Language Carrousel – Business Plan

BABEȘ-BOLYAI UNIVERSITY

FACULTY OF BUSINESS

Dissertation paper

Scientific coordinator,

Prof. Univ. dr. Oana Gica

[anonimizat]

Cluj-Napoca

Year 2016

BABEȘ-BOLYAI UNIVERSITY

FACULTY OF BUSINESS

SPECIALIZATION

INTERNATIONAL BUSINESS ADMINISTRATION

Dissertation paper

Language Carrousel – Business plan

Scientific coordinator,

Prof. Univ. dr. Oana Gica

[anonimizat]

Cluj-Napoca

Year 2016

Paper summary

Declaration regarding the content of the paper

Introduction

The aim of this paper is to demonstrate that an ecommerce business in the domain of foreign languages can become a successful one and can generate interest among people that are keen on or interested in learning foreign languages from the comfort of their own homes and most of all that such a business can generate profit from the first years of establishment.

The first chapter is concentrated in revealing the executive summary of the business and the future to be a Limited Liability Society, this being followed by a brief description of the concept of the business, the services provided, the mission and objectives and the role that the entrepreneur plays in the platform to be launched, in the second chapter of the paper.

In addition to this, in the following two chapters we shall focus on the analysis of the international business opportunity from economical, political and geographical point of view as well as on the organizational plan of the society which shall include the description of the partners and suppliers involved, the scheduling of the activities provided and the operation system used for developing the platform.

In what follows, we shall emphasize the target market which the platform shall address to, by identifying the competition and the means of advertising that shall be used in order to make the learning system we wish to create more appealing that other ones already existent on the market.

The last aspects that shall be debated in this paper shall be the financial plan of the business, meaning all the costs incomes and financial results obtained for the first three years of establishment of the business, as well as key aspects of the business that shall constitute the final proposal of this business plan.

Executive summary

A business refers to an entrepreneurial initiative which shall take shape of a certain kind of profit for all the parties implied. As defined in Romanian Explicative Dictionary, the business refers to “the financial, commercial or industrial transaction, which is often based on speculation”.

For any business to take shape, the first step to make is determining the domain of activity, the juridical form of the next to be a successful business, the services it shall provide to the future target market and the objective that the business shall meet.

The business shall take the form of a Limited Liability Company being setup by the partners AndraBlidarean, Andreea Morar and Roxana Pop-Roatis, partners that shall become the funders of the company. The domain sighted is the one of foreign languages learning due to previous academic studies of two of the founders of the company in this particular area, aspect that offers the two funders the capacity of being involved in the teaching process also and reduce part of the costs allocated to the salaries of the staff. Due to the establishment of the company as an online platform, the business shall herein develop in the E-commerce field. The platform shall be named Language Carrousel LMS as to underline the platform’s capability to offer every one of the user a journey in the foreign languages’ land.

Services provided by the platform shall be characteristic to a Learning Management System and shall consist in the tools and materials needed in order to learn a foreign language. Moreover, the users shall benefit of 24/7 assistance provided by authorized personnel and there shall also be native speakers involved available to respond to any need that might arise.

Since all the activity shall take place around an online platform, the target market consists especially in people accustomed to using computers and various internet tools. Therefore, this learning system targets a large group of consumers aged between 18 and 70 years old. Teenagers younger than 18 were not included in the target market due to the fact that most of them have foreign languages included in their study syllabus. Despite this, they shall be able to access the platform with the consignment of an adult that shall be provided in the moment of filling in the sign up membership.

The main competitors already known on the market are online platforms like www.livemocha.com, www.learn-english-online.org, www.duolingo.com. These platforms also serve as learning systems focused either on one foreign language or more. Even if the competition might be strong, our platform differentiates itself through the capacity of offering its members feedback and assistance directly from teachers not only automated generated responses. Therefore, the success of the business and the platform itself shall be ensured by factors like 24/7 assistance, worldwide coverage and user-friendly interface.

Business concept

2.1. Domain of activity

The business shall be developed in the learning foreign languages by using new formation technologies domain. For this business to take shape there is no need for any approval from the Ministry of Education and Scientific Research to be granted due to the fact that the business shall not be organized and begin to function under the ferule of the Government.

Due to the fact that the business shall take the form of an on-line platform, it shall be subsumed to the Electronic commerce area, concept better known as E-commerce. In nowadays society, E-commerce businesses are meeting a continuous growth due to their capacity of satisfying consumers’ needs faster and easier that a traditional business. As Amir Manzoor sustains, “consumers benefit significantly through enhanced capacity to research and compare products, expand choice in products that may be purchased at any time and from anywhere and more possibilities to customize products to better meet personal preferences” due to E-commerce businesses. Moreover ‘’increased transparency in E-commerce intensifies competition and oftentimes results in lower prices for consumers”; therefore the advantages of using this type of business proves to often be more appealing both to consumer and the entrepreneur.

The domain of foreign languages is more appealing than any other one, due to my University studies that concentrated on foreign languages. I mastered a degree in English and German Language and the right to teach these two languages after mastering the pedagogical module included in the three years of university education. Moreover, after 2 years of working for the Spanish team within a multinational company and having daily contact with customers, I was awarded with a Spanish certification also. Thereby, with the knowledge regarding foreign languages cumulated over the time, the diplomas that give me the right to teach and also the acquaintances that have graduated the same University, but having other foreign languages as a specialization, the thought of having qualified personnel involved in this platform become one of the main reasons of setting up a business in the domain of foreign languages learning.

Second, the era that we live in is the era of foreign languages and little time to dedicate to any other activity than the job one has. English is one of the international languages known worldwide; if we were to speak about Romania, knowing English is like knowing Romanian, and the need of diversity and getting employed in a multinational company pushes many people to begin learning more and more foreign languages, from more common one like German, French, Italian, Spanish to languages that are not to our common use as Japanese, Chinese, Russian etc.

2.2. Juridical form and shareholding

The business shall take the form of a Limited Liability Company with a starting capital of 300 RON, amount equally provided by the three partners investing in the business: AndraBlidarean, Andreea Morar and Roxana Pop-Roatis. The three partners shall become funders of the new raised society after signing the constitutive act of the next to be company. Each funder shall own 30% of the company’s shares, the remaining 10% of the shares being acknowledged by SC. Evozone SRL, the IT company being in charge of the future platform’ development and maintenance.

The founders of the company shall be obliged to maintain their investing capital for an established period of one year. If one of the founders decides to redraw from the partnership during the first year from the establishment of the business, the initial investment shall be lost and she shall redraw only with one third of the profit gained during this period. If the partnership is ended after one year from the establishment of the business by either of the parts involved, the remaining shares shall be divided between the funders left, with no right of redrawing the initial invested capital, or leave the owner right of the remaining shares to the funders and receive 50% of the starting capital invested in the beginning stages of the business.

2.3. The Role of the entrepreneur

In the last decades the terms entrepreneurship and entrepreneur have meet a continuous growth owed to the fact that more and more people have started associating the concept of entrepreneurship to economic development and the welfare of a certain nation. The entrepreneurs’ activity has acutely impacted the surrounding world due to their capacity of making things move and progress. They are the ones introducing new technologies and promoting new products on the market, and by doing this, they stimulate the process of discovering new resources and levy capital, not to mention the fact that they ensure the jobs of the majority of the population worldwide.

In this particular case, the role of the entrepreneur, in the next to be business of foreign language learning, shall be to create a certain understanding to the consumers’ life and needs by means of the products or services that the platform shall offer. The real creativity in doing this intervenes when telling the truth about the business we shall own, but using an original manner of accomplishing this.

2.4. Services provided

The online platform shall provide services specific to a Learning Management System. Firstly, any user shall have access the platform on the base of trial admittance in order to find out what the platform provides and whether if the tools provided can meet their needs or if there is anything else they found find more helpful in the process of learning a new foreign language.

The services we offer are delivered to the platform’s users by our teachers, through the means of the internet, so there is no physical means of transportation. Other suppliers will emerge with the expansion of our teachers range with other volunteers and specialist. Eventually, any user of the platform can become, in turn, a supplier for another user who asks for certain information.

A great benefit of having an online business is that the internet is the fastest means of transportation one could use for delivering services and products, and, moreover, the cheapest (you only pay your monthly internet subscription). Another benefit of using the internet as a “means of transportation” is that you do not need to pay customs’ fees and you don’t have to fill in a lot if papers – unless, in the expansion process, you going to get in touch with a very restrictive country.

Some risks this method assumes are the possibility of being hacked for getting information designed for paid subscriptions for free, and the dependence of the functionality of the internet, if the connection to internet breaks at a certain point in time, at any of the ends (provider or consumer), the learning process will be interrupted until the issue has been solved.

The services provided are the various channels that shall be used in order to provide the consumer an appropriate environment of learning a foreign language; there shall be complete courses uploaded each week. The courses shall vary from grammar teaching lessons and exercises to literature texts, video and audio courses based on stories and subjects established either by the teachers or by the consumers, depending of the need and feedback the consumers provide in the previous weeks. There shall also courses based on various domains of specialty like medical, technical, juridical domain in order for the consumers to acquire a wider vocabulary in the domain he wants to get specialized in.

In addition to the usual courses uploaded, that do not need to be thoroughly supervised by one of the teachers, the consumers may also enjoy taking part to interactive courses, individual or team classes held by one of the teacher mastering a certain foreign language. To add even more effectiveness to the program, an online chat shall be supervised permanently, for any questions the consumers might have to be answered at any time of the day. Therefore, the consumers shall enjoy of permanent assistance no matter the time zone they live in.

Due to the continuous need of learning from the best and exchange culture experience in order to better understand the specifics of a foreign language and acquire faster all the knowledge related to it, native speakers of various languages shall also be involved in this program. After developing the platform and the team in order to be able to meet the consumers’ need to learn even languages that are not often taught and learn on a certain market, users worldwide shall have the possibility to get in contact with each other to enjoy the experience exchange in any domain they might be interested in.

The “products”, meaning the learning contents and materials, shall be collected and/or elaborated by our teachers, and personalized for each learning group and type of subscription. Some examples of electronic materials are:

textbooks;

workbooks;

evaluation sheets;

audio files;

videos;

monolingual, bilingual and even multilingual dictionaries;

word lists;

conversation guides;

tips for learning faster a foreign language, etc.

As most of the processes happen online, the only inventory items we will have are the physical resources used in constructing the teaching materials (books, DVDs, tapes, paper and other office consumables, etc), that are not the individual property of the teachers and have been bought from the Language Carrousel’s profits.

2.5. Vision, mission and objectives

The first year from the foundation of the company shall put the managerial and teaching team in a great position of difficulty and challenges due to the need of the company to establish a constant clientage and win over more and more user by using innovative means of advertising and surveys that shall gather the users’ feedback and also their suggestions so that a constant improvement to the platform and the provided services to be made.

In three years from now the platform shall develop into a worldwide known foreign language learning system that shall cover languages as English, Spanish, French, Italian, German and Dutch due to the market needs revealed after a thorough research. According to the market research, 45,7% of the people questioned inclined towards learning German, therefore we shall focus from the beginning in finding adequate German teachers and also emphasize on contracting French, Spanish and Italian speakers due to the request of about 25% of the consumers involved in the survey.

In the year to follow, we shall add to our team a Dutch speaking teacher and also Japanese, Chinese, Turkish and Mandarin teachers due to the wishes expressed by the next to be members of the platform. Moreover, we are open to any new foreign language need that may arise from existing or future to be members of the Language Carrousel in the third year from establishment.

Therefore, the mission of the foreign language learning platform to acquire the following:

a highly quality, accessible but challenging learning foreign language program;

a driving motivation, engagement and professional attitude on behalf of the;

an intellectual climate offered as support for users and teachers;

the development of mutual beneficial relationships within industry and commerce.

In the light of the above mentioned vision and mission, the main objectives of the platform and the company established as an E-commerce business shall be as it follows:

create and sustain a responsible institutional and managerial culture, ready to set as objective the procurement of the best results by using its resources at its lowest capacity;

consolidate the responsibility spirit as well as increasing the efficiency and practical application of the opportunities;

realize various programs for increasing the performances of the hum an resources;

develop a support system for students and teachers as well, that shall function on cost-efficiency relation basis;

develop and implement strategies for attracting important financial resources from the private sector.

Analysis of the International Business Opportunity

3.1. Economic Analysis of the Trading in Romania

The Romania’s economic freedom in 2015 is better than last year, reflecting improvements in freedom from corruption, labor freedom, and the management of government spending outweigh a decline in businesses. Any business initiative stands for an opportunity and the government of Romania encourages Romanian and foreign citizens alike to be active in the private sector.

Following a 3.4% growth in real GDP in 2013 and 2.8% in 2014, largely driven by record harvests, Romania is well on track to another year of 3% GDP growth as it registers one of the best performances in the European Union. The first quarter of 2015 registered 1.6% quarter-on-quarter and 4.3% year-on-year GDP growth, indicating one of the fastest growth rates since the 2009 recession, with private consumption and investment as the main drivers of growth (the fastest growth rate, 5.2%, was in the last quarter of 2013). 

For the near future, the economic picture will remain largely the same. Romania’s convergence program for 2015-2018 (sent to the European Commission in April 2015) predicts steady economic growth. Nevertheless, the fiscal environment in Romania has been rather unpredictable in recent years and changes to the Fiscal Code often occurred without notice or consultations with the business community. A rewritten version of the Fiscal Code is currently being considered by Parliament.

The Romanian currency has been one of the most stable in the region for the last two to three years. Public debt is currently below 40% of GDP and is predicted to decrease in the medium-term, provided that the fiscal consolidation process and economic growth maintain their pace. While Romania is increasingly attractive for trade and investment, a coherent tax policy, liberalization of the energy supply, and reform of the education and healthcare systems are needed to register further progress in the next period and improve Romania’s business outlook.

Launching a business takes five procedures and slightly more than a week on average, but efficient bankruptcy procedures and rules have not been fully implemented. Labor regulations remain rigid, although there have been amendments to improve the labor code’s flexibility. The government listed privatization and market liberalization as major priorities. The reductions applied to VAT.

It didn’t take us a lot of money to open our small business, but our competition remained the small business that millions of people have started these kinds of firms in their quest for economic profits.

3.2. Political

Romania's current account deficit will expand over the coming years, as robust domestic demand underpins stronger import growth.

Planned VAT cuts will ensure that disinflationary pressures persist for longer in Romania than regional peers. However, the central bank will refrain from cutting rates below the current 1.75% level in 2016.

3.3. Legal Analysis of the Trading in Romania

Legal form: Limited Liability Company

Paid-in minimum capital requirement: RON 200

City: Cluj-Napoca

The Romanian Law has evolved a lot in the last years, in multiple directions: it has to reflect the Romanian reality requirements, and it has to be in compliance with the European Community Legislation.

In order to start our new business, we, the future entrepreneur had to take into consideration the next few steps:

Obtain a certificate from the Trade Registry proving the availability of the proposed company name and make a reservation of the name.

Deposit funds in a bank and obtain a document confirming bank deposit of sufficient funds.

Obtain a certificate from the Fiscal Administration Agency giving clearance for the headquarters of the offices

Register with the Unique Office of Trade Registry (BASC), with office in any major city; obtain court registration, publication of notice, and registration for statistical purposes and social security

Register for VAT

Register the employees’ individual labor contracts with the Territorial Labor Inspectorate (TLI) online

3.4. Geographic and demographic information

The Language Carrousel LMS addresses to everyone with lower incomes and who wants to learn a new language.

gender is not important

the adult population that we focus on is between 18 and 70 years old

they can access our website from everywhere is they have internet connection

no specific skills are required in order to manage with our system

time is not important, schedule is flexible.

3.5. Important customs and traditions

We cannot avoid seeing that the business environment is changing in many ways. As well does the cultural environment that is one of the most challenging areas for most international marketplaces.

These elements of culture are manifested through:

language- verbal and non-verbal;

religion;

values and attitudes;

manners and customs;

material elements;

Aesthetics.

3.6. Other pertinent cultural information

Culture in each country is different and also influenced from universal needs and wants in the society and consumer trends. Our business will analyze and cope with these differences and harness the tension to bring about reconciliation between other countries.

3.7. Competitive advantages and disadvantages of the proposed business opportunity

Our biggest advantage is time, because being an online platform you can access it at any given moment of the day/night and there will be someone online ready to help you in real time and in what language do you need.

Bringing students with a higher degree in different languages, native speakers, teachers from faculties, schools, you can be sure that you will learn the correct language, the correct grammar.

You don’t have to invest a lot of money to participate to our courses, you just have to click it, and work on it.

The disadvantage of our platform is that we work only online, you need to have an internet connection in order to keep in touch with us.

Operation of the Proposed Business

4.1. Organizational Plan

The Language Carrousel LMS will emerge as aLimited Liability Company, the result of a partnership between 3 associates, each having equal shares, rights regarding the administration of the website and any other related resources and revenues.

Our partnership is planned for an indefinite period. In case any of the partners would like to withdraw from the business, the owned shares will be equally divided among the remaining partners. The partners shall decide together whether they want to associate with new partners and what share will be given to the new partner(s).

If there will arise any disputes that cannot be settled amongst the partners, they shall approach a mediation office.

The three founding partners of LanguageCarrousel.org are, as stated at the beginning: Andra Blidarean, Andreea Morar and Roxana Pop-Roatis.

To begin with, Andra Blidarean shall represent the Sales Manager and legal representative of the society. Due to her former education in the Law department, she shall be in charge of all legal issues that the society or any of the members involved in the society shall come across. Moreover, she shall also be one of the most important members of the advertising team, having final power of decision regarding the promoting choices and advertising campaigns.

Andreea-Cristina Morar, shall be the Customer Care Manger of the society, being in charge with continuous surveys and market research regarding the feedback that the users might have on regard on the platform funded and the courses provided, and also she shall stay focused on the needs that users have and we did not manage to accomplish by that time. In addition to this, due to her former studies at the Foreign Languages University, Andreea shall also be one of the firsts and main teachers involved in this process. She shall begin teaching English and French language and civilization, due to the certifications that she has in order to do that. If the need arises and there shall not be sufficient teachers involved, she shall also start learning one more language so that she can get credited and she might teach that language too.

Roxana Pop-Roatis shall be the Product Manager being the person that came up with the idea of this business in the first place. She shall focus on continuously maximize the business value by optimizing the product and developing it to that extent that the users would not want to use any other similar product. In addition to this, as a certified teacher, she shall also teach English, German, Spanish language and civilization.

Besides the three founders there will be other collaborators, employees and volunteers that will help in running and maintaining the website:

Each language and civilization teacher shall be employed with a fixed salary for 8 hours per day, the exact timetable following to be foreseen in the moment of employment. Each teacher’s shift shall also imply her/him working 2 weekends each month. After each weekend worked, they shall receive 2 days of in order to compensate having worked in the previous weekend.

Therefore, the salary of each job position has been settled per month, the all contracts having the same contract previsions. Each employee shall benefit of 21 calendar days off per year without including the free statutory days, with the addition of 1 day to every 5 years worked.

In the first 4 months none of the partners shall collect any revenue from the profits of the website; all profits will be used to pay employees’ salaries or will be invested in the website’s improvement. After these 4 months, all partners will receive an equal share of the profits.

4.2. Partners and suppliers

There shall be four partners involved in the business; the three founders of the company owning 30% of the shares each and the IT consultancy firm, owning the remaining 10% of the shares in exchange of implementing and developing the platform.

The main suppliers shall be the web hosting service and the teachers involved in the business. The web hosting service is the key supplier of the platform, due to the fact that without it, the platform would not be accessible to the users. In addition to this, the teachers involved in the business shall be the ones updated and provided materials once a week to every user registered on the platform.

4.3. Activities schedule

Shall any unanticipated situations arise during the process of preparing the start-up of the business, the progress of deploying the launch of the platform shall be delayed with no more than one month.

4.4. Business legislation and operating system

The business shall be constituted on Law number 365/2002 regarding the electronic commerce. According to this law, there is no need for the bidder and receiver o be simultaneously present in the same place so that they could end a certain transaction. In addition to this, any electronic devices used for handling, storing or transmitting any king of information shall be accepted as part of the contract. Moreover, the establishment of a service supplier in a certain state is not necessarily determined by the place where the technical means needed for supplying the product are located.

This is a web application that shall be available to anyone that has access to a device with any type of browser installed. Therefore the only must that the user must comply, is having internet accessibility and a browser at this choice like Google Chrome, Internet Explorer, Mozilla Firefox and so on. After the first 2 years of usage, the platform shall also be available to users as a mobile app. To begin with the app shall be developed firstly for android systems, due to the fact that these are the most used at this moment, being followed by an improved app for IOS systems and in the end for Window Phone systems, that are the less used for the moment.

Marketing

5.1. Target market

Target market for this platform is the groups of consumers aged between 18 and 65 years. After a study research deployed for a period of several months, people subsumed in different age categories showed their interest in learning a foreign language. People in their 20s’ asserted their enthusiasm in applying to online foreign language courses, due to the lack of time and the comfort they would enjoy by not having to constantly change their location in order to have access to such courses. Moreover, living in the era of technology, all that has to do with internet and new tech appears to be more appealing to younger generation.

The second age category questioned, meaning the people aged between 30 and 65 years old, appeared to be a little more reticent to courses held online though a platform like this, due to their lack of knowledge when it comes to handling computers and online platforms. Despite this, all persons involved in the survey, shared their desire either to improve their general culture by learning a new foreign language, or to improve the knowledge with regard of a foreign language that they already know. Moreover, most of the people facing their late youth are involved in jobs that demand knowing one foreign language and find the employee even more valuable if the know more foreign languages. Thereby, no matter the reason, learning foreign languages seems to be alluring for this age category too, and for people using computers more frequently, the idea of having the courses needed taught in the warmth of their home, is a plus and they would exchange a traditional foreign language course to a language learning software that only requires a small fee in comparison with other types of courses.

5.2. Competition

Our main competitors are the online platform like www.livemocha.com, www.learn-english-online.org, www.duolingo.com. The big fight on the moment is given by livemocha and duolingo, due to the fact that the platform learn english online is focused only on the English language, therefore, the platform is addressed only to people wanting either to learn English or to improve the English knowledge they already have.

Duolingo, on the other hand, is one of the platforms that began to catch up popularity among the platforms that concentrate of helping consumers learn a foreign language. The concept and original design made duolingo transform into language learning software, easy to use and pretty catchy in comparison with other softwares of such type. The platform began offering its services at the end of 2011 and in present offers courses of 23 different languages and meanwhile the funders have also implemented the duolingo app available on operating systems like Windows 8 and 10, IOS and Android. Duolingo is known for being a free platform and app that everyone can sign up to, but the downside of the software is the fact that you can only learn a foreign language by knowing one of the languages provided. For example if a Rumanian member would like to learn a foreign language, he/she should also know English due to the fact that Romanian language is still not available on Duolingo.

Livemocha is another platform well known for its capacity of supporting 38 foreign languages. It has been launched in 2007 and until the present it has extended to 195 countries and gained over 60 million members worldwide. Livemocha is also a free option for users, users having to pay a certain fee only if they want to have additional benefits.

In contrast to the platforms described above, our biggest advantage is time, because being an online platform you can access it at any given moment of the day/night and there will be someone online ready to help you in real time and in what language do you need.

Bringing students with a higher degree in different languages, native speakers, teachers from faculties, schools, you can be sure that you will learn the correct language, the correct grammar.

You don’t have to invest a lot of money to participate to our courses, you just have to click it, and work on it.

The disadvantage of our platform is that we work only online, you need to have an internet connection in order to keep in touch with us.

5.3. Price policy

In the online commerce, the pricing strategy is critical due to the global visibility created by the Internet. Even though this might seem easy to acquire, this can also make the difference between success and bankruptcy.

First of all, we shall make use of the advantages of selling online, assets like flexibility and easy to use, permanent availability, favorable advertising bringing to light useful information about the product and the quality provided by it.

Every user shall benefit of a free trial of one month before deciding whether if the next modules shall be worth being paid for. After the first month of usage, each user that shall choose continue the course he applied for, shall pay a fixed fee for each moth of subscription. The fee shall be established according the complexity degree of each module and the need that each user has. The fee for having access only to the uploaded materials and not learn the foreign language under the supervision of a teacher shall be an insignificant one. The fees for courses of different complexity degree shall vary with 15%.

After the first year of functioning, there shall be exact fees established for each module and language, and various use situations; individual or team courses, courses held be a teacher or with no teacher.

Were there any other specific requests from the users, there shall be established a fee in accordance with the needs, suggestions and demands of the users.

Even though, there almost a half of the people questioned did not express their wish to pay for online foreign language courses, more than 50% of them stated that they would pay in order to get to learn a foreign language faster. The majority of the persons who would pay for this type of courses affirmed that they would pay between 20-40 RON per monthly subscription, but there were also some who would be inclined to pay even 50 to 100 RON for a monthly subscription.

5.4. Advertising

How to promote an online platform in nowadays society? To begin with, the best way of promoting anything, no matter the domain or reason for doing is by sharing that the concept or the object of the advertising campaign. The easiest and inexpensive way of doing this is by sharing the platform on social network services. At the moment, one of the most popular such network is Facebook, and over the years of its existence more and more studies and researches have showed that a big percentage of people are obsessed of this network and therefore, having and add on Facebook may drive more people into trying this new thing that Facebook advertises. A recent researched showed that for a fee of only 150 RON, the social network promotes anything you want to an audience of 34000 to 64000 people. After establishing a target area, gender or age category, one can also change the way of targeting by setting a smaller amount of money per day.

Secondly, we would begin the advertising through banners, links and advertorials in niece websites related to the business we want to promote. In addition to this, we shall use the PPCadvertising due to the fact that with a very good optimization of the campaign, it could prove very easy to get to that traffic segment that is interested in the product offered. In order to increase the brands reputation, we shall also initiate Google Adwords Display campaigns.

Moreover, we shall initiate email campaigns by creating an inbox with consumers that showed a special interest towards foreign languages in the past. Also, we shall add the URL address of the platform in the firm of our personal email, for curios people to have a look of what the platform can offer. In the end, we shall create a catchy video to be posted on Youtube, since it’s among the most accessed platforms of all times.

Financial plan

6.1. Expenses forecast

6.1.1. Costs

In order to set up our Limited Liability Society, the following costs shall be taken into consideration:

The social capital shall be of minimum 200 RON the minimum amount permitted in the case of LLS. In our case, the Social capital shall be of 300 RON, each of the three funders bringing in 100 RON. The social capital shall be deposited at any bank at our disposal.

Usual establishment fees shall not apply in our case, according to Govern decision number 166 from 2003, due to the fact that each of us is student to an accredited University and aged under 30.

The name registry fee of 50 RON and the stamp tax of 39 RON shall be paid regardless of the fact that we are students or not.

The signature specimen represents the authorized signature to be used within a commercial society. In this case there is the need of the signature specimen for each of the founder of the business, the average value of such a signature being of 60 RON.

Necessary equipments for the first three teachers involved shall be purchased. The equipments consist in one laptop of 2.000 RON for each of them.

Licenses shall be purchased as follows: 3 Microsoft office licenses of 638 RON each and Adobe Reader licenses of 608 RON each. The Windows license shall be included in each laptop’s price.

Total annual salaries shall be calculated according to the number of employees for each year and the salary per year offered for each of them. Each salary shall include the courses prepared and weekly uploaded on the platform by each teacher.

The first step in creating a web platform is buying the domain. At the present if the domain you want to choose is available, you can purchase it in exchange of 40RON per year. The domain cost is anticipated to increase in value every year, the value increase being an insignificant one. In addition to this, there is the need for a specialist in order to develop and maintain the web site. In the first and the second year the developing and maintenance costs are forecast to be the same due to the fact that the only evolution of the platform shall consist in adding new materials and the tools needed for each language that shall be added to the program. Despite this, in the first year of activity, the platform is foreseen to meet a great development by transforming into a mobile app also.

The main mean of advertising is the online one and the emphasis is put on Facebook advertisement due to Facebook’s worldwide circulation. With 6 months before the start up of the business, we have established a budget of 150 RON per month, targeting people between 18 and 40 years. In order to expand the target market, we also appointed an average budget of 200 RON per month in order for online websites to post banners promoting our platform and the services it provides. Moreover we established the monthly budget of 100 RON for pay per click advertising, which means that we chose a keyword that shall return the wished searches for our platform. In the end we have allocated an average budget of 2 RON per day for Google Adwords Display campaign.

The budget of allocated to advertising and promoting the platform shall decrease each year, due to the fact that after the first year the platform shall become known by 50% of the target market and the advertising shall also be made in terms of recommendation from existent members of the platform.

Therefore the costs shall look as it follows:

6.1.2. Incomes

According to the survey carried on before the start up of the business, 45,7% from the people questioned stated that they would want to learn German as a foreign language. Moreover, 29.6% wanted to learn French, 24.7% wanted to learn Spanish, 22.2% chose Italian as a language that would like to know. In addition to this, there were also people who expressed their desire in improving their knowledge of English (13.6%) language and start up in learning Dutch (3.7%).

Therefore, monthly membership fee shall be established as it follows:

Monthly membership fee shall be established between 25 and 40 RON for the first year of establishment, continuing with a fee increase of 5 RON each of the following two years.

According to the users’ needs, they shall also have the chance to purchase various types of courses, written, video and audio ones in case they do not want to renew their membership every month. The courses’ fees shall be established according to their complexity and difficulty degree. The costs shall vary between 50 and 250 RON. It is assumed that 10% of the members shall also purchase the courses provided.

In the third year from establishment of the business, we shall add more upgrades to the platform and we shall also develop our service as a mobile app. Any member of the platform shall have free access to the mobile app, having the opportunity to upgrading the services provided and their account in exchange of small fees varying between 10 and 50 RON. It is assumed that 20% of the users shall make the upgrade to the mobile up in the 3rd year from the platform establishment and respectively the 1st year from the mobile app start up.

Therefore the income obtained from the monthly membership fees and the selling of the courses shall be as it follows:

6.1.3. Financial results

In order to forecast the income of S.C. Language Carrousel SRL we have chosen to reveal the financial results for the first three years of establishment of the company. Therefore, we shall acknowledge the outcome by drawing the line between an optimistic, pessimistic and realistic result.

For making this learning system have the wished output we shall need the help of the following employees:

3-9 teachers

Two of the founders of the business shall also be involved in the process due to their knowledge of foreign languages and involvement in the teaching process as English, German and French language.

In order to forecast the total income of the business in different years of activity, we shall identify the income sources as to be:

Income obtained by the monthly membership fee of the users

Income obtained by the purchase of the courses

To forecast the expenditures involved in delivering the service needed to the users, it is necessary for the following costs to be covered:

Salaries expenditures

Web maintenance expenditures

Therefore, the financial results of Language Carrousel LMS shall be analyzed according the following three scenarios:

Optimistic scenario;

Pessimistic scenario;

Realistic scenario.

In the case of a realistic scenario, we shall have the following forecast hypothesis of the result account:

6.2. Investment requisite and financing sources

The investment requisite consists in the startup costs and the requisite for the first 6 months since the platform has been launched on the market. Therefore, the investment requisite for our business shall look like:

In the case of our platform we shall use personal financing sources with no need of resorting to any bank credit. Since we are not talking about a big business, each of the parties involved shall bring the financing capital as it follows: each of the founders owing 30% of the shares of the company shall submit 30% of the investment requisite, meaning 17.682,3 RON and the remaining part of 10%, meaning 5.894,1 RON shall be submitted by the IT firm that shall provide assistance in creating the platform and that while providing assistance shall own 10% of the shares of the company.

7. Final proposal of the business plan

7.1. Key aspects of the business

Like any other business, this too shall confront with risks especially in the first year from the establishment, but it shall also develop into a successful one after the first advertising campaigns that shall make the platform known for more users and especially after the initial membership shall benefit from the innovative way of learning new languages and improving their knowledge regarding various cultures. By this time, the funders and partners involved shall gain more and more experience in this domain and shall improve their customer oriented perspective in order to respond effectively and anticipate any need the users might have.

7.1.1. Factors that shall bring success to the business

The main factors that shall ensure the success of the business are the following:

the assistance given by the teachers shall be actively 24/7 and platform shall enjoy a

worldwide coverage being available to any person interested in using it, no matter of his/her location and time zone;

the platform shall be developed in such a way to be easily reached and used by any

member;

the friendly interface shall be found appealing by more age categories, providing services

according to the need of every user, no matter the age or the computer knowledge;

the products shall be described, using useful and qualitative information about every each

ofthem;

the platform shall be promoted though online campaigns and shall enjoy of a significant

percentage of members due to the coverage the extended internet coverage.

7.1.2. Risks involved

The development and success of the business shall also come across some milestones due to the following reasons:

the target market might have also heard about the existence of our competitors and might

be inclined not to use this new platform due to their fidelity for the platform that they are already using;

there are people that might find it difficult to adapt to online courses rather than the old

school courses held in classrooms with teachers being able to make a better eye contact;

there is the possibility for the users to be interested in learning languages that we did not

achieve at finding a suitable person to teach it by that moment;

there may also be certain breakdowns due to poor internet connection either by the users’

side or by the teachers’ side.

7.2. Swot analysis

Strengths:

first platform with teachers available 24/7

friendly user interface

professional team assigned to all users

opportunity to get in touch with native speakers

continuous update of the platform and the services provided

Weaknesses:

leak of experience in the business area, being the first business developed by the funders

incapacity of offering all the entire palette of foreign languages from the launch of the platform

Opportunities:

turn the platform into a worldwide known foreign languages learning system

develop the relationships between people of different cultures

get in touch with teachers that shall contribute with more innovative ideas in order to

respond to users’ needs

Threats:

strong competition

poor network coverage area in some parts of the world

Conclusion