. When targeting we have to make sure that

we set the flyers to people who belongs to Sri Lanka network.

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There are Sri Lankan direct marketing companies with email addresses of Sri Lankan

professionals, lecturers and students.. We can send direct mails informing them about our

service. Eg- Inotrend International contains 70,000 emails in their base. Once we develop

our customer base we can send the promotional mail through our technical stream.

5.2 Personal selling

We can send our representative to Sri Lankan schools (both local and international),

Universities (Private and government), firms (multinationals and larger firms specially)

and canvas about our service and the web site.

As a public relations activity in the initial stage we need to publish our web and service

launch in the news papers and online press Medias, which will create awareness about

our brand at the initial stage.

Also as a promotional strategy we can concentrate on Search Engine Optimization as

well, which will get us in the first result (Organic Position). So in future we can be able to

save our cost. The web site can be optimized to search engine friendly. So who ever

search any education key words, our web results will appear in the first ten lists.

5.3 Predicted media cost

Advertising Cost for first year

Ad words (google, yahoo,

MSN)

1,000 $ yearly budget – Spend based

on clicks

News papers 1,000,000

Print Media 500,000

Search Engine Optimization 200,000

Public Relations 50,000

Direct Mails 50,000

Face Book Flyers 500$ per Year – Spend based on

clicks

Magazines 200,000

Banners 30,000

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6.0 Service Strategy

6.1 Advisory services

To get an expert advice the student should get register with www. eknowledge.lk. Once

they get registered then there will be a personalized page created for them. After that they

can be able to select their services they need. If a student wants to get advices regarding

careers he can select the desired advisor and first make the payment. Then can select the

desired date for the advice. Those who don’t have video cam at home and to get the

online advice, can access it through the web site video cam which is connected to our

own server.

If the student wants to access the online seminars then can access it by logging in. But

except advisory services if the student wants to download papers, view online seminars

the membership services can be applicable. The member should pay a premium

membership and access all the material of eknowledge.lk also there will be free articles,

download and seminars which can be accessed too. This is depending on the importance

and the copy rights.

Also we have to get links from foreign universities and colleges. Students those who are

seeking foreign education can access all the relevant information about foreign

universities and colleges. They can apply through us. For this we have to get connected

with foreign universities and colleges.

Eg- If an International school student need to get an advice from a well known

professional then he need to login to our web site. Using the profile section can select the

desired person from who he would like to get the advice. Then select the time and date

and make the payment, which will automatically notify to the professional. Then the

student can contact him at the selected date and communicate with video conference

system. For this if the student has a web cam can communicate by looking face to face. If

not he/she can only see the professional in the set up video stream. For this we have to set

up technology at every professionals house we make contract. Also most of the Sri

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Lankan top professionals are available during the night. So he can make available at their

desired time. If the students do not have internet facility at home then he can make the

appointment at our office and meet him personally or directly. This might be the option

for the time being.

The service can be applicable for all individuals who seek for advice related to education.

6.2 Orientation Program

Generally this is an offline activity. If any organization needs to arrange an orientation

program for their employees they can send the request to us through the web. They can

create a business page in the web and send a request to us. All the arrangements will be

done by us including arranging the experts, program arrangements etc. Apart from

orientation if the organization needs to get training and development services all the

services will be arranged with greater service excellence. We can take the responsibility

from the start to end of the Training and development program.

There are universities in Sri Lanka arranging various kinds of orientation program for

their new comers and students. This can be arranged by us. The orientation will be

provided by our professionals. They may be industrial experts or the education expert.

6.3 E-Learning Materials

We can upload enough e resources to student to improve their learning. But if it’s a

premium article like research papers and publication by top professionals then the viewer

need to pay for it. It depends on the article they select. They can be able to view the

unlimited article in our web site by paying a premium membership. We can take the

responsibility through the online credit card system, But for the time being they can make

the payment to our branch as well. Also if a person need to view a research paper

uploaded by the professional then he has to pay for him through us. The learning

materials will contain all the resources. The articles could be based on areas such as

Commerce, Science, technology, arts, economics, marketing, accounting etc. If a Sri

Lankan professional need to publish his/her finding to all then he/she need to create a

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personal profile and can upload all the materials through our web site. If she/ he think

that it has to be paid for viewing, then the viewer need to pay.

6.4 Online seminars

We can publish online seminars for the people. We will be notifying the seminar time in

the web. If the organization or individual need to access it can go online and listen to it

live. Or else they can view the recorded version. For this they will be charged.

Eg- Marketingprofs.com, seochat.com

6.5 Advertising from institutions

Sri Lankan education institution can make advertisement with us. If they have courses

and degrees to promote they can create their profiles in our webs site and promote their

services. For this they have to pay us as advertisement charge.

7.0 External Market Influences

There are external market influences for this business which can be classified in to the

followings. They are Economic, social and technological

The impact of economic factors may not influence much on us. When it comes to

education these days people are willing to spend if it has a good value. They spending

rate will be higher in future.

Social market might influence us in more ways such as attitude towards online purchase,

their income, and willingness to spend time on internet related education. But here also if

the business can provide a better value for them then influence might not impact much on

us.

Technology is our heart of business. So when ever the technology changes we need to

adapt our selves. Example – hosting servers, change in video stream communication, data

bases (Data mining) integration of new operating system, updating technical personal etc.

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7.1 Technology and the Business

Since our business is highly depend on the virtual operation we have to give more

attention to the technical advancement. The technology we use should be updated and

capable enough to attract our customer base. To make our promises true, we should have

to use the effective Unix system technology. We propose to use a mix of Html, Java

Script, MySQL and PHP language to design the website and the related functions to cater

the all kind of customer expectations. In order to facilitate our learning citizens in the

way of audio/ video communication format, we have to use Flash Streaming technology.

Apart from that we have to maintain large databases and CGI’s in prominent manner to

fulfill the database marketing needs and advantages. Our attention towards technology is

high in rapidly changing technological environment.

8.0 Competitors

As a first business still no direct competitors exist for the business and there is no strong

brand names related to e learning in Sri Lanka. Also private institutions, personal

consultant for students can be the other part of competitors. But these cannot be a threat

when we attract high professionals for our business.

9.0 Strategic analysis

The strategy could be focused strategy because we target the particular industry which

comes under learning industry. In Sri Lanka the industry has sufficient market size and

growth rate and no existence of competitors. Once we build up the business we can go for

market development by using our current portfolio and target other geographic countries

which have high demand for Sri Lankan professionals. Eg- India

We can focus the market with differentiation in services we provide and get the first

mover advantage. But anyway this business can be copied by others but the branding we

do will make success for us in future.

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9.1 SWOT for the Business

Strength of the business

1- Expert Professionals

2- Technology enabled

3- Learning resource databases.

Opportunities

1- Increasing internet penetration will tend to grow

2- Awareness of education increases

3- Increase number of Foreign education seekers

4- Organization needs on T&D increases

5- The search on Internet

9.2 Segmentation Targeting and Positioning

Segment is based on the variable mentioned above on the customers. The segments could

be

1 – Schools segment

2 – Professional education segment

3- University segments both foreign and local

4- Organization segments

5- MBA Segments

6- Foreign education

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The desired positioning map for the business

10.0 Operational Plan

10.1 Daily Operations

The operation and process of the business happens daily online and offline activities.

The web process is totally depending on the servers and databases. Daily web operation

will be done in the office which could be rented out in Bambalapitiya. The web process

daily includes

1- 24 hour customer service – online toll free calls and chat ( one customer service

will be appointed per day in the first year of operation)

2- Site maintenance and checking – Checking for errors and technical problems

3- Server restarts every day to make effect new uploads

4- Database maintenance

5- Monitoring networking with the house connection of professionals and units

6- Editing ad words in Google yahoo and msn and monitoring the cost.

7- Quality Assurance Department every morning needs to ensure the assurance of

the web site.

High Quality service

Low quality service

Low price High Price

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Marketing operations daily include the activities of visiting organizations and universities

to capture new projects. Meeting up professionals and educational experts to make

contract with us, monitoring day to day operations and checking the related weaker

activities and overcoming the barriers and make sure marketing operations not contain

any error and look for new web marketing opportunities to promote the business.

10.2 Location

The location of the business should contain a one floor building in an industrial area in

Colombo. There should be a separate server and database room and Customer service call

center. Also the location of the building should be easily accessible by every one in the

beginning stage, because there may offline activities as well.

The needed technical equipments for the operation are computers, server monitoring

system, web video conferencing platform, web teleconferencing platform.

10.3 Management and Organization

The company should be registered as a private limited liability company under the new

company act No 7 of 2007. In order to incorporate the company we shall make an

application in a prescribed form to the registrar of companies signed by the initial share

holders of our company together with following documents.

1. Name of the company and a declaration that the name is

identical

2. The articles of association of the company which contain the

main objectives and other information.

3. The consent of the each person who has agreed to be director

of the company

4. Consent in a prescribed form who are to be appointed as initial

secretaries of the company.

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After receiving the certificate of incorporation which is treated as a conclusive evidence

of the business, we can start the operation officially. We proposed to issue Rs 10/= worth

of 1,000,000 shares to raise capital of 10 Million in order to fulfill the start up cost

requirement.

10.4 Personnel

The number of employees for the first year of operation includes approximately 20

employees.

Post Areas to looked at

Directors Monitoring all the business area

Manager – Marketing Getting clients, students, career guidance offers,

advertisement etc

Manager – Web site Designing, developing, checking the site

Manager- Accounts and Finance Responsible for the cash flow

Manager – Technical Date base, proper development and site functional

Panel of Professionals Handle all kind of educational activities- contract

basic

Marketing Executives Capturing new clients, monitor marketing

environment

The employees we recruit should be talented, and skilled. Our main asset would be the

professionals we are going to make contract. All are well known Sri Lankan professionals

like industry experts with high experience, professors, lecturers and consultants. We can

find and attract them by a personal visit to their place. The top management will be

responsible to get them first into the business.

For the technology department we should recruit qualified personnel’s with high benefits.

The marketing executives can be recruited from universities and through recruitment

agencies. All the marketing executives should contain knowledge on web sites and online

activities. There would be an added advantage if they have experience on virtual

organizations.

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Pay Structure

Directors – 70,000Rs each

Marketing Manager – 50,000Rs

Manager Product development / Web Master – 50,000 Rs

Database Handler – 40,000 Rs

Technology leader – 30,000

Technical staff 5 – 25,000 each

Marketing executives – Field 2 – Basic 10,000 + Commission based on their clients

Office 1 15,000

The salary structure will be for t 6 months operations during their probation period. Then

it will be increased. All the recruited employees will be on a 6 moth probationary period.

If they perform well the remuneration will be increased. Also detailed policy manual will

be given for them to follow. The common policy will be agreed in the first to

management meeting which will be held in the first year of operations.

10.5 Structure of the Organization

Directors

After the first year of operations the number of employees will be increased in every

department. Eg - Additional 10 technology staff, 5 marketing executives & an account

executive.

Web Master Marketing Manager Data Base Manager Finance manager

Technical staffs

Marketing Executives

Manager-technical

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11.0 Financial Plan

This is an Internet venture that, of course, depends on the developing financial prospects

of the growing Internet world. To make it work financially, we need to increase valuation

on schedule to bring in substantial additional assets. For that reason we have increased

the PPE time to time in order to fulfill the requirement of changing technology and

striving need. We are proposing to spend Rs.5 Million as a start up cost at the beginning

of the operation.

In designing the financial plan of the e-knowledge lanka ltd, we have considered the

following aspects.

• Assess the business environment (Virtual Business –Asset Based company)

• Confirm the business vision and objectives ( Attain good return )

• Identify the types of resources needed to achieve these objectives

• Quantify the amount of resource (Work force, equipment)

• Calculate the total cost of each type of resource

• Identify any risks and issues with the budget set(Sector Under rapid changes)

Performing Financial Planning is critical to the success of any organization. In focusing

the financial plan here we have taken some assumption.

1. Finance have been obtain by the way of issued of share capital of 600,000* Rs 10 shares.

2. Inflationary factors not taken in to account

3. Taxation is at the rate of 15%

4. No any dividend is paid to the shareholders

5. All the surplus cash is deposited at the bank (No investment were made)

6. Since this is service organization and our operations are diversified, we could not predict unit basis sales forecast or break even analysis

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3.1 Income and Expense forecast for 3 years

E-Knowledge (PVT) LTD INCOME STATEMENT FOR THE YEAR ENDED 31.12.2009 31.12.2010 31.12.2011 (All amounts in Sri Lankan Rupees)

Revenue

13,000,000

18,000,000

22,000,000

Cost of Sales

7,000,000

9,000,000

10,500,000

6,000,000

9,000,000

11,500,000

Other Operating Income

500,000

800,000

800,000

Administrative Expenses

(5,800,000)

(6,500,000)

(7,800,000)

Distribution Cost

(2,100,000)

(1,850,000)

(2,000,000)

Other Operating Expenses

(300,000)

(300,000)

(350,000)

Finance Cost

(100,000)

(150,000)

(150,000)

Profit / (Loss) before Taxation

(1,800,000)

1,000,000

2,000,000

Income Tax -

(150,000)

(300,000)

Profit / (Loss) after Tax

(1,800,000)

850,000

1,700,000

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11.2 Balance Sheet Forecast for 3 years

E-Knowledge (PVT) LTD BALANCE SHEET AS AT 31.12.2009 31.12.2010 31.12.2006 (All amounts in Sri Lankan Rupees) ASSETS Non Current Assets Property, Plant & Equipment 2,640,000 2,760,000 3,390,000

Current Assets Trade & Other Receivables 500,000 700,000 850,000 Cash in hand and at Bank 1,760,000 2,790,000 4,710,000

2,260,000 3,490,000 5,560,000

Total Assets 4,900,000 6,250,000 8,950,000

EQUITY & LIABILITIES

Capital & Reserves Issued Share Capital 6,000,000 6,000,000 6,000,000 Accumulated Profit / (Loss) (1,800,000) (950,000) 1,050,000

4,200,000 5,050,000 7,050,000

Non Current Liabilities Provision for Retiring Gratuity 300,000 550,000 800,000

Current Liabilities

Creditors & Other Payables 400,000 500,000 800,000 Provision for Taxation 150,000 300,000 400,000 650,000 1,100,000

Total Equity & Liabilities 4,900,000 6,250,000 8,950,000

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11.3 Cash Flow Forecast for 3 years

E-Knowledge (PVT) LTD FOR THE YEAR ENDED 31.12.2009 31.12.2010 31.12.2011 CASH FLOW - OPERATING ACTIVITIES

Profit /(Loss) for the year

(1,800,000)

1,000,000

2,000,000 Adjustments :

Depreciation

360,000

380,000

370,000

Provision for Retiring Gratuity

300,000

250,000

250,000 Operating Profit before Changes in Working Capital

(1,140,000)

1,630,000

2,620,000

(Increase) / Decrease in :

Trade & Other Receivables

(500,000)

(200,000)

(150,000) Increase / (Decrease) in:

Creditors & Other Payables

400,000

250,000

450,000

Cash Generated from Operations

(1,240,000)

1,680,000

2,920,000

Income Tax Paid -

(150,000)

Net Cash from Operating activities

(1,240,000)

1,530,000

2,920,000 CASH FLOW -INVESTING ACTIVITIES

Purchase of Property, Plant & Equipment

(3,000,000)

(500,000)

(1,000,000) Proceeds from sale of Computer Equipment

Net Cash out flow from Investing Activities

(3,000,000)

(500,000)

(1,000,000) CASH FLOW - FINANCING ACTIVITIES

Issue of Shares

6,000,000 - -

Net Cash Flow from Financing Activities

6,000,000 - -

NET INCREASE / (DECREASE)

1,760,000

1,030,000

1,920,000

CASH - BEGINNING OF THE YEAR -

1,760,000

2,790,000

CASH AT THE END OF THE YEAR

1,760,000

2,790,000

4,710,000

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