Business Plan for Native Speakers Club "Tiempo"

Internal regulations

As a worker continue with its duties within a certain organization, he/she must adopt a number of internal regulation that refer to its working behavior control, processing its personal information, its performance appraisal, bonus policy and so on. Some of those regulations are mandatory, but others are not.
It is important that the general director of the company has approved the regulations, as they must be also informed to the employees. Those factors are important in order for the regulations to be valid. It is a fair way to resolve conflicts that may appear in the organization, being based on the labour code system that allows the rights of the employees to prevail Lushnikov AM, Lushnikova MV The course of labor law: the textbook: in 2 volumes. Volume 1 - 2nd ed., Rev. and add. - M .: Statute, 2009, p. 353.

Important traits of the labour code that state how many working hours an employee is allowed to have, disciplinary sanctions, termination of the employment, compensation an minimum wage, holiday's range, requirement of medical examination, liability, restrictive covenants, confidentiality and foreign personal work permits are well illustrated within the labour code Starting keys of the labour law - Labour Code of the Russian Federation (LC RF) from 30.12.2001 N 197-FZ \ Consultant Plusand can be reached easily. As for the native speakers club “Tiempo” the most relevant point relies on working with foreign personal.

The actual terms of working with foreigners implies equal rights as if he/she were from the Russian Federation. During the year 2010, as it was stated on the “World Congress of Families” media source The official webpage of World Congress group. - access: http://worldcongress.org/press-releases/english-translation-2010-russian-child-protection-law-2013-amendments, free, there were made several changes to the Russian laws that would facilitate the foreign white collar work. There was added a new category of foreign white collars that got the name of “highly qualified specialists” (“HQS”), that receive significant advantages over those who didn't got the rank. One of the primordial benefits of this category is that they are not necessarily required to obtain a working permit within the Russian Federation. They are as well taken into main priority from those looking for working with foreign specialist and their working permit allows them to be able to work at different regions of the country.

On the contrary, the procedures in order to hire non-HQS workers are quite more complicated and also require additional time. As club “Tiempo” relies on working mainly with non-HQS workers, this implies additional revision, in terms of what could be the consequences while hiring a foreigner and how it could be avoided.

Moving on to some important factors stated in the labour code, as it been stated before, in order to resolve the problem of additional time and financial expenses, due to working with foreign specialists, it is been taken the decision at the Spanish native speakers club (OOO “Saint”) to work using freelancing services. This statement receives its argumentation from several factors. One of them is the fact that companies working in the market of foreign language learning have to hire and work with people from different countries (native speakers). According to the Russian employees hiring system, to conclude with a foreigner a labor contract it is required to have a work permit.

The permit is not required for:

· Citizens of the Republic of Belarus, according to the Agreement between the Russian Federation and the Republic of Belarus of 25.12.98 «On equal rights of citizens";

· Foreign citizens temporarily or permanently residing in the territory of Russia. A complete list of persons, who are not covered by the employment permission procedure in Russia, set out in paragraph 4 of Article 13 of the Federal Law of 25.07.2002 № 115-FZ "On the Legal Status of Foreign Citizens in the Russian Federation."

If a company hires a foreigner without a work permit or without a permit for such involvement (if necessary) FMS of Russian Federation may impose a fine on the company (from 250 000 to 800 000 rubles) and on its representative (from 25 000 to 50 000 rubles). Otherwise activities of the company by the court decision may be suspended for up to 90 days The official webpage of Herbert Smith association - access: http://www.herbertsmithfreehills.com/-/media/HS/MO-281011-9.pdf, free.

From the other side, the absence of permission from the employer to hire foreign labor forces does not affect the taxation of wages (a letter from the Russian Ministry of Finance 26.12.2005 № 03-03-04 / 1/444).

The calculation of the "salary" tax payment for a Russian company in favor of foreign workers has some special features.

The income tax on payments related with foreign workers is hold at a rate of 13 or 30 percent - depending on the time of his stay in Russia. In order to avoid those payments companies have the choice of recurring on freelancing services. Thus, allowing the company to avoid unnecessary expenses. OOO “Saint” system of working with foreign workers will be reviewed in a more detailed way within this project.

As another important part in the sphere of providing foreign languages services is the fact of acquiring a license to be able to provide teaching services, the borderline between whether it is always need or not is blurry. As the law states in the Education act of the Russian Federation “Article 33.1. Licensing of educational activities subject to licensing. Point 2. Educational activities of educational institutions, research organizations or other organizations for educational programs require a license. Point 3. The regulation on the licensing of educational activities needs to be approved by the Government of the Russian Federation.”

According to the law, license is required wile working as educational institutions, as well as for organizations that provide or would like to provide official valid certificates after finishing an educational course.

In the case of OOO “Saint” license is not required, considering that the main services are provided online, without the help of any educational institution and without providing official certificates. It is not necessarily to officially state a company's activity is related with education, since there is the possibility to choose working at the sphere of providing online services.

Summarizing the points mentioned above, it is important to highlight the fact that the legal and right system of the Russian Federation provides certain restrictions and rules to be followed, it also provides choices an entrepreneur can make in order to start or continue his business activities.

Chapter 4. Financial Aspects

To be able to recreate a financial model and generate numbers to analyze the financial aspects of the organization, information from inside the company as well as facts and parameters from the external analysis and tax system revision will be used.

As the company is being working for several months, it forecasts substantial sales revenue by year two. This fact can be determined by characterizing the overall target audience for the services the Native Speakers Club provides. As considered by statistically reviewing 7 main companies providing Spanish language learning services that were revised on the marketing and competitor's analysis above. The standard average price for a 90 min lesson with a personal tutor is 1500 rubles for a non-native speaker and 3100 rubles for a native speaker The official webpage of OOO “Saint” company - access: http://tiempo-club.ru/ceny/, free. The Spanish Native Speakers Club “Tiempo”, respectively provides a price policy that states a fixed price of 3000 rubles for a face-to-face 90 min Spanish lesson.

In accordance with the information gathered from the Native Speakers club general director that includes the current prices for the services it provides as well as estimated expectations, it was possible to generate an assumptions table that demonstrates the income gathered by providing it services. The table is the following:

Table 5. Assumptions

Important Assumptions for Tiempo
Classes	Revenue per client	Expected Number of Clients per month	Revenue per Month	Commission Charges (Variable)	Number Of Events	Teacher Charges (Semi fixed)	Rent etc	Net profit Per client	Total profit
Spanish Online	1500	50	75000	1100	0	0	0	400	20000
Spanish at home tutor	3000	50	150000	2600	0	0	0	400	20000
Dance Master Class	500	30	15000	0	4	6000	3600	0	5400
Spanish Speaking Club	400	35	14000	0	4	6000	3600	0	4400
Cooking master Class	700	35	24500	0	4	6000	3600	0	14900
Trips to Spain	0	0	0	0	0	0	0	0	0
Total			278500						64700

Table 5a.

Total Costs	213800
Direct costs	185000
Rent	10800
Teacher Fees	18000

Table 5b.

Other expenses	Other expenses
		Per month
Registration Charges	7000
Printing Stationary	3800
Website Design	116000
Advertising		16000
Admin		3600

Table 5c.

Inflation	10%
Growth Rate	20%
Tax Rate	6%
Other Assumptions
Monthly oficial Salary of the General Director	25000
Direct costs include only commission

As shown in the table, the monthly parameters are estimated only, due to fluctuation of clients. The estimated number of actual clients of the club is around 50 mainly focused on Spanish learning at home and online. As a result of that, the estimated numbers of clients stated in the graph is in accordance to the owner's expectations after gathering additional financing for additional advertisement.

The calculations for the following 3 years of the company's activity justified by its expected sales can be seen in the profit statement below:

Table 6. Profit Statement

Pro Forma Profit and Loss	Year 1	Year 2	Year 3
Sales	4042095	5335566	7042947
Direct Costs of Sales
Product Cost	2559764	3378888	4460132
Total Cost of Sales	2559764	3378888	4460132
Gross Margin	1482332	1956678	2582815
Gross Margin, %	0,366724	0,366724	0,366724
Expenses
Payroll	516000	567600	924360
Marketing & Advertisement	260000	312000	374400
General & Administration	50200	55220	66264
Others & Miscellaneous	20000	22000	24200
Website	138000	165600	198720
Rent	129600	155520	186624
Total Operating Expenses	1113800	1277940	1575848
EBITDA	368531,6	678737,8	1006967
Depreciation	0	0	0
EBIT	368531,6	678737,8	1006967
Interest	0	0	0
Taxes	242525,7	320134	422576,8
Net Profit after tax	126005,9	358603,8	584389,8
Net Profit after tax/Sales	3,12%	6,72%	8,3%

Also by the end of the seventh month the business will have reached EBITDA breakeven and expect to achieve sustainable profit generation on a continuous basis.

The market research and a marketing strategy, that should be detailed as well in the business plan will result in an after tax profit of 126,005 rubles in year one, increasing to nearly 584,389 rubles after tax profits within three years. Monthly breakeven starts at 139726 rubles. Average Variable cost is estimated to be around 67%.

Table 7. Breakeven Analysis

Breakeven Analysis
Average Percent Variable Cost	67,0%
Estimated Monthly Fixed Cost	92816,67 rubles
Monthly Revenue Breakeven	139726,71 rubles

The following statement is a result of the services prices without the commission that should be given to the foreign specialist. This means that the average percent of the variable costs should be equal to the average commission rate the tutor receives by providing its services.

It is also important not to forget about the seasonal factor within the sphere a language learning services. An estimation of a 70% down for the summer period in the Russian Federation is expected. In order to reflect this tendency and demonstrate how it influences the business itself, it was decided to calculate the monthly sales cash flow for the company in the following table:

Table 8. Monthly Sales

Pro Forma Profit and Loss	Month 1	Month 2	Month 3	Month 4	Month 5	Month 6	Month 7	Month 8	Month 9	Month 10	Month 11	Month 12	Total
Sales	278500	300780	324842,4	350829,8	228039,4	228039,4	371879,6	394192,4	417843,9	442914,5	469489.4	234744.7	4042095
Direct Costs of Sales
Product Cost	185000	196100	207866	220338	143219,7	143219,7	233558,2	247571,7	262426	278171,6	294861.9	147430.9	2559764
Total Cost of Sales	185000	196100	207866	220338	143219,7	143219,7	233558,2	247571,7	262426	278171,6	294861.9	147430.9	2559764
Gross Margin	93500	104680	116976,4	130491,8	84819,69	84819,69	138321,3	146620,6	155417,9	164742,9	174627.5	87313.75	1482332
Gross Margin,%	0,335727	0,348028	0,360102	0,371952	0,371952	0,371952	0,371952	0,371952	0,371952	0,371952	0.371952	0.371952	0.366724
Expenses
Payroll	43000	43000	43000	43000	43000	43000	43000	43000	43000	43000	43000	43000	516000
Marketing & Advertisement	50000	50000	16000	16000	16000	16000	16000	16000	16000	16000	16000	16000	260000
General & Administration	10600	3600	3600	3600	3600	3600	3600	3600	3600	3600	3600	3600	50200
Others & Miscellaneous	3500	1500	1500	1500	1500	1500	1500	1500	1500	1500	1500	1500	20000
Website	116000	2000	2000	2000	2000	2000	2000	2000	2000	2000	2000	2000	138000
Rent	10800	10800	10800	10800	10800	10800	10800	10800	10800	10800	10800	10800	129600
Total Operating Expenses	233900	110900	76900	76900	76900	76900	76900	76900	76900	76900	76900	76900	1113800
EBITDA	-140400	-6220	40076,4	53591,83	7919,691	7919,691	61421,34	69720,62	78517,86	87842,93	97727.51	10413.75	368531.6
Depreciation	0	0	0	0	0	0	0	0	0	0	0	0	0
EBIT	-140400	-6220	40076,4	53591,83	7919,691	7919,691	61421,34	69720,62	78517,86	87842,93	97727.51	10413.75	368531.6

As it is clear from the calculations we can see a considerable fall by the months 5, 6. The table shows the months, starting with month 1 as the beginning of the company's activity after achieving the expected number of costumers. The expected number of costumers is justified by the amount of investment that should be made on advertisement. Although it is important to state that, in order to avoid the seasonal factor, a theory of diminishing the influence of seasonal factors by the means of cross-selling (adding new services related with the Spanish learning factor) requires an additional research beyond the frames of the current project-paper.

After having an overview to some of the financial aspects of the company, certain logic must prevail, it is important to remember, that the Spanish native speakers club expectations are linked with the purpose of enhancing its advertisement policy, that way it can be represented by an overall sales forecast, based on the calculations done earlier.

The financial model does not incorporate direct personal hiring policies, but it relies on freelancing in order to work with the foreign personnel. As it was stated before, the agreement that is conducted between the foreign specialist and the Native Speakers Club “Tiempo” is being carried out through companies that provide freelancing services.

As the monthly sales assessment had been done, it is possible to provide a forecast of annual sales.

Table 9. Sales Forecast

Sales Forecast
	Year 1	Year 2	Year 3
Sales	4 042 095,39	5 335 565,91	7 042 947,01
Direct Cost of Sales	2 998 256,64	3 957 698,77	5 224 162,37
Subtotal Direct Cost of Sales	2 998 256,64	3 957 698,77	5 224 162,37

Table10. Personnel Plan

Personnel Plan
	Year 1	Year 2	Year 3
Promoter	516 000,00	567 600,00	624 360,00
Assistant Manager	-	-	300 000,00
Total Payroll	516 000,00	567 600,00	924 360,00
Total People	-	-	-

The simplicity that can be seen on the Personnel Plan table is based on the company's financial model that includes a single general director working with outsourcing companies that offer their services as well as accountant services, foreign tutors and local renting. Those expenses are already included on the operating expenses. It is important to highlight that as the company remains on its earliest stage of development, the outsourcing factor allow a considerable cost minimization.

The parameters analyzed are of great importance and allow making a positive conclusion. The company's financial growth perspective is quite high, although many factors haven't been taken into account upon the current project work. The lack of sufficient researches on the area require further analysis, thus leaving an important field of research within the foreign language market, in this case related mainly with the Spanish language.

Chapter 5. Risk Management

After reviewing the main aspects of the environment including juridical and financial parameters an important part of the company's right functioning activity should be based on the risk management of the company. In order to characterize and analyze the upcoming risks, information from inside the company will be assessed with the help of a risk matrix, followed by logical conclusions.

It needs to be noticed, that entrepreneurship and risks go hand in hand. Any business process cannot exist in the real world without risks, due to the fact that new technologies, ideas, implementations and innovations may have unexpected outcomes. However, risks can be forecasted, allowing an individual to prevent and in most cases minimize the expenses. It is important to secure a businesses success by ensuring a working system of risk management. (Kuusela & Ollikainen 2005, 66-67; Suominen 2003, 51.)

As stated by Sokolova S.V. on her article Sokolova, SV (2012). Business risks in the service sector. Bulletin of the Leningrad State University. AS Pushkin, 6 (1). the main reasons for a company's loss working on a service oriented market are the following:

1) Reduction of the planned volumes of production and sales of services due to a decrease in labor productivity.

2) Reduction of prices at which is planed to implement services in connection with non-sufficient quality, any unfavorable changes in the market situation, any decline in the demand or price inflation.

3) Increased material costs caused by overspending materials, raw materials, fuel, energy per unit of service.

4) Problems related to incompetence of specialists and managers and their errors;

5) Problem related with passive capital (loss of income);

6) Problems associated with the investment of big sums of money in the

same project;

Those problems characterize uncertainty within the company's activity and needs to be minimized in different ways. As a general way of coping with the problems stated the author on the same article provides a solution in terms of what kind of objectives a company should set in order to ensure a certain level of economic security in the company. The objectives of ensuring the economic security of the company, including those working in the service sector are:

a) Prevention of possible damage to its activities;

b) Protection of the rights of the enterprise;

c) Guard the personnel and business owners from sources of external and

internal threats;

d) Conservation and efficient use of financial, material and information

resources;

e) Early detection and prevention of various Offences, preventing the causes and conditions giving rise to them; non-admission of emergencies or minimizing their negative consequences.

The recommendations mentioned above will play an important role at the creation of the risk matrix that combined with the Native speakers club general director based criteria of the current risks will serve as an argumentation for the information shown at the risk matrix below Lansdowne, Z. F. (1999). Risk matrix: an approach for prioritizing risks and tracking risk mitigation progress. Proceedings of the 30th Annual Project Management Institute, Philadelphia, PA, October, 10-16.:

Table 11. Risk Assessment

№	Risk	Probability	Damage	Result	Rank
1	Shortage of native speakers in Russia	0,65	0,7	0,6	7
2	Delays while performing different tasks	0,5	0,6	0,48	5
3	Risks associated with the factor of trust from freelancers	0,4	0,73	0,7	6
4	Risks associated with customers tainted by teachers	0,8	0,7	0,8	8
5	Currency risk	0,7	0,6	0,42	3,5
6	Risks related to incompetence of specialists	0,45	0,6	0,33	3,5
7	Increased costs on one marketing channel	0,3	0,6	0,27	2
8	Political risk	0,65	0,75	0,4875	1

Table 12. Risk Matrix

№	Risk	Strategy	Preventive measures	Response measures
1	Shortage of native speakers in Russia	Minimize	Finding teachers from different countries for online classes	Finding the following human resources via internet services
2	Delays while performing different tasks	Minimize	Specify the conditions in the contract	Look for alternatives
3	Risks associated with the factor of trust from freelancers	Minimize	Search for reliable and proven freelancers	Fill a complaint against a company database of freelancers
4	Risks associated with customers tainted by teachers	Minimize	Increase confidence of teachers from other services (cross-selling)	Change the teacher
5	Currency risk	Minimize	Specify the procedure for pricing	Analysis of the foreign exchange market
6	Risks related to incompetence of specialists	Minimize	Immediate dispose of the specialist.	Individual response to the problem
7	Increased costs on one marketing channel	Minimize	Focus on creating costumer liability	Look for alternate channels
8	Political risk	Avoid	Submission of all required documents to the government at time, responsible organization for bureaucratic activity	If the claims of the authorities are not justified, then court system should resolve the conflict. Otherwise - immediate elimination of violations.

The risk matrix shows a subjective view of the current risk, in this case, only related with the Native speakers club “Tiempo”. The structured information reflects some alternatives and preventive maneuvers possible to allow critical losses due to the most relevant risks.

From one hand, it can be seen risks associated with costumers that decided to continue their particular Spanish classes, without using the company's services, moreover, with the specialized native speaker tutor working for the company are the most relevant risks. This phenomenon can be explained due to people's personal interest on earning money. As the company grows, this risk needs to be constantly revised, as it will remain as one of the most encountered.

Another important part of the risk management process is related with the future growth of the company, as it grows bigger, different risks will appear. In the frame of this project paper, only actual and closest potential risks were revised, although it would be important to take into account a relevant risk, that may appear in the future, due to the constant use of online payments for different services using plastic/credit cards or other online payments Ovchinnikov, S. (2012). Threats and risks of ethical and legal nature in internet research. HERALD Saratov State Socio-Economic University (3 (42)).. As a link between plastic credit cards online frauds

Chapter 6. Strategic Development of the Firm

Using the updated information and the analysis it was carried above, it is important to state that for the Spanish club “Tiempo” marketing is essential to the success of the venture. The first point of contact is usually through the marketing efforts of the organisation.

As it is known, that the company has currently been using a hybrid online offline marketing method.

The offline marketing involves the company's owner to take master classes on tourism and culture in Spanish speaking countries. All of the services are free for the first time, so as to enable a “let's try” philosophy amongst the target market Silverman, W. A. (1985). Human experimentation: a guided step into the unknown.. As for additional services the company works via renting a local paying only for the time it is meant to be used, it allows the company to minimize their rent expenses and expenses overall.

The online marketing efforts are focused on search engine optimization for the website, context and social media marketing. The company's owner attempts to focus on online marketing to draw greater traffic to the website. The fund infusion will allow focusing on online promotional activities. They are detailed below (inspired from an article from Forbes):

Search engine optimization

SEO optimization is the process that allows a company that uses this instrument of online advertisement to increase its website's visibility in any search engine's organic results by the means of pages enhancement using words and phrases people are usually searching for.

There exist different ways to improve organic search results of an individual and they can be achieved by editing existing content on the site, getting rid of barriers that would prevent indexing activities of search engines, changing the the number of backlinks or links a webpage gather from different websites -- which demonstrate the importance or popularity of the website.

SEO optimization may become into a time-consuming process at the beginning, but it needs to be considered as relevant step towards achieving more Internet traffic (webpage views) and remaining at a top spots on the most popular search engines results Xing, B., & Lin, Z. (2004). The Impact of Search Engine Optimization on Online Adverting Market..

Blogging and guest blogging

This section of the company's marketing policy offers original content on the site that it also free will help bring new visitors and set the website apart from the competition. Nevertheless, the generation of a variety of blogs in the foreign language-learning niche is more beneficial due to the possibilities e-commerce can offer.

Pay per click (PPC)

PPC Internet advertising will be used to bring in more views to the webpage from the most popular search engines like Google, Yandex. With Google AdWords, the company don't have any spending requirement -- it is permitted to set a minimal budget without restrictions a day or a maximum cost comfortable cost for each click. The main focus of this instrument is to increase the conversion of a site to get the best ROI possible.

Retargeting

Retargeting ads allow a potential customer to revisit the company's website by placing a tracking cookie on each potential costumers device. Afterwards, the advertisement of the company will return, so that they could revisit it. Using this instrument, as part of the company's strategy is fundamental, since almost 98% of the viewers the page gets, as analyzed earlier in the market analysis, leave the page. It is possible to make them come back and increase the webpage's conversion

Facebook ads

Facebook is a well-developed social network with over 1.44 billion active monthly users. The usual amount of time people spent on Facebook every day is 21 minutes. Not only it is popular with young people (mostly) students, but also all types of demographics are now regular users of the social network. Regardless, the level of promotion this instrument can assess varies depending on the company's working sphere.

Facebook ads also allow the user to locate potential costumers by sorting them through different parameters, such as age, region, interests, etc. As well it allow finding people linked with each other by “Likes”.

YouTube

Another social media that is also being used as an instrument for advertising is Youtube, that facilities the posting of videos to be available for public view. It can help the company's page unique content get found on YouTube itself. From there, not only does Google index the unique content, but others can embed the club's videos on their blogs and share it via social media. It's important to focus on a call to action that tells viewers exactly where to go (the companyґs website), how to do it (link), and why to do it (free content, contest, etc.) once they've finished watching.

The club may be also able to advertise on other people's videos by buying targeted ads relevant to the business, which could yield a high conversion. This is especially relevant to the master class on Latin American dancing. Dancing is a visual medium activity and thus YouTube is an additional platform to promote this service, in accordance to the clubґs policy.

Email marketing

Email marketing is a consider a useful tool because most people need to be engaged multiple times before they buy something, as it was stated by the company's director. It is needed to give potential costumers justifications to subscribe to the company's different event, offered on its website and then constantly offer them content that will be able to mitigate their needs. The club needs to encourage them to constantly return to the website by offering new, renovated online content -- providing a new service, videos, event, blog posts, etc.

Word of mouth (forums/Facebook fan pages, etc.)

It's vital to focus on building connections with the club's costumers and followers in order to gain positive reviews and word of mouth recommendations. It is necessary to participate in related forums or comment on blog posts in order to plug the club without coming off as too promotional.

Social media

Similar to email marketing, social media helps communicate with potential customers and encourage them to buy. The website should provide compelling reasons to “like” the Facebook page or follow Tiempo on varies social medias such as Twitter, but the club should also share content that gets user visiting the blog or interacting with the brand on a regular basis to remind them why they stopped by the website in the first place. Social media can serve as a tool for word of mouth marketing; it facilitate the administration of the company and notice what people are talking about and what recommendations they provide. Social media can serve as a tool of optimization, that could be used on any political or financial crisis approaches, although additional analysis on that topic may be required.

PR

Building the Native Speakers Club “Tiempo” reputation and costumer influence is relevant in order to increase traffic (views) to the company's website. Through public relations strategies, the company's general director can brand himself as an expert in this niche and build his credibility. Doing this can increase the club's conversion rates and build brand awareness. For instance, by serving as a source in journalist's articles, the outlet typically provides a link back to the club's website -- which is usually great traffic that converts well, all while building the reputation of the club. Press releases through big media outlets can also help drive trust and generate interest in the club's product or service.

Sales Forecast

As it could be observed on the review of financial aspects, the company plans to deliver sales of approximately 4.04 Million rubles in the first year, 5.34 Million rubles in the second year an 7.04 Million rubles in the third year of operations. As indicated, sales are forecasted to increase, with an annual growth rate of 32%. The approximate cost of sales will be 67%. language club business plan

The club is currently having a base of around 50 students on a monthly basis. The plan assumes a base of 200 students after the infusion of funds by the investor. The current marketing budget is around 10,000 Rubles per month. The plan estimates that this budget will increase to 50,000 Rubles each for the first two months and then stabilize to 16000 Rubles a month. The website will be given a major revamp by investing 116,000 Rubles and will involve a monthly expenditure of 2000 Rubles to keep it updated for the students. Thus it is safe to assume the student base will increase as indicated in the plan due to the enhanced marketing efforts.

According to Ferguson (1974) Ferguson, J.M. 1974 Advertising and Competition, Theory Measurement and Fact Cambridge.. “Advertising increase barriers to entry and reduce competition as measured by increase in monopoly profit”. Moreover, according to Nickels et al (1999) Nickels W.G Mchugh J.M., McHugh S.M 2000 Understanding Business, International Edition, 5th Edition, McGraw Hill Companies, Inc. U.S.A advertising not only helps to maintain superior stand in the industry and profit maximization, it provides information about a products or services and also gives consumers free television and radio programs. Giles (1997) Giles, 1997, Successful Marketing Technique Approach, Mac-donald and Evans Ltd. sees advertising as non-personal communication directed at a target audience through various media in order to present and promote products, services and ideas. The cost of media space, time and advertisement production is borne by the sponsor or sponsors. Advertising gives a clear image for any product or service of a company, which is a great asset. A well-structured and continuous advertising might stand as one of those strategies to sustain a distinct market position.

Also as the organization and marketing spend will grow, it will start experiencing a decreasing marginal cost of acquisition of a student. This effect is due to economies of scale. As the number of alumni of the club increase, they will suggest the club to other friends and will themselves enrol in the other classes available. This cross selling and free word of mouth advertising are essential to achieve the sales forecast.

Taking also into account the external environmental analysis carried out above the perspective to develop within the frames of the current market leave a positive forecast. In order to get a bit deeper into the company's possible strategies a SWOT analysis will demonstrate the variants it may have.

6.1 SWOT Analysis

Strengths

1. Focused Play on the Spanish Language and Latin American Cultural Market.

2. Using Teachers Partners to keep fixed costs low.

3. Past experience of the promoter in Latin America and the consulate.

4. Using online tools to scale up the business.

Weakness

1. The company's director is a one-man army and there is no fall back for the investor.

2. Repetitors.info is a well-established competitor in the foreign language learning market.

Opportunities

1. To be able to create Tiempo as a brand associated with everything Spanish thus allowing cross selling.

2. Being able to create franchises in different cities of Russia.

3. Being able to club the tourism component to Tiempo's existing operations. Tourism is a massive market

4. And can add directly to the bottom line without any significant overheads.

5. Adding additional online classes to the website from the current online Spanish classes only.

Threats

1. Entry of a well-funded competitor into the Spanish/Latin American niche.

2. The main revenue driver-Spanish classes are not well received in the target market due to bigger selection of teachers on well-established sites like repetitors.info

SWOT Matrix

SO

1. S1O1-Focussed play on Spanish and Latin American gives the authenticity to cross sell other same themed classes.

2. S2O2- Teacher partners in different cities enable the creation of franchisees with a low fixed overhead cost base.

3. S3O3- Promoters network in embassy will give an opportunity to tap the lucrative tourist market.

4. S4O4- Online tools will help Tiempo expand to other online classes without creating additional infrastructure.

ST

1. T1S1- Branding should make Tiempo synonymous with all things Spanish and Latin. This niche will create from a general all language competitors.

2. T2S2S4- Ensure a feedback system is created for teacher partners. Helps in evaluating quality and adding/incentivizing better teachers.

WO

1. W1O2- Creating Franchisees will ensure that the club grows from a One Man Army.

2. W2O3O1- Repetitors.info is an online play on tutoring. Whereas Tiempo is a cultural club focused on Spanish and Latin American culture. This gives the opportunity to cross sell classes and focus on the lucrative tourism market.

WT

1. T1W1-Add investor/partners to take on the competition aggressively.

2. T2W2- Ensure an adequate screening process to evaluate the quality of teachers on board.

The SWOT analysis intents to facilitate the possible company's strategies it may implement in accordance to its present needs, situation and goals. The measurement of the parameters was stated in accordance to the company's current need on investment for further development. The suggested and possible strategies show a completely different path the company may have expected.

As we may notice, one of the most relevant strategic positions that should be taken is focusing on the online system development, as the website allows the company to work, without the necessity of renting an office yet, it may also become a chance to develop its own online programs related with the Spanish learning area. Moreover, an important an risky opportunity relies within the creation of franchisees, that would allow the company enter to the b2b sector as well and, perhaps, becoming a more bigger player in the market. This opportunity requires a deeper analysis that should be carried out besides the frames of the current paper work.

The brand name of the native speakers club “Tiempo” is still on its earliest stage of development. This main weakness needs to be diminished by the means of upgrading the marketing policy of the company. Several conclusions were made related with the company's current situation, demonstrating its position on the market, development possibilities and expectations. The requirement of investment for further development of the advertisement system is justified. After a stable brand name is created the market may react creating a language services area based on e-commerce, but at the same time intersecting other sectors such as dancing services, tourism, recreation and others in a long future. The current project and business plan can be also treated in the future as a comparison model with the future company's position and financial parameter. It will be possible to evaluate the business plan's weaknesses and correct them for the enhancement of further researches on the area.

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