The introduction of an English language school in Gozo : feasibility study

Abstract

PURPOSE: The primary need for this feasibility study surfaced with the news that Barts are in the process of developing a Medical School in Gozo, thus demand for English Language courses is expected to increase. Provided that over recent years, especially the past year, demand for learning English has experienced a rapid increase, the objective of this study is to assess whether the introduction of a new English Language School, at a particular site in Xewkija Gozo is financially viable. DESIGN: Meetings and interviews were held with different officials to gather the necessary information. Once the latter was obtained, a thorough analysis of the site and the competitors was undertaken. The study proceeded by examining the initial capital expenditure required to construct the school. Moreover, the study also estimated the operating income expected to be earned and the expenditure to be incurred. Several computations were carried out, leading to the calculation of investment appraisal techniques along with a four-scenario sensitivity analysis. All this was necessary to conclude this study and achieve the research objectives.

FINDINGS: A projected Income Statement and a cash budget, together with several investment appraisal techniques, provided the investor with a conclusion regarding the feasibility of introducing a new English Language School in Gozo. CONCLUSIONS: In the initial years, a lump sum of money has to be invested in capital expenditure. Since the company would still be in the process of establishing its reputation, initial demand is expected to be quite low. For these reasons the project is expected to be initially loss-making. Through marketing strategies, the demand eventually increases, leading to positive net results in the future years of operation. This guarantees the project’s viability and encourages its development. However, every project can be improved. Thus, recommendations relating to the English Language School’s operations, along with recommendations requiring further research, were also provided. IMPLICATIONS/VALUE: Even though this study may have its limitations, the overall investment proved to be viable. Therefore, any investor willing to open an English Language School shall consider this study, as it provides a detailed analysis of the venture, both during the development phase and the initial 15 years of operation.