Introduction
Secondary schools are educational institutions for students in the age brackets ofb13-19 years. The school will be mixed for both girls and boys. It will cater for both day and boarding sections. It follows elementary or primary education, and is sometimes followed by university (tertiary) education. Secondary schools have in recent years increased in number according to the ministry of education and sports’ meaning the business is viable.
The viability of this business is attributed to the increasing population of people in Uganda and many pupils are joining secondary schools thus a need for more secondary schools. The startup capital for this investment is US $ 1,670,000 and working capital is estimated at US$ 10,000 generating TR of US $ 691,200 in academic year in academic year 1, US$1,822,500 in academic year 3, US$ 2,902,500 in academic year 4 and US$ 2,902,500 in academic year 5 years discounted at the rate of 10%.
However in academic year 1 there is expected revenues since it’s a year of planning and construction so no student is expected to join.
The project’s operating expenses are US$ 32,200 in AYr 1, US$ 777,167 in AYr2,US$963,881 in AYr 3, US$ 1,506,621 in AYr 4, US$ 1,508,364 in AYr 5 discounted at 10% for 5 years. However, these expenses will be paid out of the student’s school fees. The project’s net profit after tax is estimated at US$1,737,647 with a net profit margin is 21%.payback period of 2 years. Capital Investment. The scale of Investment is relatively big as it involves buying many different assets as described below.
Capital Investment Costs (in US$)
| Total (US$) | ||
|---|---|---|
| Fixed Assets | 1,955,000 | |
| Land and Site Development | 170,000 | |
| Construction of Laboratory | 140,000 | |
| Completion & construction of Classrooms | 220,000 | |
| Construction of dormitories | 240,000 | |
| Development of Sports facilities | 30,000 | |
| Construction of Teachers’ Houses | 0,000 | |
| Construction of Office Admin. Block | 50,000 | |
| Construction of Computer Laboratory | 50,000 | |
| Furniture, Sickbay, Lab., Office, Kitchen Equipment | 295,000 | |
| Motor Vehicles (3–Ton Truck yr1, Bus yr3) | 175,000 | |
| Textbooks | 80,000 | |
| Sports Equipment | 10,000 | |
| Total Investment | 1,670,000 |
Profit and Loss Account
| Activity | AYr 1 | AYr 2 | AYr 3 | AYr 4 | AYr 5 | ||
|---|---|---|---|---|---|---|---|
| Revenue (Adjusted For Fees Default Factor) 10% | 691.2 | 1,822.5 | 2,902.5 | 2,902.5 | |||
| Expenditure | |||||||
| Staff Costs | 474.78 | 321.63 | 506.91 | 506.91 | |||
| Office Administration and Operational Expenses | 0 | 225.3 | 538.87 | 841.99 | 842.32 | ||
| Utilities | 8.4 | 8.82 | 9.26 | 9.72 | 10.21 | ||
| Transport, Insurance, PR, Maintenance and Repairs | 16.0 | 16.8 | 17.64 | 18.52 | 19.45 | ||
| Depreciation Expenses | 7.8 | 51.48 | 76.48 | 129.47 | 129.48 | ||
| Total Operating Expenses | 32.2 | 777.17 | 963.88 | 1,506.62 | 1,508.36 | ||
| Net Profit(Loss) before Interest and Tax | -32.2 | -85.97 | 858.62 | 1,395.88 | 1,394.14 | ||
| Per Term | -10.73 | -28.66 | 286.21 | 465.29 | 464.71 | ||
| Activity | AYr 1 | AYr 2 | AYr 3 | AYr 4 | AYr 5 | ||
|---|---|---|---|---|---|---|---|
School Payroll Expenses
| Projected No. Of Staff | |||||
|---|---|---|---|---|---|
| A/YR 2 | A/YR 3 | A/YR 4 | A/YR 5 | Rate@ Month Per Person.(US$) | |
| Head Master | 1 | 1 | 1 | 1 | 1,200 |
| Deputy Head Teachers | 2 | 2 | 800 | ||
| Director of Studies | 1 | 1 | 1 | 1 | 700 |
| Matron/Patron | 2 | 2 | 2 | 2 | 500 |
| Subject Heads | 10 | 10 | 10 | 600 | |
| School Teachers | 10 | 5 | 15 | 15 | 500 |
| Bursar | 1 | 1 | 1 | 1 | 800 |
| Accounts Assistants | 2 | 4 | 4 | 400 | |
| Pool Intern Teachers | 5 | 10 | 10 | 200 | |
| Non–teaching | 5 | 5 | 10 | 10 | 250 |
| Others | 5 | 5 | 10 | 10 | 150 |
| Total | 25 | 37 | 66 | 66 |
School Fees Revenue (US$’000’s)
| No. Of | Fees Rate/ term | Term I | Term II | Term III | Total Fees | Total Fees 90% | |
|---|---|---|---|---|---|---|---|
| Students | |||||||
| Academic year 2 | |||||||
| School Fees – Day | 100 | 0.4 | 40.0 | 40.0 | 40.0 | 120.0 | |
| School Fees – Boarding | 240 | 0.9 | 216.0 | 216.0 | 216.0 | 648.0 | |
| Sub- | 340 | 25 | 25 | 25 | 768 | 691. |
| No. Of | Fees Rate/ term | Term I | Term II | Term III | Total Fees | Total Fees 90% |
|---|
| Students | |||||||
|---|---|---|---|---|---|---|---|
| total | 6.0 | 6.0 | 6.0 | .0 | 2 | ||
| Academic year 3 | |||||||
| School Fees – Day | 150 | 0.5 | 75.0 | 75.0 | 75.0 | 225.0 | |
| School Fees – Boarding | 600 | 1.0 | 600.0 | 600.0 | 600.0 | 1,800.0 | |
| Sub–total | 750 | 675.0 | 675.0 | 675.0 | 2,025.0 | 1,822.5 | |
| Academic year 4 | |||||||
| School Fees – Day | 150 | 0.5 | 75.0 | 75.0 | 75.0 | 225.0 | |
| School Fees – Boarding | 1,000 | 1.0 | 1,000.0 | 1,000.0 | 1,000.0 | 3,000.0 | |
| Sub–total | 1,150 | 1,075.0 | 1,075.0 | 1,075.0 | 3,225.0 | 2,902.5 | |
| Academic year 5 | |||||||
| School Fees – Day | 150 | 0.5 | 75.0 | 75.0 | 75.0 | 225.0 | |
| School Fees – Boarding | 1,000 | 1.0 | 1,000.0 | 1,000.0 | 1,000.0 | 3,000.0 | |
| Sub–total | 1,150 | 1,075.0 | 1,075.0 | 1,075.0 | 3,225.0 | 2,902.5 | |
| TR Projection | 3,081.0 | 3,081.0 | 3,081.0 | 9,243.0 |
Market Analysis
This school will cater for a niche market of pupils from middle class families. This market segment has got the ability to pay for quality education at a premium. The middle class is a growing class of Uganda’s economy.
There is ready market throughout the country as more and more children go to school. The UPE programme has boosted the numbers. The quality of the school also determines the number of students in a school in terms of qualified staff, good examination results, infrastructures like good buildings, dormitories, nice looking compound among others.
Source of Supply of Machinery, Equipments and Raw Materials
The supply of raw materials, Machinery and Equipments is procured locally although it could also be imported from countries like Japan, South Africa and Chain.
Government Facilities and Incentives Available
There are low tax rates and sometimes no taxes at all on most of the industrial equipments and raw materials. Tax policies also favor industrialists for example VAT deferment and tax exemption on scholastic materials.
Risk Certainty
This business idea is associated with some manageable risks like outbreak of fire. This can be caused poor electric connections. However, this can be addressed by insuring the school and putting in place preventive measures like fire extinguishers, among others.
