Professional Documents
Culture Documents
Feasibility Report Business Plan On D Establish of A Nusery and Primary School in Ibadan Oyo State PDF
Feasibility Report Business Plan On D Establish of A Nusery and Primary School in Ibadan Oyo State PDF
Feasibility Report Business Plan On D Establish of A Nusery and Primary School in Ibadan Oyo State PDF
BY
GROUP TWELVE
NAMES MATRIC
UNIVERSITY OF IBADAN,
IBADAN.
AUGUST 2011.
1
TABLE OF CONTENTS
EXECUTIVE SUMMARY
CHAPTER ONE
Page
1.0 INTRODUCTION 1
CHAPTER TWO
2
2.1 Market Research 8
CHAPTER THREE
CHAPTER FOUR
3
4.1 Legal Feasibility 20
(NAPPS) 33
CHAPTER FIVE
4
CHAPTER SIX
CHAPTER SEVEN
Industry
The School
Our Services
Primary education
Nursery School
School Procedures
School fees
THE MARKET
5
Customers and competition
Sales Projection
DEVELOPMENT
Development Status
List of Departments
Staff Trainings
Teaching Methods
Management Teams
School Administration
Head-Teacher
Staffs
Financial
Cash Flow
Exit Plan
6
EXECUTIVE SUMMARY
Setting up a school, especially a nursery and primary school requires that the
investor concerned first developed affections for small children and activities that
has to do with them. This keeps the business going, as establishing a school may
not be that lucrative at the teething stage of the business. Before writing this
report, a detailed survey was done, visiting various school owners, association of
school owners, the ministry of education, the intended site of the school and other
key stakeholders. Useful data, procedures and directives were received on the step
by step of establishing a school and the pitfalls. Our findings reveal that the
definition of a standard school is not only in the teaching pattern or the structure of
the school building, but also in the learning facilities but in place to aid learning.
Area, Akinyele, Oyo State. This is based on a market feasibility that reveals the
low standard of education in the area and the desire for a standard school in the
area, which made parents send their children to schools of higher standard in
distant Bodija area. The study also reveals that there are two public and four
private schools in the area presently, most of which are extremely low standard.
Apart from ensuring a quality standard in the proposed school, we also seek to
7
the school building plans and several technical requirement of putting the school in
From the legal feasibility, the necessary rule and regulation from the
ministry of education was complied with, although the ministry specifies two plots
of land, we use three to allow for adequate playground and parking space. The
the viability of projects, both discounting and non-discounting were and employed
and they all revealed that the project is viable and worth an investment to embark
on. The payback period shows that it will take one year, six months and 13days for
the project to recover its initial investments while the return on Investment through
the rate of return reveals 154.3% and Average rate of Return shows 30.9%
annually. The Cost Benefit Analysis or Benefit Cost Ratio was also used and found
to be 2.116, while the Internal Rate of Return was 0.78 and the Net Present Value a
8
CHAPTER ONE
INTRODUCTION
a nation. It seen together with health as the areas a nation should not take for
granted, this is because of its impact on the development of the human mind, in
well as its spill-over impact on other citizens and the upcoming generations.
Various nations of the world in a bid to develop their education sector have
embarked on several programs and have put the educational sector in the fore front
in terms of policy consideration. The nursery and primary education has been
recognized as the basic form of education necessary for the development of a man,
eradication of poverty and promoting social values. This is why the United Nation
as one of its developmental goals has required that universal basic education be
promoted among nations. The international institution targets to ensure that all
boys and girls complete a full course of primary schooling in year 2015. Although
there are 1,576 public primary schools and various private primary schools in Oyo
state, the standard of this basic education still appears low compare with that of
Lagos state and most advanced countries. As investors, we are aware of this
problem and have decided to proffer solutions to these problems in our own little
9
ways without neglecting profitability. But before we venture into this investment
religious sects, is plagued with high levels of illiteracy (32%) and an increasingly
population figure are 15 years old or younger that is about 40 percent of the total
Nursery and primary schools in Nigeria. There is no doubt that primary school
system in Nigeria is facing serious problems despite this huge number of pupils it
has to cater for and the problem facing the Nigeria education is the low standard
Moreover, across the various geo-political zones within the country, the
standards of education differ from one region to the other with this being largely
culture dependent. While the northern part of the country brings up the rear in
same cannot be said of the southern region of the country which boasts better and
10
counterparts. Nonetheless, this level of educational attainment by the southern
region of the country still falls well below acceptable standards in a global context.
It should be noted that the moribund standard of education witnessed at the tertiary
level can be traced to the worrisome standard at the Nursery and primary school
tiers of education, since the Nursery and primary school education is a foundation
be continuously increasing over time in almost part of the country, the case of
those Private Schools that follows the government and International standards are
very few. Moreover, the level of illiteracy rate is (32%) which is still very high
when compared with other countries of the world like South Africa with illiteracy
rate of just. In line with this, the United Nations (UN) has asserted that to ensure
United Nations Children Education Fund (UNICEF) has proposed that about 26%
11
of each countrys annual budget should be devoted to the educational sector.
Unfortunately, this has not turned out to be the case in Nigeria with a meager 6%
of its annual budget being allocated to education yet; the country expects to
commit the much needed resources necessary to advance the level of education in
the country, the onus therefore lies with private entities that have passion for
children and also know the value of quality education to provide such.
essentially for a satisfying and rewarding life, as it is not only fundamental to the
broader notion of expanded human capabilities that lie at the heart of all what
development is about, but also, it plays a key role in the ability of a developing
country like Nigeria to absorb modern technology and to develop the capacity for
this project is to inculcate permanent literacy and numeracy, and the ability to
communicate effectively among the Nigerian child. However, the other objectives
12
The need to raise educational standards especially at the Nursery
and primary school level: This project therefore seeks to address this
tomorrows leaders.
The need to raise literacy levels: this project will also help to improve
being in an economy.
Lay a sound basis for scientific and reflective thinking. This will be
participation in and contribution to the life of the society with the aim of
molding the character and develop sound attitude and morals in the child.
into Schools: This project will especially employed, the uses of informal
learning where children are going to learn about their culture, different
COMMUNITY
13
The benefits of this project will be looked at from two broad perspectives; the
ECONOMIC PERSPECTIVE
the production process and this in turn improves the level of efficiency of the
workforce which in turn leads to a rise in productivity levels in the country and this
Economic growth
It has been argued that a high rate of education is essential for countries to
support this theoretical prediction that poor (developing) countries should grow
faster than rich (developed) countries because they can adopt cutting edge
transfer requires knowledgeable managers and operators who are able to operate
order to close the gap through imitation. Therefore, education (stock of "human
14
transfer/acquisition and application of modern technologies necessary to aid
Welfare Improvements
Bearing in mind the fact that education enables rising levels of production
and a rise in efficiency of labour all leading to a rise in national output, it will
ultimately result to a rise in welfare for the citizenry as a whole. This is so because
people who are now employed earn income which they in turn use to cater for their
consumption needs. Also, the government has more funds which it can in turn use
Better education also aids the decision making process in an economy. This
decisions for the economy (policy makers) have a better and well-grounded
understanding of the dynamics of the society in which they operate in and this in
SOCIAL PERSPECTIVE
15
From a social angle, educational attainments will foster a reduction in crime
school in Oyo State, Nigeria. The methodology is based on physical visitation and
interview of school owners, the ministry of education, the pressure groups that
regulate the activities of private school in the state and every other agents like
in Oyo state especially in Akinyele local government area. The scope and coverage
of this project will be Akinyele local government area of the state, with particular
noted that education is a social good meant to impact the society as a whole.
16
1.7 LIST OF FIGURES AND TABLES
17
Table 6.1: The Pay Back Period Technique
18
CHAPTER TWO
MARKET FEASIBILITY
accordance with project market demand and to project services patronage and
annual revenues of the school. The methodology entails examination of the sites
schools as well as the regulatory bodies and the competition in the market.
Research finding are analyzed with respect to potential market area, potential
opportunities and projected absorption rate and pricing ranges. These feasibility
strategy.
19
2.1 Market Research
A detailed market survey was done on the 8th August through 12th of August,
in which various standard schools were visited, one of which refused to give us the
necessary audience (i.e. Lifeforte nursery and primary school, New Bodija).
Mr. Ayeni Olusegun Joseph, the proprietor of Total Care nursery and
primary school, New Bodija was interviewed on the whole steps in setting up the
issues. Also, madam Olaniya, the proprietress of Bloom foundation nursery and
primary schools, Bashorun also show us the various departments that should be in
the likely payback period and a little history of nursery and primary school in Oyo
state. The state general secretary of NAPPS and coincidentally Ibadan North
general secretary, Rev. Alafe, who also had being operating a nursery and primary
school for twenty years now expatiate on the various challenges of running a
school, effect of minimum wage on school owners the registration process both
20
with the body and the ministry of education and several government policies both
at state and national level. In addition, parents were interviewed on the quality of
Finally, the Oyo state ministry of education, Secretariat was visited on the
12th of August, we met with Alhaji Alabi, who was in charge of Nursery and
primary school, he gave a booklet that contain the necessary requirement to be met
Presently, there are 324 secondary schools, 1,576 public primary schools,
five Technical Colleges located at Ogbomosho, Oyo, Saki, Ibadan and Igbo-Ora.
Two Colleges of Education are located in Ibadan as well as the famous University
also the Polytechnic, Ibadan with satellite campuses at Eruwa and Saki and Special
Science Schools located within the state. The numbers of private schools in the
state - especially nursery and primary school are beyond the radar of the ministry
of education, this is due to inefficient regulations on the part of the regulatory body
(Oyo State ministry of education). Given the quest for knowledge by the residents
of Ibadan, it is expected that School- especially nursery and primary will spring up
21
to tap into these opportunities, but unfortunately many of the schools in this area
Akinyele local government area of Oyo state is highly populated with about
105,726 people with 40 percent falling within the range of our targeted age group
i.e. ages 1 to 10 years old. These children are poorly taken care of in public schools
and the so-called private schools in the area lack the major school facilities needed
to nurture them. Due to these, most of them are finding it difficult to make it up to
a higher level of education especially beyond the secondary schools. Despite the
fact Ajibode is to some extent populated by local Ibadan Indigenes, some of which
are low income earners the neighbouring communities like Awo, and University of
Ibadan are populated by high income earners that will love to send their children to
schools that are of such standard. The absence of schools of such higher standard
in the area leads them to send their children to far away area, just to ensure the
22
2.4 Our Competitors
There are about three public schools and five privately owned schools located in
the area. Most of these schools are of low standard in terms of facility especially
academic, due to this, some residential send their wards to schools far away from
the area. The introduction of Superior nursery and primary school will bring into
the area will standard education and exceptional facilities that will attract student
from the entire neighbourhoods- Ui staffs children and some other wellto-do
23
2.5 Advertisement and Awareness
under the office of the secretary/ PRO that will ensure that awareness is created all
over the state. Media like the national newspaper, radio jingles, bill boards and
24
CHAPTER THREE
TECHNICAL FEASIBILITY
This section serves as a flow chart of how the services evolve and move
through the business to physically reach your market. The Technical Feasibility
Study assesses the details of how to deliver a product or service. This have to do
with identifying the material input, labor, transportation, the location of the
Area, Akinyele, Oyo State. Ajibode community is situated very close the
University of Ibadan, and falls under Akinyele local government area. At Alagogo
area of Ajibode, there are about six plots of lands ready to be sold to intended
buyers at the rate of 850,000 per plots. The Oyo State ministry of education
suggested that we use two plots of land, but due to the facility we have in mind and
to buy three plots out of these six plots of land. At Ajibode where the school will
be located, there is a public primary school (Ade-Osun public primary school) and
several other privately owned schools. The area although just developing, has
25
potentials that can be easily tapped in before the development come to full state.
The usual problem of this area is accessing it during flood, but recently, the
community directly with Abadina community, hence, making easy for potential
students from Ui staffs quarter, Agbowo and environs in accessing the even during
floods.
The available schools in this area have poor teaching standard, inadequate
facilities and poor staffing, many parent prefer to send their children to far away
distances like Bodija where few standard schools exist. Also, the recent
residents of UI, Agbowo and environs, who have decided to send their children to
far away distance due to flooding during raining season. Finally, this area still have
some un-developed lands that can used for the construction of the project, since it
26
3.3 SCHOOL BUILDINGS AND FACILITIES
ministry of work, land and Housing and transport in Oyo State, but rather than two
plots, we have decided to use three plots so as to have adequate space for
as well as several stores. On the two sides of the building are playing grounds. The
reception is located immediately after the entrance, while the administrative block
is located on the two sides of the conference room. The plan of the intended school
is shown below.
27
Figure 3.3.1: The School building plan
A School is not betters than its teaching aids, because this is the mechanism
through which knowledge is transfer to the pupils. Since we are dealing with
children, we decided to use educational equipment and aids that are colourful and
harmless and at the same time attractive so as to gain the attraction of the pupils
during teachings. Apart from teaching aids, it is popular said that all work
without play make jack a dull boy, so tools and different types of equipment that
will make the children especially those in the nursery class feel at home will be
installed in the school environment. These will help create a conducive and
28
learning-friendly environment for all our pupils, making learning a fun. The
29
3.5 HUMAN RESOURCES REQUIREMENTS
were chosen based on the fact that they have a proper understanding of the
education in the country. They also complement each other based on the cohesion
weaknesses. Thus, they possess the ability to cover up for each other and pool
together their distinct individual ideas for the overall advancement of the college.
Academic staff:
Headmaster
Assistant Headmaster
Teaching staff
Non-academic staff:
Secretary/PRO
Bursar/Accountant
Librarian
30
Medical staff
Technical team
Sport Coordinator
Auxiliary Staffs
Nursery Assistants
Bus drivers
Security Men
Gardener
Cleaners
31
Figure 3.5.1: The School Organograms
HEADMISTRESS
Academic staffs
a) Headmistress
Responsibilities: She shall be responsible for the day to day management of the
32
b) Assistant Headmaster/ Headmistress
c) Teachers
Qualification: NCE/B.ED/B.
Non-Academic staffs
d) Secretary/PRO
knowledge.
33
Responsibilities: He or She shall be responsible for all the school correspondence
and publicity.
e) Bursar/Accountant
school.
f) Librarian
g) Medical staffs
Qualification:
Responsibilities: She shall manage the schools sickbay and attend to student that
34
h) Technical Staffs
operating.
Responsibilities: This team shall responsible for the operating and general
maintenance of the generator, as well as the borehole system and all our electrical
appliances.
i) Sport Coordinator
Auxiliary Staffs
j) Nursery Assistants
35
Experience: At least 2 years working experience with children.
k) Bus drivers
Experience: At least 2 years working experience and conversant with Ibadan road
network.
Responsibilities: Shall be responsible for conveying the students to and fro daily.
l) Security men
Qualification: SSCE
Responsibilities: Shall be responsible for the security of the school premises day
and night.
m) Gardener
36
n) Cleaners
Responsibilities: Daily cleaning of the Offices, classes and the school compound.
37
CHAPTER FOUR
execution. The rules and regulation guiding the operation of a business must be
prior to their entering the primary school. As stated in the policy document, the
(iii) Providing adequate care and supervision for the children while their parents
are at work;
38
(iv) Inculcating in the child the spirit of enquiry and creativity through the
exploration of nature, and the local environment, playing with toys, artistic and
(v) Teaching the rudiments of numbers, letters, colours, shapes forms, etc. through
play, and
(iii) Ensuring that the medium of instruction will be principally the mother-tongue
(iv) Ensuring that the main method of teaching in pre-primary institutions will be
through play;
are required to establish and enforce educational laws that will ensure that
39
and other appropriate academic infrastructure provided. Ministries of education are
The Universal Basic Education (UBE) Programme was introduced in 1999 by the
access to, and ensuring quality of basic education throughout Nigeria. The UBE
age under.
and
40
Basic Features of the UBE Programme
School education.
Schools.
and Local Governments in Nigeria for the purposes of uniform and qualitative
41
2. Every Government in Nigeria shall provide free, compulsory and universal
basic education for every child of primary and junior secondary school age.
3. Every parent shall ensure that his/her child or ward attends and completes
(a) primary school education; and (b) junior secondary school education.
every parent or person who has the care and custody of a child performs the duty
as basic education terminates at the Junior Secondary School level thus entrance
continuous assessment, while final examination and certification will now be done
JSS component is disarticulated from the SSS as stipulated in the National Policy
on Education (NPE).
42
4.2 Operating Requirements from Oyo state Ministry of Education
PRIVATE SCHOOLS
vi. The proprietor shall commence the process for the employment of teachers
vii. The registration form shall automatically lapse if not processed within one
viii. It shall be noted that an intending proprietor shall ascertain the proposed
name of the school with the concerned (Local Inspector of Education) LIE
before such name is finally accepted and submitted to the Ministry to avoid
duplication.
ix. The LIE shall ensure that the name is not duplicated within the same local
Government Area.
43
xi. On no account shall any Proprietor relocate or duplicate the school without
xii. Proprietors cannot operate schools (Annex) without satisfying all the
xiii. Clearance shall be obtained from the ministry of works and transport as
revoked if the school is no longer run in accordance with the laid down
guidelines.
(vii) Photographs of adjacent buildings showing front, left side, right side and
back views.
44
ESTABLISHMENT OF NURSERY SCHOOL
FACILITIES
(i) It shall be free from any type of danger to lives of the children and staffs
(ii) It shall be free from heavy traffic, factory and deports where inflammable
(v) The school shall be at least 1km away from an existing private Nursery/
adequately ventilated. The building shall not be shared with any other
tenants.
45
b. Magazines, pictures etc.
FURNITURE
(i) 1200mm x 880mm x 260mm (bench) and 260m x 12mm x760mm (desk)
work. This will enhance social interaction and the childs emotions and
social behaviour.
(ii) Each staff member shall have at least one standard table and chair of the
STAFFING
TEACHER QUALIFICATION
The proprietor who has no teaching qualification shall employ the services of a
qualified person as Head teacher and shall have attended at least one Early
46
(ii) Each teacher shall be assisted by a Nursery Assistant (at least Grade II).
(i) All the teaching staff shall register with teachers registration council of
Nigeria (TRCN).
ENROLMENT
An ideal class shall not consist of more than 30 children to every Teacher.
HEALTH FACILITIES
(ii) Wash hand basin shall be designed to promote ideal healthy living and be
(iii) There shall be separate toilets for male/female pupils and teachers at ratio 1
(iv) There shall be provision of sick Bay/ First Aid Box which shall contain at
a. Crepe bandage
b. Iodine
c. Methylated spirit
d. Cotton wool
e. A pair of scissors
47
f. Bandage
g. Gentian violet
i. Plasters
j. Analgesics.
(v) The school shall provide the service of trained First Aid persons(Red Cross
(vii) Provision of good waste disposal system. Each class shall have a waste hand
(ii) Equipment and apparatus for games and physical activities such as swings,
The proprietor of a Nursery school which has been running successfully for at least
2 years, if he/she desires, may apply for its upgrading to a primary school.
48
UPGRADING OF PRIVATE NURSERY SCHOOL TO PRIMARY
SCHOOL
REQUIREMENTS
(i) The school shall on its permanent site which shall be at least two
(vi) There shall be enough classrooms for the number of children to avoid
overcrowding.
FACILITIES
49
(ii) The library should have a minimum dimension of twice size of a
classroom.
STAFFING
(iii) All the teaching staff shall register with the teachers registration council
of Nigeria (TRCN).
SYLLABUS
The syllabus /scheme of work shall basically be in line with the 9- years Basic
Education.
50
4.3 Partnership Deed
This DEED OF PARTNERSHIP made this 18th day of August, 2011 between
hereinafter called the partners of the first part, Second Part, third part, fourth part
AND
A School (Superior Nursery and Primary School) registered under the provisions
of the Companies Act 1956 and having its registered office at Ajibode area Ibadan
North local government, Oyo state hereinafter called the party of Sixth part
51
WHEREAS the Parties of First, Second, third, fourth and fifth Part by
virtue of their partnership deed dated 18th August 2011 have been carrying on the
business of a private nursery and primary School under the name and style of
AND WHEREAS the Party of Sixth Part Viz. the school is formed with the
technology.
mentioned hereunder.
1. The Partnership shall come into effect from 18th day of August,2011 and shall
2. That the name and style of the Partnership firm hereby formed shall be Superior
Nursery and Primary School situated at Ajibode area Ibadan North local
government, Oyo state under the same names and style or with branch or branches
52
3. That the business of the Partnership Firm hereby formed shall be that of
manufacturing and marketing of paints, colors and varnishes etc., as hereto before.
The parties may, however, with their mutual consent open new branch or branches.
4. That the amount standing to the credit of the personal accounts of the Parties of
First, Second, Third, Fourth and Fifth Part in the books of above firm as on 18th of
Partnership.
5. That further finance required for the purpose of business of the firm shall be
contributed by the parties in such rate as may be mutually agreed upon. Interest of
which will be mutually agreed upon among the parties from time to time shall be
allowed on the capital standing to his/her credit for the time being in the books of
the partnership.
6. That the regular accounts books shall be kept in due course of business in which
shall be faithfully recorded all the transactions enter into by the firm and such
books shall be closed on last day of every month or/on any other convenient or
auspicious day as may be mutually agreed upon between the parties hereto from
time to time.
7. That on closing the account books in the aforesaid manner, a regular profit &
Loss Account shall be prepared and a balance sheet shall be drawn up.
53
8. That the Profits & Losses shall be divided among and borne by parties hereto in
9. That the active partners (Headmistress) will be paid a Salary of N 60,000 per
month for the services rendered to the rim and they will also be entitled to his/her
10. That all the assets and liabilities of the firm as on 18th August 2011 tangible or
otherwise, would be taken over by the Partnership at its book value and shall be
deemed to be assets and liabilities of this Partnership and all the Parties hereto will
54
11. That all rights of the firm as on 18th August 2011 namely ISI marketing
rights, Ownership right etc. shall be deemed to be the rights of the partnership and
(a) Diligently attend to the business of the Partnership and devote his/her
(b) Punctually pay her/his separate debts and indemnify the other partner and the
Assets of the firm against the same and all expenses therefore.
(c) Upon every reasonable request inform the other Partner of all letters,
accounts, writings and such other things which shall come to her/his hands or
13. That neither Partner shall without the consent of the others: -
(a) Lend any of the money or deliver upon credit any of the goods of the
firm to any person or persons whom the other Partners shall have
(b) Raise or advance any loan in the name of or on behalf of the firm.
(c) Assign, charge or transfer her/his shares in assets or profits of the firm.
55
14. That the account in the name of the school, Superior Nursery and Primary
School shall be opened with the Banks or bankers as the Parties may mutually
decide and the same shall be operated upon by the Parties hereto singly.
15. That any partner may retire from the Partnership firm, hereby formed by giving
two months notice in writing to the others but none shall leave the firm until or
unless all the pending commitments are carried out, liabilities paid off, assets
realized and accounts are rendered fully and settled finally to the entire satisfaction
16. That the parties hereto may, however, with their mutual consent pay
remuneration to any of the parties hereto at a rate that may be mutually agreed
upon between them from time to time. They shall be at liberty to increase or
decrease such rate of remuneration with their consent from time to time.
17. That in the event of death or retirement of any of the parties hereto the
partnership firm hereby formed shall not dissolve, but shall continue. The legal
heir or the representative of the deceased shall step into her/his shoes.
18. That upon the dissolution of the partnership in any event not hereinafter
provided for the said business, the assets, goodwill and liabilities thereof should
absolutely vest on any one partner mutually decided by the parties to the
partnership.
56
19.That it will always remain open to the parties hereto to amend, annul or change
any term or terms of this Deed of Partnership in the course of its business and in
that event of amending, annulling or changing any term or terms of this deed of
20. That without prejudice to the above terms and conditions the parties hereto in
all other matters shall be governed by the provisions of Nigeria Partnership Act,
1932.
21. That all the disputes or differences arising out of it and connected with the
Arbitration Act.
Fourth and Fifth parts here have put their respective hands on this DEED OF
viz. Superior Nursery and Primary School was pursuance to the resolution of the
Board of Directors passed in that behalf on 18th August 2011 here into affixed in
the presence of Mr. Oladejo Zubur and signed these presents in token thereof in
57
WITNESS SIGNATURE PARTNERS
58
4.4 Registration of the school
For government recognition and compliance with the law, it is required that
the school registered with the appropriate quarters namely the ministry of works,
the ministry of education and the local government where the school is situated as
Having met all the requirements stipulated by the Oyo state ministry of
Education and the National policy on education, the school shall be registered with
the ministry of education and Ibadan North local government under the name
(NAPPS)
This is a body that is composed of private school owners all over the
among the private operators and also enable them speak with one voice as regards
collected at NAPPS local office at Samanda, UI road for N1000, after which our
59
CHAPTER FIVE
FINANCIAL FEASIBILITY
benefits of the project justify its cost so as to know whether the project worth
undertaking or not. Answering this question requires identifying the cost element
of the project as well as the source of fund both in the present and in the future.
More specifically, financial feasibility assesses the cost of a project and its
profitability. It also focuses on how the project can stand on its own after the initial
capital requirement are fulfilled, that is after securing funds to implement the
project and paying for such fund. This therefore implies that financial analysis is
necessary in order to ensure adequacy of funds for the project so as to cover all
convention and concept in which revenue is earned after incurring certain costs.
both investment and operating cost is essential. Hence, there is need for projection
60
ensure sufficiency and availability of funds for the project both at the present and
in the future.
This section also includes the ascertainment of rate of return (cost of capital),
1) The revenue items including school fees are assumed to increase by 10% in
3) The loan is agreed to be paid at N10, 000,000 per year starting from year
one.
6) The cost of capital for the calculation of the present value is assumed to be
61
5.2 BASIS FOR FINANCIAL ANALYSIS AND PROJECTIONS
rate of 15% per annum. The loan is provided at the beginning of year zero
and to be repaid before the end of the fifth year together with the interest
The interest payment shall be from year zero as the bank insisted on
Year zero is the year of all requisite capital items, therefore, operation does
not start in year zero. It starts in year one, being the year after year zero.
Depreciation is charged on all the capital items on a straight line basis at the
following rates:
Building 5%
62
Table 5.2: BREAK DOWN OF KEY COST ELEMENT
FIXED COSTS N N
18,350,000
63
100 KVA GENERATOR @ 50,000
1,187,200
OTHERS 500,000
2,290,000
MOTOR VEHICLE:
1,500,000
OTHER COSTS N N
.SALARIES:
64
ACADEMIC STAFFS 3,660,000 per yr.
6,816,000
ADVERTISEMENT:
POSTERS 4,500
PAMPHETS 2,500
113,000
REGISTRATIONS
500,000
65
MISCELLANEOUS
1,000,000
---------------
---TOTAL
31,756,200
term
Class 2years
Old
66
Nursery 1 3 years 25 35,000 875,000 2,625,000
Old
Old
Old
Old
Old
Old
Old
67
5.3 FINANCING PLAN N
TOTAL 28,000,000
The equity contribution is generated from the contributions of the five partners that
originally come together to start this business. Two of them sold their landed
properties at Ajah area of Lagos state for N1,500,000 each while, also sourcing for
the remaining balance from their personal savings. The other three each
Table 5.0 shows the total capital items required for the project with their
68
LAND 2,550,000
TOTAL 23,327,200
ANNUAL DEPRECIATION OF
FIXED ASSETS
RS L
LAND 0 0 0 0 0 0 0
5% 00
69
PLANTS & 0 118,720 118,720 118,720 118,720 118,720
MACHINE 593,600
RY 10%
E & 00
FITTINGS
10%
VEHICLE 00
15%
20 20 20 20 20 00
Table 5.5.3 shows the cost of the fixed assets over the projected years, that is the
YEARS
ITEMS YEARS 1 2 3 4 5
70
LAND 2,550,00 2,550,00 2,550,00 2,550,00 2,550,00 2,550,00
0 0 0 0 0 0
00 00 00 00 00 00
MACHINE 0 0
RY
E & 0 0 0 0 0 0
FITTINGS
VEHICLE 0 0 0
Table 5.6.1 shows the detailed breakdown of the operating costs, distributional
71
THE FIRST YEAR
SALARIES 6,816,000
STATIONERY 500,000
TOTAL 7816000
DEPRECIATION
MOTOR VAN @
15% 225,000
BUILDING @ 5% 790,000
TOTAL 1,362,720
DISTRIBUTION/OPERATION/ADMIN
EXPENSES
ADVERTISEMENT 113,000
INSURANCE 2,000,000
MAINTENANCE 3,000,000
72
REGISTRATION 500,000
LOAN
REPAYMENT 10,000,000
TOTAL 18,613,000
Table 5.6.2 shows analysis of the position of the company over the projected years.
INFLOWS N N N N N N
EQUITY 8,000,000 0 0 0 0 0
LOAN 20,000,00 0 0 0 0 0
73
SCHOOL FEES 0 38,400,00 42,240,00 46,464,00 52,039,6 58,284,4
0 0 0 80 42
OUTFLOW
CAPITAL
EXPENDITURE
LAND 2,550,000 0 0 0 0 0
BUILDING 15,800,00 0 0 0 0 0
P&M 1,187,200 0 0 0 0 0
F&F 2,290,000 0 0 0 0 0
MOTOR 1,500,000 0 0 0 0 0
VEHICLE
OPERATING
EXP
74
SALARIES 0 6,816,000 8,247,360 9,072,09 9,979,30
7,497,600 6 6
T 124,300 3
2,200,000 0 0
3,300,000 0 0
550,000
REGISTRATION 500,000 0 0 0 0
0
COST
INTEREST ON 3,000,000 0 0 0
0
LOAN 1,500,000
REPAYMENT 0 0
75
FUEL & DIESEL 0 500,000 550,000 605,000 665,500 732,050
0 0
0 0 0 19 19
OUTFLOW(A + 0 0 0 0 19 19
B)
DEPRECIATION 0 0
76
Table 5.6.3 shows the summary of the net cash flows.
0 - 28,327,200 (28,327,200)
367,997,747 144,731,288
77
TABLE 5.7: SUPERIOR NURSERY AND PRIMARY SCHOOL
BALANCE SHEET
AR 0 1 2 3 4 5
ED
SET
78
M 1,187,200 1,187,200 1,187,200 1,187,200 1,187,200 1,187,200
HICLE
mulative
preciation
ED
SETS(A)
RRENT
SET
nk
79
RRENT
SETS(B)
SETS(A+B)
RRENT
BILITY:
ditors
penses 327,200
rued
bility
ANCED
uity
n 20,000,000 10,000,000 0 0 0 0
80
d profit 0 8,624,864 19,994,371.2 39,199,424.96 57,627,284.77 75,828,982.
er tax
CHAPTER SIX
ECONOMIC FEASIBILITY
societal point of view. It involves the allocation of scarce and limited resources
feasibility contribute to the well being of the society by deciding which productive
productive investments by measuring the cost and benefit associated with each.
stoppage
81
4. Make room for consistency between the distribution of the project cost and
benefits and project objectives which is maximally net output and profit.
The Major steps that have been adopted in analyzing the economic viability of this
project are
In the economic feasibility, items such as sunk cost, transfer payments, taxes or
subsidies depreciation, loan repayment and interest payments are excluded in the
analysis. All these items constitute what distinguish economic analysis from
financial analysis.
Although there is no single best method, hence, methods utilized in this feasibility
82
1 Payback Period.
2 Return on Investment
1. Payback Period: Payback period measures the time it takes to recover the initial
investments in a project. This is the simplest method for assessing the desirability
83
YEAR INFLOW OUTFLOW NETFLOW CUM. NET
FLOW
Interpretation: This shows that it will take one year, six months and 13days for
2. RETURN ON INVESTMENT
84
(a) RATE OF RETURN (RR)
223,266,459
223,266,459
RR = 100
144,731,288
RR = 154.3%
Interpretation: This shows that the total rate of return on total investment is
154.3%.
85
ARR = (Project Returns/ Cost of Project) x 100/t
223,266,459
223,266,459 100
ARR =
144,731,288 5
ARR = 30.9%
Interpretation: The average annual rate of return the project is 30.9%. This shows
that rate of return on total investment annually is 30.9%, which greater than the
Under this method, we will be making use of Benefit Cost Ratio, Internal Rate of
86
1. Cost Benefit Analysis or Benefit Cost Ratio: Benefit cost ratio is expressed as
the division of the present value of benefits (profit/loss) by the present value of
costs of a project. If the benefit cost ratio is greater than one, it implies that the
benefits of the project outweighs the costs and therefore feasible. If the benefit
costs ratio is less than one, it implies that the costs of the project outweigh the
Bt
(1 + r ) t
Benefit / Cost Ratio =
Ct
(1 + r )
Ct =Gross Cost
r = rate of return
t= time in years
87
Yrs Benefit Discount Present value Cost Discount Present Value
0 0 1 0 28,327,200 1 28,327,200
228,443,328.44 107,968,341
Bt
(1 + r ) t
228,443,328.44
Benefit / Cost Ratio = = = 2.116
Ct 107,968,341
(1 + r )
Interpretation: The benefit cost ratio is greater than 1, this shows that at a
discount rate of 15%, the present value of the cost is less than the present value of
88
2. Internal Rate of Return: Internal Rate of Return tries to find the discount rate
at which the net present value of cash is equal to zero. The discount rate at which
the net present value of cash flow is equal to zero is also the discount rate which
makes the net present value of net benefits equal the initial cost of the project i.e.
the fixed cost. It denotes the average earning power of money invested in a project.
As a result of this, this method takes full cognizance of time value of money. Using
a
IRR = A + ( B A)
a b
R factor g factor
@15% @25%
89
0 (28,327,200) 1 (28,327,200) 1 (28,327,200)
7 0
7 0 6
2 0 7
6 5 0
5 0 3
120,474,987.4 81,945,513.8
6 6
90
120,474,987.46
IRR = 0.15 + (0.25 0.15)
120,474,987.46 81,945,513.86
120,474,987.46
IRR = 0.25
38,529,473.54
IRR = 0.25[3.127 ]
IRR = 0.78
equal to zero.
3. Net Present Value: Net present value approach uses a given discount rate to
discount the expected earnings and costs. The difference between the discounted
future benefits and the initial capital investment measures the present value
equivalent of the profit/loss of a project. The method can thus be used to assess the
5
Bt Ct
NPV =
t =0 (1 + r ) t
91
TABLE 6.4 NET PRESENT VALUE TECHNIQUES
0 (28,327,200) 1 (28,327,200)
NET 120,479,048
PRESENT
VALUE
Interpretation: The summation of the discounted net benefits is greater than zero,
worthwhile.
92
TABLE 6.5 PROJECTED ECONOMIC CASH FLOW FROM YEARS (0-5)
CASH INFLOW N N N N N N
PROFIT
CASH OUTFLOW
CAPITAL
EXPENDITURE
LAND 2,550,000 0 0 0 0 0
BUILDING 15,800,000 0 0 0 0 0
P&M 1,187,200 0 0 0 0 0
F&F 2,290,000 0 0 0 0 0
93
MOTOR VEHICLE 1,500,000 0 0 0 0 0
OPERATING
EXPENSES
550,000
REGISTRATION 500,000
COST
OUTFLOW (A+B)
94
SURPLUS / (25,327,200) (1,356,200) 25,011,900 54,016,810 86,851,491 124,010,434
DEFICIT
95
SUPERIOR NURSERY AND PRIMARY SCHOOL
BUSINESS PLAN
96
BUSINESS DESCRIPTION PAGE
INDUSTRY
and pre-primary education institution or nursery schools in the country. Nearly all
playgroups and take care of the children while their parents are at work or go for
other engagements but most of them are nursery schools for providing early
97
childhood education. Variations in provision make the registration of these
institutions somehow difficult for Ministry of Education officials. Very few of the
both child-care units and nursery schools. What is in vogue now is for these
establishments to operate as nursery schools for two years or a bit more and
subsequently apply for license to operate as both nursery and primary schools.
Most of them accept children aged two into their nursery sections who later transit
to the primary sections of the same establishments at the age of five or even less.
The number of children in these institutions varies widely from one or two in the
newly established ones to over 300 in the older ones. However, owing to the high
demand for pre-primary education by parents, it does not take a long time for
such institutions in Ibadan by this Group revealed that it started as a nursery school
with only two children in 1995. In 1996 the number increased to 5 and in 1997,
when it was approved to operate as a nursery school, it had 54 children and six
teachers. The institution sought and was granted approval to operate as a nursery
and primary school in 1999 with a total of 105 children and 12 teaching and non-
teaching staff. By the end of the school year in 2004 the number of children had
98
Nowadays nursery schools are located in various places and buildings
whole of which are hired for use as nursery schools only or both nursery and
primary schools, and so on, while some are set up mainly in some towns as full-
fledged nursery and primary schools with their own building and premises. The
physical structures vary widely in terms of quality and aesthetics from one
education, companies and a few rich individuals, teacher quality is generally low.
institutions, private companies and wealthy individuals that can afford to engage
the services of university graduate teachers and the holders of Nigerian Certificate
of Education (NCE) qualifications. Most others employ a few N.C.E. teachers (if
any at all), who are usually underpaid, while others employ mainly Grade Two
teachers and secondary school leavers with the School Certificate or General
Certificate (Ordinary Level) qualification. The nursery schools that engage the
usually charge high fees while those that charge relatively low fees usually employ
99
strategy used by many proprietors to make their services affordable to a great
majority of parents and at the same time maintain a satisfactory profit margin.
Although the National Policy on Education prescribes that the child in the pre-
In the absence of such guidelines and copies of the curriculum for pre-primary
alphabets, numbers, nursery rhymes, colouring and story time and, in some cases,
short passages from various books in English language than to recreational and
because the yardstick for assessing the quality or effectiveness of nursery schools
by parents seems to be the age at which the children attending them are able to
information, poems, verses and passages. The younger the age at which children
attending a particular school can do these, the higher the quality of the school is
100
adjudged to be by members of the public, and the more patronage it is likely to
receive from parents if the fees charged are not excessive. In the attempt to show
how effective their nursery schools are, the proprietors of some combined nursery
and primary schools admit children at the age of two and allow them to transit to
the primary section of such schools at the age of five or even four, both of which
are below the official school-going age. This transition to primary education below
the official entry age often receives a nod from those parents who wish to show
how fast their children can progress through the educational system, and how
THE SCHOOL
Our Vision
community tool and a vehicle through which it would contribute its own quota
Mission Statement
101
The mission of Superior Nursery and Primary school is to provide excellent
In choosing our official school colors, we have been guided by the need not
scholarship. This is why the two colors of Purple and Yellow have been
chosen.
Purple is a blend of blue and red colors and is very rich secondary
Yellow as a color is noted not only for its tenderness and brightness
The adoption of the two colors against the background of our motto and logo
OUR SERVICES
Primary School
102
Mathematics Indigenous culture and traditions
Nursery School
Letter work
Number Work
The School opens daily from Monday to Friday except on Public holidays.
Children must have their breakfast and should be in school by 7.30am. The
103
Nursery closing hour is 12.30pm while the Primary School Section closes at
1.30pm.
one is allowed to collect a pupil before the official closing time and even
then, there is going to be a signatory book which must be signed prior to the
School Calendar
Admission
all children from three years for Nursery and five years for Primary school.
104
Prospective parents/guardians wishing to register their children/wards in the
Extra-Curricular Activities
excursions, debates, Scouting and Brownies are organized for the students to
School Uniform
All Pupils must be in their school uniforms during school sessions. At least
two sets of uniforms are recommended for each student and children in
primary school section are to dress in sport wears and local wears on
Pupil's Welfare
Children must have their breakfast before coming to school and where
possible come with packed light snacks for their mid-day meal. The School
notified whenever any child is sick. Parents should keep the school authority
105
abreast of any change of address as well as that of the family doctor. The
which any pupil may be suffering from, as this will help the management in
cases of emergency. Two medical staffs had been employed to man our
sickbay in order to attend to emergency cases that may occur during school
Various entertainment programs are lined up for the children e.g. end-of-
Regular sports and games are organized and pupils are encouraged to
sportsmanship.
SCHOOL FEES
Our School fees are quite reasonable compared to the facilities provided.
Fees should preferably be paid in advance, but where this is not possible, it should
however be paid not later than the end of the first week into the new term. Details
106
of the current regime of school fees can be obtained from the office of the
Headmistress. Fees are to be paid by means of "Teller" into the designated School
Bank Account. Pupils whose fees are not paid within the stipulated period will be
advised to stay at home until such fees are paid in full. The school official receipts
Moreover, the first term will run from January to April, the second term
from April to July while the third term runs from September to December. The
school will go on the end of session break till when the school resumes again in
late January.
The students in last stage of their primary education will be mandated to take
the common entrance examination. They are required to register for four subjects
examination will be conducted at both level of the federal ministry and the state
107
THE MARKET
nursery and primary schools exist in the country (about 18,338 as at 2006)
quality education, the quality we would offer stands out so that every
parent/guardian who wants the best for his/her ward would find it
back and expect these students to come around so, we would embark on
and outside the shores of the community where we are located. The content
but instead, we are devoted to making people see reasons and believe in the
realism that we are simply the best on offer in terms of providing educations
in the society and that was the reason we named the school SUPERIOR
108
The Demand for education in Nigeria has being increasing overtime,
considering the rising population which characterizes the country and the
means of escaping the abject poverty levels that has plagued the country over the
has also led to increasing demand for, not just education, but standard and highly
qualitative education, especially among the influential and the elite class.
Moreover, the location of the school has implications for marketing of the
service rendered, at least to a given extent. Having realized this, it was given
fast developing area with the bulk of its inhabitants, consisting of influential, elite,
high class business men and women especially lecturers and staffs of the
University and Polytechnic. Also, the desire of the school to make provision for
school buses will expand the market for our service as interested parents outside
the said location can have their children enrolled in the school. Intensive
(television and radio), and posters amongst many others are also embarked upon to
109
Superior nursery and primary school is a well-equipped school with a lot of
school projected about 165 pupils for the first one year of operation and a
consequent increased of five percent (5%) in the second year of operation. This
projection was based on the fact that most of our competitors are not adequately
equipped and their staffs are not qualified as ours. The primary target customers of
superior nursery and primary school are the residents of Ajibode community. The
secondary target customers are people of Abadina in university of Ibadan and its
environ. Ajibode falls within the Akinyele local government area. It is the 9th
Sales Projection
and the project assumes that the revenue items including school fees are
would carry out an advertisement to sensitize the public. This awareness will
110
DEVELOPMENT
Development Status
The school land area coverage shall be a minimum of 3 plots of land, although
the Ministry of Education requirement was 2 plots of Land. The extra plot is to
give room for future expansion. The certificate of occupancy shall bear the
name of the school (superior nursery and primary school). Legal lease
basis only.
One block of a well label 2 classrooms and one art centre for the nursery
school.
111
At least two classroom-sized for the school Library.
The size of the classroom shall not be less than 7m x 4m x 3m for the height.
List of Departments
Various departments have been earmarked for Superior nursery and primary
Library
Administration
Sports
Bursary/Accounting
Staff Trainings
The school staffs shall be on training and workshop session once in every
year (especially during the end of the session) so as to move them abreast of
information and teaching skills needed to train the school children and provide
them with opportunities for improving their supervisory and managerial skills
and Administration and also induction courses for Head teacher. The nature of the
seminar shall be both internal and external as teachers may also be sometimes
112
called upon to write and presents to co-staffs on current issues within his/her
teaching subject.
Teaching Methods
The teaching methods of superior nursery and primary school shall be to meet
the stated objective for the establishment of the school. The methods will
Game play
Role play
MANAGEMENT TEAMS
113
have agreed to pool resources together for the establishment of the school
The Governing Board and Trust Council determine policies and formulate
broad policy guidelines for the day-to-day running of the school under the
School Administration
Headmistress
The Head-Teacher is the coordinator of all the teaching and non-teacher staff
all operational inputs of all the teaching and non-teaching staff of the school.
Staffs
114
The Staff, made up of both teaching and non-teaching, are supervised by the
as members of one happy family and they are recruited strictly on basis of
merit. They are well remunerated much above the prevailing rate in the
industry. This is one of the factors responsible for the high staff morale and
FINANCIAL
partners. In specific terms, twenty million naira (N20, 000, 000) will be
sourced in bank loans while eight million naira (N8, 000, 000) will be
total of two hundred and fifteen million naira. These funds will in turn be
115
CASH FLOW
Income Projection
58,284,442
52,039,680
46,464,000
42,240,000
38,400,000
1 2 3 4 5
116
Profit Projection
75,828,982.22
57,627,284.77
39,199,424.96
19,994,371.20
8,624,864
1 2 3 4 5
EXIT PLAN
shows that the project is worth investing on. However, if peradventure after
the 5th year of the cost and revenue projected, the business failed to yield a
workers travel down to Bodija area whenever they need to shop. The
closer to home even at almost the same rate as shopping malls at far
117
away Bodija. This we viewed from our survey will be viable and
lucrative.
rendered.
The school bus and other assets will be sold to generate income for
REFERENCE
Press, Ibadan.
118