Business Plan

on

“Buddha Institute of Technology, Jamshedpur”

By

Group 4

Akshay Sharma
Anand Prakash
Faraz Ahmed
IIM U, PGPX 2016-17

Executive Summary

There is a huge dearth of good quality colleges for higher education in India especially in the states of Bihar, Jharkhand and West Bengal. Our research shows that the engineering education has been quiet neglected in this part of the country primarily due to the lack of any quality education provider in this sector.
After a considerable analysis of the various available options three partners/ friends and members of The National Trust, Mr. Mahesh Sharma, Mr. Nagarjuna Shetty and Mr. Patrick D’Souza have zeroed down on starting an Educational institute i.e. an engineering college. The college will be located at Jamshedpur, a tier 2 Industrial city in the state if Jharkhand in eastern India. As per the business plan, the team envisions a high quality education infrastructure, to cater to the needs of the students from the states of Jharkhand, Bihar, West Bengal as well as other nearby states.
Mr Pattrick D’souza with his immense experience as an educator and an administrator will be the director of the Buddha Institute of Technology for the first five years after its Inception. The institute will be starting off with three branches of engineering at first viz. Mechanical Engineering, Electrical Engineering, Computer Engineering. Buddha Institute of Technology aims to expand in coming years into more branches of engineering at first, followed by expansion into other fields of education like medical sciences and Management studies.
The administrative body of the Institute was formed a few months ago and is currently involved in recruiting faculties as well as other staffs. This body is also looking after the application process for approval from All India Council for Technical Education (AICTE) and affiliation from the Ranchi University. These processes are almost in their final stages.
Organization has also worked their advertisement policy in detail and have developed a well chalked out plan to establish the brand in different regions.
The team also has their financials in place and done minute detailing of proposition. They plan to hire an agency through which they will acquire the tailor made solution to the all the institute requirements. Fee structure of the course is also set and is kept at par with any regular college of the country.
Startup costs will include working capital, marketing expense and the assets will be taken on lease from the Star Lease Ltd., which provides tailor made infrastructure to education institutes at a cost of monthly payable rent. As per the various calculations (mentioned in detail in table report below) the question with the organization was whether they should build their own building or should they take building on lease. There were several benefits that were considered at the time of taking decision to enter into contract with Star Lease Ltd, the most important was that it is a national leader among infra structure leasing companies, Competitive rates were provided and choosing it would surely lead to savings on expenses on fixed assets.
To summarise the National Trust is keen on starting this engineering college that aims to become a symbol of educational excellence and lay the foundation work for further expansions of the visons of the trust.
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Table of Contents I. | Analysis of industry | 4 | II. | Management | 4 | III. | Mission | 5 | IV. | Present status | 5 | V. | Future plans | 7 | VI. | Other details | 9 | VII. | Preliminary marketing | 9 | VIII. | Competitive edge | 10 | IX. | Emerging competition | 11 | X. | Financials | 12 | XI. | Sales forecast | 16 | XII. | Advisory board | 16 | XIII. | References | 17 |

Analysis of the industry
Education sector is among the best business sectors in the current Indian scenario. Engineering as a field has been an attractive avenue for quite some time now for the Indian Diaspora. Thus it is no wonder that India is one of the largest producers of engineers in the world. But the sad state of affairs is that, except just a handful of government and private engineering colleges the majority of other engineering colleges in India rank far below on any scale when compared to engineering colleges from any other developing countries. There is a huge dearth of good quality engineering colleges especially in the states of Bihar, Jharkhand and West Bengal. Our research shows that the engineering education has been quiet neglected in this part of the country primarily due to the dearth of quality education provider in this sector.
There are presently only one good private engineering college and a few government engineering colleges operating in these states. It is pretty competitive to get in to these colleges. And all other colleges of the area are not at par with any national or global educational standards. Due to which majority of students are forced to migrate far out of the state in search of good quality education.
There is a great need for some quality engineering colleges in this part of the country. The market potential for a good engineering colleges at par with the global educational standards is huge. Quality education is the need of the hour.
Management

Buddha Institute of Technology, will be an engineering college established and run by National Trust. National Trust comprises of three members, Mr. Mahesh Sharma, the chairman of the trust. Mr. Mahesh is also an alumnus of IIT Madras and Harvard Business school. Second member of the trust is Mr. Nagarjuna Shetty who is a member secretary of the trust. Mr. Nagarjuna has a Btech and an PHd in Mechanical Engineering from IIT Delhi and California Institute of technology respectively. Third member of the trust is Mr. Pattrick D’souza who acts as the treasure. Mr. Pattrick has a degree in Humanities from the Banaras Hindu university and is also a renowned philanthropist. He has been a passionate educator for last two decades. Mr. Mahesh and Mr. Nagarjun has also been seasonal / part time educators for quite some time now. All three of them are long-time friends and the idea of opening an educational institute was first conceptualised 15 years ago, while they were attending a conference together at New Delhi.
After working in the corporate sector both as consultants and as entrepreneurs Mr. Mahesh and Mr. Nagarjun have amassed fortune enough to invest in their decades old dream of establishing an educational institute that can provide world class education in India. They have chosen Jamshedpur to be the location for the institute for many favourable reasons. Mr. Pattrick has a huge experience in the education sector of the India and is well renowned for his leadership skills and visionary outlook. He also has major experience in administrative capacities at various other educational organisations. He will be leading the Buddha Institute of Technology as its Director for the next 5 years.
Buddha Institute of Technology is headed for success due to the presence of a well experienced team, full of zeal and optimism. The team members are backed by a value driven and enthusiastic founders. The institute will be starting off with three branches of engineering at first viz. Mechanical Engineering, Electrical Engineering, Computer Engineering. Buddha Institute of Technology aims to expand in coming years into more branches of engineering at first, followed by expansion into other fields of education like medical sciences and Management studies.

Missions of the organisation 1) To provide world class education in India 2) To build reliable and trusted centres of Educational excellence. 3) To create a research driven educational culture. 4) To be a branded name in high quality education.

Objectives of the Organisation 1) To expand to other branches of engineering in the next 5 years. 2) To expand to other verticals such as humanities, medical sciences, Management courses by the end of 10 years. 3) To create employment opportunities for at least 1000 people in and around the campus. 4) To build a good and effective alumni base within two decades of inception.

Present Status

The administrative body of the Institute was formed a few months ago. This administrative body is currently temporarily operating from a make shift office at Ranchi, the capital of Jharkhand. This body is already in talks with different government bodies for various accreditations, approvals and affiliations. The request for AICTE approval was submitted a month ago and is under process. Similarly request for affiliation from Ranchi university has been submitted a fortnight ago. The organisation is hopeful that both the above processes will be finalised with the next couple of months. And Buddha Institute of Technology can begin with its first batch of students from the next academic Session. Once both the certifications i.e. affiliation and approval documents are finalised, the administrative body will begin with other processes of admitting students. The first step would be advertising about the courses and the programs, followed by entrance examinations after which the intake process will start. This administrative body is working under the expert guidance of the Director Mr. Pattrick.
The Buddha Institute of Technology will be first of the many institutes of educational excellence. So for the National Trust it is of utmost importance that this first institute performs really well on all standards of educational excellence. Because this is the foundation on which many other future educational institutes will be built upon. Generally speaking, building a brand name that is equivalent to Harvard and Cambridge is what Buddha Institute of Technology is aiming for.
The administrative body is already in talks with various faculties who are highly qualified and have large international experiences of teaching in institutes like Massachusetts Institute of Technology and California Institute of Technology. The rich and varied experience of the Mr. Pattrick D’souza, the director of Buddha Institute of Technology combined with the wide networking of Mr. Mahesh and Mr. Nagarjun is coming is handy. The vision and experiences of these three people is leading the administrative body in the right direction.
The administrative body is also in final stages of accepting the college infrastructure from the Star Lease Ltd. Star lease Ltd is the company that made the 400 Acres campus at outskirts of Jamshedpur, the oldest steel manufacturing hub of India. Start lease Ltd is providing National Trust with a build-up area of 200000 Sq feet, which comprises of various facilities such as Lecture halls, auditorium, labs, library etc ( see Exhibit 1for reference)

Facility | Capacity | Numbers | Class rooms | 60 persons | 5 | Lecture halls | 100 persons | 5 | Auditorium | 500 Persons | 1 | Mechanical Workshop | | 1 | Electrical workshop | | 1 | Computer Lab | 50 systems | 2 | Library | 4000 books | 1 | Hostel for students | 500 rooms | 1 | Canteen | 200 persons | 2 | Parking facilities | | 5 | Recreation room | | 2 | Sports centre (gym, play-ground, swimming pool etc) | | | Academic Offices block | | 1 |
Exhibit 1

The team intends to build the state of the art laboratory facility in the college and hence has roped in the world class company Tech Labs limited to supply all the equipment and setup the lab at the college. This company is the best in the country for executing the work. Since some members of the team themselves have had the opportunity of global education, they understand the importance the labs for the development of practical understanding in the students and is also keen to make world class labs as one of their Unique selling proposition and differentiator in comparison to other colleges.

The above facilities are in final stages of completion and will be handed over to the administrative body of Buddha Institute of Technology within the next few months, post which the administrative body will begin its operations from the permanent office. And in the next 9 months all the processes will be taken care off so as to begin the classes from next academic session.

The Future Plans

There will be three branches that will be starting their classes from the next session. And after the four years of their education, if the students are successful as per the examination requirements of Ranchi University they will be awarded a degree named Bachelors of Engineering or BE in their respective fields of study. The three branches that will be starting the classes next year are Mechanical Engineering (Strength of 50 students), Electrical Engineering (Strength of 50 students) and computer Engineering (strength of 50 students).
The syllabus and curriculum will be entirely based on the formats of Ranchi University but the faculties teaching the subjects will be coming from various institutes of excellence from across the globe. There will be many visiting faculties from various IITs as well. And apart from the technical subjects the students will also be supported for their campus placements post successful completion of their education.
The sessions that will be starting from the next academic year will begin with full time residential four year programs for the 150 students. There will be hostel facilities along with canteen services and other necessary infrastructure as well. All the facilities would be state of the art. These facilities have been constructed keeping in mind the expansion that’s going to take place in the coming years. And when in the second year of its inception there will be many other branches of engineering that would be inducted into the college. But those details are yet to be finalised.
The organisational structure of the Buddha Institute of Technology will be as follows. Mr. Pattrick D’souza will be at the top of the chain as the Institute director and other members of the National Trust would be acting as the trailblazers for the entire organisation. For the first academic year there would be three head of departments, one each for the mechanical engineering, computer engineering and electrical engineering along with one dean of student affairs. These three head of Departments (HODs) and the Dean of student affairs (DSA) would be directly reporting to the Institute Director.
Apart from the above hierarchy, there would be a group of professors and lecturers under each Head of Departments reporting to the respective HODs. There would also be many part time and visiting faculties who would be moving in and moving out of the institute premises as per the requirements.
Recruitment or hiring process for the above faculties is under progress and administrative body is hopeful to be completely ready well before the session starts next year.
There will be a total of 30 staffs (Permanent Faculties, adjunct faculties, administrative staffs and other staffs ) during the first year of the college. During the next phase there would be more heads joining the family as college expands into other courses and dimensions.
The development of Buddha Institute of Technology has been envisioned in 4 phases. (Please see Exhibit 2 for reference). After starting with just 3 branches of engineering in the year of inception, the college will introduce three more branches of engineering in its curriculum in the next couple of academic years. After five years of inauguration the members of National Trust has decided to expand into the field of Medical Sciences. In view of this aim, a medical hospital along with a medical college will be established. After some more years, the organisation has planned to venture in the fields of Management studies. The far sighted visionary goals of the organisation is clear since that days of the conceptualisation. Though at present all the team is focussing on is the successful inauguration of the engineering college in the next academic year.

Phase | Academic Year | Plan | Phase 1 | 2017-18 | ME, EE, CE | Phase 2 | 2018-20 | ME, EE, CE, CivE, PE, Electonics Engg | Phase 3 | 2021-2025 | Medical hospital and college | Phase 4 | 2026-beyond | Management studies (Post Graduate) |
Exhibit 2
Legends
ME : Mechanical Engineering, CE : Computer engineering, EE: Electrical Engineering, CivE: Civil engineering, PE : Production engineering

Moreover, the National Trust is planning to invite chief minister of Jharkhand Mr. Raghubar Das as a chief guest for the inauguration ceremony next year. The talks in this regard will be initiated as soon as the approval and affiliation documentation for Buddha Institute of Technology is finalised by its administrative body.
Mr. Mahesh Sharma and Mr. Nagarjuna Shetty has close relationship with many corporate big shots e.g. Chief Executive Officers (CEOs) and Vice Presidents (VPs) of many big fortune 500 multinational organisations. Many of those organisations has production units in the vicinity of the Buddha Institute of Technology. The National Trust is in talking terms with many such CEOs and VPs to be a part of the board as one of the board members of the college.

Other details

The advantage that Jamshedpur has over Ranchi or Kolkata, was that Jamshedpur is located right in the centre of Industrial hub of the state of Jharkhand. Adityapur Industrial area, which is just a few kilometres away from the premises of Buddha Institute of Technology is the second largest industrial complex of Asia.1 The opportunities for the people from academia to interact with the people from the industrial units are unlimited. This will result in a healthy relationship between the academic circle of Buddha Institute of Technology and the experts from the Industrial diaspora. The people benefitting the most from this relationship would be the students of the college. And this relationship will help the students in there learning experiences as well as for their campus placements once they successfully complete their education. The silver lining is that the industrial experts from the area are also excited about the establishment of a new engineering college in the vicinity as the college can be helpful to them in many ways. Pragmatically speaking it would be a mutually beneficial relationship between the college and the industry.
Jamshedpur is well connected to both Ranchi (Capital of the state of Jharkhand) and to Kolkata (Capital of the state of West Bengal) both through railways, roadways and airways. The nearest International airport is Ranchi which is only 120 kms away by road.

Preliminary Marketing

The organization has a plan of doing aggressive marketing and reaching out to perspective students regarding the courses being offered.
Targeted area for the campaign is the north eastern and the eastern part of country. It has chalked out a detailed plan for different states Organization is targeting various the means of advertising i.e. print, electronic through brand ambassador campaigning and hoardings etc.
Organization has mainly identified three sectors as far as marketing as concerned, those are urban, semi urban and rural. For urban regions such as Jamshedpur, Kolkata, Ranchi, Rourkela, Varanasi, Patna etc, plan is to focus more on advertising through net and radio and Television (as the internet and digital media has deeper penetration in this markets). For semi urban regions advertising will be more focused on television and Hoardings. For rural regions – Advertising will primarily be done through print media i.e by distributing pamphlet and issuing advertisement in newspapers. For North eastern states plan is to reach out mainly through Radio and television Newspapers while for other eastern states.
The plan is to make people initially aware to the brand and values of the college.
Name of Mr. M S Dhoni Indian cricket team skipper) has been finalized to be the brand ambassador of the organization. The reason why he was chosen is that not only he commands immense pan India popularity but is also a local face in that part of country and people can relate to him. The other important point why people can relate about him is that he has also belongs to middle class family, which is also the target customer for the organization. Organization has also plans to rope in the local faces wherever required. Organization is currently mulling over the name of Baichung Bhutia (famous footballer) to be the face in hoardings and pamphlets in the north eastern area.
However, the Organization is of firm view that as the time passes their quality education itself will become the biggest advertising tool of the institute.
This Project has immense growth potential in long term and trust envisions it as the center of quality education in that part of country.
Trio Mr. Pattrick, Mr. Mahesh and Mr. Nagarjuna have done a considerable amount of research in choosing the location of the institute. Before finalizing the Jamshedpur as final option. Kolkata and Ranchi were strongly considered at first but due to various considerations as discussed in the following paragraphs Jamshedpur was the better option.
Competitive Edge
As the Mahesh, Nagarjuna and patrick are themselves are highly educated and have the part of world class institutions, they have enough amount of global exposure and contacts to get the faculties and various industries on board. They also intend to bring in the global standards in and increase the industrial interface between the educational institute and the industries. Moreover, steel city Jamshedpur also has one of the largest steel plant of country along with an industrial belt with more than hundreds of manufacturing plants. This would provide a great industrial exposure to the students as well as the also the real time research opportunity for the faculty as well as students.
Institute, though has benchmarked some international institutes namely Harvard and Cambridge but they are considering competition with the reputed institutes in the region i.e. IITs and NITs.
Following are the list of IITs and Nits in the targeted region of the institute:
List of NITs NIT Manipur | NIT Meghalaya | NIT Mizoram | NIT NAgaland | NIT Patna | NIT Raipur | NIT Silchar | NIT Sikkim | Nit rourkela |

List of IITs IIT Varanasi | IIT Bhubaneswar | IIT Raipur (to be opened) | IIT Guwahati | ISM Dhanbad |

Emerging competitions
It came to knowledge of the institute that 02 other corporate groups are also opening large educational institutes in the nearby states i.e. Uttar Pradesh and Bihar. But Buddha Institute of Technology (BIT) does not any see severe threat to their business prepositions in these ventures as we are assured of our plan and vision. Moreover other corporate groups are likely invested in money making while the national trust is more inclined towards improving the quality of education.
Milestones Buddha Institute of Technology is targeting to achieve in next five years 1. Publish at least 20 papers in reputed journals around the world 2. Placing all the students with good companies where they will have bright future. 3. Maintain relationships with major industries in the country.

Financials
Start-up costs will include working capital, marketing expense and the assets will be taken on lease from the Star Lease Ltd., which provides tailor made infrastructure to education institutes at a cost of monthly payable rent.
About Star Lease Ltd:
Star lease ltd is a multimillion dollar enterprise that is involved in providing infrastructure facilities to various hospitals, corporate offices and educational institutes all over world. It works on a very simple model that is Star Lease suggests the location for the setup and then builds the building infra etc as per customer requirements; customer just pays a monthly or annual rent for using facilities. For all this Star Lease enters into a life time contract that mandates the customer to pay monthly or annual rents.
Our contract with star lease:
As a leading name in lease infrastructure, the name of Star Lease was always in our minds. At the time when we met the executives from Star Lease we were not even sure about the location where we want to start up. They suggested us the places where they can provide us infrastructure. The list included the names of following cities: * Kolkata * Ranchi * Jamshedpur
After considering the rates and various other factors discussed above the city of Ranchi was chosen over others.
Following is the rent chart provided by the Star Lease Ltd. (Prices per square feet built area in INR) | <150 Acers | 151-400 Acers | >400 Acers | Built Area < 100000 | 14 | 17.5 | 25 | Built Area 100000-200000 | 15.5 | 20 | 27.5 | Built Area > 200000 | 16.5 | 22.5 | 30 |

So as per the table the rent required per month would be around 4000000 INR per month as area of our property is 200 Acers and around 200000 Square Feet built area.
Decision to go with Star Lease: The question was whether we should build our own building or should we take building on lease. Several benefits that were considered at the time of taking decision to enter into contract with Star Lease Ltd include: 1. Star Lease in world leader among infra structure leasing companies. 2. Competitive rates were provided. 3. Out sourcing infra structure work will make directors more available to concentrate on other important matters. 4. One can relies on them about promised time line to deliver buildings at time after seeing the past record of Star Lease Ltd. 5. Custom made buildings. 6. Savings on expenses on fixed assets. Startup expense requirements:
Expenses on Legal requirements- Legal requirements includes various expenses for compliance of laws, getting permissions to setup education institutes and various approvals from government bodies like AICTE that grant permission to start professional courses like engineering. It also includes expense on registration of name. The estimated cost will come around INR 2000000
Expense on Labs and workshops- It includes various expenses on labs and workshops, such as cost of lab equipments and computers in the labs. The estimated cost will be around INR 15000000
Expense on Library- As a world class engineering college we require a world class library that includes at least 8000 Journals and 5000 books. The cost will come around INR 7500000
Expense on Consultants- Expense on consultants will be an area of focus as expense on consultant will be variable in nature. Two types of consultants needs to be hired, one needs to be a legal consultant and another needs to be a business consultant. A monthly fee will be paid initially to both consultants. That will come to be around 2000000 INR per month
Expense on Insurance- General Insurance- Expense on insurance will be annual in nature, as a mandatory requirement expense on general insurance of the buildings; infrastructure and other facilities will be made by the one who has taken everything on lease. Life insurance- It is the responsibility of the organization to get all its employees term insured. Expense on life insurance will depend on no. of employees and various factors like age etc. It will be approx 2500000 INR per annum.
Expense on Research and development: In an engineering college research and development is always an ongoing process expense on research and development will be an expense that is fixed in nature and has to be paid for every month. The expense is expected to be approx 10000000 INR per annum.
Expense on Marketing: We expected to spend more in the form of expense on marketing as initially branding plays a major role in positioning of our organization amongst various other educational institutes. Along with expense on initial branding, a budget will be required to sustain and maintain the position of the organization as a brand. The expense is expected to be around 20000000 INR per annum.
Expense on Salaries: Total no. of employees as of now is about 30. And average salary will be 35000 INR per month. So the expected monthly expense on salary will be 1050000 INR.
Total start up expense totals up to: 67800000 INR, so initial startup expense totals up to this amount.

Funding of startup expense and working capital:
Funding of the startup expense will be made by taking working capital loan and loan required for startup expense. For the sanction of this loan, all the three directors need to provide personal guarantee and if necessary they need to provide collateral also. Application has already been submitted for loan to the leading bank and sanction of loan is in process.

Startup Assets:
Cash required: The initial cash requirements include the working capital in the form of salaries and electricity, water and other amenities for at least 6 months. It accounts for up to 2500000 INR
Other current and long term assets: It includes the expense that has been made on lab setups and vehicles (including cars for the faculty who have not opted for campus accommodation and students who do not stay at hostels) that will be owned by the organization. Other expenses are calculated up to be 10000000 INR
Total startup Assets totals up to: 2500000 INR
Funding of startup assets: 67800000 INR
Liabilities: 5050000 INR
Current Liabilities: Not applicable
Long term liabilities: Not applicable

Following list shows various expenses in INR.

Type of Expense | Monthly | Annual | For Six Months | Startup expense | | | | Expenses on Legal requirements | 4000000 | | 24000000 | Expense on Labs and workshops | | | 2000000 | Expense on Library | | | 15000000 | Expense on Consultants | | | 7500000 | Expense on Insurance | 208333.3 | | | | | 2000000 | Expense on Research and development | 833333.3 | | 1250000 | Expense on Marketing | 1666667 | | 5000000 | Expense on Salaries | 1050000 | | 10000000 | Cash required | | | 2500000 | Other current and long term assets | 10000000 | | |

Sales forecast
As the Buddha Institute of Technology is initially coming up with only 150 seats, their detailed study shows that all seats will be will be occupied in next academic session.
Fee structure in-line with the rules of AICTE is as follows: Tuition Fee (B. Tech.) | Rs. 39,150/- (per semester) | Development Fund | Rs. 5,850/- (per semester) | Student Fund | Rs. 750/- (per semester) | Caution Money | Rs. 2,000/- | Total | Rs. 47750 |

Altogether there are 02 semesters in one year and 50 students in total hence sales figure will be amounting to INR. 1,43,25,000/-

Advisory Board

Mr. Ramesh Joseph, MD, supreme Technology - Mr. Ramesh has long experience in technical roles across various industries. He also has wide knowledge about licensing patents and negotiations.
Mr. Suresh Desouza, Lawyer - Mr. Suresh has experience of 35 years in legal field. An expert in the legal framework.
Mr. Ravi Paul - Mr. Paul is ex director of IIT Delhi and has been advisor to many prestigious Organizations in the country.
Mr. Rajesh Uppal - Ex MD of Venus steel and power limited: He has industrial experience of around 35 years across various sectors.
Mr. K R Rama Moorthy - Ex Vice president of Tata sons, Ex Board of director at Voltas He has industrial experience of around 45 years across various sectors.
Mr Ramanathan - Sr GM at AD bank, member of institute chartered accountant of India. He has industrial experience of around 15 years across various sectors.
Mr. Pawan Joseph - Ex dean of Indian institute of technology, Mumbai He has industrial experience of around 40 years across various sectors.
Mr. Ajay Chandra - Ex principal of Indian Institute of Mines, He has academic experience of around 35 years across various institutes.
While choosing the advisory board the team has particularly decided to make a mx and match of stalwarts both from industries and academic field.

References
1List of Industries in Adityapur Industrial Area Retrieved from http://www.aiada.in/web/industry-directory/large-industrial-sector.php

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