BUSINESS PLAN

FOR THE ESTABLISHMENT OF

NURSING REVIEW CENTERS

Plan Outline

1. Business Concept

- Objectives
- Target market/ marketing area
- Future of this market
- Type of business structure/alternatives

2. Financial Plan

- Sales and profits objectives

- Start-up requirements

3. Personnel/ Administrative Plan

- Recruitment objectives/hiring criteria

- Salary and incentive pay structure
- Executive/consultant compensation

4. Competition

5. Working Capital

CONFIDENTIALITY AGREEMENT

This business plan ("the Plan") is intended as a tool for discussion.

However, investor acknowledges that certain information contained herein might
have proprietary value to the proponent/preparer of this plan. Wherefore,
Investor agrees to keep confidential all information contained in this plan.
Investor promises not to use such information in competition with the
professional review centers subject of this plan.

Date __________ _______________________________

Signature of Investor
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I. BUSINESS CONCEPT

Prefatory Statement

This Business Plan ("the Plan") will outline the major short and long range
objectives in establishing nursing review centers in the Philippines (Centers).
Since the actual process of planning is cumulative, requiring the inputs of those
interested in the success of the business, it is by no means a complete blue-print
of the business. Rather, it is intended as a discussion tool. Comments, criticisms,
and suggestions are always welcome.

Objectives

The main objective is to establish a comprehensive nursing review center

in the Philippines that would provide top caliber instructors and would utilize
cutting edge technology in the latest test preparation techniques.

Traditionally, review centers focus on either local Philippine board

examinations or foreign (US) state board exams (NCLEX-RN). Review centers
that combine or offer services for both have started to emerge lately. These
review schools also complement their offerings with review classes for various
English-language competency tests such as TOEFL/TSE and IELTS. The reason
is purely economics. It is commonly perceived that review classes for local board
cost a lot less than review classes for foreign exams. However, economies f
scale will come into play since local boards are offered twice a year and typically,
there are approximately 100,000 students who graduate every year from some
400 nursing schools. A review center that offers review classes for local board
might draw in hundreds of enrollees who pay a fraction of the cost to review for
foreign board. Space and logistical limitations will force review centers to choose
between fewer but more lucrative customers, to the quantity with lower returns on
the other end of the spectrum.

One distinct advantage of offering test preparation classes for both local
and foreign examinations is the maximization of space and personnel.

Target Market/Marketing Area

The review center will initially operate in _____________ area, providing

services to graduates of area nursing schools/hospitals. Eventually, it expects to
operate in the major markets of the whole Philippine archipelago.

Future of this market

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The immediate future of this geographical market is encouraging. From a

temporal point of view, the review should be operational by October to be able to
provide services for graduates of the first semester term. If the review center is
established soon, it should have enough lead time to select qualified instructors
and develop core curriculum for both local and foreign board examinations.

II. TYPE OF BUSINESS STRUCTURE

The choice of legal structure under which the business operates will affect
your taxes and personal liability. The pros and cons of selecting a particular
structure is one major aspect that needs further discussion.

Sole Proprietorship - It is the simplest and cheapest form of business to

start. The major disadvantage is that you personally assume all liabilities of the
firm. The business income also becomes your personal income. However, it is
the least complicated among the alternatives. A good insurance policy will
protect you against many, if not all liabilities.

Partnership and Limited Partnership - General partnerships are similar to

sole proprietorships from the liability and taxation standpoints. Each partner has
unlimited liability. However, the limited partnership is an attractive variation in
that a person can invest money in an operation, have liability to the amount
invested, and have tax benefits of the partnership. The limited partner, however,
cannot participate in management. Partnerships are generally more flexible.
Besides, a good insurance will protect you against most, if not all liabilities.

Corporation - A corporation limits your personal liability and provides

continuity/ease of transferability of ownership. The disadvantages include the
cost of starting a corporation vis-a-vis sole prop or partnerships, not to mention
the more extensive government entanglement and paperwork. There are some
fringe benefits you enjoy as a stockholder and/or employee of a corporation that
would not be available to sole props and partners. For example, group life,
medical and dental insurance premiums are tax deductible for key employees. A
skilled CPA or tax attorney can explain these matters further.

III. FINANCIAL PLAN

Sales and Profits Objectives

The tuition for local nursing review/test preparation ranges from P ______
to P _______. The tuition for foreign nursing exam test preparation ranges from
P ______ to P ________. The length of time needed for local review is typically
45-60 days. Foreign review classes normally last about the same aslocal review
classes. Some review schools offer pre-week (final coaching) classes for
separate tuition fees (optional).
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The breakeven tables and analysis below assume a 365-day year both
from income and expense standpoint. In reality, preferences of the
owners/employees of the business will determine the number of days that the
firm will operate in a year. However, the trends and percentages would still
remain valid. As shown hereunder, it would take only ____ months at ______
combined enrollees per month in order for the firm to breakeven.

PROJECTED BREAKEVEN PROFIT & LOSS STATEMENT

REVENUES
(average: local & foreign tests P ________ 100%
____ enrollees/month

VARIABLE COST (for ____ enrollees)

Payroll for instructors ________ 70.00%
Living/transport/Allowance ________ 3.71%
Est. workers comp premiums ________ .51%
TOTAL VARIABLE COST P_________ 74.22%

FIXED COST (for whole operation)

Staff payroll & payroll/SSS taxes P ________ 13.30%
Health insurance ________ 1.72%
Rent and Utilities ________ 1.72%
Telephone ________ .75%
Answering Service & Pager ________ .20%
Office Supplies ________ .20%
Postage, copying, etc. ________ .34%
Food, Lodging & Travel - instructors ________ 2.74%
Representation ________ 1.72%
Insurance (liability & property) ________ 1.37%
Advertising & promotion ________ 1.72%
TOTAL FIXED COST P ________ 25.78%

PROFIT & LOSS -0-

BREAKEVEN ANALYSIS

Assumptions:

Breakeven Point - Fixed Cost/ (1-Variable Cost as % of Sales)

Fixed Cost - P _________ per year
Variable Cost - 74.22% of Sales
Average tuition fee - P __________
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No. of new RNs Profit or

Enrolled/Mo. Sales Fixed Cost Variable Cost (loss)

20
40
60
80
100

Star-up Requirements

Review center location - A substantial size space of approximately 300-

600 sq. ft. in a professional building or shopping plaza would be sufficient,
preferably one that is accessible and/or open 7 days a week. The administrative
office is important during the start-up period because most enrollees would be
walk-in applicants. The rest would normally be institutional referrals from
contacts and recruitment agencies. At least 6 persons should staff the
administrative/back office aspect of the business This initial personnel
compliment are broken down as follows: Two (2) full-time staffers who would
also act as bookkeeper and marketing reps during spare time; Two (2) nurse
instructors/consultants who would double as hospital marketer and nurse
marketer at the same time, and two (2) technical persons who would have
knowledge about computers and software maintenance.

The following summaries refer to the anticipated start-up costs, which

include pre-opening costs and projected working capital/cash flow requirements
for the first few months.

IV. PERSONNEL/ADMINISTRATIVE PLAN

Recruitment Objectives

Students from various nursing schools can be contacted through

institutional contacts, school presentations, trade journals, job fairs, and similar
activities. However, with the projected volume that we presented in this plan and
because of the amount of working capital we initially require, it is anticipated that
recruitment efforts would be all out.

Salary and incentive pay structure

Instructors are the lifeblood of the business. Qualified and competent

instructors will be recruited both locally and abroad. They can be paid either on
fixed monthly salary or per diem.

Executive Compensation/Draw
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Depending on the business structure agreed upon later on, it is expected

that the CEO of the business would be entitled to monthly compensation or
managing partner's draw. It is proposed that the minimum salary for the CEO
would be fixed as soon as the business has reached break-even point.

As started elsewhere, the corporate structure is preferred for the reasons

stated therein. However, a limited partnership would also be acceptable,
considering that the business considers taking liability insurance. If a corporation
is going to be formed, and if silent participation in the business is preferred by
investor, it could be recorded as a loan to the corporation. For instance, GSN
could act as the sole shareholder for all issued stocks, then the corporation
would borrow from the investor for the agreed amount, the latter taking a note
from the corporation. As a collateral for the note, GSN would also assign some
of the shares equal to the agreed percentage of ownership and/or profits that the
investor wants from the corporation. Similar arrangements could be made for the
general or limited partnership type of business structure. However, if the investor
opts to become an ostensible player, then there would be no need for such
elaborate paperwork.

Although certainly subject to further discussion, it is proposed that the

investor would put up at least P _______ while GSN would invest at least P
______ or a total available liquid capital of P ________.

Considering that GSN had exerted substantial labor in the past in

researching, testing, and practicing the intricacies of the business, as well as
evaluating the feasibility of the business in the target geographic area, it is
expected that her share in the net profits would be substantially more than what
the percentage of her capital contribution would bear to the total liquid capital, i.e.
her share of the net profits should include not only her capital contribution, but
also labor previously exerted as well as efforts to be done during the pre-
opening and operational phase of the business. A share of at least 50% of net
profits is proposed. Depending on the volume of the business (please refer to
the breakeven charts and analysis), a substantial return of investment is
anticipated even under the most conservative conditions.

V. COMPETITION

The major competition of this business are the current review centers that
provide test preparation classes to approximately 100,000 new nursing
graduates every year. The most glaring advantage that GSN can provide to this
new venture is the track record in terms of passing scores of nurses who have
used GSNs system in the past.
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VI. SUMMARY OF START UP COSTS

Pre-opening Costs

Leasehold

1st month's rent P _____

2 mos. security deposit _____

Equipment, Furniture, & Fixture

Incorporation fee, kit, licenses P _____

Phone systems lease & hook-up _____
High volume copiers _____
Computers, printers & scanners _____
Software (accounting, billing, database) _____
Electric typewriters (2) _____
Computer tables, desks, chairs _____
Filing cabinets _____
Office supplies _____
Office forms and supplies _____
Marketing brochures/mailers _____
Pre-opening promotion/marketing _____
Coffee maker, water cooler, small ref _____
Total pre-opening costs P ______

VII. WORKING CAPITAL

The working capital of P is expected to be sufficient for an

operation based on expected enrollment of at least _____ nurses per month. It is
assumed that enrollees pay their accounts before classes or at most within 30
days of classes. Therefore, the illustrations only calculate the period during the
pre-opening phase and the first two months of actual operation because it is
expected that on the third month, the students would have paid their accounts on
time. These payments would then be rolled over for the third month's use and so
on.

Initial working capital summary

Pre-opening 1st month 2nd month

P _______
Variable cost _______ _______
Fixed cost (P _______) _______ _______
CEO compensation/draw _______ ______ _______
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Total initial working capital P ________