BUSINESS PLAN KIDS CARE CENTRE
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Table of Contents
BUSINESS PLAN FOR CHILD CARE CENTRE 1
EXECUTIVE SUMMARY 3
Keys to Success 5
Company Ownership 5
Start-up Summaries 6
Company Locations and Facilities 7
Market Analysis Summary 7
Market Segmentation 8
Part-Time Working clients 8
Target Market Segment Strategies 8
Market Needs 9
Service Business Analysis 9
Competition and Buying Patterns 9
Strategy and Implementation Summary 10
Competitive Edge 10
Sales Strategy 10
Sales Forecast 10
Management Summary 12
Personnel Plan 12
Financial Plan 13
Break-even Analysis 13
PROJECTED PROFIT AND LOSS 13
The business will be known as Kids Care. Kids Care is a startup Centre that will offer day care services. The center will serve small kids aged between three months to 6 years. The services offered are safe, offering parents/guardians an exemplary place where children spend quality time. The Centre will be established as a private operated business with two shareholders: Andrea Child and Danielle Freelander. Each of the shareholders will contribute in raising the capital (Cude 12).
The Kids Care Centre intends to offer safe childcare always. A close focus on every child is important to offering a quality experience for the children, thus, satisfactory personnel are employed to ascertain that every child has the appropriate care required (Cude 12).
History of the Business
As a start-up Centre, it seldom has any history as such. The management team (owners) has vast experience in handling young kids. They possess excellent reputation in their respective positions. Moreover, the two individuals are proficient in handling the sales, marketing finance and administration roles (Early Childhood Facilities 28).
The childcare market is rather competitive in America because of the facilities used. Generally, childcare operates under two types of facilities. One of the facilities, which are somehow large, is commercially operated, while the other one is a franchise Centre. Moreover, the two facilities operate both regionally and nationally. Currently, the largest childcare facilities in the United States occupy nearly 29% of the market segment. Yet, there are numerous different yet smaller locally operated and private faculties. The largest facilities can accommodate between 20 and 100 children, while the locally franchise centers can accommodate a maximum of 20 kids. As illustrated, the market is rather competitive. The childcare center will use two strategies to differentiate it from its competitors. The first strategy is the pricing strategy, whereby, the Childcare will set up the price at 5% and 10% less than the competitors (commercially operated centers). The second differentiating strategy will be the standardized customer service. The management will integrate the customer centric philosophy into the organization. The kids’ center will use extra cash to lure and train its staff. The staff will have the opportunity to impress staff and students to become loyal customers and to tell others about their childcare experience (Cude 12).
The Kids Centre will concentrate on two target customer segments. The first will involve permanent working customers, which comprises of about 80 percentage of Kids Centre business. The second customer segment will involve the sporadic customers, or customers that will use the Centre whenever the need arises. This segment is escalating at a rate of 20% and there are over 50 families using the second segment (Early Childhood Facilities 28).
The Management Team
People with knowledge and experience in Child Care services, for instance, Andrea Child and Danielle Freelander, will lead the Kids Centre. Andrea Child possesses sales, marketing and management skills and has vast experience in this field after working in over seven years at the Toddler Warehouse. While working at Toddler Warehouse, Andrew contributed to the business growth from $98,000 to over $4.6 million annually. On the other hand, Danielle Freelander, with finance and administration skills, worked with The Rug Rat Vault, which is the seventh biggest childcare Centre in America. While working as a Chief Financial Officer, Danielle contributing in generating operating profits by over 12%. In essence, the staffs needed must play a major role in growing the kids Centre. The Kids Centre is an exhilarating opportunity that offers a safe and secure kids care. Through the integration of suitably priced services, excellent customer service, and effective management team, Kids Centre will swiftly obtain market share and brand image as a leading Kids Centre provider (Early Childhood Facilities 28).
The Kids Care Centre intends to offer safe childcare always. A close focus on every child is important to offering a quality experience for the children, thus, satisfactory personnel are employed to ascertain that every child has the appropriate care required.
Keys to Success
The key success factors for the Kid Centre will include:
Keys to success for the company will include:
1. Maintaining a strong brand image in the society
2. Quality care
3. Competent pricing
4. Flexibility in operating hours
This Kids Centre will commence as a simple proprietorship, operated by the founders. As the Centre expands, it will be registered as a limited Liability Agency based or a corporation based on the future needs.
The Starters of the Kid Centre will take charge of the daily operations and will work in collaboration to ascertain the success of the business. It is projected that the startup capital will amount to $3,000 comprising of the legal expenses, advertising costs and other expenses. Additional costs amounting to about $67,000 will be used to purchase assets. The owners will finance the start-up capital in equal portions using their contributions and a loan amounting to $ 30,000 payable in 5 years.
Legal $ 1,000
Brochures $ 350
Stationery $ 100
Activity Supplies $ 250
Food Preparation Supplies $ 300
First Aid Supplies $ 200
Cleaning supplies $ 150
Nap time supplies $ 250
Others $ 400
Total start-up expenses $ 3,000
Start-up Assets required
Cash balance on opening data $ 67,000
Other current starts $0
Total Current Assets $ 67,000
Long Term Assets $0
Total Assets $ 67,000
Total requirements $ 70,000
Owner Freelander $ 20,000
Owner Child $ 20,000
Total Investment $ 40,000
Accounts Payable $0
Current borrowing $0
Other current liabilities $0
Current liabilities $0
Long term liabilities $ 30,000
Total Liabilities $ 30,000
Loss at Start-up ($ 3,000)
Total Capital $ 37,000
Total Capital and Liabilities $ 67,000
Kids Care will offer childcare services to kids aged between 3 months and 6 years old. The reporting hours will be from 6:30 A.M. to 7:30 P.M., Monday throughout t to Friday.
Company Locations and Facilities
Kids Care will locate its business in Lyn and its environs. The facility will measure 1,300 sq. ft. house in a calm, built-up neighborhood. The yard will be fenced to ascertain that the kids remain within the yard. The facility will contain safe and entertaining equipment. The house will help give shelter for kids during rainy days and during meal preparation. The house will as well be furnished with toys, games, and books to entertain the kids.
Market Analysis Summary
Kids Care is a facility that is increasingly significant in today’s dynamic world. Many families have become reliant on two incomes. This creates the necessity of setting up a child’s care facility. There are numerous facilities that offer similar services to Kids care, and each of them having a large operational base and a profitable business. It is certain that there exists a gap in the market for a high quality kids care services.
Kids Care focuses on meeting the local demands offered by Kids care services in Lynn. The facility will offer both the part-time and full-time services based on the needs of the parents.
Permanent Working Couples
The facility will setup a considerably large permanent regular base with the aim of establishing a healthy, steady revenue base to ascertain business stability. Client relation services are extremely important, since it is vital to please the parents and lure them into bringing their children into the daycare centre.
Part-Time Working clients
The temporary working clients within the Lynn account for about 20% of total revenues. However, part-time clients are rarely the primary target, but the ability to absorb this secondary market will help in bringing in supplemental profits.
Target Market Segment Strategies
The target market for the Kids Care Centre will consist mainly of the full-time working clients. The Child Care Centre will utilize the referral marketing as the marketing strategy. Maintenance and improving its reputation is essential in absorbing supplemental market share within this target market.
With increasing economic demands, most families are finding it necessary to depend on two incomes. Therefore, this increases the need of establishing kids care centre. The trend seems to remain unchanged in the near future; therefore, the Kids Centre looks forward into capturing a big market segment.
Service Business Analysis
The kid care business is a lucrative business as discussed in this paper. Therefore, there exist numerous offering the similar services as the Kids Care Centre. The Child Care services are offered by commercially- operated Centers ad privately operated centers. Kids Care Centre will compete with the privately operated Centre since the main competition lies in this sector. The Centre is certain that it will be a successful venture because of its competent managerial team and potential of the care staff (Early Childhood Facilities 28).
Competition and purchasing trends
Lynn has more than 300 childcare agencies. The larger commercially operated childcare company, such as KinderCare, absorbs most of the market share. These large centers are capable of competing because of their strong brand image in the market. In the Kids Care Centre, the number of staffs is low compared to children’s ratio, which is attractive to many parents. Moreover, the Centre offers the services at a low price compared to the large commercially operated Centers (Kristin 2; Kim & Davis 1-5).
Strategy and Implementation Summary
The success of the Kids Care Centre follows its mission of providing children with a safe, and secure environment, and a close attention to kids. The mission of the Centre is two-fold: ensure parents feel safe about the care of their children, and ensure children feel safe, and get the fun experience while within the facility (Kaplan 1-10).
Kids care competitive edge entails the endeavors necessary in acquiring the required licensing and certifications. Moreover, the Centre will conduct a comprehensive screening on personnel before hiring them to take care of the kids (Kaplan 1-10).
Kids Care Centre intends to generate significant revenues by offering quality care services to children. Although the Kids Centre will charge less fees compared to the larger commercially operated Centers, the Centre will generate profits within the first year of its operation, because of using oral advertising technique. The Centre aims at doubling its client’s base after every six months in its first year of operation (Fackler & Boise 3).
As the following table indicates, the Center plans to deliver sales amounting to about $262,000 in its first year of operation, $515,000 in its second year, and $674,000 in the third year (Fackler & Boise 3).
UNIT SALES 2014 2015 2016
Full time working clients –child 640 1,200 1,500
Part –time client child 1,875 3,500 4,000
Other 0 0 0
Total unit sales 2,515 4,700 5,500
Unit Sales 2014 2015 2016
Full time working clients –child 400 420 441
Part –time client child 3 3.15 3.31
Other 0 0 0
Full time working clients –child 256,000 504,00 661,500
Part –time client child 5,625 11,025 13,240
Other 0 0 0
Total sales 261,625 515,025 674,740
Direct Unit Costs 2014 2015 2016
Full time working clients –child 10 11 12
Part –time client child 0.75 0.80 0.90
Other 0.00 0.00 0.00
Sub-total Direct cost of sales 7, 806 16,000 21,600
The management team as indicated possesses flawless competence in the Childcare industry. This is beneficial to Kids Care Centre in various ways, such as:
– Clients will bring their children from other centers to Kids Care Centre and
– Their experience will bring in new clients. (Fackler & Boise 3).
Based on the Personnel Plan, the Centre expects to generate steady investments in training its personnel over the next couple of years considering the number of kids requiring care at the Centre (Fackler & Boise 3).
2014 2015 2016
Managers $72,000 $80,000 $84,000
Staffs $138,000 $252,000 $291,000
Other $0 $0 $0
Total staffs 10 12 13
Total remuneration $210,000 $232,000 $375,000
Kids Care Center intends to raise $40,000 as the start-up capital and obtain a loan amounting to
$30,000 and pay it in 5 years. This will help furnish the financial burden required in operating the Centre (Kaplan 1-10).
The Break-even Analysis is founded on the first year averages generated from the total sales and operating expenditures. These are illustrated as either revenue per unit, cost per unit and fixed costs (Kristin 2; Kim & Davis 1-5).
Monthly Units Break-even 222
Monthly Revenue Break-even $23, 063
Average Per-Unit Revenue $104.03
Average Per-Unit Variable Cost $3.10
Estimated Monthly Fixed Cost $22,375
Projected Profit And Loss
As illustrated by the Profit and Loss account, the Centre anticipates continuing its stable growth in profitability after opening the center
Pro- Forma P&L 2014 20 15 2016
Sales $261, 625 $515, 025 $674,740
Direct Cost of Sales $ 7,806 $16,000 $21,600
Total cost of Sales $ 7,806 $16,000 $21,600
Gross Margin $253,819 $499,025 $653,140
Gross Margin % 97.02% 96.89% 96.80%
Payroll $210,000 $332,000 $375,000
Sales & Marketing expenses $0 $0 $0
Depreciation $0 $0 $0
Leased facilities $1,800 $2,000 $2,200
Certs & inspections $2,400 $2,500 $2,600
Utilities $1,800 $2,000 $22000
Insurance $3000 $3600 $42,000
Rent $18000 $20,000 $25,000
Payroll taxes $31,500 $49,800 $56,250
Other $0 $0 $0
Total operating expenditure $268,500 $411,900 $525,050
Profit Before Interest and Taxes ($14,681) $87,125 $128,090
Interest expense ($2610) ($1780) ($780)
Taxes Incurred $0 $25,604 $38,193
Net Profit ($17,291) $59,742 $89,117
Net profit/ Sales -6.61% 11.60% 13.21%
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